Excerpt from Budget Suggestions for 1996

The Proposed Preliminary Budget Must Be Given to the Council No Later Than the First Monday in October

MRSC has been alerted to the significance of a statute that could have a major impact on the timing of your budget process. RCW 35.33.135 (and RCW 35A.33.135) states, in part, as follows:

At a time fixed by the city's ordinance or charter, not later than the first Monday in October of each year, the chief administrative officer shall provide the city's legislative body with current information on estimates of revenues from all sources as adopted in the budget for the current year, together with estimates submitted by the clerk under RCW 35.33.051 [and RCW 35A.33.050 for code cities].

How Does this Statute Fit into the Budget Calendar?

RCW 35.33.051 and RCW 35A.33.050 are the statutes that require that the clerk submit the proposed preliminary budget to the chief administrative officer (CAO), who is the mayor or manager, no later than the first business day in October. This proposed preliminary budget must include, among other things, information on last year’s revenues and expenditures for every fund, the estimated revenues and expenditures for the current year, and the proposed revenues and expenditures for the coming year.

Checking the budget calendar printed on pages 1 and 2, you can see that, in 1995, the first business day in October, the day by which the clerk must present the proposed preliminary budget to the CAO, is October 2. The first Monday in October, the day by which the CAO must present to the council estimates on current revenues and the proposed preliminary budget per RCW 35.33.135, is also October 2. If the CAO wishes to review the proposed preliminary budget before giving it to the council, the CAO will have to request that the clerk complete and submit it before October 2. Alternately, the council may require, by ordinance, that the clerk provide the proposed preliminary budget to the CAO before October 2.

What Is the Legislative History of this Statute?

Here is what we know. Prior to the enactment of the Optional Municipal Code, the budget process for all cities and towns in the state, except Seattle, was governed by chapter 35.33 RCW. Before the Optional Municipal Code was developed, the statutory budget process in chapter 35.33 RCW began in July, and cities and towns were required to adopt their budgets for the coming year and file their property tax levy requests with the counties in early October.

When the legislature established the Optional Municipal Code in 1967, it modified this budgetary time line for code cities, with the procedure beginning in September and ending at any time "prior to the beginning of the fiscal year" with the adoption of the budget. Curiously, however, the legislature nevertheless kept the October deadline in chapter 84.52 RCW for adopting the property tax levy for the next year, even after it completely reworked chapter 35.33 RCW and established for other cities a budget preparation timeline like that for code cities. The retention of the October deadline for tax levies probably explains why the legislature included RCW 35.33.135 and RCW 35A.33.135, requiring the CAO to provide the council with the revenue estimates by the first Monday in October. The council would clearly need this information to set the levy. (However, we are left to wonder why the legislature chose to put this statute where it did, rather than earlier in the chapter along with the other timing requirements.)

When the legislature amended RCW 84.52.020 and 84.52.070 in 1988 to move the property tax levy-settingand filing requirements to November, it did not alter the first Monday in October deadline in RCW 35.33.135 (and in RCW 35A.33.135), even though there was no longer a reason to maintain this deadline for property tax purposes. Did the legislature simply forget to amend RCW 35.33.135 and RCW 35A.33.135? Did the legislature consciously decide that city and town councils needed that additional time to review the budget? We do not know.

How Did this Get Overlooked for So Long?

This is a mystery. MRSC has never had any reference to RCW 35.33.135 and RCW 35A.33.135 in its budget calendar. And, the budget calendar in the BARS Manual also omits the requirements of these statutes.

Implementing the Requirements of this Statute May Change the Way Your City Does its Budget

In many cities and towns, the budget process is a collaborative one between the council, the CAO, and city staff. They often begin the process in the summer with a retreat, where the councilmembers set the goals and budget policies that they wish the CAO and city staff to consider as the budget is developed. In these cities, the council is often briefed during the budget process prior to actually receiving the preliminary budget. Cities and towns that use a collaborative process will probably have little trouble fitting the requirements of RCW 35.33.135 or RCW 35A.33.135 into their current schedule. In other cities, the CAO does not share information on the budget with the council until he or she actually presents the preliminary budget. Often this does not occur until November 1. In order to comply with the requirements of these statutes, these cities will have to make some changes in their budget processes. MRSC believes that cities can continue to follow their current practice, if the council agrees.