Budget
Budget Description
Each year the Mayor is required by the Town Charter to submit a budget to the Town Council for the up-coming fiscal year. The Council must adopt the budget as an ordinance. The adopted budget authorizes the Mayor to spend Town funds up to established amounts in the various accounts described below. This procedure is called appropriation. The Mayor may not authorize expenditures that exceed appropriated amounts in any account nor spend funds for any purpose lacking an appropriation. Current and past budgets are post on the Garrett Park web site.
There are essentially three parts to the annual budget:
Annual Operating Budget
This part of the budget sets anticipated revenues and establishes the amounts to be spent on operations and routine maintenance for a fiscal year. At the end of that fiscal year this budget “dies” and all spending authority it has granted ceases. On July 1st of each year a new budget takes over, establishing new spending authority. It is the annual operating budget that covers such revenues as local property taxes, income taxes, rents and fees received, etc.; and expenditures such as salaries, equipment operating and maintenance costs, minor repairs to buildings, roads, and sidewalks, and contracted services such as trash and leaf collection.
Debt Service
From time to time, the Town may borrow funds for large capital expenditures. Debt principal and interest are paid on an agreed-to schedule, extending over up to twenty years. While debt service is an annual appropriation, because it represents a multi-year contractual commitment by the Town, it is not considered to be the same as an annual operating expense in that it is not voluntary and, similar to a capital expenditure, it increases the Town’s net asset value
Capital Budget & Capital Program
In each annual budget there is an appropriation for capital expenditures. This spending authority is defined in a Capital Program that is adopted by the Council. Capital appropriations do not “die” at the end of the year, but continue until expended, or until they are changed by Council action. The reason for this is, of course, the multi-year nature of many capital programs. Also, capital expenditures typically increase the net asset value of the Town over an extended period of time.
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