ChadYowler_BudgetAnalysis

Mr. Chad Edward Yowler | PLSC 668 | February 9, 2016
MT. LEBANON
BUDGET ANALYSIS

Dear Mr. Feller,
I have spent some time reviewing the proposed 2016 budget for Mt. Lebanon using the
guidelines from the Government Finance Officers Association’s “Distinguished Budget Presentation
Awards Program.” By performing a diligent page by page review based on these guidelines I have
developed an array of suggestions to improve upon the delivery of the details of the proposed
budget.
The budget has been reviewed with the understanding that it is an ongoing process that is
directed at allocating funds for a variety of competing projects that can be understood by the
general public. This review is not a suggestion on the specifics of the allocation of funds nor is it
designed to be a channel for proposing changes on what projects are to be funded. The document
will focus instead on the contents, visibility, diligence, accuracy, and validity of the budget.
The criteria of for the GFOA Award focuses on the following categories for assessing a
budget: the operations guide, financial plan, policy document, and the communications device. The
review will follow these categories in the respective order and provide guidance based on each
categories criterion. Additionally, there will be comparisons made to peer budgets within the
review to highlight areas of exceptionalism and areas that could be improved. The peer budgets
selected are The Borough of Carlisle’s 2014 Budget and Lower Merion Township’s 2014 Budget.
These are both award winning budgets that can be used for comparison and improvements in the
lacking areas. They were chosen because they are both Pennsylvania municipality budgets and have
demographics and total budget amounts within a selected scope. Carlisle’s budget represents a
slightly smaller area with a slightly smaller budget and the Lower Merion budget represents a
slightly larger entity with a bigger budget. Mt. Lebanon is directly in the middle making these peer
budgets effective benchmarks for what can be done to produce and enhance the budget document.
The intention is that this review will assist in better budgeting practices that are focused
on transparency and incorporate all guidelines for a distinguished budget. The community and
policy makers will mutually benefit from amending the budget in current and future years to
adhere to the guidelines and criticisms suggested throughout the document.
Best Regards
Chad Yowler

Contents
OUTLINE OF EVALUATION .....................................................................................................................3
ORDER OF EVALUATIONS.......................................................................................................................3
OPERATIONS.............................................................................................................................................. 4
FINANCIAL ...................................................................................................................................................7
POLICY........................................................................................................................................................ 15
COMMUNICATIONS ................................................................................................................................18
QUICK REFERENCE MATRIX.................................................................................................................22
CONCLUSION............................................................................................................................................23
SOURCES ....................................................................................................................................................23

OUTLINE OF EVALUATION
ORDER OF EVALUATIONS
Guidline
Category
• Operations, Financial, Policy, or
Communications
Criterion # • The corresponding criteria # (1-27)
Assessment •Recommendations or commendations
based on met criteria
OPERATIONS
FINANCIAL
POLICY
COMMUNICATIONS

OPERATIONS
 To meet the requirements of this category the budget should include an
organizational chart, descriptions of the organizational units,
performance measures at the department level, the impact of those
measures on goals and objective of that unit and on the government’s
mission, and a summary table of personnel for previous, current, and
budget years.
#O1:The document shall include an organization chart(s) for the entire entity.
There is no organizational chart provided for the entire entity. A
simple graphic that shows the flow and hierarchy of the entity like
that of The Borough of Carlisle is reader friendly visual that can
make understanding the process of the local government.

#O2:The document should provide narrative, tables, schedules, or matrices to
show the relationship between functional units, major funds, and non-major funds
in the aggregate.
The relationship between the functional units, major funds, and
non-major funds in the aggregate is loosely explained and illustrated
through fund breakdown narratives and the Budget recap. The
budget recap allows the reader to connect the dots to how funds are
connected, however the Carlisle example is a much better
illustration of the fund structure
#O3:A schedule or summary table of personnel or position counts for prior,
current and budgeted years shall be provided.
There is only a personnel count for the budget year and current year,
the previous year is absent (found on page 9). Staffing changes are
noted, 2 additional fulltime employees, and explained.
#O4:The document shall describe activities, services or functions carried out by
organizational units.
The budget does an excellent job of describing the organizational
units and the programs. The purpose of the units is addressed and

prospective programs are detailed for what benefits they may offer
for future considerations.
#O5:The document should include clearly stated goals and objectives of
organizational units (e.g., departments, divisions, offices or programs).
The goals of each unit and the objectives are described within the
particular unit descriptions. The majority of goals highlight entity
goals as well as unit goals. An example would be the Emergency
Management fund description (page 68). The issue with the budget
regarding objectives and goals is there are no quantifiable measures
or timeframes set in place. To improve the budget, including
information similar to the Carlisle budget (Public Works
Department Information) would greatly increase the understanding
of the goals and performance measures.
#O6:The document should provide objective measures of progress toward
accomplishing the government’s mission as well as goals and objectives for specific
units and programs.

