HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 10/27/2015 - LONG TERM FINANCIAL PLANNINGDATE:
STAFF:
October 27, 2015
Andres Gavaldon, Financial Policy & Project Manager
Mike Beckstead, Chief Financial Officer
John Voss, Controller/Assistant Financial Officer
WORK SESSION ITEM
City Council
SUBJECT FOR DISCUSSION
Long Term Financial Planning.
EXECUTIVE SUMMARY
The goal of Long Term Financial Planning is to identify issues which will be addressed in the Strategic Plan
process. This project highlights potential challenges over the next 10 years and seeks to aid in decision-making
on possible solution strategies. The analysis brings awareness to alignment considerations between financial
capacity and service level objectives. With an awareness of these issues, decision makers can have a
meaningful discussion with a long-range perspective.
GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED
1. Is the information provided sufficient for Council to effectively understand and identify issues that may provide
input into the Strategic Plan?
BACKGROUND / DISCUSSION
The project was originally brought to Council Finance Committee and Futures Committee in fall of 2014 to confirm
scope and deliverables. The original analysis has been updated to coincide with the 2017-2018 Strategic Plan
cycle.
The project scope included 28 funds (not including Utilities), and discretely modeled 8 primary funds for additional
review. The model utilizes 14 years of historical transactions, 30 years of Sales and Use Tax revenue, service
area capital estimates and debt service projections. 879 income statement accounts are summarized into 71
account types and forecasted individually. Forecasting methodologies included: historical trends, correlation
analysis, and custom drivers based on service area analyst input.
The model analysis results show that if KFCG is not renewed, a loss of $32M in revenue is anticipated and would
require significant reduction and reprioritization of expenditures. If KFCG is renewed, all funds are generally
healthy and gaps between revenue and expenditures are manageable with some issues in Transit and
Transportation. The resulting takeaway's also highlight that increased potential future capital needs would require
additional revenue and/or decreased spending, and show significant impact to the financials from as little as 2.5%
change in forecast assumptions.
Future use of the analysis will incorporate the results within the 2017-2018 Strategic Plan cycle. The model can
also be used to support long-term strategic discussions around specific project issues such as growth
management area maximization.
ATTACHMENTS
1. Council Finance Committee minutes, May 19, 2014 (PDF)
2. Council Finance Committee minutes, October 20, 2014 (PDF)
3. Council Futures Committee minutes, November 24, 2014 (PDF)
4. Powerpoint presentation (PDF)
Excerpt from Council Finance Committee minutes
May 19, 2014
Long Term Financial Planning Work Scope
Andres Gavaldon presented the scope for Long Term Financial Planning (LTFP) that Council requested. The
City has never developed such a Plan, so Staff researched potential methodologies and is now proposing a
process for this new project built on GFOA recommendations. The proposed process improves on the City’s
current “5-Line” analysis used in the budget process and takes an approach which can be completed within
the current fiscal year with existing resources.
Initially, Staff envisioned a robust plan with a 30 year forecast; however, because the City is a multi-faceted
organization, this approach is very complex and would require extra time and resources. Staff consulted
Bob Eichem, President of GFOA and CFO for the City of Boulder. Bob directed Staff to a more high-level
approach. This model is directional rather than a forecast, meaning that it will help reveal possible funding
gaps in the future and how to avoid them rather than projecting a number for 2030.
In 2005, the City implemented a 5-line review which addressed key funds for the BFO Process. This review
looks 4-5 years out; whereas, the Long Term Financial Planning will look 20-30 years out. The new plan
would leverage the 5-line Review, adding some more drivers and lengthening the timeline. It would also
apply different growth rates by expense line items.
Ross asked for more clarity on how this tool would be used. Andres gave the example of the Plan examining
the potential of KFCG ending, looking at the impact of such an event and possible directions Staff could take.
Andres explained that if Council approves the “5-line” method, Staff should be able to bring this item back
to CFC in December 2014 or January 2015. Karen said that Council has been supportive of GFOA processes
and will likely continue to follow their direction.
