Web Stream Event Government Finance Officers Association #GFOA - - PowerPoint PPT Presentation

Government Finance Officers Association

2nd Annual Better Budgeting Web Stream Event

#GFOA

Speakers

Mike Mucha, GFOA (Facilitator) Lisa Bracken, Atlanta Public Schools Ann M. Carbone, City of Boston John Fishbein, GFOA David Schmiedicke, City of Madison Ebony Shelton, County of San Diego

Overall Budget Process

Develop Approaches To Achieve Goals Develop a Budget Consistent with Approaches To Achieve Goals Evaluate Performance And Make Adjustments

1 2 3 4

Establish Broad Goals to Guide Decision Making

POLLING QUESTION 1

• What phase of the budget process do you

feel your organization has the most room for improvement?

• 1. Establishing goals / defining community

priorities

• 2. Developing approaches / operational

planning

• 3. Allocating resources / creating the budget
• 4. Monitoring the budget and evaluating results

Training Focus

Develop Approaches To Achieve Goals Develop a Budget Consistent with Approaches To Achieve Goals Evaluate Performance And Make Adjustments

1 2 3 4

Establish Broad Goals to Guide Decision Making

Budget Process / Budget Roles Identify Goals Long-Term Planning Internal Collaboration Capital Budget Understanding

Training Agenda

• The budget process / budget roles
• Identifying goals and community priorities
• City of Madison Case Study
• Long-term planning / dealing with

uncertainty

• Capital planning
• City of Boston Case Study
• Internal collaboration
• County of San Diego Case Study
• Transparency and budget understanding
• Discussion – better budgeting

Structure of Training

Discussion, Tips, and Lessons Learned Key Takeaways Additional Resources Questions and Follow Up www.gfoa.org/betterbudget2018

Budget Roles Budget Process

Policy within the Budget Process  Strategic planning (GFOA Best Practice)

 Environmental scan - what’s happening around you that

you should take into account?

 Goals – what broad goals are driving your organization?

 Fiscal policies (GFOA Best Practice)

 What changes need to be made?  What did you learn from the past that should influence a

change in policy?

 Communicate (GFOA Best Practice)

 How do you communicate externally around priorities?  How do you communicate internally about connecting

goals to resource requests?

http://www.gfoa.org/best-practices

Strategic Planning - Environmental Scan Strengths and Weaknesses

Rochester Genesee Regional Transportation Authority, New York

Strategic Planning - Environmental Scan Opportunities and Threats

Rochester Genesee Regional Transportation Authority, New York

Strategic Planning Influence on Budget

City of New Orleans, Louisiana

POLLING QUESTION 2

• Does your organization have a strategic plan

that is well understood and used for the basis for the budget process?

• 1. No. We don’t have a strategic plan
• 2. We have a strategic plan, but it is not well

communicated

• 3. We have a good strategic plan, but it is not

linked to the budget

• 4. We have a good strategic plan that is used in

the budget process, but it is not made to guide budget decisions

• 5. Our strategic plan is in complete alignment with
• ur budget

Financial Policies Summary

Napa Sanitation District, California

Financial Policies Compliance

Napa Sanitation District, California

Financial Policy Revisions

New Kent County, Virginia

Important Steps in Communicating the Process

• 1. Identify the public’s perspective – broader

range collected through a variety of ways and sources

• 2. Collect information before a decision has been

made

• 3. Encourage all citizens to participate
• 4. Communicate how public involvement has

specifically made a difference

Citizen Involvement as a Policy

 Citizen involvement shall be encouraged in the

annual budget decision-making process through public hearings and community meetings. Such involvement shall include assistance in establishing program and budget priorities for the city.

 Involvement shall also be facilitated through city

boards, task forces and commissions, which shall serve in advisory capacities to the city council and the mayor.

City and County of Honolulu, Hawaii

First Step – Getting Community Feedback

City of Tacoma, Washington

Reaching Out to Stakeholders

City of San Antonio, Texas

Community Surveys

City of San Antonio, Texas

Letter for Funding Proposals

City of Lawrence, Kansas

Know the Policy – Key Dates

Town of Avon, Connecticut

Budget Calendar

Gloucester County, Virginia

Know the Law

City of Bridgeport, Texas

BALANCED BUDGET As per State Law, current operating revenues, including Property Tax Reduction Sales Tax (which can be used for

• perations), will be sufficient to support current
• perating expenditures. Annually recurring revenue will

not be less than annually recurring operating budget expenditures (operating budget minus capital outlay). Debt or bond financing will not be used to finance current expenditures.

Help Frame Issues for Decision Makers

• Identify the key policy options, including

points to consider (pros, cons, long-range implications, etc.)

• Place the options into context – Why has

this issue arisen? What will be the impact if nothing is done? What are other priorities?

• Create a narrative – How do all the pieces

fit together into a cohesive budget? How is the budget balanced and priorities met?

