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HomeMy WebLinkAbout11-09-09 TC Agenda PacketThe Workshop Meeting of the Town of Westlake Town Council will begin immediately following the conclusion Photos shoot but not prior to the 6:00 p.m. posted start time. Page 1 of 3 Mission Statement TOWN OF WESTLAKE, TEXAS On behalf of the citizens, the mission of the Town of Westlake is to be a one-of-a-kind community that blends our rural atmosphere with our rich culture and urban location. Westlake, Texas – A Premier Knowledge Based Community TOWN COUNCIL MEETING AGENDA November 9, 2009 WESTLAKE TOWN HALL 3 VILLAGE CIRCLE, 2ND FLOOR COUNCIL CHAMBERS / MUNICIPAL COURT ROOM Workshop Session 6:00 p.m. The Town Council will meet at Westlake Academy for a photo shoot at 4:30 p.m. The photo shoot will be held in the Commons area at Westlake Academy, 2600 J.T. Ottinger Road, Westlake, Texas. The Workshop will begin after the photo shoot but not prior to the posted time. Page 2 of 3 Workshop Session 1. CALL TO ORDER 2. PLEDGE OF ALLEGIANCE 3. EXECUTIVE SESSION The Council will conduct a closed session pursuant to Texas Government Code, annotated, Chapter 551, Subchapter D for the following: a. Sec. 551.074(a)(1) PERSONNEL MATTERS - to deliberate the appointment, employment, evaluation, reassignment, duties, of a public officer or employee: Town Manager 4. RECONVENE MEETING 5. TAKE ANY NECESSARY ACTION FROM EXECUTIVE SESSION, IF NECESSARY 6. PRESENTATION AND DISCUSSION OF A PROPOSED PROCESS FOR AMENDING/UPDATING THE TOWN’S COMPREHENSIVE PLAN. 7. DISCUSSION OF TOWN REVENUE SOURCES INCLUDING IDEAS FOR NEW REVENUE SOURCES AS IT RELATES TO THE STRATEGIC PLAN OUTCOME STRATEGY OF ACHIEVING FINANCIAL SUSTAINABILITY FOR THE TOWN OF WESTLAKE, INCLUDING WESTLAKE ACADEMY. 8. REVIEW AND DISCUSS THE PROPOSED 2010 MEETING CALENDAR. 9. FUTURE AGENDA ITEMS: Any Council member may request at a workshop and / or Council meeting, under “Future Agenda Item Requests”, an agenda item for a future Council meeting. The Council member making the request will contact the Town Manager with the requested item and the Town Manager will list it on the agenda. At the meeting, the requesting Council member will explain the item, the need for Council discussion of the item, the item’s relationship to the Council’s strategic priorities, and the amount of estimated staff time necessary to prepare for Council discussion. If the requesting Council member receives a second, the Town Manager will place the item on the Council agenda calendar allowing for adequate time for staff preparation on the agenda item. - None Page 3 of 3 10. ADJOURNMENT ANY ITEM ON THIS POSTED AGENDA COULD BE DISCUSSED IN EXECUTIVE SESSION AS LONG AS IT IS WITHIN ONE OF THE PERMITTED CATEGORIES UNDER SECTIONS 551.071 THROUGH 551.076 AND SECTION 551.087 OF THE TEXAS GOVERNMENT CODE. I certify that the above notice was posted at the Town Hall of the Town of Westlake, 3 Village Circle, by Thursday, November 5, 2009, by 5:00 p.m. under the Open Meetings Act, Chapter 551 of the Texas Government Code. CERTIFICATION _____________________________________ Kelly Edwards, TRMC, Town Secretary If you plan to attend this public meeting and have a disability that requires special needs, please advise the Town Secretary 48 hours in advance at 817-490-5710 and reasonable accommodations will be made to assist you. Town of Westlake Item # 2 – Pledge of Allegiance Texas Pledge: "Honor the Texas flag; I pledge allegiance to thee, Texas, one state under God, one and indivisible." EXECUTIVE SESSION The Council will conduct a closed session pursuant to Texas Government Code, annotated, Chapter 551, Subchapter D for the following: a. Sec. 551.074(a)(1) PERSONNEL MATTERS - to deliberate the appointment, employment, evaluation, reassignment, duties, of a public officer or employee: Town Manager Town of Westlake Item # 3 – Executive Session Town of Westlake Item # 4 – Reconvene Meeting EXECUTIVE SESSION The Council will conduct a closed session pursuant to Texas Government Code, annotated, Chapter 551, Subchapter D for the following: a. Sec. 551.074(a)(1) PERSONNEL MATTERS - to deliberate the appointment, employment, evaluation, reassignment, duties, of a public officer or employee: Town Manager Town of Westlake Item # 5 – Take any Necessary Action, if necessary 1 Memo Town of Westlake To: Honorable Mayor and Members of the Town Council From: Tom Brymer, Town Manager Subject: Workshop Meeting of November 9, 2009 Date: November 3, 2009 Presentation and Discussion of a Proposed Process for Amending/Updating the Town’s Comprehensive Plan ITEM This item supports the following Vision Point and Key Result Areas: VISION POINT AND KEY RESULT AREAS  Inviting Residential & Corporate neighborhoods o On-going comprehensive planning o Sensitivity to neighborhood integrity o Outstanding community appearance o Highest quality development and aesthetic standards o Open space preservation  We are Leaders o Premier educational facilities and programs o Producing well educated future leaders and thinkers o Business partnerships with Westlake Academy o Environmental stewardship initiatives o High quality services delivery coupled with financial stewardship o Infrastructure maintenance and planning  Hospitality Finds its Home in Westlake o Citizen engagement and communication o Historic Preservation o Tourism development Contained in the adopted Strategic Plan for the Town under the Vision Point “Inviting Residential & Corporate Neighborhoods”, in the Key Result Area “On-going Comprehensive Planning” is an Outcome Strategy for Updating/Amending the Town’s Comprehensive Plan. The current Comprehensive Plan was formulated and put in place in the late 1990’s. The purpose of this agenda item is to foster discussion and gain consensus from the Council on the process it wishes to use as we move forward on this Outcome Strategy. While this is a discussion of process, due to the importance of the Comprehensive Plan, the process used to amend/update it is very important as it will shape the outcome received as well as the community consensus behind it. BACKGROUND The portion of the Adopted Strategic Plan pertaining to this Outcome Strategy is attached giving a calendar with some major milestones and dates for this effort. A flow chart outlining steps in a 2 proposed process for addressing this project is also attached for discussion at the workshop. A memo to the Council is also attached further identifying issues to be discussed at the workshop pertaining to this agenda item. FUNDING : In the Adopted FY 09-10 there is $25,000 budgeted for this project. Cost will vary depending on scope of consultant services desired for this project. RECOMMENDATION : That the Council discuss the proposed process suggested, identify whether it wishes to use that process, modify it, or create an alternative process and provide direction to Staff accordingly so this Outcome Strategy can progress in a timely fashion. ATTACHMENTS 1. Page 8 of the Adopted Town Strategic Plan related to amending/updating the Town’s Comprehensive Plan. : 2. Flow chart of the proposed process for amending and updating the Comprehensive Plan. 3. Memorandum dated 11-3-09 from the Town Manager to the Town Council re: issues and considerations in arriving at a process for amending the Comprehensive Plan. 4. Fact sheet on comprehensive planning from Ohio State University. Outcome Strategies: 1. Update master plans to guide development and provide a framework for future projects; promote the Master Plan as a community focal point — Short & Mid-Range Goals. Team Co-Leaders: Tom Brymer / Eddie Edwards Objective 1.1: Develop RFP for master plan review. Estimated Completion Date: Spring, 2010 Objective 1.2: Work with consultant to draft the master plans — form community/staff task force. Estimated Completion Date: Winter, 2010 Key Result Areas and Outcome Strategies Glenwyck Park Vaquero 2. Precinct Line Road construction — Mid-Range Goal. Team Leader: Jarrod Greenwood Objective 2.1: Facilitate stakeholder meetings to communicate project status and engage community members. Estimated Completion Date: Fall, 2009 Objective 2.2: Finalize construction plans with TxDOT; TxDOT bid placement. Estimated Completion Date: Summer, 2010 Objective 2.3: TxDOT commences construction. Estimated Completion Date: Winter 2010 Page 8 2009 ON-GOING COMPREHENSIVE PLANNING — Ensure the master plans are continually updated and reviewed to enhance the development of the Town. Outcome Measure: All master plan documents are not more than 5 years old. Vision Point One—Inviting Residential and Corporate Neighborhoods “We are limited, not by our abilities, but by our own vision.” - Anonymous SENSITIVITY TO NEIGHBORHOOD INTEGRITY — Maintain the high standards of neighborhood planning and residential construction to foster the Town’s unique character and rural atmosphere. Outcome Measure: Utilize the 2009 Direction Finder survey to establish a benchmark measure for neighborhood integrity. Outcome Strategies: 1. Promote and develop landscaped entrances to neighborhoods — Mid-Range Goal. Team Leader: Troy Meyer Objective 1.1: Review and update ordinances and Unified Development Code for all landscaping requirements which would include, but not limited to: irrigation systems, plans, trees, xeriscape concepts, water features, lighting, gates, and signs. Estimated Completion Date: Spring, 2010 1. Gather Data •Existing Plans •Corporate Partners Plans •Staff Identified Key Changes 2. Council Discussion & Consensus 3. Stakeholders Meeting •Council / P&Z •Town Staff •Business Owners •Land Owners 4. 