Wasilla seeks to streamline budgeting

March 11, 2005

KATE GOLDEN/Frontiersman reporter

WASILLA - Ted Leonard, finance director for the city of Wasilla, clad in a tie adorned with U.S. bills, pitched a major change of the annual budget process to the council at its annual retreat Saturday.

"In theory, as a council, it really will not take much more time to do two years," he said.

Leonard estimated that the city council, city clerk, mayor and city administrators logged a total of 1,242 hours in a six-month period during what he called a traditionally "horrendous process."

Leonard said he thought the city could save half to three-quarters of that time with a multi-year process. With the time saved, finance administrators and elected officials could spend more time on management, program evaluation and monitoring, long-term planning and other activities.

Each budget change the council initiates, he said, causes 20 to 30 pages of changes in the document itself.

There are two options for restructuring the budget process, he said. Either the city can allocate one pot of money for two years, or, using a "rolling" process, it can forge two one-year budgets at once.

Leonard favors the latter, for the sake of auditors and citizens alike.

"Auditors would go crazy trying to audit a two-year budget … They've never dealt with that," he said.

Still, it's not unforeseeable that if rolling budgeting works, the city could switch to the more radical biennial method.

Either process would require a minor supplemental document on the off years for changes due to legislative funding or other unanticipated developments. This, however, would take much less time than the entire budget, Leonard noted.

A two-year budget wouldn't be possible without financial forecasts. Recently, the city hired Northern Economics, an Anchorage-based firm, to do the calculations for 2006-2011. Leonard said that forecasting isn't just for this year, but should be a long-term part of Wasilla's financial planning. Each year after this initial five-year forecast, the city will contract a firm to plug in the numbers for the next year's update.

Council members who spoke after hearing Leonard's pitch, Diana Straub and Rob Sande, were receptive.

Mayor Dianne M. Keller said the change could improve the city's success getting outside funds.

"Investors like to see consistency," she said.

Leonard described a two-year budgeting process as a "progressive" way to do business that several states have adopted. Of Alaska municipalities, only Juneau has set such a precedent. That city adopted a rolling budgetary process eight years ago.

Craig Duncan, Juneau's finance director, estimated that by adopting two one-year budgets at once, policymakers and administrators save about half of their budget-related time. The real benefit, he said, is in planning.

"By budgeting and balancing on a two-year window, it actually forces the city to be a little bit more proactive looking out to the future," he said.

Contact Kate Golden at 352-2284 or kate.golden@frontiersman.com..