Decision Process

• Identify decision items
• Use various data visualization tools
• PowerPoint, maps, etc.
• Place options before the decision makers

– balance the need to stay on task with time for consideration and consultation with others

• Keep the process going – your role is
• ften to facilitate and maintain focus
• Develop a tolerance for ambiguity

Watch the Steps

County of Chester, Pennsylvania

Budget Process/Budget Roles Takeaway

• Set up long-term goals
• Develop financial policies
• Encourage stakeholder involvement in the

budget process

• Assign responsibilities, tasks, and key dates
• Communicate the process concisely

Key Takeaways:

• 1. Identify appropriate stakeholders and get them involved, especially

up-front

• 2. Communicate key dates and expectations. Communicate results

and decisions.

POLLING QUESTION 3

Which scenario best describes how department stakeholders are involved in the budget process?

• 1. They are not at all. The budget is prepared by

the budget office.

• 2. Departments are given a target budget by

finance and identify how to allocate discretionary or non-salary spending

• 3. Departments work with the budget office to

identify new programs or strategies for achieving results

• 4. Departments are involved throughout the

budget process to help create efficiencies, develop more effective programs, and work collaboratively to create the budget

Identifying Goals and Community Priorities

 Building relationships and trust with the public

• Communicate
• Honestly
• Early
• Often

 Balancing special interest / politics

• First, educate
• Then, follow-up
• Depth vs. breadth
• “You can’t always get what you want…”

Building Relationships and Trust with the Public

Commit

Communicate

To persuade? Make the case. Ensure understanding. Outline next steps.

To create buy- in? How has input changed the

• utcome?

Demonstrate you listened…

To inform? What’s the media? Can it be accessed? Easily understandable?

To build trust? How will you close the loop?

Honestly,

Know where the gaps are and address them openly and honestly Come out of the cube… But tell the GOOD NEWS TOO!!! Prepare stakeholders for what’s ahead (Money on Non-Fun Stuff) Speak to the perceptions and address it head on (Bloated Central Office) Be transparent about where you were (acknowledge the past), where you are (transformation takes time), and where you are going (won’t please everyone)

Early,

Budget and Finance Advisory Committee (BFAC): provides guidance and counsel on matters of budget and finance; meets regularly with the Chief Financial Officer, working alongside staff and others to develop tools and methodologies on how to best improve the district’s budgeting process. The administration has been responsive to BFAC’s recommendations for greater cohesion and clarity.

Every meeting includes an update from our office, feedback protocol, and BFAC led discussion

and Often.

New Student First Funding Initiative Multi-Year Planning

(And Again!)

Balancing Special Interest and Politics

First, educate

Superintendent’s Employee Meeting FY2018 Budget Development October 12, 2016 4:00-7:00

• Welcome and Introductions
• Budgeting 101
• FY18 Budget: Closing the Gap
• FY18 Budget: Unfunded

Components of Transformation

• Wrap–Up and Next Steps

Then, follow-up

Superintendent’s Employee Meeting FY2018 Budget Development December 14, 2016 4:00-6:00

• Recap - Last Superintendent’s Employee

Meeting

• Introduction - Budget Development Exercise
• Table Work Session
• Share-out

Depth vs. Breadth

• 1. The district will allocate resources pursuant to the

district’s definition of equity.

• 2. The district will continue investing in the Turnaround

Strategy, providing additional support and interventions for schools that have been chronically struggling on the state accountability metric.

• 3. The district will recruit, develop, retain, and promote

high-quality staff by developing and implementing a multi-year compensation model.

• 4. The district will continue implementing its charter

system operating model and core components of signature programming, cluster funds, school flexibility dollars, and community engagement strategy.

• 5. The district will fund pension obligations in

accordance with State statute and actuarial standards.

• 6. Per resource parameter #2, with additional public

funding and/or partnership resources, the district will make investments in Pre-K through 3rd grade to ensure all students are reading by the end of 3rd grade.

• 7. Per resource parameter #2, with additional public

funding and/or partnership resources, the district will focus on whole-child development, including positive behavior supports, arts and athletics.

• 8. Per resource parameter #2, with additional public

funding and/or partnership resources, the district will create a comprehensive leadership development program.

• 9. Per resource parameter #2, with additional public

funding and/or partnership resources, the district and its partners will significantly expand access to quality Early Childhood Education.

FY2018 Expenditures Parameters FY2017 Expenditures Parameters

• 1. Allocation decisions will be made to prioritize achieving a more equitable

distribution of resources pursuant the district’s equity audit.

• 2. The district will allocate resources to implement effectively the system’s move

to a “charter system” operating model.

• 3. The district will fund pension obligations in accordance with State statute and

actuarial standards.

• 4. The district will invest in a multi-year school turn-around strategy that provides

additional support and interventions for schools at risk of state take-over.

• 5. The district will make investments in early childhood education based on

findings from research study.

