“This is a way to really get to know your municipality as to where your dollars are going.” Town Administrator Thomas Guerino
Looking for a better way to analyze and develop Bourne’s annual budget, town administrator Thomas M. Guerino has introduced town leaders to a different approach to the budgeting process.
Mr. Guerino said that the new process, known as priority based budgeting, is a way of “drilling deeper” to determine where budget cuts would be most effective. He said the system would not be a part of this year’s budget planning process, but he would like to incorporate it in the near future.
“If we can implement this over the next two to three years, it will become a matter of course on how we do business, and I think you’ll see that we are able to really hone down on expenditures,” he said.
Mr. Guerino said he first became
aware of priority based budgeting when he attended a town managers
conference in Seattle, Washington, last year. Members of the Bourne
Board of Selectmen, Bourne Finance Committee and the Bourne School
Committee were introduced to the new budgeting approach Tuesday night,
January 13, during the first part of a two-night workshop at Bourne
Middle School.
The workshop was taught by
Christopher E. Fabian, co-founder of the Lakewood, Colorado-based Center for Priority Based Budgeting. Mr. Fabian and his partner, John M.
Johnson, founded the organization back in 2010.
Mr. Fabian explained that there
is a five-step process to priority based budgeting that begins with the
simple question: Why is a given organization, in this case the Town of
Bourne, in business? In essence, what would be the result of the town
not being in business? Subsequent questions include how to determine if
the town is achieving its desired results; what to do to achieve those
results and how much does it cost; and which programs and services have
the greatest impact on the results the town is trying to achieve?
The questions are applied to each
department and each program or service provided by that department. A
score is then applied to that offering. After the department does it own
self-review, programs go through a peer review process that results in a
final composite score. With all the programs scored, a four-line bar
graph is then created which displays the number of programs having the
highest impact on the town’s desired results down to those having the
lowest impact. Decisions can then be made as to which programs are
crucial and which may have become obsolete.
Mr. Fabian said that priority based budgeting is a more effective alternative to measures towns often resort to when crafting a budget, including implementing an across-the-board cut. Admittedly, the advantage to an across-the-board cut is that no one department feels more pain than another. It is also easier than attempting to justify why one department or program should get more money than another, he said.
However, an across-the-board cut
on a municipal level would be the same as a homeowner applying a similar
cut to their household expenses. The example he drew would be cutting
the amount paid to a monthly mortgage bill by the same amount as the
Netflix bill. That, he suggested, is not something the average homeowner
would do.
"If we would never do it in our own house, why do we do it in our organizations?” he said.
The idea behind priority based
budgeting is to determine which services provided by the town are
“mortgage” expenses versus “Netflix.”
“What we’re trying to do with
priority based budgeting is understand your best investments, understand
the Netflix, where you can perhaps rechannel some of the resources to
something that’s getting better results,” he said.
Mr. Fabian said the process does
allow for identifying programs or services that are mandated by either
the federal or state government, or the town itself. In those cases, if
the mandated program falls within the category of lowest impact, the
suggestion would be to seek an outside, independent source of funding,
he said.
He also noted that priority based
budgeting can reveal misperceptions that all the programs offered by a
single department, such as police and fire, are of highest priority. He
mentioned programs in both Boulder, Colorado, and Chandler, Arizona,
that the police chiefs in each city felt were not achieving the desired
results. Funding for each was rerouted to other programs, he said.
Mr. Guerino said he does not know
the cost of the program yet, but “we’re not talking huge money.”
Whatever the cost is, however, it will be shared by all the town’s
departments. He admitted that it is a very involved process, and that it
would take anywhere from three to five years before it is up and
running fully. During the first several years, it would be a continual
process of evaluation. After that, department heads would examine
programs on more of a quarterly basis to see how services are matching
up with expectations and needs, he said.
“This is a way to really get to know your municipality as to where your dollars are going,” he said.
This article was originally published in CapeNews.net
This article was originally published in CapeNews.net
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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