1st Draft RFP Prepared 5. TC/P&Z Joint Workshop •Review Draft RFP •Form Taskforce 6. Town Staff Revise Draft RFP 7. Comp Plan Update Taskforce •7 Members •1 Maguire •1 Hillwood •1 Residential Developer •2 Citizens •2 P&Z Members •Review & Comment 8. Interview & Retain Consultant 9. Presentation of Draft Update to Taskforce 10. Present Draft to Community 11. Present Draft to P&Z 12. Present to Town Council 1 MEMORANDUM Date: November 3, 2009 TO: Honorable Mayor and Council FROM: Tom Brymer, Town Manager/CEO Westlake Academy SUBJECT: Issues and Considerations for Discussion Regarding the Process Used for Amending the Comprehensive Plan As the Council moves forward on this Outcome Strategy in its Strategic Plan, it is important to have some Council discussion on the process used to amend/update the Town’s Comprehensive Plan. The Town’s current Comprehensive Plan was put in place in the late 1990’s. Regarding terminology, often the terms “comprehensive plan” and “master plan” are used interchangeably in municipal work. Generally speaking, these terms are describing the same thing. However, in this memo the term comprehensive plan is utilized. Following are some factors that should be taken into consideration as the Council and staff discusses a process for moving this important work forward: Why Update/Amend the Comprehensive Plan? A comprehensive plan is one of the Town’s most important tools for guiding the growth, development, composition, and physical appearance of the Town. Zoning decisions should be based off of the comprehensive plan. It is also important for a municipality to review its comprehensive plan on a regular basis so it remains relevant as an easily used working tool for guiding planning and development for the staff, development community, Council, our business community, residents, and the Planning & Zoning Commission. Over time, development practices and trends can create circumstances that warrant a fresh look and discussion of the comprehensive plan. Examples of changes that often warrant re- looking at a comprehensive plan can include: types of single family housing due to the retiring “baby boomers, new transportation infrastructure such as a new major roadway corridors or interchanges, public transit options that affect land use, and mixed use. How Often Should the Comprehensive Plan be Updated/Amended? As a general rule, it is a good idea to have a thorough review, update, and amendment of a comprehensive plan at least every 5-10 years, particularly if there has been a significant level of development activity and/or a change of conditions present in the community over that time period. An opportune time to update and amend a comprehensive plan is when development activity is at a low level. It is much harder to undertake an effort like 2 this when development activity is booming, if for no other reason than the amount of staff time this effort requires. What are the Components of Comprehensive Plan? • a thoroughfare plan including basic street types (thorough fares, arterials, collectors, residential streets) and standards which can also include landscaping and streetscaping requirements for the various street types While there may be some variation between communities as to what comprises their comprehensive plan, generally most plans contain the following parts: • a parks and open space plan (note: this should cover both private and public open space) • a bicycle/pedestrian plan that is integrated with a trail plan • a land use plan including a land use inventory of existing uses and those that might be desired in the future • a water and sewer utility plan (the land use plan helps to determine this) • storm water/drainage plan (note: the land use plan helps determine this and this should be linked to the trail plan) What Should the Scope of the Comprehensive Plan Amendment/Update Be? • the component parts of the comprehensive plan mentioned above This varies from community to community depending on several factors including, but not limited to: • how much development activity has occurred since the comprehensive plan was last re-visited in a systematic manner • how much change has occurred in market conditions, development practices and land use practices since the last major comprehensive plan review • do we know what the build/out analysis shows in the way of financial sustainability for the municipality under the current comprehensive plan? • how much public input does the Council desire for this process? • how web based the amended/plan is desired to be (note: the trend today is for the municipality’s plan to be very accessible via the web) • how much existing data and previous planning work can be utilized in the plan update/amendment • does the municipality want a build-out analysis performed on recommended land use scenarios for the updated/amended plan • how much value is placed on outside expertise, perspective, and knowledge of best practices in urban planning as the plan is updated and amended 1 Ohio State University Fact Sheet Community Development 700 Ackerman Road, Columbus, OH 43202-1578 Comprehensive Planning CDFS-1269-99 Land Use Series John B. Conglose Community Economic Development Agent Huron County Ohio State University Extension Introduction An old saying amongst those in the planning profession is that if you fail to plan, in reality what you are doing is planning to fail. Communities are always facing this dilemma. If the community you work, play, and live in does not have a plan for its future, what ultimately may happen is that the community will fail to adapt to change. The community will fail to take advantage of opportunities. The concept of comprehensive planning is very much related to the economic prosperity of communities. A comprehensive plan can be used as a tool to plan for the future growth or decline of a local community. Most importantly, it can be used as a tool to address the constant change and evolution of a community. Comprehensive plans are sometimes referred to as land-use plans, because in many cases they are dealing with issues related to the appropriate uses of land. In many cases, comprehensive plans are prepared to address compatibility issues between various uses of land, management and preservation of natural resources, identification and preservation of historically significant lands and structures, and adequate planning for infrastructure needs. In other instances, comprehensive plans are utilized to address issues related to schools, recreation, and housing. 2 History of Comprehensive Planning The issue of comprehensive planning in the United States has been addressed since the birth of the country. The original Williamsburg was one of the first highly successful products of an attempt to create a land-use plan in the colonies. In 1699, Williamsburg was laid out under the most detailed piece of town-planning legislation adopted in the English Colonies up to that point. Williamsburg reflected what is referred to as "axial planning," which means that it is formal, yet not pompous.1 Many consider the modern phase of American City Planning dated to the Columbian Exposition of 1893. The modern era of planning for growth and development began, however, in 1900, when, at an annual meeting of the American Institute of Architects in Washington, D.C., several papers were presented dealing with the beautification of government buildings in the capital. This resulted in the appointment of a committee responsible for the work of preparing a plan for the District of Columbia's park system. A final plan for the District Park System was completed in 1901. The impression left from this final plan was shared with many cities and villages throughout the country. Public improvement groups in these communities were created and became devoted to applying a new gospel of planning in communities. This early concept of this process was referred to as the "City Beautiful Movement." This movement established two aspects of the local comprehensive planning process that are still in use today -- the professional consultant in the field of comprehensive land-use planning and the planning commission, many of which are in existence in communities all across the country. The City Beautiful Movement was the beginning of what is more commonly referred to today as "Comprehensive Planning." 2 What Is a Comprehensive Plan? Comprehensive planning is an attempt to establish guidelines for the future growth of a community. The term comprehensive means exactly what it says. It should be a comprehensive or all-inclusive approach at addressing the issue of the future growth of a community. A comprehensive plan is the document that is the final product from the efforts of this process. The document is official in nature, meaning that some form of local government should adopt it into local law. The document should then be used as a policy guide to decisions about the development of the community. According to William I. Goodman, a well-known author on the subject of comprehensive planning, the key principle in the concept of the comprehensive plan is that it is an instrument to be used by those leaders in a community who establish the policies and make the decisions regarding physical development. According to Goodman, there are six basic requirements which the plan document should fulfill: 1. The plan should be comprehensive. 2. The plan should be long-range. 3. The plan should be general. 4. The plan should focus on physical development. 5. The plan should relate physical design proposals to community goals and social and economic policies. 6. The plan should be first a policy instrument, and only second a technical instrument.3 3 Goodman goes on to say that there are six basic requirements to the procedure for creating a comprehensive plan: 1. There should be only one official comprehensive plan. 2. The plan should be formally adopted by the legislative body. 3. There should be a lengthy period of public debate prior to adoption. 4. The plan should be available and understandable to the public. 