• 6. The district will ensure that the budget is aligned to the Board’s mission and

vision and that resources are allocated against key district strategic priorities in the areas of:

• a. Academic Program
• Ongoing implementation of district’s CRCT remediation &

enrichment efforts

• Improvement in student achievement in math, science, and

literacy, including a comprehensive materials of instruction strategy (inclusive of textbook adoption and online student and teacher resources)

• Ongoing implementation of signature programming across

clusters

• Ongoing implementation of positive behavior supports

programming

• b. Talent Management
• Strategies to recruit, professionally develop, and retain high

quality staff

• Continued implementation of multi-year compensation study

recommendations to address pay parity

• c. Systems & Resources
• The safety, security, and well-being of students and staff

(including the implementation of a new safety/security model)

• Preventative maintenance of support infrastructure (including

buildings, buses and technology)

• d. Culture
• Continued implementation cultural transformation strategy,

including strengths based programming

• Implementation of District’s external communications strategy

“You can’t always get what you want…”

POLLING QUESTION 4

• Do you think that all employees are aware
• f and understand your mission and

goals?

• 1. Yes. All understand
• 2. Somewhat. Most would understand
• 3. No. Mission and goals are not communicated

POLLING QUESTION 5

• On a scale of 1 to 5, please indicate how

well your budget is aligned with your strategic plan and works to accomplish the plan.

• 1. Not at all
• 2. Some alignment
• 3. Mostly aligned but no communicated link
• 4. Aligned
• 5. Perfect alignment. All programs are

consistent with stated priorities and strategic goals

• NA. We don’t have a strategic plan

Key Takeaway # 3: Remember your purpose and mission and commit to it

The key to building trust is open and honest communication and then follow-through on your commitments. Or in short… put your money where your mouth is!

City of Madison Case Study

Better Budgeting

Background – City of Madison

• 30 city agencies
• 2,900 FTE positions
• Budget:
• $700 million all-funds operating budget
• $283 million general fund
• $17 million library fund
• $219 million levy
• $360 million capital budget ($170 million GO)
• Strong Mayor; 20-member council
• one of the largest per capita in the country

(12,500 people per member)

• About 100 city committees

City General Fund Revenues - $300 million

73% 12% 4% 3% 2% 2% 2% 2%

2017 Revenues

Property Tax State Aid Payments in Lieu of Taxes Charges Fines and Forfeitures Other Licenses/Permits Room Tax and Other

Issues Facing City

• Rising poverty rate – 50% of school students eligible

for free and reduced price lunch

• Rising violence – gun violence in parts of the City
• State retrenchment – strict levy limits; state aid

reductions; 50% pro-ration of payments for police and fire services to state-owned and UW buildings

• Infrastructure pressures – reconstruction of major

city streets; renovation of key city facilities; rising debt service share (historically 12.5% of g.f. expenditures; could exceed 19% by 2023)

• Economy is strong – state government, University
• f Wisconsin, biotech, medical records technology

Mayor and Council

• Council has a neighborhood view
• 12,500 residents per Council district
• Mayor has city-wide view
• Strong political support for labor
• Collective bargaining agreements replaced

with ordinance and handbooks

• Strong non-profit organization sector

Approaches

• City-wide goals and outcomes
• Better connecting budgeting to outcomes
• Data inventory effort
• Cross-functional/agency teams
• Joint executive/council strategic

management oversight group

• Racial equity and social justice initiatives

Data in Action

Ad-hoc Data Collection Siloed Data Sources Agency Specific Goals and Initiatives Proactive Data Collection Enterprise-Wide Solutions

City-Wide Goals and Cross Functional Teamwork

• Efforts are intended to make systems easier to

interact with & manage

• Principles of strategic management intended to

become THE WAY we do business instead of AN

ADDITIONAL WAY

OLD WAY NEW WAY

Framework that connects the City’s vision and mission with

• utcome areas and S.M.A.R.T. indicators. The framework

serves as a cornerstone in the decision-making process.

City-wide Goals Outcomes & Indicators Agency Service Delivery

Strategies Performance Measures

Strategic Framework

The Strategic Framework

• Guidance

Teams worked together to define what success would look like and how that success would be measured

• Staff currently

working to bring concepts together with Comp Plan

The Planning Process

Strategic Framework

Mayor, Council, & residents set priorities Agencies submit proposals that will drive outcomes Mayor & Council adopt budget that funds strategies to advance

• utcomes

City services implement strategies as

• utlined in

workplans funded in budget Data collected by service to monitor progress against goals articulated in budget Quarterly meetings provide forum to track City-wide

• utcomes across

services Service delivery adjusted based on what we know from data

Connecting Service Delivery & Outcomes

Tools to Guide Us

These tools will help foster innovation among City staff at all levels helping us to achieve our objective of delivering the outcomes that matter most to Madison’s residents.

Continuous Improvement Accountable Government Data Informed

• Use data to identify

where we can be more efficient

• Provide training

and support for agencies to pilot innovations to improve service delivery

• Connect our services

with the outcomes they are seeking to influence

• Use the budget

process as an annual planning opportunity to confirm our priorities

• Convene around City-

wide Goals to monitor progress in driving

• utcomes
• Share data about our

progress internally & with the public

Next Steps:

Connecting City Services & Outcomes

Step 3: Develop Data Action Plan

Identify the data source and variables necessary to develop dashboards.

Step 2: Define How to Measure Success

Define how much are we doing with each service, how well are we doing it, and is anyone better off.

Step 1: Identify Services

Define services in a way that is consistent with how residents interact with them.

