1st Annual Better Budgeting - Government Finance … · 1st Annual Better Budgeting October 6,...

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1stAnnualBetterBudgeting

GovernmentFinanceOfficersAssocia2on

Welcomeandintroduction

• GFOA’sFirstAnnualBe)erBudge-ngWebinar•  Anannualtrainingeventforgovernmentbudgetprofessionals•  SimilartoGFOA’sAnnualGovernmentalGAAPUpdate

• Objec;ve•  Tohelpbudgetprofessionalsbe>erservetheneedsofdecisionmakers

• Approach•  Focusonselectedaspectsofthebudgetprocess•  Offerprac;cal;psforimprovement 2

Thisyear’stopics

1.  SeDngupalong-termplanningprocess2.  Crea;ngatrulyeffec;vecapitalbudge;ng

process3.  Be>erassessingthepoten;alimpactof

changesinservicelevel4.  Makingbe>erdecisionsontheappropriate

levelsoffeesandcharges5.  Designingmoreeffec;vemeasuresof

performance6.  Improvingtheprocessofbudge;ngforsalaries

andwages3

“HousekeepingItems”

1.  Thistwo-hourprogramisworth2CPECredits.Allpaidpar;cipantswillreceiveacer;ficatebyregularmailin2-3weeks

2.  Mul;plepar;cipantssharingonecomputerwerecapturedinthetextboxontheregistra;onpage.Ifyouaccidentallyskippedthisstep,youcane-mailthelistofpar;cipantstotraining@gfoa.org

3.  AcopyofthePowerPointslidesareavailableunderthe“resources”tabatthetoprightofthescreen

4.  GFOAstaffareavailableduringtheprogramtoanswercontent-relatedques;ons.Youcansubmitques;onsthroughthe“chat”tab

5.  Pollingques;ons–testmaterial(incorrectanswersdonotaffectCPE).Weencourageyoutopar;cipate

Instructors

•  JohnFishbeinSeniorProgramManagerGovernmentFinanceOfficersAssocia;on(GFOA)

•  MichaelBaileyFinanceDirectorCityofRedmond,Washington

•  Explanatoryslidesoutlinethemajorpointscoveredinthispresenta;on.Theexplana;onsarethenreinforcedwithexamples.

•  Thebulletpointsintheexplanatoryslidesthatarehighlightedinredanditalicizedspecificallyrelatetothecorrespondingexamples.

•  Pleasenotethatthebulletpointsthatarenothighlightedareequallyimportant.

•  Ineachoftheexampleslides,thenameoftheen;tyappearsintheupperrightcorneroftheslideandkeypointsoftheexampleareemphasizedinaredunderline.

Afewnotesabouttheformatofthispresentation…

•  SeDngupalong-termplanningprocess•  1.1 Convincedecisionmakersoftheneed•  1.2 Developabindingfinancialpolicy•  1.3 Ini-alphase•  1.4 Methodology•  1.5 Decisionphase•  1.6 Execute/monitorphase•  1.7 Communicate

1.1Convincedecisionmakersoftheneed

•  ExplainLRFP(Long-RangeFinancialPlanning)•  Findoutanyqualmsorobjec;onsthatthedecisionmakersmayhave

• Diagramtheprocessandwhereitwouldfitin• NoteotherpeergovernmentsthatdoLRFP

Long-RangeFinancialPlanThefirstdrahoftheredesignedLong-RangeFinancialPlan(LRFP)waspresentedtotheLong-RangeFinancialCommi>eeinApril2015.TheLRFPisintendedtoserveasatoolforfinancialplanninganddecisionmakingintheyearsahead,andtheCityaimstoupdatethisplanannually.TheLRFPisaten-yearforecas;ngmodelfortheGeneralFund.Thisplanshouldbeconsideredaworkingdocumentthatwillconstantlychangeastrendsbegintodevelop.

CityofSantaRosa,California

1.2DevelopabindingGinancialpolicy

• Addlong-rangefinancialplanningtoyourfinancialpolicies

• Numberofyears(-mehorizon)•  Star-ngpoint(baseyear)• Whichfunds(scope)

•  Majorfunds•  Don’tjustfocusonthegeneralfund

•  Thosewithstructuraldeficits•  Aggregatenon-majorfunds

• Whichcategories(content)•  Majorrevenues•  Majorexpendituresordepartments•  Debt

CityofWilsonville,Oregon

•  Thebaseyearoftheforecastistheadoptedbudgetforthefiscalyear(FY)2014-15.TheadoptedbudgetforFY2014-15isthenadjustedforvariousknownitemsthathaveoccurredsincetheCounciladoptedthebudgetinJune2014,andprojec;onsfor2014-15aredeveloped.Thefive-yearforecastisthengroundedbyCouncilintentandlevelsofserviceasreflectedintheadoptedbudget,adjustedforupdatestorevenuesandexpensesasFY2014-15unfolds.

•  Thisfive-yearforecastaggregatesallpersonnelservicescostsintoonecategory.Keycomponentsofthiscategoryincludewages,re;rement,andhealthinsurance.

1.3Initialphase

• Responsibleparty•  Individual•  Projectteam

• Recognizeanyspecialissues•  Poli;cal•  Legisla;on

•  Linktostrategicplan• Complywithfinancialpolicies• Definepurposeandscope

Discussiononfutureservicedeliverymergerwilltakeplace.FuturediscussionsanddecisionsonthemostequitablemeansofprovidinglawenforcementserviceswithintheCountymayoccur.DiscussionsmayoccurtoreviewthepossibilityofamergerbetweentheCityandCountyforCrimeScene/ForensicServices.ThepossiblemergeroftheCounty’s911CenterandtheSheriff’sCommunica;onsec;onwillbediscussedinthenearfuture.

