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Budget Strategies for Local Government

Budget Strategies for Local Government. Horatio Porter Budget Officer City of Fort Worth. 2. Fort Worth. 1873. Fort Worth - 2009. City of Fort Worth. FY2010 Budget $1.2B Staff Size 6425 Employees Organization 18 City Depts Population 720,000 Residents. 5. Major Attractions.

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Budget Strategies for Local Government

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  1. Budget Strategies forLocal Government Horatio Porter Budget Officer City of Fort Worth

  2. 2

  3. Fort Worth 1873

  4. Fort Worth - 2009

  5. City of Fort Worth • FY2010 Budget $1.2B • Staff Size 6425 Employees • Organization 18 City Depts • Population 720,000 Residents 5

  6. Major Attractions Museum District Texas Motor Speedway Cowboys of Color Rodeo Colonial Tournament Bass Performance Hall Historic Stockyards District Zoo

  7. POPULATION GROWTH 1950-2030 720,250 17th Largest City in America Sources: U.S. Census Bureau, 1950-2000; NCTCOG, 2001-2030.

  8. The Recession hit Fort Worth

  9. 5 Year ForecastGeneral Fund Gap = $59M 9

  10. Bucket Approach:

  11. Bucket Descriptions • Bucket A – Service Reductions • Bucket B – Citywide Initiatives • Bucket C – Organizational Changes • Bucket D – Enhance Revenues

  12. Bucket A – Service Reductions • Closed 6 of 7 swimming pools • Reduced hours at community centers • Eliminated one Code Compliance District • Reduced mowing of parks, medians and right of way

  13. Bucket B – Citywide Initiatives • Instituted 8 Furlough Days • Revised funding for healthcare benefits • Reduced funding to Ambulance Authority • Reduced purchases for city vehicles • Reduced misc. discretionary spending

  14. Bucket C – Organization Changes • Moved Departments / Functions out of the General Fund into Enterprise Funds • Accelerated Outsourcing Efforts

  15. Bucket D – Enhance Revenues • Assessed payment to Enterprise Funds • Suspended our Policy on Gas Well Revenues • Hired a collection agency to pursue delinquent court fines • General fee increases (Library, Parks, Meters)

  16. Overview of FY2010Budget Recommendations Citywide Initiatives Service Reductions A B $16 m $25 m Organizational Changes Enhance Revenues C D $3 m $15 m $59 millionbudget shortfall

  17. Updated 5 Yr Financial ForecastGeneral Fund Balanced Gap = $25M 17

  18. Observation • June 1, 2009 January 2006, North American International Auto Show – Speaker: Jerry York • Key points: • Be realistic about revenue expectations • Cut product offerings. Offer fewer and better products • Use a “clean sheet of paper” approach. No sacred cows • Make tough decisions. If something isn’t core, sell or close it. • Time is of the essence.

  19. GM vs Ford • Be realistic about revenue expectations • GM – focused on sales volume, selling cars at a loss • Ford – reengineered operations, focused less on market share • Cut product offerings. Offer fewer and better products • GM – Closed 1 brand (Oldsmobile) • Ford – Shifted focus from SUVs to small cars • Clean sheet of paper, no sacred cows • GM – No material changes in production • Ford – Cut material costs, made plants more flexible

  20. GM vs Ford • Make tough decisions, sell it or close it • GM - Worked on green technology, hydrogen cars and solar panel (but maintained 60 models across 8 brands) • Ford – Sold Jaguar, Land Rover and Aston Martin (generated cash) • Time is of the essence • GM – Almost $50b in bailouts, filed bankruptcy 3 years after speech • Ford – Solvent, improving quality and product offerings

  21. Implication / Application • Be realistic about revenue expectations • Deal with the reality of a flat revenue stream. • Cut product offerings. Offer fewer and better products • Determine what services you will provide and be the best at delivering those offerings • Clean sheet of paper, no sacred cows • Every dept should be critically evaluated and challenged to improve • Make tough decisions, sell it or close it • Programs that are not making a measurable impact should be eliminated • Time is of the essence • Act now

  22. City of Fort WorthSimplified Budget Process

  23. City of Fort WorthSimplified Budget Process

  24. Questions 24

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