Engagements with City agencies will focus on connecting their work with the outcomes they drive

The 2018 Executive CIP has been mapped allowing you to see where projects are planned for the next 6 years

Mapping the Plan

Projects have been grouped into four categories to reflect the way our residents think about the budget. The categories are: Facilities, Parks, Transportation, and Utilities. The overview map allows you to see all of the projects planned throughout the CIP; keep scrolling through the map to see more detail about the categories including link to the City’s projects portal & budget.

Capital Projects

• Each section of the map

highlights key projects included in the budget

• Project amounts reflect the

total project budget; this may cause budget to vary slightly from what is in the budget document as prior year appropriation is not shown in the budget book

• Each section of the map

includes an introductory

• verview that shows the

funding breakdown and anticipated spending levels across the CIP

Use this map as a tool to talk about the budget with your constituents learning more about their budgetary priorities

Key Takeaways -

#4 - Engage Council in goals and outcomes development – help them understand the larger picture #5 - Transparency in data – be a resource (e.g., mapping the capital budget) #6 Understand that neighborhood issues will usually be adopted by the Council #7 Need to integrate comprehensive land use plan with budget outcomes

County of San Diego

Policy Analysis and Budget Process

Policy Analysis and the Budget Process

• Importance of policy analysis
• Creating financial policies
• Communicating your financial

policies

• Fiscal impact of new policies

Importance of Policy Analysis

• Every policy has a fiscal impact
• This is almost always true
• Two examples
• Intergovernmental revenue
• How other policies impact “my” cash flow
• Economic/Business impact
• How “my” policies impact other cash flow

POLLING QUESTION 6

• Does your organization require that policy

proposals contain a fiscal impact analysis?

• 1. Yes
• 2. Yes, but the process is not always followed
• 3. No

Creating Financial Policies

• Align with broad government goals
• Implement best practices in the following policy areas:
• Budget
• Performance
• Capital
• Reserves
• Contingencies
• Revenue
• Debt
• and more…
• Fees
• Select government organizations in finance
• Government Finance Officers Association (GFOA)
• International City/County Managers Association (ICMA)
• National League of Cities (NLC)
• National Advisory Council on State and Local Budgeting (NACSLB)

Source: National Advisory Council on State and Local Budgeting Practice

Communicating Your Financial Policies

• Publish on public website
• Engage in dialogue with key stakeholders
• Elected officials
• Constituents
• Investors
• Budget
• A living document of short-term priorities
• Reflects policy decisions of elected officials
• Must consistently apply existing financial policies

Fiscal Impact of New Policies

• Short term
• Typically in alignment with the budget
• Long term
• Typically in alignment to maintain a long-term

financial outlook

• Job of elected official
• Goal is to weigh public benefit vs. cost of

program/service in the short and long term

Conclusion

• Do your financial policies reflect your agency’s

goals?

• What are the short- and long-term effects of

new or proposed policies?

Key Takeaway #8: You need to understand the effects of new policies

This is the only way to provide decision makers with accurate information, allowing them to make the right decisions about your

• rganization’s future.

Creating Long-Range Capital Plans

Long-Range Capital Planning

GFOA Recommends

• Comprehensive
• Fiscally sustainable
• Identifies and prioritizes expected needs

based on a’ strategic plan

• Establishes project scope and cost
• Details estimated amounts of funding

from various sources

• Estimate future operating and

maintenance costs

• At least three years, preferably five or more

Step 1: Identify Needs

• Governments should:
• Develop a capital asset life cycle for major capital

assets.

• Include costs to:
• Operate
• Maintain
• Administer
• Renew or replace the capital asset
• Identify present and future service needs that

require capital infrastructure or equipment

Step 1: Identify Needs (cont)

• Attention should be given to:
• Infrastructure improvements that support

private development and the good of the public

• Changes in policy or community entity needs
• Incorporating input and participation from

major stakeholders and the general public

• Projects with revenue-generating potential
• Analyze the non-financial impacts of the

project (e.g., environmental) on the community

Determine Financial Impacts

• GFOA recommends governments

determine the full extent of the capital project/asset and the associated life cycle costs

Determine Financial Impacts (cont)

• Scope and timing
• Identify and use the most appropriate approaches

when estimating project costs and potential revenues

• Adjust cost projections based on anticipated inflation
• All major components
• Land acquisition needs
• Design, construction
• Contingency
• Post-construction costs
• Quantify ongoing life-cycle costs
• Sources of funding for those costs should be identified

Prioritize Capital Requests

• Health and safety
• Asset preservation
• Service/asset expansion/addition

Prioritize Capital Requests

• Attention should be given to:
• Coordination with related entities
• Allowing submitting agencies to provide an initial

prioritization

• Incorporating input and participation from major

stakeholders and the general public

• The impact on operating budget impacts resulting

from capital projects

• Appling analytical techniques, as appropriate, for

evaluating potential projects (e.g., net present value, payback period, cost-benefit analysis, life- cycle costing, cash-flow modeling)

• Using a rating system to facilitate decision-

making

Develop a Comprehensive Financial Plan

• GFOA recommends
• Develop a viable overall multi-year financing

plan

• Covering the multi-year period of the capital

plan

• Ensuring that the proposed capital plan is

achievable within expected available resources

Develop a Comprehensive Financial Plan

• Financing strategies
• Should align with expected project

requirements while sustaining the financial health of the government.

