[PDF] - 1 What c an you affor d? Do yo u wa nt to g ive yo ur e mplo ye PDF Document

SLIDE 1

1 L

ng T

e r m Planning/ Cash Basis F

r

e c asting

Pr e se nte d by: L

c al Gove r

nme nt Se r vic e s

2

Pe r Me rria m-We b ste r (via the inte rne t):
“to c a lc ula te o r pre dic t (so me future

e ve nt o r c o nditio n) usually a s a re sult

f study a nd a na lysis o f a va ila ble

pe rtine nt da ta ”

“a pro phe c y, e stima te , o r pre dic tio n o f

a future ha ppe ning o r c o nditio n”

What is a for e c ast?

3

Wha t is a fina nc ia l fo re c a st?

A fina nc ia l fo re c a st is pro spe c tive

fina nc ia l sta te me nts tha t pre se nt, to the b e st o f ma na g e me nt’ s kno wle dg e a nd b e lie f, the g o ve rnme nt’ s e xpe c te d re ve nue s, e xpe nditure s a nd fund b a la nc e s.

I

t is b a se d o n manage me nt’s assumptions

r e fle c ting c onditions it e xpe c ts to e xist and the c our se of ac tion it e xpe c ts to take.

F inanc ial F

r

e c asts

SLIDE 2

2

4

Do yo u wa nt to g ive yo ur e mplo ye e ’ s ra ise s?

L a yo ffs?

If yo u o ffe r insura nc e , ho w muc h will yo ur pre miums

inc re a se ?

Ca n yo u a ffo rd a ne w o r c urre ntly e xisting se rvic e ?
Ca n we b uy so me ne w e q uipme nt o r ma ke re pa irs

to fa c ilitie s?

Do yo u ha ve re se rve s fo r a n e me rg e nc y o r do wnturn

in the e c o no my?

Wha t a r

e the long -te r m e ffe c ts of the de c isions tha t are made today?

What c an you affor d?

5

Why do yo u ne e d a fo re c a st?
I

de ntify pro g ra ms, a c tivitie s a nd se rvic e le ve ls tha t yo u CAN pro vide c o mpa re d to wha t yo u WANTto pro vide .

I

de ntify c o sts a sso c ia te d with pro viding se rvic e s a nd the funding so urc e s use d to pro vide the m.

I

de ntify c a pita l ne e ds a nd e sta b lishe s a pla n fo r fulfilling tho se ne e ds.

Allo ws ma na g e me nt to se t prio ritie s a nd do c ume nt

pla ns.

De te rmine the e ffe c t o n the c o mmunity
IFyou ar

e de c lar e d in F isc al Watc h or F isc al E me r ge nc y by the Auditor

f State , a five ye ar

for e c ast is r e quir e d.

Is this r e ally ne c e ssar y?

6

T

he Go ve rning Bo dy - Co unc il

Chie f Ope ra ting Offic e r(s) – Ma yo r,

Administra to r, Ma na g e r

F

ina nc e Co mmitte e (if o ne e xists)

Chie f F

ina nc ia l Offic e r - F isc a l Offic e r, Audito r

De pa rtme nt he a ds
Pro c e ss sho uld b e a ll inc lusive so tha t a ll pa rtie s

a re a wa re o f the fina nc ia l situa tio n a nd prio ritie s c a n b e se t.

Who should be involve d in the pr

c e ss?

SLIDE 3

3

7

Wha t sho uld a fo re c a st

inc lude ?

An Ope ra ting Pla n
A Ca pita l Pla n
Do e s it ma tte r whic h c o me s

first?

L

ng-T

e r m Planning

8

Ope ra ting Pla n
Ba se d o n histo ric a l tre nds, ne w

la ws o r re g ula tio ns, upc o ming

r e xpiring re ve nue s /

e xpe nditure s, o the r fa c to rs.

Assume s e xisting pro g ra ms will

c o ntinue a t the sa me le ve l o f se rvic e , b o th no w a nd in the future .

L

ng-T

e r m Planning

9

Ope ra ting Pla n - Whe re do yo u Sta rt?
AL

WAYS sta rt with re ve nue e stima te s! Wha t

re ve nue s do yo u kno w a re g o ing to c o ntinue into future ye a rs (i.e . ta xe s) a nd wha t re ve nue s ma y e xpire (i.e . g ra nts). Ne w re ve nue s? If the se e stima te s a re no t truthful a nd a s re a listic a s po ssib le , the n the e ntire pla n is use le ss.

