Ehlers Financial Management Plan for the City of HopkinsEHLERS
LEADERS IN PUBLIC FINAWA
Financial Management Plan
City of Hopkins
August13.2013
What is a Financial Management Plan?
■ A multi-year fiscal plan for all tax -
supported funds
■ Integrates:
✓ Existing Debt
,/Capital Improvement Plans
✓ Future Debt
✓ Tax base growth
✓ Future operating expenses
■ Compares entity to standards
✓ Government Finance Officers Association
(GFOA)
✓ Similar entities
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What Makes It Practical?
■ Helps to manage expectations
✓ New spending proposals evaluated against other identified
priorities
✓ Weigh proposals vs. predefined affordability parameters
■ Helps to maintain assets
✓ Regular replacements
✓ Large periodic repairs
■ Reduces stress during budget process
✓ Previously agreed spending guidelines
✓ Better understanding of the effect decisions have
■ Rating Agencies like multi-year planning
■ Reduces reactivity amidst an unpredictable fiscal
environment and unfunded mandates
4- E,HLERS
AM
Step One: Review your situation
■ Review the entity's financial position —
✓ Fund balances
✓ Annual operating surplus or deficit
✓ Projected debt payments
■ Review financial policies to make sure the appropriate
financial controls and constraints are understood by
management and staff
■ COMPLETED
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Step Two: Assemble the Required Information
■ Develop an inventory of all capital needs (CIP)
✓ Look for deferred or one-time maintenance expenditures (non-
recurring)
■ Identify current and alternative revenue sources
■ Estimate growth in the tax base
✓ New value for both commercial and residential construction
✓ Inflation in existing properties
✓ TIF District Decertification
■ Look for new budget needs to meet growth demands
✓ Personnel and Equipment
■ COMPLETED
EHLERS
Step Three: Prepare the Model
■ Analyze the financial impact of the total
requested spending
■ Determine if it meets the affordability limits
defined by the governing body
■ Affordability limits may include:
✓ Impact on overall tax levy
✓ Tax impact on average home
✓ Impact on City tax rate
■ IN PROCESS AND REFINING
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Step Three: Prepare the Model
Level out expenditures and bonding to smooth
any tax changes
Tax Rate including TIF Decertification
43.000%
41.000%
y
39000%
A
% 37.000%
A
35.000%
C.1 33.000%
31.000%
29.000% _
1 Year Ar pa p.
TIF District Ex fires
FREERS
Next Steps
• Step four Through six
— On following slides
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Step Four: Analyze and Compare to Standards
■ Compare to other similar entities — best
practices
✓ Level of expenditures
✓ Employees per capita
✓ Debt
• Per Capita
• As a Percentage of Budget
■ Model and analyze alternative "what if"
scenarios
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Step Five: Council Discussion and Input
■ Layout policy issues
■ Discuss priorities and options
— Bring back options for review at future Council
work session(s)
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Step Six: Develop Support and Communicate Plan to
the Public
■ Approve plan
■ Develop key messages for public
■ Access
✓ City website, etc.
EHLERIS
Tactics for Successful Implementation
■ Make this a comprehensive fiscal plan
■ Integrate budget, tax policy, and capital plans
✓ Often seen as completely separate processes, but this should
be a unifying document
■ Update annually
■ Get involvement from all departments
✓ You need their information to make the plan accurate
✓ This will increase their understanding of how they fit
into the big picture
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Results
1. Less "paycheck to paycheck" thinking
2. Projects, in the context of multi-year planning, tend to
be less controversial
3. A Financial Management Plan makes difficult decisions
easier for elected officials
4. If there is a plan, projects get done
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