Develop a Comprehensive Financial Plan

• Revenue and expenditure trends
• Cash flow projections
• Compliance with all established financial policies
• Recognize appropriate legal constraints
• All appropriate funding alternatives
• Sources and uses for debt service
• Affordability of the financing strategy

Capital Project Monitoring and Reporting

• The financial management of capital

projects requires a substantial commitment of organizational time and resources

• Given their scale and cost, capital

projects can represent a significant risk for local governments

Data Systems

• Appropriate technological solutions
• Positional roles
• Process for controlling and managing project

changes

• Accountability and data integrity
• Data accuracy
• System controls and security
• Consistency and standardized language
• Ease of accessing data ***

Monitoring Projects

• Plan identifies all required resources and

milestones

• Scope has been clearly identified
• Project stays within scope
• Review project-related financial transactions
• Review expenditures
• Confirm continued availability / appropriateness of

revenue sources

• Confirmation adequacy of cash
• Review timing of investment maturities
• Review of sources and project
• Results compared to established measures of

performance

Project Status Reports

• Percent of project completed
• Percent of project budget expended
• Progress on key project milestones
• Contract status information
• Revenue and expenditure activity
• Cash flow and investment maturities
• Funding commitments
• Available appropriation
• Comparison of results in relation to

established performance measures

GFOA Best Practices Multi-Year Capital Planning Capital Project Monitoring and Reporting

http://www.gfoa.org/best-practices

POLLING QUESTION 7

• Who is primarily responsible for tracking

capital project needs and capital budgeting in your organization?

• 1. Finance / Budget Office
• 2. Public Works
• 3. City Manager / County Manager / CEO
• 4. Engineering
• 5. Other
• 6. Everyone works collaboratively on capital

budgeting

County of San Diego

Revenue and Expense Forecasting

Revenue and Expense Forecasting

• Why local governments forecast
• Types of forecasting
• Goals of forecasting
• Structure of forecasting

Why Local Governments Forecast

• What problem does forecasting solve?
• Identifies potential problems and issues in

future

• It’s better to look at the problem now than to look

for the problem later

• Allows leaders to make early decisions
• Prompt choices enable performance in a non-

emotional environment

Examples of Major Challenges Facing Local Governments

• Fluctuations in the economy
• Pension costs
• State budget challenges and uncertainties
• Tax base continuity
• Federal government budget deficit
• Delivering services in a new technological

age

• Changing demographics of the population
• Tax and expenditure limitations
• Aging infrastructure
• Healthcare costs
• Educational attainment

• Visionary, thinking process about the

future

• Solve problems, meet challenges, capture
• pportunities, sustain essential services
• Link between strategic planning and

budgeting

• Strategic planning sets broad goals
• Budgeting is short term and tactical, and is

used to operationalize long-term strategies

• Helps direct resources to highest priority

items

• Multi-year horizon
• Government-wide (all funds)
• Comprehensive content
• Institutionalized and integrated with

strategic planning and budgeting

Our Planning and Budgeting Environment

Strategic Plan 5-Yr Forecast 2-Yr Op Plan

Board Priorities Political Influences Department Initiatives Labor Agreements State & Federal Mandates, Regulations & Budgets Funding Opportunities Public Requests Documented or Perceived Needs Resources Available Population Growth Local Regulations

Financial Planning Process Phases

• Mobilization
• Purpose, who leads, who participates, preliminary

financial analysis, service-level and outcome- preferences, financial policy review, and scope

• Analysis
• Data gathering (aka “environmental scan”), revenue

and expenditure trends, and financial balance (gap) analysis

• Decision making
• The organization’s response to the analysis
• Execution
• Budgeting, monitoring, and reporting

Source: GFOA

Types of Forecasting

• Qualitative
• Use when data is scarce or unavailable.
• EX techniques: visionary forecasts, market research, panel

consensus.

• Accuracy = poor
• Time-series analysis
• Use if data is available for several years and relationships/trends

are relatively clear.

• EX techniques: moving avg., exponential smoothing, trend

projections.

• Accuracy = poor to good
• Causal models
• Use when historical data is available & clear relationships among

variables exist.

• EX techniques: regression, econometric models, input-output,

economic-input-output.

• Accuracy = good to excellent

Source: Harvard Business Review

Picking a Forecast Type and Technique

• Picking a forecast type & technique
• Many factors to consider
• Size & context of government
• Accuracy & availability of historical data
• Desired accuracy of the forecast
• Time available to develop the forecast
• The value government places on the forecast
• The number of projection periods
• Cost to conduct the forecast
• Remember: forecasting is an art!
• But goals and structure are still valuable in forecasting.

