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Trend Analysis Report
PADM702: Public Budgeting
Dr. Samuel Clovis
April 14, 2024
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INTRODUCTION
Financial management is one of the most challenging responsibilities facing governments,
aware that they must achieve a level of fiscal health to be sustainable over the long term.
Governments can utilize analytical skills and financial indicators to perform assessments of the
organization’s fiscal health. With the information gained from this kind of assessment, the
organization can determine what symptoms might be contributing to its fiscal distress and what
additional testing and analysis needs to be done to get a more accurate picture of the
organization’s fiscal problems. Problems can then be treated in the most effective way to
achieve the level of fiscal health that is needed to serve its citizens. There are several
advantages to providing a long-range assessment of financial condition including:
Improving the quality of information for making policy and budgetary decisions
Identifying emerging trends to take corrective or proactive action
Providing a graphical analysis for review and tracking of trends
Utilizing the trends of specific financial indicators to guide budget decisions and
priorities
Financial Condition
Financial condition is defined as the ability of a government to balance recurring
appropriations with recurring expenses, allowing them to provide necessary services on a
continuing basis. A government in good financial condition can maintain adequate service
levels during economic downturns and is able to develop resources to meet future needs.
In contrast, a government in fiscal stress struggles to balance the budget, experiences
service disruptions, and has limited resources to finance future needs. Maintaining a sound
financial condition requires governments to adjust to long-term changes in community needs
and develop the ability to plan.
There is no single measure that fully captures the financial condition of a
governmental entity therefore it is necessary to take a comprehensive approach that focuses
on both external and internal fiscal factors.
GENERAL BUDGET INDICATORS
Public Safety
Description: If t he percent of Revenues allocated to Public Safety decreases or becomes
lower, it may hamper the agency’s ability to maintain the existing level of services unless
new sources of revenues or ways of trimming expenses can be found.
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Warning Trend: Decrease as a Percent of Revenues allocated to
Public Safety
12.3%
14.5%
15.3%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
2020 2021 2022
Percent of Revenues allocated to Public Safety
Years
Percent of Revenues Allocated to Public
Safety
Parks and Recreation
Description: If t he p ercent of Revenues allocated to Parks and Recreation decreases or
becomes lower, it may hamper the agency’s ability to maintain the existing level of services
unless new sources of revenues or ways of trimming expenses can be found.
Warning Trend: Decrease as a percent of Revenues allocated to Parks and
Recreation
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3.0%
2.7%
2.5%
2.3%
2.4%
2.5%
2.6%
2.7%
2.8%
2.9%
3.0%
3.1%
2020 2021 2022
Percent of Revenues allocated to Parks and Recreation
Years
Percent of Revenues Allocated to Parks and
Recreation
Senior Services
Description: If t he percent of Revenues allocated to Senior Services decreases or becomes
lower, it may hamper the agency’s ability to maintain the existing level of services unless
new sources of revenues or ways of trimming expenses can be found.
Warning Trend: Decrease as Revenues allocated to Senior Services
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1.7% 1.7%
1.4%
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
1.6%
1.8%
2.0%
2020 2021 2022
Percent of Revenues Allocated to Senior Services
Years
Percent of Revenues Allocated to Senior Services
Planning and Permits
Description: If the percent of Revenues allocated to Planning and Permits decreases or
becomes lower, it may hamper the agency’s ability to maintain the existing level of services
unless new sources of revenues or ways of trimming expenses can be found.
Warning Trend: Decrease as a percent Revenues allocated to Planning and
Permits
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1.88%
1.80%
1.69%
1.60%
1.65%
1.70%
1.75%
1.80%
1.85%
1.90%
2020 2021 2022
Percent of Revenues allocated to Planning and Pemits
Years
Percent of Revenues Allocated to
Planning and Pemits
MAYOR'S PERSONNEL INDICATORS
Four Major Departmental Expenses for Mayor’s Office
Description: If the percent of the mayor's personnel indicators decreases or become lower,
it may hamper the agency’s ability to maintain the existing level of services unless new
sources of revenues or ways of trimming expenses can be found.
Warning Trend: Decrease as Comparison of mayor's four major personnel
indicators.
