1st Annual Better Budgeting - Government Finance … · 1st Annual Better Budgeting October 6, 2016, ... “Housekeeping Items” 1. ... to revenues and expenses as FY 2014-15 unfolds

1stAnnualBetterBudgeting

October 6, 2016, and January 12, 2017 Copyright 2016 by Government Finance Officers Association

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;[email protected]

3.  AcopyofthePowerPointslidesareavailableunderthe“resources”tabatthetoprightofthescreen

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

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

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Instructors

•  JohnFishbeinSeniorProgramManagerGovernmentFinanceOfficersAssocia;on(GFOA)

•  MichaelBaileyFinanceDirectorCityofRedmond,Washington

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•  Explanatoryslidesoutlinethemajorpointscoveredinthispresenta;on.Theexplana;onsarethenreinforcedwithexamples.

•  Thebulletpointsintheexplanatoryslidesthatarehighlightedinredanditalicizedspecificallyrelatetothecorrespondingexamples.

•  Pleasenotethatthebulletpointsthatarenothighlightedareequallyimportant.

•  Ineachoftheexampleslides,thenameoftheen;tyappearsintheupperrightcorneroftheslideandkeypointsoftheexampleareemphasizedinaredunderline.

Afewnotesabouttheformatofthispresentation…

Part1

•  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

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1.1Convincedecisionmakersoftheneed

•  ExplainLRFP(Long-RangeFinancialPlanning)•  Findoutanyqualmsorobjec;onsthatthedecisionmakersmayhave

• Diagramtheprocessandwhereitwouldfitin• NoteotherpeergovernmentsthatdoLRFP

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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

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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

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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

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Belowisthedetailofthecostofes;matedcompensa;onandinsuranceincreasesforcomparisonpurposes($millions).

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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

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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)

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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

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St.JohnsCounty,Florida

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CityofCoRonwood,Arizona

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

Part2

• 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

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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.

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Defini2onofCapitalExpenditures

IncorporatedCountyofLosAlamos,NewMexico

2.2Calendar

• Acalendarshowingkeydatesinthecapitalbudgetprocessshouldbepresented,alongwithtextdescribingtheprocess

• Responsiblepar-es(departments)andstatutorydeadlinesareusefulindescribingtheprocess

•  Thecapitalprocesscalendarcouldbeapartorjuxtaposedwiththeopera-ngbudgetcalendar

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CityofTempe,Arizona

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• Capitalassetsthatrequirerepair,maintenance,orreplacementthat,ifnotaddressed,willresultinhighercostsinfutureyears

•  Infrastructureimprovementsneededtosupportnewdevelopmentorredevelopment

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

2.3Iden;fyneeds

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RegionalMunicipalityofYork,Ontario

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• Understandprojectscope

•  Clarifyprojectgoals•  Verifyalignmentwithstrategicneeds•  Clarifyintendedcustomer(s)

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

•  Cost,includinglaborandmaterials•  Timeline•  Ongoingmaintenancecosts

• Whocanfillitout•  Projectoriginator

2.4Capitalprojectrequests

CityofSpringfield,Oregon

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•  Informa-ononhowcapitalprojectsareevaluatedandpriori-zediscri-cal

• Considerastructuredprocessforpriori;zingneed•  Linktostrategicplan

•  Iden;fychangesinpriori;es•  Includestakeholdersintheprocess

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

2.5Priori;ze

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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

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•  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

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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

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• An;cipateexpectedrevenueandexpendituretrends,includingtheirrela;onshiptomul;-yearfinancialplans

• Preparecashflowprojec;onsoftheamountand;mingofthecapitalfinancing

•  Ensurecompliancewithallestablishedfinancialpolicies

• Recognizeappropriatelegalconstraints• Considerandes-matefundingamountsfromallappropriatefundingalterna-ves

•  Ensurereliabilityandstabilityofiden;fiedfundingsources

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

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CityofWoodstock,Illinois

2.8Capitalprojectdetailinthebudgetdocument

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• Notecapitalprojectsasrecurringornon-recurring•  Provideconciseprojectdetailwithjus-fica-onandbenefits