Karen asked what boards and commissions will be involved in creating and approving this plan. Darin said
that he didn’t see this as Board and Commission intensive, but rather an administrative process. Once the
plan begins to affect policy, then it will be brought to Boards and Commissions. Karen asked if there was a
way to clarify in the name of the project that it is more administrative; “Long Range Financial Plan” makes it
sound like an external issue. Andres said that the name is actually “Long Term Financial Planning” and we
could clarify by adding Process to the end of the name.
Council Finance supports the 5-Line approach to Long Term Financial Planning.
ATTACHMENT 1
Excerpt from Council Finance Committee minutes
October 20, 2014
Long Term Financial Plan (LTFP)
Mike explained that the purpose of presenting the Long Term Financial Plan (LTFP) is to get Council
Finance’s response on its structure and assumptions before a draft is brought to Council in February
2015. Andres Gavaldon noted that the purpose of the LTFP is to provide a directional tool to highlight
potential issues. It will provide a base case 10 year view of revenue and expenditures based on key
assumptions and provide directional understanding of the gaps between various revenue and
expenditure assumptions. The LTFP will also provide the ability to evaluate the impact of various
scenarios from the base case.
Bob noted that this tool could be helpful in evaluating the impact of financing things such as
sustainability initiatives. Mike noted that this tool could be helpful in running such scenarios as the
impact of the City deciding to take on maximum debt capacity.
Andres reviewed the scope of the LTFP, noting that nine funds have been discretely modeled and
included in the total City view. The Mayor asked why KFCG is broken out as a fund, but the other ¼ cent
taxes are not. John Voss explained that all sales taxes are included in the model; however the dedicated
taxes, such as the ¼ cent street maintenance tax, are not broken out of the funds they are dedicated to.
Mike Beckstead said that Staff would consider a way to make this clearer; perhaps a footnote could be
added to the information on funds.
Ross Cunniff suggested adding a column to the Correlation Matrix that spoke to the unpredictability
/ predictability of each forecast.
Andres noted that Staff aims for a February 2015 completion target date for council work session. The
results will be incorporated into the Strategic Planning Cycle. Throughout 2015, there will likely be a lot
of polishing and adjusting as Staff works with Council to cement the structure of this new tool. Once
finalized, the LTFP will be updated every two years.
Council Finance sees the LTFP as a useful tool and suggested that the LTFP be an ongoing process in
2015.
ATTACHMENT 2
City Manager’s Office
300 LaPorte Avenue
PO Box 580
Fort Collins, CO 80522
970.221.6505
970.224.6107 - fax
fcgov.com
Minutes
City of Fort Collins
Futures Committee Meeting
Regular Meeting
CIC Room, City Hall
300 LaPorte Ave
November 24, 2014
3:00–5:00pm
Committee Members Present: Committee Members Absent:
Gerry Horak Wade Troxell, Chair
Bruce Hendee
Darin Atteberry
Gino Campana
City Staff:
Dianne Tjalkens, Admin/Board Support
Andrés Gavaldón, Strategic Finance Manager
Mike Beckstead, Chief Financial Officer
Sam Houghteling, Graduate Management Assistant
Travis Machalek, Graduate Management Assistant
Invited Guests: none
Community Members:
Kevin Jones, Fort Collins Area Chamber of Commerce
Gerry Horak called meeting to order at 3:15pm
Member Comments: none.
Approval of October Minutes:
Not discussed.
Think Tank Item 20: Long Term Financial Plan Status Review—Mike Beckstead and
Andrés Gavaldón
Andrés gave a presentation on the ten year forecast. The data used to drive the model includes 13
years of account history and 30 years of sales and use tax revenue. Staff is creating unique data
sets to drive the model including capital improvement plans, debt service projections and an FTE
ATTACHMENT 3
headcount database. Mike added that the capital improvement plan has not
existed. Once it is complete and vetted by Council, it will be helpful. Staff can show how much
has been spent historically on capital and how much debt could be held for capital
improvements. The goal is to complete that plan by 2015 and update the forecast at that time.
The result is a plan to incorporate the long term financial plan into the City’s strategic plan
process. 533 active accounts are being summarized into 32 revenue line items. Seven have been
identified as driving revenue. There are 346 active accounts on expense side, with 10 drivers.
