Southeast Michigan Council of Governments

1. Fiscal Assessment Process Tool for dealing with municipal fiscal challenges Webinar Presentation by Dave Boerger - SEMCOG & Jaymes Vettraino, City Manager, Rochester February 15, 2011 Southeast Michigan Council of Governments

2. Webinar Logistics For audio dial the 800 number emailed & enter code For questions, type into the text box on the right hand side of your screen. Each will be answered at the end of the webinar For technical help, call Buzz Brown at 248-217-7979 Copies of this presentation will be emailed after the webinar Please compete a webinar evaluation that will also be emailed The webinar will be archived on the SEMCOG website

3. Agenda • Overview - SEMCOG’s member services • Fiscal Assessment Process • Case Studies • Wrap-up • Q&A

4. SEMCOG Who? 161 member local governments Assist local governments deal with issues Plan for common needs Recognize regional opportunities. Facilitate cooperation among local governments for mutual benefit. Advocate for changes in public policy

5. Programs and Services

6. SEMCOG Member Services • How to make your community run more efficiently? • Local government restructuring/budgeting assistance • Local government collaboration & shared services • How to make my community greener? • Stormwater management • Low impact development • How to make my community more desirable? • Economic development • Combating foreclosures • Walkable/ bikeable/road safety audits • Traffic access management • How to become a better leader • SEMCOG Universities & outreach workshops • SEMCOG delegate/task force member

7. Metro-Area Home Price Indices Source: S&P/Case-Shiller Home Price Indices

8. Yearly Percent Change in SEV and Taxable ValueWith Preliminary Forecasts, 2011-2013 Southeast Michigan Source: SEMCOG

9. Impact On Communities • Municipal revenues dropping 20-30% • Government services being curtailed • Office hours restricted/furlough days • Pay and benefit concessions • Layoffs • Capital expenditures cut/infrastructure deteriorating • Tax and fee increases • Stress prevalent throughout organization

10. Contrasting Practices Effective Ineffective • Hidden agenda • Ineffective management • NIH - not invented here • Razor approach/across- the-board cuts • Stops/starts • Poor fiscal skills • Fragmented board • Denial • Stakeholder input solicited • Full disclosure/transparency • Willingness to collaborate • Performance measurement • Benchmark gaps identified • Cultural change • Financial planning • Dynamic leadership • Communicate - communicate

11. Bottom Line – Major Deficits & Unsustainable Cost Structure

12. Fiscal Assessment Process • On-site evaluations by a team of SEMCOG consultants • Preferred timing - just prior to budget preparation • Detailed financial analysis performed in advance • Kick off meeting with administrators and department heads • Breakout sessions with each department head and key staff • Observe and listen as departmental challenges are described • Offer ideas other communities have successfully implemented • Dialog about potential budgetary solutions • Document discussions on flip chart • Reconvene entire group to discuss findings/recommendation

13. Fiscal Assessment Factors • Free-of-charge for member local governments • Typically a half to full day session involving 6-9 departments • Written documentation provided that can be shared with staff & elected officials • Presentation to elected officials if desired • Follow-on implementation & budgetary help available from consultants

14. Case Studies • Jaymes Vettraino, City Manager, Rochester, will provide more input on the process and how the recommendations are being applied throughout the various departments in the City • The City of Rochester proactively modified much of its operation since fiscal year end 2007 • In 2010, the City asked to participate in the SEMCOG Fiscal Assessment Process to identify additional structural changes to further reduce expenditures or enhance revenue • Rochester’s fiscal year is July-June

15. Case Study – Rochester • Goal was to identify ideas to reduce costs or enhance revenues • Budget targets were developed by department heads in advance of the Assessment • Department heads were challenged to meet budget by exploring new ideas with SEMCOG’s consultants • Encouraged Department heads to consider the next budget earlier (November) • Independent input from SEMCOG was beneficial • Best practice ideas • Validation of changes implemented or being planned • Comparable benchmark data provided to help focus the efforts

16. Ideas Validated - Rochester • Modify health care plans to reduce cost • Cross charge non-General Funds appropriately for services provided (DDA, Water/Sewer) • Numerous collaborative efforts: Library , Recreation, Senior Center • Shift from infrastructure replacement model to an infrastructure maintenance model • Bidding of all services

17. General Fund Adjustments – Rochester

18. Ideas Being Pursued – Rochester • Develop a sound Fund Balance Policy and Identify (and fund) obligations • OPEB • Pension • Tax tribunal risk • Consolidate departments • Early consideration of POAM contract • Cost recovery from special events

19. Ideas Being Pursued – Rochester • Expand the City’s provision of contracted services • Police (dispatch and lock-up facilities) • Plowing non-City publicly owned parking lots • Medical transport services • Services to the Downtown Development Authority • Invest in new water meters • Full list of ideas to be provided via email with this presentation

20. Tools & Resources @ www.semcog.org

21. Q&AWebinar Evaluation • Type your questions into the text box on the right hand side of your screen • Complete and return a webinar evaluation that will be emailed along with this presentation shortly after the webinar • The webinar will be archived on the SEMCOG website within the week

22. For additional information or to arrange a fiscal assessment, contact: Dave Boerger SEMCOG boerger@semcog.org 248-875-7120 www.semcog.org Southeast Michigan Council of Governments 535 Griswold St., Suite 300 Detroit, MI 48226