Financing the Future Long-Term Financial Planning for Local Government
Agenda <ul><li>Part I – Introduction to Financial Planning </li></ul><ul><li>Part II – Overview of Planning Process  </li>...
Part I – Introduction
What is Long-Term Financial Planning? <ul><li>A combination of technical analysis and strategizing </li></ul><ul><ul><li>F...
What is a Financial plan? <ul><li>Essential characteristics </li></ul><ul><ul><li>What is the time horizon?  </li></ul></u...
Coral Springs’ Business Model Strategic Plan Business Plan Budget Output to Citizens Data Analysis Citizen Input
So, Why Financial Planning Now? <ul><li>Determine financial position & condition </li></ul><ul><li>Build case for action <...
What Financial Planning Has Done for Coral Springs <ul><li>Focus on key indicators of financial health </li></ul><ul><ul><...
Trust
Citizen Perception of Taxes
Highlights <ul><li>Similar percentages believe “it is okay to collect the same amount of property taxes to preserve curren...
Trust <ul><li>Preliminary Findings of “Choice Works Dialogues” </li></ul><ul><li>“We are prepared to pay more in taxes if ...
Part I – Take-Aways <ul><li>LTFP is a strategic and visionary process </li></ul><ul><li>LTFP is part of a complete plannin...
Part II – Overview of the Planning Process
Four Major Phases
Mobilization Phase <ul><li>Align Resources </li></ul><ul><ul><li>Identify participants </li></ul></ul><ul><ul><li>Design a...
Mobilization Phase <ul><li>Service level preferences </li></ul><ul><ul><li>Strategic priorities and objectives </li></ul><...
Example of Policy Self-Assessment
Align Resources With Strategy Resource Allocation (Budget & CIP) Measurement (Quarterly Performance Reports and State of t...
Mobilization Phase Take-Aways <ul><li>Preparation is key to financial planning. </li></ul><ul><li>A clear “roadmap” increa...
Analysis Phase <ul><li>Environmental Analysis </li></ul><ul><ul><li>Objective and subjective sources </li></ul></ul><ul><u...
 
 
Crime Rate Comparisons Fiscal Year per 100,000
Drill Down…
…and Down
Analysis Phase <ul><li>Debt Analysis </li></ul><ul><ul><li>Analyze impact of current obligations </li></ul></ul><ul><ul><l...
Fund Balance
Environmental Factors
Getting the Right Tax Rate/Service Level Mix Updated Good
$13.5 million bond approved by voters Debt Service Millage Rate is Unchanged  Despite Decline in Property Tax Base
Analysis Phase Take-Aways <ul><li>Environmental analysis is the foundation of planning – invest in it! </li></ul><ul><li>H...
Decision Phase <ul><li>Develop Financial Strategies </li></ul><ul><ul><li>Match strategy to size of imbalance </li></ul></...
Coral Springs Business Plan <ul><li>Translates the Strategic Plan into action   </li></ul><ul><li>Develop initiatives to s...
Decision Phase Take-Aways <ul><li>The means by which strategies are developed is as important as the strategies themselves...
Execution Phase <ul><li>Executing the Plan </li></ul><ul><ul><li>The budget is the most important execution tool </li></ul...
Coral Springs’ Key Intended Outcomes Financial Health & Economic Development Goals   92% 91% 90% Customer Service Rating (...
Execution Phase Take-Aways <ul><li>The budget and LTFP must be linked </li></ul><ul><li>Participant commitment  is crucial...
Part III – Financial Planning and Recovery from Financial Distress
 
LTFP’s Role in Recovery <ul><li>Recognize financial condition </li></ul><ul><li>Identify & implement long-term strategies ...
Surviving and Thriving <ul><li>Recently, LTFP leaders have… </li></ul><ul><ul><li>Reached or maintained AAA bond ratings <...
Features of a Resilient System <ul><li>Diversity </li></ul><ul><li>Redundancy </li></ul><ul><li>Decentralization </li></ul...
Diversity <ul><li>Avoiding a single point of failure </li></ul><ul><li>Multi-faceted perspective on financial health </li>...
Redundancy <ul><li>Avoid having one path of escape or rescue </li></ul><ul><li>Reserves </li></ul><ul><ul><li>A policy to ...
Decentralization <ul><li>Centralized systems look strong, but when they fail, the failure is catastrophic   </li></ul><ul>...
