Financial Update PresentationBoulder City Council Study Session
May 24, 2022
Financial Update & 2023 Budget Outlook
Finance Department
Agenda
Finance Department| Financial Update & Budget Outlook
1.CU Econometric Forecast Overview
Special Guests:
Richard Wobbekind (Associate Dean for Business & Government Relations, Senior
Economist and Faculty Director of the Business Research Division at the University of
Colorado Boulder)
Brian Lewandowski (Executive Director of the Business Research Division at the
Leeds School of Business, University of Colorado Boulder)
2.2020-2021 Financial Results and Implications (Kara Skinner, Interim Chief Financial
Officer)
3.Fund Balance & Emergency Reserves (Kara Skinner)
4.2022 & 2023 Budget Projections (Mark Woulf, Senior Budget Manager)
5.2023 Budget Process & Boulder OpenGov (Mark Woulf)
6.Council Questions/Discussion
Boulder Sales and Use Tax Forecast
March 2022 Report
Robert McNown
Richard Wobbekind
Brian Lewandowski
Business Research Division
University of Colorado Boulder May 24, 2022
The Study
The purpose of this study is to continue
providing an econometrically derived tax
forecast to the City of Boulder to inform the
Finance office about expected changes in sales,
use, and property tax collections in the short
term (one-to-two years) and medium term
(five years).
The University of Colorado A Line. Photo courtesy of RTD.
U.S. Real GDP
Source: Bureau of Economic Analysis and Consensus Forecasts.
15
16
17
18
19
20
21
Q1 2015 Q1 2016 Q1 2017 Q1 2018 Q1 2019 Q1 2020 Q1 2021 Q1 2022 Q1 2023
Q4 2019
Q3
Q3 2020
Q1
-31.2% SAAR
-9.1% YoY +33.8% SAAR
-2.9% YoY
Consumption
Investment
Net Exports
FederalState and local
Q4
-1.4% SAAR
+3.6% YoY
Q2
Q1
Q1 2022
U.S. Quarterly GDP, $ Trillions
U.S. Nonfarm Employment
Source: Bureau of Labor Statistics, CES (Seasonally Adjusted).
130
135
140
145
150
155
2017 2018 2019 2020 2021 2022
Jan. 2017
145.6 million
Feb. 2020
152.5 million April 2022
151.3 million
April 2020
130.5 million
March 2020
151 million
0
DETAIL
U.S. Nonfarm Employment, Monthly, Millions of Jobs
Months to Recovery from Recessions
Source: Bureau of Labor Statistics (Seasonally Adjusted).
-16
-14
-12
-10
-8
-6
-4
-2
0
0 6 12 18 24 30 36 42 48 54 60 66 72
Percent
Number of Months Since Peak
2008-20142001-051990-931981-831974-761980
2020-2022?-6.3%
-0.8%
U.S. Nonfarm Employment, Number of Months Since Recession Peak
Employment Recovery
Source: Bureau of Labor Statistics, Current Employment Statistics (Seasonally Adjusted), as of April 2022.
Change from Prerecession Peak
0
1
2
3
4
0
1
2
3
4
0
1
2
3
4
Federal Funds Rate Outlook
2022 2023 Longer Run
Current
Target
Range
Source: Federal Reserve, March 2022 Meeting.
2024
March 2022 Meeting
December 2021 Meeting
September 2021 Meeting
Inflation
Source: Bureau of Labor Statistics (March 2022). Forecast from Consensus Forecasts.
Consumer Price Index, Percent Change Year-Over-Year
0
1
2
3
4
5
6
7
8
9
Mar 20 Oct 20 May 21 Dec 21 Jul 22 Feb 23Percent Change YoYNational CPI: All Items
May July October
December
February
March
Items
U.S. City
Average Mountain
Denver-
Aurora-
Lakewood
Item
Weights
All items 8.5%10.4%9.1%100.0%
Food and beverages 8.5%8.7%8.8%14.3%
Housing 6.4%9.7%7.9%42.4%
Apparel 6.8%12.1%3.9%2.5%
Transportation 22.6%22.4%21.7%18.2%
Medical care 2.9%4.0%7.6%8.5%
Recreation 4.8%6.5%6.7%5.1%
Education and Comm.1.5%0.0%-1.6%6.4%
Other goods and services 5.5%7.1%9.6%2.7%
Core Inflation 6.5%9.0%8.0%
Source: Bureau of Labor Statistics, CPI for All Urban Consumers (CPI-U).
