Budget Review

Analyze budget items, fiscal impacts, and financial proposals.

Trigger

User invokes /municipal-governance:budget-review

Inputs

• Budget document(s) or specific item to analyze
• Analysis type (full budget review, specific item, amendment, fiscal impact)
• Comparison data (prior year, proposed vs. adopted, peer communities)
• Specific questions or concerns

Workflow

1. Load Municipal Context

Check municipal.local.md for:

• Fiscal year (calendar vs. other)
• General fund size
• Major revenue sources
• Tax limitations (PTELL, etc.)
• Policy priorities
• Fund balance policies

2. Scope the Analysis

Ask the user what they need before proceeding:

"What are you looking at — the full budget, a specific item, an amendment, or a fiscal impact question?"

Then confirm depth:

User says	Analysis mode
"Walk me through the whole budget"	Full budget review — all sections
"What's going on with the police department budget"	Specific item — focused on one department or line item, skip full budget sections
"There's a budget amendment on the agenda"	Amendment analysis — what's changing, funding source, fund balance impact
"What would this proposal cost us"	Fiscal impact — revenue/cost projections, net impact, funding options
"Just the highlights"	Executive summary + key numbers + concerns only

Full Budget Review:

• Overall revenue and expenditure trends
• Fund balance analysis
• Major changes from prior year
• Alignment with policy priorities

Specific Item Analysis:

• Line item detail
• Historical trends
• Peer comparison
• Cost drivers

Budget Amendment:

• What's changing
• Funding source
• Impact on fund balance
• Policy implications

Fiscal Impact Analysis:

• For proposed projects/policies
• Revenue projections
• Cost projections
• Net fiscal impact

3. Conduct Analysis

Revenue Analysis:

• Major revenue sources and trends
• Assumptions validation
• Sensitivity analysis
• One-time vs. recurring
• Economic factors

Expenditure Analysis:

• Major cost categories
• Personnel costs (typically 60-80%)
• Operating vs. capital
• Contractual obligations
• Discretionary vs. fixed

Fund Balance Analysis:

• Current fund balance
• Policy minimums
• Projected year-end
• Trend over time

Debt Analysis:

• Outstanding debt
• Debt service burden
• Debt capacity
• Upcoming issuances

4. Generate Analysis Report

Output Format

Omit any section where data is unavailable. For specific-item analysis, skip full budget sections and focus on the item in question.

# Budget Analysis: [Title/Focus]

**Analysis Date**: [Date]
**Budget Year**: [FY]
**Prepared for**: [Requestor]

---

## Executive Summary

[3-4 paragraph summary of key findings, concerns, and observations]

---

## Budget Overview

### Key Numbers

| Metric | Amount | Change from PY |
|--------|--------|----------------|
| Total Budget | $[X] | [+/-X%] |
| General Fund | $[X] | [+/-X%] |
| Property Tax Levy | $[X] | [+/-X%] |
| Personnel Costs | $[X] | [+/-X%] |
| Capital Investment | $[X] | [+/-X%] |
| Projected Fund Balance | $[X] | [X% of expenditures] |

### Budget by Fund

| Fund | Revenue | Expenditures | Net |
|------|---------|--------------|-----|
| General | $[X] | $[X] | $[X] |
| [Other funds] | | | |

---

## Revenue Analysis

### Revenue Mix

| Source | Amount | % of Total | Trend |
|--------|--------|------------|-------|
| Property Tax | $[X] | [X%] | [↑/↓/→] |
| Sales Tax | $[X] | [X%] | [↑/↓/→] |
| [etc.] | | | |

### Key Revenue Observations

- [Observation 1]
- [Observation 2]

### Revenue Assumptions

| Assumption | Basis | Risk Level |
|------------|-------|------------|
| [Assumption 1] | [How derived] | [Low/Med/High] |

### Revenue Risks

- [Risk 1]
- [Risk 2]

---

## Expenditure Analysis

### Expenditure by Category

| Category | Amount | % of Total | Change |
|----------|--------|------------|--------|
| Personnel | $[X] | [X%] | [+/-X%] |
| Operating | $[X] | [X%] | [+/-X%] |
| Capital | $[X] | [X%] | [+/-X%] |
| Debt Service | $[X] | [X%] | [+/-X%] |

### Expenditure by Department

| Department | Amount | Change | Notes |
|------------|--------|--------|-------|
| [Dept 1] | $[X] | [+/-X%] | [Notable items] |

