HomeMy WebLinkAboutGrowth Policy Finance Letter
May 11, 2020
Dear Planning Board,
There has been some concerns regarding the City’s financial planning in regards to the Growth Plan. The
City goes to great lengths to plan for many financial scenarios. Forecasting and financial modeling are
foundations of budgeting and financial planning in government. Depending on the revenue stream,
program or business function we use short‐term or long term forecasting. We use these models to build
the five‐year Capital Improvement Plan, the three year Staffing Plan and the annual Budget.
Throughout the year we monitor and adapt to actual results, changes in the economy, program
performance or other factors not known during planning. Monthly reviews and the quarterly report
(presented to the Commission and published to our website) help us review our progress and helps us
adapt our future forecasts to modify and build the next years’ plans and budget.
We take in account the many plans throughout the City while building our financial plans from the
Transportation Master plan, to the Growth plan, to the Commission’s Strategic Plan. We have to look at
the City’s funds with different lenses and use the various plans, service levels, and revenue generation
abilities that impact them.
Some forecasting and modeling is not published in any financial documents as described above and are
more for internal planning purposes. Some scenarios and forecasting are provided to the Commission for
policy decisions as well. Recent economic events with COVID‐19 we had to adapt our financial models and
also model different types of recession and recovery in order to make short and long term decisions. This
is a good example on why financial modeling and forecasting needs to be nimble and updatable.
I understand there has been some thoughts around financial modeling being in the growth plan. Based on
how we have to adapt and update financial models, the growth plan is not the place for our financial
planning to live since it’s not intended to be updated often and it would be one more area for finance to
update. Rather, the City’s financial modeling should live in the finance documents and plans, where they
can be updated and modified as needed and be in one location to be accessed by the stakeholders.
Best regards,
Kristin Donald
Finance Director
City of Bozeman