Colorado Rank Among Other States
Data Sources: Bureau of Economic Analysis (2021), Bureau of Labor Statistics (2/22), U.S. Census Bureau (2020), Bureau of Labor Statistics (2022),
Federal Housing Finance Agency All Transactions Index (Q4 2021), BRD calculations. *Unemployment rate for the last month.
Metric 1-Year 3-Year 5-Year 10-Year
Real GDP Growth 12 11 8 5
Employment Growth 13 10 8 6
Population Growth 12 9 9 7
Personal Income Growth 7 16 5 4
PCPI Growth 7 16 3 5
PCPI 8 11 12 21
Average Hourly Wage % Growth 1 17 10 31
Average Annual Pay % Growth 27 10 10 10
Average Annual Pay 8 9 11 12
Unemployment Rate 28 15 9 26
Labor Force % Growth 7 5 4 3
LFPR 3 4 7 10
FHFA Home Price Index Growth 20 16 13 8
National Retail and Food Services Sales
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022$ Millions-13%
peak to trough,
41 months to return to
peak
-22%
peak to trough,
5 months to return to peak
March 2022:
+28.8% from prior peak
+7.8% year-over-year
+0.9% month-over-month
Source: U.S. Census Bureau.
Sales Tax Collections
State of Colorado
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
0
50
100
150
200
250
300
350
400
2003 2005 2007 2009 2011 2013 2015 2017 2019 2021$ Millions, 12-Month Rolling Sum$ Millions, 12-Month Rolling SumSource: Colorado Department of Revenue.
April (12 Mo.) YoY: 17.5%
Industry composition
Tourism
Commuters
Retail mix
Development
Population growth
State Net Taxable Sales by County
Source: Colorado Department of Revenue.DenverWeldAdamsArapahoeBroomfieldBoulderJeffersonLarimerMesaPuebloEl PasoDouglasTeller-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
2021 compared to 2019
City of Boulder Forecast
Note: Baseline Forecast uses Moody’s S2 Scenario.
National
Economy
Colorado
Economy
Boulder
Economy
Boulder
Sales Tax
Revenue
Boulder
Use Tax
Revenue
The Model Data and Sources
Bureau of Economic Analysis (e.g., personal income, GDP)
Bureau of Labor Statistics (e.g., employment, wages)
U.S. Census Bureau (e.g., retail sales, population)
Colorado State Demography Office (population, migration, age)
Moody’s Analytics (macroeconomic variables forecast)
Colorado Department of Revenue (sales taxes)
Office of the State Controller (taxes)
City of Boulder (sales, use, property taxes)
U.S. Economic Assumptions
Percent Change, Year-over-Year
YEAR CONSUMER
PRICES
RETAIL
TRADE REAL GDP UNEMPLOYMENT
RATE EMPLOYMENT PERSONAL
INCOME
2018 2.4 4.3 2.9 3.9 1.6 5.1
2019 1.8 3.3 2.3 3.7 1.3 4.1
2020 1.3 0.3 -3.4 8.1 -5.8 6.5
2021 4.7 19.4 5.7 5.4 2.8 7.4
2022 6.1 6.3 2.3 5.0 1.6 -1.0
2023 2.7 2.9 1.4 4.6 1.2 3.1
2024 2.2 4.1 3.0 3.6 1.8 5.6
2025 2.3 3.0 2.6 3.9 0.3 4.8
2026 2.3 3.2 2.7 4.1 0.3 4.6
Note: Baseline Forecast uses Moody’s S2 Scenario.
