112 th Annual Conference

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10:30 12:10 May 9, 2018 Room 223-226 112 th Annual Conference May 6-9, 2018 St.

Controller/Deputy Mayor, City of Lawrence, IN Heather A.

1 10:30 12:10 May 9, 2018 Room th Annual Conference May 6-9, 2018 St. Louis, Missouri Moderator/Speakers: John Fishbein Senior Program Manager, GFOA Jason Fenwick Controller/Deputy Mayor, City of Lawrence, IN Heather A. Johnston City Manager, City of Burnsville, MN Amelia Clark Merchant Director of Finance, City of Roanoke, VA Budget Basics: Decision Making and Decision Sharing #GFOA2018

2 Government Finance Officers Association CITY OF LAWRENCE, INDIANA May 9, 2018

3 Lawrence Facts Marion County, IN Lawrence is one of four excluded cities In Marion County Population: Approximately 48,000 (est. 2016) Location: Marion County Indiana City Budget: $68 million

A LOOK AT OUR PAST Standard and Poor s downgrades City of Lawrence to A- - March 29, 2012 Lawrence announces drastic cuts to stay in black - WTHR, October 5,

4 A LOOK AT OUR PAST Standard and Poor s downgrades City of Lawrence to A- - March 29, 2012 Lawrence announces drastic cuts to stay in black - WTHR, October 5, 2012 Another budget shortfall prompts layoffs in Lawrence - Fox59, June 10, 2013 Standard & Poor s downgrades City of Lawrence Water Utility to BB+ - November 9, 2015

5 Indianapolis Star November 13, 2015 Lawrence computers crash, data lost in midst of Mayoral transition June 6, 2016 State audit questions former Lawrence mayor's management, overspending Indianapolis Star

6 The City of Lawrence decided to utilize its budget process and budget book as a cornerstone of its turnaround story and to promote transparency and community input. Our budget process included: Preparation of a detailed budget, which is posted on our website upon introduction to the City Council Introduction of a budget video, which provides an overview of the process, funding priorities, and financial goals

Submission to the GFOA s distinguished budget presentation

objectives and goals with our budget proposal Budget

employees City received award for the first time in its

7 Submission to the GFOA s distinguished budget presentation awards program Preparation of a Citizen s guide providing key objectives and goals with our budget proposal Budget presentation was created in-house by City of Lawrence employees City received award for the first time in its history in 2017 Our Goal is to provide a simple, quick overview of budget priorities

8 State of the City Guide Review of financials and accomplishments Reinforce priorities set for current fiscal year budget

positive outlook NOVEMBER 2017 Indiana Business Journal honors Jason Fenwick as a finalist for its CFO of the

9 What we ve accomplished: APRIL 2017 City upgraded by S&P to A+ JUNE 2017 LPD earns Amazon Web Services City on a Cloud Innovation Challenge SEPTEMBER 2017 S&P upgrades water utility to BBB, investment grade with a positive outlook NOVEMBER 2017 Indiana Business Journal honors Jason Fenwick as a finalist for its CFO of the Year award APRIL 2018 City earns Tyler Technologies Excellence Award City receives GFOA Distinguished Budget Award

explain the budget process tremendous Jerry

And more importantly, very professional.

Bob Jones Common Council At-Large Kudos to

10 Budget Video response was Tom Shevlot Common Council - District 5 Really helps explain the budget process tremendous Jerry Clifford Citizen of Lawrence Very Nice! And more importantly, very professional. Thanks for sharing. Bob Jones Common Council At-Large Kudos to the City and a great job putting it together also with a balanced budget for 2018.

11 Response to Citizen s Guide Provides a quick summary of where budget dollars are going Helps to explain priorities and accomplishments and provides an understandable snapshot of the City s fiscal health

12 RESULT City s financial reputation has improved dramatically Has provided greater transparency to our elected officials and citizen s Dramatically improved the budget process, changing from hostility and opposition to open dialogue and cooperation

13 MOVING LAWRENCE FORWARD

Jason was appointed City Controller/Deputy Mayor for the City of Lawrence on January 1, 2016.