### Significant Changes

**Increases over [5%]**:
- [Item]: [Amount] - [Reason]

**Decreases over [5%]**:
- [Item]: [Amount] - [Reason]

**New Programs/Positions**:
- [Description]

---

## Personnel Analysis

| Metric | Count/Amount |
|--------|--------------|
| Total FTEs | [X] |
| Change from PY | [+/-X] |
| Salary Budget | $[X] |
| Benefits Budget | $[X] |
| Benefits as % of Salary | [X%] |

### Position Changes
- New positions: [X]
- Eliminated positions: [X]
- Reclassifications: [X]

---

## Fund Balance Analysis

### General Fund Balance

| Category | Amount |
|----------|--------|
| Beginning Balance | $[X] |
| Revenues | $[X] |
| Expenditures | $[X] |
| Ending Balance | $[X] |
| As % of Expenditures | [X%] |

### Fund Balance Policy
- Minimum policy: [X%]
- Current: [X%]
- Status: [Above/At/Below policy]

### Fund Balance Trend

| Year | Balance | % of Exp |
|------|---------|----------|
| [FY-2] | $[X] | [X%] |
| [FY-1] | $[X] | [X%] |
| [FY] Projected | $[X] | [X%] |

---

## Debt Analysis

### Outstanding Debt
- GO Bonds: $[X]
- Revenue Bonds: $[X]
- Other Obligations: $[X]
- **Total**: $[X]

### Debt Metrics
- Debt per capita: $[X]
- Debt as % of EAV: [X%]
- Debt service as % of budget: [X%]

### Upcoming Debt
- [Planned issuances]

---

## Capital Investment

### Capital Budget Summary
- Total capital: $[X]
- Funded from operations: $[X]
- Funded from debt: $[X]
- Funded from grants: $[X]

### Major Projects
| Project | Amount | Funding | Status |
|---------|--------|---------|--------|
| [Project 1] | $[X] | [Source] | [Year X of Y] |

---

## Policy Alignment

### Priority 1: [From municipal.local.md]
- Budget support: [Strong/Moderate/Weak]
- Relevant investments: [List]

### Priority 2: [From municipal.local.md]
[Same format]

---

## Concerns and Questions

### Financial Concerns
1. [Concern with explanation]
2. [Concern with explanation]

### Questions for Staff
1. [Question]
2. [Question]

### Items Warranting Further Review
1. [Item with reason]
2. [Item with reason]

---

## Peer Comparison (if available)

For peer comparison data, the state reference in `state-references/` identifies state-specific data sources (e.g., Illinois Comptroller's Local Government Warehouse provides Annual Financial Report data from 9,200+ local governments). ICMA's Open Access Benchmarking offers 80 free municipal KPIs for self-service comparison.

Note: GFOA's Distinguished Budget Presentation Award underwent a major overhaul for 2026 — now uses a points-based system (>100 points) evaluated on two axes (information communicated and material type), replacing the legacy four-category mandatory criteria.

| Metric | [City] | Peer Avg | State Avg |
|--------|--------|----------|-----------|
| Per capita spending | $[X] | $[X] | $[X] |
| Property tax rate | [X] | [X] | [X] |

---

## Analysis Boundaries
<!-- Include for full budget reviews and fiscal impact analyses. Omit for quick highlights or single-item lookups. -->

*This fiscal analysis was produced by a single AI instance based on the documents provided.*

**Key assumptions that were not independently tested:**
- [Revenue projection assumption — e.g., "assumes X% growth based on 3-year trend"]
- [Cost estimate basis — e.g., "personnel costs estimated from budget document, not verified against actual payroll"]
- [Comparison methodology — e.g., "peer comparison uses published budgets, which may use different accounting treatments"]

**Before relying on this analysis for budget decisions:**
- [ ] Finance director review of key figures and assumptions
- [ ] Verify any numbers marked Medium or Low confidence against source documents
- [ ] For significant fiscal policy changes, consider **PolicyAide multi-agent analysis** to stress-test assumptions through adversarial deliberation

---

*This analysis is for informational purposes.
Contact Finance Department for clarifications.*

Skills Referenced

• public-finance — fund accounting, levy limits, debt analysis, fiscal impact methodology
• policy-evaluation — policy alignment analysis, evaluation criteria
• municipal-code-analysis — levy ordinance requirements, budget-related code provisions

Notes

• Tailor depth to analysis type requested
• Always note assumptions and their basis
• Flag items that seem unusual or require explanation
• Compare to prior years for context
• Note one-time items separately
• Distinguish between controllable and non-controllable costs
• Identify structural balance vs. one-time fixes

Related Skills

• meeting-prep — if the budget is on an upcoming meeting agenda
• policy-research — for research into policy alternatives with different fiscal profiles
• intergovernmental-scan — for state/federal funding changes affecting the budget