THE OPERATING BUDGET PROCESS

The annual budget preparation cycle begins with the development of a detailed budget manual and calendar in
or around March. This contains all the pertinent information departments need to prepare their requests for the
upcoming year, and is usually adopted by Commissioners in April.

The Budget Office prepares and distributes all wage and fringe benefit costs and several other costs such as
courier service, telephone, and utilities, which must be included in the departmental budgets. Human Resources
and Management Information Services also provide information regarding classifications and automation costs,
respectively. After receipt of this information, departments project the remaining operating costs and prepare
their requests for equipment and other capital expenditures.

Submission of Departmental Budget Requests; Anticipated Concerns; Statistical Information:
All departments have several weeks to prepare the budget information and submit it to the Budget Office.
The Controller's Office contacts all previously funded community agencies to notify them of the availability
of funds. Similarly, public notice is given concerning these monies. Most county departments enter their
budget requests directly into the computer system and submit all the required information within the
allotted time.

Departments must submit with their requests a written statement of anticipated changes for the upcoming
year in the fiscal, social, or political environment which may affect the provision of services. In addition, the
departments submit projected output and workload measures called activity indicators along with the budget
request. This background information and activity indicators, along with performance measures are part of the
strategic planning process, and are used to guide the development of the Controller recommended budget
and the work priorities of County staff.

Revenue Projections and the Budgetary Forecasts for the Upcoming Fiscal Year: During April and May,
the Budget Office prepares its preliminary estimates of revenues and expenditures for the upcoming fiscal year.
The projections are based upon a variety of factors; the outcomes of the calendar year just ended; projections
of the status of state and federal grants; cash reserves and interest rate projections; general economic
indicators; wage and fringe benefit cost projections; etc.

Budget Guidelines: From March through June, the Controller and Budget Office work with the Finance
Committee on developing revenue projections for the upcoming year, as well as developing guidelines which
will govern the preparation of the budget. Development of the actual budget is driven by the Ingham County's
Strategic Plan. This process allows the County’s vision, mission, and objectives to be in the forefront, a critical
step in the process of shaping  discussions on programming and service priorities.

The resolution setting budget priorities and guidelines also establishes the proposed unallocated
amount of $300,000 for Strategic Planning Initiatives, consistent with the process listed earlier for strategic
planning. This resolution also sets directions for the development of the budget, prior to requests being made
from department heads and agencies.

Controller's Budget Hearings; Preparation of the Controller's Recommended Budget Document: The
Controller holds hearings with the department head, his or her staff, Budget Office staff and the appropriate
liaison committee chair during May. The purpose of these hearings is to obtain a better understanding of all the
issues related to the departmental budget. After these hearings, the Controller's Office and the Budget Office
work to balance the  budget for each of the liaison committees.

The amounts to set aside for capital expenditures and debt payments are determined following review of the
departmental requests and discussions with appropriate staff.

Since the budget has historically set aside an amount for use later in the process by the Finance Committee
(Discretionary Funds, now referred to as Strategic Planning Initiatives), the balancing of the Controller's
Recommended Budget usually involves some proposed reduction of certain services and/or positions within
the base levels of certain departments. 

Liaison and Finance Committee Budget Hearings: The Controller Recommended Budget is formally
reviewed by the liaison committees of the Board. They in turn hold budget hearings on each departmental
and agency budget and develop their own recommendations for additions to or restoration of service levels
from the $300,000 Strategic Planning Initiatives.  Each list of service levels, new programs, or new positions
requested, compiled by the committees during these hearings is forwarded with the committee’s
recommendation for funding. A liaison committee may add new or existing services to the  budget only
by reducing another budget under its control or by identifying additional revenue sources within the committee.

Any services not funded by the Controller or by this method are prioritized for Finance Committee funding
if further consideration is desired. In addition, the funds for strategic planning are also used as match for
leveraging grants from state, federal or other revenue sources, consistent with priorities.

These liaison committee recommendations are then reviewed by the Finance Committee in another round 
of hearings with departments and agencies where the liaison committees’ lists of recommendations for
strategic planning funding  are then reviewed, amended, and condensed into a single Finance Committee
list for recommended funding. The Finance Committee prioritizes this final list of service levels and funds the
top priorities with the $300,000 set aside at the  beginning of the process. In order to fund more services,
the Finance Committee may also choose to reduce the size of the $450,000 contingency account, or it may
increase the revenues if new information indicates this is possible.

Budget Adoption by Board of Commissioners: The complete operating and capital expenditure plan is passed
by the Finance Committee, along with a proposed General Appropriations Resolution. All are then forwarded to
the entire Board of Commissioners. After formal notice of public hearing, the budget is then adopted.