1. Budget Strategies for Local Government Horatio Porter Budget Officer City of Fort Worth 1

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3. Fort Worth 3 1873

4. Fort Worth - 2009 4

5. City of Fort Worth 5 FY2010 Budget$1.2B Staff Size6425 Employees Organization18 City Depts Population 720,000 Residents 5

6. Major Attractions Museum District Texas Motor Speedway Cowboys of Color Rodeo Bass Performance Hall Historic Stockyards District Colonial Tournament Zoo 6

7. POPULATION GROWTH 1950-2030 Sources: U.S. Census Bureau, 1950-2000; NCTCOG, 2001-2030. 720,250 7 17 th Largest City in America

8. Expenditures Increasing Contract Costs Infrastructure needs Healthcare / pension costs Service demands Revenues Declining Property values Sales tax Interest income Construction activity Gas well drilling 8 The Recession hit Fort Worth

9. 5 Year Forecast General Fund 9 Gap = $59M 9

10. Bucket Approach: 10

11. Bucket Descriptions Bucket A – Service Reductions Bucket B – Citywide Initiatives Bucket C – Organizational Changes Bucket D – Enhance Revenues 11

12. Closed 6 of 7 swimming pools Reduced hours at community centers Eliminated one Code Compliance District Reduced mowing of parks, medians and right of way 12 Bucket A – Service Reductions

13. Bucket B – Citywide Initiatives Instituted 8 Furlough Days Revised funding for healthcare benefits Reduced funding to Ambulance Authority Reduced purchases for city vehicles Reduced misc. discretionary spending 13

14. Moved Departments / Functions out of the General Fund into Enterprise Funds Accelerated Outsourcing Efforts 14 Bucket C – Organization Changes

15. Assessed payment to Enterprise Funds Suspended our Policy on Gas Well Revenues Hired a collection agency to pursue delinquent court fines General fee increases (Library, Parks, Meters) 15 Bucket D – Enhance Revenues

16. Overview of FY2010 Budget Recommendations Service Reductions Organizational Changes Citywide Initiatives C B Enhance Revenues $59 million budget shortfall A $16 m $25 m $3 m $15 m D 16

17. Updated 5 Yr Financial Forecast General Fund 17 Gap = $25M Balanced

18. Observation June 1, 2009 January 2006, North American International Auto Show – Speaker: Jerry York Key points: 1.Be realistic about revenue expectations 2.Cut product offerings. Offer fewer and better products 3.Use a “clean sheet of paper” approach. No sacred cows 4.Make tough decisions. If something isn’t core, sell or close it. 5.Time is of the essence. 18

19. GM vs Ford 1.Be realistic about revenue expectations A.GM – focused on sales volume, selling cars at a loss B.Ford – reengineered operations, focused less on market share 2.Cut product offerings. Offer fewer and better products A.GM – Closed 1 brand (Oldsmobile) B.Ford – Shifted focus from SUVs to small cars 3.Clean sheet of paper, no sacred cows A.GM – No material changes in production B.Ford – Cut material costs, made plants more flexible 19

20. GM vs Ford 4.Make tough decisions, sell it or close it A.GM - Worked on green technology, hydrogen cars and solar panel (but maintained 60 models across 8 brands) B.Ford – Sold Jaguar, Land Rover and Aston Martin (generated cash) 5.Time is of the essence A.GM – Almost $50b in bailouts, filed bankruptcy 3 years after speech B.Ford – Solvent, improving quality and product offerings 20

21. Implication / Application 1.Be realistic about revenue expectations Deal with the reality of a flat revenue stream. 2.Cut product offerings. Offer fewer and better products Determine what services you will provide and be the best at delivering those offerings 3.Clean sheet of paper, no sacred cows Every dept should be critically evaluated and challenged to improve 4.Make tough decisions, sell it or close it Programs that are not making a measurable impact should be eliminated 5.Time is of the essence Act now 21

22. City of Fort Worth Simplified Budget Process Identify Priorities Inspect Performances Invest Resources 22

23. City of Fort Worth Simplified Budget Process Priority What services should we provide What programs do we offer What business are we in Performance Are our residents satisfied Are our programs effective Are we getting better at delivering services Resources Fund priority programs Fund activities that are producing results 23

24. Questions 24