ForsythCounty,NorthCarolina

Assump;onsforPublicSafetyServiceArea-Sheriff

1.4Methodology

• Movingaverages• Regression•  Trends

•  Historical•  Structuralimbalances

•  Scenarioanalysis•  Environment

•  Demographics•  Growth•  Composi;on

•  Economy•  Infla;on

Belowisthedetailofthecostofes;matedcompensa;onandinsuranceincreasesforcomparisonpurposes($millions).

Item 2016Adopted

2017Projected

2018Projected

2019Projected

2020Projected

2.5%compensa;on

n/a $4.3 $8.8 $13.3 $18.1

5.0%Insurance n/a $1.2 $2.5 $3.8 $5.2

CityofAurora,Colorado

The“Compensa;onIncrease”scenariocontains:

•  Asalaryincreaseof2.25percentforallemployeesin2016and2.5percentforeachyearthereaherthrough2020.•  Anincreaseofhealthbenefitsof5.0percentin2016followedby5.0percentincreasesinhealthanddentalbenefitsperyearfor2017-2020.

1.5Decisionphase

• ResponsiblePar;es•  Officials•  Staff•  Public

• Decisionsmadeonsuchitemsas•  Taxes/fees•  Servicelevels•  Fundbalance

TownofRiverBend,NorthCarolina

DuringtheFY2016budgetprepara;onprocess,thelong-rangeoutlookandprojecteddeficitswerethoroughlydiscussedbytheCouncil.Ifallprojec;onsholdtrue,wean;cipateasmalldeficitattheendofFY2016.Insubsequentyears,itisprojectedtoincrease.Currently,thosedeficitsareminimalandwillnothaveasubstan;alimpactonourcashbalance.Infact,asnotedearlier,cashbalanceisprojectedtoincreasethroughtheendofFY2019.

1.6Execute/monitorphase

•  Executestrategies•  Officials•  Staff

• Monitor•  Opera;onal(performancemeasures)•  Financial(budget)•  Timeintervalofmonitoring(dollarvalueandsignificanceofac-vity)

CityofPortland,Oregon

TheCityBudgetoffice(CBO)isreleasinganupdatetotheDecemberfive-yearfinancialforecastthatincorporatesnewinforma;ononinfla;on,businesslicenseandtransientlodgingrevenue,andaCouncildecisiontoallocatemoneytoaffordablehousingdevelopment.Thisupdatealsoincludesinforma;ononthegeneralfund’sperformanceinFY2015-2016aswellasthelatestlocaleconomicindicators.Largelyresul;ngfromahigherbusinesslicensetaxforecast,CBOnowprojectsthattheCitywillhave$4.4millioninexcessofongoingrevenueand$15.9millioninexcessofone-;merevenueintheFY2016-17budget.Boththeongoingandone-;mefiguresareupfromDecember,consistentwithwhatonewouldexpectgivencurrenteconomiccondi;ons.AfinalbudgetforecastwillbereleasedinlateApril.

1.7Communicate

• Web• Boardmee;ngs• Presenta;ons

• Whatlevelofdetail•  Throughtablesorgraphs

•  Roundtothousandsormillions

•  Includeprojec-ons,assump-ons,andconcisediscussion

St.JohnsCounty,Florida

CityofCoRonwood,Arizona

CONCLUSIONThisfive-yearanalysisoftheGeneralFunddemonstratesthatopera;ngrevenueswillnotkeepupwithopera;ngexpendituresforthenextfiveyears.ThisreflectstheCity’sinabilitytosubstan;allyincreasethecurrentrevenuestreamsviarateincreasesorthroughdiversifyingthecurrentrevenueswithaddi;onalfeesorchargesforservices.Thepresenteconomicsitua;onwillalsos;flefuturerevenuegenera;on.

• Crea;ngatrulyeffec;vecapitalbudge;ngprocess•  2.1 Defini-on•  2.2 Calendar•  2.3 Iden-fyneeds•  2.4 Capitalprojectrequests•  2.5 Priori-ze•  2.6 Determinecosts•  2.7 Developfinancingstrategies•  2.8 Capitalprojectdetailinthebudgetdocument•  2.9 Monitor/report 23

2.1DeGinition

•  Thedefini-onofacapitalprojectcanbedesignedinawaythatisbroadenoughtoencompassavarietyofdifferentsitua-ons

• Governmentsfrequentlyrefertoassetlife,assettype,anddollarthresholdinthisdefini;on

AssetCategory ConsideredaCapitalImprovementProject

AMaintenanceProjectorExpenditure

PublicFacili*es

•  Newfacilityconstruc;on. Majorreplacementorupgradingofthedesignofexis;ngmajorbuildingcomponents(roofreplacement,majorhea;ngsystemimprovements).

PublicFacili*es

•  Majorremodelingandstructuralalterna;onstoimprovespaceu;liza;onorincreasecapacity.

Preven;vemaintenancerepairsthatdonotsignificantlyupgradethestructureorincreaseitspreviouslyes;matedusefullife(forexampleminorroofpatchingorgu>errepairwork).

•  Programtomakeenergy-related

physicalimprovements.

•  Programtomakehandicapped-accessibilityphysicalimprovements.

