Behind the Springs Podcast: Budget's Big Game

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It’s budget season and that impacts YOU! Find out about the priorities included in the 2020 budget from our Chief Financial Officer Charae McDaniel. She shares the most challenging part of her job and how you can get involved in the budget process. You don’t even have to love numbers to enjoy this episode!

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Intro: (00:00)
Behind the Springs, an inside look at your local government. As I said, we need to take the ball by the horns. Colorado Springs, nearly 500,000 people, Olympic city, USA, garden of the gods, Pikes peak. It's a growing city. Our local government has a lot of employees. What exactly do they do? How does it impact my life? This is where you find out behind the Springs and inside. Look at your local government.

Jen: (00:34)
The city of Colorado Springs has a budget of more than $300 million.

Ted: (00:39)
You may have a general idea of what that money pays for.

Jen: (00:43)
or you may not.

Ted: (00:44)
Either way, we're pretty sure you can learn something new about how our financial decisions are made and how they impact you every day.

Jen: (00:51)
We're so happy to have our chief [inaudible] financial officer here. Charae McDaniel. Thank you for joining us so much.

Charae: (00:57)
Thank you for having me.

Jen: (00:58)
Yeah. We're excited to learn about the budget process because even though I think people go, Oh, budget, I don't know if that's very exciting. It matters so much to people. Right. In their everyday lives.

Charae: (01:10)
Yeah. It really impacts how we run our operations here at the city, each and every department.

Jen: (01:14)
Absolutely. So tell us a little bit about yourself and your background. Are you, um, did you grow up here in Colorado Springs? Where do you come from? How do you get to be chief financial officer for the city?

Charae: (01:26)
Sure. I am a native of Colorado Springs,

Jen: (01:29)
uh, clap for that, clap for that.

Ted: (01:31)
Well we'll give a clap later when we don't have other technical things going on.

Charae: (01:38)
I was born and raised here. And I went to school for uh, under my undergrad as an economics and my graduate degree is in public administration with an emphasis in finance. So I am one of those weird people who is doing exactly what I went to school to do. So, um, I started working at the city as an intern for my graduate program actually. And from there ended up getting hired on in the budget office. And so have worked in the budget office for most of my 24 year career. Wow. And in the last two years was then hired into the role of chief financial officer.

Jen: (02:16)
So literally worked your way up, which is awesome. So you've seen it from every, I would think that would make you kind of a unique manager in that sense that you've worked in every level of your act, your own department.

Charae: (02:27)
Yes. I started out as an analyst and then went to budget lead and then budget manager and then moved into chief financial officer. So yeah, I've really been here a long time and seeing the city change and grow and um, and at all the levels in finance.

Jen: (02:42)
That's awesome.

Ted: (02:42)
Well, it's nice to see, you know, we work for the city too, so it's always nice to see when there's promotions from within as well. And one of the questions that we do have because we're trying to be a fun podcast for the government. So you said you were one of the lucky people, you're doing exactly what you went to school to do. What's fun in the finance department? Are you guys having fun?

Jen: (03:04)
You get a bad rap?

Ted: (03:05)
Yeah. How is, how is handling budget fun exploring that.

Charae: (03:08)

Jen: (03:10)
Do you get that all the time from people like, Oh my goodness,

Charae: (03:13)
whenever i start talking about it then their eyes just kind of glaze over and start to let go half mass. And I'm like, okay wait, I'll just stop talking about. Um, no, we do really have, um, a lot of fun. We have really, really great people in the finance department and in the budget office we have a crew of five and so it's a small but mighty crew over there and they do very hard work and all through the year we're working on budget. So, um, we do have a lot of fun. We spend a lot of time together. So yeah, we try to keep it lighthearted.

Jen: (03:45)
and it really is amazing that you only have a crew of five because talk about how big the budget is and how many departments you serve.

