1 Newly Elected Township Trustees Meeting Department of Local Government Finance Dan Jones Budget...

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Newly Elected Township Trustees Meeting

Department of Local Government Finance

Dan JonesBudget Division Assistant Director

November 17, 2010

Discussion TopicsDiscussion Topics

Budget Process Budget Calendar Budget Forms, Hearings, and

Notices Budget Approval Process Property Tax Issues and Trends

Indiana Department of Local Government Finance 2

Budgeting 101Budgeting 101

Introduction to Budgeting– Financial plan that includes both

revenues and expense for specified period of time.

– Legal control on a civil taxing units authority to “spend”. The control may be in addition to limiting the amount but also the purpose (or “line item”)


Budget ProcessBudget Process

Begins in early spring – Units evaluate future spending

needs and the revenue trends Mid-summer (by June 30)

Results of first half of CY operations First half of CY property tax distribution



Using the information from the first half, the Trustee prepares the ensuing years budget– Begins with the June 30 cash figures and

adds 2nd half estimated revenues and subtracts estimated 2nd expenses to project an ending fund balance at Dec. 31.

– This balance is used to supplement next years budget



Trustee works with the other agencies in the township to estimate the appropriate expense for the incoming year

Revenues are also estimated, including property taxes and income taxes

Trustee estimates maximum levy Trustee submits budget to the township

board



Township board deliberates and possibly amends the proposed budget – Cannot exceed the advertised levels

Before adoption, the board submits the budget to the county council for a “non-binding recommendation”

After receiving the recommendation, the board adopts the budget, tax rates, and tax levies (deadline – Nov. 1)



Adopted budget is submitted to county auditor’s office, who forward to DLGF

Budget is implemented on Jan. 1 DLGF will certify budget, property tax

rates and property tax levies by Feb. 15th

Property taxes billed by Apr. 23rd with due date of May 10

Taxes distributed by June 30th


Role of the DLGFRole of the DLGF

Involved from property assessment through the certification of property tax rates

Reviews all tax-supported funds Enforces the maximum levy controls Certifies budgets, rates, and levies


Budget CalendarBudget Calendar

Deadlines for various actions– June 30 closing– Advertise budget by Sept. 2 & 9– Give to county council by Sept. 17– Sept. 20th is last day to file appeals– Adopt budgets by Nov. 1


Budget FormsBudget Forms

Form 1 – Budget (Appropriations) by Fund Form 2 – Estimated Revenues by Fund Form 3 – Notice to Taxpayers

(Advertisement) Form 4 – Certificate of Appropriations

(Signature Form) Form 4b – 16-Line Statement Form 5 – Budget Submission Letter



Forms are prescribed by DLGF Available online

www.in.gov/dlgf/4952.htm Minor changes from year to year All forms are available to the public Only Form 3 is to be advertised



Budget Form 3 – Advertisement– Form has language in the heading and

footing that is to be included– Describes the process for taxpayers to

object to a budget, rate, or a levy– Includes a column for excessive levy

appeals– Advertises public hearing and the adoption

date



Budget Form 4b– 16-Line Statement– Form is a cash flow statement covering

the entire 18-month long budget cycle– Form prepared for each fund– Provides proof the budget is “funded”– Calculates an ending fund balance– Calculates a property tax rate


Public HearingsPublic Hearings

Opportunity for the public to express opinions on budget, tax rates, and tax levies

Notice (advertisement) of the public hearing must be at least ten (10) and three (3) days before the public hearing

Both advertisements must be published before Sept. 10


Public NoticePublic Notice

Failure to comply with requirements will result in denial of budgets.

Denial will freeze the appropriations and property tax levy at the previous years levels


Budget Recommendation Budget Recommendation and Approval Processand Approval Process

Non-Binding Review– Before budgets are adopted by the

township boards, they must be submitted to the county council

– Council will review budget and issue a “non-binding” recommendation

– Budget is returned to township where they may incorporate recommendations into budget before adoption

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Adoption– Township board will adopt the

budget by fund in a public meeting on the advertised date

– Adoption must be by Nov. 1– Board must have a quorum– Adoption is by a simple majority

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– After adoption, budget is forwarded to county auditor within three days

– Auditor provides copies for the DLGF– DLGF review the budgets and applies the

most recent information regarding revenues and assessed values to formulate the budget, rates, and levies.