5. The plan should be formulated so as to capitalize on its educational potential.4 What Is Included Within a Comprehensive Plan? The elements of a comprehensive plan can vary from community to community. In most cases though, the plan consists of a study of existing conditions and a discussion of future trends, goals, and objectives. Land-use patterns, housing conditions, population, roadways, and other infrastructure are usually the principle elements that are studied. In some cases, educational facilities along with recreation and other government facilities are reviewed. Social service facilities can also be discussed. Comprehensive plans deal with the land-use related issues relevant to each of these topics. The Comprehensive Planning Process A comprehensive plan should be a vision of what a community is to be in the future. The process of developing this plan should be a community-wide effort. All interest groups should have a part in determining what this vision should be. Goals and objectives should be developed along with a time frame for implementation. The contents of a comprehensive plan can vary from community to community but in most cases, it should consist of the following elements: land use -- both existing and future; demographics -- existing and projected; housing; infrastructure; education; recreation; and thoroughfares. The first phase of the process consists of collecting all available data on these topics. A citizens participation process should also be developed. After analyzing all existing data and taking input from the citizenry into consideration, goals and objectives can then be developed. Getting Organized Before any work begins on the comprehensive plan, a leader should be appointed to coordinate this project. A committee should also be appointed to provide direction to the person or persons held responsible for developing the plan. A popular scenario is to have the county commissioners or village (city) council appoint the committee and assign the task of leading the process to an administrative department head or consultant. Data Collection One of the first steps in the comprehensive planning process is to collect data on existing conditions. The data that is to be collected should relate to each of the elements that will make up the plan. For example, obtaining existing zoning maps or existing land-use maps that have been 4 developed in the past can be a starting point for reviewing current land-use information. If this information is not available, then a survey of the existing uses of land may have to be conducted. A classification system must then be developed that identifies the various types of land use that are in existence. Typically, existing land uses can be identified as falling into three major categories -- residential, commercial, or industrial. Additional categories can include recreation/open space, agricultural, and government. You can then break down each of the three or more categories into other classifications within each category. For example, you can have multi-family (meaning more than one unit) and single family as two classifications within the residential land-use category. The industrial land-use category can be divided into heavy industrial classifications or light industrial classifications. Each parcel of land within the community should be classified and identified on a map with a specific classification. If housing is an element of the comprehensive plan, data must also be collected regarding existing housing in the community. Information pertaining to conditions, age, number of units, whether or not each unit has adequate plumbing and kitchen facilities, whether the unit is owner- or renter-occupied could be relevant information. Most of this data could be obtained from available U.S. Census Bureau information. This is also true for collecting data related to the demographics of the community population. However, a more detailed house- by-house survey may also be desired. If a study of transportation is going to be part of the comprehensive plan, then a review of the existing roadway system in the community can be conducted. This can be initiated by reviewing existing maps of the community. As part of the transportation element, a review of current transportation services can also be included. Various types of data collection can be used, depending upon what elements are to be included in the comprehensive plan. It is important to remember that most information is readily available through a number of sources. Analyzing Data Once all of the data has been collected, the next step in the comprehensive planning process is to analyze the data. The coordinator and committee should take time to study data that has been collected in each of the various categories. The data should be analyzed for trends or other types of significant points. Upon thorough review and analysis, the next step in the process is to come up with goals and objectives. Goal Setting The comprehensive plan should conclude with a set of recommendations established by the committee. The recommendations should be in the form of goals and objectives. The objectives should consist of strategies to address each of the goals that have been established. Citizen Participation Throughout the entire comprehensive planning process, citizen input should be obtained. 5 After all, the comprehensive plan is a document for the community. The citizens of the community should have a say as to what their community should be like in the future. There are a number of ways to obtain citizen input. A series of open forums or public meetings is a good way to obtain public comment. News releases explaining what is being worked on and inviting written comments are other ways to obtain input from the public. Many communities include a citizen survey as part of the comprehensive planning process and incorporate the results into the body of the plan. Citizen input helps to determine the goals and objectives of the plan. Conclusion In 1972 President Nixon appointed a Citizen's Advisory Committee on Environmental Quality. This committee established a task force to study land use and urban growth. The task force consisted of prominent people at the time, including Lawrence S. Rockefeller from the famous Rockefeller family and Mayor Pete Wilson from the city of San Diego, California. Other appointees were experts on various subjects from the academic, legal, banking, land development, and conservation communities. A nine-month study was funded by a grant from the Rockefeller Brothers Fund. A final report was published entitled The Use of Land: A Citizen's Policy Guide to Urban Growth. A major conclusion of this study and ensuing report was that land is a basic resource on which human activity ultimately depends. Planning its wise use is considered to be the best tool to aid citizens to guide growth toward achieving economic benefits and protecting environmental quality.5 Where to Get More Information About Comprehensive Land-Use Planning This conclusion is still true 27 years later. Comprehensive planning is a tool that citizens can use to achieve this goal. American Planning Association, 122 South Michigan Avenue Suite 1600, Chicago, IL 60603, 312-431-9100, fax 312-431-9985. www.planning.org. Ohio Planning Conference, 129 South Third Street Suite 510, Columbus, OH 43215-7100, 614- 221-4349. Ohio State University Extension, Community Development, 700 Ackerman Road Suite 235, Columbus, OH 43202-1578, 614-292-8436. http://www-comdev.ag.ohio-state.edu/. References Principles and Practices of Urban Planning. 1968. William I. Goodman, Ed., and Eric C. Fruend, Assoc. Ed. Chicago, Ill. International City Managers Association. How Will America Grow? A Citizen Guide to Land-Use Planning. 1976. Citizens Advisory Committee on Environmental Quality. Washington, D.C. The Practice of Local Government Planning. 2nd. Ed. 1988. Frank S. So and Judith Getzels, Eds. Chicago, Ill. International City/County Management Association. 6 The Small Town Planning Handbook. 2nd. Ed. 1995. Thomas L. Daniels, John W. Keller, and Mark B. Lapping. Chicago, Ill. American Planning Association Press. 1 William I. Goodman, Ed., and Eric C. Fruend, Assoc. Ed. Principles and Practices of Urban Planning. Chicago, Ill. International City Managers Association. 1968. p. 1. 2 Ibid. 3 Ibid. 4 Ibid. 5 Citizens Advisory Committee on Environmental Quality. How Will America Grow? A Citizen Guide to Land-Use Planning. Washington, D.C. April 1976. All educational programs conducted by Ohio State University Extension are available to clientele on a nondiscriminatory basis without regard to race, color, creed, religion, sexual orientation, national origin, gender, age, disability or Vietnam-era veteran status. Keith L. Smith, Associate Vice President for Ag. Adm. and Director, OSU Extension. TDD No. 800-589-8292 (Ohio only) or 614-292-1868 | Ohioline | Search 1 Memo Town of Westlake To: Honorable Mayor and Members of the Town Council From: Tom Brymer, Town Manager Subject: Workshop Meeting of November 9, 2009 Date: November 2, 2009 Discussion of Town Revenue Sources Including Ideas for New Revenue Sources as it Relates to the Strategic Plan Outcome Strategy of Achieving Financial Sustainability for the Town of Westlake, Including Westlake Academy. ITEM This item supports the following Vision Point and Key Result Areas: VISION POINT AND KEY RESULT AREAS  Inviting Residential & Corporate neighborhoods o On-going comprehensive planning o Sensitivity to neighborhood integrity o Outstanding community appearance o Highest quality development and aesthetic standards o Open space preservation  We are Leaders o Premier educational facilities and programs o Producing well educated future leaders and thinkers o Business partnerships with Westlake Academy o Environmental stewardship initiatives o High quality services delivery coupled with financial stewardship o Infrastructure maintenance and planning  Hospitality Finds its Home in Westlake o Citizen engagement and communication o Historic Preservation o Tourism development BACKGROUND : At the September 21, 2009 regular meeting under future agenda items, Town Council member Tim Brittan asked that an agenda item be scheduled for a Council workshop to brainstorm and discuss Town revenue sources, including ideas for new revenue sources. This topic directly relates to the Council’s Strategic Plan’s Outcome Strategy for “Achieving Financial Sustainability for the Town of Westlake, Including Westlake Academy”. FUNDING : N/A at this time. RECOMMENDATION: Staff recommends that Council discuss their revenue source ideas with staff at this workshop and for that discussion to be done within the context and framework of the timeline and strategy for dealing with financial sustainability that was presented and 2 discussed with the Council at its October 26, 2009 workshop (copy attached, see attachments to this agenda memo). Further, any revenue source ideas identified will need to be analyzed by staff in terms of (a) what it is conservatively projected to produce in the way of income (including the ability to reliably forecast that revenue source); (b) practicality and cost of administering