Charae: (03:53)
We have probably, I dunno, 40 or 50 divisions in the city. And so the budget typically is budgeted down to that division level. And so we have to keep track of all of those divisions. And of course if there's a compensation package, we, you know, divide that out into all the different divisions that need it so that we can have that going forward into next year. So it is a lot of work and it's a lot of details, but, um, they do a great job of, uh, putting it all together and getting it in a budget document.

Jen: (04:23)
And it's harder than people think, um, to S to sit there and I guess, how do I phrase this? Ted? People have strong opinions about the budget.

Ted: (04:33)
One of the things we hear about how the city money, so.

Jen: (04:36)
how the city should be spending their money, correct? Yes.

Charae: (04:40)
And we're very, very aware of that. It is the taxpayers funding our organization and we have a really big responsibility to the taxpayers to be spending their money wisely, um, and to the highest use, the most important prioritize to use. And so really that's what we do through the budget process. When we sit down and look at how much revenue do we have, so how much spending can we have and sit down with the mayor and his executive staff and talk about, okay, what are the highest priorities as we move into the next year so that we make sure we're funding those highest things.

Ted: (05:13)
For people that don't know moving into 2020, um, we'll just use that year as an example. What is the overall amount of money that we're looking at for a city our size and the budget that we're looking at for 2020? What's that, that main number to give people?

Charae: (05:29)
Well our all funds total, which is what we talk about a lot when I'm, our total budget is over $600 million. That includes the general fund, which we often talk a lot about cause that funds your very traditional governmental services, police, fire, um, communications, finance, very important to us. And then it also has the special funds, for example, the two C road tax, which is over $50 million a year in and of itself. And then also things like, um, the public safety sales tax fund, the tops parks fund. So all of those add into that total also.

Jen: (06:07)
Okay. And what would you say to let people know about what the priorities are at this point for the city in terms of spending?

Charae: (06:12)
Sure. We've had, um, over the last couple of years, the mayor and the council have as one of their highest priorities to add 120 police officers over, uh, by the end of 2020. And so we are on track to do that. It's very exciting. We've been able to add 20 officers over the last couple of years and we'll be adding, um, another 20 in 2020 and also to add 32 fire fighters over the five, same five year period. And we're on track to do that again also. So that is, um, extremely important and also to be paying them competitively and fairly. So, uh, the adding of the public safety positions. Also keeping the compensation at a competitive level, especially for that sworn personnel so that we can retain the ones we have and attract new employees.

Jen: (07:04)
And besides public safety, what comes next would you say? Infrastructure? Uh, we do have a lot of infrastructure needs. We have been trying to fund at a higher level our fleet and equipment replacement for the city and we have over the past couple of years been adding $1 million to that fleet replacement strategy going forward into 2020. We did have to um, moderate that a little bit. We're going to add half a million dollars. And then also, um, yes, the equipment and facility maintenance is extremely important and those capital projects, those big capital projects that we have

Ted: (07:40)
so that people can maybe visualize this, you just hit on public safety as our biggest portion of the pie. So cut it into a pie for people. Um, I know that you're very right down to the decimal point normally with numbers, but just give us the very general, um, percentage that we see. Cause I think a lot of people don't realize what is it almost like 50% of the budgets going to public safety. And then it's the, the rest of the pie from there. So if you could break down kind of those big chunks of the pie for people, um, and give us those percentages.

Charae: (08:11)
Okay. You're putting me on the spot.

Ted: (08:13)
Well, very, very general. Yeah.

Charae: (08:15)
Yeah. Going into 2020, and if we just look at the general fund a, which is one that we have the most control or the most discretion, right between police and fire and we'll add OEM in there. So to call those emergency, uh, kind of public safety services that accounts for probably a 65 or so percent of both the number of people and the dollars,

Jen: (08:40)
which let's take a moment and I'll admit that. Let's admit that most folks don't realize,

Ted: (08:45)
no, and I didn't even realize that coming over to the city or working in news prior, um, that, that amount of money. But I think in most people would probably agree the number one thing that your local governments should be doing is keeping you safe. So, uh, so that's why that's such a big number. What are, what are some of those other, uh, big numbers?