Source: Harvard Business Review

Goals of Forecasting

• Revenue forecasting
• Project revenues for 3+ years
• Analyze government’s major revenue sources
• Seek consensus among leadership team/decision makers with final

forecast

• Get better – use forecast variances from prior years to make better

projections and/or assumptions

Source: National Advisory Council on State and Local Budgeting Practice

POLLING QUESTION 8

• How far in advance does your
• rganization forecast revenue?
• 1. 1 year
• 2. 2-5 years
• 3. 5-10 years
• 4. 10-20 years
• 5. 20 + years

Goals of Forecasting

• Expenditure forecasting
• Project expenditures for 3+ years
• Identify and explain service-level assumptions
• Develop capital improvement plan (CIP) for 5+ years
• Comparison of forecasts
• Compare revenue and expenditure forecasts
• Use the results as a tool to identify future issues or problems where

expenditures exceed future revenues

Source: National Advisory Council on State and Local Budgeting Practice

Structure of Forecasting

• Aspects of structure
• Timeline
• Available data
• Consistent forecasting across organization
• GFOA forecasting resources
• Online Resources (www.gfoa.org)
• Printed Resources like Informed Decision Making through

Forecasting (a step-by-step guide for in-house revenue forecasting)

Case Study

BOSTON – CAPITAL PLAN

• Mayor Martin J. Walsh today presented

his $2.08 billion proposed Fiscal Year 2018 - Fiscal Year 2022 (FY18-FY22) Capital Plan

• Makes critical investments in the City's

infrastructure in every Boston neighborhood

• Guided by Boston's citywide plan, Imagine

Boston 2030

• Apr 13, 2017

CITYWIDE PLANNING

IMAGINE BOSTON 2030

• Ambitious initiatives
• An ambitious set of initiatives form the

foundation of the Imagine Boston 2030

• plan. Taken together, these initiatives will

support Boston's dynamic economy and improve quality of life for residents by:

• encouraging affordability;
• increasing access to opportunity;
• promoting a healthy environment; and
• guiding investment in the public realm.

OPPORTUNITY OF GROWTH

OPPORTUNITY OF GROWTH

INCREASING POPULATION

INCREASING POPULATION

AFFORDABILITY

CLIMATE CHANGE

CLIMATE CHANGE

EQUITY AND ECONOMIC OPPORTUNITY

EQUITY AND ECONOMIC OPPORTUNITY

• Moving into the 21st century
• Mayor Walsh committed $1 billion over ten

years to bring Boston's school buildings into the 21st century, and this Capital Plan launches that investment with funding for:

• 21st century classrooms;
• MSBA Accelerated Repair Program

partnerships;

• Completion of projects in the pipeline; and
• Reserves for future projects identified by

BuildBPS community engagement.

• Core initiatives
• Boston, in collaboration with State and

Federal sources, will invest $709 million over the next five years in implementing the core initiatives outlined in Go Boston 2030:

• streets that are safer for all users of our

roads and sidewalks, particularly pedestrians and cyclists;

• travel that is more reliable and predictable;

and

• quality transportation choices that improve

access to interconnect our neighborhoods for all modes of travel.

FY2018 CAPITAL PROJECTS

Key Takeaway # 1: Name of Takeaway One sentence explanation

FY2018 CAPITAL BUDGET

FY2018 CAPITAL BUDGET

FY2018 CAPITAL BUDGET

124

CAPITAL PROJECTS

CAPITAL PROJECT FINANCING

Fiscal Years 2018 - 2022

DEBT SERVICE

DEBT SERVICE REQUIREMENTS

Fiscal Years 2015 - 2022

OUTSTANDING PRINCIPAL BY STATUTE

(a/o 4/30/17)

OPEN BUDGET FY 17 SNAPSHOT

IMAGINE BOSTON

County of San Diego

Communication and Collaboration

Communication and Collaboration

• Need for communication & collaboration
• Types of communication & collaboration
• Purposes of communication & collaboration

Need for Communication and Collaboration

• Tone set at the top
• It filters down based on leader’s priorities
• Reasons to communicate & collaborate
• Accuracy and control
• To understand and determine variances
• Ethical behavior
• To safeguard public resources
• Excellence and performance
• To meet audit requirements and exceed operational

expectations

Source: Financial Management for Public, Health, and Not-for-Profit Organizations

Types of Communication

• Verbal
• Sounds, language & tone of voice
• Auditory
• Listening & hearing
• Non-Verbal
• Facial expressions, body language & posture
• Written
• E-mails, memos & other recorded text
• Visual
• Pictures, symbols & other representations

Source: Department of Labor

Types of Collaboration

• Collaboration combinations
• Open or closed network?
• Flat or hierarchical governance?
• Elite circle
• Closed and hierarchical collaboration
• Innovation mall
• Open and hierarchical collaboration
• Innovation community
• Open and flat collaboration
• Consortium
• Closed and flat collaboration

Source: Harvard Business Review

Purpose of Communication and Collaboration

• For making decisions
• To maintain and understand operational

impacts

• For public consumption
• Long-term forecasts
• Budget
• Quarterly reports

SD Example: Making Decisions

• Group finance director model
• Facilities planning board
• Capital Improvement Needs Assessment (CINA)
• Major Maintenance Improvement Plan (MMIP)

SD Example: Operations

• Quarterly Meetings with CAO
• Cost Commission
• Internal Service Fund (ISF) rates

SD Example: Public Consumption

• Tips for creating a public document
• Hire and train the right people
• Give employees a baseline of knowledge according to

agency standards

• Document expectations
• Develop clear processes and procedures
• Discuss changes for upcoming fiscal year
• Encourage budget office to work with departments on

a draft

• Invite stakeholders to edit draft until it is finalized and

published

Communication and Collaboration

• Do you know your communication and

collaboration style?

