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Home My WebLink AboutCritical Challenges Critical Choices Presentation“Critical Challenges, Critical Choices” The Town of Westlake Proposed 2009 - 2010 Budget April 12, 2013 Introduction •$12.4 million FY 2009-2010 Budget Premises: –Provide basic, but high quality, Town services –Continued decline in sales tax revenue necessitates the use of some fund balance in the General Fund to balance the budget –Continued support for the Westlake Academy –No Town ad valorem/property tax levy –Proposing only self-funded capital improvement projects, Utility Fund projects, and the Water well for the Academy. Fund Balances Fund Type Estimated Proposed Inc(Dec) Inc(Dec) FY 08/09 FY 09/10 Percent Amount General Fund $ 3,904,487 $ 3,119,934 -20% $ (784,553) Special Revenue 2,439,379 1,863,922 -24% (575,457) Debt Service Fund - - 0% - Capital 230,445 230,445 0% - Utility Fund 1,728,860 1,330,033 -23% (398,827) Internal Services 100,000 100,000 0% - Total Fund Balance $ 8,403,172 $ 6,644,335 -21% $ (1,758,837) Budget Preparation & Scrubbing •Identified one-time revenue sources •Service Level Adjustments were used to identify both: –Maintain existing service levels –Increased service levels –Expanded or new services •Reduced the Proposed FY 2009 – 2010 Budget 5% from the estimated FY 2008 – 2009 Budget •Delayed most general government capital improvement projects unless funding is already in place FY 08/09 Accomplishments •Fidelity Regional Headquarters Phase II Completed •Developed and adopted five year Strategic Plan •Five year Capital Improvement Plan (CIP) was compiled •Began and Completed the Academy Arts & Sciences Center •Positive results from the Town’s first DF survey •Governmental Finance Officers Association (GFOA) Distinguished Budget Award •GFOA Certificate of Achievement for Excellence in Financial Reporting •The Westlake Wire went “Green” •Westlake’s e-Tube went live •Westlake Windows was launched Critical Challenges, Critical Choices •Current economic downturn has affected Westlake, surrounding communities, the state, and the nation •Westlake is dependent upon sales tax, fees, and permits for operating revenue, all of which are volitional in nature •Current conditions create a challenge for the Town’s ability to meet service demands and their associated costs Governing & Managing for Outcomes Strategic Planning CIP Financial Forecast Budget Performance Measurement Direction Finders Performance Evaluations Strategic Plan = Strategic Focus •One of a kind community –Inviting Neighborhoods –We are Leaders –Hospitality finds its home in Westlake –Page 7 Strategic Plan SLA’s •Included comprehensive plan update funding •Recommended pursuing others, but consider each as a budget amendment Strategic Plan Outcome Strategy •“Establish a strategy for achieving long term financial sustainability for the Town government, including Westlake Academy.” –Use time wisely –Citizen outreach & education is critical Performance Measurement = Accountability –Key Results Areas Affected –Program Description –Trends –Program Broad Goals –Goals & Objectives for coming FY –Efficiency/Effectiveness Measures –Vision Point/Strategic Plan Impacts •“If you can’t measure it, you can’t evaluate it.” City of Olathe, KS •“You measure what you treasure.” Tom Brymer •Departmental Budgets Use: Important Conversations •High Performance Organizations –Confront the brutal facts –Never lose faith - Jim Collins, Good to Great •What are the brutal facts? –Page 10 Critical Challenges, Critical Choices •The Town’s five year forecast shows that the Town’s revenue will be outpaced by expenses in FY 12/13 without changes occurring: –Increase in sales tax revenue –Attracting another major corporate campus within the next year –Increasing the retail presence in Westlake –Decreasing Town services –Implementing other revenue streams Financial Forecast Illustrates the Challenge - 2.0 4.0 6.0 8.0 10.0 12.0 14.0 FY 08/09 Estimated FY 09/10 Proposed FY 10/11 Projected FY 11/12 Projected FY 12/13 Projected FY 13/14 Projected Mi l l i o n s Revenues Expenditures General Fund and Visitor Fund Balance Depleted - 2,000,000 4,000,000 6,000,000 8,000,000 FY 08/09 Estimated FY 09/10 Proposed FY 10/11 Projected FY 11/12 Projected FY 12/13 Projected FY 13/14 Projected General Fund Revenues Expenditures - 500,000 1,000,000 1,500,000 FY 08/09 Estimated FY 09/10 Proposed FY 10/11 Projected FY 11/12 Projected FY 12/13 Projected FY 13/14 