Collaboration <ul><li>Working together to become stronger  </li></ul><ul><li>Elected officials </li></ul><ul><ul><li>Engag...
Fail Gracefully <ul><li>Failure happens.   Make sure a failure state won’t make things worse </li></ul><ul><li>Recognize c...
Tax reform plus an economic downturn eroding revenue Projected Phase I of Tax Relief Double Homestead Exemption Actual Mil...
Flexibility <ul><li>Be ready to change when plans aren't working   </li></ul><ul><li>Constant environmental scanning  </li...
Foresight <ul><li>Think and prepare   </li></ul><ul><li>Forecasting </li></ul><ul><ul><li>Identify the parameters within w...
General Fund 5-Year Forecast This chart is for planning purposes and illustrates the potential shortfalls the General Fund...
Take-Aways <ul><li>Don’t be satisfied with sustainability… </li></ul><ul><li>…Go for  resiliency ! </li></ul><ul><li>If yo...
The End <ul><li>For more information … </li></ul><ul><li>Get on our mailing list (email  [email_address] ) </li></ul><ul><...
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Shayne Kavanagh and Bob Goehrig

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  • Forecasting and analysis reveals problems, and then strategies are developed to address them Above all, the plan is strategic and visionary. It doesn’t just forecast the status quo into the future. It also involves others – particularly elected officials and other departments to develop consensus strategies and ensure a successful implementation. Tell CoMntclr story Develop big picture, long-term thinking among elected and appointed officials. Tell story of SV council.
  • A plan is between 5-10 years. Some plans included 20-year forecasts, but these are usually speculative in nature A plan could consider a range of funds but beginners tend to limit to fewer funds. However, the plan must include the funds that are relevant to the most pressing issues (e.g., if street repair is a big issue, then the street repair fund must be included) 3. A plan can be done annually or as-needed. Annually is ideal so that the plan can act as prelude to the budget process and contribute a long-term perspective to budget deliberations. As-needed plans may be driven by special issues like a large debt issuance or a financial crisis. A hybrid approach is also possible, where a plan is done annually but more sophisticated elements are only undertaken every few years. For example, Coral Springs does extensive community visioning and workshops only every few years. 4. A plan contains a scan of the environment, long-term forecasts, debt analysis, and financial strategies.
  • This shows integration between planning process in Coral Springs. The major points are: -Data analysis is a key part of the planning process because it leads to “data driven decision making” and away from intuitive or seat-of-the-pants, ad hoc decision making. For example, rather than basing decisions on which residents complained loudest at the last council meeting, decisions are made on community survey results. -Citizen input is key element of the plan. Citizen input is vital to maintaining financial support for City government. There will be more on this later in the show. -The City communicates back to citizens to let them know how the City is doing – it remains accountable to the community thereby building trust that citizen input matters and that resources are used wisely.
  • Define the problem and whether it is structural or cyclical Call stakeholders to action Important to balance short-term and long-term to get sustainability. This will become an ever more crucial discipline as governments face financial pressure – determining a few number of services to focus on, rather than providing all the same services at a now sub-standard level This is the most important reason – citizen trust is essential for counteracting forces like TABOR and TELs (reference back to Coral Springs, 1.35% petition)
  • Also brought in an economist to describe the economic situation to the council. Provides external credibility City offers classes and assistance on strategic and financial planning A long-term deliberate approach has allowed coral springs to maintain a stable, consistent set of public services.
  • These results are from the Gallup Poll. Shows trust declining over time. Perhaps, unsurprisingly, TELs and TABORs have taken off during this same period.
  • Notice that a minority think taxes are too high for the service.
  • Profile customer views on unmet service need
  • “Choice Works” is a series of focus groups held across the country, sponsored by Ford Foundation, Hewlett Foundation, and Kellogg Foundation The take-away here is that Leaders must understand and act on priorities for spending and service outcomes and that there must be transparency in financing and spending
  • This is summary slide. Highlight any other key points.
  • This is a summary slide. Each phase will be covered in more detail in the following slides. Mobilization – Setting the stage for success Analysis – Information for decision support Decision – Informed Response Execution – Plan into action
  • A particularly important participant is the leader of the process. This is typically the CEO or the CFO. The leader must design the process and guide the participants though it, helping to interpret the environment and overcome problems along the way. A process map helps participants visualize the outcome and their role in planning An initial environmental scan is indispensable. Other analyses might include preliminary revenue/expenditure forecasts, etc.