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79.9%
10.7%
4.5% 5.0%
Comparison of the Four Largest Expense Items in the Mayor's
Personnel Budget, 2020
Salaries
Health Insurance
Retirement Expenses
Social Security Taxes
78.8%
11.5%
4.8% 4.9%
Comparison of the Four Largest Expense Items in the Mayor's
Personnel Budget, 2021
Salaries
Health Insurance
Retirement Expenses
Social Security Taxes
78.4%
15.5%
1.2%
4.9%
Comparison of the Four Largest Expense Items in the Mayor's
Personnel Budget, 2022
Salaries
Health Insurance
Retirement Expenses
Social Security Taxes
Concluding Analysis
Trend analysis is the process of collecting data that has been organized in sections and
using it to compare trends, predict future trends, and investigate patterns that would otherwise go
unnoticed (Sureka et al., 2022). Trend analysis can often be compared to budget forecasting and
proves useful when working with needing to predict expenses that will impact the budget (Kwon
& Kang, 2018). Trend analysis can be used in many different fields and for many different
business purposes. It is also a way that many companies can develop a chance to utilize
technology like they have not in the past since trend analysis of budgets is usually done on
computer software (Bergmann et al., 2020). However, for this report, it is being used to identify
patterns and trends of Maumelle, Arkansas’ budget. The charts and graphs above help to
conclude the following:
Public Safety
The public safety’s percentage increased from 2020’s 12.3% to 14.5% in 2021. It
increased further in 2022 to 15.3%. This shows a significant raise in the revenue allocated
towards public safety in the second year and a slight uptick in third. This steady and significant
increase in the public safety budget in comparison to its warning trend leave little to worry. This
is because the allocated amount to public safety has increased over the data set. Looking into the
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reasons behind his increase uncovers possible justifications. Maumelle’s police chief of 19 years,
a decorated officer with over 40 years of policing experience, retired in September of 2019
(Turnage, 2019). The next appointed police chief, Cory Pickard, came from a military
background and called for more tactical training, as well as hiring new and skilled personnel to
keep up with technology (Hebda, 2020).
All this change for improvement was also shortly after Maumelle was rated the safest city
in Arkansas, tied with Bentonville, but with special recognition that Maumelle has a higher law
enforcement employee to resident ratio which boosts their score (Police Department Maumelle,
AR, n.d.). After winning an award like this, it would be natural for law enforcement leaders, a
major part of the public safety sector, to aim for even higher levels of public safety. This could
explain the reason behind the raise in percentage of money allocated towards public safety.
Parks and Recreation
Moving on to the revenue allocation for Parks and Recreation, the chart shows a decrease
in allocation of funds. Parks and Recreation received 3% in 2020, ticking down to a 2.7% in
2021, and ending with the lowest percentage of 2.5 in 2022. This shows a downward trend
throughout the three years on the data set which is concerning. Parks and Recreation is a major
part of city wellbeing due to all that the department handles. Some of their responsibilities
include managing the city parks, cultivating entertainment and recreational fun for tourists and
citizens, and running many public facilities.
Parks and Recreation also implements a unique system of park planning that helps to
create job opportunities, decreases crime, and benefits climate change (Gibson, 2021, para. 10).
The decrease in 0.5% is worrisome when compared to the warning trend, decrease as a percent of
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Revenues allocated to Parks and Recreation. The reason for this is because it shows the city is
unable to sustain 2020’s level of services and coverage. With less and less funds being allocated
their way; it will be hard for Parks and Recreation to continue to operate at the level they need to.
Senior Services
Moreover, when looking at the data set for Senior Services, it can be concluded that there
is a downward trend. Year 2020 and year 2021 had a percentage of 1.7%, before being decreased
further to 1.4% in year 2022. Like Parks and Recreation, this is a concern in comparison to the
warning trend of, decrease as Revenues allocated to Senior Services. With less funds being
allocated to Senior Services, there is going to be issues with maintaining the level of care and
services offered for senior citizens. Senior citizens are estimated to make up 17.3% of the
population in Maumelle over the past 5 years (U.S. Census Bureau, 2022). Due to this, the
decrease in allocated funds to Senior Services is worrisome and needs to be taken seriously by
the mayor.
Planning and Permits
Lastly, the chart for Planning and Permits shows a downward trend alike to Parks and
Recreation and Senior Services. The percentage of revenue allocated towards Planning and
Permits was 1.88% in year 2020, but this decreased to 1.80% in year 2021. Finally, only 1.69%
of revenue was allocated to Planning and Permits in year 2022. There is cause for concern when
comparing the allocation of revenue with the warning trend of, decrease as a percent Revenues
allocated to Planning and Permits. The downward trend of allocated funds will cut into the
budget for Planning and Permits’ work and what the department will be able to provide for the
city.
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Data Trends
Between the four departments charted out above, one had an upward trend and three had
downward trends. Public Safety’s revenue percentage trended upwards, while Parks and
Recreation, Senior Services, and Planning and Permits’ revenue percentages trended downwards.
Public Safety’s percentage increased by 2.2% from 2020 to 2021, and again by 0.8% for 2022.
However, Parks and Recreation decreased by 0.3% from 2020 to 2021, and another 0.2% by
2022. Senior Services percentage decreased from a steady and two-year consecutive percentage
of 1.7% in 2020 and 2021 to 0.3% lower in 2022. Finally, Planning and Permits’ percentage
decreased by 0.8% in 2021 from 2020, and eventually decreased further to 0.11% in 2022.