– DLGF schedules a public hearing to hear public comment on each budget in the county.



– DLGF issues a “1782 Notice” to each civil taxing unit in the county.

– This notice indicates all changes by the DLGF to any part of the budget

– The “1782” is for all property tax supported funds

– Unit must respond to the DLGF within 10 days



– After the “1782 Notice” period expires, the DLGF certifies the budgets, tax rates and tax levies for each unit and each fund in the county

– DLGF provides the county auditor with certified tax rates so they can calculate and prepare property tax bills

– Tax rates are advertised three (3) times by the county


Property Tax RatesProperty Tax Rates

Ratio between Assessed Value (AV) of property and the property tax levy.

Expressed per $100 of AV Formula:

Tax Rate=Tax Levy/(AV/100)


Property Tax LevyProperty Tax Levy

Amount of revenue a civil taxing unit charges property owners

Amount that may be charged is limited to the amount charged last year plus a growth factor– “Controls” do not apply to debt service– Few exceptions to levy “controls”– “Controls” are called “maximum levy”


Township FundsTownship Funds

Townships have a fund structure similar to other forms of governments:– Operating (Levy controlled)

General Township Assistance Fire (Controlled

separately)

– Capital (Rate controlled)– Debt (Not controlled)


Budget Amendments and Budget Amendments and ModificationsModifications

Budget Amendments– Certified budgets can be increased by the

township board with approval of a resolution and the proper public notice

– Requires ten and three day notice – Subject to available funding– Must be filed with DLGF for approval– Process also applies to reductions


Fire and Emergency Medical Fire and Emergency Medical ServicesServices

Funding Emergency Medical Services– Generally accepted that this is function of the

(township) fire department and is budgeted as a part of the fire department

Combined (or Consolidated) Dispatch– Trend is to consolidate at the county level

Fire District and Fire Territories– Creating a district or territory gives units an

opportunity to consolidate for greater efficiency


Circuit Breaker CreditsCircuit Breaker Credits

• Limit the amount of property taxes that can be charged at a percentage of the property’s gross assessed value

• The caps provide a dual benefit to all taxpayers• Predictability and protection• A credit on the property tax bill of a

taxpayer that is charged above the cap


Local Option Income Local Option Income TaxesTaxes

Legacy– Three (3) Types: COIT, CEDIT, CAGIT

New– Levy Freeze– Property Tax Relief– Public Safety

Adopted by either the county council or the county income tax council


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Gateway: Online Budget Program

Development of online portal– 3 budget forms

Form 1, Form 2, Form 4B– Automatic load for reporting utilities

Piloted in 7 counties (178 units) Will be live for 2012 budget cycle

Annual report to SBoA to be filed electronically

303030

General Reassessment

Began July 1, 2010 Affects 2012-pay-2013 property tax

bills Schedule:

– December 1, 2010: ¼ parcels done– May 1, 2011: ½ parcels done– October 1, 2011: ¾ parcels done– March 1, 2012 – all parcels done

On-Time billing priority


DLGF Resources

New Officials Packet - www.in.gov/dlgf/8813.htm

Memos - www.in.gov/dlgf/2444.htm – Additional Appropriation Memo– Cumulative Fund Memo– Budget Calendar Memo– Fire District and Territory Memo

Team members - www.in.gov/dlgf/2338.htm Listservs - www.in.gov/dlgf/7063.htm


For More InformationFor More Information

Dan Jones, Assistant Budget Division Director– Telephone: 317-232-0651– Email: [email protected]

Contact the DLGF– 317.232.3777– “Contact Us”: www.in.gov/dlgf/2338.htm

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