this revenue source (with current staff) compared to the dollars received from it (i.e. does it cost more to pursue the revenue source than the net financial gain it produces?); and (c) the legality of that revenue source. ATTACHMENTS 1.) Pages 14-15 of the adopted Town Strategic Plan : 2.) Flowchart of the proposed process for pursuing the Strategic Plan Outcome Strategy Regarding Financial Sustainability contained in the adopted Town Strategic Plan. 3.) ICMA article - It's All in the Questions: The Manager's Role in Achieving Fiscal Health Page 14 Town of Westlake C. Water Conservation Efforts Objective 1.7: Develop water conservation messages for landscaping and the use of xeriscaping in neighborhoods and common areas. Develop plant listing for landscape ordinance. Integrate input from resident master gardeners to enhance conservation and landscaping recommendations. Estimated Completion Date: Spring, 2010 Objective 1.8: Assist Academy with water conservation, protection, and production education by speaking to students and arranging field trips to water and wastewater treatment facilities. Estimated Completion Date: On-going Objective 1.9: Provide water conservation information to customers through the website, mailings, news letters, and Academy publications. Estimated Completion Date: On-going Environmental Stewardship Initiatives (cont.) HIGH QUALITY SERVICES DELIVERY COUPLED WITH FINANCIAL STEWARDSHIP Research available revenue resources to offset the cost of providing services; continue to provide outstanding government administrative support services while working within the municipal budget. Outcome Measure: Implementation of at least one new demand driven revenue source per year, over the next five years. Outcome Strategies: 1. Establish a strategy for achieving long-term financial sustainability for the Town government, including Westlake Academy — Mid-Range Goal. Team Leader: Tom Brymer Objective 1.1: Review 2009 Direction Finders results with Council. Estimated Completion Date: Summer, 2009 Objective 1.2: Review 2009 Westlake Academy Parent Survey with Council. Estimated Completion Date: Summer, 2009 Objective 1.3: Review Town Capital Improvement Plan, municipal 5-year financial forecast, and Academy financial forecast during proposed 09/10 budget deliberations. Estimated Completion Date: Summer, 2009 Objective 1.4: Research and compile report regarding municipally owned and operated charter schools and their organizational structure. Estimated Completion Date: Fall, 2009 Objective 1.5: Council to review long-range financial forecast, Academy cost structure components, staff to identify options and strategies to address financial issues and their timing. Estimated Completion Date: Spring, 2010 Westlake DPS Engine Page 15 2009 High Quality Services Delivery Coupled with Financial Stewardship (cont.) Objective 1.6: Council to prioritize service options and provide staff direction on future budgeting and resource allocation. Estimated Completion Date: Spring, 2010 2. Review and discuss growth related policies — Short-Range Goals. Team Co-Leaders: Tom Brymer / Todd Wood / Debbie Piper A. Council discussion of ”Growth pays for growth” approach to financial stewardship and policy making. B. Impact Fees Objective 2.4: Discuss and receive Council direction on impact fee feasibility study. Estimated Completion Date: Spring, 2010 Objective 2.5: Prepare proposal of utility impact fee analysis and feasibility report. Estimated Completion Date: Fall, 2010 Objective 2.6: Review impact fee recommendations and consider fee adoption. Estimated Completion Date: Summer, 2011 C. Park Land Dedication and Development Fee Objective 2.7: Discuss and receive Council direction on park land dedication and development fee implementation. Estimated Completion Date: Spring, 2010 Objective 2.8: Prepare proposal of park land dedication and development fee analysis and feasibility report. Estimated Completion Date: Fall, 2010 3. Explore public safety service delivery options and funding — Short-Range Goal. Team Co-Leaders: Tom Brymer / DPS Lieutenants Objective 3.1: Research available options to deliver and fund public safety programs. Estimated Completion Date: Spring, 2010 Objective 3.2: Present options and recommendations to Council. Estimated Completion Date: Summer, 2010 Westlake DPS Ambulance Objective 2.1: Identify sources of Town expenditures related to service delivery which are not currently offset by fee collection. Analyze identified expenditures, from the standpoint of current impact and future expansion to ensure quality service delivery. Estimated Completion Date: Fall, 2010 Objective 2.2: Identify actual or potential costs incurred by the Town. Estimated Completion Date: Fall, 2010 Objective 2.3: Survey other communities to benchmark costs for newly proposed fees and amendments of existing fees. Estimated Completion Date: Fall, 2010 TOWN STAFF TASK TC/BOT TASK FINANCE DEPT TASK Process for Pursuing Council’s Strategic Plan Outcome Strategy Regarding: Financial Sustainability October 2009 November 2009 December 2009 January 2010 February 2010 March 2010 Community Engagement/Education 3. Complete Departmental Program Prioritization Scorecards 1.c. TC/BOT Workshop to clearly outline the Community Desired Conditions (Governance Issues) 1.f. Identify all revenue sources & create Revenue Manual 4. Peer Review of Department Program Inventories and Department Prioritization Scorecards2. Identity Program & Activity Costs 2.a. Evaluate Program & Activity Costs 6. Recommend Resource Allocation for Programs from all Funds (Funding Scenarios) 1.b. Prepare Town Program Activities List 1.a. Prepare Town Department Program Inventories 1.d. Prepare Guiding Principles (Focus Areas) for Town & WA 1.e. Council Ranks Guiding Principles 5. Create Ranked Order of Programs (Based upon Community Desired Conditions and Department Scorecards) To w n Ac a d e m y 4. Identity Program & Activity Costs 3.b. Prepare WA Program Activities List 3.a. Prepare WA Department Program Inventories 1. Develop Strategic Plan for Westlake Academy. Co m b i n e d ACADEMY STAFF TASK 6.a. Implement into the budgeting process 2. Initiate a Tabula Rasa (Blank Slate) exercise for the WA budget. 1. Begin the staff/council conversation regarding process for pursuing a strategy for achieving long-term financial sustainability for the Town government. Current Issue About PM Contact PM Subscribe Advertise Editorial Guidelines Editorial Calendar Professional Services Directory ICMA Upcoming Events PM Index Issues Archive September 2009 · Volume 91 · Number 8 It's All in the Questions: The Manager's Role in Achieving Fiscal Health by Jon Johnson and Chris Fabian As the fiscal reality facing local governments across the nation becomes more challenging to manage and the necessary financial choices become more difficult to make, local government managers must ensure that the right questions are being asked to assess their organization's state of fiscal health. In times of economic prosperity, the manager has the luxury of focusing on issues related to growth, enhanced service delivery, and community initiatives and can rely on increasing revenues and healthy fund balances to maintain the organization's fiscal health. Today's reality for most if not all local governments is declining revenues, slower if not stagnant growth, and depleted reserves. The manager must depend on the finance officer to perform the diagnostic analysis necessary to identify the symptoms and causes of the organization's fiscal distress, and then they must work together, using the diagnosis, to correctly prescribe and apply the most appropriate and effective treatments. Through a series of basic diagnostic questions, the manager will gain a better assessment of not only the positive signs of the organization's fiscal health but also the root causes of the fiscal "dis-ease" impacting long-term financial sustainability. With a thorough diagnosis, the manager can effectively answer important questions posed by the elected decision makers: Is it time to raise taxes? Should we begin cutting expenses by eliminating programs or staff? What do we do to balance the budget? To provide the best answers to the governing body, it isn't enough to ask the questions of the finance officer. The manager must follow up with another question: Can you show me? Without documented and demonstrated analysis supporting the answer, the manager may be relying on inaccurate assumptions or unsubstantiated conclusions that don't treat the real symptoms. A diagnostic approach helps an organization achieve fiscal health, the first step leading to long- term financial sustainability. By asking the right questions in five areas and then asking for basic diagnostic tests to be performed, the manager can obtain answers that help isolate the potential cause(s) of the fiscal issues and then focus on more in-depth analysis to identify and apply the most appropriate and effective treatments. QUESTION 1: ARE WE TRULY SPENDING WITHIN OUR MEANS? Seems like a simple question, but in a time when increases in costs—often fixed costs—are outpacing revenue growth, it becomes the most critical question of all. This question also requires a more detailed response than simply a yes or no. Governments are experiencing skyrocketing expenses in almost every area of their budgets. Unfortunately, most are also seeing major revenue sources moving in the opposite direction. Few revenue forecasts predict that this trend isn't going to continue for the foreseeable future and beyond. Spending within your means is a philosophy that should be adopted regardless of the economic crisis du jour. Understanding the sources of funding for operations, for one-time initiatives, and for investment in capital is a foundation of good fiscal health. Adhering to this philosophy is imperative for the fiscal sustainability of today's communities. Page 1of 7 11/2/2009http://icma.org/pm/9108/public/cover.cfm?author=Jon%20Johnson%20and%20Chris%20F... Without spending controls, some governments are looking toward bankruptcy, privatization, borrowing against future revenues, or even disincorporation as viable treatment options. Posing this first question helps the manager achieve these objectives: Establish alignment between ongoing revenues and ongoing expenditures.