BETTER BUDGETING WASHINGTON PUBLIC TREASURERS ASSOCIATION BY: MIKE BAILEY

Transcription

1 BETTER BUDGETING WASHINGTON PUBLIC TREASURERS ASSOCIATION BY: MIKE BAILEY

2 THE PLAN 1. Understanding the opportunities the budget presents 2. Setting the stage for success 3. Using best practices 4. It s more than a budget activating strategy 5. The mechanics 6. Communication 2

3 TWO CONTEXTS GFOA s Distinguished Budget Presentation Awards Program National Advisory Council for State and Local Budgeting 3

4 GFOA S BUDGET AWARD CRITERIA Role and Purpose of the Budget 1. Policy Document 2. Operational Guide 3. Financial Plan 4. Communications Chronology of Content 4

5 See more at 5

6 We ll use a budget I reviewed for GFOA as our example. It isn t perfect, but it is pretty darn good 6

7 NACSLB (THE CONTEXT FROM HERE ON OUT) Still a GFOA best practice Created in 1998 Collaboration among state and local governments, business and labor GFOA led the effort and still hosts the publications 7

8 YOUR MISSION (SHOULD YOU CHOOSE ) The mission of the budget process is to help decision makers make informed choices about the provision of services and capital assets and to promote stakeholder participation in the process. 8

9 SO, HOW DO YOU DO THAT THE FOUR PRINCIPLES OF THE BUDGET PROCESS 1. Establish Broad Goals 2. Develop Approaches that Achieve the Goals 3. Develop a Budget Consistent with the Approaches that Achieve Goals 4. Evaluate Performance and Make Adjustments 9

10 PRINCIPLES ARE SUPPORTED BY ELEMENTS 1. Establish Broad Goals 1. Assess community needs, priorities, challenges and opportunities 2. Identify opportunities and challenges for government services, capital assets, and management 3. Develop and disseminate broad goals 10

11 ESTABLISH BROAD GOALS Assess community needs, priorities, challenges and opportunities Assessment tools: May already exist (or you can leverage as you build) Comprehensive Plans, Functional Area Plans, Other Plans Surveys, Focus Groups Simple Survey Monkey Surveys Already existing groups (advisory boards, commissions, civic groups) Hint: Check out the SAO s LGPC ( 11

12 ESTABLISH BROAD GOALS Identify opportunities and challenges for government services, capital assets, and management Your mission / multi-year strategic plan Capital Facilities Plan (within your Comprehensive Plan) Partnership opportunities (RFAs, Shared technology, etc.) Hint: Check out the City of Redmond s Vision, Capital Investment Strategy 12

13 The Vision drives investment into the urban centers to enable growth to occur there and preserve the character of the community s neighborhoods. This is a significant part of our budget context 13

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16 ESTABLISH BROAD GOALS Develop and disseminate broad goals A retreat of some sort not your usual business Council adoption of goals (or at least some validation) Use to guide investments (both capital and operating) Incorporate in your budget instructions 16

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18 Disseminate Lobby Conference Rooms Mayor s Office Council Chambers Elevators Offices Cubicles 18

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20 PRINCIPLES ARE SUPPORTED BY ELEMENTS Develop Approaches to Achieve Goals 4. Adopt financial policies 5. Develop programmatic, operating, and capital policies and plans 6. Develop programs and services that are consistent with policies and plans 7. Develop management strategies 20

21 DEVELOP APPROACHES TO ACHIEVE GOALS Adopt financial policies GFOA Best Practice Stabilization Funds (reserves, fund balance, working capital) Fees and Charges (who has what authority?, fee philosophy, cost recovery) Debt Issuance and Management (when, how and how to comply) Use of One-Time / Unpredictable Revenue (sustainability) Balancing the Budget (what type, how often, legal requirements) Revenues (diversification, philosophy, options) Contingencies (how to recognize and implement for emergent conditions) Capital Assets (thresholds for reporting / budgeting, maintenance, replacement) 21 Check out MRSC s budget related resources ( )

