Recent information from Moody's (the nation's largest bond rating agency) confirms that prioritization processes such as what Blue Ash is going through demonstrate a strategic approach to managing the current fiscal environment.
So where do we go from here? The local government advisors developed a unique tool that Blue Ash can utilize for years to come as a part of the city's annual budgetary planning process. This tool will be valuable in assisting the council and administration in determining what services and programs contribute directly to the city's overall objectives, including the evaluation of any future new programs or services being considered.
Since early this year, the city of Blue Ash has been working with ICMA-affiliated local government advisors Jon Johnson and Chris Fabian on a process with the city in evaluating and prioritizing city services as a way to assist in budgetary planning.
To provide brief background, for the past several years, the city council and administration have recognized that like virtually all municipalities across the country, recent economic conditions have had a significant impact on revenues. Blue Ash enjoyed a 20-year double-digit revenue growth period from the late 1970s to the late 1990s, experiencing an average earnings tax growth rate of about 12.7 percent per year. However, over the past 10 years, Blue Ash's revenue stream has leveled out, with Blue Ash experiencing very little growth - characteristic for a maturing community such as Blue Ash.
This impact was intensified by two significant national-level economic downturns during this period: the attack on our nation on Sept. 11, 2001, and the ongoing economic recession. It is clear that although Blue Ash has fared better than most communities in the region, we are not immune to national trends and economic downturns, and that we, like other communities, will have to adjust to a "new normal" - one very different than ever experienced.
The administration and council have worked hard for years to keep operational expenses in check. In fact, over the past three years, those expenses have been held to an average increase of less than 1 percent each year, despite increasing costs (especially associated with gasoline, energy, health insurance, etc ...).
If the city had to deal only with the conditions associated with a maturing community, these fiscally-conservative efforts would have been more than sufficient to keep things on track. However, given the severity of the revenue declines since 9-11 and during the current recession, the impact upon the city's earnings tax collections - the city's greatest source of annual revenue - has been significant, requiring even further adjustments.
With this in mind, help was sought from the local government advisors in developing a prioritization process that could be used as one tool within the city's budgetary process. This course of action is intended to help focus the city's decision-making process by basing priorities on outcomes.
According to Johnson and Fabian, addressing current fiscal realities while still meeting the objectives and the expectations of citizens represents the biggest challenge to every organization's long-term fiscal wellness. Prioritization of services creates an objective and transparent decision-making process, one that ensures programs of higher value to citizens - those that achieve the organization's objectives most effectively - can be sustained through adequate funding levels, regardless of the economic conditions.
Recent information from Moody's (the nation's largest bond rating agency) confirms that prioritization processes such as what Blue Ash is going through demonstrate a strategic approach to managing the current fiscal environment.
Work began on this budget prioritization process with the local government advisors at the Jan. 28 council work session, when Mr. Johnson and Mr. Fabian facilitated an exercise with council to determine the city's "results," or overall objectives and strategic goals. After much discussion, it was determined that the city's overall objectives should be (listed in no particular order):
* strong and vibrant economic environment;
* attractive and well-maintained community;
* a safe community;
* quality and diverse leisure-time activities;
* quality and desirable neighborhoods;
* connected, accessible and reliable transportation network.
Additional work with the administration and staff during the following weeks took place to further define what each of these objectives means specifically to Blue Ash. Work during this period also involved the creation of an overall "inventory" of city services - what programs and services that Blue Ash offers to its citizens.
A next step in this prioritization process involved the "grading" of the overall city services and programs - specifically grading in terms of how each program or service rates specifically to each of the six overall city objectives listed above. Those programs that contribute significantly to the objectives received higher "grades" than those programs that do not contribute directly. Next, the overall cost of each program was determined.
In addition to the internal work described above, the city incorporated several other efforts into this process to assure maximum citizen input and involvement (citizen input was factored into the weighting of the individual objectives). One of these efforts involved the citizen survey which was recently completed with the assistance of the Institute for Policy Research associated with the University of Cincinnati.
IPR surveyed more than 500 Blue Ash adults (via telephone), and most of the survey questions tied directly to the budget prioritization process, including incorporation of the overall objectives determined earlier in the year. In addition to the citizen survey, the following efforts were also incorporated into the prioritization process:
* Written comments and input received from residents through the station set up at the Recreation Center earlier this year.
* Comments and input received from citizens who attended an open house held at city hall.
* Comments and input received from Sycamore High School students. the Advisors spent more than half a day in March talking directly with five high school senior level government classes.
* Comments and input received from business citizen participant from a recent survey of business citizens.
* Input received from a recent survey from Raymond Walters College students.
At the May 27 council meeting, the advisors explained the results of these computations. The results show clearly that the city is in fact spending most of its resources on the types of services that contribute most directly to the overall objectives.
"We were very impressed with this outcome since most of the other communities we are assisting with through this process have not seen similar results," noted Mr. Johnson. "This will present a real challenge to your city, though, as you determine how to proceed," added Johnson.
Also at the May 27 council meeting, Eric Rademacher from UC's IPR gave a presentation of the citizen survey results. Among other items noted, Rademacher stated that "it is clear: when it comes to quality of life, the city has very stable numbers" (in comparing recent past citizen survey results). "The results show residents continue to have a great deal of satisfaction from living in Blue Ash," added Rademacher.
Another interesting result from the citizen survey in considering the budget prioritization process concurrently underway was that the programs and services Blue Ash citizens found most important to them correlated very highly with those overall objectives determined by council earlier in the year.
"It is evident that council and the administration have their finger on the pulse of Blue Ash citizens in knowing what is important to them in terms of the services and programs offered by the city," noted Johnson.
So where do we go from here? The local government advisors developed a unique tool that Blue Ash can utilize for years to come as a part of the city's annual budgetary planning process. This tool will be valuable in assisting the council and administration in determining what services and programs contribute directly to the city's overall objectives, including the evaluation of any future new programs or services being considered.
Although it is clear that additional implementation of operational cost-saving measures will be necessary throughout this year and in future budgets, the driving goals of Blue Ash will remain unchanged: to continue investment in community infrastructure, such as roads, sidewalks, storm drainage, etc.; to continue the provision of quality core services for residential and corporate citizens, such as snow and ice control, police and fire public safety services, etc.; and to continue investment in community assets and programming, such as the recreation center and other parks, special events, etc ...
Longer-term, the city will remain focused on operational cost containment and reductions to minimize impact in these core areas which are so important to our citizens, community, and quality of life.
Sue Bennett is Blue Ash's public information officer.
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