City’s Budget Season for Fiscal Year 2027 Begins Soon

Work on the City of Virginia Beach’s budget takes place year-round. But City Council engagement kicks off in November, when the Department of Budget and Management Services presents the Five-Year Forecast to City Council and the School Board. The Five-Year Forecast gives a first look at the City’s overall financial position, so that policy discussions can begin. The budget wraps up when City Council adopts the revised budget in May.  

So what happens from the completion of one budget cycle in May to the start of the next in November? Budget and Management Services answers this question and more.  

Budget Q&A

How many staff members are in the Department of Budget and Management Services, and what do they do? 

The Department of Budget Management and Services is made up of 13 full-time employees. The department is led by the director and the deputy director. Nine budget and policy analysts and a business application specialist report to the deputy director, and the department is supported by an executive assistant. The staff often includes summer youth employees and graduate interns. The staff’s primary responsibilities are to analyze financial data, assist in developing the City’s operating budget and Capital Improvement Program (CIP), and evaluate programs to ensure they comply with goals and policies.  

Some of the key duties include reviewing department budget proposals, monitoring program outcomes, collaborating with city departments, providing fiscal impacts, evaluating city-wide revenue performance, and providing information for the city manager and the City Council to make data-informed decisions. 

What work does the Department of Budget and Management Services complete from May to November each year? 

After the formal budget adoption, required by May 15 each year, Budget and Management Services staff focus on post-budget-adoption activities, research projects and preparation for the upcoming budget process.  

Staff make all changes from the proposed budget to the adopted budget, so that the documents can be published in print and online to comply with guidelines of the Americans with Disabilities Act (ADA). The budget is then uploaded into the financial system and verified by Budget and the Department of Finance staff to be ready to implement on July 1. If the budget includes changes in staff pay, Budget and Management Services works with Human Resources to ensure each position receives the appropriate adjustment. 

Budget analysts work on research projects requested by the City Council, the city manager and individual departments. This often involves researching operations and evaluating policies for City Council to consider during the next budget process. Some of the recent research projects have included evaluating the Princess Anne Athletic Complex operations, building stress test budget models for Special Revenue Funds, evaluating the City staff ID badge process, benchmarking the Convention & Visitors Bureau’s pricing strategy, working with the Process Improvement Steering Committee, and overseeing the Community Organization Grant program. 

Staff prepare for the upcoming budget process by evaluating revenue, establishing budget targets for the CIP and operating budget, preparing the budget system for the next budget process, and training all budget system users. CIP targets are set at the end of August, and budget staff provides support through November, when the CIP section managers submit their initial CIP requests. Operating budget targets are provided to departments toward the end of September, and budget staff provides support through early December, when the departments provide their initial operating requests. 

How do staff members develop initial revenue forecasts and funding targets for the upcoming operating budget? 

Staff use several methods to forecast revenues. These include: 

• Surveying departments regarding revenue trends 
• Interviewing local economists and reviewing national economic forecasts 
• Monitoring national and local economic trends 
• Examining state and federal budgets and legislative changes 
• Analyzing relationships between revenues and economic variables 

Projections are expected to remain within 2% of the actual collections. In Fiscal Year 2023-24, the City’s General Fund revenue estimates varied only 1.5% from the actual collections, which is in line with  historical trends, although estimates varied more during the pandemic.

Departments are given a funding target based on these projected revenues. Departments then submit budget requests based on these targets, along with their needs for additional resources to support current services, as well as new or expanded programs. 

Why is the budget divided into the operating budget and the CIP? 

The operating budget details the expenditures, personnel resources and revenues for one fiscal year, along with the policies and priorities guiding these allocations. This document informs residents and officials about the City's past, present and future services and programs, including expected outcomes. 

The CIP is the City’s six-year plan for major projects such as acquiring, building, expanding and maintaining infrastructure. Since these projects require significant resources, the CIP is crucial for financial and strategic planning. Each year, the City updates the CIP to identify needs, prioritize projects, plan funding and anticipate impacts on the operating budget. This allows the City to adapt to changing priorities and opportunities. 

While the operating budget is primarily concerned with the day-to-day expenditures required to run City services such as public safety, education and maintenance, the CIP focuses on long-term investments in infrastructure projects such as new schools, roads and public facilities. The operating budget is reviewed and approved annually, allowing for adjustments based on immediate needs and revenue forecasts. In contrast, the CIP spans six years, emphasizing strategic planning and future growth, although it also is developed annually. Together, the operating budget and CIP ensure the City of Virginia Beach remains responsive to current demands while proactively investing in its future development. 

What do you wish more people understood about the City’s budget? 

The Department of Budget and Management Services wants residents to understand that the City budget is a communication tool reflecting City Council’s effort to value and implement community priorities. It is one of the most important policy documents adopted annually by the City of Virginia Beach, determining how tax dollars, fees and other revenues are allocated to achieve community goals.  

Caption: Graphic illustrating the fiscal year budget cycle: November: Five-Year Forecast, February: Real Estate Assessment & School Budget, March: Proposed Budget Presented, April: Department Reports & Public Hearings, May: Budget Finalized, Aug.-Sept.: Planning, Sept.-Oct.: Department Requests.

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