FY2016-17 Budget Final

CITY OF DESOTO SOARING FOR EXCELLENCE

OFFICE OF THE CITY MANAGER

July 22, 2016

Honorable Mayor and City Council Members:

The proposed fiscal year (FY) 2017 budget continues to foster a conservative doctrine that was introduced nearly six (6) years ago. By utilizing the aforesaid budgeting methodology, our municipality has been able to consistently thwart a tax rate of .8600 that was projected by the former administration for FY2014. Fortunately, the clarion call for deific financial intervention was graciously answered by a newly formed body of local government professionals who were hired to serve in several key leadership positions. These industrious individuals in collaboration with tenured Executive Leadership Team members were able to strategically dissect and improve an outmoded structure for organizational management, as well as re-engineer an antiquated model for developing sustainable FY budgets. This innovative ideology of thought used for budgetary preparation and its meticulous management ushered in unprecedented achievements during a period when property valuations were rapidly decreasing. Although there was not a textbook panacea for this matchless time in history, the Executive Leadership Team was able to tactically analyze their departmental operations and historical expenditures. These proactive measures were indisputably responsible for undermining an inevitable succession of multi-year tax rate increases. Though this was considered a monumental accomplishment for the Executive Leadership Team, there were still remnants from past financial decisions that were in desperate need of being rectified and restored. Over the years and prior to my arrival in 2009, the City issued a significant amount of debt to finance numerous capital improvement projects and other internal programs. In most settings, investments of this nature for these particular ventures are thoroughly studied to determine their overall fiscal impact on future budgets. Yet, in this case, these visionary ideas were funded based upon the future growth and development of this community without a realistic financial plan to support debt service payments. By utilizing this approach toward managing debt, the City was left in a vulnerable state in terms of being dependent on an unpredictable economy for revenue. This process of hedging debt service expenditures on prospective revenues came to a screeching halt with the worldwide economic downturn in 2008. During my initial evaluation of the adopted FY2009 budget as an Assistant City Manager candidate, it became relatively obvious as an outsider that the financial health of this City was in serious jeopardy. My theoretical perspective on this matter was formulated by studying the ascending patterns of certified taxable

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