■ Establish alignment between one-time sources and one-time uses.■ Understand how services rely on general government revenues versus program revenues (user fees, grants, permits). ■ Provide incentives for departments to manage and monitor program revenues.■ Shift the focus of forecasting and budgeting from expenditures to revenues.■ To obtain a sufficient answer to the question of whether the community is truly spending within its means, a manager needs to review the diagnostic analysis carried out after getting answers to these questions: 1. DO WE DIFFERENTIATE BETWEEN ONE-TIME AND ONGOING REVENUES AND EXPENDITURES? IF SO, HOW ARE THEY BEING TRACKED? DOES OUR FORECAST DEMONSTRATE THIS DIFFERENTIATION? Develop an understanding of how revenues are classified as either one-time or ongoing in nature. ■ Determine how recurring revenue streams exhibiting some degree of volatility or uncertainty are classified. ■ Assess the clarity of the tool used (historically and for forecasting purposes) to demonstrate that fund balance (or any other one-time source) is not being used to support ongoing operational costs. ■ Request a chart or graphic that demonstrates that ongoing revenues have historically been and are forecast to be greater than ongoing expenses. ■ Ensure that multiyear forecasts consistently match ongoing revenues with ongoing expenses and one-time sources with one-time uses. ■ 2. ARE RESOURCE ALLOCATION DECISIONS FOR BUDGETARY PURPOSES INFLUENCED BY PROGRAM REVENUES GENERATED BY EACH INDIVIDUAL DEPARTMENT, DIVISION, OR ELECTED OFFICE? IF SO, HOW ARE PROGRAM REVENUES DIFFERENTIATED FROM GENERAL GOVERNMENT REVENUES (TAXES, INVESTMENT EARNINGS, FRANCHISE FEES, AND SO FORTH)? Determine whether program revenues are allocated specifically to the operation responsible for generating them and whether increases or decreases in these revenue streams directly affect that operation's budget allocation. ■ Assess the method by which resource allocations for operational expenses are established in the budget process: Are they based on prior year expenditure budgets for each department or are they based solely on available ongoing revenues? ■ 3. IS THERE A FORMAL REVENUE MANUAL? IF SO, WHAT INFORMATION IS INCLUDED? Review the manual to see if all major revenue sources are included, if they are clearly described, if the source of authority for collecting them is clear, if historical and forecast trend data are present, if the forecasting methodology is clear, and if relevant statistical data (historical, economic, demographic) linked to forecasts are being tracked. ■ Verify that fees for services, including permits and licenses, are updated regularly and that written policies support the level of cost recovery desired. ■ After the questions have been asked and the answers verified through a review of the appropriate diagnostic analysis, the manager should work closely with the finance officer to treat any symptoms that indicate a poor state of fiscal health. It is critical that the manager partner with the finance officer in the development of policies, procedures, and philosophies that create an environment that supports good fiscal health practices. Page 2of 7 11/2/2009http://icma.org/pm/9108/public/cover.cfm?author=Jon%20Johnson%20and%20Chris%20F... After the treatment is determined, the manager's leadership role is to engage and empower the organization to achieve a strong state of fiscal health. The most critical elements of fiscal health that should be in place are: Use only ongoing revenues to fund ongoing expenses (and one-time sources for one-time uses). ■ Understand the impact of decisions affecting one-time alignment and ongoing alignment.■ Establish a distinction between general government revenues and program revenues; create incentives for self-sustaining programs by allowing departments to keep 100 percent of program revenues generated. ■ Require reductions in program revenues to be offset by reductions in the associated departmental operating budgets. ■ Base resource allocations strictly on available revenues and one-time sources (as opposed to historical or forecast expenditures). ■ Figure 1 illustrates the distinction between ongoing alignment and one-time alignment. Note the pattern of persistent inability to "spend within your means" that emerged in the 2001–2002 period. This fiscal health problem was masked because the organization continued using one-time sources to plug the ongoing gap. QUESTION 2: ARE WE MAINTAINING REQUIRED RESERVES? ARE THEY ADEQUATE AND APPROPRIATE? The concept of having reserves set aside for emergencies and economic downturns is a no- brainer. But just as in the fairy tale Goldilocks and the Three Bears, the manager must assess whether the level of reserves is too high, too low, or just right. Maintaining inadequate reserve levels puts the long-term sustainability of the organization at risk. But in times when resources are scarce, assessing the right amount of reserves to maintain will ensure that funds critical to the operation are available. Reserves are important not only during this period of economic disaster but during natural disasters as well. Floods, wildfires, hurricanes, tornadoes, drought—few local governments have sufficient rainy-day funds to deal easily with Mother Nature's wrath. Entities without adequate reserves for emergencies have been forced to make difficult choices to address the cost impacts from natural devastation. Working capital (or emergency) reserves are a critical element in establishing good fiscal health. The Government Finance Officers Association has set forth a best practice—Appropriate Level of Unreserved Fund Balance in the General Fund—that recommends that "general purpose governments, regardless of size, maintain unreserved fund balance in their general fund of no less than 5 to 15 percent of regular general fund operating revenues." Similarly, ICMA recommends that the most influential guidance comes from the bond-rating firms, which use a rule-of-thumb figure of at least 5 percent of annual operating expenditures as an acceptable level of (accessible) reserves (on top of restricted reserves). Unfortunately, a brief scan of news reports reveals that local governments are experiencing lower bond ratings because they have failed to meet even these minimum requirements. Establishing an appropriate working capital reserve is one of the most straightforward yet overlooked objectives for achieving fiscal health. Even with an adopted reserve policy, many governments have not instituted adequate monitoring mechanisms to ensure that those balances are securely maintained. In light of this practice, it's not enough to ask whether there is a formal reserve policy; the manager must verify that steps to monitor compliance with the policy are in place and being used. In addition to working capital reserves, organizations normally have other reservations, restrictions, or designations of fund balance that may be statutory, required by bond covenant, established by the provider of a restricted revenue source, or set forth by ordinance. The Page 3of 7 11/2/2009http://icma.org/pm/9108/public/cover.cfm?author=Jon%20Johnson%20and%20Chris%20F... manager should ensure that an up-to-date inventory of all reserves exists and that mechanisms are in place to ensure compliance with those reserve requirements—to both maintain adequate levels and ensure that the organization isn't holding too much. In posing this second question, the manager: Establishes a working capital reserve policy and ensuring that there are monitoring mechanisms in place to demonstrate compliance with that policy. ■ Creates an inventory of all reserves maintained across the organization to ensure that all reserve levels are adequate and appropriate—not too high, not too low. ■ When asking whether a community is maintaining required reserves and whether the reserves are adequate and appropriate, a manager should frame the question more specifically and ask to see the analysis that supports the answer: Do we have a written fund balance reservation policy? If so, how are we monitoring those reserves to ensure they are maintained? How do we assess the adequacy and appropriateness of all restricted, reserved, designated, and unreserved fund balance levels? Review the written working capital reserve policy and compare with best practices.■ Require the appropriate degree of analysis to ensure that working capital reserves are sufficient to meet emergency needs or revenue shortfalls. ■ Verify that an inventory of all reserved, restricted, or designated fund balances exists and states their purpose, the authority establishing them, and how they are to be calculated. ■ Validate the presence of adequate controls and monitoring mechanisms that ensure compliance with reservations, restrictions, and designations of fund balance. ■ Discuss the adequacy and appropriateness of all fund balance levels—excessive balances may be as much of an impediment to good fiscal health as insufficient levels. ■ After the manager has assessed the responses and the accompanying analysis, determining the existence of these critical elements of fiscal health is possible: Adopt a written policy establishing working capital reserves.