Smooth government means good planningPublished 9:13am Wednesday, January 9, 2013
Column: City View, by Chad Adams
The city recently wrapped up our 2013 budget approvals, which included a number of new and enhanced planning and analysis tools. The primary goal of using these tools is to better project our future needs and resources to provide city services. The Albert Lea City Council advocated in the summer of 2011, upon my hire to the community, that creating a long-term sustainable financial plan was a top priority. We have now laid the foundation and are achieving that goal for the city.
One of the tools that we have used in the past is a five-year capital improvement plan, or CIP. We have recently enhanced the CIP to include more detail on capital needs and how they will be funded.
For example, instead of illustrating the need for a capital project to be funded through general taxpayer dollars, we are now specifically indicating if those dollars will be funded via the city’s annual general fund budget (tax dollars), debt service or equipment certificates (tax dollars), or use of fund reserves (also tax dollars). Identifying the specific type of tax dollar revenue will create a more effective and transparent strategy on how we are using such tax dollars annually, but also for several years into the future. The details in the CIP also better allows the City Council to incorporate their philosophy on willingness to bond for projects, use existing or increase tax dollars, and the amount of our fund reserves we should be using to fund the projects.
Another enhancement to the CIP is more long-term planning beyond five years. While many projects have been included in the CIP as “beyond five years,” we are now beginning to identify details for 10 years, which will again include specific sources of revenue.
We also recently updated a rate analysis for both the city’s water and sanitary sewer utilities. While we already were aware of the water utility’s insufficient low cash reserve, we created the plan to determine the amount needed to raise rates today and for the next several years to meet basic infrastructure needs. The sewer utility is in better condition and the rate analysis once again help us identify a plan for expected rates over the next several years. The rate increases in the water utility and sewer utility for 2013 directly reflect the rate analysis and future needs.
The one new tool that we used for the 2013 budgets is a financial management plan, or FMP. In short, the FMP brings together all the items noted above, which include the general fund operating needs, capital infrastructure needs, equipment needs, fund reserves, revenue sources and includes them in a 20-year plan.
The FMP is a great working tool and will be used as a guide to help the departments, city manager and council make financial decisions in the future.
The city has also been working the past several months on preparing for a new financial software system that will improve financial transaction and accounting efficiencies, provide better analytical and available data to departments, and provide stability in a system compared to the city’s antiquated and nearly obsolete system, which requires far too much manual entry and troubleshooting. Finance Officer Terry Berg and finance staff have been working on the change, and all departments will be affected by the improved system and change. The new system and accompanying internal procedures will be implemented fully beginning this spring and will deliver improved customer service to our residents.
While there will always be anomalies to budgeting and long-term financial forecasting (i.e. local government aid), the tools and systems we have implemented will mitigate the large increases in taxes and utility fees in the future as well as preserve our core community services. Benjamin Franklin once stated, “By failing to prepare, you are preparing to fail.”
The city recognizes the value of good planning, and that’s why “planning” is identified as one of our organization’s key value statements: “We will make decisions that are based on the entire community and future generations.”
Chad Adams is the city manager for Albert Lea.