Andres showed a sample chart that illustrates what kind of information will come from the long
term financial plan. Some scenarios they are thinking of modelling include mimicking recession
economics, savings in a favorable economy, implementation of capital projects, maxing out the
debt policy without affecting credit rating, etc. They will also model what could happen if certain
revenue sources are not renewed. Expense uncertainties that can be modelled include healthcare,
headcount assumptions, climate action planning, east Mulberry annexation, etc. Mike added that
staff met with the CFO of Boulder, and his recommendation was to go macro on revenue and
expenses to find the gap. Andres’ modelling is more sophisticated than others in the industry.
Staff is meeting with service areas to finalize the capital improvement plan and verify expense
drivers. The projection is to review the data over the next month, do programming in January,
and present to Council in February.
Comments/Q & A:
x What software is being used to do the modelling?
x It is Excel based, but was developed by a programmer for this type of modelling.
x Part of the challenge is getting the systems used in various departments to speak to each
other to share information. JDE Edwards is our universal financial system.
x What percentage of Andres’ time is used on this?
x Fifty percent or more.
x Can the expense of creating this model be calculated?
x It is something we have to have, with the CIP, and strategic risk assessment, and then we
can do the strategic planning necessary. To truly understand the issues we are facing, we
need this data.
x This is a foundational tool that is necessary. The opportunity cost could be significant,
but we have matured to a level where this is critical.
x Once we get the database built and the models working, it will be a reduced effort to keep
it up to date.
x This model was bought by the City five years ago and enhancements were made to get
this project going.
x How do you fund these types of things in your department?
x We have discretionary funds. There was a position open for a few months that left
available funds. This was under $4000.
x Is this part of your department plan? People should know about this. It’s odd that this
didn’t exist already, and that other communities don’t have it either.
x Regarding long range planning, ten to twelve years ago, there was a ten-year shadow
budget so that the City Manager and Council could make projections, but that went away
with the introduction of the BFO process. If you talk to Utilities about their long range
planning, it is far from a wish list. This group would like more rigor, process, and
2
alignment around these strategic plans. We should be leveraging
opportunities between departments, such as Streets and Utilities.
x I see rigor in the CIP as similar to BFO. There are a lot of things we’d like to do, but
there is a process to prioritize and select. There is a big gap between what we have spent
historically and what we’d like to do. The list must be thorough and vetted. If there is a
gap between what should be done and the funding available, we need to work on that.
x The work done around build out shows projections for growth, which could be used in
this model.
x We are using that kind of data for revenue projections.
x Andrés has done correlation a between CPI and population growth, which becomes the
basis for revenue.
x If we have growth projections that are at a certain point, if the growth does not happen in
the northeast quadrant, and happens instead along the Mason Street corridor, what kinds
of changes does that make to the financial planning? These need to be integrated to make
better long range decisions.
x That is the scary part about moving into areas like social sustainability and affordable
housing. Every two years we have a free for all for general funds. The ten year capital
improvement plan isn’t a plan so much as a list. What kinds of businesses should we be
involved in?
x Regarding overall management, does the City want to grow or have in-migration? Do we
encourage satellite cities and invest in transportation? These are the types of planning
conversations that need to happen.
x These models will help show the effects of various choices, such as growing into the
northeast quadrant or not.
x At the February 10 Council work session staff will present a couple of scenarios, but
would like direction from Council on other scenarios to play with.
x How does this tie into other plans? We have a bike plan, a transportation plan, etc. They
all have plans for what is going to happen, maybe, but we clearly don’t have the money
to do all these things.
x We can get into affordable housing at whatever level Council decides, but that is an
opportunity cost that prevents another project from happening. Funds are limited. These
are the hard conversations we need to have.
x This tool resources how we prioritize.
x How you leverage other resources is a wild card: private development, grants, etc.
x Think how much time and effort we have put into talking about a couple of FTEs, when
we could have been discussing what direction the community can take over the next five
to ten years. The assumption is we can do everything all the time.
x That is one reason we have levels for various funds such as Natural areas, KFCG, etc.