Colorado Economic Assumptions
Percent Change, Year-over-Year
YEAR CONSUMER
PRICES
RETAIL
TRADE
PERSONAL
INCOME
UNEMPLOYM
ENT RATE EMPLOYMENT
2018 2.7 6.1 7.2 3.0 2.5
2019 1.9 3.4 5.6 2.7 2.3
2020 2.0 4.9 5.7 7.3 -5.2
2021 3.5 14.6 9.0 5.9 2.8
2022 8.9 1.6 2.7 5.3 2.4
2023 4.3 3.8 5.2 4.8 2.0
2024 3.0 5.6 8.3 3.5 2.7
2025 3.0 4.4 8.1 3.8 1.5
2026 3.0 4.6 8.3 4.0 1.6
Note: Baseline Forecast uses Moody’s S2 Scenario.
Component Projections
Percent Change, 2022
Note: Baseline Forecast uses Moody’s S2 Scenario. **First revenue year.
Component % Change
Grocery 16.0
Restaurant 20.9
Computer Related -23.6
Auto Sales 2.0
Building Materials 15.2
Mfo Sales 8.7
Out Of State Sales (Less Mfo)3.7
Other Sales 13.9
Total Sales Taxes 10.7
Short-Term Sales and Use Revenue Forecast
20
25
30
35
40
45
50
55
60
2019Q1 2019Q3 2020Q1 2020Q3 2021Q1 2021Q3 2022Q1 2022Q3 2023Q1 2023Q3Nominal, Millions of DollarsMedium
Low Forecast
High Forecast
Note: Quarterly forecast excludes property taxes.
Medium-Term Total Revenue Forecast
150
170
190
210
230
250
270
290
310
330
350
2018 2019 2020 2021 2022 2023 2024 2025 2026Nominal, Millions of DollarsMedium
Low Forecast
High Forecast
Forecasts are updated to reflect the most current economic situation.
Forecasts may be too high or too low, reflecting uncertainty in the
economy.
Forecasts are generated from theoretically sound economic relations,
modeled with state-of-the-art methods of modern econometric time
series analysis.
BRD forecasts do not incorporate “add factors” or other subjective
adjustments of model forecasts.
Integrity of
Model
Forecasts
Consumption
COVID Variants
Human Behavior
Rural Migration
Birth Rates
Work from Home
Ukraine Conflict
Inflation
Supply Chain Disruptions
Worker Shortages
Fed Policy
Labor Participation
Energy Prices
Drought
Vaccine
Retail Sales
Technology
Wage Growth
Infrastructure Spending
Output
Tailwinds Headwinds Unknowns
Q&A
•Pandemic Fiscal Impact
•2021 Budget Uncertainty
•Recovery Adjustments and Implications
2020-2021
Financial Results
& Implications
Finance Department –
Financial Update & Budget
Outlook
City of Boulder
Finance Department
2020 Pandemic Fiscal Impact
Revenue Impacts
•Sudden decline of revenue with stay-
at-home orders & shut-downs
•Tremendous uncertainty as to when
revenues would recover
•Actual revenue impact significant, but
less than early projections –General
Fund was down $15M
•Strong use tax performance helped
offset some of the retail sales tax
impact
Expenditure Saving Measures
•Reduction in expenditures of $18.3
million (10.4% of approved 2020
budget)
•Staffing and service reductions
-56 layoffs
-121 furloughs
-103 vacancy holds
-Non-standard: 68 terminations; 472
furloughs
25
City of Boulder
Finance Department
2021 Budget Development & Organizational
Recovery
2021 Budget Development
•Conducted within a period of great uncertainty, prior to vaccines
-2021 Budget was developed/approved June through October 2020, on the heels ofbudget reductions made in June 2020
•Adopted 2021 Budget was $341.7, a 7.6% decrease over originally adopted 2020 Budget
Revenue Recovery & Federal Support
•December 2021 Sales Tax Revenue increased $19.7 million or 19.0% compared to 2020
-Apparel stores (up 39.6%), Eating Places (up 36.9%), and General Retail (up 32.3%) all showed strong recovery
•Parking revenues up 17.6% over 2020 (down 43.6% from pre-pandemic levels)
•Accommodations Tax revenue up $3.1 million from 2020 (down 37.5% from pre-pandemic levels)
•$3.98 million in ARPA appropriated in 2021 ($20.1 million over two years available)
26
City of Boulder
Finance Department
2021 Original Budget & Recovery Efforts
27
City of Boulder
Finance Department
$158.7
$148.1
$170.0 $167.2$172.0
$157.8 $153.9
$171.2
$50
$70
$90
$110
$130
$150
$170
$190
2019 Actual 2020 Actual 2021 Actual 2022 Revised
Total Revenues Total Expenditures
General Fund: Actual Revenues & Expenditures
Key takeaways:
Previous fund balance after
reserves has been applied to
one-time uses
Strong revenue performance
and expenditure savings led
to large fund balance
contribution in 2021
Some draw expected in 2022
for one-time uses
28
$13.4
draw
$9.6
draw
$16.1
contrib.
