City of Mission Viejo, California Successfully Balances Budget with Priority Based Budgeting

Read the City's Budget Message:
http://wpean.org/assets/0/72/108/112/1449/a56eccba-c58f-4802-8766-8562031ded4a.pdf

The goal in developing the 2011-13  budget was to  avoid having to  draw down discretionary reserves to balance the budget, and given that the 2009-11 budget incorporated roughly a $1.5 million annual draw down of discretionary reserves, the need to make a significant reduction in the City’s adopted budget for 2011-13 was anticipated.

The PBB process, used by a number of agencies around the country, is designed to  better align  an agency’s budget resource allocation decisions with  community  values and the agency’s strategic goals.  The underlying premise of the approach is that across-the-board cuts that are often used in governmental agencies to achieve budget balance, are not the best approach since they put equal importance on all budget expenditures when, in fact, some activities contribute more to achieving the strategic goals of the organization than do other activities.

The City Manager developed budget reduction targets for  FY 2011/12 and FY 2012/13 for each City
department based on the results of this budget prioritization project that were proportionate to how the
department’s programs fell into the various quartiles.
 Each City department  was asked to develop its  FY 2011/12 and 2012/13 budgets  based on  the target reduction amounts, but was also given the flexibility of proposing alternative approaches for reaching the target.   Departments proposed various combinations of reductions, primarily  in lower-priority programs, staffing reductions and/or revenue increases.  The budget reductions included in this adopted budget are focused on the lower scoring activities, or are in areas where greater cost efficiencies can be achieved in the delivery of the higher scoring activities.

The PBB process proved to be a very valuable tool in assisting staff with the development of the 2011-13 Budget and will continue to be a valuable resource for developing budgets in the future that are consistent with the City’s strategic goals.