14 Jason was appointed City Controller/Deputy Mayor for the City of Lawrence on January 1, As City Controller, Jason is the City s Chief Financial Officer, where he is responsible for the financial management of the City, which includes producing the annual budget for the City and its utilities, which combined total approximately $70 million. Jason was previously the City Controller for the City of Anderson from 2013 to Prior to joining the staff of the City, Jason spent approximately 15 years in Investment Banking, where he structured over $20 billion in public financing for power and utility companies across the country. Jason spent almost half his career with J.P. Morgan Securities as Vice President and then joined KeyBanc Capital Markets Inc. as Managing Director, both based in Chicago. Prior to investment banking, Jason worked for the City of Indianapolis in varying financial positions, including Chief Financial Officer for the Department of Public Safety and Deputy Controller. He has a BS degree in Mathematics from Indiana University and an MBA in Finance from Indiana University Kelley School of Business. Jason Fenwick City of Lawrence Deputy Mayor City Controller

15 The Budget as a Decision Making Tool

16 About Burnsville, Minnesota Burnsville, MN: A third-ring suburb of the greater Minneapolis/St. Paul metro area Geographic Area: 27 square miles Population: 61,300 City Budget: $109 million 279 employees, 5 unions 16

17 2019 Budget Process Meeting Dates June 12 Discussion Topics Financial Management Plan Review Budget Pressures August 21 September 4 October 31 October 31 Council Gives Direction to Staff to Prepare Maximum Tax Levy Council Adopts Maximum Tax Levy Virtual Open House Video Release Department Budget Presentations at Worksession November 13 November 27 Council Worksessions on the Budget: General Fund & Other Property Tax Supported Funds Capital Projects, CIP, & Enterprise Funds December 4 Council Adopts Tax Levies and Budget

18 Making the Decisions Crucial in the success of the process Approaches is dependent on: Organizational politics What information is presented What phase the budget process is in Need to use various formats

19 Who is your Audience? City Manager/Administrator Metrics Options/trade-offs City Council: Organizational politics Policy questions Service level Public Cost/service

20 Budget Context For Decisions Departments should know guidelines and themes (emphasis) before preparing decision packages Is this a growth year; a cut year? What immediate priorities/issues need to be addressed? Implications of the strategic plan and long-range financial plan? Consistency and advance notice, e.g., from strategic and/or long-term financial plan will help with organization s ability to adapt and accept But still need to be flexible and adjust to current needs and situation

21 Burnsville: Budget Development Considerations Develop budget based on sound financial policies & Council priorities Build a foundation for sustainable future Deliver consistent level of service from current resources Seek the highest quality services for the lowest cost Provide competitive pay in the middle of the market Maximize cost recovery through fees Make decisions based on indicators of quality and efficiency

22 Financial Policies: A Critical Framework for Decision Making Institutionalizes good financial management practices Clarifies strategic intent for management Defines boundaries Promotes long-term thinking Manages risks to financial conditions

23 Objectives of Financial Policies: City of Burnsville Provide short- and long-term future financial stability for providing services to community Protect the City Council s policy-making abilities Provide sound principles to guide decisions Employ diverse revenue policies Provide essential public facilities Protect and enhance City s credit rating Create a reference document for financial planning, budgeting and decision making

24 Supporting Information Supporting information for decisions (depending on approach/type of budget) may include: Priority assignment based on predefined criteria Addressing strategic and/or long-term financial plan or other governing body/chief executive priorities (may or may not be part of priority assignment) Relevant performance metrics A (simple) justification

25 Tips for Engaging Elected Officials Keep it at the policy level Present trend and other contextual data Measure your policies Provide the BIG picture

26 Department Presentations: Overview Departments and types of services delivered Innovation, quality service & efficiencies Budget pressures

27 Financial Condition of the City AAA Bond rating strong financial management mentioned as a plus Sound budgeting practices and multi-year financial planning Stable fund balance and cash position

28 General Fund Source of Funds $38.8 million Charges for Services 15% Licenses & Permits 5% Property Tax 67% Intergovernmental 5% Rents & Interest 3% Other 2% Use of Reserves 3%

29 Five-Year Financial Projections $45 $40 Tax Levy in Millions $35 $30 $25 $20 $15 $10 $27.0 $28.1 $29.4 $30.3 $31.4 $32.5 General Debt EDA EAB ITF $5 $0 $3.2 $3.3 $3.3 $3.4 $3.4 $ Adopted

30 Tips for Engaging the Public Don t get bogged down in the details Focus on service Provide several ways for engagement: Document itself with a Budget in Brief Meetings Website comment form Video: 2018 Budget Video

31 Estimated Impact of 3.6% Levy Increase $21 Increase ($1.80 per month) Effect on Residential Median Home $238,200 (Home value growth 7.3%) $334 Decrease ($28 per Month) Effect on a $1 Million Commercial Property (Property value growth 2.3%)

32 A Successful Budget Process 32

33 33 Getting the Word Out Document itself is one piece of the puzzle Don t be afraid to talk to local reporters Include information in many ways

34 Signs of a 34 Successful Budget Process When stakeholders are pleased with the process (but not necessarily with allocation) Did stakeholders understand the basis for decisions? If performance measures are available, were they actually used in decision making? Did the process provide timely, adequate, correct and truthful information?

