Analyze This! ELGL + CPBB Webinar Training: Fiscal Visualization, Forecasting and Decision Modeling

"The Unique Lens" is itself a product of the process as are the tech tools that have opened up a view on local government strategy, culture, management and decision-making unlike anything else!

ELGL and CPBB are proud to partner in an innovative webinar training series, "I Want to be Your Analyst." This series, consisting of a monthly blog and training webinar, is intended to provide case studies, introductions to unique analytic tools, and expertise into the hands of all local government (emerging) leaders.

This ten part series will pair proven CPBB concepts and tools with one of our partner local government communities who are actively implementing (or have implemented) our innovative trends. This will provide key insights into how communities actually utilize these tools.

The October Training Webinar

With I Want to be Your Analyst, local government professionals will gain an introduction and key insights into the CPBB war chest of cutting-edge online tools. On October 27^th at noon PST, join ELGL, CPBB and Administrative Services Director Heather Geyer with the City of Wheat Ridge as we explore and discuss the concept of fiscal visualization, forecasting and decision modeling. Register here!

The New (Economic) Lens

Taxpayers are perhaps expecting local government to provide even more support in meeting their social, physical, environmental, and economic needs, especially with the declining assistance in these same areas from federal and/or state sources.

How does local government continue to offer the important, even vital, services required by communities in a responsive and timely fashion?

How will finance chiefs address significant debt obligations while maintaining enough resources to provide prioritized services?

What can managers do to successfully navigate these challenging waters so that their communities become better, stronger, and more relevant than ever before?

Let’s consider a completely different perspective. In order to achieve success and accept the challenges that are ahead, we must see more clearly how to manage, use, and optimize resources in a much different way than has been done in the past. This new environment demands a new vision of the future.

For managers, resources can appear to be scarce because of our tightly clenched grasp on some commonly held assumptions from which they need to break free. Perhaps there is a different way to see things. A new lens!

Case Study - Wheat Ridge, Colorado 

In 2012, Wheat Ridge City Council included the identification of core services as a top priority goal in their strategic plan.  The City was already operating at a base level of service due to budget cuts implemented to cope with the nationwide economic downturn.   In addition, the City continued to face a long-term lack of funding for Capital Improvement Projects (CIP).  With no dedicated revenue stream to fund more than 250 million in infrastructure projects and a systemic budget shortfall, 2014 would be the final year the City could fund minimal preventive maintenance projects with a transfer from the General Fund.  

The Fiscal Health Model provided a new visual tool to help facilitate budget discussions.  The Fiscal Health Model allows staff to develop live scenarios to provide elected officials an instant picture of the financial impacts of their decisions. One of the more powerful traits of this process is how it has equipped Council and staff that is resulting in new conversations around budget and resource allocation.

The power of the Fiscal Health Model was realized on May 19th, 2012 at the City Council’s annual planning retreat.  City Manager Patrick Goff used the model to show Council members how different scenarios affected the City’s financial situation.  Wheat Ridge has a backlog of more than $250 million in unfunded CIP projects.  The Fiscal Health Model allowed staff to illustrate to Council, not by pointing to numbers in a budget book but by modeling the financial data, that given the current fiscal situation, “cutting” the budget to solve the problem was not a viable option.  

The City needed to identify new dedicated revenue sources to ensure the success of these projects in the future. One Council Member in particular had a very interesting reaction to this new way of looking at budgeting opportunities.  Although he believes there are still ways and areas to find efficiencies to save money, he now sees and concedes to the fiscal realities the City faces.  He realizes, as we all do, that no amount of reductions or cuts would ultimately solve the City’s long-term budget issues related to capital improvements. 

Seeking clearer understanding and communication with your elected officials?

• Elected officials have adopted Fiscal Health as their preferred means of communicating with staff regarding any decisions brought before them that potentially might have a fiscal impact – asking staff to “show us” those impacts using the principles of Fiscal Health as the primary communication device.  

Working through challenging conversations about compensation with staff or bargaining units?

• Organizations have entered into labor negotiations with their bargaining units using Fiscal Health as a way to quickly agree on the assumptions behind the City’s fiscal forecasts, therefore establishing a basis of trust in the discussion – then modeling the bargaining units’ requests to demonstrate impacts to the City’s fiscal position.

      Weighing various financial related decisions, with complex variables, and long-term impacts?

• Fiscal Health modeling is a powerful scenario-planning tool, providing easy to understand visualization of data. It has even been used to help a Water and Sewer District prioritize capital projects, understand the ongoing impacts of those projects, and effectively develop rate increases by better understanding their ongoing and one-time sources and uses of funding in their operation.

Local governments choosing to implement the concepts of Fiscal Health as a treatment regimen are making substantial progress because they are doing the analytical work required to more accurately diagnosis the reasons behind their fiscal issues and then determining the best treatments that lead to a viable cure. Once an organization is on the road to being fiscally healthy, it can then become more financially sustainable by implementing a Fiscal Wellness regimen centered around the principles of Priority Based Budgeting.

Fiscal Transparency 

First and foremost, local governments must be clear and transparent about what truly is their picture of fiscal health. Communicating that picture simply, clearly, and understandably without volumes of numbers, spreadsheets, tables, and an endless series of charts is frankly a challenge that has plagued managers for years. If managers are going to be able to demonstrate financial reality internally to elected officials and staff, and externally to residents, they have to find better ways to make fiscal situations understandable and transparent to everyone.

Finding creative, clear, and nontechnical ways to demonstrate what the next five to 10 years might look like is a must if people are going to address fiscal concerns. All too often, local governments are unable to make sound, timely decisions regarding investing in new resources, starting new programs, or initiating major capital projects because elected officials, local government managers, and staff members are paralyzed by the uncertainty of whether they actually have enough money to appropriate for these purposes. Developing a long-term financial forecast is key to gaining a better understanding of what the future might hold. 

Next Steps 

At the Center for Priority Based Budgeting, we're the first to admit we don't have all the answers. However, we do offer unique and innovative concepts and resources that allow local government communities to better understand their fiscal position and comprehensively model a multi-year variety of financial scenarios that provide options and solutions based on each individual communities unique goals and challenges (something very few municipalities perform to their detriment).

"But it's not too late to do something." And that "something," as we've previously stated in this article, is to consider a completely different perspective. In order to achieve success and accept the challenges that are ahead, we must see more clearly how to manage, use, and optimize resources in a much different way than has been done in the past. This new environment demands a new (economic) vision of the future.

For managers, economic resources can appear to be scarce because of our tightly clenched grasp on some commonly held assumptions from which they need to break free. There is a different way to see things!

Register here! October 27^th at noon PST, join ELGL, CPBB and Administrative Services Director Heather Geyer with the City of Wheat Ridge as we explore and discuss the concept of fiscal health visualization and the fiscal health diagnostic tool.