Strategic Business Plan Summary by pbu14307


									               Strategic Business Plan Summary

Irvine is a great place to call home, raise children, do business, relax, and enjoy life. The City provides a
                                              comprehensive and wide-range of services to the community.
                                              The City is renowned as the nation’s largest master-planned
                                              community and as one of the nation’s safest cities.

                                             Through its Strategic Business Plan (SBP), Irvine’s City
                                             Council seeks to assure that this high quality of life endures
                                             and improves as the City ages and doubles in size.

                                             The Strategic Business Plan was created in l994 as a way to
                                             help the City Council assess the effect of today’s decisions
                                             on the City’s future quality of life. As a blueprint for the
                                             City’s future, the Strategic Business Plan defines the City
                                             Council’s goals and evaluates the City’s financial capacity to
                                             achieve them. The strategic goals set priorities for City
                                             operations and the annual budget.

                                            The SBP is the City of Irvine’s comprehensive plan to
                                            address its long term business needs. Strategic business
                                            planning is a team effort that builds consensus on a future
                                            direction. Strategic business planning is a tool used to
                                            manage today’s results with tomorrow’s objectives. The
technique is a long-term, future-oriented process of assessment, goal setting, and strategy building that
establishes an explicit path between the present and a vision of the future. The process relies on careful
consideration of an organization’s capabilities and leads to priority-based resource allocation. It is a
disciplined effort to produce fundamental decisions and actions that shape and guide what an agency is,
what it does, and why it does it.
The City provides a comprehensive and wide-range of services to the community. The City Council
reviews the Strategic Business Plan to evaluate the previous year’s accomplishments, as well as to set
budget priorities for implementing City services and the strategic goals for the coming fiscal year. The
Strategic Business Plan’s five-year financial projections form the basis for allocating annual resources to
services and strategic goals. When financial resources are not available to fund all goals and objectives,
then core services, as defined in the business plan, are funded first.
Strategic Goals
The City Council’s goals are based on the understanding that investments of financial, physical, and
staffing resources made today assure that the community’s quality of life is preserved and enhanced in the
future. Therefore, City Council priorities are to assure that the City is clean, well maintained and safe,
and that no visible disorder or deterioration ever takes hold. The City Council wants to assure a strong
economic base and prosperous business climate. The City Council also wants to assure that the
government organization, that provides services to the community, is responsive and cost-effective.

 FY 2002-03 Budget                                                                           SBP Page 1
               Strategic Business Plan Summary

The City Council’s goals are:

Maintain And Enhance The Physical Environment
                •   The Fight Against Development of the El Toro Airport and Expansion of Musick Jail
                •   Implementation of The Great Park
                •   Code Enforcement
                •   Maintenance of Streets, Landscape and Facilities
                •   Rehabilitation of Streets, Landscape and Facilities
                •   Graffiti Removal

Promote A Safe And Secure Community
                          •     Community Policing and Problem-Solving
                          •     Meeting Emergency Response Standards
                          •     Development of a Wide Variety of Recreational Opportunities for Families
                          •     Prevention of Crime Through Community Programs and After-School
                                Programs that Support Youth
                          •     Increasing Community Involvement

Promote Economic Prosperity
                      •       Implementing the Economic Development Plan·
                      •       Expansion of the Revenue Base·
                      •       Implementing the Capital Improvement Plan
                      •       Reducing the Cost of Doing Business in Irvine

Promote Effective Government
                     •        Assuring Flexible, Responsive and Cost-Competitive Services
                     •        Implementing the Technology Plan
                     •        Developing and Meeting Measurable Service Standards
                     •        Assuring and Evaluating Customer Satisfaction

 SBP Page 2                                                                       FY 2002-03 Budget
                Strategic Business Plan Summary

Baseline Five-Year Fiscal Forecast
Table 1, which was prepared in the Fall of 2001, illustrates the overall recurring revenues and
expenditures for the baseline five-year forecast for the General Fund portion of the City’s operating
budget. Presently, the City is reviewing the Strategic Business Plan, as part of its annual evaluation. The
baseline forecast prepared in the fall of 2001 shows the City’s general fund operating budget with positive
balances in the first two years and turning negative in the last three years. The baseline forecast reflects a
slowing development trend coupled with energy, insurance infrastructure inventory increases starting in
FY 2003-2004. As such, recurring expenditures advance at a faster rate than recurring revenues (i.e., 4%
vs. 3% annual average increase for expenditures and revenues, respectively).
                                                 Table 1
                               Total Revenue and Expenditure Comparisons
            Totals              FY 2002/03 FY 2003/2004 FY 2004/2005 FY 2005/2006 FY 2006/2007
                Total Revenues $101,230,972 $106,631,765      $111,732,758  $117,230,577 $118,945,523
                   Total Costs    $99,599,606 $105,924,788    $112,093,342  $118,437,088 $121,981,614
          Difference            $1,631,366     $706,977      ($360,584)    ($1,206,512) ($3,036,091)