Staff will model discrete primary funds.
x Two things people said were on their minds in the citizen survey were transportation and
housing affordability. How did we do on those two things now that we have a budget?
What kind of impact did that survey have?
x It would be interesting to do that survey again.
x The strategic plan ought to identify the major changes we’d like to see. That should drive
our BFO offers, and we should be able to show progress in those areas. The more
3
intentional Council can be at the beginning, it drives department
plans and offers. We should get good at honing in on Council, with input, to make
priorities for two years.
x Be careful how you craft the survey. There is not a lot we can do about housing
affordability. Two studies showed this. How are we going to measure our offers and
outcomes against that? We need to be careful what is on that list. What can we really
influence directly for housing affordability? It’s very small, so we shouldn’t tailor our
budget around that.
x We should put our money into things we are in charge of and do well. We can maximize
the transit routes for housing. Students are picking housing based on bus stops. That is
what we can do.
x We came out with 72 objectives, but if in the strategic plan we came up with 3 or 4 main
objectives where we could make real change, that would be powerful.
x Everything the City does is generally good, but we have not done enough thinking on
what we can really do well, instead of trying to do everything people ask us to do. Social
Sustainability is one such area. I want a housing capital fund; sell the land we have, and
have that available for people with meaningful projects that address housing, especially
for the lower end. It can be priming the pump. I’d rather have the money there than have
to backfill. Then we don’t even deal with it.
x These tools help us do that. The real question is if we are willing to prioritize. Because it
means we chose something not to do.
x Council says housing is important and CDBG has done a great job.
x We are getting more information that directly relates to Council making informed
decisions to prioritize.
x Who in the community will have access to this? How will the results or tool be made
publically available?
x That is something we will work through by February.
x It is good to get the message out to the public that we are working on this.
x We are anticipating taking the long term financial plan to the Chamber after Council.
x We are trying to create too many products with not enough revenue coming in, which is
not a successful business model.
x Vancouver has completed a 100 year plan. Everything you’ve been talking about with
modelling is about where we want to be and who we want to be. We have discussed top
population at 250,000 people. Should we start there and see what it takes to achieve that?
x If at 2025 we are at 250,000 people and we want to preserve the lifestyle we have, and
one attribute is that you can live, work and play in Fort Collins, then we are going to need
X number of primary jobs. You can start thinking along those lines. Then we can stop
debating primary jobs, and make a plan. The plan can be dynamic.
x If you backward plan, it can inform the models staff does.
x We have a vision and policies, but these have a lot of grey area. You can refine that
vision based on population numbers.
x Aren’t there assumptions for what certain areas will look like if 250,000 is the right
number?
x Cameron will come to talk about that next month. But if you go vertical, that changes
everything.
4
x If the 250,000 is based on current zoning for density and height, is
it still correct?
x That number is based on student population growth projections, build out of Mason
corridor, maximum density in areas that haven’t been developed based on current zoning,
etc.
DO 20: Next Steps
x Not discussed.
Future Meeting Topics Discussion
x December 8—Land Use Planning & Build Out Revisited
x January 12—Social Sustainability
x February 9—Community Dashboard
Meeting adjourned at 4:13pm.
5
1
Long Term Financial Planning
ATTACHMENT 4
Goal
Identify Long-Term Financial Issues to be
Addressed in Strategic Plan
2
What is Long Term Financial Planning?