35 More Signs of a 35 Successful Budget Process Bond rating agencies Did the adopted budget adequately function financially What was the level of resources used Was the process timely in all respects

36 36 Resources GFOA Best Practices Assistance from GFOA GFOA Distinguished Budget Presentation Award Consulting services Other Budget Officers and Finance Directors Budget documents and process manuals

37 Communications and Engagement 37

City of Roanoke Overview Chartered as an independent city in 1884 96,681 residents 43 square miles Council-Manager form of government Recent

38 City of Roanoke Overview Chartered as an independent city in ,681 residents 43 square miles Council-Manager form of government Recent reorganization merges Finance and Budget under one Director 7 th largest employer in MSA FY 2018 Budget: Operating: $282,785,000 FY 2019 Budget: Operating: $291,699,000

39 City of Roanoke Priorities Assure community safety needs are met and promote a safe and desirable region. Safety Economy Cultivate a thriving business environment and innovative workforce opportunities to ensure the prosperity of our community. Enhance Roanoke s exceptional vitality as an attractive, diverse, culturally inclusive, vibrant and active city in which to live, work and play. Livability Education Foster an environment for lifelong learning which encompasses cradle to career and beyond through shared services and community involvement. Infrastructure Good Government Maintain and build quality infrastructure that supports healthy residential neighborhoods, successful commercial areas, and accessible public facilities and amenities. Human Services Foster a caring community that utilizes a regional and collaborative approach which encourages self-sufficiency while providing a social safety net to citizens when they are most vulnerable. Provide effective government which maximizes resources to ensure an open, responsive, and innovative service to the community.

40 Departments provide: Budget offers Programs Services New requests Inflationary costs Justification for funding levels Tiers 1-3 Tier 4 Essential Tier 4 Non-Essential Safety Offer Base Base Reallocations Supplemental Requests Total Employee Stipend for Mental Health Unit $ - $ - $ 27,451 $ 27,451 Police Investigations and Support $ 4,549,882 $ - $ - $ 4,549,882 Police Career Enhancement Program $ - $ - $ 18,789 $ 18,789 Sheriff's Office Operations $ 3,395,140 $ - $ - $ 3,395,140 Sheriff's Office Operations - Supplemental Offers $ - $ - $ 2,275 $ 2,275 Emergency Management $ 109,756 $ - $ - $ 109,756 Residential Juvenile Detention Services $ 973,818 $ (116,140) $ - $ 857,679 Traffic Signals $ 619,824 $ - $ - $ 619,824 Traffic Signals - Supplemental $ - $ - $ 26,100 $ 26,100

Communicating with City Council and the Public Settings Briefings Council Meetings Public Hearings Tools Budget in Brief City Hall Without Walls Website

41 Communicating with City Council and the Public Settings Briefings Council Meetings Public Hearings Tools Budget in Brief City Hall Without Walls Website Facebook Leadership College Media (newspaper, radio) Neighborhood Meetings Recommended/Adopted document Saturday Budget Academy Twitter Working Document

42 Benefits of Engaging with Citizens Different perspectives Opportunity to further educate citizens Opportunity for Council to be informed of concerns and opinions Discussions can prompt Council to provide direction to administration Future benefit of engaged citizens available for appointments to committees, boards, commissions Engaged citizens can become informed, engaged employees

43 Think Forward Citizen engagement is work, but is also an investment Succession Planning Engage with current employees/citizens Invest time with elementary, middle, high school and college students Follow-up with citizen requests; acknowledge responses publicly

44 Don t give up!

45 112 th Annual Conference May 6-9, 2018 St. Louis, Missouri Speaker Contact Information: John Fishbein Jason Fenwick Heather A. Johnston Amelia Clark Merchant Questions: Speakers will take questions and comments. This session is being recorded, please utilize the microphone in the aisle to ask all questions. Provide Feedback: Please take a few minutes to provide your feedback at Discuss/Comment: Join the discussion at #GFOA2018 Contact GFOA: To contact GFOA about session topics please research@gfoa.org #GFOA2018

112 th Annual Conference May 6-9, 2018 St. Louis, Missouri

4:15 5:30 May 7, 2018 Rooms 223-226 112 th Annual Conference May 6-9, 2018 St. Louis, Missouri Moderator/Speakers: Daryl Okrzesik Treasurer, City Colleges of Chicago, IL Judith M. Marte Chief Financial