$4.0
draw
City of Boulder
Finance Department
$158.7
$148.1
$170.0 $167.2$172.0
$157.8 $153.9
$171.2
$50
$70
$90
$110
$130
$150
$170
$190
2019 Actual 2020 Actual 2021 Actual 2022 Revised
Total Revenues Total Expenditures
General Fund: Actual Revenues & Expenditures
Key takeaways:
Previous fund balance after
reserves has been applied to
one-time uses
A fund balance draw was
necessary in 2020 as a result
of the pandemic
29
$13.4
draw
$9.6
draw
$16.1
contrib.
$4.0
draw
City of Boulder
Finance Department
$158.7
$148.1
$170.0 $167.2$172.0
$157.8 $153.9
$171.2
$50
$70
$90
$110
$130
$150
$170
$190
2019 Actual 2020 Actual 2021 Actual 2022 Revised
Total Revenues Total Expenditures
General Fund: Actual Revenues & Expenditures
Key takeaways:
Previous fund balance after
reserves has been applied to
one-time uses
A fund balance draw was
necessary in 2020 as a result
of the pandemic
Strong revenue performance
and expenditure savings led
to $16.1M fund balance
contribution in 2021
30
$13.4
draw
$9.6
draw
$16.1
contrib.
$4.0
draw
City of Boulder
Finance Department
$158.7
$148.1
$170.0 $167.2$172.0
$157.8 $153.9
$171.2
$50
$70
$90
$110
$130
$150
$170
$190
2019 Actual 2020 Actual 2021 Actual 2022 Revised
Total Revenues Total Expenditures
General Fund: Actual Revenues & Expenditures
Key takeaways:
Previous fund balance after reserves has been applied to one-time uses
A fund balance draw was necessary in 2020 as a result of the pandemic
Strong revenue performance and expenditure savings led to $16.1M fund balance contribution in 2021
Some draw expected in 2022 for one-time uses
31
$13.4
draw
$9.6
draw
$16.1
contrib.
$4.0
draw
•Reserve & Fund Balance Definitions
•General Fund Emergency Reserve History
•General Fund 2021 Performance
•Policy Implications
Fund Balance &
Emergency
Reserves
Finance Department –
Financial Update & Budget
Outlook
City of Boulder
Finance Department
•Emergency Reserves. Unappropriated, designated funds for use in the
event of a major revenue disruption or emergency.
•Restricted Reserves. Unappropriated, designated funds that have a
specific restricted use based on the revenue type and source.
•Fund Balance After Reserves. Unappropriated, undesignated funds
that can be used for general purposes.
