Part I: The Operating Budget for the City of Raleigh
PAD505
April 27, 2016

Introduction
The city government in Raleigh North Carolina is made up of a number of different departments. These include the Budget and Management Services, City Clerk, City Manager, Development Services, Finance, Fire, Hosing and Neighborhoods, Parks, Recreation and Cultural Resources, Public Affairs, and others that help maintain the city and surrounding areas throughout the year. With all of these departments you will see a multitude of goals and missions. However, by taking a look at the city council of the city it is clear to see that sustainability is a huge goal for the city. In December 2009 the city council reaffirmed its mission statement to include sustainability. “We are a 21st Century city of innovation focusing on environmental, cultural, and economic sustainability, we welcome growth and diversity through policies and programs that will protect, presser and enhance Raleigh’s existing neighborhoods, natural amenities, rich history, and cultural and human resources for future generations.” (Raleigh's Commitment,) The goal of the city is to be able to work with the universities, colleges, citizens and regional partners to promote emerging technologies, create new jobs and cultivate local businesses and entrepreneurs. These goals can be seen when looking at things like the large Research Triangle Park that provides numerous jobs, and learning opportunities for residents. To obtain all of these goals the city council adopted a new strategic plan in April 2015. This new plan established six key areas that reflect the current and future identity of the city. The six key focus areas include: Arts & Cultural Resources, Economic Development & Innovation, Growth & Natural Resources, Organizational Excellence, Safe, Vibrant & Healthy Community, and Transportation & Transit. All of these areas along with the strategic plan itself is aimed to provide long-range guidance for growth and development of the city. (City of Raleigh,)

Budget Overview
Being able to obtain the goals that have been set clearly defining the funding each department will receive is extremely important. Taking a look at the budget for Fiscal year 2015-2016 there was an increase of 10.5% for both revenue and expenditures from the 2014-2015 budget. The $833,627,661 in revenue for the year come from property tax, water & sewer charges, interest, fees & miscellaneous, sales tax, intergovernmental (less grants), debt and fund balance reserves, federal and state grants. With any revenue there is always expenditures to balance out the revenue. The city of Raleigh will see the following expenditures in FY2015-2016: public safety, capital debt service, public utilities, capital improvements, leisure services, public works & public transit, general government & external agencies, solid waste services, planning & neighborhoods, information technology, financial management.
On top of the overall city budget, each department has its own budget as well. This can complicate things a bit when you are now talking about having to maintain 18 or more different department budgets. Being able to determine which department needs more funding than others is going to be a huge part of making sure the city has an effective budget. By looking at the budget included you can see that the police and public utilities departments take the largest amount of the budget, followed closely by the fire department, and then parks and recreation. Although other departments like human resources, Finance, and City Planning don’t take up as much of the yearly budget it is important to make sure they are getting sufficient funding as well.
They city of Raleigh receives several different grants on an annual basis. The budget for FY16 will be the first year these grants are adopted into the city budget. In previous years they were adopted into the budget throughout the year as they were received, and not included at the beginning of the year. These grants include departmental specific grants, city agency grants, art agency grants, human service agency grants, community enhancement grants, and other outside agency grants as well. These grants help supplement the revenue that is received to make sure each department is able to have sufficient funding for the fiscal year.
They city has many different capital projects going on as well. These must be taken into consideration when allocating funds for the budget. Each project takes a significant amount of funding, which will be taken from the overall budget as well. These expenditures include: Technology fund, the capital projects fund, sidewalk fund, street improvement fund, street facility fees fund, park facility fees fund, park improvement fund, Walnut Creek AMPH. Capital fund for a total of $36,458,813 in expenses. There are other expenses to consider as well, we will not go into great detail here, but things like bond funds, enterprise funds, and internal service funds have to be allocated as well.
The city continues to construct, upgrade and maintain a long-term debt program. They manage the debt over a 10 year Capital Improvement Program (CIP) in order to have the opportunity to structure debt events well in advance for specific needs. This means that specific revenue sources are identified. This is to help avoid spontaneous funding of debt, and provide a much smoother channeling of funds to debt.
Cost Analysis
Costs are resources used to operate a program or organization (Chen, 2008). When it comes to a city budget these costs include things like wages, upkeep, and any special things that come along the way. In order to be prepared for those unexpected things doing a cost analysis to see what costs you have. Below you will find a list of the fixed costs, step-fixed costs and variable costs for the FY2016. Fixed costs | | Administrative Charges | 2230000 | Operating Expenses | 192134176 | Total | 194364176 | | | Step-Fixed Costs | | Personnel | 225127789 | Employee Benefits | 75577980 | Capital Equipment | 2674127 | Total | 303379896 | | | Variable Costs | | Capital Projects | 9796045 | Special Programs | 28093302 | Employee Claims | 34690000 | Total | 72579347 |

