Fiscal Planning and Management

FISCAL PLANNING
AND MANAGEMENT
fiscal- usually refers to government finance
Management- is the function that coordinates the efforts of people

to accomplish goals and objectivesby using available resources
efficiently and effectively.
FISCAL PLANNING ANG MANAGEMENT
Some would argue that urban planning is effective only when it is

integrated with fiscal matters.
The basis for this belief is that most private and public undertakings
in the built environment are constrained by economic and fiscal
realities
THE FISCAL
finance is an integral part of the overall management and planning
function.
The relatively recent inclusion of fiscal planning in the larger context of
urban planning and local government finance has occurred largely
because of the increasing complexity and severity of financial problems in
local government and the growing trend to integrate the planning process
into the overall functions of local government management.
THE FISCAL CRUNCH

Local government are increasingly finding that the demand for public
goods and services exceeds the supply.
Increasing population, income, and urbanization, along with rising
expectations, have resulted in a need for more extensive local
government activity..
The depth and scope of public services has expanded dramatically in
recent decades, and it appears that this trend will continue over the long
run.
PLANNING AND FINANCE

There appears to be a general trend towards increased fiscal
management and planning in local government.
This can be seen in the historical development of the functions of
planning and finance.
Before world war 2, planning responsibilities resided in independent
commissions of the citizens, which were presumably free of political
influence
Planning was identified as a staff function of the mayor, manager, or city
council.
I.
CITY COUNCIL-serves as the legislative body
II. MAYOR-can fill several different position. He or she may serve as the
presiding officer of the council ( a weak mayor ), or as the chief executive
officer ( a strong mayor )
III. COUNCIL MANAGER-manager structure uses a city manager, who is
appointed by the council and/or mayor.
Local government finance developed in a quite different way. In the early

1900s there was very little actual financial management. The main
concen was to prohibit illegal spending.
Financial functions were distributed among several independent officials:
1. THE TREASURER
2. TAX COLLECTOR
3. AND CONTROLLER
As finance and planning become integral parts of the central

management function, planners and related professionals must fully
understand fiscal matter and financial personnel must learn to appreciate
the planning process.
MANAGEMENT
Planning and management may be viewed as the same process. That is,
rather than look at planning and finance as separate functions, the
planning and management process should be applied to all the functions
of local government, all of which have financial aspects.
Management is such a broad and general concept that precise definitions
are possible.
A. W. STEISS
Refers to management as
the art of getting things done involving
the direction, coordination, and control of resources to achieve some
purpose or objective
M. J. MUNSON
Describes management as that
which keeps the various activities of the organization coordinated and
continuously striving towards fulfillment of the organization internal and
external purpose
MANAGEMENT SYSTEM
Is an interrelated group of decision processes, the planning function is an
integral part of the management system not a separate element. Munson
uses the following categories ;
1.Strategic planning-involves the formulation group

overall goals and objective and selection of policies
that apply to the acquisition and expenditure of
resources.
2.Management planning-involves the formulation of
programs of activities that are design to accomplish
goals and objectives within policy constraints.
3.Operational planning- involves the conduct of
specific program tasks in order to affect objectives.
THE MANAGEMENT SYSTEM

STRATEGIC PLANNING
OBJECTIVES POLICIES
MANAGEMENT PLANNING
POLICY ANALYSIS
PROGRAM EVALUATION
PROGRAMS
OPERATIONAL CONTROL
PROJECT EVALUATION
TAKS
EVIRONMENT
THE FISCAL PLANNING SYSTEM

Is approached here as a subsystem of the overall process of management
as a series of specific fiscal activities that are symbiotically related to
individual element of the management process.
Basic economic research
involves the estimation of future levels of demand for

public goods
and services. The local government is the producer and the
citizen is the consumer. Therefore the fiscal impact of
alternative public policies depends heavily on the future
economic composition of the city.
Fiscal policy analysis
involves formulation and evaluation of alternative

fiscal policies and the estimation and evaluation of the
economic financial consequences of alternative general
policies.
LONG-RANGE FISCAL PLANNING

3 FUNCTIONS
1.It provides financial dimension to the comprehensive plan.

2.It identifies the sequence of actions required to carry out fiscal policies.
3.It generates the necessary inputs to the capital, service and revenue
programs.
SEQUENCE OF FISCAL PLANNING ACTIVITIES

Inventory of activities by category
-The inventory of activities is constructed from all existing and proposed activities
included in the comprehensive plan
Analysis of service standards, methods of operation and cost factors.
-After the inventory of activities is constructed or revised from the previous year, each
activity should be evaluated in terms of standards of service, methods of production and
supply, and unit cost factors. The objective is to select appropriate level of service and to
relate unit costs to output for existing and alternative methods.
Analysis of Analysis of Estimation of future expenditures and revenues
-The levels of expenditure for each year are usually estimated for future periods(5 -10
years)
Revenues are estimated in much the same way. Total revenues include taxes, user charges,
administrative fees, short-term investment returns, and other transfer.
A combined fiscal lookout and identification of problems