Fund Balance Definitions
33
City of Boulder
Finance Department
$25.6 $23.1 $27.0 $30.3 $31.4
$15.0
$7.9
$11.8 $7.3 $8.1
$10.3
$0.0
$2.3
$19.7 $13.8
$0
$10
$20
$30
$40
$50
$60
2019 Actuals 2020 Revised 2020 Actuals 2021 Actuals 2022 Outlook
Emergency Reserves Restricted Reserves Fund Balance After Reserves
19.5%16.7%19.5%
General Fund –Fund Balance History -$ Millions
Key takeaways:
Anticipated exhaustion of
emergency reserves in
2020 did not come to
fruition –emergency
reserve levels have stayed
consistent
2021 revenue and
expenditure performance
drove contribution to fund
balance
34
19%19.5%
City of Boulder
Finance Department
$25.6 $23.1 $27.0 $30.3 $31.4
$15.0
$7.9
$11.8 $7.3 $8.1
$10.3
$0.0
$2.3
$19.7 $13.8
$0
$10
$20
$30
$40
$50
$60
2019 Actuals 2020 Revised 2020 Actuals 2021 Actuals 2022 Outlook
Emergency Reserves Restricted Reserves Fund Balance After Reserves
19.5%16.7%19.5%
General Fund –Fund Balance History -$ Millions
Key takeaways:
Anticipated exhaustion of
emergency reserves in
2020 did not come to
fruition –emergency
reserve levels have stayed
consistent
2021 revenue and
expenditure performance
drove contribution to fund
balance
35
19%19.5%
City of Boulder
Finance Department
$25.6 $23.1 $27.0 $30.3 $31.4
$15.0
$7.9
$11.8 $7.3 $8.1
$10.3
$0.0
$2.3
$19.7 $13.8
$0
$10
$20
$30
$40
$50
$60
2019 Actuals 2020 Revised 2020 Actuals 2021 Actuals 2022 Outlook
Emergency Reserves Restricted Reserves Fund Balance After Reserves
19.5%16.7%19.5%
General Fund –Fund Balance History -$ Millions
Key takeaways:
Anticipated exhaustion of
emergency reserves in
2020 did not come to
fruition –emergency
reserve levels have stayed
consistent
2021 revenue and
expenditure performance
drove contribution to fund
balance
36
19%19.5%
City of Boulder
Finance Department
$25.6 $23.1 $27.0 $30.3 $31.4
$15.0
$7.9
$11.8 $7.3 $8.1
$10.3
$0.0
$2.3
$19.7 $13.8
$0
$10
$20
$30
$40
$50
$60
2019 Actuals 2020 Revised 2020 Actuals 2021 Actuals 2022 Outlook
Emergency Reserves Restricted Reserves Fund Balance After Reserves
19.5%16.7%19.5%
General Fund –Fund Balance History -$ Millions
Key takeaways:
Anticipated exhaustion of
emergency reserves in
2020 did not come to
fruition –emergency
reserve levels have stayed
consistent
2021 revenue and
expenditure performance
drove contribution to fund
balance
37
19%19.5%
City of Boulder
Finance Department
$25.6 $23.1 $27.0 $30.3 $31.4
$15.0
$7.9
$11.8 $7.3 $8.1
$10.3
$0.0
$2.3
$19.7 $13.8
$0
$10
$20
$30
$40
$50
$60
2019 Actuals 2020 Revised 2020 Actuals 2021 Actuals 2022 Outlook
Emergency Reserves Restricted Reserves Fund Balance After Reserves
19.5%16.7%19.5%
General Fund –Fund Balance History -$ Millions
Key takeaways:
Anticipated exhausting
fund balance after reserves
& tapping in to emergency
reserves in 2020 did not
come to fruition –
emergency reserve levels
have stayed consistent
2021 revenue and
expenditure performance
drove contribution to fund
balance
38
19%19.5%
City of Boulder
Finance Department
•Emergency Reserve Level
-“One-time” expense of $800,000 -$900,000 in 2022 to achieve 20% level
-Ongoing expense beginning in 2023 is incremental (based on future year’s
ongoing expenses)
•Use of fund balance after reserves
-Best practice is for one-time uses
-Some appropriated with ATB1 2022
-Recommended Budget will consider fund balance availability
Policy Implications for 2022/2023 Budget
39
•2022 & 2023 Major Revenue Source Outlook
•Retail Sales Tax Performance
•Budget Projections & Implications
2022-2023 Budget
Projections
Finance Department –