Defini2onofCapitalExpenditures

IncorporatedCountyofLosAlamos,NewMexico

2.2Calendar

• Acalendarshowingkeydatesinthecapitalbudgetprocessshouldbepresented,alongwithtextdescribingtheprocess

• Responsiblepar-es(departments)andstatutorydeadlinesareusefulindescribingtheprocess

•  Thecapitalprocesscalendarcouldbeapartorjuxtaposedwiththeopera-ngbudgetcalendar

CityofTempe,Arizona

• Capitalassetsthatrequirerepair,maintenance,orreplacementthat,ifnotaddressed,willresultinhighercostsinfutureyears

•  Infrastructureimprovementsneededtosupportnewdevelopmentorredevelopment

• Projectswithrevenue-genera;ngpoten;al•  Improvementsthatsupporteconomicdevelopment•  Safety• Changesinpolicyorcommunityneeds

2.3Iden;fyneeds

RegionalMunicipalityofYork,Ontario

• Understandprojectscope

•  Clarifyprojectgoals•  Verifyalignmentwithstrategicneeds•  Clarifyintendedcustomer(s)

• Understandprojectcosts•  Develop/validateprojectrepor;ngformatandfrequency•  Validateprojectassump;onsbyprojectphase

•  Cost,includinglaborandmaterials•  Timeline•  Ongoingmaintenancecosts

• Whocanfillitout•  Projectoriginator

2.4Capitalprojectrequests

CityofSpringfield,Oregon

•  Informa-ononhowcapitalprojectsareevaluatedandpriori-zediscri-cal

• Considerastructuredprocessforpriori;zingneed•  Linktostrategicplan

•  Iden;fychangesinpriori;es•  Includestakeholdersintheprocess

•  Ci;zens•  Publicofficials•  Businesses•  Communitygroups•  Staff•  Otheragencies,includingregulatory

2.5Priori;ze

TownofWindsor,Colorado

Allimprovementsmustbypriori;zedandrankedbasedonthefollowingcategories:PriorityI:IMPERATIVE(Must-Do)–Projectsthatcannotreasonablybepostponedinordertoavoidharmfulorotherwiseundesirableconsequences.

A.Correctsacondi;ondangeroustopublichealthorsafetyB.Sa;sfiesalegalobliga;onC.Alleviatesanemergencyservicedisrup;onordeficiencyD.Preventsirreparabledamagetoavaluablepublicfacility.

PriorityII:ESSENTIAL(Should-Do)–Projectsthataddressclearlydemonstratedneedsorobjec2ves.

A.Rehabilitatesorreplacesanobsoletepublicfacilityora>achmenttheretoB.S;mulateseconomicgrowthandprivatecapitalinvestmentC.Reducesfutureopera;ngandmaintenancecostsD.Leveragesavailablestateorfederalfunding.

PriorityIII:IMPORTANT(Could-Do)–Projectsthatbenefitthecommunitybutmaybedelayedwithoutdetrimentaleffectstobasicservices.

A.ProvidesaneworexpandedlevelofserviceB.Promotesintergovernmentalcoopera;onC.Reducesenergyconsump;onD.Enhancesculturalornaturalresources.

PriorityIV:DESIRABLE(OtherYear)–Desirableprojectsthatarenotincludedwithinfive-yearprogrambecauseoffundinglimita2ons.

PRIORITIZINGCAPITALIMPROVEMENTS

2.6Determinecosts

•  Thescopeand;mingofaplannedprojectshouldbewelldefinedintheearlystagesoftheplanningprocess

•  Agenciesshouldiden;fyandusethemostappropriateapproaches,includingoutsideassistance,whenes;ma;ngprojectcostsandpoten;alrevenues

•  Forprojectsprogrammedbeyondthefirstyearoftheplan,governmentsshouldadjustcostprojec;onsbasedonan;cipatedinfla;on

•  Theongoingopera-ngcostsassociatedwitheachprojectshouldbequan-fied

•  Acleares;mateofallmajorcomponentsrequiredtoimplementaprojectshouldbeoutlined,includinglandacquisi;onneeds,design,construc;on,con;ngency,andpost-construc;oncosts

•  Thenon-financialimpactsoftheproject(e.g.,environmental)onthecommunityshouldberecognized

Thecostsoffutureopera;onsandmaintenancefornewCIPprojectsarees;matedbyeachdepartmentbasedonadetailedsetofcostguidelinesthatisprovidedtoalldepartmentseachyear.Theseguidelinesareupdatedannuallyinconjunc;onwiththevariousdepartmentsthatareexpertsondifferenttypesofopera;ngcosts.TheFY2016–2025CIPreflectsthefollowinges;matedopera;ngcostforcapitalprojects:•between$1.97and$2.80persq.h.annuallyforelectricalandgascostsinabuilding;•between$2.00and$3.00persq.h.annuallyforbuildingmaintenance,includinghea;ng,ven;la;ngandaircondi;oning(HVAC),plumbing,electrical,andstructuralrepairs;•$1.22persq.h.annuallyforcustodialservices;•$0.195persq.h.annuallyforbuildingwaterusage;•$341.26permonthforrefuse(two6-yardcontainerspickedupthree;mesaweek)

CityofGlendale,Arizona

2.7DevelopGinancingstrategies

• An;cipateexpectedrevenueandexpendituretrends,includingtheirrela;onshiptomul;-yearfinancialplans

• Preparecashflowprojec;onsoftheamountand;mingofthecapitalfinancing

•  Ensurecompliancewithallestablishedfinancialpolicies

• Recognizeappropriatelegalconstraints• Considerandes-matefundingamountsfromallappropriatefundingalterna-ves

•  Ensurereliabilityandstabilityofiden;fiedfundingsources

•  Evaluatetheaffordabilityofthefinancingstrategy,includingtheimpactondebtra-os,taxpayers,ratepayers,andothers

CityofWoodstock,Illinois

2.8Capitalprojectdetailinthebudgetdocument

• Notecapitalprojectsasrecurringornon-recurring•  Provideconciseprojectdetailwithjus-fica-onandbenefits

•  Projectcoststhroughthecompletecycle•  Timetablethatincludesthedifferentphasesandscheduledcomple;ondate