Charae: (09:02)
Well when we look at an all funds total, um, parks has pretty large all funds total. And one of the things that we do in the budget office parks has the most funding sources. So for example, when we, uh, try to look at, you know, maybe redoing the format of a narrative or, or looking at how we're going to display information, we always use the parks operations and maintenance budget because they have an incredible number of funding sources that go into their budget. So they have general fund money, conservation trust, money tops, money. They have special improvement maintenance district monies. They have gift trust money, all of those different funds. So they're like a model. Yes. And it's complicated. So they have to manage a lot of different funding sources. So they on an all funds basis are also one of the bigger, um, departments of the city. And then of course, you know, public works, so they do a massive amount of work in public works and between traffic and operations and maintenance and city engineering, building all the projects. And so they have also, um, one of the larger pieces of the pie. Okay.

Ted: (10:15)
And then while, uh, while the all fund is that w is that what it's called? All funds is over 600 million. Um, I think most people think about general fund, the here general fund, that's a much more digestible uh, term and people know no where that's coming from. What's the general fund looking like for 2020?

Charae: (10:34)
That's going to be over 300 million, about $330 million coming into the 2020.

Ted: (10:41)
It's been that way for a, for few years now. Right. So, uh, the revenues have been looking good for, for the city as uh, Colorado Springs continues to grow. I think we're going to take a quick break here and when we come back I want to talk about now this is very exciting what the Superbowl is for the budget and finance department.

Charae: (11:00)
Yes, we do have a Superbowl.

Ted: (11:01)
We're about to hit it so we'll be right back.

Break: (11:04)
Thanks for listening to behind the Springs an inside look at your local government. If you're enjoying the show, please rate like and subscribe to this podcast. Did you do it yet? Come on. You know you want to never miss an episode now, back to Jen and Ted. Just kidding. Still me. Did you do it yet? Just click the little button. Want to know a secret Ted and Jen's lives depend on it. Grab your phone and just do it unless you're driving. Then wait. Okay, last thing. Seriously. Just rate like and subscribe.

Commercial: (11:35)
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Jen: (11:48)
All right, we have [inaudible]. Yeah, sure. Ray McDaniel here and she is talking about budget finance and all the important numbers that make the city run. We appreciate you giving us the low down on all this cause I think a lot of people have a general idea, but they don't really know the specifics.

Ted: (12:02)
Even us, we don't know this.

Jen: (12:03)
I would say especially us. Yeah, we're not really number folks, are we?

Ted: (12:09)
No, no. Actually, you know, at one point I was going to college to get into business and, uh, for some reason I changed to journalism, which was probably the worst decision of my life.

Jen: (12:18)

Ted: (12:20)
Uh, but I remember getting into accounting and I used to be really good at math in high school. It was one of my strong suits. Getting into accounting, everything is just turned backwards from what you learned in normal math. And uh, and it kind of scared me. That was a big reason why I jumped over to this.

Jen: (12:35)
Usually the point where you either go, okay, I'm in or I'm out. Yeah, yes.

Ted: (12:40)
Well, and they weeded me right out. But here I am.

Jen: (12:44)
You're lucky. You're glad that you're here where you're using your other skillset. ted yes. And only one I have. We're lucky that Charae is with us because you do a great job and you have a great team. And I'm speaking of your team, we want to talk about what your super bowl, I mean regular Superbowl February, super bowl for finance,

Ted: (13:03)
Even if you are abaseball fan, October playoff time, world series coming up here. But, uh, the real world series, the real Superbowl like you were saying is October for the finance department. So, uh, so explain everything that happens in October from that first Monday, uh, right on through.

Charae: (13:22)
Great. So we have a very big deadline. Our biggest deadline of the year and the budget office is when we transmit the mayor's budget to city council and that occurs on the first Monday of October. And so, um, for this year, that happens on October 7th. So that's what we are just uh, trying to get across the finish line for that. We print a document that is over 500 pages and so we have to have that entire, all the numbers, right? All the narratives, right. Put together, printed in a binder and transmitted to city council on the first Monday.