■ Develop appropriate monitoring mechanisms to ensure that the organization is in full compliance with all required restrictions, reservations, or designations of fund balance. ■ Inventory all fund balance reserves maintained across the organization and eliminate any that are excessive, unnecessary, or duplicated. ■ Assess adequacy and appropriateness of the level of unreserved fund balance across the organization—having too much may be as problematic as having too little if there is no plan for how it is to be used to benefit the community. ■ QUESTION 3: DO WE UNDERSTAND OUR VARIANCES—ESPECIALLY BUDGET VERSUS ACTUAL? Like finding buried treasure, understanding the nature of significant financial variances may yield a fortune of opportunities in achieving good fiscal health. Explaining variances might be viewed only as an exercise to satisfy auditors or critique the finance department's forecasting skill, but this process is far more important than that. Page 4of 7 11/2/2009http://icma.org/pm/9108/public/cover.cfm?author=Jon%20Johnson%20and%20Chris%20F... Comparing last year's budget amounts with current year budget dollars provides a better understanding of what has changed from one year to the next in terms of service delivery needs, increased costs, and anticipated revenues. Looking at revenue and expenditure variances to compare prior year actuals with current year actuals provides an explanation of changes in spending patterns and revenue collections as well as helps identify emerging trends that need to be considered for forecasting purposes. Negative variances normally garner a fair amount of attention, but positive variances should also be carefully analyzed to determine why they occurred. A primary responsibility of any manager is to ask for an explanation, supported by detailed analysis, that provides a clear understanding of why variances occurred, regardless of whether they are to the good or the not-so-good. Another type of variance is largely overlooked by many organizations as they try to understand their fiscal health. Analyzing the reason behind budget-to-actual variances for any given fiscal period may uncover opportunities to address ongoing alignment concerns or projected budget shortfalls without looking to actual reductions in services or staffing levels. Most organizations have controls in place that prevent negative expenditure variances from occurring, but they fail to understand the true reason for negative variances caused by revenue shortfalls. Significant negative revenue variances should be analyzed thoroughly to determine the specific reasons that they occurred and, more important, to look for emerging trends that need to be integrated into future revenue forecasts. The manager should also require that the same level of attention, if not more, be placed on understanding positive budget-to-actual variances. Failure to understand the reason for a positive revenue variance may critically impact future forecasts if that variance was caused by a fluke or unusual circumstance rather than an upswing in economic activity or an increased demand for service. Favorable budget-to-actual expenditure variances, especially those that recur year after year, must be analyzed carefully to ensure that permanent efficiencies are captured so the savings generated from these changes can be reallocated to other critical areas. Analysis of these positive variances may validate the need for more precise salary and benefit cost projections specifically related to vacancy savings and the timing of individual wage increases. This analysis may also lead to the discovery of a multitude of contingency budgets spread throughout the organization that could be satisfied through a single, smaller amount budgeted in one central account or could uncover cyclical costs that are budgeted each year but are spent every three or four years. By simply understanding the nature of these budget-to-actual variances and bringing future budget amounts more in line with actual experience, the manager may find opportunities to reduce the budget without actually having to eliminate a single employee or cut actual spending. Asking this third question helps the manager: Determine the specific reasons variances have occurred and adjust the budget to be more in line with actual experience. ■ Identify programs or services where resources have historically been over allocated, allowing for those resources to be reallocated to other areas of need. ■ Eliminate the extras in departmental budgets for contingencies, cyclical needs, worst- case scenarios, or the proverbial "just in case we need it." ■ Improve the accuracy of revenue and expenditure forecasts by better isolating and identifying emerging trends as well as eliminating the impact of recurring historical variances. ■ In seeking the answer to whether we understand our variances—especially budget versus actual—more specific questions will help obtain a better understanding: 1. AT YEAR END, ARE VARIANCES BETWEEN BUDGETED AND ACTUAL REVENUES AND EXPENDITURES ANALYZED AND EXPLAINED? IF SO, HOW DO THOSE Page 5of 7 11/2/2009http://icma.org/pm/9108/public/cover.cfm?author=Jon%20Johnson%20and%20Chris%20F... VARIANCES AFFECT FUTURE BUDGET CYCLES? HOW SIGNIFICANT ARE REPORTED VARIANCES RELATED TO CAPITAL PROJECTS? Determine the reasons for consistent variances that seem to occur year after year.■ Obtain an explanation of significant revenue variances in order to identify important trends that will help forecast future receipts or affect the level of funds available for future allocation of resources. ■ Look closely at recurring patterns of carrying forward from one year to the next significant dollar amounts appropriated for multiyear capital projects, and gain an understanding of why project dollars are not expended in the year they are appropriated. ■ Isolate any resources allocated on an ongoing basis as a place holder for one-time costs or costs that are projected to occur only cyclically. ■ 2. DO WE HAVE A FORMAL COMPENSATION PLAN THAT IS USED TO ESTABLISH EMPLOYEE SALARY OR WAGE RANGES? IF SO, HOW IS THIS PLAN DEVELOPED (FOR EXAMPLE, MARKET COMPARISONS, UNION NEGOTIATIONS, STEP AND GRADE SYSTEM), AND HOW OFTEN IS THE PLAN UPDATED? Ensure the plan is used to prepare salary and benefit projections.■ Ensure that reasons for variances between the formal plan and actual employee compensation (whether over or under) are clearly explained. ■ 3. WHEN ASSESSING THE ADEQUACY OF EMPLOYEE COMPENSATION, ARE EMPLOYEE BENEFIT PACKAGES INCLUDED IN THIS ASSESSMENT? DO WE BELIEVE THAT OUR TOTAL COMPENSATION PACKAGE IS ATTRACTIVE ENOUGH TO RECRUIT COMPETENT INDIVIDUALS AND RETAIN THEM? Determine that salary and benefit projections are being developed by separating salary projections from benefit projections and applying individual calculations for each benefit factor (some benefits are based on percentage of wages while others are calculated as a flat dollar amount). ■ Understand the impact of the total compensation package on employee recruitment and retention (variances may be exacerbated by excessive turnover or long recruitment periods). ■ After the manager has evaluated the responses and looked at the analysis, it's easier to see whether these assumptions of fiscal health are present: Identify where resources have been regularly allocated for one-time or cyclical costs, and eliminate ongoing resource allocations where possible. ■ Identify possible causes of revenue variances and trends that need to be monitored.■ Ensure that expenditures related to multiyear capital projects are budgeted in the years in which costs will be incurred; this prevents large unplanned appropriations (carry forwards). ■ Eliminate unnecessary contingencies maintained in department budgets.■ Develop a salary-benefit projection tool that budgets employee compensation costs more accurately and aids in analyzing the impact of vacancies. ■ This article continues with more questions in the October issue of PM. Jon Johnson (jjohnson@icma.org) and Chris Fabian (cfabian@icma.org) are local government practitioners serving as senior management advisors with ICMA Consulting Services, ICMA, Denver, Colorado. Learn about the benefits of joining ICMA and receiving PM magazine as part of your benefits package at http://icma.org/join. To subscribe to PM, call 202/289-ICMA (202/289-4262) or e- mail bookstoremanager@icma.org. Page 6of 7 11/2/2009http://icma.org/pm/9108/public/cover.cfm?author=Jon%20Johnson%20and%20Chris%20F... ©2009 International City/County Management Association ICMA is the leading organization for information on professional local government management. Its membership includes city managers, county managers, and other chief appointed officials and assistants in local governments throughout the world. ICMA's mission is to create excellence in local government by developing and fostering professional local government management worldwide. Page 7of 7 11/2/2009http://icma.org/pm/9108/public/cover.cfm?author=Jon%20Johnson%20and%20Chris%20F... Current Issue About PM Contact PM Subscribe Advertise Editorial Guidelines Editorial Calendar Professional Services Directory ICMA Upcoming Events PM Index Issues Archive October 2009 · Volume 91 · Number 9 It's All in the Questions by Jon Johnson and Chris Fabian The current fiscal reality for most if not all local governments is challenging and bleak, to say the least. Declining revenues, slower if not stagnant growth, and depleted reserves are factors forcing the local government manager to become more involved as a partner with the finance officer in order to identify the symptoms and causes of the organization's fiscal distress. Working together this way, they can use the diagnostic analysis performed to correctly prescribe and apply the most appropriate and effective treatments. By asking a series of basic diagnostic questions, the manager is able to gain a better understanding of the organization's fiscal health. It isn't enough, however, to simply pose the questions to the finance officer. It's also necessary to follow up with another question: Can you show me? Without documented and demonstrated analysis supporting the answer, the manager may be relying on inaccurate assumptions or unsubstantiated conclusions that don't treat the real symptoms. The September issue of PM presented the first three questions that managers should be asking their financial officers: Question 1: Are we truly spending within our means? Question 2: Are we maintaining required reserves, and are they adequate and appropriate? Question 3: Do we understand our variances— especially budget versus actual? This article continues the discussion and suggests the additional questions that need to be asked and analyzed to accurately and successfully assess the state of the organization's fiscal health. Figure 1 outlines a diagnostic approach that helps an organization achieve fiscal health, the first step leading to long-term financial sustainability. By asking the right questions in five areas and then asking for basic diagnostic tests to be performed, the manager can obtain answers that help isolate the potential cause(s) of the fiscal issues and then focus on more in-depth analysis to identify and apply the most appropriate and effective treatments. Page 1of 5 