Five ways to plan long-term resources more easily

For many years, municipalities have been faced with major management challenges. With ever-increasing operating costs, as they are called upon to provide more and more services to their citizens (i.e. transportation, road networks, leisure services, etc.), their revenues in the meantime, almost exclusively derived from property taxes, struggle to keep up. As a result, municipalities are often faced with shrinking flexibility.

Not only that, but the situation doesn’t seem likely to improve over the coming years, as upper government echelons seem disinclined to help out with the budgetary imbalance. In this context, careful investment planning is one of the best solutions for municipalities to achieve their development projects.

Significant Investments

Due to this imbalance between the financial needs of municipalities and their inability to pay, a major deficit in infrastructure maintenance has accrued over the last few years. While contributions from upper government echelons have helped to rebalance the budget to a certain extent through the implementation of a municipal infrastructure program, municipalities continue to face major challenges since the federal program nevertheless requires that they pay at least a third of project funding. Naturally, such expenditures can be quite significant for smaller municipalities.

Municipalities are also confronted with other challenges concerning new expenditures. For example, with reference to environmental protection and sustainable development, Quebec’s new Residual Materials Management Policy has set some ambitious objectives for the coming years, including banning the disposal of residual organic materials in technical landfill sites as of 2020. However, major equipment and operating cost investments will be required to achieve these objectives.

With respect to public safety, implementing the risk coverage plan will also require investments and additional resources for certain municipalities.
Like so many other organizations, municipalities are faced with labour shortages and salary competitiveness, in addition to facing major unfunded actuarial liabilities in their employees’ pension plans. In such situations, municipalities often have to grapple with complex management issues where the revenues generated by their property taxes have hit their limit.

So, how can a municipality be sure that it’s providing sufficient services while taking into account taxpayers’ ability to pay? And how can it be sure that it’s implementing the best financial strategies and financing the most advantageous projects while maintaining a reasonable debt level?

Long-term strategic financial planning

Long-term financial strategic planning is definitely the route to take. It allows elected officials and municipal management to develop a shared vision of a municipality’s priorities and issues. This approach also makes it possible to get a clear picture of operating costs, required investments, impact on the municipality’s debt and, incidentally, how its residents should be taxed. This shared vision helps the municipality to be proactive in developing the best tax strategies for its citizens.

Here is brief summary of the five steps necessary for conducting long-term financial planning:

  • Establish financial principles to guide investment decisions;
  • Identify and document all projects and new activities that may affect the municipality’s finances;
  • Define various hypotheses on which to base financial projections;
  • Simulate results based on all projects and new activities to be implemented and then analyze the impact on debt servicing, expenditure progression and taxes;
  • Establish the municipal administration’s financial strategies.

Considering the financial challenges of certain municipalities, this kind of planning can become an indispensable tool. In addition to helping prepare annual budgets, it is completely in line with modern approaches to municipal governance. And especially, beyond the fact that it encourages efficient resource management, it has the advantage of providing transparent management of municipal public finances.

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The global food and beverage industry suffered during the recession and the global malaise that followed. And while measured growth again appears to be the norm in many markets, challenges persist. High commodity prices continue to impact profitability. Consumer spending remains sluggish and limits the ability of food and beverage companies to raise their prices.

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The IASB has published IFRS 13, Fair Value Measurement. The standard:

  • explains how to measure fair value by providing a clear definition and introducing a single set of guidance for (almost) all fair value measurements;
  • clarifies how to measure fair value when a market becomes less active;
  • improves transparency through additional disclosures.

IFRS 13 applies to both financial and non-financial items but does not address or change the requirements on when fair value should be used.

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Your supervisor is absent for a few days, on sick leave or quits without warning and you’re asked to fill in until a replacement can be found. Do you accept the challenge?

If you’re up to it…

Refusing can be poorly perceived by your superiors and stall your career. On the other hand, accepting the position may ruffle some feathers around the office. Ultimately though, this is an opportunity to tackle new strategic and operational challenges, and a chance to gain visibility and highlight your talents.

Whether you accept or not, in any case, this decision is not one to be taken lightly. It’s no small task becoming a manager, and an even greater one to manage one’s colleagues.

In taking on this challenge, your colleagues suddenly become your subordinates. Considering that you may return to your former position one day, important decisions that could change team dynamics must be made very carefully and, ideally, alongside your superiors.

Congratulations, you’ve accepted the challenge!

Here are six points to consider that can help you in your new role, increase your chances of success and help turn the temporary assignment into a permanent position:

1.  The first important aspect is determining how long you’ve been given these new responsibilities, because this will have a major impact on the way you manage your team. Sometimes, especially in the case of a sick leave, this period can’t be defined accurately. Therefore, it’s important to be especially tactful in your interactions and increase your scope of action gradually as the interim period extends. If the assignment is short-term, you should focus your energies on daily operations. If the assignment extends further, you’ll need to develop a more comprehensive strategic plan (motivating personnel, dealing with issues, orienting the team, etc.).

2.  It’s essential to determine, alongside your supervisor, the board of directors or any other relevant authority, the tasks, responsibilities and influence you’ll have during this period. Aspects such as purchasing new computer systems, modifying strategic orientations and being granted the authority to dismiss staff must be clearly defined before you accept any position; otherwise it is likely that conflicts will arise with both employees and management. This aspect is closely related to the length of the period discussed in the previous point.

3.  Regularly communicating the status of projects to your superiors is a win-win strategy, since it allows you to get management’s support andalmost as importanthighlights your achievements. Management will remember what you did during the interim period and may be inclined to give you additional tasks if you are not granted the position permanently.

4.  Don’t be afraid to ask for help. Your superiors are aware that you will likely go through an adaptation period and probably need help in completing certain projects. Don’t hesitate to call on both external and internal resources for support. It’s in the best interest of the organization that everything goes as smoothly as possible.

5.  Up your communications with your team. In the case of an interim replacement, it’s wise to be transparent when making important decisions. Remember that people are watching and judging you in your new role and that the assignment may not be permanent. You’re managing a team without having complete authority over your employees.

6.  Practice what you preach and maintain a positive attitude. To avoid damaging your image and reputation, remember that you are still part of the original team. For example, favouring certain employees over others or taking certain liberties that you wouldn’t have as an employee may cause certain people to hold a grudge, which could tarnish your return to the team as a colleague. Therefore, it’s important to be fair at all times.

In conclusion, remember that accepting a promotion can be a very rewarding and character-building experience. It’s also an opportunity to take on a challenge and learn more about yourself. However, it’s important to be prepared.

Such an opportunity is a ticket to showcasing your abilities and climbing the corporate ladder, and who knows? It may even lead to a long career in management.