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HomeMy WebLinkAbout10-02-2018 Item 11 2019-2021 Financial Plan Schedule Meeting Date: 10/2/2018 FROM: Derek Johnson, City Manager, Brigitte Elke, Interim Finance Director Prepared By: Alex Ferreira, Budget Manager SUBJECT: FINANCIAL PLAN SCHEDULE FOR 2019-21 RECOMMENDATION Approve the goal setting process and timetable for development of the 2019-21 Financial Plan. REPORT-IN-BRIEF This report sets forth the proposed Council goal setting process and schedule for the development of the City’s 2019-21 Financial Plan. The key dates and steps in the goal-setting process are summarized below and then discussed in greater detail. The Council meeting dates shown in June 2019 cover the review and ultimate adoption of the budget generated by staff following the Goal Setting process and Strategic Budget Direction. Proposed Key Council Meeting Dates: Goal-Setting Process for 2019-21 1) Tuesday, November 13, 2018 Special Meeting Setting the Stage. Provide the background needed for goal- setting by considering the current status of both long- and short-term goals previously adopted by the City. This meeting will focus on the incorporation of the City’s Fiscal Health Response Plan into the 2019-21 Financial Plan. 2) Tuesday, December 4, 2018 Regular Meeting Budget Foundation. Finalize plans for the goal-setting process including a deadline for submitting Council Member candidate goals; review Financial Plan policies and organization of the Financial Plan itself; review of long-term economic forecast; hold initial discussion on options to be considered for paying down the unfunded liabilities. 3) Wednesday, January 23, 2019 Special Workshop 6:30 to 9:30 p.m. Community Forum. Consider comments and suggested goals from residents, community groups, other interested individuals, and Council advisory bodies. 4) Saturday, February 9, 2019 Special Workshop 8:30 AM to 4:00 PM Council Goal-Setting Workshop. Discuss candidate goals presented at the Community Forum; consider Council member goals; prioritize and set Major City Goals. 5) Tuesday, February 5, 2019 Regular Meeting Mid-Year Report and Guiding Principles for Allocation of Resources. Review 2017-18 financial results based on the City’ Comprehensive Annual Financial Report; review the updated Five-Year Forecast; hold initial discussion on guiding principles for fund allocation within the 2019-21 Financial Plan framework and options to be considered for paying down the unfunded liabilities. Packet Pg. 99 Item 11 Proposed Key Council Meeting Dates: Goal-Setting Process for 2019-21 6) Tuesday, April 16, 2019 Regular Meeting Major City Goal Work Programs & Strategic Budget Direction. Conceptually approve detailed work programs for Major City Goals adopted by the Council; set strategic budget direction for preparation of the 2019-21 Financial Plan. 7) June 4, 2019 Regular Meeting Preliminary Budget Review. Hold workshops to review and discuss Preliminary Budget: General Fund and Enterprise Funds operating programs and General Fund CIP and rates. 8) Tuesday, June 18, 2019 Regular Meeting Continue Financial Plan Review and Adopt Budget. Hold a special meeting on June 25, if needed, to continue review and adopt budget. DISCUSSION Based on the City’s experience over the years, and informed by Council and community feedback, staff recommends beginning the two-year 2019-21 Financial Plan process with the Council setting the goals for the most important initiatives for the City to accomplish over the two years of the next financial plan. This has been a successful approach in assuring the most optimal achievement of the fundamental purpose of the City's budgetary process which is: Linking, through public engagement and decision-making processes, the interests of the community to optimize the allocation of financial resources to achieve the desired results. As mentioned above, staff is recommending a six-step process for identifying and reaching agreement on financial policies and the Council’s Major City Goals. Each of the five major goal setting steps is described in greater detail below: 1. “Setting the Stage” Workshop. A special meeting on Tuesday, November 13, 2018 will be devoted to a comprehensive review of the status of current City plans, goals, policies, and programs. This is an especially appropriate start as the Council goal-setting process should take into consideration the City’s adopted long-term plans, current t wo -year goals, and an updated fiscal outlook. Accordingly, staff plans to present reports on the following: a. Status of General Plan Programs. Staff plans to present an overview of the status of each General Plan program in each of the ten elements (over 400 programs in total). Organized by element, staff will provide a short summary of each program, whether it has been completed, and if not, a high-level assessment of how challenging it will be to complete. As two years ago, staff also plans to prese nt a similar summary of the status of the programs in the Conceptual Physical Plan for the City’s Center. While this is not a General Plan Element, it is referenced in the General Plan, and several of its programs are closely linked and provide a framework for Downtown development. Packet Pg. 100 Item 11 b. Long Term Capital Improvement Plan. This will provide a “high level” summary of the estimated costs of the new facilities and infrastructure that will be needed to implement the General Plan based on plans and policies previously adopted by the Council. c. Status of the Current Two-Year Major City Goals: Carryover and Spin-Offs. Since some of the Major City Goals may not be complete by June 2019, the unfinished work needed to complete them may be considered again as Major City Goals for the 2019-21 Financial Plan. For those goals where the specific work programs for 2017 -19 may be completed by June 2019, there may be “spin-off” tasks as a result. This is especially true for work programs where the objective was to complete plans or studies. A likely “spin- off” into 2019-21 may be the implementation of these studies. d. Status of Current Capital Improvement Plan (CIP) Projects. This report will present an overview of the status of all current CIP projects. It will also identify candidate projects for deletion or deferral based on their status and priority relative to other needs that have emerged since they were initially approved. Based on the volume of information to be conveyed at the “Setting the Stage Workshop,” it would be most effective to hold a dedicated budget workshop to ensure adequate time for the Council to ask questions and fully discuss any issues. 