Financial Update & Budget
Outlook
City of Boulder
Finance Department
2022 & 2023 Major Revenue Sources Outlook
•Retail Sales Tax
-Revised 2022 retail sales tax revenues projected to exceed budget by $3.5 -$7.8 million
-Projected 2023 revenues could exceed 2022 budget by $8.5 –$13.8 million
•Property Tax
-2022 property tax collections on track to budget
-SB21-293 temporarily reduces residential assessment rates
o Likely impact of -1.5% to original 2023 assumption
•Accommodations Tax
-Updated 2022 budget for accommodations tax is $7.0 million, up 9% more than 2021 actuals
-Occupancy is currently up 13% YTD over 2021 (down 5% from pre-pandemic levels)
•Other Taxes
-2022 collections of business use tax (9%) and marijuana tax (15%) are down from original projections YTD over 2021 actuals
-Construction use tax is up $1 million YTD over 2021 actuals
41
City of Boulder
Finance Department
2022 & 2023 Major Revenue Sources Outlook
•Retail Sales Tax
-Revised 2022 retail sales tax revenues projected to exceed budget by $3.5 -$7.8 million
-Projected 2023 revenues could exceed 2022 budget by $8.5 –$13.8 million
•Property Tax
-2022 property tax collections on track to budget
-SB21-293 temporarily reduces residential assessment rates
o Likely impact of -1.5% to original 2023 assumption
•Accommodations Tax
-Updated 2022 budget for accommodations tax is $7.0 million, up 9% more than 2021 actuals
-Occupancy is currently up 13% YTD over 2021 (down 5% from pre-pandemic levels)
•Other Taxes
-2022 collections of business use tax (9%) and marijuana tax (15%) are down from original projections YTD over 2021 actuals
-Construction use tax is up $1 million YTD over 2021 actuals
42
City of Boulder
Finance Department
2022 & 2023 Major Revenue Sources Outlook
•Retail Sales Tax
-Revised 2022 retail sales tax revenues projected to exceed budget by $3.5 -$7.8 million
-Projected 2023 revenues could exceed 2022 budget by $8.5 –$13.8 million
•Property Tax
-2022 property tax collections on track to budget
-SB21-293 temporarily reduces residential assessment rates
o Likely impact of -1.5% to original 2023 assumption
•Accommodations Tax
-Updated 2022 budget for accommodations tax is $7.0 million, up 9% more than 2021 actuals
-Occupancy is currently up 13% YTD over 2021 (down 5% from pre-pandemic levels)
•Other Taxes
-2022 collections of business use tax (9%) and marijuana tax (15%) are down from original projections YTD over 2021 actuals
-Construction use tax is up $1 million YTD over 2021 actuals
43
City of Boulder
Finance Department
Retail Sales Tax Performance & Projections
(in Millions)
44
2021 Actuals 0.5%
higher than 2022
original budget
2022 Revised
projections reflect
strong YTD
performance
2023 Projected is
currently the average
of the medium and
low models from CU –
likely too cautious
51.6 47.0 56.4 59.8 60.1
22.2
20.2
24.2 25.7 25.8
21.6
19.7
23.6
25.0 25.2 8.6
7.9
9.5
10.0 10.1
7.2
6.6
7.9
8.3 8.4
$0
$20
$40
$60
$80
$100
$120
$140
2019 Actuals 2020 Actuals 2021 Actuals 2022 Revised 2023 Projected
General Fund Open Space Transportation CCRS 0.25 Parks/Rec
City of Boulder
Finance Department
Retail Sales Tax Performance & Projections
(in Millions)
45
2021 Actuals 0.5%
higher than 2022
original budget
2022 Revised
projections reflect
strong YTD
performance
2023 Projected is
currently the average
of the medium and
low models from CU –
likely too cautious
51.6 47.0 56.4 59.8 60.1
22.2
20.2
24.2 25.7 25.8
21.6
19.7
23.6
25.0 25.2 8.6
7.9
9.5
10.0 10.1
7.2
6.6
7.9
8.3 8.4
$0
$20
$40
$60
$80
$100
$120
