Best Practices In Budgeting. Lori Allshouse, Albemarle County Erin McLellan, Loudoun County Betty Meyer, City of Norfolk Kathy Seay, Hanover County

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1 Best Practices In Budgeting Lori Allshouse, Albemarle County Erin McLellan, Loudoun County Betty Meyer, City of Norfolk Kathy Seay, Hanover County

2 Albemarle County 104,500 population AAA Bond Rating from all three rating agencies 720 square miles Home to UVA 110 miles southwest of Washington, D.C. LORI ALLSHOUSE DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET LONG RANGE FINANCIAL PLANNING FY 16 Total Budget - $375 Million 2

3 GFOA BEST PRACTICES LONG RANGE FINANCIAL FORECASTING Financial Forecasting in the Budget Preparation Process (1999, 2014) Include major revenues and expenditures Extend forecast several years into the future Present the information clearly Make forecast available to stakeholders in the budget process Present forecast concisely in the final budget document Monitor regularly and periodically update 3

4 ALBEMARLE COUNTY THE PATH WE HAVE TAKEN 4

5 LONG RANGE FINANCIAL PLANNING - A CRITICAL COMPONENT OF ALBEMARLE COUNTY S BUDGETING PROCESS Comp Plan CIP Strategic Plans Five Year Financial Plan Annual Budget Citizen Engagement lallshouse@albemarle.org 5

6 LONG RANGE FINANCIAL PLANNING OUR PLAN CONNECTS THE FOLLOWING: School Fund CIP General Fund These three funds = 90% of Total County Budget Creates framework for long-term policy discussions and for our annual budget development process We hold three work sessions with Board of Supervisors and one joint work session with the Board of Supervisors and the School Board lallshouse@albemarle.org 6

7 LESSONS LEARNED It s financial planning not budgeting! Collaborate process with the School Division Be O.K. with not balancing the Plan Involve policy makers, staff, and community members in discussions Citizen Committee formed this year based on long-range financial outlook It is a great tool for discussing major policy initiatives and impacts of potential tax rate adjustments Consider multiple scenarios Build various assumptions into the spreadsheet utilizing a yes/no toggle to quickly view impacts of various decisions lallshouse@albemarle.org Use as backdrop and framework for annual budget conversations Include long-term impacts of shorterterm grant funding 7

8 Loudoun County 376,255 population Triple AAA Bond Rating 520 square miles $2.3 Billion annual budget ERIN MCLELLAN DIRECTOR, DEPARTMENT OF MANAGEMENT AND BUDGET 35 miles west of Washington, D.C. BUDGET DOCUMENT BEST PRACTICES 8

9 GFOA BEST PRACTICES BUDGET DOCUMENT Departmental Presentation in the Operating Budget Document (2012) Key points: Enhance presentation using graphs, charts, borders, tabs, etc. Enhance public/decision-maker understanding through design Keep discussions focused and concise; avoid excessive detail Discuss challenges, issues and opportunities Focus on key decision points, with an emphasis on solutions Include measures that enhance the discussion of the departments goals 9

10 LOUDOUN S OLD DOCUMENT FORMAT Uninteresting design No graphs to display info Too many words Bulleted narrative design didn t help tell the story Key decision points not clear Too many measures Erin.McLellan@loudoun.gov 10

11 NEW ENHANCED PRESENTATION 11

12 CONCISE DESCRIPTION WITH CLEAR LINK TO EACH PROGRAM Description briefly describes the department and its lines of service. Graphic displays concise summary of each of the department s programs. Erin.McLellan@loudoun.gov 12

13 QUICK KEY INFO USING GRAPHICAL DATA Graphs on the first page give a glimpse at staffing and financial history. Erin.McLellan@loudoun.gov 13

14 FOCUSED DISCUSSION OF ISSUES AND METRICS CLEARLY LINKED TO CURRENT DECISION POINTS Mission statement directly linked with performance measures. Highlights capture accomplishments facilitated by resource allocation decisions. Performance measures are moved up to give context. 14