Objective:
• Highlight potential challenges and aid in philosophical decision-making on strategies that
span the long term (>10 years)
What it is:
• Methodology to identify macro issues that need to be addressed in the strategic plan
• The process of aligning financial capacity with long-term service level objectives
• Stimulate discussion and engenders a long-range perspective for decision makers
• Estimate of future forecast with goal of 50% probability of being too high or too low
What it is not:
• Detailed 10 year budget
• Project Specific Initiatives Analysis
• Tactical Operation Next Steps
3
Total of 28 funds included in model
Transactions Included:
Ø Benefits Fund
Ø Self Insurance Fund
Ø Equipment Fund
Ø Data & Communications Fund
Primary Funds Discretely Modeled
Ø General Fund
Ø KFCG
Ø Transit
Ø Transportation
Ø Natural Areas
Ø Cultural Services
Ø Recreation
Ø Golf
Scope Review
4
Total City View “All Fund Groups” Includes: Primary Funds, Secondary
Funds and Internal Fund Charges (excludes Utilities)
Secondary Funds Examples
Ø URA
Ø Neighborhood Parkland Fund
Ø Street Oversizing
Ø Capital Projects
Process
Model Data:
Ø 14 years of history at the individual account level
Ø 30 years of Sales and Use tax revenue
Ø Service Area Capital Estimates
Ø Debt Service Projections
Revenue Inputs:
Ø 533 revenue accounts are summarized into 32 revenue line items that are each forecasted
individually
Ø Revenue line items forecasted using variables that had highest correlation in the past,
combined with analyst unique knowledge
Expense Inputs:
Ø 346 expense accounts are summarized into 39 expense line items that are each forecasted
individually
Ø Service Area liaisons and budget office fund owners reviewed and gave direction on future
expenditures
5
Methodology for Forecast
• Unique drivers at the organizational line item level
• Historical Trend Perspective
• Customization based on service area analyst input
• Correlation analysis
• Rational assumption or generic default growth rate
6
Revenue Assumptions
Primary Drivers (revenue > $10M excluding transfers):
Ø Sales and Use Tax - tax revenue driven taxable sales (Sales portion) and by 15
year averages for Use Tax revenue at 3.6%
Ø Property Tax - tied to CPI, growth currently calculated at 2.8%
Ø Capital Grants – project specific and difficult to forecast, tied to CPI at 2.8%
Ø Shared Revenues – County and State Distributions CAGR for majority of 2000s
was 1.56%
Ø Cultural, Park, Recreation and Natural Areas Fees – 14 year historical rate of
3.26%
7
Expenditure Assumptions
Primary Drivers (expense > $10M excluding transfers):
Ø Salaries and Wages - Highly correlates to taxable sales; growth of 3.2%
Ø Benefits – 8.5% growth rate is combination of population, wages, and health costs
Ø Professional and Technical – Highly correlates to population; growth of 2.3%
Ø Repair and Maintenance Services – 4.0% average for 2000s for most of accounts
Ø Infrastructure - 4.2% growth rate proxy for average of 2000s
8
$138M
$207M
$161M
$242M
$301M
$359M
$225M
$269M
$369M
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
$ MILLIONS
REVENUES & EXPENDITURES -ALL FUNDGROUPS - WITH TRANSFERS
Year End Balance Revenue Scenario Revenue Expenditures Scenario Expenditures
All Funds
9
• Healthy financials through 2020 at existing service levels
• $32M 2021 funding eliminated without KFCG
General Fund
10
Ø Bullet 1
Ø Bullet 2
Ø Bullet 3
$30M $74M
$47M
$81M
$134M
$182M
$77M
$121M
$189M
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
$ MILLIONS
REVENUES & EXPENDITURES - 00100 - GENERAL FUND - WITH TRANSFERS
Year End Balance Revenue Scenario Revenue Expenditures Scenario Expenditures
• 2025 $7M deficit is 3.7% of total
• Manageable deficit amounts over next 10 years based on
current service level being funded by General Fund
• 2025 $7M deficit is 3.7% of total
KFCG Fund
11
$0M $15M
$0M
$0M
$26M
$0M
$0M
$24M
$0M
-$5
$0
$5
$10
$15
$20
$25
$30
$35
$40
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
$ MILLIONS
REVENUES & EXPENDITURES -00254 - KEEP FORT COLLINS GREAT FUND - WITH TRANSFERS