• With what purpose do you communicate and

collaborate?

Working with Other (Non Budget) Departments

Collaborative Budgeting

Successful Budget Process

Successful Budget Process

Collaboration Essentials

Budget Collaborators

Questions for Collaborators

From the Beginning

To Budget Completion

Budgets reflect an organization’s priorities

• The relationship between budgets and

priorities is critical for good planning

• Division heads give preferential treatment

to proposals that directly support the priorities

• There’s a finite amount of funds, and

priorities help us determine how best to use them

• Departments submit plans to their division

head, explaining why their projects are important and how they support priorities

• The division heads, in turn, review the

proposals and develop their division-wide budgets

Budget Cycle

Unlocking Boston’s budget

• Until this year, three books, 860 pages, and

almost three inches of data-rich Boston budget and performance information was buried in a PDF format.

• This year, the Budget Office worked closely

with the City’s Digital Team to unlock this budget information with the public in three new ways: an in-depth budget website, a quick 100-second video on how the budget works, and live streams of budget presentations on Facebook and YouTube.

POLLING QUESTION 9

• What is the biggest challenge in getting

departments to work more collaboratively?

• 1. Trust issues
• 2. Not enough time (collaboration is time

consuming)

• 3. Departments don’t understand budget

process

• 4. No executive commitment
• 5. Lack of process

Case Study: County of San Diego

GFOA Better Budgeting Webinar September 2017

Internal Communication

INTRODUCTION

157

• Most southwestern county

in the United States

• 4,526 square miles with

70 miles of coastline

• 3.8 million residents (2016)
• 2nd most populous county

in California

• 5th most populous county

in the U.S.

• Fiscal Year 2017-18
• Total budget = $5.79 billion
• Workforce = 17,413 staff years

COUNTY OVERVIEW

Public Safety $1,836.1M 31.7% Health & Human Services $1,914.4M 33.1% Land Use & Environment $511.8M 8.8% Community Services $328.6M 5.7% Finance & General Gov’t $409.1M 7.1% Capital Program $154.1M 2.7% Finance Other $632.3M 10.9%

Total Adopted Budget: $5.79 billion

158

• Five-member elected Board of

Supervisors

• Five business groups headed by a

Deputy Chief Administrative Officer (DCAO)

• DCAO of Finance and General

Government is also the Auditor & Controller

• Office of Financial Planning

GOVERNANCE

Mission: To provide comprehensive financial planning, policy oversight, advisory services, and administration of community grant programs to ensure stability, integrity and promote accountability and transparency in government to foster public confidence.

159

• Business model that guides all County operations
• Annual cycle drives financial planning and budgeting
• Begins with strategic planning

GENERAL MANAGEMENT SYSTEM

160

LONG-TERM FINANCIAL PLANNING

161

WHERE DO WE WANT TO BE IN FIVE YEARS?

• Goals for the County and community
• Defines internal County culture

STRATEGIC PLANNING

162

FIVE-YEAR FINANCIAL FORECAST

INTERNAL PROCESS FOR ALL FUNDS

• Comprehensively anticipates expenditures, revenues, and any gaps
• Not a five-year budget, but first two years become basis for budget
• Subject matter experts
• Identify operational needs and forecast expenditures/revenue

County Departments

• Coordinate input from departments
• Identify Group needs and constraints

DCAOs and Group Finance Directors

• Provides framework/tools and compiles results
• Establishes County-wide assumptions for salaries and benefits, ISF rates
• Communicates County priorities

Office of Financial Planning

163

STRATEGIC FACILITIES PLANNING

• Identifies future business needs and physical environments
• Capital Improvements Needs Assessment (CINA)
• Major Maintenance Improvements Plan (MMIP)
• Essential Infrastructure program: 50+ year-old buildings

CAPITAL PLANNING

164

MEETING OF CAO and DCAOs

• Share results of Five-Year Financial Forecast
• Discuss enterprise-level issues including capital needs
• Integrate any revisions to Strategic Plan

EXECUTIVE OFFSITE WORKSHOP

165

COORDINATED BY CAO WITH DCAOs

• General Purpose Revenue
• One-time use of fund balance(s)

RESOURCE ALLOCATION

166

BUILDING THE BUDGET

167

FROM THE TOP DOWN…

• Operational Plan Kickoff meeting
• Shares assumptions and rates
• Identifies enterprise-level issues and changes
• Provides “standard language” for consistency
• County-wide training for budget and operational staff
• Operational Plan User Guide