-Expenditures are projected for each category of activity, assuming changes
in expenditure bases and costs. Revenues are likewise projected, assuming
changes in the bases but not in rates.
Analysis of alternative solutions
Recommended set of fiscal actions, in sequence with the probable effects,
leading to a balanced budget and a sound of financial state
Capital, service and revenue programs
-are formulated to carry out the long-range fiscal plan.in other words,fiscal
programs translatet the fiscal plan into shorter range components(5 years
period with one-year increments)of the program activities of local government
THE CAPITAL PROGRAM
1.List and description of each capital project, including the purpose of the
project.
2.Estimation of the costs for each project over a five-year period
3.Source of funds for each project.
4.Corresponding service costs for each capital project.
5.Interralationships among projects, including physical, financial, and
timing.
6.Priority risk
7.Summary of the total capital program.
BUDGETING
-is an integral part of the fiscal planning process after the basic
economic research, fiscal policy analysis, long-range fiscal planning, and
programming have been completed.
-is often used to refer to the overall process of allocating resources as
well as to the preparation of specific documents.
THE BUDGET PROCESS

The budgeting process commonly involves four major activities:
1. Executive preparation
2. Legislative review, modification, and enactment
3. Executive implementation
4. Post audit
THE BUDGET CALENDAR

-Local government budget authority is set by state or law or local
government charters or both.
-This budget manual normally outlines several budget activities and a
budget calendar or cycle.
DEPARTMENTAL ESTIMATES
-The chief executive issues a budget memorandum to all department heads and to others
with expenditure responsibilities.
The memorandum includes the following items:
Anticipated fiscal policy- a summary of the overall fiscal situation, with policies that will affect
specific departments, such as changes in total or particular revenues and expenditures or
changes in personnel policies and salaries.
Capital and service programs- a summary of anticipated activities over a five- or six-year
period, including continued, discontinued, and/ or new programs, with expenditure and
revenue estimates.
Departmental activity inventory- an activity inventory for each department organized by
budget category, including projected service volumes, service standards, methods of
operation, and cost factors.
Request for departmental budget request- a standardized set of forms, designed to facilitate
executive review, which is consistent with budget and accounting format.
EXECUTIVE REVIEW
-is done to balance total required expenditures with total expected
revenues.
DOCUMENT PREPARATION
-Once the executive budget has been formulated, it is submitted to the
legislative body and the general public. Budget documents include a
budget message and summary, a detailed operating budget, a capital
budget, and various ordinances.
Operating
Capital Budget
LEGISLATIVE REVIEW
-The chief submits the budget documents to the legislative body, with a
verbal presentation of the budget message. Copies are made available to
the press, libraries, organizations, and interested groups and individuals.
Public hearings are then scheduled and advertised to provide additional
informatin and criticism. After the public hearings and reviews, the
legislative body may make changes in any part of the budget.
ADOPTION
-Once the final budget is formulated, the legislative body adopts it by
resolution or ordinance. If changes have been extensive, the entire adopted
budget is reprinted; if not, only the changes are printed and attached. The
adopted budget is sent to the chief executive for implementation.
END OF THE REPORT

Fiscal Planning and Management

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What are the main steps involved in the budget process?

What are the main steps involved in the budget process?

What are departmental estimates and what information do they include?

What are departmental estimates and what information do they include?

FISCAL PLANNING

fiscal- usually refers to government finance

Management- is the function that coordinates the efforts of people

FISCAL PLANNING ANG MANAGEMENT

Some would argue that urban planning is effective only when it is

THE FISCAL CRUNCH

PLANNING AND FINANCE

CITY COUNCIL-serves as the legislative body

Local government finance developed in a quite different way. In the early

As finance and planning become integral parts of the central

1.Strategic planning-involves the formulation group

THE MANAGEMENT SYSTEM

THE FISCAL PLANNING SYSTEM

Basic economic research

involves the estimation of future levels of demand for

Fiscal policy analysis

involves formulation and evaluation of alternative

LONG-RANGE FISCAL PLANNING

1.It provides financial dimension to the comprehensive plan.

SEQUENCE OF FISCAL PLANNING ACTIVITIES

A combined fiscal lookout and identification of problems

THE CAPITAL PROGRAM

THE BUDGET PROCESS

THE BUDGET CALENDAR

The memorandum includes the following items:

END OF THE REPORT

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