2. “Budget Foundation” Workshop. This meeting on Tuesday, December 4, 2018 will be dedicated to generating policy guidance from Council that will serve as the foundation for the City’s budget and goal-setting process. Staff plans to cover the following topics at this workshop: a. Finalize plans for the Community Forum and Council Goal-Setting Workshop. Staff will present a proposed approach for the forum and goal-setting workshop at this meeting. b. Review of Financial Plan policies contained in Section B of the 2017-19 Financial Plan and update or recommend changes as appropriate. This may include proposed changes to the existing fund balance targets for enterprise funds and the capital replacement funds. c. Review the organization of the Financial Plan and obtain Council guidance regarding the style of presentation expected or preferred by Council. d. Review the long-term economic forecast. e. Hold initial discussion on the considered options for paying down the unfunded liabilities. Based on Council feedback, staff would return in February with the plan reflecting these options. Getting guiding principles direction from the Council in February will be helpful in crafting the recommendations contained when Strategic Budget Direction is sought in April 2019. 3. Community Forum. Held on the evening of Wednesday, January 23, 2019, the purpose of this workshop is to solicit and discuss suggested goals and work programs from Council advisory bodies, community groups and interested individuals. Advisory Body goals will be developed during the fall of 2018 and submitted to staff in final for m by the mid November 2018. Based on last year’s attendance, staff plans on holding the forum at the Veterans’ Hall. Packet Pg. 101 Item 11 Other Community Outreach Efforts. Following Council approval of the budget calendar, staff will mail notices to community groups, governmental agencies, media organizations and interested individuals inviting them to participate in this process. In addition to these notices, staff plans to place display ads in The Tribune, SLO Journal, SLO City News, and New Times and use social media in order to encourage the broadest possible participation in this process. Information about the goal-setting and budget process will also be placed on the City’s web site and City Hall. Staff also intends to again insert a Community Budget Bulletin in all utility bills inviting the public to participate in the goal-setting and budget process and soliciting comments on the “three to five most important things for the City to do in the next two years.” In the past, this approach has generated hundreds of replies which were distributed to the Council along with a summary of the “top emerging themes.” 4. Mid-Year Report and Guiding Principles for Allocation of Resources. The Mid-Year Review and review of the Five-Year Forecast scheduled for Tuesday, February 5, 2019, will allow the Council an early opportunity to provide guiding principles and direction for paying down unfunded liabilities and efficient allocation of resources with the 2019 -21 Financial Plan focusing on community priorities. 5. Council Goal-Setting Workshop. Following the receipt of written and oral comments during the Community Forum, the Council goal-setting workshop will be held on Saturday, February 9, 2019 in the Council Chambers. This will be an all-day workshop to answer the question, “What are the most important, highest priority things for the City to accomplish over the next two years?” Council will be asked to provide up to five goals before the workshop which staff will organize and distribute prior to the workshop. As in the past, staff recommends the use of a professional facilitator to assist in prioritizing input into three categories, Major City Goals, Other Council Objectives, and Address as Resources Permit. Using an independent facilitator allows all Council members to participate fully in the process; and allows staff to devote their efforts to listening to the discussion. Moreover, the facilitator can assist the Council ensuring that the number and scope of the goals established are appropriate. 6. Major City Goal Work Programs and Strategic Budget Direction. On Tuesday, April 16, 2019, this workshop is a critical part of the budget process. It affords the City Council an opportunity to review the draft work programs and associated financial resources proposed to acco mplish Major City Goals established by the City Council in January. At this stage of the process the City Council provides direction on any changes needed to refine these work programs and resource allocations to better achieve the desired outcomes. Additionally, the City Council is asked to provide the City Manager with the key policy direction needed to allocate resources in line with Council’s expectations or to further amend budget or fiscal policies that align with Council direction. This process is extremely helpful so that the Preliminary Financial Plan that is presented to the City Council and community in May mirrors the Council’s expectations as much as possible. Packet Pg. 102 Item 11 At this meeting, staff will prepare detailed work programs for the Major City Goals in order to: a. Clearly define and scope the work program. b. Ensure that there is a clear understanding of the means used in pursuing the goal. c. Convert the general goal into specific action steps, so progress can be measured. Each work program will provide