Table 2 illustrates projected revenues and expenditures for the City’s General operating budget by major
revenue category and by departmental unit, respectively.
                                                      Table 2
                                        Revenue and Expenditure by Category
     REVENUE SOURCES                   FY 2002/03     FY 2003/2004    FY 2004/2005    FY 2005/2006    FY 2006/2007
                      Property Tax      $14,109,160     $15,178,927     $16,402,152     $17,707,281     $18,921,044
                          Sales Tax     $46,199,902     $48,857,974     $51,345,946     $53,845,921     $55,527,503
                  Tran. Occup. Tax       $7,287,972      $7,591,086      $7,903,894      $8,231,479      $8,568,546
                   Utility User Tax      $2,882,705      $3,017,587      $3,157,477      $3,304,699      $3,456,937
                     Franchise Tax       $2,752,355      $2,881,137      $3,014,701      $3,155,267      $3,300,621
                          Cable TV       $1,027,074      $1,054,646      $1,116,397      $1,160,810      $1,186,179
                 Doc. Transfer Tax       $1,289,444      $1,387,210      $1,499,002      $1,618,278      $1,729,205
                  Business License         $737,628        $772,142        $807,937        $845,608        $884,563
                 License & Permits         $197,415        $201,757        $209,973        $217,355        $221,629
                    Other Agencies       $7,366,541      $7,528,580      $7,835,147      $8,110,617      $8,270,105
                      Fines & Fort.      $2,756,315      $2,830,392      $2,913,629      $2,998,202      $3,049,953
                          Dev. Fees      $8,678,472      $9,284,132      $9,290,722      $9,628,921      $7,324,472
                  Comm. Ser. Fees        $4,555,589      $4,655,796      $4,845,382      $5,015,737      $5,114,367
                     Miscellaneous       $1,390,400      $1,390,400      $1,390,400      $1,390,400      $1,390,400
        Total Revenues                $101,230,972    $106,631,765    $111,732,758    $117,230,577    $118,945,523
       EXPENDITURES                   FY 2002/03      FY 2003/2004    FY 2004/2005    FY 2005/2006    FY 2006/2007
             City Manager's Office       $5,235,355      $5,531,225      $5,859,417      $6,190,909      $6,364,333
            Administrative Services      $5,828,350      $6,175,109      $6,553,312      $6,936,588      $7,142,242
           Community Development        $11,630,093     $12,706,449     $13,078,221     $13,381,611     $11,892,790
              Community Services        $18,181,196     $19,920,422     $21,456,834     $22,969,853     $24,223,750
                     Public Safety      $33,190,666     $35,033,677     $37,441,029     $40,067,443     $42,282,965
                     Public Works       $17,852,534     $18,680,944     $19,716,235     $20,693,047     $21,660,217
                Non-Departmental         $7,681,412      $7,876,962      $7,988,293      $8,197,638      $8,415,317
       Total Expenditures             $99,599,606     $105,924,788    $112,093,342    $118,437,088    $121,981,614

 FY 2002-03 Budget                                                                                    SBP Page 3
                 Strategic Business Plan Summary

Strategic Goals Five-Year Fiscal Forecast
Since the City started its Strategic Business Plan process in 1994, many of the strategic goals’ costs have
been incorporated into the City’s annual budget and the baseline five-year forecast. Examples include
funding increases for landscape maintenance due to the implementation of the Landscape and Lighting
Assessment, and funding for the implementation of the Technology Plan. Table 3 illustrates the costs to
fund additional strategic goals beyond the City’s baseline forecasts that fund ongoing service
requirements. As such, the combined estimated expenditures exceed projected revenues from $3.9
million in the first year to $8.9 million in the fifth year. The majority of the strategic needs funding
requirements are for rehabilitation of City infrastructure such as arterial and local streets, traffic signals,
landscaping, and public facilities.