  • Preferences come from a strategic plan. Policies set the standard against which long-term financial stewardship can be judged, e.g., fund balance levels, user fee cost recovery ratios, capital budgeting evaluation criteria. Scope establishes common understanding for purpose of plan. It is suggested by all of above. It is crucial to define expectations for the planning process up front so that participants won’t be dissapointed by the results.
  • This is from San Clemente. If the City is in compliance with a policy it gets a check. Areas where the City is not in compliances suggests issues that long-term planning can help fix.
  • The entire process creates a feedback loop so that Coral Springs is always able to make “course corrections” and react to changing conditions. The City also use what its learns from measurements and feedback to make process improvements aimed at increasing efficiency, customer satisfaction, and effectiveness.
  • Summary slide
  • Environmental analysis builds expertise for forecasting and strategizing. Environmental analysis also identifies special events (e.g., closing of a major local business, new major development, legislative change, etc.) Consulting a variety of sources results in better information and credibility. Factors should include demographics, land use, legislative, and public opinion issues. For example, what is the public’s opinion toward a voter approved tax? What new development is expected in the future? How will the population change? Hybrid forecasting is a mixture of quantitative and qualitative techniques The City of Palo Alto engaged an economist to compare the City’s hybrid of historical trending and expert judgments against more statistically rigorous techniques and the economist found that there was no appreciable gain in accuracy available. Revenue model on the next slide
  • This is a revenue model that shows what Virginia Beach, VA, considers when forecasting sales tax. The City doesn’t necessarily build mathematical relationships between these factors - rather, this is what they consider when making their final forecast, using both qualitative and quantitative techniques.
  • Use GIS technology to find that larceny crimes are taking place at soccer games in the public parks. Hence, the City directed existing resources to focus on these areas during high-risk periods and also implemented appropriate tactical solutions like bike police in the park during games and leaving notes in unsecured vehicles that tells the owner that “If I were a thief, you would have been robbed.” This is an example of data driven decision making and working with police to come up with solutions other than undirected staffing increases.
  • Debt can have important ramifications for future financial position as a long-term obligation. A long-term plan can serve different purposes with respect to debt. Perhaps it focuses on affordability of current debt levels and how a sustainable level of debt can be maintained. Or perhaps it focuses on making elected officials and the public more comfortable with the use of debt fund critical infrastructure needs. In this case the plan might concentrate on development of debt policies. Examples of imbalances Underfunded liabilities: pensions, asset maintenance, capital needs Policies that need revision: user fees Unfavorable trend: Gresham education levels Many examples of data visualization on following slides
  • Integrates financial policies into decision-making Focuses on fund balance, which is a bottom-line indicator of financial position.
  • Shows how environmental indicators can be communicated. Note the self-explanatory progress indicator on the right.
  • Summary slide
  • Different mechanisms: council-staff workshops, committees, community surveys Mix of strategies: short and long-term. Short-term strategies can be used to buy time, but know what you are buying time for Correcting decision-making processes: Financial policies that decision-makers support and a budget process that focuses on meeting citizen priorities, addresses financial constraints, and aligns budget with strategies. Culminating event: Celebrate success, transition to action Commitment: Meaningful participation throughout the process is essential to commitment. Commitment should really be in place before the meetings
  • Business plan is translates strategy into action -Money is allocated -Results to be achieved are identified -Accountabilities created – held accountable for results, not for spending a budget
  • Summary slide
  • Uses of budget Implement specific recommendations – for example, if user fee cost recovery ratios are to be increased, then the budget should provide the allocation for necessary studies and then show projections for increases in revenue. Develop budget within given parameters – identify critical assumptions like debt affordable and headcount levels. Update the plan regularly to make it a living document. Use a financial scorecard to focus attention the big issues.
  • Summary slide
  • Show the LONG-TERM Mitigate SIDE-EFFECTS OF FIRST AID TECHNIQUES Things like financial policies and forecasting
  • -Flight to quality -Sunnyvale’s conversion of a new City Manager via successes (no lay-offs, improved bond ratings) -Coral Springs’ CRA and use of stimulus funds. Also, electronic ticket writing (willing to accept long-term ROI). Recession makes people willing to drive change -Hanover’s joint committees on revenue forecasting, employees working out of department (transferring building inspectors to code enforcement) due to prior practice with joint problem solving.
