The purpose of the long-term financial forecast called for in the charter is to ensure the city has the capacity to meet its financial challenges of today and in the future, while maintaining appropriate levels of service. It is simply a projection and it should provide a 5-year summary of revenue and expenditures and projected tax increases.
At the city council meeting last evening, it was apparent that the financial team had some heartburn by this provision of the charter. Why is preparing this forecast so challenging for them? If they don’t know how to create one, there is tons of resources to assist them. It is not uncommon for cities throughout the U.S. to have a 5-year plan and some cities have plans that go out 30 years. There are no excuses, please just do you job! The people of Fall River deserve insight into our future financial capacity.
The city is already creating a 5-year capital improvement plan. So, it just makes sense to integrate the capital improvement plan into a long-range plan that will help identify funding and gauge its overall impact, including the affect it may have on taxes and water/sewer rates.
The long-term financial plan should include input from city council members and department heads. Getting their buy-in serves to establish a solid foundation of goals, which can help the council efficiently evaluate annual budget needs. When presented properly, an established plan allows for continuity—and prevents a lapse in focus on key goals—as our city council usually changes every 2 years.
Financial management is an important variable used by bonding agencies in determining our city’s bond rating. Having a long-term financial plan in place speaks to the city’s knowledge of reserves, its commitment to future debt management, and its forward-thinking approach—all of which score points during the bond-rating process.
Taking time to prepare a long-term financial plan is key to our city’s future success. Planning is never a bad thing.
The people of Fall River deserve no less!