the following information: Objective. What is to be to accomplish? (This will be based on the objective adopted by the Council at the January 26th goal-setting workshop.) Discussion. What are the factors driving the need for this goal? What act ions have already been taken in trying to resolve this problem area? What are the key assumptions? What key challenges, constraints or obstacles can be expected in achieving this goal? What concerns, or issues will remain unresolved even if the goal is a chieved? Who are the key stakeholders? Action Plan. What specific tasks will need to be accomplished in order to achieve the goal, and when will they be completed? These “action steps” are the fundamental building blocks in defining and scoping the work program, and in monitoring the progress in accomplishing the goal over the next two years. Responsible Department. Who is accountable for getting it done? Financial and Staff Resources Required to Achieve the Goal. What will it take to achieve the goal? Will resources be needed (staffing, contract services, CIP project) to do this? Outcome: Final Work Product. What are the “deliverables?” 7. Budget Hearings and Budget Adoption. Budget hearings (also known as “Fund Reviews” including the City’s four enterprise funds) are currently scheduled for two consecutive meeting days in June. This will allow for a third meeting to be added for the approval of the 2019-21 Financial Plan, should the need arise. Council Advisory Body Participation Consistent with past Council direction, the advisory bodies will again play an important role in the goal-setting process by providing the Council with their recommended goals for 2019 -21. Staff will provide advisory body members with background materials outlining t heir important role in this process. An update on this process is also scheduled to be presented at the next quarterly meeting with the Mayor and advisory body chairs in October 2018. Lastly, staff liaisons are already beginning to work with Advisory Body Chairs in scheduling time for this purpose at upcoming advisory body meetings. Packet Pg. 103 Item 11 SUMMARY This report sets forth the proposed Council goal setting process and schedule for the development and ultimate adoption of the City’s 2019 -21 Financial Plan. Council will be asked to consider whether the budget workshop dates are acceptable or need to be changed to suit the needs for reviewing the preliminary financial plan. ENVIRONMENTAL IMPACT Approving the Financial Plan schedule for 2019-21 is not a project as considered by California Environmental Quality Act (CEQA) and does not require any environmental review. FISCAL IMPACT There is no direct fiscal impact from the adoption of the 2019 -21 Financial Plan and Goal Setting Schedule. The Goal Setting Process and the development of the Financial Plan inherently take considerable amounts of staff time. Publicizing the process and notification of interested parties will engender nominal advertising and mailing costs covered through current allocations in the City Clerk, and Finance budgets. Attachments: a - Proposed 2019-21 Financial Plan Schedule Packet Pg. 104 Item 11 Attachment A: 2019-21 Financial Plan Calendar: Proposed Key Dates for Council Date Responsible Action 1 October 2, 2018 Regular Meeting Council Approves 2019-21 Financial Plan Schedule 2 October 11, 2018 City Manager/ Finance Updates advisory body chairs on the goal-setting process at the Mayor’s quarterly meeting 3 November 6, 2018 Finance Sends letters inviting participation in goal-setting process to community groups and interested individuals. Begin inserting Community Budget Bulletins in utility bills 4 November 13, 2018 Advisory Bodies Provides recommended goals to Finance 5 November 13, 2018 Special Meeting Council Setting the Stage workshop on status of General Plan programs, long-term capital improvement plan (CIP), status of Major City Goals and Other Important Objectives, and CIP projects 6 November 20, 2018 Finance Distributes consolidated listing of draft recommended goals to advisory bodies for their review 7 December 4, 2018 Regular Meeting Council Budget Foundation: Finalizes goal-setting process and plans for Community Forum. Review and provides guidance regarding Financial Plan policies. 8 December 13, 2018 Finance Receives written comments from community groups and interested individuals, and any changes in goals from advisory bodies 9 January 23, 2019 Special Workshop Council Community Forum at the Veterans’ Hall to receive and review goals presented by individuals, community groups, and advisory bodies 10 February 5, 2019 Regular Meeting Council Mid-Year Report and Guiding Principals for Allocation for Resources. Review of results from 2017-18; Review Five Year Forecast; hold initial discussion on guiding principles for fund allocation within the 2019-21 Financial Plan framework and options to be considered for paying down unfunded liabilities. Packet Pg. 105 Item 11 Attachment A: 2019-21 Financial Plan Calendar: Proposed Key Dates for Council Date Responsible Action 11 February 9, 2019 Special Workshop Council Saturday Goal-Setting Workshop to discuss candidate goals presented at the January 23 Community Forum; discusses Council member goals distributed on January 28; prioritizes and sets Major City Goals 12 April 16, 2019 Special Workshop Council Approves detailed work programs for Major City Goals. Sets strategic budget direction in preparing Preliminary Financial Plan 13 May 13, 2019 City Manager Finalizes budget recommendations and issues preliminary budget 14 May 15, 2019 Planning Commission Reviews CIP for consistency with General Plan 15 June 4, 2019 Regular Meeting Council Holds evening workshops to review and discuss Preliminary Budget including General Fund and Enterprise Funds programs, CIP projects, and rates 16 June 18, 2019 Regular Meeting Council Holds continued Financial Plan review and adopts budget and rates. 17 June 25, 2019 Council If required, holds special meeting to continue review and adopt budget Packet Pg. 106 Item 11