•  Picturestendtobemoreeffec-vethanmaps• Opera-ngimpacts•  Linktostrategicplan

Significant Non-Routine Capital Expenditures

Botanica Expansion

CouncilDistrict:AllType:NewConstruc;onCategory:ParkStart&CompleteDate:2012-2013Cost(total):$2,650,000Opera2onalCosts(addi2onal):$50,000Opera2onalStaff(addi2onal):MinimalBotanicacon2nuestoprovideapremiumaRrac2onontheriverthatsupportstheCoreAreaandNeighborhoodgoal.ThedevelopmentofthegardensandinfrastructurewillstrengthentheeconomicviabilityoftheBotanicaorganiza2onandsupporttheCityofWichitainprovidingculturalartsprogramsforci2zensandvisitors.ThefirstphaseoftheBotanicaExpansionProjectincludedthedevelopmentofachildren’sgardencomprisedofapproximatelyoneacrelocatedwestofthecurrentcomplex.Newinfrastructureforu2li2esandaroadlinkingNorthAmidontoSimParkDriveandMuseumBoulevardwereincluded.Addi2onalimprovementsincludemoremee2ngandclassroomspace.Addi2onalopera2ngcostsarees2matedat$50,000formaintenanceandu2li2es.

CityofWichita,Kansas

2.9Monitor/report

• Developrepor;ngrequirementsthroughpolicies•  Includewhetherprojectisonscheduleandwithinbudget•  Incorporateaprovisiononhowtohandlechangesandamendmentstotheplan

• Closeoutprojectswhencompleted

IllinoisStateTollHighwayAuthority

• Be>erassessingthepoten;alimpactofchangesinservicelevels•  3.1 Iden-fyservices•  3.2 Linktogoals/policies•  3.3 Summarize•  3.4 Reasonsforchange•  3.5 Servicestandards•  3.6 Equity(fairness)•  3.7 Financialsustainability•  3.8 Newrisks•  3.9 Customersa-sfac-on/qualityofservice 42

3.1Identifyservices

•  Purpose•  Categoriza-on

MecklenburgCounty,NorthCarolinaThefourquadrantsoftheChoicematrixare:NoChoices(Red)–ItemsinthiscategoryoffertheBoardnoop;onswhenitcomestoprovidingservicesortheamountoffunding.NoProgramChoice/FundingChoice(Blue)–ProgramslistedinthiscategoryareimposedontheBoard,yettheCountyhastheflexibilitywhenitcomestotheleveloffundingnecessarytomeettheprogramneeds.ProgramChoice/NoFundingChoice(Purple)–TheBoardhastheop;ontoprovidetheservicesinthiscategory.ProgramandFundingChoice(Green)–TheBoardhascompletecontroloverbothprogramandfundingdecisions.ThiscategoryofferstheBoardthegreatestdegreeofbudgetaryflexibility.TheChoicematrixisorganizedbyPrioritylevels,lis;ngeachservicewithineachmatrixquadrant.

MecklenburgCounty,NorthCarolina

$inmillions

NoChoices(ServiceorFunding)

NoServiceChoiceFundingChoice

ServiceChoiceNoFundingChoice

ServiceChoiceFundingChoice

NoFundingChoice FundingChoice

NoServiceCh

ServiceCh

3.2Linktogoals/policies

•  Relatetostrategicplan•  Relatetolong-rangefinancialplans

•  Assignbudgetdollarstoservices•  Areyougebngwhatyoupaidfor

TownofHillsborough,California

TownGoals

RelatedBudgetItems

1.CommunityService POLICE–FundoneServiceClerkposi;onwhichwillresultinincreasedpatrol;mebyshihingadministra;vedu;es,suchasfleetmaintenance,transportofevidencetolabs,etc.fromtheofficers.NewroleasAlarmServiceTechnicianwillprovidesinglepointofcontacttoresidents/alarminstallerforsetupofnewalarmmonitoringaccounts($75K).POLICE–FundoneLieutenantposi;ontoprovidesinglepointofcontactforcommunityoutreach,tooverseetrainingprogram,tomanageanaly;csfromnewdispatchandrecordsmanagementsystem,andtoenhanceinves;ga;onscasemanagementinpartnershipwithcountywidecrimepreven;on.Inaddi;on,theposi;onwillimproveeffec;venessinsolvingcrimebyapplyingmoreresourcetointernalinves;ga;onsandcasereviewsandwillimprovetrainingprograms($170K).

LinkingGoalstoSignificant2015-2016BudgetItems

3.3Summarize

•  Chooseaformat•  Couldbeforeitherenhancementsorreduc-ons•  One--meorrecurring

•  Includedifferentfunds•  Don’tgettoodetailed

CityofMapleValley,Washington

3.4Reasonsforchange

•  Legisla;on•  Cost•  Revenue•  Demographics•  Changesindemand•  Poli;cs•  Servicequality

•  Safety•  Maintenance 50

3.5Servicestandards

•  Parameters•  Ra-os•  Acceptablelevels

CityofLeawood,Kansas

3.6Equity(fairness)•  Makeservice-leveldecisionsinajustmanner•  Takethefollowingintoconsidera-on

•  Legisla-on•  Geography•  Ethnicity•  Accessibility•  Affordability

KingCountyDepartmentofTransporta2onMetroTransitDivision,Washington

Thetaskforcefeltthatitisimpera;veforanyfuturealloca;onofservicetoprovidetransitservicestothosewhohaveno,orlimited,transporta;onop;ons.TheydefinedSocialEquityandEnvironmentalJus;cetomeanusingtransitservicetoaddressgapsinmobility,andtoavoidormi;gatedispropor;onatelyhighandadversesocial,economic,orhumanhealthimpactsforpopula;onsthathavelimitedtransporta;onop;ons,includingyouth,students,elderly,disabled,peopleofcolor,thosewithlimitedEnglish.Inaddi;ontoconsideringtriporiginsforpeoplewithlimitedtransporta;onop;ons,considera;onshouldbegiventodes;na;onsforemployment,educa;on,healthcare,socialservices,andothercivicengagementac;vi;es.