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23 DEVELOP APPROACHES TO ACHIEVE GOALS Develop programmatic, operating, and capital policies and plans Operational aspect of your budget Departments, or programs, or priorities Capital Planning process Management approach 23

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27 DEVELOP APPROACHES TO ACHIEVE GOALS Develop programs and services that are consistent with policies and plans What services are delivered, how are they delivered What are the purposes of the service units (mission statement) Intended results and how are they evaluated What issues exist how does this budget address them 27

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29 DEVELOP APPROACHES TO ACHIEVE GOALS Develop management strategies Strategies to Facilitate Attainment of Program and Financial Goals Status of last year s goals, periodic check-in with council Develop Mechanisms for Budgetary Compliance Regular / routine reporting Develop the Type, Presentation, and Time Period of the Budget 29

30 PRINCIPLES ARE SUPPORTED BY ELEMENTS Develop a Budget Consistent with Approaches to Achieve Goals 8. Develop a process for preparing and adopting a budget 9. Develop and evaluate financial options 10. Make choices necessary to adopt a budget 30

31 DEVELOP A BUDGET CONSISTENT WITH APPROACHES TO ACHIEVE GOALS Develop a process for preparing and adopting a budget Develop a budget calendar Develop budget guidelines and instructions Coordinate budget preparation and review Develop procedure to facilitate budget review, discussion, modification, adoption Identify opportunity for stakeholder input 31

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34 DEVELOP A BUDGET CONSISTENT WITH APPROACHES TO ACHIEVE GOALS Develop and evaluate financial options Conduct long range financial planning Prepare revenue and expense projections Analyze the major revenues (GFOA says 75%) and expenses Evaluate potential changes to major revenues or expenses (Analyze tax and fee rates) Achieve consensus and document Develop capital improvement plan Prepare and present recommended budget (see next slide) 34

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37 Capital Project Descriptions 37

38 PREPARE AND PRESENT RECOMMENDED BUDGET Describe key policies, plans and goals Identify key issues Provide a financial overview Provide a guide to operations (department structure, FTE counts, etc.) Explain the budgetary basis of presentation (accounting) Prepare a budget summary Communicate this clearly (for your audience, not for you ) 38

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40 DEVELOP A BUDGET CONSISTENT WITH APPROACHES TO ACHIEVE GOALS Make choices necessary to adopt a budget Facilitate a successful budget discussion In WA: Executive prepares the budget (it is theirs to prepare as they see fit) Legislative adopts a the budget (they can change it how they like) Calendar workshops, public hearings, anticipated adoption date Make the proposed budget very accessible 40

41 PRINCIPLES ARE SUPPORTED BY ELEMENTS Evaluate Performance and Make Adjustments 11. Monitor, measure, and evaluate performance 12. Make adjustments as needed 41

42 EVALUATE PERFORMANCE AND MAKE ADJUSTMENTS Monitor, measure, and evaluate performance Performance measures At least track goals Measurement at some level is better than none at all However, Performance can (should) become the focus with respect to results Monitor and measure stakeholder satisfaction Monitor and measure budget performance (financially) including capital Monitor and measure financial condition (balance sheet) Monitor and measure external conditions 42

43 City of Redmond approach - Performance reporting This is in the budget This is the report /analysis 43

44 This was added, along with budget amendment We ve already seen this slide 44

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48 EVALUATE PERFORMANCE AND MAKE ADJUSTMENTS Make adjustments as needed Policy on budget amendments / adjustments Adjust related policies, programs, management strategies Adjust goals if appropriate 48

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51 BUDGET MANAGEMENT SYSTEM 1. Stakeholder Input Citizen Survey 8. Adjust as necessary As Necessary 2. Long Term Goals Broad Goals / Strategic Plans 7. Monitor results Financial reports and Annual Performance Report 6. Adopt budget Biennial budget and CFP 3. Short-term goals Areas of Emphasis Action Steps 4. Direction to staff Macro Workshop / Financial Policies 5. Operating / budget Impacts Proposed preliminary budget and Strategic Plans 51

52 BACK TO GFOA A proposed table of contents 52

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