Wha t e xpe nditure s MUST

yo u pa y fo r (i.e . de b t o r le a se pa yme nts, sa la rie s, utilitie s)? Ite ms yo u c a nno t c ut.

Wha t e xpe nditure s do yo u re a lly ne e d, b ut c a n

live witho ut if a b so lute ly ne c e ssa ry (a t le a st fo r a time )?

Wish list

L

ng-T

e r m Planning

SLIDE 4

4

10

Ca pita l Pla ns
Pla n fo r c a pita l e xpe nditure s
ve r a pe rio d o f ye a rs
Se ts fo rth e a c h pro je c t o r

purc ha se in whic h the lo c a l g o ve rnme nt is to ha ve a pa rt

I

de ntifie s the re so urc e s to b e a va ila b le to fina nc e the pro je c t / purc ha se

L

ng-T

e r m Planning

11

Ca pita l Pla n - Whe re do yo u Sta rt?
De ve lo p a list o f pro je c ts & purc ha se s -

no c e iling

I

nc lude ro a ds, b ridg e s, b uilding s, pa rks a nd re c re a tio n fa c ilitie s

I

de ntify re pla c e me nt o f e xisting ve hic le s a nd e q uipme nt

Se t pr

ior itie s base d on……

I

de ntify re so urc e s to fina nc e the e xpe nditure s

Are the re a ny a lte rna tive s (i.e . sha re d

se rvic e s, sha re d g ra nts)

L

ng-T

e r m Planning

12

Ho w c a n I

pa y fo r Ca pita l E xpe nditure s?

Re duc ing e xpe nditure s e a c h ye a r to b uild

up a b a la nc e in a fund.

Re se rve Ba la nc e Ac c o unts
No te o r Bo nd I

ssua nc e s

L
a ns – OPWC/ OWDA/ E

PA/ USDA/ ODOT , e tc .

Spe c ia l Ca pita l le vie s
Gra nts
Spe c ia l a sse ssme nts
ORC 5705.13 Ca pita l Pro je c ts F

und

L

ng-T

e r m Planning

SLIDE 5

5

13

Spe c ia l Re ve nue F

und (ORC 5705.13)

Ac c umula te s re so urc e s fo r the pa yme nt o f

sic k le a ve a nd va c a tio n le a ve , a nd fo r pa yme nts in lie u o f ta king c o mpe nsa to ry time o ff, upo n the te rmina tio n o f e mplo yme nt o r the re tire me nt o f e mplo ye e s/ o ffic e rs.

Ma y a lso a c c umula te re so urc e s fo r pa yme nt
f sa la rie s during a ny fisc a l ye a r whe n the

numb e r o f pa y pe rio ds e xc e e ds the usua l a nd c usto ma ry numb e r o f pa y pe rio ds.

L

ng-T

e r m Planning

14

Ca pita l Pro je c ts F

und (5705.13)

Ac c umula te s re so urc e s fo r the

a c q uisitio n, c o nstruc tio n, o r impro ve me nt o f c a pita l a sse ts, inc luding mo to r ve hic le s

Mo re tha n o ne c a pita l pro je c t fund

ma y b e e sta b lishe d a nd ma y e xist a t a ny time

L

ng-T

e r m Planning

15

F
r Ope ra ting a nd Ca pita l Pla ns, wha t type o f

L e g isla tive a ppro va l sho uld the re b e ?

L
ng -T

e rm Ope ra ting Pla n

Cho ic e o f the L

e g isla tive Bo dy

Co mmitme nt is the c urre nt ye a r Appro pria tio n

Me a sure

Ca pita l Pla ns
Cho ic e o f the L

e g isla tive Bo dy

Co mmitme nt to a pro je c t ta ke s pla c e whe n

a ppro pria te d a nd b ids a re a utho rize d

L

ng-T

e r m Planning

SLIDE 6

6

16

Manage me nt – T

ho se pe rso ns who a re e xpe c te d to dire c t the o pe ra tio ns o f the e ntity during the pro spe c tive pe rio d. Ma na g e me nt typic a lly re fe rs to tho se pe rso ns a t the hig he st le ve l o f a utho rity within the e ntity.

Assumptions – T

he b uilding b lo c ks fo r the fo re c a st de ve lo pe d fro m the ke y fa c to rs. T he y ide ntify sig nific a nt ma tte rs tha t a re e xpe c te d to o c c ur, b a se d o n a n e ntity’ s pla ns.

