1 / 6

Financial Management of the Fire Service

91-406 : Week 5. Financial Management of the Fire Service. Revenue forecasts. Steps in revenue estimating (keep it simple!) Last year’s budget + % increases + inflation Issues: Understanding tax forecasts What State will pass back to local governments problematic

gersemi-hannes
Télécharger la présentation

Financial Management of the Fire Service

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. 91-406 : Week 5 Financial Management of the Fire Service

  2. Revenue forecasts • Steps in revenue estimating (keep it simple!) • Last year’s budget + % increases + inflation • Issues: • Understanding tax forecasts • What State will pass back to local governments problematic • What grant monies will be garnered in the coming FY • How new user fees may change the forecast • How can FD budget mgr. help? • Advise City budget mgr. of any new strategies being implemented at FD • Be aware of possible changes in last year’s budget that could affect the forecast – communicate those to the City budget mgr.

  3. Revenue forecasts • Forecasts don’t affect fire department operations until… • Revenue shortfall creates budget cuts • Budget cuts create loss of services, or… • Conflict occurs over which services should be cut • Personnel loss: layoffs, furloughs, open positions • Equipment replacement: equipment ages, money for replacement is cut • Training: lost training time, lost access to particular training (out of town training, specialty training) • Prevention programs: fewer inspections, less public education

  4. The meaning of budget cuts… • Loss of a Chicago fire station: • 24 personnel cut = $820,000.00 • Savings on fringe benefits (@25%) = $205,000.00 • Ongoing expenses cut (heat, power, supplies, training, etc.) = $154,000.00 • Sale of building & equipment = $2,680,000.00 • Total savings = $3.9 million

  5. Why revenue forecasts affect operations • Overstated revenue at beginning of budget year creates false assumptions and poor decisions • More personnel hired than affordable • Supplies purchased upfront because of “rich” budget • Overtime expenditures may be increased as supervisors lose some control of OT dollars • Mid-year adjustments based on unforeseen, lower revenues • Overtime cuts • Training cuts • Delayed expenditures for new equipment • That apparatus that was scheduled to be purchased in the 2nd half of the year – now it may be delayed!

  6. References • Mikesell, J. L. (2011). Fiscal Administration: Analysis & Applications for the Public Sector. (8th ed,). Wadsworth. • Chen, G.C; Forsythe, D.W.; Weikart, L.A.; Williams, D.W. (2009). Budget Tools: Financial Methods in the Public Sector. CQ Press.

More Related