  • -Consider multiple angles of financial health, not just revenues and expenditures: land-use, demographic trends. -Financial modeling shows need to diversify tax base. LTFP promotes recognition of net users of public services. CS example of residential users vs. industrial and property tax -Create a diverse set of constituents who support local government. For example, Mentor Schools actively seeks to demonstrate its financial responsibility to non-parents.
  • Reserves are key. This the foundation and establishes the right attitude about fund balance’s purpose A This is important to preserve credibility and protect the integrity of the reserve. Helps protect reserve politically B. Policies help financial planning continue beyond current individuals B. Citizen engagement helps continuation of planning Mentor Schools (finance committee), Coral Springs (getting the word out) Don’t bank on just one strategy – have multiple going on (short and long term, revenue and expense).
  • Budget management is the foundation. Minni story. B SV story about Rec Dir arguing against parks. SC story- fighting to be on teams. FORECASTING. Hanover revenue team – improve expertise to make forecasts Develop system in which all departments strive toward the same goals – encourages innovation by “granting permission to fail”
  • -Elected officials can communicate best on service issues – everyone can participate in this. Use Minni mayor story. -Elected officials can review key assumptions. -One-on-one meetings give chance to ask questions that may not get asked in public. SV charter study put 10 years planning into town charter -Mentor Schools uses % of budget on personnel (85%), recurring revenues vs. expenditures forecasts, enrollment trends vs. staffing
  • Regular environmental scanning and forecast updates. Mentor publicly updates their forecast formally twice per year, but is regularly scanning. A good planning process increases the credibility of the finance function and promotes open conversation about current and future financial position – back to permission to fail. Projected decline isn’t a cause for recriminations – it is an opportunity to take preventative action to avoid crisis.
  • Build capacity among staff and council to diagnose strategic issues through collaborative exercises – muscle metaphor. GFOA interviews Financial modeling capabilities like scenario analysis to determine the impact of change strategies Change as needed to address new issues, accommodate new stakeholders, etc. SC planning “theme” example.
  • Forecasting anticipates changes in the environment Coral Springs anticipated downturns in economy and anticipate property tax limitations and promotes realistic and informed analysis Use opportunity to pursue reforms – open union contracts, process automation like electronic tickets (eliminate 4 clerk positions) Provide additional long-term perspective on planning and increase quality of long-term forecast
  • Shayne Kavanagh and Bob Goehrig

    1. 1. Financing the Future Long-Term Financial Planning for Local Government
    2. 2. Agenda <ul><li>Part I – Introduction to Financial Planning </li></ul><ul><li>Part II – Overview of Planning Process </li></ul><ul><li>Part III – Financial Planning in the Recovery Process </li></ul>
    3. 3. Part I – Introduction
    4. 4. What is Long-Term Financial Planning? <ul><li>A combination of technical analysis and strategizing </li></ul><ul><ul><li>Forecasting & strategy development </li></ul></ul><ul><li>A collaborative and visionary process </li></ul><ul><ul><li>Elected officials, staff, & public </li></ul></ul><ul><li>An anchor of financial sustainability </li></ul><ul><ul><li>Changing mindsets </li></ul></ul><ul><ul><li>Institutionalize long-term thinking </li></ul></ul>
    5. 5. What is a Financial plan? <ul><li>Essential characteristics </li></ul><ul><ul><li>What is the time horizon? </li></ul></ul><ul><ul><li>What funds are considered? </li></ul></ul><ul><ul><li>How often is a plan done? </li></ul></ul><ul><ul><li>What is in it? </li></ul></ul>
    6. 6. Coral Springs’ Business Model Strategic Plan Business Plan Budget Output to Citizens Data Analysis Citizen Input