Year End Balance Revenue Scenario Revenue Expenditures Scenario Expenditures
• $32M KFCG Tax expires at the end of year 2020
• Service levels impacted significantly unless renewed
Recreation Fund
12
$1M $3M $4M
$6M $7M
$9M
$7M $6M
$9M
$0
$1
$2
$3
$4
$5
$6
$7
$8
$9
$10
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
$ MILLIONS
REVENUES & EXPENDITURES -00274 - RECREATION FUND - WITH TRANSFERS
Year End Balance Revenue Scenario Revenue Expenditures Scenario Expenditures
• Projected surplus and deficit amounts are controllable
• Supplemental funding in KFCG Fund began in 2011 (5.5%)
$2M
$1M
-$34M
$6M
$12M
$16M
$7M
$14M
$22M
-$40
-$30
-$20
-$10
$0
$10
$20
$30
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
$ MILLIONS
REVENUES & EXPENDITURES -00290 - TRANSIT SERVICES FUND - WITH TRANSFERS
Year End Balance Revenue Scenario Revenue Expenditures Scenario Expenditures
Transit Fund
13
• Personnel is large part of total cost and growing at faster rate than revenue
• Forecast does not include: weekend service, increased hours, shorter headways
$6M $19M
$2M
$19M
$30M $35M
$17M
$26M
$39M
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
$ MILLIONS
REVENUES & EXPENDITURES -00292 - TRANSPORTATION FUND - WITH TRANSFERS
Year End Balance Revenue Scenario Revenue Expenditures Scenario Expenditures
Transportation Fund
14
• 2014 revenue increase due to Sales and Use Tax, and capital leasing
• Personnel is large part of total cost and growing at faster rate than revenue
Scenarios
15
• KFCG Renewed
• Capital Spending increases by $25M/year
• 2.5% unfavorable revenue growth
• 2.5% unfavorable revenue growth & 2.5% higher
expenses
$138M
$207M
$177M
$242M
$301M
$396M
$225M
$269M
$407M
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
$ MILLIONS
REVENUES & EXPENDITURES -ALL FUNDGROUPS - WITH TRANSFERS
Year End Balance Revenue Scenario Revenue Expenditures Scenario Expenditures
KFCG Renewed
16
• Renewal of KFCG maintains healthy revenue & expense relationship
• Deficit in later years is at a manageable level
Capital Spending Scenario
17
$138M $207M
-$73M
$242M
$301M
$396M
$225M
$269M
$432M
-$100
$0
$100
$200
$300
$400
$500
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
$ MILLIONS
REVENUES & EXPENDITURES -ALL FUNDGROUPS - WITH TRANSFERS
Year End Balance Revenue Scenario Revenue Expenditures Scenario Expenditures
• Capital Scenario includes $25M/year extra capital spending
on potential projects currently under consideration
2.5% Unfavorable Revenue Scenario
18
$138M $207M
$82M
$242M
$301M
$386M
$225M
$269M
$407M
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
$ MILLIONS
REVENUES & EXPENDITURES -ALL FUNDGROUPS - WITH TRANSFERS
Year End Balance Revenue Scenario Revenue Expenditures Scenario Expenditures
• Fund balance erodes $80M by 2025
Decline Revenue, Increase Expense Scenario
19
$138M $207M -$14M
$242M
$301M
$386M
$225M
$269M
$417M
-$50
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
$ MILLIONS
REVENUES & EXPENDITURES -ALL FUNDGROUPS - WITH TRANSFERS
Year End Balance Revenue Scenario Revenue Expenditures Scenario Expenditures
• 2.5% unfavorable change in forecast results
in use of all fund balance by 2025
Takeaways
20
• Elimination of KFCG Would Require Significant Reductions in Spending
• Funds Generally Healthy Given Assumptions
• Except Transportation & Transit – Expenses Growing Faster then Revenue
• Gaps are Manageable - Financials Allow Flexibility to Adjust to Future
Events
• 2.5% Change in Revenue or Expense can Cause Dramatic Shift in Outlook
• Increased Capital Needs will Require Additional Revenue or Reduction in
Current Spend Levels
Future Uses
• Long Term Financial Plan will be Updated Every Two Years as Part of the
Strategic Plan Process
• Support Long-Term Strategic Discussions with Quantitative Projections
• Growth management area maximization
• Specific project support and analysis
21
Next Steps
• Identify Strategic Objectives to be Addressed in Strategic Plan
• Improve Model Programming Utilizing Team Approach
• Update Model On a Consistent Basis
22