11/2/2009http://icma.org/pm/9109/private/feature2.cfm?author=Jon%20Johnson%20and%20Chris%... QUESTION 4: ARE WE BEING TRANSPARENT ABOUT THE TRUE COST OF DOING BUSINESS? Within every entity, whether a Fortune 500 company or a local government, are elements commonly referred to as overhead or hidden costs. Being transparent about the true cost of doing business— another essential step in achieving fiscal health—means these costs must no longer be hidden but clearly identified and made transparent to the organization and the citizens who provide for their funding. Transparency is simply about understanding and trust. The services provided by such internal functions as human resources, finance, legal, information technology, facilities, and fleet are critical to the success of the organization. Thus, the costs associated with these services should not be unexpected. If these internal or indirect costs are not connected with the various services being provided directly to citizens, it is unclear what any particular service truly costs, and a lack of transparency about the true cost of doing business is created. Establishing fees for services without accounting for all costs, both direct and indirect, may unfairly use tax dollars to fund services that are expected to partially or fully pay for themselves. Failing to allocate indirect costs to other funds that benefit from the services provided by the overhead departments unnecessarily and unfairly burdens the general fund, affecting its financial sustainability. But transparency involves not only understanding but also trust—trust that these costs are appropriate and that the end users of those overhead services see clearly what drives those costs. Involving end users in discussions about changes they can make that may reduce costs not only establishes an atmosphere of trust but also drives further efficiencies and operational changes that benefit the organization. After trust is established, these previously hidden costs can be equitably associated with those operational areas that receive the benefit. In raising this fourth question, the manager will realize these fiscal health objectives: Allocating appropriate internal and indirect costs so that the burden is shared by the programs (and other accounting funds) that demand and use those services. ■ Ensuring that fees for services where some level of cost recovery is expected are capturing both direct and indirect costs associated with the service. ■ Identifying opportunities to establish internal service funds for those departments that exist primarily to provide services to internal customers. ■ In determining the answer to the question of whether the local government is being transparent about the true cost of doing business, these more specific questions will help ensure a more complete and transparent understanding: 1. Do we have any internal service funds? If so, what services are accounted for in those funds, and how are the internal charges established and distributed? Assess that appropriate demand metrics are evaluated when determining rates to be charged to the internal customers of these internal services. ■ Verify that internal customers perceive that costs are transparent and that they have the ability to influence those costs by altering their own demands. ■ 2. Do we prepare any type of cost allocation plan (for example, the cost plan or full cost allocation plan described in OMB A–87, "Cost Principles for State, Local, and Indian Tribal Governments")? If so, how is this plan incorporated into the budget process? Gain an understanding of the allocation methodologies incorporated in the cost plan.■ Page 2of 5 11/2/2009http://icma.org/pm/9109/private/feature2.cfm?author=Jon%20Johnson%20and%20Chris%... Validate that fees charged to offset the cost of providing services are calculated using both direct and indirect costs. ■ Determine whether indirect or overhead costs accounted for in the general fund could more appropriately be charged to another fund, thus relieving the burden on the general fund. ■ As the manager assesses the responses and looks over the accompanying diagnostic analysis, it becomes more apparent that these elements of fiscal health are present: Implement internal service funds, where appropriate, to align cost and level of service with customer demand. ■ Use a cost-allocation plan to appropriately establish the means by which costs associated with all overhead and administrative programs can be allocated between departments and between accounting funds. ■ Ensure that fees charged to offset the cost of providing a service recapture an appropriate level of both direct and indirect costs. ■ Relieve the burden of indirect costs charged to the general fund by more appropriately charging them against the funds that benefit from the internal services provided. ■ QUESTION 5: HOW ARE WE INCORPORATING ECONOMIC ANALYSIS AND LONG- TERM PLANNING INTO DECISION MAKING? In "Excelling in Times of Fiscal Distress," an October 1, 2008, article posted on Governing.com, ICMA Executive Director Bob O'Neill observes, "Most of us can articulate the early-warning signs that preceded the current economic downturn: Global forces that dramatically changed the local, state and federal playing fields. Skyrocketing fuel costs. A failing housing market. . . . Property tax limitations. Yet, many of us failed to correctly interpret these early-warning signs in relation to their impact on our government organizations." Among the causes behind the failure that O'Neill recognized is the lack of attention given to the visible warning signs and their potential impacts. An even more significant cause of local government's distress occurs when, despite accurate interpretations of economic indicators and despite forecasts made with reasonable accuracy, decisionmakers make decisions without the context of how economic conditions impact their assumptions about the future. Effects of the economy on expenditures and revenue sources are not the only influences many local governments fail to interpret or appropriately incorporate into their planning. Many entities devise elaborate and precise long-term plans to help focus on the achievement of organizational objectives. These plans include key capital projects like infrastructure improvements, technology enhancements, citizen surveying, the development of comprehensive plans, or other strategic initiatives. Unfortunately, these plans often remain isolated (and unnoticed) within individual departments and are never appropriately synchronized with the big-picture scenarios decisionmakers depend on. It is only by incorporating every planning tool available that decisionmakers can objectively understand the long-term effects their decisions have on the organization and, more important, the impact of those decisions on the entity's overall fiscal health. Championing the merits of scenario planning in the context of upholding an organization's stated objectives, Peter Schwartz postulates in The Art of Long View that "you can tell you have good scenarios when they are both plausible and surprising; when they have the power to break old stereotypes; and when the makers assume ownership of them and put them to work. Scenario making is intensely participatory or it fails." Incorporating all long-term plans that are relevant to the objectives the organization is trying to achieve will ensure that these decisions are made in a more informed and strategic context. In posing this fifth question, the manager can achieve the final objectives of fiscal health and bring it all together to frame decision making: Account for the impact of external economic influences.■ Incorporate and consolidate long-term plans into long-term forecasts.■ Assimilate all elements of fiscal health into scenario planning to ensure that decisions are made while upholding the objectives of fiscal health. ■ Page 3of 5 11/2/2009http://icma.org/pm/9109/private/feature2.cfm?author=Jon%20Johnson%20and%20Chris%... When asking how the local government is incorporating economic analysis and long-term planning into decision making, a manager should specifically ask these questions and see the diagnostic analysis that supports the answer: 1. Does our five-year forecast incorporate other long-term plans our organization has developed? If yes, what plans are included, and how are they incorporated into our forecasts? Verify that the all capital improvement plans, comprehensive plans, and other long-range plans are incorporated into the budget process. ■ Verify that all plans are included in long-term forecasts.■ 2. What is our approach to planning for one-time or other capital-related initiatives? What information do we include or exclude? How is this information used in our budget process and our financial forecasts? Is the plan complete, with no monsters under the bed (in other words, capital needs or initiatives that are not planned completely but could have a serious impact on our available resources)? Determine that all ongoing operating costs associated with the completion of a project are fully and accurately identified. ■ Verify that funding sources are identified for each project or initiative (both ongoing and one- time). ■ 3. What tools does our organization use to communicate financial information to our elected decisionmakers? Understand the tools used to communicate critical financial information.