Monday, October 27, 2014

High Five to Boulder, CO! The City Unveils 2015 Budget Based Upon 5th Straight Year of Priority Based Budgeting!


"Priority based budgeting contributes to the city's long-term financial sustainability and allows the City of Boulder to serve its residents in the most effective, efficient and fiscally responsible manner possible."


At the Center for Priority Based Budgeting, we pride ourselves on being dependable long-term partners with the communities we work with across the nation. We have strived to develop our core concepts of Fiscal Health through Priority Based Budgeting (PBB) to be the most effective local government budgeting, planning and economic forecasting tools available.

We are often asked if our tools are scalable and replicable from one community or public entity to another. While we have always been confident that priority based budgeting truly is the most effective, scalable and replicable public finance budgeting tool available, the real proof is demonstrated by the size, diversity, geographic location and sheer variety of the over 70 communities who have implemented PBB.

And now we have yet another case study that demonstrates the long-term effectiveness and sustainability of priority based budgeting. The City of Boulder, Colorado first implemented PBB in 2011. And now in their fifth straight fiscal year of utilizing priority based budgeting to develop their annual budget, Boulder depends upon PBB as "the cornerstone of the city's budget process," and "the framework within which all budget decisions are made."

These are powerful statements from a city that is consistently listed as one of the top 10 best communities to live in in the US. We at the CPBB are so proud of how effectively the city's staff, leadership and elected officials have developed PBB into their work, and are honored to be partners with the City of Boulder, Colorado.

To learn more about the city's utilization of PBB in their 2015 budget read the summary (below) or click here for their full 2015 Budget Overview document.

Priority Based Budgeting

Purpose of Priority Based Budgeting

Priority Based Budgeting (PBB) builds on the city's prior Business Plan, which separates goals and actions into near term versus long term frames. PBB harnesses the policies and values of the Boulder Valley Comprehensive Plan and department strategic and master plans. As the cornerstone of the city's budget process, PBB gives the city three central benefits:
  • Identifies key Council and community goals (see the next section on PBB Results and Attributes)
  • Evaluates the impact of these goals of city programs and services
  • Provides a tool for strategic decision-making in funding, adding and/or eliminating programs and services, and making more effective use of the city's limited resources  

 2015 PBB Outcomes


Now integrated into its fifth consecutive year of budget development, PBB is the framework in which all budget decisions are made. In the 2015 budget process, the city engaged in a streamlined PBB process, recognizing the significant work that had been done in prior years, as well as the demands on staff due to flood recovery and the implementation of an integrated Finance and Human Resources business solutions software package. The 2014 budget invested primarily in enhancing existing high priority programs, with the goal of an increased impact on achieving the PBB identified results. As a result, the 2015 PBB process was able to maintain the quartile information previously identified and the 2015 budget process focused on continued investment in high quartile programs and services, reflecting community priorities.

The city continues to have a favorable distribution of resources between the highest priority (Quartile 1) and lowest priority (Quartile 4) programs. Fewer resources are invested in programs yielding lower impact on community values. A listing of all 2015 programs by quartile is included in the following section (page 55). Community programs are those providing direct service to residents and businesses, while governance programs are those providing support services within the city to other departments.




Strategic Planning



This graph shows the distribution of proposed 2015 budget additions by Quartile. The largest amount of investment is in Quartile 1, with a decreasing amount in Quartile 2, 3 and 4 respectively. Taking into account inflation, the actual dollar increase in Quartile 4 funding actually represents flat to decreased investment levels.

Another way to look at the resource shifts achieved by using PBB is shown in Table 2-01 below. The use of PBB in the 2015 budget process achieved a reduced proportion of city resources being allocated to Quartile 3 and 4 programs, little to no change in the proportion of resources allocated to Quartile 2 programs and an increased proportion of resources being allocated to Quartile 1 programs.



Budget Allocation By PBB Quartile


Final program scores created four Quartiles. The highest rated programs are rated Quartile 1. Figures 2-03 through 2-05 below demonstrate that the city is recommending an allocation of greater financial resources to programs identified as highly influential in achieving city results (Quartiles 1 and 2). Priority Based Budgeting provides the city with an additional tool to identify efficiencies and ensure that the city provides priority services to residents and businesses.







To better understand how the City of Boulder utilizes priority based budgeting as the "framework in which all budget decisions are made," click here!

Congratulations again to the City of Boulder, Colorado! You remain a true priority based budgeting all-star and a leading PBB practitioner in local government fiscal stewardship! 



Keep an eye on the CPBB blog for further updates. Sign-up for our social media pages so you stay connected with TEAM CPBB!

