City of Berkeley Lake 2025 Budget

The City has budgeted to spend far more than it actually spends for many years. As a result, the City has a huge reserve, far more than necessary. I will post more about this later. For this post, I'll discuss the budget for the past two years, 2024 and 2025. For this discussion, I will cover the General Fund only because SPLOST has specific requirements and is generally a breakeven budget.

A common practice when preparing a new budget for the next year is to begin with the budget and actual figures for the current year. Normally, each line is reviewed to understand why the budget and actual figures are different. Then, based on the analysis, each budget line is increased or decreased to reflect planned expenditures for the next year.

The 2024 budget shows a planned increase to reserves of $54,375, even though the actual reserve was already above 4 million dollars. By December 2024 the actual expenses were well below the planned budget numbers and the projected addition to reserves was $521,040 instead of the $54,375 planned. At the end of December, the actual amount added to reserves for 2024 was even higher, $616,040, which is over eleven times the amount in the budget, according to the City’s audited financial statements.

In spite of the above excess, the City increased every category of expense for 2025.

This was not a fluke. A review of the December 2023 council agenda packet shows similar lack of planning. The 2024 budget indicates a planned addition to reserves of $57,330. Yet the December council packet shows $565,578 forecast by 2023 year-end, almost ten times the budget amount. The audit report shows the actual amount added to reserves was much higher, $656,132. Yet the 2024 budget reduced only two line items as the result of an analysis. Does the City have a hidden agenda of increasing reserves by over budgeting annually? Is there a target for how much reserve is needed?

In typical accounting terms used by for-profit businesses, addition to reserves is the same as profit. I don't think it's appropriate for the City to have a profit of over $600,000 in two consecutive years. Is this deliberate, or is there a lack of understanding budgeting by the City staff and council?

The Financial Affairs Committee is meeting October 8, at 3pm. Because this is a committee created by the City, its meetings are subject to the Georgia sunshine law.