■ Assess whether these tools are easily interpreted by those unfamiliar with government finance. ■ Validate that these tools are more graphic than statistical in nature, convey information at a high level, and aren't number intensive. ■ When the manager has assessed the responses and looked over the accompanying diagnostic tools and analysis, it will be more apparent if these elements of fiscal health are present: Identify all long-term plans maintained by every department within the organization and ensure that they are incorporated in decision making. ■ Prepare a comprehensive capital improvement plan that spans a period of at least five years and includes all potentially significant one-time expenditures as well as any associated ongoing operating costs. ■ Develop a simple, graphic communication tool that is used consistently to provide decisionmakers with financial information at a summarized level. ■ Figure 3 demonstrates a scenario-planning model that many organizations are implementing to aid in the decision-making process. Note the separation of ongoing fiscal health in the graph on the left and one-time fiscal health on the right. Also note that the model demonstrates the organization's ability to uphold the objectives of fiscal health by tracking the effects of every decision made. WRAP UP William Osler, an early-twentieth-century doctor who was known as the father of modern medicine, transformed the medical profession by showing that proper diagnosis is the key to treating disease. Practitioners began recognizing that readily identifiable symptoms presented evidence of the cause of Page 4of 5 11/2/2009http://icma.org/pm/9109/private/feature2.cfm?author=Jon%20Johnson%20and%20Chris%... disease, and this marked a paradigm shift away from less evidence-based treatment methods like bloodletting and administering leeches and untested potions. This same paradigm shift must also be embraced by local government managers in order to effectively address current fiscal problems—entities must first diagnose and then treat. Often government leaders are confronted with a problem to solve but feel pressured to deal with it immediately. There is an urgency to rush to treatment, especially given today's fiscal environment, just to demonstrate timely response, ease the anxiety, or move on to the next major issue. In this rush to apply a treatment, little time is allotted to actually diagnosing the root causes that need to be addressed. Would it be acceptable for our own doctor to prescribe treatment before analyzing our symptoms? Without a thorough examination, across-the-board budget cuts or a shortened workweek put in place to achieve a balanced budget would be as effective as non-evidence-based treatments like bloodletting or potions. The causes of an organization's fiscal disease require a more thorough, robust, rigorous analysis if we are to improve our approach to finding effective and sustainable solutions. The good news is that many organizations already have what is needed to make this transformation: it's simply a matter of asking the right questions to uncover the root causes that need to be treated. Our finance directors, our financial analysts, our auditors, our clerks, our department heads are the physicians on staff who can reveal the symptoms and the hidden causes to treat, but the manager needs to know the right questions to ask. In most cases, the medical records and data about vital signs are already at our fingertips—the finance director has the comprehensive annual financial report and the department heads understand the variances in their spending and in their program revenues. By asking the right questions, assessing the documented analysis, and then partnering with the finance officer to accurately diagnose the causes, identify the treatment options, and apply the appropriate treatment, the local government manager can lead the organization down the path toward fiscal health. In The Principles and Practice of Medicine, Osler identified and summarized most diseases and their causes, documented the method of diagnosing these conditions, and then recommended treatment options. This work became the bible for medical professionals of his time, and it is still considered essential reading in today's medical schools. The road to fiscal health does not require medical training, but it does require a focus on spending within our means, identifying and maintaining reserves, understanding our variances, being transparent about the true cost of doing business, and ultimately guiding decision making with economic analysis and long-term planning. Osler said "observe, record, tabulate, communicate. Use your five senses. Learn to see, learn to hear, learn to feel, learn to smell, and know that by practice alone you can become expert." Fiscal health is within every organization's grasp. The only question left is: Will you be able to achieve it? Jon Johnson is senior management adviser (jjohnson@icma.org) and Chris Fabian is senior management adviser (cfabian@icma.org), ICMA Consulting Services, Denver, Colorado. Learn about the benefits of joining ICMA and receiving PM magazine as part of your benefits package at http://icma.org/join. To subscribe to PM, call 202/289-ICMA (202/289-4262) or e-mail bookstoremanager@icma.org. ©2009 International City/County Management Association ICMA is the leading organization for information on professional local government management. Its membership includes city managers, county managers, and other chief appointed officials and assistants in local governments throughout the world. ICMA's mission is to create excellence in local government by developing and fostering professional local government management worldwide. Page 5of 5 11/2/2009http://icma.org/pm/9109/private/feature2.cfm?author=Jon%20Johnson%20and%20Chris%... Memo Town of Westlake To: Honorable Mayor and Town Council Members From: Tom Brymer, Town Manager Kelly Edwards, Town Secretary Subject: Workshop Meeting of November 9, 2009 Date: November 4, 2009 Review and discuss the proposed 2010 meeting calendar. ITEM This item supports the following Vision Point and Key Result Areas: VISION POINT AND KEY RESULT AREAS  Hospitality Finds its Home in Westlake o Citizen engagement and communication From time to time, the Council’s regular meeting schedule requires modification due to holidays and other events that may create a conflict for Council Members and staff to attend Council meetings. BACKGROUND Several factors have been taken into consideration as staff prepared the 2010 proposed meeting calendar, including national holidays, school holidays, and early voting. I have outlined deviations from the regular meetings dates of the 2nd and 4th Monday of each month below: Given the limitations and guidelines outlined below, it is recommended the Council hold a meeting on May 17, 2010, to canvass the election results, administer oaths to elected candidates and also conduct other Town business. May 2010 Canvassing of the election results is also a consideration. Canvass can occur as early as the 3rd day following Election Day, but only if Federal Postcard Applications (FPCA) (armed forces, overseas citizens, and dependents residing with them) have been received and the ballot board has completed the count of provisional ballots. In reality, it is an efficiency matter to schedule the canvassing following the 8th day after Election Day. Also, in a General Law city, candidates are not eligible to take office until the 5th day after Election Day (excluding Sundays). Consideration must be given to the election as early voting begins Monday, April 26th and runs through Tuesday, May 4th. Early voting is held in the council chambers/courtroom and relocating the voting apparatus to another location would require pre-clearance by the U.S. Department of Justice. Tarrant County Elections has not selected the date(s) they will conduct early voting at the Town offices. Staff recommends moving the Board of Trustees meeting from the 1st Monday to the 2nd Monday of the month. Staff recommends one meeting in the month of August due to the first day of school. Staff also recommends joint meeting of the Town Council and Board of Trustee in July and September due to national and school holidays. Additionally, and in accordance with Resolution 07-18, only one meeting will be held in November due to the Thanksgiving holiday. November 2010 There are no conflicts with the December meeting dates for 2010; however, the Council may choose to meet only once as the 4th Monday follows Christmas. December 2010 None FUNDING Consider approval of the proposed meeting schedule RECOMMENDATION 2010 Proposed Meeting Calendar ATTACHMENTS: January 2010 1 February 2010 2 March 2010 3 S M T W Th F Sa S M T W Th F Sa S M T W Th F Sa 1 2 1 2 3 4 5 6 1 2 3 4 5 6 3 4 5 6 7 8 9 7 8 9 10 11 12 13 7 8 9 10 11 12 13 10 11 12 13 14 15 16 14 15 16 17 18 19 20 14 15 16 17 18 19 20 17 18 19 20 21 22 23 21 22 23 24 25 26 27 21 22 23 24 25 26 27 24 25 26 27 28 29 30 28 28 29 30 31 31 April 2010 4 May 2010 5 June 2010 6 S M T W Th F Sa S M T W Th F Sa S M T W Th F Sa 1 2 3 1 1 2 3 4 5 4 5 6 7 8 9 10 2 3 4 5 6 7 8 6 7 8 9 10 11 12 11 12 13 14 15 16 17 9 10 11 12 13 14 15 13 14 15 16 17 18 19 18 19 20 21 22 23 24 16 17 18 19 20 21 22 20 21 22 23 24 25 26 25 26 27 28 29 30 23 24 25 26 27 28 29 27 28 29 30 30 31 July 2010 7 August 2010 8 September 2010 9 S M T W Th F Sa S M T W Th F Sa S M T W Th F Sa 1 2 3 1 2 3 4 5 6 7 1 2 3 4 4 5 6 7 8 9 10 8 9 10 11 12 13 14 5 6 7 8 9 10 11 11 12 13 14 15 16 17 15 16 17 18 19 20 21 12 13 14 15 16 17 18 18 19 20 21 22 23 24 22 23 24 25 26 27 28 19 20 21 22 23 24 25 25 26 27 28 29 30 31 29 30 31 26 27 28 29 30 October 2010 10 November 2010 11 December 2010 12 S M T W Th F Sa S M T W Th F Sa S M T W Th F Sa 1 2 1 2 3 4 5 6 1 2 3 4 3 4 5 6 7 8 9 7 8 9 10 11 12 13 5 6 7 8 9 10 11 10 11 12 13 14 15 16 14 15 16 17 18 19 20 12 13 14 15 16 17 18 17 18 19 20 21 22 23 21 22 23 24 25 26 27 19 20 21 22 23 24 25 24 25 26 27 28 29 30 28 29 30 26 27 28 29 30 31 31 School Board School & Town Holiday Town Council School Holiday Town Holiday Joint BOT & Council Election Day /First/Last Day Special Meeting to of School Canvass Returns Meeting Schedule Town of Westlake Paydays FUTURE AGENDA ITEMS: Any Council member may request at a workshop and / or Council meeting, under “Future Agenda Item Requests”, an agenda item for a future Council meeting. The Council Member making the request will contact the Town Manager with the requested item and the Town Manager will list it on the agenda. At the meeting, the requesting Council Member will explain the item, the need for Council discussion of the item, the item’s relationship to the Council’s strategic priorities, and the amount of estimated staff time necessary to prepare for Council discussion. If the requesting Council Member receives a second, the Town Manager will place the item on the Council agenda calendar allowing for adequate time for staff preparation on the agenda item. - None Town of Westlake Item #9 - Future Workshop Agenda Items Town of Westlake Item # 10 – Workshop Adjournment Back up material has not been provided for this item.