Florida Government Finance Officers Association LongTerm Financial Planning and as it pertains to Ca

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Florida Government Finance Officers
AssociationLong-Term Financial Planning and (as
it pertains to) Capital BudgetingNovember 17,
2008300 440 pm
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Welcome

• City of Largo
• Kimball R. Adams, CPA Amy L. Davis, MPA
• Finance Director
  OMB Manager
• Alachua County
• Suzanne Gable, CPA E. John Brower,
  MBA
• OMB Director Management
  Analyst

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Our Focus of Discussion

• Long-term financial planning
• What is it?
• Why should we do it?
• Capital budgeting
• What is it?
• Why should we do it?

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Long-Term Financial Planning
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Long-Term Financial Planning

• Long-term financial planning
• Process of aligning financial capacity with long
  term service objectives
• High Quality revenue projections
• Personal Services, Operating, Capital expenditure
• Increase?
• Decrease?
• Flat?

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Long-Term Financial Planning

• GFOA Recommended Practice
• Plan should include these elements
• Time Horizon
• Scope
• Frequency
• Content
• Visibility

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Long-Term Financial PlanningTime Horizon

• Create an organization wide long term focus and
  direction
• Strategic Plan Board Retreats
• 1to 5 years is most common
• Short term is funded financially feasible
• 5 to 10 years more difficult
• Less accurate but can provide a general outlook
  for planning

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Long-Term Financial PlanningScope

• Consider all appropriated funds
• Focus on those with most significance to elected
  officials and community

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Long-Term Financial PlanningFrequency

• How often do we update our financial plan?
• Most often during the budget process
• For what purpose do we update it?
• Focus on your main/target audience?

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Long-Term Financial PlanningContent

• Revenue projections
• Utilize past information, apply current
  knowledge, and focus on the future
• Consult with experts
• Others?
• Expenditure projections
• Isolate large items
• Consider potential changes using history,
  experience, and known information
• Incorporate projections into planning

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Long-Term Financial PlanningVisibility

• Post in conspicuous places to make accessible to
  everyone
• Make document easy to read and comprehendible

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Capital Budgeting
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Capital BudgetingRECOMMENDED PRACTICEMulti-Year
Capital Planning (2006) (CEDCP)

• GFOA recognizes the importance of establishing a
  
• viable financing approach for supporting the
  multi-year
• capital plan. Financing strategies should align
  with
• expected project requirements while sustaining
  the
• financial health of the organization. Governments
  
• undertaking a capital financing plan should

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Capital BudgetingRECOMMENDED PRACTICEMulti-Year
Capital Planning (2006) (CEDCP)

• Anticipate expected revenue and expenditure
  trends,
• including their relationship to multi-year
  financial
• plans
• Prepare cash flow projections of the amount and
• timing of the capital financing
• Continue compliance with all established
  financial
• policies
• Recognize appropriate legal constraints

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Capital BudgetingRECOMMENDED PRACTICEMulti-Year
Capital Planning (2006) (CEDCP)

• Consider and estimate funding amounts from all
• appropriate funding alternatives
• Ensure reliability and stability of identified
  funding
• sources
• Evaluate the affordability of the financing
  strategy,
• including the impact on debt ratios, taxpayers,
• ratepayers, and others

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Capital Budgeting

• Utilize your long-term financial plan
• Revenue projections will carry into the capital
  budget
• Focus on buildings and infrastructure
• Identify capital preservation
• Identify unfunded projects

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Capital Budgeting

• GFOA Recommended Practices
• Define capital expenditures
• Summarize project information
• Include schedule for project completion
• Describe general scope of project including
  expected service and revenue.

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Capital Budgeting

• GFOA Recommended Practices (continued)
• Describe all operating impacts of project
• Estimate total cost based on most current info
• Identify all funding sources for funding
  feasibility
• Any other information deemed appropriate

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Capital Budgeting

• CIP planning into practice getting started
• Consult policy documents (Comp Plan, MVV)
• Define whats included in your Capital Plan and
  build a 5-year CIP to illustrate planning,
  priorities, direction
• Incorporate diversified involvement
• Capital preservation vs. capital improvement

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Capital Budgeting

• CIP planning into practice getting started
  (Continued)
• Calculate operating costs for all projects
• Adoption and reporting
• Keep focused on larger projects
• Build in disaster resiliency projects
• Unfunded projects
• Now, stand back and look at the big picture

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Capital Budgeting
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Capital Budgeting

• Rolling forward prior year projects
• Review annually to ensure projects still adhere
  to policy direction, and Mission, Vision, and
  Values
• Do not get complacent
• Re-allocate or re-prioritize projects if needed
  based on current conditions
• Re-examine projections as well do not carry
  forward budget blindly

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Recap

• Long-term financial planning is crucial to the
  public sector
• Horizon, Scope, Frequency, Content, and
  Visibility
• Based on the financial projections, formulate the
  capital budget and plan based on your entities
  priority policy

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Thank You

• City of Largo
• Kimball R. Adams, CPA Amy L. Davis, MPA
• Finance Director
  OMB Manager
• www.largo.com
• Alachua County
• Suzanne Gable, CPA E. John Brower,
  MBA
• OMB Director Management
  Analyst
• www.alachuacounty.us
• www.gfoa.org