The City of Orinda plans to become more efficient by switching to a two-year budget cycle beginning next year. City Council Member, Victoria Smith, took some time to answer some questions with

Explain the fundamental differences and improvements that go along with a two-year budget cycle?

In my view, Orinda is switching from a one-year to a two-year budget cycle in order to have a more forward looking budget.  Although predictions a year-plus out are more difficult to make, it is important to us – especially in this economy – to try and determine what our revenues and our expenditures will be for a longer period of time.

Is that the primary reason the city has decided to switch to a the new budget cycle?

We want to be able to better plan ahead.  For example, labor contracts frequently extend over multiple years, and therefore being able to better predict the city’s revenue – to attempt really to forecast the projected change in our real property tax revenue, which is Orinda’s single largest source of revenue – will help us to understand the funds available for employee compensation, fixing our roads, improving our Web site and other communications with citizens, etc.

Do you expect this process to save you money?

Yes, over the long run there will be some savings in staff time, as staff will spend less time in the second year of the cycle in refining the budget.

What are the possible pitfalls that come with the switch?

We need to be sure that we dedicate sufficient staff time in the coming three months to make the new two-year budget accurate; three months is not a lot of time to ramp up from the preparation of a one-year to a two-year budget.

What literal costs come with the switch?

About $10,000 in additional staff time will be spent in 2009 to make the switch.

Where and when was the idea generated?

The City’s Finance Advisory Committee recommended it to the Council at the Committee’s March 2009 meeting.

Was the entire council on board with the switch?

Yes. The only difference of opinion was over the timing.  I preferred to implement the two-year budget in 2010 so as not to incur additional staff costs in 2009 and in order to have an ordered process for implementation that didn’t impact the ongoing work of staff.