•  Projectcoststhroughthecompletecycle•  Timetablethatincludesthedifferentphasesandscheduledcomple;ondate

•  Picturestendtobemoreeffec-vethanmaps• Opera-ngimpacts•  Linktostrategicplan

Significant Non-Routine Capital Expenditures

Botanica Expansion

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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

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• Developrepor;ngrequirementsthroughpolicies•  Includewhetherprojectisonscheduleandwithinbudget•  Incorporateaprovisiononhowtohandlechangesandamendmentstotheplan

• Closeoutprojectswhencompleted

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IllinoisStateTollHighwayAuthority

Part3

• 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

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

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MecklenburgCounty,NorthCarolina

$inmillions

$334

$801

$23

NoChoices(ServiceorFunding)

$412

NoServiceChoiceFundingChoice

$801

ServiceChoiceNoFundingChoice

$23

ServiceChoiceFundingChoice

$334

NoFundingChoice FundingChoice

NoServiceCh

oice

ServiceCh

oice

3.2Linktogoals/policies

•  Relatetostrategicplan•  Relatetolong-rangefinancialplans

•  Assignbudgetdollarstoservices•  Areyougebngwhatyoupaidfor

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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

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CityofMapleValley,Washington

3.4Reasonsforchange

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

•  Safety•  Maintenance 50

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3.5Servicestandards

•  Parameters•  Ra-os•  Acceptablelevels

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CityofLeawood,Kansas

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

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

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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

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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

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•  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

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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

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

roundingtothousandsofdollarsisbe>erD.  Mostroundtothousandsofdollars,but

roundingtothenextwholedollarisbe>er63

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

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Question4Mapsarethemosteffec;vewaytopresentprojectinforma;ononcapitalprojects:A.  TrueB.  False

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Question5Whichofthefollowingwouldbeleastlikelytoaffectalong-termserviceleveldecision?

A.  UnfundedmandatesB.  DemographicchangesC.  WeatherD.  Poli;cs

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

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Part4

• 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

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4.1Considerapplicablelawsandstatutes

•  Lookatlawsandstatutesbeforeimplementa;on• Beawareofcurrentandproposedlegisla-on

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TwoIllinoisStateSenateBillstoRestricttheAdministrativeFeesChargedbyCities

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•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

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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

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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

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•  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

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CityofBurnsville,Minnesota

4.6Utilizelong-termforecasting•  Servicefeeplanshouldbeconsistentwithlong-rangefinancialprojec-ons

• Recognizetheplanmaybeamendedtoreflectchangingcondi-onsinthefuture

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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.

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NAPASanita2onDistrict,California

4.7Communicatetostakeholders• Provideinforma-ononchargesandfeestothepublic• Giveci;zensfeedbackopportunity

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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

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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

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TheNationalPerformanceManagementCommission

•  Representedelevenna;onalpublicinterestorganiza;onsofelectedandappointedstateandlocalgovernmentofficials(includingGFOA)

•  Issuedareportin2010,APerformanceManagementFrameworkforStateandLocalGovernment:FromMeasurementandRepor-ngtoManagementandImproving

•  Sixmajorprincipleswereaddressed

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

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

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CityofBeRendorf,Iowa

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

•  Limitthenumberanddegreeofperformancemeasuresthatprovideanefficientandmeaningfulwaytoassesstheeffec-venessandefficiencyofkeyprograms

• Reportinternallyandexternally

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CityofWilliamsburg,Virginia

5.3Goals,programs,activities,andresourcesarealignedwithprioritiesanddesiredresults

•  Ensurethatthebenefitsofestablishingandusingperformancemeasuresexceedtheresourcesrequiredtoestablishperformancemeasures

