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Transcript of 1st Annual Better Budgeting - Government Finance … · 1st Annual Better Budgeting October 6,...
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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CityofMapleValley,Washington
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
66
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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72
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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CityofMapleValley,Washington
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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