The trends compared between the departments and warning trends shows that while
public safety was prioritized, the other departments were taken from to prioritize the budget for
Public Safety. The total amount decreased in revenue allocation was 1.1% from 2020 to 2021,
and 0.61% from 2021 to 2022 for total of 1.71% of revenue decrease across the four departments
from year 2020 to 2022. The increased revenue percentage for the departments is centered on
Public Safety with the 2.2% increase in the second year and the 0.8% increased by 2022 for a
other budget of 3% increase in revenue allocation.
Priority of Needs
When stacking up the 3% increase to the 1.71% decrease, it can be concluded that the
increase in allocated revenue for Public Safety impacted the other departments allocated funds.
Public safety had an increase in budget in comparison to the other three departments. For this
reason, the city of Maumelle should not be concerned about with the quality of public safety and
the services being offered. However, the other three departments being discussed shared
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downward trends through the set times. This is concerning for many reasons. A decrease in
allocated funds causes issues for staffing, continued services, and even improvements for
departments (Vidyattama et al., 2022).
It will be hard for the departments with decreased funds to operate on the same level they
have planned to or are used to. While it is understandable for revenue to allocated based on
needs, some of the other departments do have increased needs as well and ae not being
prioritized. For example, the Senior Services percentage of allocated funds was decreased but
Maumelle has a prominent senior citizen population of an estimated 17.3% of the population
aged 65 and older (U.S. Census Bureau, 2022). Furthermore, in 2022, there was an increased
usage in the senior center in Maumelle and it was proposed that they should build an indoor pool
for the senior citizens using the center (Tierney, 2022, sec. April 6, 2022 Update). This shows a
clear need for properly allocated funds for the department of Senior Services.
An adjustment may need to be made when deciding the level of priority for allocation of
funds among the departments. The way they had it set up from 2020-2022 was problematic for
other departments. This could be corrected by ensuring that all city department leaders come to
the table and discuss the needs together for the good of the people. If the city leaders, along with
the mayor all worked together to prioritize allocation of funds, it would help to create a fairer
spread among the departments based on their needs. This take mayors and other city leaders
learning from each other’s and being open to what makes other leaders great at their roles
(Carreri & Payson, 2023).
Largest Expenses in the Mayor’s Personnel Budget for 2020-2022
Now, to turn attention to analyzing the mayor’s personnel budget. Mayors are entrusted
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with the responsibility of overseeing the city’s budget and works with city leaders to prioritize
where it goes (Yasun, 2022, para. 24). This is very hard job since it can cause issues if the funds
are not allocated effectively, leaving departments without the money they need to run effectively.
There are also many moving parts of the city’s budget that must be taken into consideration.
Within that budget, the mayor has their own personnel team that helps to run the city. The
personnel team require a working budget of their own to operate.
This operating budget, like many other operating budgets, would need to take into
account salaries for staff, benefits packages, retirement plans, software for communication, and
any other needs based on the specific job like housing and transportation funds. Studying
Maumelle’s mayor personnel team’s four major expenses budget in the pie charts above, the
following can be concluded:
Mayor Personnel Expenses
The percentage of revenue used for the mayor’s personnel team decreased from 79.9%
2020 to 78.8% in 2021 and decreased further in 2022 to 78.4% In 2022. As for social security, it
also decreased from 5% in 2020 to the steady drop of 4.9% for the next two years. Health
Insurance for the personnel team showed an upward trend from 10.7% in year 2020 to 11.5% in
year 2021, before increasing again to 15.5% in year 2022. However, retirement expenses for the
mayor’s office went up from 2020’s 4.5% to 4.8% in 2021, before dropping to a staggering 1.2%
in 2022.
Mayor Personnel Data Trend
Salaries show a decrease in allocated funds by 1.1% from 2020 to 2021, and again by
another 0.4% from 2021 to 2022. Social Security decreased by 0.1% from 2021 to 2022. Health
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Insurance increased by 0.8% from 2020 to 2021 and again by 4% from 2021 to 2022. Lastly,
Retirement Expenses increased in the in 2021 by 0.3%, but decreased in by 3.6% in 2022. These
numbers show a horizontal trend among the pie charts.
Causes for Concern and Change
The salaries of the mayor’s office decreased slighting among the years while the health
insurance increased significantly throughout the same years. This could mean that while they
have had less staff, or decreased wages, they have had more expenses for health insurance due to
market prices for it being raised or choosing to enlist better and higher quality health insurance
packages. Many employers feel that healthcare plans are one of the most vital parts of employee
benefits and highly regarded when candidates are choosing to accept jobs (Reshmi & Mulla,
2023, para. 6).
The organization should be proud of the fact that they have maintained steady salary and
social security expenses across the three years. They also should not be concerned with the
health insurance expenses being raised since this is a normal and natural event that they cannot
correct (Reshmi & Mulla, 2023, para. 18). Instead, they just need to focus on planning for it
based on the trends they see. If they see that it becomes more of a problem in future, they could
look into partnering with different insurance agencies to try and lower their coverage costs for
staff.
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