Projected Visitor Fund Revenues Expenditures - 1,000,000 2,000,000 3,000,000 4,000,000 FY 08/09 Estimated FY 09/10 Proposed FY 10/11 Projected FY 11/12 Projected FY 12/13 Projected FY 13/14 Projected Utility Fund Revenues Expenditures The Price of Government (Osborne & Hutchinson) •Getting a grip on the problem –Is it short or long term? Is it driven by revenue or expenses, or both? •Setting the Price of Government –Determine how much citizens are willing to pay. •Setting the Priorities of Government –Deciding which results citizens value most. •Setting the Price of each Priority –Deciding how much the government will spend to produce each of these outcomes. •Purchasing the Priorities –Deciding how best to produce the desired results at the price citizens are willing to pay. Getting a Grip on the Problem •Financial forecast show the problem is revenue driven –Revenues are not diverse, not on-going and declining –This is a short and long term problem General Fund Revenue •Amount of GF revenue that is one-time income: 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Sales Tax (Situs) (43%), 350,000 Permits and Fees (9%), 2,547,570 On-Going (49%), 2,890,166 General Fund Revenue FY 08/09 Estimated On-Going (49%) Permits and Fees (9%) Sales Tax (Situs) (43%) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Sales Tax (Situs) (12%), 452,600 Permits and Fees (13%), 505,220 On-Going (73%), 2,795,021 General Fund Revenue FY 09/10 Proposed On-Going (73%) Transfer In from UF (1%) Permits and Fees (13%) Sales Tax (Situs) (12%) General Fund Revenue •Composition of Sales Tax: - 200,000 400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 1,600,000 Sales Composition Total General Fund Sales Tax 1,000,000 - 452,600 1,452,600 Situs On-Going Setting the Price of Government •The DirectionFinders survey provided feedback on what the citizens are willing to pay for and the levels of service desired –Public Safety •51% willing to pay more to maintain current levels •62% not willing to pay more for expanded service levels –Maintenance of streets and drainage •50% willing to pay more to maintain current levels •63% not willing to pay more for expanded service levels –Parks, trails, and recreation programs •46% willing to pay more to maintain current levels •64% not willing to pay more for expanded service levels Setting the Priorities of Government •The DirectionFinders survey also provided feedback on what citizen priorities are –77% selected public safety as what they felt was most important –41% selected Westlake Academy as what they felt was most important –33% selected maintenance of Town streets and the quality of water utility services as what they felt was most important Setting the Price of each Priority •Council has adopted a five year strategic plan that will be used as a guideline –This document will be updated annually to reflect the continued desires of the Council and community Purchasing the Priorities •The Town will need to evaluate the best delivery options available. •Ceilings may need to be placed on expenses. Westlake Academy Expenditures Contained in the Municipal Budget Total Budget FY 09/10 $12,435,855 100% Debt Service $1,499,750 12.06% Direct Expenses $248,638 2.10% Indirect Costs $339,469 2.73% Total Westlake Academy Costs $2,087,857 16.89% Positioning Ourselves for the Future •What are the “core” services the Town should be offering and how best do we accomplish that? •What level of financial support can we provide for Westlake Academy versus their ability to pursue other sources of funds, via the foundation or other means? •How best do we engage the citizens of Westlake in this critical conversation? •What do we want Westlake to be and look like in 50 years? What is the critical challenge and choice? •Realigning the Town’s business model •Riding “a different horse” - Osborne & Hutchinson Closing Comments •E + R = O •Problem or an opportunity? Osborne & Hutchinson •“they (citizens) want government to provide what only the public sector can provide…But they want their money’s worth. They want value for dollars. When they can’t get it, they often opt for tax cuts and private services. When they do get value form public institutions, however, they are often willing to invest in them.” Our Challenge •Making sure Westlake residents have confidence in us, are getting value, so they are willing to invest in Town services. Citizen Outreach is Critical •Acknowledgements •Another budget workshop on 9/21 •Questions