3.7Financialsustainability•  Long-termfinancialplan

•  Compa;blewithfinancialstrategy•  Supportsfinancialsustainability

•  Rangeandlevelofservicesthatbestmeetservice-levelneedsandpreferences

•  Ifcurrentservicelevelsjeopardizeongoingfinancialsustainability•  Consideralterna;vestrategies

Morespecifictotheissueoftheagingpopula;onistheincreasednumberofelder-livingcommuni;esthatofferindependent,assisted,orfullcare.Thesecommuni;esvaluethepresenceoffire,rescue,andEMSandgenerateincreasedcalldemand.Forambulancetransport,thisisespeciallysignificantinboththedemandandthereimbursementrate.AmbulancetransportsforMedicarepa;entsarealmostalwaysreimbursedbutatamuchreducedrate.ThuswhiletheDistrictmayhaveincreasedgrossrevenues,roughlyhalfoftheincreasewillbeclassifiedasnon-allowed.ThisrestrictstheCFPD’sabilitytoincreasetheresponsecapacity.

CunninghamFireProtec2onDistrict,Colorado

3.8Newrisks•  Changeinserviceproviders•  Budgetaryconstraints

•  Choiceshavetobemade

•  Legisla-on•  Unfundedmandates

•  Weexpectthedemandforpublicsafetyandhumanservicestocon;nuetoincreasefor2015.WehaveincreasingcallsforEMSservice;growingcrimerates(whichbringsassociatedjailoralterna;vecorrec;onalneeds);increaseddemandformentalhealthservices(forallages);wai;nglistsforindividualswithdevelopmentaldisabili;es;andhelpingtokeeptheincreasingnumberofelderlyintheirhomesinsteadofcostlylong-termcare.

•  Noneoftheseareserviceswecancut.Formanyofthese,weareobligatedtoprovidemandatedservicesonbehalfofthestate,atacostof$150million,ofwhichSedgwickCountyonlyreceivesabout15%ofthefundingneededfromthestate.Thechoiceis—doweuselocalpropertytaxdollarstomeetthegapinservices,andifso,whatotherprogramsdoweeliminatetodothat?

SedgwickCounty,Kansas

3.9Customersatisfaction/qualityofservice

•  Whatlevelofserviceisacceptable•  Useoftechnology

•  Howtotrack/measure

Weareworkingtoenhanceourcommunica;onandoutreacheffortswithpatronsandresidents.Whilethiswillsupportourmarke;ngefforts,itisalsointendedtoprovidenewchannelsforpatronstocommunicatewiththedistrict.Keyitemsinthebudgetforthisthemeinclude:•  Fundingtodevelopamobileapptoprovideanother

toolforpatronstointeractandconductbusinesswiththedistrict

•  Fundingtodevelopnewreports,whicharenowbecomingafinancialmanagementbestprac;ce,forcommunica;ngbudgetandfinancialinforma;ontoresidentsinaconciseandeasilyunderstoodmanner

•  Con;nuedfundingforasystemthatallowsparkandfacilityuserstoprovidereal-;mefeedbackonthequalityofourfacili;esaswelltoprovideimmediateno;ceofproblems

Tuala2nHillsParkandRecrea2on,Oregon

Question1Inpresen;nginforma;onaboutlong-termplanning,governmentstendtobeweakestinregardtowhichofthefollowing?

A.  Showingtheprojec;onsB.  Describingtheassump;onsusedtomake

projec;onsC.  Discussingthesignificanceoftheprojec;ons

Question2Whichofthefollowingstatementsbestdescribesroundingforpurposesoflong-rangefinancialprojec;ons?A.  MostroundtothenextwholedollarB.  MostroundtothousandsofdollarsC.  Mostroundtothenextwholedollar,but

roundingtothousandsofdollarsisbe>erD.  Mostroundtothousandsofdollars,but

roundingtothenextwholedollarisbe>er63

Question3Governmentsareleastlikelytotakeintoaccountwhichofthefollowingwhenquan;fyingopera;ngimpacts?A.  CostsavingsB.  Addi;onalexpendituresC.  Addi;onalrevenue

Question4Mapsarethemosteffec;vewaytopresentprojectinforma;ononcapitalprojects:A.  TrueB.  False

Question5Whichofthefollowingwouldbeleastlikelytoaffectalong-termserviceleveldecision?

A.  UnfundedmandatesB.  DemographicchangesC.  WeatherD.  Poli;cs

Question6Whenpresen;ngexpenditureamounts,governmentstendtofocusleastonwhichofthefollowing?A.  SpendingbyexpenditurecomponentB.  SpendingbydepartmentC.  Spendingbygoal

• Makingbe>erdecisionsontheappropriatelevelsoffeesandcharges•  4.1 Considerapplicablelawsandstatutes•  4.2 Adoptformalpolicies•  4.3 Calculatethefullcostofprovidingaservice•  4.4 Reviewandupdate•  4.5 Benchmark•  4.6 U-lizelong-termforecas-ng•  4.7 Communicatetostakeholders•  4.8 Presentfeeinforma-on

4.1Considerapplicablelawsandstatutes

•  Lookatlawsandstatutesbeforeimplementa;on• Beawareofcurrentandproposedlegisla-on

TwoIllinoisStateSenateBillstoRestricttheAdministrativeFeesChargedbyCities

•SenateBill2261wouldlimittheadministra;vefeeforimpoundingvehiclesfromexceedingtheactualcostoftheserviceprovided.Italsopreventsanillegallyparkedcarfrombeingimpoundedunlessithasbeenabandonedformorethan48hours,andexemptscarslehbehindinanemergency.•SenateBill2265requiresthatdailystoragefeesforimpoundedvehiclescannotaccrueforatleastfivedaysaheracaristowed.Italsorequiresthatano;ceofseizuremustbesentbymail,andallowsaleaseholdertotakepossessionofanimpoundedvehicle.