F inanc ial F

r

e c asts

17

Ke y F

ac tor s – T

he sig nific a nt ma tte rs o n whic h a g o ve rnme nt’ s future re sults a re e xpe c te d to de pe nd. Suc h fa c to rs a re b a sic to the g o ve rnme nt’ s o pe ra tio ns a nd thus e nc o mpa ss ma tte rs tha t a ffe c t, a mo ng o the r thing s, the g o ve rnme nt’ s fina nc ia l a c tivitie s. Ke y fac tor

s se r ve as a foundation for pr

spe c tive financ ial

infor mation and ar e the basis for the assumptions.

F inanc ial F

r

e c asts

18

A fina nc ia l fo re c a st is use d:
As a pla nning to o l
T
ide ntify to g o ve rnme nts whe the r

the y c a n pro vide se rvic e s o r unde rta ke pro je c ts the y a re pla nning .

T
he lp gove r

nme nts de te r mine whe the r

r

not the y ar e he ade d towar d financ ial diffic ulty.

F inanc ial F

r

e c asts

SLIDE 7

7

19

Wha t a re ma na g e me nt’ s

re spo nsib ilitie s?

Re a so na b le ne ss o f the a ssumptio ns
Pre pa ra tio n o f the fo re c a st
Ac c ura c y o f the pre se nte d fig ure s

F inanc ial F

r

e c asts

20

AI

CPA “Guide fo r Pro spe c tive F ina nc ia l I nfo rma tio n” pro vide s ge ne r

al guide line s to the

re spo nsib le pa rty fo r pre pa ring fina nc ia l fo re c a sts. T he se a re :

F
re c a sts sho uld b e pre pa re d in g o o d fa ith
F
re c a sts sho uld b e pre pa re d with

a ppro pria te c a re b y q ua lifie d pe rso nne l

F
re c a sts sho uld b e pre pa re d using

a ppro pria te a c c o unting princ ipa ls

F

r

e c ast Pr e par ation Guide line s

21

Assumptio ns use d in pre pa ring fo re c a sts

sho uld b e a ppro pria te

K

e y fa c to rs sho uld b e ide ntifie d a s a b a sis fo r the a ssumptio ns

I

nfo rma tio n use d in pre pa ring fo re c a sts sho uld b e c o nsiste nt with the pla ns o f the e ntity

F

r

e c ast Pr e par ation Guide line s

SLIDE 8

8

22

Pro c e ss use d to de ve lo p fo re c a sts sho uld pro vide a

me a ns to de te rmine the re la tive e ffe c t o f va ria tio ns in the ma jo r a ssumptio ns (ra ise s, insura nc e / utility inc re a se s)

Pro c e ss use d sho uld pro vide a de q ua te

do c ume nta tio n o f the fo re c a st a nd the pro c e ss use d to de ve lo p it (suppo rting yo ur a ssumptio ns)

Pro c e ss use d to de ve lo p fo re c a sts sho uld pro vide fo r

se e king o ut the b e st info rma tio n that is a va ila b le a t the time (histo ric a l info rma tio n, c o ntra c ts, de b t sc he dule s, c a lc ula tio ns, e tc .)

F

r

e c ast Pr e par ation Guide line s

23

Pro c e ss use d to de ve lo p fo re c a sts sho uld

inc lude the re g ula r c o mpa riso n o f the fo re c a st with the a c tua l re sults

Pro c e ss use d to pre pa re fo re c a sts sho uld

inc lude a de q ua te re vie w a nd a ppro va l b y the re spo nsib le pa rty a t the a ppro pria te le ve ls o f a utho rity

F

r

e c ast Pr e par ation Guide line s

24

Pro pe rty T

a xe s

T

he type o f le vie s, ra te o r do lla r a mo unt, ye a r

f a ppro va l, first a nd la st ye a r o f c o lle c tio n
F

ull a nd e ffe c tive ra te s (re a l a nd c o mme rc ia l)

Asse sse d va lua tio ns
T

rie nnia l a nd se xe nnia l upda te s

De linq ue nt ta xe s a nd c o lle c tio ns
Ne w a nd e xpiring le vie s
Curre nt a me nde d c e rtific a te

Assumptions and Ke y F ac tor s

SLIDE 9

9

25

Munic ipa l I

nc o me T a xe s

L

e vy ra te a nd e ffe c tive pe rio d

De pa rtme nt o f T

a xa tio n e stima te s

I

nc o me tre nds fo r a re a

Une mplo yme nt tre nds fo r a re a
Ne w b usine sse s fo r a re a ? Any b usine ss

le a ving the a re a ?