Jen: (13:57)
So that comes from mayor Suthers to city council. And then what can you talk about what city council's role is?

Charae: (14:02)
Sure. So that budget that we transmit is the mayor's recommended budget. We then that's officially handing over that document to be in city council's hands now. And so what we do then is we bring in the departments to have a budget work session with city council so that the department directors can brief the city council on the changes that they have going into 2020, which is an all day gauntlet. It is an all day gauntlet. And they can ask questions, ask questions, and uh, you know, walk through all the changes, any additional information they have, why they, you know, may have funded, moved money to fund a certain item in their budget. And then from there we have our public input meetings, uh, and we have a formal public input meeting that's required by charter. And so we have that and citizens can give us their input and they can email and come to the meeting and talk or a Facebook post or however any type of input.

Jen: (15:00)
and citizen to do.

Charae: (15:01)
Yes, absolutely. Citizens do. And we take all of that. And that is input for city council so that they can hear from constituents about what is important to them. And if something, if I want something else funded in the budget, something more, something less. That's the citizens way of providing that input to city council. And then what we do with city council is sit down and have what we call the markup session. And that is city councils opportunity to make any modifications to the budget that they would like to see. And typically what we do is if they want to, for example, add a add a line item or a program, then they also have to figure out where that money is coming from.

Jen: (15:42)
Just like at home.

Charae: (15:43)
Just like at home. So you have to have a net zero impact to the bottom line. So it's really a responsibility if they're gonna be adding something, they have to really figure out, okay, how are they going to fund that? And then what we do from there is we take that input that they provided and they have to have a consensus on making any of those changes. So then we take that and that becomes part of our budget ordinance that then city council passes to adopt and appropriate the money for 2020

Ted: (16:11)
and usually when, when does that ordinance get voted on?

Charae: (16:15)
That generally gets voted on the T it takes two votes and that occurs in November. So then we have a finalized a 2020 budget by the end of November of the prior year.

Ted: (16:25)
And um, you know, I worked for council, but obviously I don't see too many of the decisions going on all the time with the, with the budget. But talk about these past few years under mayor Suthers, um, it's gotta be kinda easy for you once, once you guys get that 500 page document printed. But it seems like council and mayor have been working well together.

Jen: (16:47)
That's what I was going to say. People might wonder if counsel has a real problem with something can may or come back and, you know, can they go, can there be that back and forth? And how does that go?

Charae: (16:55)
Well as you all know, one of the main things, uh, that was on mayor Suthers mind when he got elected to be mayor was the mayor council relationship. And he has really done a lot to make that a very cohesive, uh, back and forth type of relationship and it has positively impacted the budget process enormously. And so we are keeping council up to date on what our priorities are as we move through each budget process. And we even sit down with the budget committee, the city council budget committee prior to finalizing all of the numbers on the mayor side, just to brief them on the big things that are included, what isn't included, what the priorities were as we move through. So we get their input even before we finalize the numbers on the mayor side, we are already talking with city council on what they want to see what's important to them so that we can be collaborative and have that in there for them. And so then when we move through the budget process, it has been very, a lot easier with this city council and mayor and it's much more smooth and to the point where last year and I, you know, I don't want to jinx anything but last year, um, the process went so well and we communicated with the council, um, between administrative side and the counsel side well enough that city council did not have any changes to the mayor's budget. And that was the first time in my entire career that that's ever happened. So that was amazing. And it's all due to that relationship that has been fostered between the mayor and city council and.

Jen: (18:33)
kudos to all of them. That's great. And your office.

Ted: (18:37)
It shows your department is doing great work as well.

Jen: (18:39)
Yeah. That's great. See what happens when we all try to get along.

Ted: (18:42)
We work together. And I guess my next question now that we've gone through that time frame is end of November there early December. Do you guys all just leave and go to a warm beach somewhere?

Charae: (18:53)
Shut down. That's it.

