Budget Strategies forLocal Government

Horatio Porter

Budget Officer

City of Fort Worth1

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Fort Worth31873

Fort Worth - 20094

City of Fort Worth

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• FY2010 Budget $1.2B

• Staff Size 6425 Employees

• Organization 18 City Depts

• Population 720,000 Residents

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Major Attractions

Museum District Texas Motor Speedway

Cowboys of Color Rodeo

Bass Performance Hall

Historic Stockyards District

Colonial Tournament

Zoo 6

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

1950 1960 1970 1980 1990 2000 2010 2020 2030

POPULATION GROWTH

1950-2030

Sources: U.S. Census Bureau, 1950-2000; NCTCOG, 2001-2030.

720,250

717th Largest City in America

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The Recession hit Fort Worth

5 Year ForecastGeneral Fund

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$400

$450

$500

$550

$600

$650

$700FY

09

FY10

FY11

FY12

FY13

FY14

Millions

Revenues Baseline Expenditures

Gap = $59M

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Bucket Approach:

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Bucket Descriptions

• Bucket A – Service Reductions

• Bucket B – Citywide Initiatives

• Bucket C – Organizational Changes

• Bucket D – Enhance Revenues

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• Closed 6 of 7 swimming pools

• Reduced hours at community centers

• Eliminated one Code Compliance District

• Reduced mowing of parks, medians and right of way

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Bucket A – Service Reductions

Bucket B – Citywide Initiatives

• Instituted 8 Furlough Days

• Revised funding for healthcare benefits

• Reduced funding to Ambulance Authority

• Reduced purchases for city vehicles

• Reduced misc. discretionary spending13

• Moved Departments / Functions out of the General Fund into Enterprise Funds

• Accelerated Outsourcing Efforts

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Bucket C – Organization Changes

• Assessed payment to Enterprise Funds

• Suspended our Policy on Gas Well Revenues

• Hired a collection agency to pursue delinquent court fines

• General fee increases (Library, Parks, Meters)

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Bucket D – Enhance Revenues

Overview of FY2010Budget Recommendations

Service Reductions

Organizational Changes

Citywide Initiatives

C

B

Enhance Revenues

$59 millionbudget shortfall

A$16 m

$25 m

$3 m $15 mD

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Updated 5 Yr Financial Forecast

General Fund

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$400

$450

$500

$550

$600

$650

$700

Millions

Revenues Baseline Expenditures

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Gap = $25MBalan

ced

Observation• June 1, 2009

January 2006, North American International Auto

Show – Speaker: Jerry York

• Key points:1. Be realistic about revenue expectations

2. Cut product offerings. Offer fewer and better products

3. Use a “clean sheet of paper” approach. No sacred cows

4. Make tough decisions. If something isn’t core, sell or close it.

5. Time is of the essence.

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GM vs Ford1. Be realistic about revenue expectations

A. GM – focused on sales volume, selling cars at a loss

B. Ford – reengineered operations, focused less on market share

2. Cut product offerings. Offer fewer and better productsA. GM – Closed 1 brand (Oldsmobile)

B. Ford – Shifted focus from SUVs to small cars

3. Clean sheet of paper, no sacred cowsA. GM – No material changes in production

B. Ford – Cut material costs, made plants more flexible19

GM vs Ford4. Make tough decisions, sell it or close it

A. GM - Worked on green technology, hydrogen cars and solar panel (but maintained 60 models across 8 brands)

B. Ford – Sold Jaguar, Land Rover and Aston Martin (generated cash)

5. Time is of the essenceA. GM – Almost $50b in bailouts, filed bankruptcy 3 years

after speech

B. Ford – Solvent, improving quality and product offerings

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Implication / Application1. Be realistic about revenue expectations

Deal with the reality of a flat revenue stream.

2. Cut product offerings. Offer fewer and better products Determine what services you will provide and be the best at delivering

those offerings

3. Clean sheet of paper, no sacred cows Every dept should be critically evaluated and challenged to improve

4. Make tough decisions, sell it or close it Programs that are not making a measurable impact should be eliminated

5. Time is of the essence Act now 21

City of Fort WorthSimplified Budget Process

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City of Fort WorthSimplified Budget Process

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Questions

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