                                                           Table 3
                                               Strategic Goals’ Fiscal Forecast
      Funding Requirements                FY 2002/03      FY 2003/04      FY 2004/05      FY 2005/06      FY 2006/07
         Operating Budget Revenues
                            (Projected)   $101,099,562    $106,628,052    $111,528,861    $117,052,859    $118,485,679
      Operating Budget Expenditures
                            (Projected)    $99,599,606    $105,924,788    $112,093,342    $118,437,088    $121,981,614
      Operating Budget Fund Balance
              Reserved For SBP Needs
                           (Projected)      $1,499,956       $703,264        ($564,480)    ($1,384,230)    ($3,495,935)
         SBP Expenditures
                     Strategic Goal:
             Maintain and Enhance the
                Physical Environment        $3,572,843      $3,069,622      $3,121,127      $3,180,757      $3,287,272
                     Strategic Goal:
         A Safe and Secure Community         $300,000        $300,000        $300,000        $300,000        $300,000
                     Strategic Goal:
                  Economic Prosperity        $160,540        $316,032        $308,641        $358,957        $360,459
                     Strategic Goal:
               City's Business Strategy     $1,429,234      $1,396,531      $1,338,110      $1,475,572      $1,467,072
       Total SBP Expenditures               $5,462,617      $5,082,185      $5,067,877      $5,315,287      $5,414,803
       Unfunded SBP Needs                  ($3,962,661)    ($4,378,922)    ($5,632,358)    ($6,699,516)    ($8,910,738)

Fiscal Evaluation Of The Capital Improvement Program
In conjunction with the City’s annual Strategic Business Plan and budget process, the City utilizes a
General Plan level fiscal model to forecast and evaluate both short-term and long-term revenue and
expenditure patterns of the City. The City’s fiscal model is based on the City’s adopted General Plan and
the current annual budget. The fiscal model is a relationship model, not an economic model. The model
links land use and infrastructure data to municipal revenue and expenditure patterns. The model measures
the fiscal impact due to changes in revenue sources, expenditure patterns, land use and infrastructure

For example, if the annual street maintenance budget is $1,000,000 and the total lane miles being
maintained are 1,000 then the model’s expenditure factor for lane mile maintenance would be $1,000 per
year. If the Capital Improvement Budget proposes to increase the City’s infrastructure by adding ten
additional lane miles to the City’s street inventory next year, the model will forecast an increase in

 SBP Page 4                                                                                    FY 2002-03 Budget
               Strategic Business Plan Summary

expenditures of $10,000 starting in the year that the lane miles are added to the City’s infrastructure. As
such, as the Capital Improvement Program builds new infrastructure, future maintenance expenditures are
folded into the model’s baseline fiscal forecast. This system allows the City to measure and monitor
subsequent expenditure requirements against future revenue projections.

Additionally, the first of the City’s four strategic goals noted previously emphasizes the maintenance and
enhancement of the physical environment (i.e., prevention of deterioration). The City places a high
priority on ensuring that all streets, landscaping, and facilities are maintained is such a manner that
deterioration of the City’s infrastructure and costly rehabilitation efforts are minimized or avoided. In the
early 1990s, the City worked diligently to complete all deferred maintenance projects identified at that
time. A comprehensive infrastructure maintenance schedule was also developed to avoid costly deferred
maintenance issues in the future. Scheduled annual maintenance costs are included in the Strategic
Business Plan’s baseline five-year fiscal forecast and updated annually. Based on that five-year schedule,
the annual CIP budget funds the first year’s projects including new construction and rehabilitation
endeavors. Because the City is current in its long-term maintenance and rehabilitation endeavors and
does not have a backlog of deferred maintenance and rehabilitation projects, long-term deferred
maintenance and rehabilitation costs are avoided.
The baseline five-year fiscal forecast shows the City’s general fund operating budget with positive
balances in the first two years and turning negative in the last three years. The baseline forecast reflects a
slowing development trend coupled with energy, insurance, and infrastructure inventory increases starting
in FY 2003-2004. When the costs of implementing additional strategic goals are added to the operating
budget, the forecast budget surplus quickly turns negative all five years. (The combined estimated
expenditures exceed projected revenues from $3.9 million in the first year to $8.9 million in the fifth
year.) This forecast illustrates that the City must continue to set priorities for service delivery while
striving to accomplish additional strategic goals.

 FY 2002-03 Budget                                                                            SBP Page 5

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