COUNTY-WIDE COMMUNICATION

168

FROM THE BOTTOM UP…

• Departments develop their budget(s)
• Expenditures and revenues
• Accomplishments and objectives
• Performance measures
• Office of Financial Planning reviews and edits
• Departments, groups, and executive stakeholders

finalize drafts

BUDGET DEVELOPMENT

169

ONGOING BUDGET MONITORING

170

FROM LEADERSHIP

• Quarterly all Fiscal Staff meetings
• Monthly meetings with DCAO and departments
• Internal department meetings

FINANCIAL COMMUNICATION

171

TO LEADERSHIP

• Quarterly Executive Management Exchange
• Reports to CAO and other key executives
• Focus changes each quarter
• Generates discussion

FINANCIAL COMMUNICATION

172

QUARTERLY ACTION BY THE BOARD OF SUPERVISORS

• Public hearing
• Projects year-end results
• Updates on County finances

and economy

• Identifies key issues/risks
• Incorporated into next Five-Year Financial Forecast

BUDGET ADJUSTMENTS

173

Understanding the Budget Document

Budget Transparency

 Budget transparency, while not a goal in itself, is a

prerequisite for public participation and

• accountability. A budget that is not transparent,

accessible, and accurate cannot be properly

• analyzed. Its implementation cannot be

thoroughly monitored nor its outcomes evaluated.

POLLING QUESTION 10

• Describe the level of online budget

transparency in your organization.

• 1. We do not post anything online
• 2. We post a PDF of the budget document
• 3. We post a PDF of the budget document

along with other important reports, plans, and documents

• 4. We have a financial transparency website

that is updated frequently

• 5. We have interactive dashboards/queries that

allow citizens to view financial information

GFOA Budget Award Winners

Using PDF Files

Town of Queen Creek, Arizona

Quick Reference Guide

County of Chester, Pennsylvania

Document Mapping

Arlington Heights Park District, Illinois

Budget in Brief

City of Oceanside, California

Issue Discussion

Smith County, Texas

From the transmittal letter...........

City of Lawrence, Kansas

This year, the method by which funds are budgeted changed rather dramatically. This was done in an effort to reduce some of the transfers occurring between funds, which complicated the ability to fully understand the

• budget. Another purpose for the restructuring was to

include funds that were previously not budgeted, such as grant funds, in order to increase transparency to the public.

Purpose of Debt Obligations

Gallatin County, Montana

Prioritization

Town of Windsor, Colorado

Priority I: IMPERATIVE (Must-Do) – Projects that cannot reasonably be postponed in order to avoid harmful or otherwise undesirable consequences.

• A. Corrects a condition dangerous to public health or safety
• B. Satisfies a legal obligation
• C. Alleviates an emergency service disruption or deficiency
• D. Prevents irreparable damage to a valuable public facility.

Priority II: ESSENTIAL (Should-Do) – Projects that address clearly demonstrated needs or

• bjectives.
• A. Rehabilitates or replaces an obsolete public facility or attachment thereto
• B. Stimulates economic growth and private capital investment
• C. Reduces future operating and maintenance costs
• D. Leverages available state or federal funding.

Priority III: IMPORTANT (Could-Do) – Projects that benefit the community but may be delayed without detrimental effects to basic services.

• A. Provides a new or expanded level of service
• B. Promotes intergovernmental cooperation
• C. Reduces energy consumption
• D. Enhances cultural or natural resources.

Priority IV: DESIRABLE (Other Year) – Desirable projects that are not included within five-year program because of funding limitations.

Departmental Financials

Town of Avon, Connecticut City of Olympia, Washington

Explain Charts and Tables

Palm Beach County Clerk of the Circuit Court, Florida

Still the Best Deal Around

, Texas Coachella Valley Water District, California

Transparency Grades

Mobile Apps

City of El Paso, Texas

Transparency Takeaway

• Modern governmental budgeting includes

more than a financial plan

• Build on the budget document with
• Community focused content
• Illustrations of the information focused on your

audience

• Use of visualization technologies, and
• Relevant non-financial information as well

Key Takeaways:

• 9. Make the budget document easy to navigate
• 10. Budgets should focus on the entire community
• 11. Budget transparency goes beyond just financial data

POLLING QUESTION 11

• What do you feel is the biggest challenge

to overcome in building a better budget?

• 1. Uncooperative elected officials
• 2. Lack of attention on budget process
• 3. Lack of time
• 4. Lack of technology resources
• 5. Poor communication internally

Key Takeaways:

• 1. Identify appropriate stakeholders and get them involved, especially

up-front

• 2. Communicate key dates and expectations. Communicate results

and decisions.

• 3. Remember your purpose and mission and commit to it
• 4. Engage Council in goals and outcomes development – help them

understand the larger picture

• 5. Transparency in data – be a resource (e.g., mapping the capital

budget)

• 6. Understand that neighborhood issues will usually be adopted by the

Council

• 7. Integrate comprehensive land use plan with budget outcomes
• 8. Understand the effects of new policies
• 9. Make the budget document easy to navigate

10.Budgets should focus on the entire community

• 11. Budget transparency goes beyond just financial data