The Operating Budget for Oklahoma City

Introduction

The financial outlay for the city is available at www.okc.gov/finanacetab/. This report will use the 2014 financial plan. The priorities of the city are laid out clearly in the preamble, which is copied below:

“Our priorities are grounded in the lessons of the City’s history and the values of inclusiveness, mutual respect, and self-reliance that are the hallmarks of our future. We see our diversity as a source of strength and an important resource for our City. We will be responsive to our citizens’ needs as we address these priorities and continue to deliver what we promise. The trust of our citizens is the cornerstone value we will strive to maintain as we move forward together” (Oklahoma City, 2013, p. 3).

The preamble is set out to show the mission and objectives to provide “leadership, commitment, and resources to achieve” (Oklahoma City, 2013, p. 8) Oklahoma’s vision through the following initiatives:

Providing a clean, affordable and safe City,
Offering a good and well-managed infrastructure,
Providing a conducive environment to foster cooperation and partnerships for job creation, and
Enhancing professionalism (Roosa, 2010).

These statements make it plain what the objectives of the city are in the next five years. Indeed, it can be seen that the city has five key areas that it intents to focus on in the next five years. By doing so, the city makes the budgeting process much easier.

Offer a safe and sound community
Sustain a strong financial management
Ensure neighborhoods are thriving well
Develop an efficient transportation system that supports the city’s growth
Supporting quality education as well as better healthcare for the people (Roosa, 2010).

Further, the major department can be grouped based on the five priorities. The grouping below is based on the information provided in the proposed budget.

City Department	Offer a safe and sound community	Sustain a strong financial management	Ensuring neighborhoods are thriving	Efficient transportation system	Support for quality education and healthcare priorities
Airports
Auditor
City Clerk
City Council Office					/
City Manager		/			/
Emergency Medical Services Authority	/
Finance		/
Fire	/
General Services
Information Technology
MAPS/MAPS for Kids
Municipal Counselor
Municipal Courts
Neighborhood Services
Parks & Recreation				/	/
Personnel
Planning			/	/
Police	/
Public Information & Marketing
Public Safety Capital Projects
Public Transportation and Parking				/
Public Works				/
Transit Services
Water & Wastewater Utilities
Zoo

In order to be on course in meeting the set priorities (Barrow, 2013, Baker & English, 2011), the city adopted a Leading for Results performance Management system as the guiding strategy. The system is provided on page 19 and is as follows;

Oklahoma City’s Leading for Results Performance Management System (Oklahoma City, 2013, p. 19)

Budget Overview

Financial Summary

The consolidated budget overview for the 2013/14 financial year is provided on pages 36-69. The city planned to spend $1,027,852,482 for the current financial year (Office of Management and Budget, 2013). This amount is $48,331,831 higher than that of 2012/13 financial year. This amount would be used as follows;

	Amount	%
Personal Services	$439,478,698	42.76%
Other Services	159,890,708	15.56%
Supplies	39,628,994	3.86%
Capital	249,427,918	24.27%
Debt Service	90,280,684	8.78%
Reserve for Future Capital Costs	8,585,710	0.84%
Transfers	40,559,770	3.95%
Total Expenditures	$1,027,852,482	100.00%

For a detailed listing of the categories and sources of the city’s revenues, you can refer to page 50.

Department Budgets

The proposed budget for each department was based on several issues including

Issues affecting the given department
The strategies that the department wishes to execute to address these issues, and
The results it expects to achieve with these strategies (Baker & English, 2011).

For instance, the City Clerk Department (pp. 106-117) identified increasing cost as one of the major issues facing the department. To solve this problem, the department proposed centralization of its records as a strategic measure. In addition, each department, major budgetary changes, summary of expenditures, sources of funds and the department’s line of business were provided. Further, the city amalgamates non-departmental budgetary items that are not identified with any one department.

Funding

The funding structure for the city is provided on page 50. From this structure, it can be seen that the city’s major sources of funds are as follows;

Taxes, franchise fees, licenses and permits, service charges, fines
Revenues that are generated from internal services
Revenues that come from providing external services
Donations and debts (Office of Management and Budget, 2013)

Capital Projects

The City budgeted for a total of $277,051,018 for capital improvements. This budget is broken down as follows:

	Amount	%
Capital Improvement Projects Fund	$39,556,784	14.28%
City & Sch Cap Proj Use Tax Fund	14,728,956	5.32%
Hotel/Motel Tax Fund	8,953,142	3.23%
MAPS Operations Fund	3,577,295	1.29%
MAPS Sales Tax Fund	516,187	0.19%
MAPS 3 Sales Tax Fund	167,945,898	60.62%
MAPS 3 Use Tax Fund	21,171,970	7.64%
OKC Sports Facilities Sales Tax Fund	931,311	0.34%
OKC Sports Facilities Use Tax Fund	2,013,187	0.73%
OKC Tax Increment Financing Fund	850,000	0.31%
Police Sales Tax Fund	5,701,260	2.06%
Police/Fire Cap Equip Sales Tax Fund	5,700,325	2.06%
Storm Water Drainage Utility Fund	3,769,168	1.36%
Street & Alley Fund	1,635,535	0.59%
Total Capital Improvements	$277,051,018	100.00%

Debt Administration

Oklahoma has provided $90,270,684 to service its debts (Office of Management and Budget, 2013).
Cost Analysis

The cost analysis is done for the whole city. Doing the cost analysis for each department might be not possible for the purpose of this report. In undertaking this part, it would be critical to look at the Expenditures summary as provided on page 57.

Cost Item	Cost Type	Analysis
General Fund	Fixed	General fund went up by about 0.63% . The figure is almost stagnant.
OKC Sports Facilities Sales Tax Fund	Variable	This item went down by 100%. Sports facilities related expenditures are easy to determine.
Debt Service Fund	Mixed or Step-Fixed	There are fixed amounts that should be cleared by the city for interest expenses. In addition, the variable elements available to provide for its debts earlier than maturity date.

Budget Challenges

The greatest challenge for the city mayor and others would be dealing with the massive volume of information contained in the budget. The budget is meant to achieve the objectives set out by the leaders. Therefore, going through the voluminous information will be a herculean task for those concerned. The second challenge that the city faces is coming up with an accounting system to keep track of all the activities proposed in the budget. Designing an effective accounting system will not be easy for the budget manager since it is expected that each a detailed analysis as well as comparisons among the departments be done to determine overall performance.

Budget Recommendation

Oklahoma, as identified above, has five priorities that require urgent attention. First, I would recommend that more funds be availed to enhance development activities in the thriving neighborhoods. From the provided budget estimates, there is nothing for this priority. The second recommendation would be allocating more funds for research-related activities. This will give the city an opportunity to learn how the identified priorities can be better enhanced. Lastly, a detailed examination of the Oklahoma’s general fund expenditures should be considered in order to introduce budgetary cuts in the next 5 years. In this way, more funds will be available to finance capital projects.

References

Baker, K. H. & English, P. (2011). Capital Budgeting Valuation: Financial Analysis for Today’s Investment Projects. New York: John Wiley & Sons

Barrow, C. (2013). Practical Financial Management. London: Kogan Page.

Office of Management and Budget (US). (2013). Budget of the United States Government, Analytical Perspective, Fiscal Year 2014. Washington, DC: U.S. Government Printing Office.

Oklahoma City (2013). 2013-2014 Proposed Budget: Focused on Priorities The City of Oklahoma. Retrieved from www.okc.gov/finance/FY14%20Proposed%20Budget%20Book%20for%20Web%20Con.pdf

Roosa, S. A. (2010). Sustainable Development Handbook. London: Taylor & Francis Ltd.