    7. 7. So, Why Financial Planning Now? <ul><li>Determine financial position & condition </li></ul><ul><li>Build case for action </li></ul><ul><li>Develop mix of strategies for financial health </li></ul><ul><li>Create financial resiliency </li></ul><ul><li>Build trust with citizens! </li></ul>
    8. 8. What Financial Planning Has Done for Coral Springs <ul><li>Focus on key indicators of financial health </li></ul><ul><ul><li>Bond rating (AAA) – save money </li></ul></ul><ul><ul><li>FTMS and General fund balances </li></ul></ul><ul><li>Data-based, evidence-driven decisions </li></ul><ul><ul><li>Business survey reveals demand for planning help </li></ul></ul><ul><ul><li>City provides planning assistance </li></ul></ul><ul><ul><ul><li>http:// www.csbizassist.org / </li></ul></ul></ul><ul><li>Results </li></ul><ul><ul><li>No layoffs, no service reductions </li></ul></ul><ul><ul><li>Millage rate has remained low </li></ul></ul>
    9. 9. Trust
    10. 10. Citizen Perception of Taxes
    11. 11. Highlights <ul><li>Similar percentages believe “it is okay to collect the same amount of property taxes to preserve current levels of city services” (44.3%) as who agreed “the City should reduce taxes with an associated reduction in City services” (44.7%). </li></ul>
    12. 12. Trust <ul><li>Preliminary Findings of “Choice Works Dialogues” </li></ul><ul><li>“We are prepared to pay more in taxes if that is necessary to realize the future we want, but only if steps are taken to increase accountability and trust.” </li></ul>
    13. 13. Part I – Take-Aways <ul><li>LTFP is a strategic and visionary process </li></ul><ul><li>LTFP is part of a complete planning portfolio </li></ul><ul><li>LTFP provides benefits across a spectrum of concerns </li></ul>
    14. 14. Part II – Overview of the Planning Process
    15. 15. Four Major Phases
    16. 16. Mobilization Phase <ul><li>Align Resources </li></ul><ul><ul><li>Identify participants </li></ul></ul><ul><ul><li>Design a process </li></ul></ul><ul><li>Preliminary Analysis </li></ul><ul><ul><li>Initial SWOT analysis </li></ul></ul><ul><ul><li>Other analyses, like forecasts </li></ul></ul>
    17. 17. Mobilization Phase <ul><li>Service level preferences </li></ul><ul><ul><li>Strategic priorities and objectives </li></ul></ul><ul><li>Financial policies </li></ul><ul><ul><li>Self-assess compliance with policies </li></ul></ul><ul><ul><li>Identify new policies </li></ul></ul><ul><li>Define purpose and scope </li></ul><ul><ul><li>Consensus on problems planning is to solve </li></ul></ul><ul><ul><li>Limit scope of planning to those issues </li></ul></ul>
    18. 18. Example of Policy Self-Assessment
    19. 19. Align Resources With Strategy Resource Allocation (Budget & CIP) Measurement (Quarterly Performance Reports and State of the City) Feedback (Surveys, Town Meetings, Focus Groups, and Citizen Committees) Strategic Alignment (Business Plan) Policy Deployment (Strategic Plan)
    20. 20. Mobilization Phase Take-Aways <ul><li>Preparation is key to financial planning. </li></ul><ul><li>A clear “roadmap” increases confidence in the planning process </li></ul><ul><li>Financial policies are crucial </li></ul><ul><li>Mobilization must identify service priorities </li></ul><ul><li>There must be consensus on the purpose of planning </li></ul>
    21. 21. Analysis Phase <ul><li>Environmental Analysis </li></ul><ul><ul><li>Objective and subjective sources </li></ul></ul><ul><ul><li>Build expertise for analysis & strategizing </li></ul></ul><ul><ul><li>Examine variety of factors, not just financial </li></ul></ul><ul><li>Revenue and Expenditure Forecasting </li></ul><ul><ul><li>5 to 10 year forecasts are typical </li></ul></ul><ul><ul><li>Hybrid techniques are the most common & powerful </li></ul></ul><ul><ul><li>Revenue modeling is a key practice </li></ul></ul>
    22. 24. Crime Rate Comparisons Fiscal Year per 100,000
    23. 25. Drill Down…
    24. 26. …and Down