The performance areas are nonexistent for the budget. This is an
area that is severely missed and it is a critical part for comparing
previous year performance to proposed funding. The Lower Merion
budget includes a detailed 3 year table of performances for each
department within the budget so that any reader can quickly see the
success of their tax dollars.
FINANCIAL
 Successful financial planning within the budget should focus on the
historical role the budget has played as a tool in financial management.
A description of the fund structure should be included for how funds are

appropriated and a summary of revenues and expenditures. Revenues
and expenditures should be compared over a minimum of three years.
Additionally, an explanation must be provided for the budget plans and
expectations. Any changes in the fund balances should be detailed,
information on capital spending must be outlined, and there needs to be
a discussion of the impacts of capital improvements. Finally, the GFOA
specifies that a good financial plan includes debt service information.
#F1:The document should include and describe all funds that are subject to
appropriation.
The Fund structure for the entity is provided in both narrative and
graphic forms in the opening budget message. The description of
each appropriated fund is included in the document as well. The
description and structure could be easier to locate or all in one area.
The Lower Merion Budget does an excellent job at addressing this
with its layout.
#F2:The document shall explain the basis of budgeting for all funds, whether
cash, modified accrual, or some other statutory basis.

There is no explanation of the basis of budgeting defined in terms of
accrual, modified, or cash anywhere in the document. No basis of
accounting is described in the document either. It appears to be
accrual based throughout however, this is neither stated nor
displayed. An example of how this should be done can be seen in
Carlisle’s budget in the fund description section. The chart is a
supplement for written descriptions provided in a previous section of
their budget. Together this allows for an understanding of the
accounting and budgeting practices for each department in a very
user friendly way.
#F3:The document shall present a summary of major revenues and
expenditures, as well as other financing sources and uses, to provide an overview of
the total resources budgeted by the organization.
The budget details an overview of all revenues and expenses for all
appropriated funds in the line item budget (page 80). In the line
item budget all revenues are presented by major type. All
expenditures are displayed by function and object. The line item
budget works as a great tool for a reader to quickly and accurately
see how the revenues and expenditures breakdown in the budget.
#F4:The document must include summaries of revenues and other financing
sources, and of expenditures and other financing uses for the prior year actual, the

current year budget and/or estimated current year actual, and the proposed budget
year.
The budget presents revenues, other financing sources,
expenditures, and other financing uses for the prior year, the current
year, and the budget year together (page 15). The comparison
includes a total of all appropriated funds as well as the individual
breakdown.
#F5:The document shall include projected changes in fund balances, as defined
by the entity in the document, for appropriated governmental funds included in
the budget presentation (fund equity if no governmental funds are included in the
document).
Mt. Lebanon describes the use of “Zero Based Budgeting” in the
budget and uses this process to define a fund balance as the deficit
or surplus remaining after all designated projects for the year are
allocated. The fund balance information is presented for the budget
year. There is a comparison of current year and budget year balances
with increases and decreases described and ending fund balances.
This information is presented in both percent form and amount. The
differences for fund balances are discussed in the opening message
of the budget for any change over 10%. For example the
intergovernmental revenue decreasing by 17.4% is mentioned (page
8).
#F6:The document shall describe major revenue sources, explain the
underlying assumptions for the revenue estimates, and discuss significant revenue
trends.
Individual revenues are described for the budget. Over 75% of the
revenues are from taxes which are described through millage and
narrative. The tax revenues are listed as estimates from the finance
department with no assumption of change from the current year. All
other revenue sources are not discussed in detail or with rationale.
There is no trend analysis or hard quantitative figures for the
revenue assumptions. The Lower Merion Budget describes the trends
and figures for its revenues and provides a very detailed graph of

each source of revenue. Charts, graphs, and analysis allow the reader
to understand how the revenue is being assumed and budgeted for
as well as the rationale behind changes.
#F7:The document should explain long-range financial plans and its effect upon
the budget and the budget process.
No long range financial plans are identified in the budget. Future
projects are identified for each department but no strategy is
explained on how to achieve them. Long term capital improvement
timelines are implemented in an additional document. The Carlisle
Budget addresses potential financial goals and events that could
affect the budget in future years. Descriptions of programs, goals,
and potential issues are listed in the budget summary as well as in
the department descriptions.