Source:BellviewNews-DemocratApril14,2016

4.2Adoptformalpolicies

•  Iden;fythefactors(affordability,pricinghistory,infla;on,servicedeliveryalterna;ves,andavailableefficiencies)tobetakenintoaccountwhenpricinggoodsandservices

•  Statewhetherthejurisdic-onintendstorecoverthefullcostofprovidinggoodsandservices

• Outlinetheconsidera;onsthatmightinfluencegovernmentalpricingdecisions

Park&Recrea2onFeesA.  TheCitywilla>empttocoveratleast45percentofthetotalcostofrecrea;onprogrammingbychargingfeesforrecrea;onac;vi;esanduseofcityfacili;esandequipment.B.  TheCitywillestablishandmaintainthefollowingfeecategoriesandrelatedcostrecoverygoals:1.MaximumFeeSupport:Programfeesshouldfund80%ormoreofthecostforthefollowingprograms:specialinstruc;onclasses,compe;;veswimming,recrea;ontripsandou;ngs,adultsportleagues,majorspecialevents,latchkeyservices,andgolf.2.  Par;alFeeSupport:Programfeesshouldfund33%to80%ofthecostforthefollowingprograms:preschoolac;vi;es,introduc;ontosports(primarygrades),outdoorrecrea;on,specialcrahworkshops,andaqua;cs.3.MinimumFeeSupport:Programfeesshouldfundupto33%ofthecostforthefollowingprograms:communitycentersandac;vi;es,youthcentersandac;vi;es,minorspecialevents,playgroundac;vi;es,juniorathle;cs,non-sponsoredoutdoorrecrea;on,andco-sponsoredspecialinterestac;vi;es.

CityofAnkeny,Iowa

4.3Calculatethefullcostofprovidingaservice

• Calcula;ngthefullcostprovidesabasisforseDngthechargeorfee

•  Fullcostsincorporatedirectandindirectcosts• Costsofcollec;onneedtobeaddressed

CostofServicesAnalysisandFeeMethodologyCityofMinneapolis,Minnesota

Source:CityofMinneapolis2013Study

Followingthedetermina;onofdirectcost,a>en;onwasturnedtotheiden;fica;onandcalcula;onofindirectcostsassociatedwiththesupportofthedirectstaff.Forthisstudy,indirectcostsweredeemedtoinclude:

4.4Reviewandupdate

•  Lookatvariousfactors•  Impactofinfla;on•  Othercostincreases•  Adequacyofcostrecovery•  Useofservices•  Compe;;venessofcurrentrates

• Updatefeesonaperiodicbasis•  Helpstosmoothchargesandfees

•  Asapartofthebudgetprocess,theBoardsetwaterratesthatwillgointoeffectonJanuary1,2016.

•  Theplannedwaterrateadjustmentis2.5%basedonacostof

serviceanalysis.Thisrepresentsanimpactof$1/monthforthetypicalresiden;alcustomer.Themaincostdriversthatmakeanincreasein2016necessaryareinvestmentsininfrastructurereplacement,laborexpenses,securityenhancements,andagradualdeclineinindoorwateruse.

•  The2016rateisconsistentwithWaterOne’sapproachtoavoidratevola;litybycrea;ngincrementalrateadjustments.Stable,predictableratesarepreferredbycustomersandpromotethegrowthofthelocaleconomy.

WaterOne,Kansas

4.5Benchmark

• Benchmarkindividualfeesandchargeswiththosechargedbycomparableorneighboringjurisdic-ons

CityofBurnsville,Minnesota

4.6Utilizelong-termforecasting•  Servicefeeplanshouldbeconsistentwithlong-rangefinancialprojec-ons

• Recognizetheplanmaybeamendedtoreflectchangingcondi-onsinthefuture

KeepRatesandExpensesattheRateofInfla2on.•  TheBoardhasestablishedapriorityofmaintainingsewerrateaffordabilitybystrivingtokeeprategrowthtonomorethantheConsumerPriceIndex(CPI).Thishasbeenchallenging,astheDistrict’sopera;ngexpenses(wages,healthcare,re;rement,electricity,chemicals,etc.)tendtoincreasefasterthanCPI.

•  Forthepast9years,theDistricthasmaintainedthegoalofnotincreasingratesbeyondinfla;onbyinves;ngincapitalprojectsandprocessesthatreduceopera;ngexpenses.

•  Thecalcula;onofsewerservicechargesratesbasedonassetlifecyclecosts(intheTen-YearFinancialForecastsec;onofthebudgetdocument)highlightsthat,evenwiththecostsavingmeasuresimplementedbytheDistrict,thesewerservicechargesarenotadequatetomeettherenewalandreplacementneedsoftheDistrict.

NAPASanita2onDistrict,California

4.7Communicatetostakeholders• Provideinforma-ononchargesandfeestothepublic• Giveci;zensfeedbackopportunity

CityofDaytonaBeach,Florida

•  Thenewproposalaimstocreateconsistencyandclarityinfeesacrosscityvenues.Thechangesincludesugges;onstoassessnon-cityresidentsrentalfeesthatare25percenthigher,removefeesthatkeepfamiliesfromusingopenspaceforfreeplayatsomeparksandcommunitycenters,establishconsistentfeesforallathle;cdailyrentalsforprac;ceandgamesandlowerthebaserentalfeeoffacili;esbutaddsurchargesbasedontheimpactandrequirementsofplannedevents.