Budget Challenges
Any time money is involved there are going to be challenges faced. Managing a budget comes with some big responsibility, and challenges are bound to pop up along the way. One challenge will be the fact that we have to constantly be prepared for the unexpected. This can be things as big as the recession we saw back in 2009, or small like losing revenue in one park. When you have a state that relies highly on revenue from parks for the tourism it draws a simple fire, or wind storm can close down the parks, and decrease the revenue that is brought in. Another challenge that will be faced is the ever growing population of the city. If you look at the population between 2001 and 2014 there was a 49% increase. Though the rate of growth has slowed from a huge leap from 2000-2010 of just above 46% to a smaller increase of 8.9% between 2010 and 2014, there is still a steady increase year after year. On one hand this could be good as it can bring in more revenue for you, but also creates strain on the budget in many ways. The road ways can need more upkeep as there are more cars traveling on them day after day, as well as seeing an increased need for police and other public safety options to protect the growing community. This type of things was actually seen on the current budget as there was an addition of 8 new police officer positons added to the pay roll.
Budget Recommendations
When it comes to new initiatives and budget cuts there has to be a strategy behind the decisions that are made. One strategy I recommend for the city of Raleigh is to use programmatic cuts in order to reduce programs according to their importance or efficiency. (Kash,) This will go hand in hand with forecasting over the next five years. You can use the previous year’s budget to see what programs really need more funding than others, and cut where it is appropriate. Although it is not fool proof forecasting will allow for an educated estimate of what needs to be done in the future. There are also other ways to help reduce spending without cutting funding to departments and programs. I recommend providing employee incentives for saving money. By providing them incentives you will need to budget for those, but the small amount you will see for incentives will be negligible compared to the amount of money you will save each year if employees are conscious of what they are spending.

References:
Chen, G. G., Forsythe, D. W., Weikart, L. A., & Williams, D. W. (2008). Budget tools: Financial methods in the public sector. Washington, D.C.: CQ Press.
City of Raleigh Strategic Plan. (n.d.). Retrieved April 25, 2016, from http://www.raleighnc.gov/government/content/BudgetManagement/Articles/StrategicPlan.html
City of Raleigh Salaries :: WRAL.com. (2007). Retrieved April 26, 2016, from http://www.wral.com/news/public_records/page/1281175/
Kash, W. (n.d.). Eight Strategies For Cutting Agency Budgets – To Be Used With Care. Retrieved April 26, 2016, from http://breakinggov.com/2011/09/27/eight-strategies-for-cutting-agency-budgets-to-be-used-with-ca/
Raleigh's Commitment to Sustainability. (n.d.). Retrieved April 25, 2016, from https://www.raleighnc.gov/environment/content/AdminServSustain/Articles/SustainabilityPhilosophy.html
Raleigh Demographics. (n.d.). Retrieved April 25, 2016, from https://www.raleighnc.gov/government/content/PlanDev/Articles/LongRange/RaleighDemographics.html

Click below to see the current budget for the City of Raleigh North Carolina