$140
2019 Actuals 2020 Actuals 2021 Actuals 2022 Revised 2023 Projected
General Fund Open Space Transportation CCRS 0.25 Parks/Rec
City of Boulder
Finance Department
Retail Sales Tax Performance & Projections
(in Millions)
46
2021 Actuals 0.5%
higher than 2022
original budget
2022 Revised
projections reflect
strong YTD
performance
2023 Projected is
currently the average
of the medium and
low models from CU –
likely overly cautious
51.6 47.0 56.4 59.8 60.1
22.2
20.2
24.2 25.7 25.8
21.6
19.7
23.6
25.0 25.2 8.6
7.9
9.5
10.0 10.1
7.2
6.6
7.9
8.3 8.4
$0
$20
$40
$60
$80
$100
$120
$140
2019 Actuals 2020 Actuals 2021 Actuals 2022 Revised 2023 Projected
General Fund Open Space Transportation CCRS 0.25 Parks/Rec
City of Boulder
Finance Department
2023 Budget Approach
47
Projections, Risk Posture, and Revenue Performance
•Revenues have consistently performed above original projections
•Cautious budgeting approach balanced with realistic projections
•Risk tolerance will impact budget development
2022 Adjustments –Ongoing & One-Time Impact
•Some flexibility limited by 2022 adjustments
•More ongoing costs (e.g.new personnel) added in ATB1
•Consideration of other fund balance after reserves
2023 Budget Process
•Budget process improvements
•New or continued investments with context & prioritization
•Move toward an “Outcome-Based Approach”
City of Boulder
Finance Department
2023 Budget Approach
48
Projections, Risk Posture, and Revenue Performance
•Revenues have consistently performed above original projections
•Cautious budgeting approach balanced with realistic projections
•Risk tolerance will impact budget development
2022 Adjustments –Ongoing & One-Time Impact
•Some flexibility limited by 2022 adjustments
•More ongoing costs (e.g.new personnel) added in ATB1
•Consideration of other fund balance after reserves
2023 Budget Process
•Budget process improvements
•New or continued investments with context & prioritization
•Move toward an “Outcome-Based Approach”
City of Boulder
Finance Department
2023 Budget Approach
49
Projections, Risk Posture, and Revenue Performance
•Revenues have consistently performed above original projections
•Cautious budgeting approach balanced with realistic projections
•Risk tolerance will impact budget development
2022 Adjustments –Ongoing & One-Time Impact
•Some flexibility limited by 2022 adjustments
•More ongoing costs (e.g.new personnel) added in ATB1
•Consideration of other fund balance after reserves
2023 Budget Process
•New or continued investments with context & prioritization
•Budget process improvements
•Move toward an “Outcome-Based Approach”
•Budgeting for Resilience
•Process Improvement Overview
•Program-Based Budgeting
•Introduction of Boulder OpenGov
2023 Budget Process
Improvements &
Boulder OpenGov
Finance Department –
Financial Update & Budget
Outlook
City of Boulder
Finance Department
Boulder Budgeting for Community Resilience (BFCR)
City received DOLA grant in 2018 to improve resilience through
budgeting
City retained HRA Advisors to develop a framework
Final report was issued in 2019 that recommended several key items
Full implementation was paused due to COVID
Some elements were integrated into budget process for 2021 budget
City of Boulder
Finance Department
BFCR Final Report
Recommendations
Develop Department Outcomes and KPIs
Embed Outcomes and KPIs into Budget Process
Create Annual Budget Priority Document and Evaluation Approach
Link Council Priorities to Citywide Outcome Indicators
City of Boulder
Finance Department
Why Now?
