Nordic Skiing Financial Management Plans - Planning Your Run

2 Outline  Why Planning  What are key components  What are the desired outcomes  What is the Ehlers Process Model  Summary

3 Why Undertake a Planning Process?  Establish consensus and priorities for operational and capital needs  Develop a tool to provide control and flexibility by integrating operational and capital budgets, including determining the impact to taxpayers  Analyze the impact of levy limit legislation on the community’s finances (State budget currently includes a 3% cap or net new construction)

4 Why Undertake a Planning Process (Cont.)  Crisis Management  Budget  Economic  Service

5 What are the Key Components of a Plan?  Key Financial Indicators  Establishing a strategic framework  Operational budget (targets if appropriate)  Capital Needs (cash financing or borrowing)  Integration of Operational and Capital budgets

6 Key Financial Indicators  “Key Financial Indicators” provide an overview of financial and economic position. Used by rating agencies to evaluate and compare communities  Benchmarks important even if your community is not rated -- identify broad financial and economic strengths & weaknesses  Catalyst to develop Financial Management Policies

7 Establish Strategic Framework  What are the strengths & weaknesses of day-to- day services?  Are services adequately keeping up with growth?  Should all of its existing services be provided into the future?  What opportunities, if any, exist for shared services?  Establish Financial Policies

8 Operational Budget  Revenues  Look at history of revenue sources and study actual trends from previous years  Discuss “department specific” revenues (law enforcement, inspection & parks for example)  Identify revenues influenced by larger economic factors (building permits for example)

9 Operational Budget (Cont.)  Expenditures  Look at history of expenditures for trends  Evaluate program/service driven expenditures  Miles of road to be maintained  Acres of parkland  Determine if operational targets should be established  How many miles of roadway should be replaced annually?  How much of roadway maintenance should be cash financed?  How many officers per capita should be funded?

10 Capital Plan  Inventory existing capital items (define)  Develop replacement schedule  What additional equipment and facility needs exist?  Identify funding sources  Cash  Depreciation  Enterprise Funds  Rent

11 What are the desired outcomes of a plan?  Integrated Operating and Capital Budget  Understanding of impacts on taxpayers  Framework to run sensitivity analysis  “What if” Scenarios  Governing Body Consensus  Operational  Capital  Duck & Cover Room

12 Basic Projection

13 Basic Projections  2010 Balanced Budget  Meet 15% reserve requirement  Meet all operational needs  Projections move to negatives

14 “What if” Scenarios  Health Insurance jumps 20%  State Shared Revenue drops 25%  Labor contracts increase 3.5% vs. 2.5%  Levy Limits 2% vs. 3%  Goal is to be in a position to reflect the impacts of the above changes

15 The “What ifs”

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17 Ehlers FMP Process Model  A series of workshops held by the governing body outside of normal meetings  Session 1  Where is the community now (basic benchmarking)  What are strengths/weaknesses  Where do you want to go? (goal setting)  Sessions 2-3  Capital Planning  Operational Planning  Gap Identification

18 Ehlers FMP Process Model  Session 4  Adoption of Refined Plan  Adoption of Financial Policies to Implement Plan  Annually or Semi-Annually  Plan Update  Review Assumptions for validity  Review Policies  Report Card

19 Summary & Questions  Can’t afford not to have a plan  Time consuming to create a plan (difficult to start/stop)  Questions

20 Contact Information James Mann Todd Taves