The Case for a Biennial Budget

Yesterday, Holly, who works in the City Manager’s Office, put pressure on me by complimenting my recent columns. She thought that maybe my writing or thinking is getting better as I get closer to retirement. My response is to write a really boring essay on budgeting just to let people know that I haven’t forgotten how to be a bureaucrat.

We are currently in the process of reviewing departmental budgets in preparation for annual Budget Committee meetings coming up in late April and early May. As many of you know, we spend a great deal of time estimating upcoming needs, completing appropriate forms, and explaining requests at all levels of the organization. The process usually starts in October or November with a review of the Strategic Plan and ends in June when the budget is adopted by the City Council. I strongly believe in the need for transparent and effective budgeting, but I also believe there is a better way to do it.

Albany should consider moving to a biennial budget process. Biennial is an ambiguous word; so to make it clear, I mean we should only go through the budgeting process once every two years. Oregon law allows local governments to follow the State’s example in doing a biennial budget, and a number of jurisdictions do so. Benton County has been on a biennial budget for a number of years, apparently without any noticeable negative effects. I know of several cities that also budget every two years.

The primary benefit of the biennial process is the savings throughout the organization of only having to spend half as much time on a very labor-intensive exercise. Most revenues and expenditures do not vary widely from year to year, and making changes to either an annual or biennial budget is not particularly difficult or time-consuming. City councils have great authority to respond to changing circumstances when needed, so a biennial budget allows for significant savings with very little risk.

I believe all the benefits of an annual budget can be found in a biennial process. The exercise begins with an estimate of revenues that are seldom volatile. Even in the worst days of the Great Recession, we knew roughly what the effects would be and how they would affect us at least two years in advance. My budget message from 2007 specifically noted a likely decrease in revenue in the future and called for an increase in reserves to help cope with the change. Biennial budgets do not change accounting procedures, and we would still be required to conduct an annual audit.

A couple of years ago, a former City Councilor suggested that the greatest gift I could leave the City would be an improvement to the budget process. He wasn’t referring to a biennial budget, but that’s my opinion of a very valuable change I could help make before I go. I will present the concept to the Budget Committee and Council again this year and advocate for the change beginning with next year’s budget.