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Why Every Agency Needs a Long-Term Financial Plan

Updated: Jun 14, 2023

As we are in a period of economic downtown after Covid-19, the war in Ukraine, interest rate hikes, stubborn inflation and nationwide banking failures, time is of the essence to create strong financial planning tools that will lead to sustained fiscal resilience for your public agency.

The best thing any public agency can do in a time of economic crisis is re-evaluate its current fiscal position and utilize experienced consultants to accurately forecast upcoming revenues and expenses, in order to create a structured Long-Term Financial Plan (LTFP). A good LTFP serves as an invaluable tool for the agency’s decision-making and financial planning for the next ten plus (10+) years. Creating fiscal discipline will ultimately lead to balanced spending, fewer budget deficits, reliable debt management practices and sound investment and spend decisions.

Preparing for Volatility

Economic downturns in the US and world economies are inevitable and a reality every public agency needs to consider in its long-term forecasts. The LTFP offers a means to measure your agency's needs and resources to ensure the agency's financial position is sufficient to support ongoing services and long-term needs, while ensuring sustainability within potential future economic restraints.

Building reserves in order to reduce the severity of impact of economic volatility or unforeseen financial hardship is an essential practice, but seasoned government officials know that it must be balanced with the numerous demands on each available "discretionary" dollar. Building consensus among staff and elected is essential. A reserve policy is an essential part of the equation, but a good LTFP equates to better decision making, prudent allocation practices and overall more responsible fiscal management.

Revenues v. Expenses

The LTFP will provide decisionmakers with a robust tool for evaluating the projected financial impact of policy decisions related to general fund and enterprise operations, adequate reserve levels, capital improvements, pension cost mitigation, debt management practices and strategic priorities and emerging initiatives.

Included in a good LTFP should be a detailed analysis of major revenues and expenses including potential tax initiatives, any sunset provisions, availability of grants and subsidized loans, tax credit opportunities, debt limitations and constraints, salaries, retirement and health benefits, infrastructure and capital expenditures.


Most of our attorneys are also registered municipal advisors, however we also work closely with municipal advisory firms to accurately create a detailed LTFP proforma financial analysis for the upcoming 10+ years. In your proforma analysis, we will include economic "buttons and levels" allowing for changing micro and macroeconomic assumptions.

Positioning for the Future

Every LTFP that our team works on includes the following goals (1) budget stabilization, (2) pension cost mitigation, (3) planning for contingencies, (4) planning for and funding agency capital improvement project needs, and (5) bolstering overall financial health. Our team will work closely with you to develop a LTFP that paves the way for optimal fiscal health and resiliency on a long-term sustained basis.

The LTFP acts as a tool linking your agency's budget to your overall strategic plan. The Long-Term Financial Plan is not meant to replace your strategic plans or budgets but instead will intertwine with each to create a more detailed overview of how funds should be properly allocated in the next ten years, providing for unexpected economic restraints. The GFOA has been a large supporter of long-term financial planning for years and states, "Long-term financial planning relates to strategic planning, developing financial policies, capital improvement planning, and budgeting, but it is inherently different, as shown in the table below. Each process fulfills a different combination of planning purposes. As such, long-term financial planning is most valuable when accompanied by these other planning processes and often communicated together."

If you would like to learn more about the strategies mentioned in this article or any other public financing matter, you can schedule a no-obligation zoom meeting directly on our scheduling calendar. We would love to learn more about how we can help you generate savings and create a healthy financial future for your agency.


The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact a designated Weist Law representative. This material may be considered advertising under certain rules of professional conduct.

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