#F8:The document should include budgeted capital expenditures, whether
authorized in the operating budget or in a separate capital budget.
The budget document defines what capital expenditures are under
the capital improvements section (page 74). The total dollar amount
of capital expenditures is disclosed in the document. Significant
capital expenditures are described along with a dollar amount in the
capital improvements section and an additional CIP document is
linked. The display and information for these expenditures could be
improved upon to represent capital improvements like the Lower
Merion Budget does in its Capital Improvements section (example in
#F9 criterion critique).

#F9:The document should describe if and to what extent significant
nonrecurring capital expenditures will affect the entity’s current and future
operating budget and the services that the entity provides.
There is no statement of anticipated operating cost for nonrecurring
capital expenditures presented within the budget. Additionally, no
revenue savings are mentioned in the document from the
improvements. The Lower Merion does a nice job of identifying
projected costs and there is an additional impacts section that
follows describing the benefits and savings of the improvements.

#F10:The document shall include financial data on current debt obligations,
describe the relationship between current debt levels and legal debt limits, and
explain the effects of existing debt levels on current operations.
The amount of principle and interest debt obligations is described,
however debt limits are not described. In the debt overview section
of the Carlisle budget a description of debt limits is discussed as well
as debt for the municipality. A simple overview section that includes
statements of these characteristics would improve the reader’s
financial understanding of the financial health of the entity.

POLICY
 The policy guideline focuses on the role the budget plays in influencing
policy in the local government. This should answer questions
concerning short-term initiatives that influenced the budget and a
statement of policies and priorities that had a role in the current budget.
Successful policy planning in the budget should also include goals for
each department as well as their role in the achievement of
governmental goals should be addressed.
#P1:The document should include a coherent statement of organization-wide,
strategic goals and strategies that address long-term concerns and issues.
The budget opening statement provides non-financial goals such as
crime rate reduction, social media expansion, and citizen
involvement (page 12). Other planning processes are discussed.
There is a discussion on future developments for the public works
facility which has a plan in place but no budgetary considerations.
There is also talks of tax assessment changes and collaboration with
the private sector to utilize the transit system.
#P2:The document should describe the entity’s short-term factors that
influence the decisions made in the development of the budget for the upcoming
year.
Short term factors are addressed. It is stated that PennDOT is
improving Cochran road in the municipality so there is a budget
assignment to put new curb ramps in and update storm inlets in
connection with the state construction. There will be two full time
librarians replacing part time positions to cover recent influx of
patron usage. Lower fuel and rock salt costs add a 6.8% amount to
the budget allowing for some additional funding. These funds
allowed for new programs, greening of the municipality initiatives,

and research for projects such as “pay as you throw.” Service level
changes are presented in chart form for current and budget year.
#P3:The document shall include a budget message that articulates priorities
and issues for the upcoming year. The message should describe significant changes
in priorities from the current year and explain the factors that led to those changes.
The message may take one of several forms (e.g., transmittal letter, budget
summary section).
Principle factors are highlighted in the budget message addressing
revenues such as the county freeze on property assessment, the lack
of tax rate change, and the small increase of .7%. However, it is also
mentioned that banking policies will allow for an increase in revenue
of 36.8%. The plans for addressing these issues are only briefly
elaborated on. There is no direct solution for revenue freezes, the
assumption is that the offset of new revenue will make the lack of
growth not worthy of addressing. The budget addresses the minor
budget priorities change concerning the capital improvements with
the resources and influence it will have on the budget year. The
message is comprehensive of the entity, a brief summary of all funds
and changes is in the message through chart and graph forms.
#P4:The document should include a coherent statement of entity-wide long-
term financial policies.
The budget identifies the Zero Based Budgeting summary
explanation for the goals of the entity. It is intended to benchmark
operational costs and current budget items with presentation of
additional future items. The entity uses the ZBB as its defining
principle for a balanced budget. All financial polices stated for the
entity in the ZBB statement. The document does not effectively cover
all policies for budgeting there is no addressing of revenue, debt, or
expenditure polices in detail. The definition is loose at best and
provides little insight to the process for any outside viewer. The
Carlisle budget provides descriptive details of how the balancing of
the budget will be done as well as accounting for the key areas and
the way they will be calculated.