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If you're thinking of jumping into the world of Fiscal Health and Wellness through Priority Based Budgeting we would certainly like to be part of your efforts! Contact us to schedule a free webinar and identify the best CPBB service option(s) to meet your organization's particular needs.

 

Thursday, October 2, 2014

Long-Term Financial Sustainability through Priority Based Budgeting in the City of Bainbridge Island, WA



Starting in the spring of 2014, the City of Bainbridge Island partnered with the Center for Priority Based Budgeting (CPBB) to change our budgeting process to a priority based budgeting (PBB) approach.

Priority Based Budgeting (PBB) provides a way to compare community values with the programs and services that a government entity provides. PBB helps the City and community:

• Identify key Council and community goals
• Evaluate the impacts of these goals on city programs and services
• Engage in strategic decision-making regarding funding for services, and/or changes to service levels for current programs and services.

PBB helps the community and city employees understand the City’s use of its limited resources. This method of budgeting contributes to the city’s long-term financial sustainability by encouraging explicit choices. These choices help the City develop a strategic budget that reflects our community values and ensures a high level of city service to residents.

Community and Governance Results


Based on Council discussions, staff input, and consultant review, six strategic priorities have been identified for the City of Bainbridge Island. The following critical areas are where the City will focus its efforts:

• Safe City
• Green, Well-Planned Community
• Reliable Infrastructure and Connected Mobility
• Healthy and Attractive Community
• Vibrant Economy
• Good Governance

 Results Maps show how the City is working to achieve each result.

Department Program Inventories


Each department develops a comprehensive list of programs and services offered by that department. These program inventories build a common understanding of what the City is offering to the community.

The citywide Program Inventory is a list of 447 programs.

Program Scoring


Each department then evaluates each program in its inventory, and indicates how much each program contributes to achieving each result. Departments also score other attributes of each program, such as the level of mandate to provide the program, the amount of cost recovery of the program, change in demand for the program, and portion of the community served by the program.

CPBB provides scoring guidelines for community and governance programs.

After departments score the programs, other departments review, validate, and cross-check the scores through a peer review process.

Program Costing


In addition to scoring each program against the Results identified through the PBB process, departments also provide estimated cost information for each program. Through this process, departments estimate the level of staff effort and other department budget dedicated to each program.

CPBB combined the Inventory, Costing and Scoring information in a Scorecard, one for community programs and one for governance programs.  

What we learned and the Resource Alignment Diagnostic Tool



Reviewing the list of 2014 programs offered by City departments shows the wide variety of programs and services offered by the City of Bainbridge Island. This initial effort to present the City’s information through the Priority Based Budgeting lens resulted in a list of over 300 community programs and over 100 governance programs. By adding costing information, the City can see how much it budgets to provide each program.

The Center for Priority Based Budgeting reviewed all the information it had requested from the City and compiled it into the Resource Alignment Diagnostic Tool. This presentation allows for multiple methods of sorting the information. Initial feedback indicates:

• The City’s overall spending pattern indicates a positive distribution across quartiles, with the most spending in Quartiles One and Two.

• The spending distribution by department differs somewhat, based on the programs offered by each department and the outcome of the program scoring.

• Program costing data indicates that we spend more on programs that align most closely with some Results than others. For example, the 2014 data indicates that the City budgets $7.2 million for programs supporting the Safe City Result, while budgeting $1.5 million for programs supporting the Vibrant Economy Result.

Next Steps:


The City is committed to work in early 2015 to begin next iteration of the Priority Based Budgeting process. In advance of that effort, City staff will be going back to complete some identified housekeeping from the initial round of analysis:

1. Affirm and document the level of mandate. The City will provide specific reference to source of mandate for all programs scored 2 or higher.
2. Review the program inventory lists from all departments to ensure a consistent level of detail on program inventory across departments.
3. Review program inventory to compress cross-departmental functions into a single program (for example, Public Notary).
4. Review program inventory to provide complete and meaningful descriptions for each program.

Further detail on the Priority Based Budgeting process as it has been implemented at other cities is available from the Center for Priority Based Budgeting or the International City Managers Association (ICMA) Center for Management Strategies Leading Practices web page. 


Keep an eye on the CPBB blog for further updates. Sign-up for our social media pages so you stay connected with TEAM CPBB!

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If you're thinking of jumping into the world of Fiscal Health and Wellness through Priority Based Budgeting we would certainly like to be part of your efforts! Contact us to schedule a free webinar and identify the best CPBB service option(s) to meet your organization's particular needs.

