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The Government Finance Officers Association <br /> GDLong-Term Financial Planning ( - <br /> • An Introduction \] <br /> Deliberate Responses <br /> A long-term financial plan enables proactive management of government finances,rather <br /> than reactive responses to financial crises as they occur. When you develop a long-term <br /> financial plan you combine financial forecasting with financial strategizing to identify <br /> future challenges and opportunities, causes of fiscal imbalances, and strategies to secure <br /> financial sustainability. <br /> Improved Allocation of Resources <br /> Financial planning brings a long-term perspective to resource availability that is <br /> necessary for setting realistic boundaries on what your government can accomplish and <br /> helps direct resources to the highest priority activities. A long-term perspective integrates <br /> strategic planning and budgeting,enabling you to forecast,predict, and actively <br /> communicate challenges before they arise and opportunities before they pass by. <br /> The Phases of a Long-Term Financial Plan <br /> A long-term financial planning process takes place over phases. These phases are: <br /> Mobilization Phase-Setting the Stage for Success <br /> Long-term financial planning begins by creating consensus on what the purpose and <br /> results of the planning process should be. Mobilization determines the composition of the <br /> • project team, identifies the project sponsor, and formulates a strategy for involving <br /> important stakeholders. Here you should expect to create a high-level roadmap that helps <br /> participants understand how the process will unfold and their role in it. A financial plan <br /> must identify the service level preferences of the community because this has important <br /> implications for how resources will be spent and how revenues will be raised. A financial <br /> plan also articulates critical financial policies, which allow you to set and validate <br /> baseline standards for financial "Finally.... a model Long-Term Financial Plan! <br /> stewardship and perpetuate The City of San Clemente developed a Long Term <br /> structural balance. Based on these Financial Plan 15 years ago and the process would <br /> initial activities, it becomes have been much easier if GFOA's resources had <br /> possible for you to define the been available then." <br /> ultimate purpose the financial plan Pall Gudgeirsson,Asst. City Manager and Treasurer <br /> is intended to fulfill. From City of San Clemente, CA <br /> expanding services in order to meet <br /> growth,to reducing reliance on unstable or low-growth revenue sources, defining the <br /> purpose of planning up-front builds shared expectations for the plan and provides the <br /> basis for later evaluation of the results. <br /> Analysis Phase-Supporting Decisions <br /> By properly setting the stage through Mobilization,you are prepared to produce an <br /> analysis that supports development of strategies for financial sustainability. In the <br /> Analysis Phase,you analyze the financial environment, create long-term revenue and <br /> expenditure projections, and analyze debt position. This helps you gain a better <br /> understanding of the forces that impact financial stability,potential future imbalances in <br /> i <br /> Page 2 of 3 <br />