    25. 27. Analysis Phase <ul><li>Debt Analysis </li></ul><ul><ul><li>Analyze impact of current obligations </li></ul></ul><ul><ul><li>Examine capacity for future indebtedness </li></ul></ul><ul><li>Financial Balance Analysis </li></ul><ul><ul><li>Consider all different types of imbalances </li></ul></ul><ul><li>Data visualization helps communicate imbalances </li></ul>
    26. 28. Fund Balance
    27. 29. Environmental Factors
    28. 30. Getting the Right Tax Rate/Service Level Mix Updated Good
    29. 31. $13.5 million bond approved by voters Debt Service Millage Rate is Unchanged Despite Decline in Property Tax Base
    30. 32. Analysis Phase Take-Aways <ul><li>Environmental analysis is the foundation of planning – invest in it! </li></ul><ul><li>Hybrid techniques are the most effective </li></ul><ul><li>Debt analysis varies in importance with local circumstances </li></ul><ul><li>Consider multiple types of imbalances </li></ul><ul><li>Develop effective presentation techniques </li></ul>
    31. 33. Decision Phase <ul><li>Develop Financial Strategies </li></ul><ul><ul><li>Match strategy to size of imbalance </li></ul></ul><ul><ul><li>Find the right mix of strategies </li></ul></ul><ul><ul><li>Correct decision-making processes that led to imbalance </li></ul></ul><ul><li>Plan Conclusion and Transition to Action </li></ul><ul><ul><li>Design a clear culminating event </li></ul></ul><ul><ul><li>A public meeting to approve the plan is common </li></ul></ul><ul><ul><li>Gain formal commitment to financial strategies </li></ul></ul>
    32. 34. Coral Springs Business Plan <ul><li>Translates the Strategic Plan into action </li></ul><ul><li>Develop initiatives to support Strategic Priorities </li></ul><ul><li>All resources are allocated within the Business Plan </li></ul><ul><li>Financial strategy aligns short-term objectives with long-term financial health </li></ul><ul><li>Performance monitored via review of KIOs and process-level performance measures </li></ul><ul><li>Focuses budget decisions on strategic </li></ul><ul><li>priorities instead of line items </li></ul>
    33. 35. Decision Phase Take-Aways <ul><li>The means by which strategies are developed is as important as the strategies themselves </li></ul><ul><li>Redressing a fiscal imbalance almost always requires a change to decision-making processes </li></ul><ul><li>A culminating event is a mandatory part of the planning process </li></ul>
    34. 36. Execution Phase <ul><li>Executing the Plan </li></ul><ul><ul><li>The budget is the most important execution tool </li></ul></ul><ul><ul><li>Other tools include performance measurement, action plans, and participant commitment </li></ul></ul><ul><li>Monitoring </li></ul><ul><ul><li>Updates </li></ul></ul><ul><ul><li>Scorecards </li></ul></ul>
    35. 37. Coral Springs’ Key Intended Outcomes Financial Health & Economic Development Goals 92% 91% 90% Customer Service Rating (Business Survey) 95% 93% 91% Customer Service Rating (Citizen Survey) 95% 95% 91% Percent Plan Reviews Completed Within 15 days 22% 20% 20% Non-residential Value as % of Total Taxable Value 72% 72% 70% Resident’s Value Rating (Citizen Survey) AAA AAA AAA Bond Rating 2009 2008 2007 Key Intended Outcome
    36. 38. Execution Phase Take-Aways <ul><li>The budget and LTFP must be linked </li></ul><ul><li>Participant commitment is crucial for execution </li></ul><ul><li>Develop on-going monitoring mechanisms to keep the plan at the forefront </li></ul>
    37. 39. Part III – Financial Planning and Recovery from Financial Distress
    38. 41. LTFP’s Role in Recovery <ul><li>Recognize financial condition </li></ul><ul><li>Identify & implement long-term strategies </li></ul><ul><li>Institutionalize good long-term financial practices </li></ul><ul><li>Sustainability versus Resiliency </li></ul><ul><ul><li>A sustainable system is potentially brittle </li></ul></ul><ul><ul><li>A resilient system is regenerative and adaptable </li></ul></ul><ul><li>Go beyond sustainability to resiliency </li></ul>
    39. 42. Surviving and Thriving <ul><li>Recently, LTFP leaders have… </li></ul><ul><ul><li>Reached or maintained AAA bond ratings </li></ul></ul><ul><ul><li>Made believers out of skeptics </li></ul></ul><ul><ul><li>Prepared for the future </li></ul></ul><ul><ul><ul><li>Investing in infrastructure </li></ul></ul></ul><ul><ul><ul><li>Implementing labor saving technologies </li></ul></ul></ul><ul><ul><li>Improved collaboration </li></ul></ul>