 

Tuesday, September 30, 2014

A Unique Approach to Budgeting - The Town of Christiansburg, VA & Priority Based Budgeting


A Unique Approach to Budgeting


Since late 2010, the Town of Christiansburg has been working with the Center for Priority-Based Budgeting, based in Denver, CO, on a radically different budget process that evaluates and prioritizes the programs and services provided by the town. Like so many other municipalities across the country, Christiansburg enjoyed many years of prosperous economic conditions. Most capital projects were paid for in-full and residents have long enjoyed a relatively low real estate tax rate for decades. However, the economic downturn of the past few years had a significant impact on revenues and the town found itself in a budget deficit situation.

When faced with a budget deficit, the common approach in many localities is to take “emergency-room measures,” such as across-the-board cuts, pushing back replacement schedules for vehicles and construction equipment, or implementing furlough days or even layoffs. These steps, while effective in cutting spending in the short-term, can have long-term implications on a town’s ability to provide the level and type of service citizens desire.

Developing a Process


With the above information in mind, help was sought from the Center for Priority-Based Budgeting in developing a prioritization process that could be used to help the town better understand:
  • The programs and services it provides the community
  • The true cost of providing these services
  • The best way to allocate funds as the town strives to spend within its means

This course of action is intended to help focus the town’s decision-making process by basing priorities on outcomes. The concept behind prioritization of services is that it creates an objective and transparent decision-making process, one that ensures programs of higher value to citizens (i.e., those that achieve the organization’s objectives most effectively) can be sustained through adequate funding levels, regardless of the economic conditions. This strategic approach to managing the current fiscal environment will also help insure the town’s long-term fiscal wellness.

Priority-based budgeting is a key component in the budgeting process, with Town Council and staff using its results to determine the best way to allocate available resources. In addition to assisting in the determination of what services and programs contribute directly to the Town’s overall objectives, the process also helps in evaluating any future new programs or services being considered.

Working on the Process


Work on the budget prioritization process began in December 2010, when advisors from the Center for Priority-Based Budgeting met with councilmembers and representative citizens at a public meeting. The advisors facilitated a discussion to help define and refine Christiansburg’s results, or overall objectives and strategic goals. The group first examined the Vision 2020 previously prepared by Town Council to ensure the goals in the vision were broad enough to cover the many needs and desires of the community, yet specific enough to allow for further definition. Participants then wrote down the services, amenities, and/or initiatives that went into achieving these goals for our town. (In other words, participants defined what it specifically means for Christiansburg to be, whether a “clean, healthy, safe place to live” or an “interconnected community.”) While some answers seem obvious and would be basic requirements regardless of where you live or work, the exact way in which each objective is defined by and for our town is uniquely representative of our community’s needs and desires.




After much discussion, it was determined that the town’s overall objectives should be:

Meeting Multiple Objectives


You may notice a bit of redundancy in some of these definitions. This is due to the fact that some programs, services, or initiatives offered by the town are so important, or so all-encompassing, that they help meet multiple objectives in Christiansburg’s desire to make our town a great place to live, work, and visit. For example, building and maintaining quality transportation and utility infrastructure systems is listed under “Clean, Healthy, Safe Place to Live.” However, you will also find slight variations related to transit options and mobility under “Green, Well Planned Community,” “Interconnected Community,” and “Retail, Commerce and Tourist Destination.”

Why is this? Simply stated: transportation is vital. A well planned, well built, and well maintained transportation network is necessary if Christiansburg is to going to meet all of these objectives. If you were to only list transportation issues under one objective, the others would be incomplete. As part of the priority based budgeting process, town staff also diligently worked to create an overall “inventory” of all services and programs currently provided to its citizens. The final tally included over 400 listings; from installing sewer lines in the ground to installing child safety seats in citizens' vehicles, and everything in between.

Grading Services & Citizen Input


A next step in this prioritization process involved the “grading” of the overall Town services and programs, specifically grading in terms of how each program or service rates specifically to each of the six overall Town objectives listed above. Those programs that contributed significantly to the objectives received higher “grades” than those programs that did not contribute directly. Next, the overall cost of each program was determined.

In addition to the internal work described above, the town incorporated a Citizen $100 Exercise into the process, where those who live and work in town were asked to prioritize the goals/objectives that the town is striving to achieve for the community. This citizen input was factored into the weighting of the individual goals/objectives.

View the final list of programs and their corresponding quartile listings.


Keep an eye on the CPBB blog for further updates. Sign-up for our social media pages so you stay connected with TEAM CPBB!

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If you're thinking of jumping into the world of Fiscal Health and Wellness through Priority Based Budgeting we would certainly like to be part of your efforts! Contact us to schedule a free webinar and identify the best CPBB service option(s) to meet your organization's particular needs.

