The budget is the most important document a city produces. It contains the financial, political, and service delivery plans for a city’s fiscal year. It is a vital tool for communicating public policy to the public. While every city develops the annual operating budget differently, there are common activities regardless of a city’s size. Whether your city prepares an annual budget that consists of several sheets of paper stapled together, or a thousand-page document with charts and graphs, it is important to understand the terms and concepts inherent to the budget process. Budget development is complex and requires the input of appointed and elected municipal officials. The process combines the efforts of people with knowledge and skills in finance, accounting, policymaking, management, state law, and the institutional knowledge of the city’s fiscal condition to make the difficult decisions necessary to provide the highest level of services for city residents. The combination of these skills is necessary to successfully create, adopt, and implement a balanced annual operating budget.