Purpose of
Budget Process
Improvements
Solidify
Foundational
Process
Improved
Strategic
Decision-Making
Greater Focus on
Outcomes of
Funding
Greater
Organizational
Alignment
Improved
Transparency &
Accessibility
City of Boulder
Finance Department
Adapting BFCR to Current Needs
Current state
Departmental-based budgeting
Capital Improvement Plan (CIP) &
Operating Budget developed separately
Orientation around department-specific
goals
Decision-making at margins
Outcomes and budgeting are mutually
exclusive
Future state
Program-oriented budgeting
Orientation around citywide goals
CIP & operating alignment and strategic
funding
Holistic and goal-oriented decision-
making
Outcomes and indicators are embedded
in budgeting process
City of Boulder
Finance Department
Adapting BFCR to Current Needs
Current state
Departmental-based budgeting
Capital Improvement Plan (CIP) &
Operating Budget developed separately
Orientation around department-specific
goals
Decision-making at margins
Outcomes and budgeting are mutually
exclusive
Future state
Program-oriented budgeting
Orientation around citywide goals
CIP & operating alignment and strategic
funding
Holistic and goal-oriented decision-
making
Outcomes and indicators are embedded
in budgeting process
City of Boulder
Finance Department
Recommended Implementation Elements
Citywide program &
project inventory and
alignment
Revised budget process
and enhanced decision-
making process
Development of
outcomes & key
performance indicators
Implementation of new
budgeting &
Transparency tool
City of Boulder
Finance Department
Program Budgeting & Budget Proposals
Program Realignment
•First step was to articulate our operating budget activities in terms of a program
•Programs should align with citywide goals and indicate clear intended outcomes
-Continuing to embed equity within program goals
•Outcomes should be measurable with the goal of developing citywide Key Performance Indicators (KPIs)
Budget Proposals
•Department budget submissions to Executive Budget Team (EBT) by Program and Capital Project and by type (enhancement, realignment, reduction)
•Broader picture of city activities allows improved strategic decision-making at EBT level
•Recommended budget will be able to articulate how proposed investments will better meet our intended outcomes
57
City of Boulder
Finance Department
Program Budgeting & Budget Proposals
Program Realignment
•First step was to articulate our operating budget activities in terms of a program
•Programs should align with citywide goals and indicate clear intended outcomes
-Continuing to embed equity within program goals
•Outcomes should be measurable with the goal of developing citywide Key Performance Indicators (KPIs)
Budget Proposals
•Department budget submissions to Executive Budget Team (EBT) by Program and Capital Project and by type (enhancement, realignment, reduction)
•Broader picture of city activities allows improved strategic decision-making at EBT level
•Recommended budget will be able to articulate how proposed investments will better meet our intended outcomes
58
City of Boulder
Finance Department
Towards Performance & Budget
Year 1
•Comprehensive Program Inventory
•Budget Proposals establish intended outcomes
•Enhanced Decision-Making Process
Year 2
•All Programs Specify Intended Outcomes and Associated Measurements
•Citywide KPIs are Identified
Year 3
•KPIs are Utilized to Guide Budget Decisions
•Focus on Realignment of Resources to Achieve Intended Outcomes
City of Boulder
Finance Department
Boulder OpenGov Demo
Previous Budget Software
•Extremely manual, spreadsheet
analysis, opaque information
•Transparency required manual
publishing of graphs, charts into PDF
•No actual budget performance data
without manual report production
•No language accessibility
OpenGov
•Cloud-based 21st Century solution
•Much more approachable for budget
staff and greater visibility of reports
•Actuals reporting –both internally and
publicly
•Online budget book
•Transparency Portal
•Language accessibility
60
City of Boulder
Finance Department
Boulder OpenGov Demo
Previous Budget Software
•Extremely manual, spreadsheet
analysis, opaque information
•Transparency required manual
publishing of graphs, charts into PDF
•No actual budget performance data
without manual report production
•No language accessibility
OpenGov
•Cloud-based 21st Century solution
•Much more approachable for budget
staff and greater visibility of reports
•Actuals reporting –both internally and
publicly
•Online budget book
•Transparency Portal
•Language accessibility
61
City of Boulder
Finance Department
Council
Questions/Feedback?
62
City of Boulder
Finance Department
Backpocket slides
63