• Baseonperformancemeasuresthat-etoastatementofprogrammissionorpurpose

• Measureprogramoutcomes

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CityofTemecula,California

CoreValue

Five-YearLong-TermGoal

PerformanceMeasures

FY2013-14Actuals

FY2014-15Actuals

FY2015-16Target

ASafeand

Prepa

red

Commun

ity

MinimizeTheImpactToLife,

Property,andTheEnvironmentFromNaturalHazards

AndEmergencySitua;ons

PercentageofCSO’s

trainedintheopera;onandsetup

oftheMobileCommandPost

60%

75%

80%

RemainWithinTheFederalRankingOfTheTop25Safest

Ci;es

Percentageofpatrolofficersmaintaining24-hourperishable

skillstraining

95%

100%

100%

PoliceDivision/ProgramPatrolServicesPERFORMANCEMEASURESFORFISCALYEAR2015-2016

5.4Decisionsandprocessesaredrivenbytimely,accurate,andmeaningfuldata

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

• Adoptcommondefini-onsofkeyefficiencyandeffec-venessperformancemeasurestoallowintergovernmentalcomparisons

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5.5 Performancemanagementhelpstotransformtheorganization,itsmanagement,andthepolicy-makingprocess

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

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

•  Developandperiodicallyreviewsupportabletargetsforeachperformancemeasure

•  Developmul-yearseriesofqualityoroutcomeindicatorstomeasuretheeffec-venessandefficiencyofservicedeliverywithinprograms

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CityofGrantsPass,Oregon

5.6Practicesaresustainableovertimeandacrossorganizationalchanges

• Designtheprac-cesinsuchawaytomo-vatestaffatalllevelstocontributetowardorganiza-onalimprovement

•  Evaluatethedatatouseinlong-termresourcealloca;onandbudgetdecisionsforcon;nuousimprovement

• Developcommonorimprovedapproachestotheu-liza-onoffinancialandnon-financialperformancemeasuresinmakingandevalua-ngdecisions

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TownofChapelHill,NorthCarolina

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Source:Na2onalLeagueofCi2es2014

Part6

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

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6.1Personneltrackingsystem

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

•  Thesystemtotrackbudgetedposi;onsmayresideinthehumanresourcesdepartmentratherthanthebudgetdepartment

•  Itisvitalthatthedepartmentsworktogethertobeconsistentinrepor;ng

•  Thesystemshouldbeabletotrackalltypesofemployees,notjustfull-;me 101

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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

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CityofRye,NewYork

6.3Fundedversusunfundedpositions

• Approvedposi-onsshouldbefundedinthebudget

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

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WhioieldCounty,Georgia

6.4Frozenoreliminatedpositions

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

•  Iftheposi;onsbeingeliminatedarecurrentlyfilled,thenthegovernmentmightalsoneedtoincludeseverancepayoutsinthebudget

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WhioieldCounty,Georgia

6.5Compensationapproaches•  Stepandgradesystems

•  Salaryrange• Payforperformance

•  Fosterworkplaceproduc;vity•  Needtodesignausefulappraisalsystem

• Wagesurveys• Cost-of-livingadjustmentsohenareusedwhenforecas-ngpersonnelcosts

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

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CollierCounty,Florida

6.6OptimalstafGinglevel

• Comparisontoothergovernments•  Usepopula-ontoemployeera-os

•  Staffingguidelines•  Setupspecificpolicies

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

•  Over;meratherthanhiringfull-;me•  Useofre;redemployees

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CityofTempe,Arizona

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CityofLiRleton,Colorado

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

Es;matedVolunteerHours-2014

Question7Thereisnoprac;calreasontocalculatethefullcostofasubsidizedac;vity.

A.  TrueB.  False

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

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

performanceandfutureperformance

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Question10Whichofthefollowingstatementsisfalse?A.  Tobeeffec;ve,performancemeasuresmust

belinkedtogoalsB.  Objec;vityrequiresthatperformance

measuresfocusprimarilyonac;vitylevels(measuresofoutput)

C.  Performancemeasuresmayincludecomparisonstoselectedbenchmarks

D.  Performancemeasuresmayincludecomparisonswithpeergovernments

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Question11Whichofthefollowingstatementsismoreaccurateregardingsalaryforecasts?

A.  Assumingfull-;meemploymenttendstoresultintheleastvariance

B.  Usingahiringlagfactortendstoresultintheleastvariance

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Question12Whichofthefollowingcompensa;onapproachesshouldbeavoided?

A.  StepandgradesystemsB.  PayforperformanceC.  UseofwagesurveysD.  Noneoftheabove

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Markyourcalendar

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

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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 [email protected].

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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 [email protected].

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