Annapolis no longer hides its spending behind gimmicks
”The greatest obstacle to discovery is not ignorance — it is the illusion of knowledge” Daniel J. Boorstin
It is my belief that city budgets prior to Mayor Gavin Buckley’s administration were based on an illusion that was an obstacle to discovery, to understanding and to informed decision making.
My first introduction to the city budget was when, as president of the Ward One Residents Association. I met with the then-finance director to discuss the proposed elimination of a bus route from Bloomsbury Square to the Sojourner Douglass campus in Edgewater.
When the finance director presented the city’s budget to me, I cringed when I saw the budget was a massive Excel spreadsheet. I knew from my experience in construction estimating the risk of error from bad formulas, broken links, and hidden cells.
Once elected, my colleagues and I found out the budgets of those prior administrations gave the illusion of being a complete picture of the city’s finances, but, in fact, all expenses were not budgeted. Rather, some expenses were paid from “revolving funds” that were never included in the budget. While the Excel budgets balanced on paper, it was an illusion because monies were spent outside of the budget, and actual expenses routinely exceed the amounts budgeted.
The city budget is made up of funds. The General Fund is for the city’s general operating expenses, funded primarily by property and income taxes. The enterprise funds, such as water and sewer, are funded by user fees. Special revenue funds are used for revenues that are legally restricted for a specific purpose, such as restricted grants.
And lastly, internal service funds account for operations internal to the government, such as employee health insurance and maintenance of the city’s vehicle fleet. Prior to the Buckley administration, all of these funds were not budgeted as required by the City Code. For example, grants were received and spent, but they were not included in the budget.
Only a few months into this term, the finance director and the then-city manager advised the City Council that revenues were expected to be significantly less than expected. Either taxes had to be raised, or services had to be cut — significantly. Because there had been an illusion of fiscal well-being, the public was outraged, and so was I.
Buckley promptly hired Teresa Sutherland as city manager, directing her to use her government finance expertise to do an autopsy on the budget so we could understand the gaps more fully. Sutherland uncovered the use of unbudgeted revolving funds, that former administrations routinely overspent the budget, and that the consumer fees in the enterprise funds were being used to subsidize general government operations.
Over the last three years, that illusion has been exposed and eliminated.
All expenses and all funds are now budgeted. The budget is developed and presented transparently using OpenGov budgeting software instead of error-prone Excel spreadsheets, a huge accomplishment by Finance Director Jodee Dickinson and her staff.
The city has modified its debt and financial administration policies to ensure adequate reserves for emergencies and that the city does not borrow more than it can afford to repay.
These improvements to the budget process allow us to accurately evaluate projected revenues and expenditures, undertake informed analysis, and make relevant comparisons. We now have a transparent budget that facilitates good policy discussions and allows us to face future challenges with relevant knowledge, such as the expected growth in property tax revenue vs. the expected growth in employee salaries and benefits.
No more illusions. No more obstacles to discovery.
The city’s proposed Fiscal Year 2022 budget may be viewed on the city’s website at annapolis.gov.