Ted : (18:57)
Or is it just ramping up for 2021?

Charae: (19:01)
Well we do have, um, typically we'll have some modifications even if it's from the administrative side of updating a number here or there or making some modification, uh, to some numbers or to some narratives. So then what we started doing is, um, start printing the F what we call final budget, which includes, um, the mayor's suggestions and any changes by the city council. And so then we put that document together and re print the entire thing again. So that's a much easier process obviously because we're just updating and making any modifications to that. And so we try to have that out. Um, you know, sometime near the beginning of the year we do have a little bit of a like, ah, yeah, take a little breather there. Um, because September is just crazy trying to get that first document out. So, um, and then we try to catch up on all the stuff that we set aside while we were putting the budget document together, uh, at the first part of the year. And then we start planning for the next year around March.

Jen: (20:02)
because throughout the year you're helping all these departments manage their budgets and you know, make good decisions and purchases and so forth. So that's really critical also.

Charae: (20:11)
Yup. And we're tracking revenue and how's that coming in? Is that on budget and how are the expenditures looking? Are they on budget and do we need to make any changes in course at all or are we doing good? So that's what we're doing for.

Ted: (20:23)
What do you think the biggest challenge is? Do you think it is, you were just saying kind of looking at what the revenue is coming in, is it forecasting what's going to happen a year in advance and where each department should end up?

Charae: (20:36)
The really, the thing that is really the hardest part of the job is that there are not enough resources for all of the things that we want do and need to do as a city. And so really, um, the revenue forecasting, you know, it, it is hard. And the only thing when you put together a revenue forecast, the only thing you know for sure is it's not going to be right. So it's just a matter of like, how close can you get? And so, um, but it's really hard because the departments bring forward items that really do need done. They are important. All of the departments have things that they need and want to do to be more efficient or do business better. And we just don't have the resources to fund all of those very important needs. Those decisions, it's really hard. And to see things come forward that, you know, are good programs, you know, they need the money and it just can't get done because we don't have enough resources to do it.

Jen: (21:39)
So we do a lot with very little here.

Charae: (21:42)
We are very efficient and people really stretch every penny and uh, the departments are, are good at that. They know, you know exactly how to spend and, and do a really good job of being responsible with the money.

Ted : (21:55)
As I've said before in the show, we try to be good stewards of taxpayer money and we've had different departments on that talk about their expenditures and whatnot.

Jen: (22:04)
and stretch that money with their help with the budget.

Ted: (22:06)
Exactly. Yeah. You guys are the ones that really lay the, uh, the, the road for us. Thank you for that, for the education on the process. I think that's really valuable for people. We appreciate it.

Jen: (22:17)
And we thank you all for listening. We hope you learned a little something about the budget, whether you're really good at math, like Shaarei or not good at all. Like Ted in between like me,

Ted: (22:26)
just the accounting side was not good. Sorry I was a calculus freak at one point.

Jen: (22:32)
So very good Ted.

Ted: (22:33)
But also before we jump off, I just want to tell people they can find the budget online. Um, do we know what the exact.

Jen: (22:40)
Is it Colorado Springs dot gov slash budget?

Charae: (22:42)

Ted: (22:42)
Yeah. I think it's nice and easy like that. And then also very cool tool to, uh, to, to Pat communications on the back, the open budget tool that's also on the webpage as well. So you can go on and that's updated every month,

Charae: (22:55)

Ted: (22:55)
Yes. So every month you can go and see exactly what's being spent. Um, and, and you know, if you're, if you're an accounting nerd yourself, you go on there and, and, and see exactly how the city's doing.

Jen: (23:07)
And even if you're not, there are very simple pie charts.

Ted: (23:10)
Oh yea, For even for a guy that like, doesn't, it doesn't do accounting very well, um,

Jen: (23:14)
You can get as in depth as you want, or it's as basic as you want, which is really nice. Yeah.

ted: (23:18)
Yeah. So, uh, open budget, open budget. We'll see on the next episode of behind the Springs.

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