    40. 43. Features of a Resilient System <ul><li>Diversity </li></ul><ul><li>Redundancy </li></ul><ul><li>Decentralization </li></ul><ul><li>Collaboration </li></ul><ul><li>Fail gracefully </li></ul><ul><li>Flexibility </li></ul><ul><li>Foresight </li></ul>
    41. 44. Diversity <ul><li>Avoiding a single point of failure </li></ul><ul><li>Multi-faceted perspective on financial health </li></ul><ul><ul><li>Diversity of land-use </li></ul></ul><ul><li>Enlarge base of supporters </li></ul>
    42. 45. Redundancy <ul><li>Avoid having one path of escape or rescue </li></ul><ul><li>Reserves </li></ul><ul><ul><li>A policy to prevent use for recurring expenses </li></ul></ul><ul><ul><li>Create reserves for specific purposes </li></ul></ul><ul><li>Governance </li></ul><ul><ul><li>Policies </li></ul></ul><ul><ul><li>Citizen engagement </li></ul></ul><ul><li>Multiple Financial Strategies </li></ul>
    43. 46. Decentralization <ul><li>Centralized systems look strong, but when they fail, the failure is catastrophic </li></ul><ul><li>Engage depts in financial management </li></ul><ul><ul><li>Make managers manage budgets </li></ul></ul><ul><ul><li>Actively engage depts in financial strategy </li></ul></ul><ul><li>Joint approach to forecasting </li></ul><ul><ul><li>Promotes accuracy and understanding </li></ul></ul><ul><li>Long-Term Planning Framework </li></ul>
    44. 47. Collaboration <ul><li>Working together to become stronger </li></ul><ul><li>Elected officials </li></ul><ul><ul><li>Engage by building in their priorities </li></ul></ul><ul><ul><li>Orient new council members </li></ul></ul><ul><ul><ul><li>Create peer pressure for new council members </li></ul></ul></ul><ul><ul><li>Use key indicators to get officials on board </li></ul></ul>
    45. 48. Fail Gracefully <ul><li>Failure happens. Make sure a failure state won’t make things worse </li></ul><ul><li>Recognize changing conditions to make a soft landing </li></ul><ul><li>Promote credibility and open dialogue </li></ul>
    46. 49. Tax reform plus an economic downturn eroding revenue Projected Phase I of Tax Relief Double Homestead Exemption Actual Millions Actual Budget Projected -$1.67 chg -$2.35 chg -$2.23 chg -$4.26 chg Economic Recession *Preliminary Estimate as of June 1 Economic Recession
    47. 50. Flexibility <ul><li>Be ready to change when plans aren't working </li></ul><ul><li>Constant environmental scanning </li></ul><ul><ul><li>Know when flexibility will be called for </li></ul></ul><ul><li>Financial Modeling </li></ul><ul><li>Evolve the planning process </li></ul>
    48. 51. Foresight <ul><li>Think and prepare </li></ul><ul><li>Forecasting </li></ul><ul><ul><li>Identify the parameters within which to develop and execute strategies </li></ul></ul><ul><li>Environmental scanning </li></ul><ul><li>Complement financial planning with other long-term plans </li></ul>
    49. 52. General Fund 5-Year Forecast This chart is for planning purposes and illustrates the potential shortfalls the General Fund could face if no positive action is taken. By Florida law, the proposed budget will be balanced. Financial Strategies will be formulated to address future year shortfalls and will be included in the Fiscal Year 2010 Business Plan.
    50. 53. Take-Aways <ul><li>Don’t be satisfied with sustainability… </li></ul><ul><li>…Go for resiliency ! </li></ul><ul><li>If you aren’t doing long-term financial planning, get started – even now </li></ul><ul><li>If you are, assess your process against the resiliency characteristics </li></ul>
    51. 54. The End <ul><li>For more information … </li></ul><ul><li>Get on our mailing list (email [email_address] ) </li></ul><ul><li>E-mail us </li></ul><ul><ul><li>[email_address] </li></ul></ul><ul><li>Visit our websites </li></ul><ul><ul><li>www.gfoa.org/ltfp </li></ul></ul><ul><ul><li>www.coralsprings.org /quality </li></ul></ul><ul><li>Read our book Financing the Future </li></ul>

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