Budget & Management

Department of Finance

The Division of Budget and Management provides budget analysis and management consulting services to the Mayor and all City departments by preparing, implementing, and monitoring annual operating budgets and financial plans.

These plans project the availability of funds and anticipated expenditures needed to deliver City services.

Budget Organization

The General Fund Operating Budget is the main way the City of Cleveland provides programs and services to residents. The General Fund budget is created every year to allocate tax dollars towards day-to-day expenses for delivering City services. 

City Income Tax is the largest source of revenue for the General Fund. Income Tax is the 2.5% tax that anyone who works in the City of Cleveland must pay. This means that both residents and non-residents of the City contribute to our budget.

The General Fund Budget is used to fund City Services and the people who provide the services. We allot these funds each year. Some examples of services and programs funded through the General Fund are:

  1. Safety Forces, like Police, Fire, and EMS 
  2. Waste and Recycling Pick Up 
  3. City Parks
  4. Neighborhood Resource and Recreation Centers

The City’s budget also includes Enterprise Funds. Enterprise Funds are city services for which users pay a fee or generate revenue. Enterprise Funds are generally self-supporting, meaning that the money that comes in is the money spent on providing that service.

What are the Enterprise Funds?

The Major Enterprise Funds: 

  1. Water 
  2. Water Pollution Control 
  3. Cleveland Public Power (Electricity) 
  4. The Airport 

The Small Enterprise Funds:

  1. Cemeteries 
  2. Golf Courses 
  3. City Parking Facilities 
  4. Public Auditorium (Public Hall) 
  5. West Side Market  

In addition to the General Fund, there are ways we fund services and programs that are not allotted every year. The other ways we fund city services and programs are: 

Capital Budget 

This budget funds major improvements to City facilities, infrastructure, and equipment. We generally fund these city operations with debt, restricted funds dedicated for capital improvements, or grant money.

Grants 

Community Development Block Grants (CDBG): The City combines 10 programs from the US Department of Housing and Urban Development (HUD) into one flexible grant. These funds must support local improvements that eliminate blight and assist low- and moderate-income residents.  

  1. Some examples of projects are: 
    1. Housing: construction, mortgage assistance, code enforcement, weatherization 
    2. Public Improvements: playground rehab, sidewalk replacement, trees/ lawns, streetlights 
    3. Land use: vacant lot clean up, the Land Bank, urban gardening 
    4. Public services: crime prevention, transportation, job training, elderly services 
    5. Economic development:  assistance to CDCs, small business loans, storefront renovations 
  2. City Council reviews CDBG proposals near the same time as the General Fund Budget Hearings. 

Public Health and Public Safety: there are many, many federal and state grants available to local health departments and safety departments. Like other local agencies, the Cleveland Department of Public Health and the Cleveland Division of Public Safety regularly apply for grants to increase the reach of their work, expand staff capacity, and partner with other agencies. 

Special Revenue and Debt Service

  1. Streets: repair and maintain roads using state gas and automobile license taxes, permit fees, and sometimes a little bit more from General Fund. 
  2. Debt Service: paying down our debt using property tax, income tax, and interest earnings. 
  3. Restricted Income Tax: we tax a small portion of all collected taxes and set them aside for paying our debts if we are ever in financial trouble.

FAQs

The state requires City Council to finalize a budget by April 1st each year. This process is a little complex:

  1. In accordance with the City Charter, the Mayor is required to send "the Estimate" to City Council no later than February 1st. This is the first public version of the budget. 
  2. The Estimate, which is a big piece of legislation, is read into the record at a City Council meeting. This is known as the "first reading." 
  3. After the first reading, the estimate goes to City Council budget hearings, a 2-week long process where the administration defends the estimate to Councilmembers.  
  4. Once budget hearings end and all the questions have been answered, the Estimate will go back to a City Council meeting for its "second reading." This is a tentative approval of the budget.  
  5. After the second reading, the estimate must sit for 10 days. No changes may be made. 
  6. Once the estimate has sat for 10 days, it can go to a City Council meeting for its third and final reading. When Councilmembers vote to approve it, the estimate is officially adopted and becomes the Budget.   

To make sure everything is funded and balanced prior to budget hearings, the City 2 main tools:

  1. Temporary Budget: Funds the City from January to March while we square up the budget. We use historical information and our best estimates of tax revenues to set this up. 
  2. Transfer Ordinance: We monitor all annually appropriated fund budgets and anticipate what each budget is projected to spend and receive. If a division is expected to require additional funds then we will move funds from another division that is anticipated to have availability for transfer.  
  3. Supplemental Ordinance: If we have available resources, we have the ability to put it back into the Budget 
  • We are required by state law to have a balanced budget. This means the amount of money we are budgeting for the City must match the amount of money we think we will take in.  
  • Any other time we have had an unbalanced budget, we have used one-time funding to even things out. We don’t always have one-time funding.