#P5:The document shall describe the process for preparing, reviewing, and
adopting the budget for the coming fiscal year. It also should describe the
procedures for amending the budget after adoption.
There is only a brief schedule of the budget development
process and no review process is included. There is also no
discussion on the amended process detailed for the public.
The Lower Merion budget provides a very detailed schedule
that is easy to understand and covers the whole process.

COMMUNICATIONS
 This area of the GFOA guidelines addresses how the budget
communicates with the community, the policy makers, and other
outsiders. Trends should be outlined, other planning processes that
effect the budget should be noted, and the process for approving and
preparing the budget should be outlined. Finally, figures, charts, and
graphs should be utilized to convey information, the structure should be
easily understandable to non-financial or governmental individuals, and
terminology should be reader friendly.
#C1:The document shall include a table of contents that makes it easier to
locate information in the document.
There is a comprehensive table of contents that accurately identifies
all pages and sections.
#C2:The document should provide an overview of significant budgetary items
and trends. An overview should be presented within the budget document either in
a separate section (e.g., executive summary) or integrated within the transmittal
letter or as a separate budget-in-brief document.
There is a summary of the key budget points provided at the
beginning. The summary information is presented in a clear way
with real numbers and percent. Budgetary trends are highlighted to
include 2013 and forward.

#C3:The document should include statistical and supplemental data that
describe the organization, its community, and population. It should also furnish
other pertinent background information related to the services provided.
No information is provided about the community or municipalities
demographics. The Carlisle budget includes a community profile
section that is approximately 10 pages long. It details the make-up of
the community, local government, economic trends, demographics,
and projections.
#C4:A glossary should be included for any terminology (including abbreviations
and acronyms) that is not readily understandable to a reasonably informed lay
reader.

The budget does not have a glossary of terms. The Lower Merion
budget provides a detailed glossary with key terms and definitions
that spans approximately 5 pages. This information makes
understanding the budget easier for any reader, especially those with
little budget knowledge.
#C5:Charts and graphs should be used, where appropriate, to highlight
financial and statistical information. Narrative interpretation should be provided
when the messages conveyed by the graphs are not self-evident.
There a variety of charts and graphs that help express the key items
in the budget. The narratives addressed in the budget message are
properly graphically presented.

#C6:The document should be produced and formatted in such a way as to
enhance its understanding by the average reader. It should be attractive,
consistent, and oriented to the reader's needs.
The overall presentation of the document is adequate and easy to
follow. The contents of the document are lacking in the areas
addressed in the above points, especially concerning financial
policies. The information that is provided and the formatting do
enhance the ability for a reader to follow along with most key points.

QUICK REFERENCE MATRIX
Criteria Met Needs Improvement Not Met
#O1 X
#O2 X
#O3 X
#O4 X
#O5 X
#O6 X
#F1 X
#F2 X
#F3 X
#F4 X
#F5 X
#F6 X
#F7 X
#F8 X
#F9 X
#F10 X
#P1 X
#P2 X
#P3 X
#P4 X
#P5 X
#C1 X
#C2 X
#C3 X
#C4 X
#C5 X
#C6 X

CONCLUSION
There are several areas of the budget that can be improved upon.
Using the suggestions mentioned in the analysis and comparing the
budget to the Carlisle and Lower Merion budgets will result in a
more enhanced document. This will improve the readability and
presentation effectiveness to the community. The lack of defining
practices and policies makes the budget a limited resource for future
usage and adequate measuring of success. With the improvements
suggested, it is expected that the Mt. Lebanon budget going forward
will serve the community and entity at a much more efficient scales.
SOURCES
GFOA Criteria:
http://gfoa.org/sites/default/files/u63/2014BudgetCriteriaExplanations.pdf
Mt. Lebanon Budget:
http://mtlebanon.org/DocumentCenter/View/11258
Borough of Carlisle Budget:
http://www.carlislepa.org/departments/finance/2014-budget/
Lower Merion Budget:
http://www.lowermerion.org/Index.aspx?page=1389

ChadYowler_BudgetAnalysis

Recommended

Recommended

More Related Content

What's hot

What's hot (19)

Viewers also liked

Viewers also liked (11)

Similar to ChadYowler_BudgetAnalysis

Similar to ChadYowler_BudgetAnalysis (20)

ChadYowler_BudgetAnalysis