 

Friday, September 19, 2014

ICMA 100th Annual Conference + CPBB & YOUR Local Government Community!



The Center for Priority Based Budgeting (CPBB) is momentarily "home" after having the honor of presenting Fiscal Health and Wellness through Priority Based Budgeting at the ICMA 100th Annual Conference.  It was an incredible experience for us, having four distinct opportunities throughout the program to reach new audiences eager to embrace an entirely new way of leading their communities with the tools of Priority Based Budgeting. As this was the 100th Anniversary of ICMA, the CPBB was humbled and invigorated to be positioned as providing the "new lens" necessary to thrive in the next 100 years of leading local government!

As true believers in the “New Wave” of Local Government, the CPBB actively promotes the fact that local governments cannot continue to do things the way they always have. Of most interest to us is the concept of the “intended use” of resources based on the results a community desires to achieve, or what we would call “alignment of resources with results” in Priority Based Budgeting (PBB).
  

Central to PBB is the idea that all local government organizations can determine the role they're suited to serve best within a community, and amongst all potential service providers within a region - identifying the overlap, the potential for partnerships, consolidated services, and spinning off of services between city, county, school district, non-profit and private sector organizations. The end goal is nothing short of the most efficient use of a community's resources as a whole, to achieve the results of a region – it’s "bang for the buck" for the provision of public services.



Never before has the mission of our work in Priority Based Budgeting come into clearer focus. Today, we in local government are being called to embrace “The New Wave of Local Government.” This “New Wave” will be a time "in which the fiscal woes of federal and state governments will leave local governments on their own” and yet a time "in which local government will lead the way in developing creative solutions to extraordinary problems."

The CPBB dives deep into what it will require of all of us to seize the opportunities brought forth by this “New Wave” of Local Government, rather than succumbing to it’s challenges. These articles and video expands upon these opportunities by diving deeper into the definition, concepts and innovative local government opportunities represented by the “New Wave” of local government.

Local government communities must consider a completely different perspective. In order to achieve success and accept the challenges that are ahead, we must see more clearly how to manage, use, and optimize resources in a much different way than has been done in the past. This new environment demands a new (economic) vision of the future.  And over 70 communities have now embraced a new (economic) vision of the future through the New Wave of Fiscal Health and Wellness through Priority Based Budgeting

To discover how the CPBB might be able to benefit your community, contact us to schedule a free webinar. We like to use webinars to learn more about your unique community, gain a better understanding of your community goals and challenges, identify what you intend to achieve by implementing Fiscal Health and/or Priority Based Budgeting, and provide an overview of the process so you understand the steps necessary to meet your goals. 

We look forward to talking with you!

P.S.- As a “thank-you” for attending and participating in our presentation(s), please see the link below for the full presentation slides.

ICMA University: Fiscal Health and Wellness through Priority Based Budgeting

Learning Lounge: Fiscal Health Modeling


Learning Lounge: Priority Based Budgeting


Keep an eye on the CPBB blog for further updates. Sign-up for our social media pages so you stay connected with TEAM CPBB!

Follow Us on FacebookFollow Us on Google+Follow Us on TwitterFollow Us on LinkedInFollow Us on RSS

If you're thinking of jumping into the world of Fiscal Health and Wellness through Priority Based Budgeting we would certainly like to be part of your efforts! Contact us to schedule a free webinar and identify the best CPBB service option(s) to meet your organization's particular needs.

 

Monday, September 8, 2014

City of Salinas CA "working on a significant new way of allocating valuable City resources" through Priority Based Budgeting


--> "This cutting edge trend is now a best practice and is growing in the government sector because it is helping cities, counties and other governmental agencies allocate resources to programs that matter most."- City of Salinas Finance Director

 

The City of Salinas, CA initially began implementing priority based budgeting (PBB) in partnership with the Center for Priority Based Budgeting (CPBB) in late 2013. Through the significant leadership of the City Manager and City Council, staff have worked through the five steps of PBB and now have the resources and tools (the PBB Resource Alignment Diagnostic Tool) necessary to make thoughtful decisions regarding the best use of limited fiscal resources for the benefit of the citizens.

