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FY2015: Grants and Your Local Government Budget

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"Budget" typed by typewriter for article on local governments budgeting and grants in FY2015

It’s budget planning season for many local governments whose new fiscal year begins in July. For many counties, cities, and towns, formula grant funding is a major revenue source. But as your department looks at its budget for the next fiscal year, have you considered how competitive grants fit into the picture and how they can help supplement your line items? Here are some tips to get you thinking about competitive grant revenue streams for your projects.

Review Smaller Line Items

Look at line items under $25,000 and determine if these are priority funding areas for corporate and foundation grantmakers in your region. For example, "Assess your professional development requests and divide them into tiers 1, 2, and 3 for priority training areas," says Dr. Beverly Browning, Vice President of Grants Professional Services at eCivis. In addition, adds Browning, "Consider building relationships with and taking these requests (individually) to your corporate and foundation grantmakers."

Think Fire, Police, and Parks and Rec

Fire and police departments often have big-ticket items such as replacement of vehicles in disrepair. But this should not preclude departments from pursuing private-sector grants from corporate and foundation grantmakers to fund necessary equipment such as vehicles and fire apparatuses. Some examples of private-sector funders that fund fire equipment include the Firefighters Support Foundation and the Fireman’s Fund Insurance Company, as seen in the following screenshot from the eCivis database:

eCivis Grants Network: Research database screenshot

Create an Account for Matching Requirements

Consider creating a grant matching reserve fund to be used as a source of revenue when grant applications require a cost-share or matching requirement. Doing so "will alleviate the need for departments to use pre-programmed operating/capital funding for grant applications," says Cherrise Wilks, MPA, President of Affinity Consulting Group.

Set Up a Municipal Equipment Reserve Fund

This kind of fund (sometimes called an equipment replacement fund, vehicle replacement fund, and pay-go fund) can be used as a financing mechanism to secure the planned and orderly acquisition and replacement of equipment necessary for the efficient and effective operation of the city. "The fund can be used for immediate needs to finance the acquisition of new equipment needed immediately, and future needs to finance needed future replacements and acquisitions by setting aside a reserve amount," says Browning.

Examples of municipal equipment reserve funds can be found in this Kansas statute and from the City of Kelowna, B.C.

Bring the Grant Pros to the Table

Include grants professionals on all department budget discussions. "Grants professionals offer a variety of expertise," adds Wilks, "and they may be able to help departments identify gap financing for projects."

Your Takeaway

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Why You Should Consider Competitive Grants for FY2015 Budget Planning