Source:h>p://www.news-journalonline.com

4.8PresentFeeInformation•  Explainwhy•  Showdollarimpact

• Neworexis-ng• Adjustforconsump;on• Donotlisteveryfeeinbudgetdocument

PinellasCounty,Florida

Part5•  Designingmoreeffec;vemeasuresofperformance(TheNa;onalPerformanceManagementCommission)•  5.1 Informa-on,measures,goals,andac-vi-esshould

berelevanttothepriori-esandwell-beingofthegovernmentandthecommunity

•  5.2 Informa-onrelatedtoperformance,decisions,regula-ons,andprocessesshouldbetransparent,easytoaccess,use,andunderstand

•  5.3 Goals,programs,ac-vi-es,andresourcesshouldbealignedwithpriori-esanddesiredresults

•  5.4 Decisionsandprocessesshouldbedrivenby-mely,accurate,andmeaningfuldata

•  5.5 Performancemanagementshouldhelptotransformtheorganiza-on,management,andthepolicy-makingprocess

•  5.6 Prac-cesshouldbesustainableover-meandacrossorganiza-onalchanges

TheNationalPerformanceManagementCommission

•  Representedelevenna;onalpublicinterestorganiza;onsofelectedandappointedstateandlocalgovernmentofficials(includingGFOA)

•  Issuedareportin2010,APerformanceManagementFrameworkforStateandLocalGovernment:FromMeasurementandRepor-ngtoManagementandImproving

•  Sixmajorprincipleswereaddressed

5.1Information,measures,goals,priorities,andactivitiesarerelevanttotheprioritiesandwell-beingofthegovernmentandthecommunity• Usecommunitycondi;onmeasurestoassessresidentneedsthatmaynotbeaddressedbycurrentprograms

• Usecustomerorresidentsa-sfac-onsurveys•  Avoidprin-ngoutthefullsurveyandalloftheresults•  Summarizefindings

CityofBeRendorf,Iowa

5.2Informationrelatedtoperformance,decisions,regulations,andprocessesistransparent,easytoaccess,use,andunderstand

•  Limitthenumberanddegreeofperformancemeasuresthatprovideanefficientandmeaningfulwaytoassesstheeffec-venessandefficiencyofkeyprograms

• Reportinternallyandexternally

CityofWilliamsburg,Virginia

5.3Goals,programs,activities,andresourcesarealignedwithprioritiesanddesiredresults

•  Ensurethatthebenefitsofestablishingandusingperformancemeasuresexceedtheresourcesrequiredtoestablishperformancemeasures

• Baseonperformancemeasuresthat-etoastatementofprogrammissionorpurpose

• Measureprogramoutcomes

CityofTemecula,California

CoreValue

Five-YearLong-TermGoal

PerformanceMeasures

FY2013-14Actuals

FY2014-15Actuals

FY2015-16Target

ASafeand

Commun

MinimizeTheImpactToLife,

Property,andTheEnvironmentFromNaturalHazards

AndEmergencySitua;ons

PercentageofCSO’s

trainedintheopera;onandsetup

oftheMobileCommandPost

RemainWithinTheFederalRankingOfTheTop25Safest

Percentageofpatrolofficersmaintaining24-hourperishable

skillstraining

PoliceDivision/ProgramPatrolServicesPERFORMANCEMEASURESFORFISCALYEAR2015-2016

5.4Decisionsandprocessesaredrivenbytimely,accurate,andmeaningfuldata

• Beverifiable,understandable,and;mely• Bemonitoredandusedinmanagerialdecision-makingprocesses

• Adoptcommondefini-onsofkeyefficiencyandeffec-venessperformancemeasurestoallowintergovernmentalcomparisons

5.5 Performancemanagementhelpstotransformtheorganization,itsmanagement,andthepolicy-makingprocess

•  Provideforresourcealloca;oncomparisonsover;me• Measureefficiencyandeffec-venessforcon-nuousimprovement

•  Beconsistentthroughoutthestrategicplan,budget,accoun;ngandrepor;ngsystemstotheextentprac;cal

•  Developandperiodicallyreviewsupportabletargetsforeachperformancemeasure

•  Developmul-yearseriesofqualityoroutcomeindicatorstomeasuretheeffec-venessandefficiencyofservicedeliverywithinprograms

CityofGrantsPass,Oregon

5.6Practicesaresustainableovertimeandacrossorganizationalchanges

• Designtheprac-cesinsuchawaytomo-vatestaffatalllevelstocontributetowardorganiza-onalimprovement

•  Evaluatethedatatouseinlong-termresourcealloca;onandbudgetdecisionsforcon;nuousimprovement

• Developcommonorimprovedapproachestotheu-liza-onoffinancialandnon-financialperformancemeasuresinmakingandevalua-ngdecisions

TownofChapelHill,NorthCarolina

Source:Na2onalLeagueofCi2es2014

•  Improvingtheprocessofbudge;ngforsalariesandwages•  6.1 Personneltrackingsystem•  6.2 Vacancyadjustments•  6.3 Fundedversusunfundedposi-ons•  6.4 Frozenoreliminatedposi-ons•  6.5 Compensa-onapproaches•  6.6 Op-malstaffinglevel

6.1Personneltrackingsystem

• Budgetpayrollprojec;onsarebasedonthees;mateofbudgetedposi;onsfortheyear•  Providingthecorrectnumberofbudgetedposi-onsisimportant

•  Thesystemtotrackbudgetedposi;onsmayresideinthehumanresourcesdepartmentratherthanthebudgetdepartment

•  Itisvitalthatthedepartmentsworktogethertobeconsistentinrepor;ng

•  Thesystemshouldbeabletotrackalltypesofemployees,notjustfull-;me 101

TheCity’sCentralOrganiza;onandPosi;onManagementSystemmaintainsacompleteinventoryoftheCity’sposi;ons,theira>ributes,andrepor;nghierarchies.AnaccurateandconsistentOrganiza;onandPosi;onManagementsystemiscri;calinavoidingbudgetaryover-expenditureandisessen;alinprovidingdecision-makinginforma;oninsupportoftheCity’sHumanResources,andfinancialplanning,andmanagement.

