Financial Overview FY2021 It is important to calculate the true cost of service for programs, facilities, amenities, events, etc. to understand the cost, where funds come from, to identify the benefit and translate into a unit cost (per mile, per hour, etc.). It costs to try things; it is important to determine what is the cost as a lot of time and a lot of money goes into preprograms with little return on investment and its BPARD’s fiduciary responsibility to minimize that including subsidized offerings. It is critical to establish cost recovery and identify what costs to be recovered prior to implementation and follow the department’s business principles, Proforma’s, Business Plans and KPI’s.
Business Principles Know the difference between and investment and an expense. An expense cost you money an investment is supposed to make you money.
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Know that from programs to facilities People don’t build things without securing the operational dollars to operate it and maintain it. Data drives the majority of operational and capital decisions Equity, Diversity, and Inclusion principles are in place to manage access for all and capital decisions. All budgets are combined for revenues and expenses to give true financial picture. Revolving funds are used to improve facilities and programs. PRO FORMA Is an accounting product use to forecast expected revenues based on how much is that going to cost, including start up costs and the length of time to recover based on evidenced based research for cost recovery, projecting how the revenue will climb each year and then pay for the costs to pay for it? BUSINESS PLAN Deeper and more strategic than the using a proforma it allows for more flexibility, for unanticipated shortfalls (ex – COVID-19, weather, or incidents) with the use of historic data to make better decisions for forecasting and look back on prior years. It is important to ask questions before investing public funds in new program or offerings:
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Why the program? Why are you starting this, answer first. Should you? Is someone in the private sector doing this? If so, are they missing the audience you are targeting, Who are our customers? Know who our customers are – research this, targe this, not only our community, research the industry – who else is doing this, are they successful at it? If not, don’t do it, don’t saturate it. Establish the understanding of the money part of offerings- the revenues, expenses, equipment costs, and staffing. OPEB – FED making them set aside, part time vs FTE, other partnerships (not have to do all by yourself) Tracking both direct and indirect cost- whatever cost you have to put on event, program – indirect everything else – cell phones, vehicles, salary, - every single dime accounted for. Marketing and promotions.
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Who is your market, how much do they spend? 30 | P a g e
