Thursday, November 6, 2014

Priority Based Budgeting - Innovation & Implementation Beyond Cities and Counties

At the Center for Priority Based Budgeting (CPBB), we're proud of our work assisting dozens of
cities and counties across North America fundamentally change their approach to resource alignment through Priority Based Budgeting (PBB). PBB contributes to a communities long-term financial sustainability and allows communities to better serve their residents in the most effective, efficient and fiscally responsible manner possible. The City of Boulder, Colorado recently stated that "priority based budgeting is the "framework" in which all budget decisions are made."

We developed Priority-Based Budgeting in 2009 due to the very fact that nothing else existed within local government public finance that truly is scalable, transferable and effective. And our work in assisting over 70 city and county local government communities, of different geographies, demographics and economies, across the US and Canada, successfully implement this best and leading practice substantiates the demise of the myth that little can be replicated across local government communities.

What excites us so much now is discovering how truly scalable, transferable and effective priority based budgeting can be not only for cities and counties, but beyond! Local government is not specifically confined to cities and counties, but also represents school districts, utility districts, fire districts, special districts and a variety of public authorities, boards and commissions. There are over 50,000 of these "special districts" across the US which are using public dollars to provide some level of public service. And now this sector of local government is also discovering the power of priority based budgeting!

Mountain View Fire Rescue (MVFR), a fire protection district based out of Longmont, Colorado, is the latest "special district" to successfully implement priority based budgeting. MVFR is a full service fire department tasked with the "care and safety of 50,000 permanent residents and a commuting population of more than 60,000 daily. The district has seven fire stations located strategically throughout its 184-square-mile district."

MVFR has recently published an article on how they've successfully implemented priority based budgeting. MVFR states, "Over the past year MVFR has worked with the Center for Priority Based Budgeting (CPPB) to offer a clearer, more transparent picture of our Organization’s fiscal health.  MVFR is the first independent Fire District in North America that has taken the steps to examine our financial health from a new angle to ensure we are providing the utmost transparency to our citizens.

The CPPB has provided us with the tools and techniques needed to assess and monitor the District’s picture of fiscal health.  They have assisted MVFR in clearly defining 5 goals and objectives that lead to a process that prioritizes spending to align with these goals. 

MVFR has always placed a strong emphasis on superior financial management and we are prudent with taxpayer’s dollars.  Using Priority Based Budgeting gives us another set of tools to bring more transparency to our business and assist us with analyzing and improving on the financial health for the MVFR District." To read the full article and see a larger image of the above graphic click here.

We're also proud to announce that we've partnered with JEFFCO Public Schools in Colorado to launch priority based budgeting in our first school district! Jeffco has been providing education in Colorado for over 60 years. They serve nearly 85,000 students representing approximately 9 percent of all K-12 students in the State. And with a budget of nearly 1 billion dollars, this is a fantastic opportunity to ensure these resources are strategically invested in Colorado's students (through priority based budgeting).

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.  

The underlying philosophy of priority based budgeting is about how a government entity should invest resources to meet its stated objectives. It helps us to better articulate why the services we offer exist, what price we pay for them, and, consequently, what value they offer citizens. The principles associated with this philosophy of priority based budgeting are:

• Prioritize Services. Priority based budgeting evaluates the relative importance of individual programs and services rather than entire departments. It is distinguished by prioritizing the services a government provides, one versus another.
• Do the Important Things Well. Cut Back on the Rest. In a time of revenue decline, a traditional budget process often attempts to continue funding all the same programs it funded last year, albeit at a reduced level (e.g. across-the-board budget cuts). Priority based budgeting identifies the services that offer the highest value and continues to provide funding for them, while reducing service levels, divesting, or potentially eliminating lower value services.
• Question Past Patterns of Spending. An incremental budget process doesn’t seriously question the spending decisions made in years past. Priority based budgeting puts all the money on the table to encourage more creative conversations about services.
• Spend Within the Organization’s Means. Priority based budgeting starts with the revenue available to the government, rather than last year’s expenditures, as the basis for decision making.
• Know the True Cost of Doing Business. Focusing on the full costs of programs ensures that funding decisions are based on the true cost of providing a service.
• Provide Transparency of Community Priorities. When budget decisions are based on a well-defined set of community priorities, the government’s aims are not left open to interpretation.
• Provide Transparency of Service Impact. In traditional budgets, it is often not entirely clear how funded services make a real difference in the lives of citizens. Under priority based budgeting, the focus is on the results the service produces for achieving community priorities.
• Demand Accountability for Results. Traditional budgets focus on accountability for staying within spending limits. Beyond this, priority based budgeting demands accountability for results that were the basis for a service’s budget allocation.

Priority Based Budgeting has now been successfully implemented in over 70 local government
communities coast-to-coast. We take pride in our partnership with these CPBB communities in an effort to improve a community's fiscal health for the benefit of the entire community. 

The core CPBB concepts of Fiscal Health and Wellness through Priority Based Budgeting are truly inspiring a new wave of municipal fiscal stewardship. A complete revolution in how local governments utilize their limited resources to the benefit of the communities they serve. 

This "New Wave," the fundamental paradigm shift in municipal financial stewardship, must be accepted if local governments are to be financially viable and able to create the types of communities their citizens are proud to call home.

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 that vision is created through 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!

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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.


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