Healthcare costs, infrastructure needs and pensions
cited as most critical challenges to long-term financial planning
Philadelphia, PA (June 5, 2017) – A new survey published by PFM Solutions LLC, a leading provider of financial modeling technology using its Whitebirch platform, reveals that nearly three-quarters of local government financial executives lack confidence in their long-term financial decision-making. This can be attributed to the findings that more than half (58%) of local government financial executives view the reliability of their long-term financial projections as limited or problematic and more than one-third (36%) of respondents characterized their current process for long-term financial planning as problematic or burdensome.
“Even though the national economy has been growing, local governments are still facing long-term budget pressures,” said Brett Matteo, President, PFM Solutions LLC. “Tax growth has been weak, the prospect of cuts in state and federal aid is increasing and challenges related to infrastructure, healthcare costs and pensions continue to mount. It’s critical that local governments have confidence in their modeling so they can make the best decisions for their municipalities and yet most don’t.”
The survey – representing more than 200 financial executives from municipalities, utilities, special districts, school districts and non-profits, among others – was conducted in-person at the Government Finance Officers Association (GFOA) 2017 annual conference, which brought together more than 4,000 CFOs, finance officers, budget directors, treasurers, accountants and others focused on state and local government finance.
When asked to identify what poses the greatest challenge to their organization’s long-term financial planning, respondents identified: difficulty in evaluating different future financial scenarios (38%); lack of advanced modeling tools (26%); over reliance on Excel spreadsheets (25%); and lack of complete financial information (11%). In totality, these challenges cause difficulty in projecting accurately.
In a tangible application, these challenges can manifest in local governments finding it difficult to estimate the impact of various potential scenarios on their organization’s credit rating, with more than half of the respondents (54%) acknowledging this issue.
“Fiscal health is the cornerstone of municipal health,” said Matteo. “Financial executives must be able to map competing priorities across a range of what-if scenarios, and – especially now – have the capability to stress test potential outcomes against potential setbacks and downturns. Ultimately, the long-term sustainability of their organizations depends on this type of fiscal planning. In response to these persistent challenges, we created the Whitebirch platform as a sophisticated, responsive and dynamic tool to help local governments develop and communicate better long-range plans.”
About PFM Solutions LLC
PFM Solutions LLC focuses exclusively on developing and delivering best-of-breed financial modeling technology and services to public and private markets. Whitebirch is a high-performance financial modeling solution that helps financial professionals and their teams more effectively create, manipulate and communicate unlimited combinations of strategic what-if scenarios in real-time to enhance mission-critical planning. The patented technology provides a structured modeling environment for financial leaders to gain higher levels of insight about the downstream impacts of critical decisions and strategic options on financial positions.
Whitebirch Multi-Year Planning for Local Governments is designed for complex organizations in fast-changing environments. Purpose-built for organizations with large multi-dimensional operations, the Whitebirch engine takes financial strategy and decision-making to an entirely new level. To learn more, visit www.whitebirchsoftware.com.