About the Annual Budget
How does the City of Stillwater determine how your tax dollars are used? Much like the budget you use at home. For instance, you plan for known expenses; however, if your roof begins to leak or a pipe in your kitchen bursts, you will have to use money set aside for the unexpected or you have to adjust your spending to pay for the repairs?.
The City also has to plan for the known expenses and to save for future and unexpected expenses. For example, the City must ensure proper funding in its Annual Budget so that:
- departments have the funds they need to operate,
- employees are compensated fairly for the work they do,
- future capital projects are funded, and
- reserve funds are adequate in case of emergency.
Why does the City prepare a budget?
- A budget serves many purposes, which are listed as follows:
- Provides a flexible working plan for operating the City in the coming year.
- Converts the City’s long- and short-term plans and policies into services and programs.
- Establishes the amount of revenue expected to be available, which sets limitations on the amount of expenditures that can be supported.
- Establishes the costs of providing services and programs.
- Sets priorities to determine how the resources will be allocated among the services and programs our citizens expect and need.
- Provides a benchmark to which actual revenues and expenses can be compared.
- To comply with the Oklahoma Municipal Budget Act, 11 O.S. 17-201.
You are a part of this year-round process. Public hearing(s) are held in March-May concerning the proposed budget for the next year. Contact the City Manager’s Office or visit the website for the specific times of these meetings.
The City has adopted the zero-based budgeting philosophy of budget preparation. Department heads are charged with developing annual action plans to achieve departmental strategies. Budgets are built around the tactics used to complete the departmental strategies.
Each department’s budget submission is measured for reasonableness against a rolling three-year average of actual expenditures. Large increases must be justified and related back to tactics used to achieve departmental strategies. Tactics change over time and so do budgets.
The budget cycle refers to the life of a budget from creation to evaluation. The City of Stillwater's fiscal year begins July 1 and ends June 30.
Staff and city council collect continuous feedback from the public at public meetings and on social media year-round.
The City uses a four-step process which is outlined below.
1. Budget Preparation (January – March)
- City manager directs staff to prepare the City Manager’s Proposed Operating Budget.
- Finance Department gathers the following budgetary input:
- revenue estimates
- departmental operating expense estimate
- salary and benefit estimates
- community investment (capital expenditure) estimates
- The City Manager’s Proposed Operating Budget is developed from the inputs submitted.
2. City Council Approval (April – June)
- The City Manager’s Proposed Operating Budget is presented to City Council for review and input.
- A public hearing is held for citizen input.
- City staff reviews citizen and City Council input and revises City Manager’s Proposed Operating Budget
- The City Manager’s Proposed Operating Budget is adopted by the City Council by resolution and becomes the Adopted Budget.
3. Implementation (July – June)
- The new budget year begins July 1.
- After July 1 the Adopted Budget becomes a working document, which is known as the Operating Budget. This new version of the budget includes all of the modifications made during the fiscal year that ends June 30. Modifications may include carryforward adjustments, budget amendments and budget revisions.
- The Finance Department monitors the Operating Budget regularly. As the City’s organizational or operating environment changes, adjustments to the current budget may be required.
4. Feedback/Audit (July – December)
- The annual year-end accounting and financial reporting, as required by city charter, begins in July. The reporting process provides financial feedback on the Operating Budget.
- The Finance Department prepares the accounting and financial reports for audit by an independent outside auditor.
- The City’s Annual Audit is completed in December by an outside CPA firm. This ensures financial statements have been presented fairly. Audit information is included in the Annual Comprehensive Financial Report (ACFR).
- The Annual Comprehensive Financial Report (ACFR) is presented to City Council in December. The ACFR is filed with the Oklahoma State Auditor and Inspector and with other interested parties.
- A pdf version of the Annual Comprehensive Financial Report (ACFR) is published to the website.
- In January, the budgeting process begins again.
Types of Funds
There are three main fund types within the Stillwater budget: Governmental, Business-Like Funds, and Trust and Agency Funds.
Some funds are restricted, which means money can only be used as allocated, and some are unrestricted, which can be used for whatever purpose deemed necessary.
Restricted budgets are similar to a health savings account you might receive from your employer and can only use on health-related expenses. Unrestricted funds are similar to your monthly allowance - you may use it however you wish.
Governmental (General) Funds
Governmental (General) Funds provides funding for general government needs, public safety, public works and community services.
Special Revenue Fund (restricted funds)
The money in this fund is restricted, which means it can only be used for what it was allotted for. Stillwater's Special Revenue Funds include the following:
- Hotel tax
- Rural fire
- Community Development Block Grants (CDBG)
- Park grant funds
- Special Ops Team
Community Investment Fund (restricted funds)
Money from this fund is used to pay for or build large costly assets. Stillwater's Community Investment Fund is the Transportation Improvement Fund.
Debt Service Fund (restricted funds)
This fund is set aside to pay interest and finance bonds, the sale of which pays for long-term capital improvements including the following:
- Streets and drainage
- City facilities
Internal Service Fund
These funds are provided by one department for another, which includes the following:
- Risk management
- Health claims
Business-Like funds are similar to business transactions in that the City provides a service and the user pays for it (no taxes are involved). For example, the City provides water to residents and businesses and in turn, they pay for what they use. Examples include:
- Water and waste water
- Waste management services
Trust and Agency Funds
Trust funds account for assets held by the government in a trustee capacity. Agency funds account for assets held by the government as an agent. Examples include:
- Escrow fees
- Public library donations
Transportation Improvement Fund
In 2001 the citizens of Stillwater authorized a Half-Cent Transportation Sales Tax and have reauthorized the tax twice with the current expiration date occurring in 2026.
The fund allows the City to address transportation issues by providing funding for planning, design and construction for projects that improve mobility, such as streets, traffic signal systems, sidewalks, bridges and bikeways. Currently, the Half-Cent Transportation Sales Tax generates approximately $4 million annually.
Many cities choose to collect transportation funds through sales tax because approximately a third of the money is paid by non-residents - people who drive into our community to work, visit and shop.
Street projects make up a majority of the Transportation Improvement Fund's expenditures and include improvements to existing arterial and residential streets, sidewalks, alleyways, screening walls, traffic signals and signs, and guardrails.