Annual Budget and 10-Year Financial Plan
Annual Budget and 10-Year Financial Planning Process
We develop projections of revenue and expenditure over a 10-year period for all major funds of the City, including the General Fund, the Internal Services Funds (ISF), the Enterprise Funds, the Redevelopment Agency funds, and the Capital Improvement Program. The projections indicate all projected sources of revenue and all projected expenditures, including salaries, benefits, materials, services and capital improvement projects (CIP). As a principle, the Enterprise Fund programs are self-supporting, with those using the services paying user fees to support them. Where there is a limited public benefit in providing such services, fees are collected to cover a large portion of program costs.
The financial plans are revisited every year by Staff who reviews the assumptions that influence the projections, including CIP inflators, Sales Tax, Property Tax, Vehicle License Fee, Transient Occupancy Tax, fees and charges, and projections on the condition of the overall economy. Each year, all the ingredients that go into the plan are updated and adjustments are made as necessary.
What looks healthy in the short term may not prove to be supportable over the long term when planning factors are considered. Where problems in funding the 10-year period are identified, strategies are developed ahead of time, to make necessary adjustments. Re-allocating resources by shifting resources from programs of lower priority to higher priority is also considered. Since the organization began 10-Year Financial Planning, financial stability has been realized and maintained.
Ensuring economic stability for public resources
10-Year Financial Planning is a fiscal management approach adopted by the City of Concord to realize our Vision as "trustworthy guardians of the public's resources" and our Mission to be a "cost-effective" government. Most importantly, it has been used to attain financial stability.
The 10-Year Financial Planning approach requires us to develop projections of revenue and expenditures over a 10-Year planning period. Each year City staff reviews the assumptions, makes adjustments as necessary and updates all the ingredients that go into the plan, on a rolling 10-year basis.
The 10-Year Financial Plan is a very useful tool for developing strategies to effectively meet community goals and for building the economic stability of the City. In a world of shrinking revenues and increasing demands of service, one of our major challenges is to attain financial stability over the long term. The 10-Year Financial Plan proves itself to be an effective tool in sustaining financial stability.
Financial planning enables us to foresee potential problems early, giving the City time to respond before a problem develops. It enables us to determine whether we can support today's decisions tomorrow, or if we can support future projects and their operating and maintenance costs. We need to determine if we can continue to afford what we presently do, and how we do it, or make adjustments early to avoid problems later. 10-Year Financial Planning allows us ample time to make adjustments to avoid problems later by either cutting costs or exploring other possible resources.
10-Year Financial Planning helps increase the accountability to stakeholders by communicating explicitly and clearly the financial situation of the City over a 10-year period. It makes communicating financial decisions to the public much easier. For example, it would be possible to predict the need for fee adjustments and to announce them in advance. Displaying periodic needed fee increases in the 10-year plan to support added projects and programs indicates to the public that a well thought out process is in place to raise needed revenue versus what the public may perceive as a knee jerk reaction to unmet, unplanned needs.
Planning in advance discourages piecemeal decisions. The 10-Year Financial Plan is a useful means for policy makers to develop and maintain a long-term vision. It enables Council to think long term instead of merely their terms of office. The 10-Year Financial Planning approach provides financial policy continuity.