The Art of Budget Cuts: Elected Official Perspective

1. The Art of Budget Cuts: Elected Official Perspective Arizona City/County Management Association Gordon Mortensen, Council Member/ Chair of Budget Committee February 5, 2009

2. Presentation Outline • Queen Creek Overview • Stepping Up Your Leadership • Communicating with Clarity • Working from a Firm Foundation • Brutal Realities of Budgets • Developing Options • Moving Forward

3. Town of Queen Creek • Located in the Southeast Valley • Adjacent to Mesa & Gilbert • Population: 24,000 • up from 4600 in 2000 • Top 7 National Boom Towns • Rich in Country Friendliness, Bridging Maricopa and Pinal Counties • Two Fortunate Financial Pieces.. • Huge burst in Retail Centers • Passed property tax for Fire and Safety

4. Stepping Up Your Leadership • Council Member’s Job-- • Hire Top Notch City Manager • Help Set Direction ( 30,000 ft. view) • Establish Accountability… • Let Manager do his/her Job • City Manager • Be the Professional • Be the Expert (Use Developed “Skill Sets”) • Navigate and “Right the Ship” during difficult times. • Be Cool, Calm, and Collected.. (The Steady Hand that Calms Anxieties)

5. Communicating with Clarity • Face the “Brutal Facts” (The sooner the better) • Develop an Internal and External Communication Strategy • Manager Creates Plan with Staff & Council Input • Know All Audiences: Citizens/Shareholders, Council, Media, and Town Staff (Strong Public Outreach) • (Requires Great Listening Skills) • Be a Proactive Communicator • with Council, Staff, Community, Media… • Use Press Briefing: • Mayor and Manager, Together, Brief Local Reporters. • Manager Role to Council – Advise, Inform, and Coach • Develop Talking Points for Key Areas

6. Working from a Firm Foundation • Sound Working Relationship with Council, Manager and Staff • Semi-Annual Retreats and Strategic Planning Sessions • Vision/Mission Statements, Core Values…. Vital • “Corporate Strategic Plan,” Short-term & Long-term • 3-Legged Financial Stool • Adopted Financial Policies on: • Debt-management • Reserves • Cash/Investment management • Purchasing authorization limits

7. Our Brutal Budget Facts • General Fund Budget is Weakest • Financial Climate Declining Fall 2006 • General Fund Revenues Drop from $30M to $19M(Approx. 33% in 2 yrs) • New Housing Permits Dropped 80% in Approx. 2 Year Period. • Capital Budget Reduced from $79M to $28M in One Year.

8. Developing Options • Requires candid, straight-forward and no sugar-coating of the seriousness of the issue. • Your expertise is needed in evaluation of political and technical options. • Requires honest discussion on-- • “Real Core Services” vs. • “Nice to have Service.” • “Start with the end in mind”

9. Good Decisions We Have Made • Property Tax for Fire and Safety approved May, 2007 • Our 3-legged stool of municipal finance. • Established buy-in early by using Budget Committee (a Council committee) • Restructured the organization to 2003 staffing level • Tied to development services and related support services • Reduced work-week (37.5 hours per week); 4-day work-week but with staggered schedules, 40-hours of service M-Th; • Salaries reduced 6.25% • Set aside extra-large cash reserves • Projected a 2-Year Financial “Recovery Plan”, • Extended forecasts out 5 years

10. Moving Forward • Make the tough decision quickly – do not delay • Stay positive, speak of things done right, portray bright future for your community. • Show appreciation for your community, council and staff. • Engage in reductions of staff early • review and plan prior to the fiscal year end. (Is easier to enforce at start of new fiscal year.) • STEP UP AND LEAD

11. Final word….. An Economist is a surgeon with an excellent scalpel and rough-edged lancet; who operates beautifully on the dead and tortures the living. Nicholas Chamfort A City Manager is a surgeon with an excellent scalpel and rough-edged lancet; who operates beautifully on the dead and tortures the living.

12. Questions?