Assumptions and Ke y F ac tor s

26

L
c a l g o ve rnme nt re ve nue s – pro vide d b y

the Sta te o f Ohio . I nc lude d a s pa rt o f the Sta te ’ s b ie nnium b udg e t e ve ry two ye a rs.

Gra nts – a re the re time c o nstra ints? One -

time o r c o ntinuo us?

Ho me ste a d a nd Ro llb a c k – pro vide d b y

the Sta te o f Ohio (b a se d o n pro pe rty ta xe s).

Assumptions and Ke y F ac tor s

27

F

ine s a nd F e e s

I

nte re st

L

ic e nse s a nd Pe rmits

Re nta ls
Misc e lla ne o us
F
r re ve nue s suc h a s re nta ls, a re yo u

c ha rg ing e no ug h? Are yo u c ha rg ing to o muc h?

Pre dic ting the se re ve nue s is diffic ult

Assumptions and Ke y F ac tor s

SLIDE 10

10

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Pe rso na l Se rvic e s
Ba rg a ining unit c o ntra c t da te s
Sa la ry sc he dule s
Sta ff po sitio ns
Se ve ra nc e pa y
Re tire me nt inc e ntive s
Co mputa tio n o f sa la rie s (o ld/ ne w ra te s)

Assumptions and Ke y F ac tor s

29

F

ring e Be ne fits

Pe nsio n pa yme nts (% o f sa la rie s) a nd the

me tho d o f pa yme nt

He a lth Ca re Be ne fits
Purc ha se o f se rvic e c re dit
Wo rke rs’ c o mpe nsa tio n

pre miums/ ra te s/ re b a te s

Othe r b e ne fits

Assumptions and Ke y F ac tor s

30

Co ntra c tua l Se rvic e s/ Ma te ria ls &

Supplie s

Sig nific a nt c o ntra c tua l o b lig a tio ns
Ma te ria ls a nd supplie s ne e de d
I

nfla tio n fa c to r

Utilitie s

Assumptions and Ke y F ac tor s

SLIDE 11

11

31

Ca pita l Outla y
Ca pita l Asse ts to b e purc ha se d
L

a nd

Building s
F

urniture a nd E q uipme nt

Ve hic le s
I

nfra struc ture – inc lude s wa te r a nd se we r pla nts a nd line s (E PA re q uire me nts? )

Assumptions and Ke y F ac tor s

32

Ca pita l Outla y
Ca pita l Asse ts to b e c o nstruc te d
I

nfra struc ture – I n-K ind Co ntrib utio ns

Ca pita l Asse ts to b e a c q uire d
L
c a l sha re o f c o ntrib ute d a sse ts

Assumptions and Ke y F ac tor s

33

De b t Se rvic e
Princ ipa l a nd I

nte re st o n de b t pa yme nts

E

xa mple : Stre e t truc k, fire truc k, ne w/ re no va te d b uilding , wa te r a nd se we r impro ve me nt lo a ns

Assumptions and Ke y F ac tor s

SLIDE 12

12

34

Misc e lla ne o us
Othe r e xpe nditure s tha t do n’ t fa ll into

a ny o f the o the r c a te g o rie s

No n-re o c c urring ite ms
Spe nding pra c tic e s – a re yo u g e tting

“the b e st b a ng fo r yo ur b uc k? ”

Assumptions and Ke y F ac tor s

35

Othe r F

unds

De fic its o r a ntic ipa te d de fic its
F

ire L e vy fund

Po lic e Sa la ry L

e vy fund

T

ra nsfe rs to ORC 5705.13 F unds

T

e rmina tio n Pa yme nts/ E xc e ss Pa y Pe rio ds

Ca pita l Pro je c ts

Assumptions and Ke y F ac tor s

36

Be RE

AL IST IC a nd HONE STa b o ut yo ur situa tio n:

g o o d, b a d o r ug ly.

Be willing to ma ke a nd e xpla in de c isio ns, e ve n

to ug h o ne s.

Ma intain a ll do c ume nta tio n a nd ma te ria ls

suppo rting the va lue s a nd the a ssumptio ns

Co ntinue to upda te b o th pla ns a s a dditio na l

info rmatio n b e c o me s a va ilab le o r pla ns/ g o a ls c ha ng e .

Gra nt Awa rds
Co nstruc tio n Co ntra c ts
De b t I

ssua nc e

Unpla nne d E

me rg e nc y Situa tio ns

Suc c e ssful Planning

SLIDE 13