CityofPortland,Oregon

6.2Vacancyadjustments

•  Startdates•  Trends

•  Itmaybeprudenttoincludeahiringlaginthebudget,sincemostgovernmentsexperiencesomevacanciesduringtheyear•  Todeterminethedollarimpactofthislagistoreviewtrends(averagefilledposi-onsperyearversusaveragevacantposi-ons)

•  Analysiscanbeconductedatthedepartmentlevelorbrokenoutbyindividualposi;on

•  Technicalorhigherlevelposi;onsareusuallyhardertofill 103

CityofRye,NewYork

6.3Fundedversusunfundedpositions

• Approvedposi-onsshouldbefundedinthebudget

• Unfundedposi;ons,orthosethatwererequestedbutnotapproved,shouldbenoted,especiallyifmanagementdecidesatsomepointtoreconsidersomeofthosedeniedposi;onrequests

WhioieldCounty,Georgia

6.4Frozenoreliminatedpositions

•  Someposi;onsmaybefrozen• Otherposi;onsmaybetemporarilyfrozen•  Thedollarssavedbynotfillingtheseposi-onsshouldbequan-fied

•  Iftheposi;onsbeingeliminatedarecurrentlyfilled,thenthegovernmentmightalsoneedtoincludeseverancepayoutsinthebudget

WhioieldCounty,Georgia

6.5Compensationapproaches•  Stepandgradesystems

•  Salaryrange• Payforperformance

•  Fosterworkplaceproduc;vity•  Needtodesignausefulappraisalsystem

• Wagesurveys• Cost-of-livingadjustmentsohenareusedwhenforecas-ngpersonnelcosts

•  TheConsumerPriceIndex(CPI),abroadmeasureofconsumerinfla-on,isthecost-of-livingindexusedmostohenfordeterminingsalaryincreases 109

CollierCounty,Florida

6.6OptimalstafGinglevel

• Comparisontoothergovernments•  Usepopula-ontoemployeera-os

•  Staffingguidelines•  Setupspecificpolicies

• Posi;onsclassifiedbygoal• Useofvolunteers•  Seasonalandtemporaryposi;ons• Otherconsidera;ons

•  Over;meratherthanhiringfull-;me•  Useofre;redemployees

CityofTempe,Arizona

CityofLiRleton,Colorado

Communica;ons&Marke;ng 40CommunityDevelopment 360Police17,073PublicWorks24Library3,032Museum8,344Total 28,873

Es;matedVolunteerHours-2014

Question7Thereisnoprac;calreasontocalculatethefullcostofasubsidizedac;vity.

A.  TrueB.  False

Question8Whatfeesshouldbelistedinthebudgetdocument?A.  ThosewithahighdollarimpactB.  Thosesubjecttoahighlevelofci;zenconcernC.  ThoseaffectedbysignificantchangesD.  AlloftheaboveE.  Alistofallfeesshouldbepresented

Question9Whichofthefollowingstatementistrueregardingperformancemeasurement(PM)?A.  PMshouldfocusonactualpastperformanceB.  PMshouldfocusonfutureperformanceC.  PMshouldfocusonbothactualpast

performanceandfutureperformance

Question10Whichofthefollowingstatementsisfalse?A.  Tobeeffec;ve,performancemeasuresmust

belinkedtogoalsB.  Objec;vityrequiresthatperformance

measuresfocusprimarilyonac;vitylevels(measuresofoutput)

C.  Performancemeasuresmayincludecomparisonstoselectedbenchmarks

D.  Performancemeasuresmayincludecomparisonswithpeergovernments

Question11Whichofthefollowingstatementsismoreaccurateregardingsalaryforecasts?

A.  Assumingfull-;meemploymenttendstoresultintheleastvariance

B.  Usingahiringlagfactortendstoresultintheleastvariance

Question12Whichofthefollowingcompensa;onapproachesshouldbeavoided?

A.  StepandgradesystemsB.  PayforperformanceC.  UseofwagesurveysD.  Noneoftheabove

Markyourcalendar

•  2017GFOAAnnualBe>erBudge;ng•  Thursday,October5,2017

Biography John D. Fishbein is a Senior Program Manager in Government Finance Officers Association’s (GFOA) Technical Services Center. Mr. Fishbein came to GFOA in 2002. He is responsible for the day-to-day operation of GFOA's Distinguished Budget Presentation Awards Program. He is the author of GFOA’s recent publication, Building a Better Budget Document. He previously authored Preparing High Quality Budget Documents for School Districts and Preparing High Quality Budget Documents. He serves as staff to GFOA’s standing Committee on Governmental Budgeting and Fiscal Policy. John can be reached by phone at 312-578-2268 or by e-mail at jfishbein@gfoa.org.

Biography

Mike Bailey has worked in local government finance since 1980 and is currently the Finance Director with the City of Redmond. He has served as president of the Washington Finance Officers Association and the state representative for the Government Finance Officers Association (GFOA). Mike was on GFOA’s Executive Board. He has served as Chairman of GFOA Technology Resource Group and as a member and Vice Chair of GFOA’s Budget and Management Committee. He is a CPA and has been a GFOA budget reviewer for almost two decades. Mike can be reached by phone at 425-556-2160 or by e-mail at mebailey@redmond.gov.