The following Report to the City Council, and more comprehensive City of Salinas PBB Process Report, will be presented at the September 9th Council meeting. The CPBB congratulates the City of Salinas staff leadership and staff for their successful implementation of PBB!
-->

REPORT TO THE CITY COUNCIL - City of Salinas, California

DATE:            September 9, 2014

FROM:           Matt N. Pressey, CPA, Finance Director

SUBJECT:      PRIORITY BASED BUDGETING – Administrative Report

RECOMMENDATION:


It is recommended that the Council accept this administrative report and identify key policy questions and areas for departments to explore further.
DISCUSSION:

During the Council meeting, Chris Fabian with the Center for Priority Based Budgeting will provide in-depth coverage of how the “Resource Alignment Diagnostic Tool” can be used and he will facilitate a discussion with Council to identify key policy questions and areas Council may want departments to explore further using the Priority Based Budgeting model.  Chris will provide an overview of the types of policy questions that exist and provide samples of policy questions other agencies have come up with.

Background
With the leadership of the City Manager and City Council, staff has been working on a significant new way of allocating valuable City resources: Priority Based Budgeting.  This cutting edge trend is now a best practice and is growing in the government sector because it is helping cities, counties and other governmental agencies allocate resources to programs that matter most.

Priority Based Budgeting has been declared a leading practice for government management by the International City/County Manager’s Association (ICMA).  Priority Based Budgeting is a strategic alternative to traditional budgeting. The philosophy of priority-driven budgeting is that resources should be allocated according to how effectively a program or service meets the City Council’s goals and priorities and how effectively a program or service achieves the goals and objectives that are of greatest value to the community.

City Staff have progressed through the first four steps and are now in the final, fifth step of evaluating the model data and will begin to use the diagnostic tool.  The diagnostic tool used in the fifth step was briefly presented to the City Council at this May 6, 2014 meeting by Chris Fabian with the Center for Priority Based Budgeting. For the FY 2014-15 budget cycle, department heads were asked to review
all of the tier 4 (lowest tier) programs and consider reducing the program or eliminating the program.  For this next budget year and for the potential new revenue measure, departments will be trained on using the model to further evaluate the higher tier (1 and 2) programs and identify which programs deserve an additional allocation of resources.

The entire process has been a significant collaborative effort city wide including over 32 directors and mangers, as well as other staff, from all departments.

Priority Based Budgeting – Progress through the 5 Steps

As a reminder, there are five steps in priority based budgeting:

1. Determine “Results”
  What are the Goals and Objectives (Results) the City is in business to achieve?
2. Define Results
        “When the City does    X   , then the Result is achieved”
3. Identify Programs and Services
  Prepare a comprehensive list of programs and services
  Comparing individual programs and services as opposed to comparing departments that provide those services allows for better priority setting
4. Value Programs Based on Results
  Score the Programs based on their influence on Results
5. Allocate Resources Based on Priorities
  Using “Resource Alignment Diagnostic Tool”

ISSUE:


Shall the City Council accept this administrative report and identify key policy questions and areas for departments to explore further?

FISCAL IMPACT:

There is no impact to the City’s General Fund with the Council’s acceptance of this Administrative Report.

CITY COUNCIL GOALS:


Priority Based Budgeting promotes all five of the Council Goals of 1) Economic Diversity & Prosperity; 2) Safe, Livable Community; 3) Effective Sustainable Government; 4) Excellent Infrastructure; and 5) Quality of Life.

 

CONCLUSION:

 

With the fiscal challenge of addressing the General Fund structural deficit that grows to over $12.7 million by fiscal year 2019-20, the City needs a strategic approach to allocate limited resources according to how effectively a program or service achieves the goals and objectives that are of greatest value to the community.

 

And don't forget! The Priority Based Budgeting Resource Alignment Diagnostic Tool is going web-based! Priority Based Budgeting is a unique and innovative approach being used by local governments across the Country to match available resources with community priorities, provide information to elected officials that lead to better informed decisions, meaningfully engage citizens in the budgeting process and, finally, escape the traditional routine of basing "new" budgets on revisions to the "old" budget.  This holistic approach helps to provide elected officials and other decision-makers with a "new lens" through which to frame better-informed financial and budgeting decisions and helps ensure that a community is able to identify and preserve those programs and services that are most highly valued. 

We've already built the basic model, but have invited leading local government priority based budgeting implementers to assist us in crafting the final product. With the launch of this powerful new public finance technology tool, we now have 10 communities already signed up to define the future of on-line local government budgeting! If your community is interested in contributing to the final development of this disruptive new tool, and being among the first to utilize on-line priority based budgeting, contact us!

Keep an eye on the CPBB blog for further updates. Sign-up for our social media pages so you stay connected with TEAM CPBB!

Follow Us on FacebookFollow Us on Google+Follow Us on TwitterFollow Us on LinkedInFollow Us on RSS

If you're thinking of jumping into the world of Fiscal Health and Wellness through Priority Based Budgeting we would certainly like to be part of your efforts! Contact us to schedule a free webinar and identify the best CPBB service option(s) to meet your organization's particular needs.