15 LESSONS LEARNED Changing the budget document is a collaborative process Get buy-in! Focus on the document as a decision-making tool Examine how the document fits in with the other documents produced and make sure they tie together Tell your story Don t overthink it! Erin.McLellan@loudoun.gov 15

16 City of Norfolk 246,394 population Independent City provides full services One of 100 Resilient Cities Worldwide High fiscal stress (12 th in Virginia) BETTY MEYER, PHD ACTING DIRECTOR OF BUDGET & STRATEGIC PLANNING BEST PRACTICES: - ACHIEVING A STRUCTURALLY BALANCED BUDGET - PUBLIC PARTICIPATION IN PLANNING, BUDGETING, AND PERFORMANCE MANAGEMENT First upgrade in 50 years by S&P to AA+ Naval Station is largest in the world 57,800 employees 16

17 REAL ESTATE RECOVERING SLOWLY The average homeowners tax bill is projected to be $215 less in FY 2016 than in FY

18 CURRENT AND HISTORICAL BUDGET OUTLOOK 18

19 STEPS TAKEN TO CLOSE THE GAP 19

20 ENGAGED THE COMMUNITY AND OUR EMPLOYEES TO GATHER INPUT 20

21 CITY MANAGER S LISTENING TOUR Poverty Commission Norfolk First Economic Initiatives IMPACT (311 Call Center) Complete Streets Norfolk Public Schools Millennials in Norfolk Community Policing / Neighbors Building Neighborhoods Betty.Meyer@norfolk.gov 21

22 FINANCIAL UPDATE 22

23 Hanover County Population - 105, square miles FY16 Total Budget - $397.6 Million Triple AAA Bond Rating 15 minutes north of the Commonwealth s capital, Richmond KATHY SEAY DIRECTOR OF FINANCE AND MANAGEMENT SERVICES CAPITAL BUDGETING AND MANAGING RESERVES Home of the internationally renowned Hanover tomato 23

24 still sound Moody s WHAT COULD MAKE THE RATING GO-DOWN: "Significant decline in reserves ktseay@hanovercounty.gov 24

25 Millions Millions $2.0 $1.5 $1.0 $0.5 $0.0 -$0.5 -$1.0 USE OF DEBT CAPACITY FY14 FY15 FY16 Capital Reserve Debt Service $21.0 $20.0 $19.0 $18.0 $17.0 $16.0 $15.0 $14.0 $

26 Millions PLANNED USE OF DEBT CAPACITY RESERVE OVER 5 YEARS $2.0 $1.8 $1.6 $1.4 $1.2 $1.0 $0.8 $0.6 $0.4 $0.2 $0.0 ktseay@hanovercounty.gov Radio System Law Enforcement Software Public Safety Equipment Pubilc Safety Construction 28

27 FY16-20 COUNTY PROJECTS Projects by Type FY16-20 Roads and Public Works $ 11.7 Technology 10.7 Equipment Replacement 9.7 Construction 8.0 Vehicles 7.6 Facility Improvements 6.1 Reserve 1.0 General Government Admin $8.4M 15% Parks, Recreation & Cultural $10.3M 19% PROJECTS BY FUNCTIONAL AREA Remaining Functions $2.8M 5% Public Works $14.7M 27% Public Safety $18.6M 34% Total 54.8 ktseay@hanovercounty.gov 29

28 SCHOOLS CAPITAL IMPROVEMENT PROJECTS FY16-FY20 TOTAL BY PROJECT TYPE (IN MILLIONS) Facility Improvemen ts $ % Equipment Replacement $ % Technology $ % 30

29 QUESTIONS? Lori Allshouse, Albemarle County Erin McLellan, Loudoun County Betty Meyer, City of Norfolk Kathy T. Seay, Hanover County 31