Analyze This! Priority Based Budgeting w/ ELGL, CPBB + South Jordan City, UT!

"Priority-driven-budgeting is a common sense, strategic alternative to budgeting."   - South Jordan City Mayor David Alvord

ELGL and CPBB are proud to partner in an innovative webinar training series, "I Want to be Your Analyst." This series, consisting of a monthly blog and training webinar, is intended to provide case studies, introductions to unique analytic tools, and expertise into the hands of all local government (emerging) leaders.

 
This ten part series will pair proven CPBB concepts and tools with one of our partner local government communities who are actively implementing (or have implemented) our innovative trends. This will provide key insights into how communities actually utilize these tools.

The January Training Webinar

With I Want to be Your Analyst, local government professionals will gain an introduction and key
insights into the CPBB war chest of cutting-edge online tools. On January 13th at noon PST, join ELGL, CPBB and South Jordan City Executive Leadership, including City Manager Gary Whatcott, CFO Sunil Naidu and Budget Director Don Tingey as we explore and discuss Priority Based Budgeting (PBB). In this training webinar, we'll specifically discuss:

• What is Priority Based Budgeting
• How to implement PBB
• Advanced implementation (Online Priority Based Budgeting)
• Successes and challenges in how South Jordan City implemented PBB

Register here!

Message from South Jordan City Mayor David Alvord

Some of you may know that in preparing for the 2015-2016 fiscal year budget the City Council, City Manager, senior staff and I engaged in a new priorities based budgeting format. Priority-driven-budgeting is a common sense, strategic alternative to budgeting. The philosophy of priority driven budgeting is that resources should be allocated according to how effectively a program or service achieves the goals and objectives that are of greatest value to the community. As those needs are identified and prioritized through discussion, a very clear picture of where to allocate resources emerges. As a result the City will once again have a balanced budget in 2015-2016.

One of the budget priorities for me since I became interested in local government has been seeing  that taxes reflect our actual needs. I am pleased to announce that after working with our City Council and city staff, that the 2015-2016 budget will include further reductions in tax revenue, meaning that the City will be taking less taxes. This accomplishment could not have happened without the cooperation of our excellent staff and employees.  

Priority-based budgeting also requires elected officials to make fiscal decisions which benefit the long term financial health of the City. To that end, the City will be paying off $4,000,000 in debt from the bond used to purchase the Mulligan’s property. Reducing our debts improves our already well regarded credit ratings and improves the overall fiscal health of South Jordan.

Purpose of Priority Based Budgeting

South Jordan’s residents and elected officials disagree about a wide variety of political positions. That’s part of the political freedoms we share in the United States. Our shared commitment to efficient governance, however, will focus all of us on working together to find solutions that benefit our common good. Thank you for the privilege of serving as your Mayor. It’s great to live in South Jordan!

Webinar Training Prep

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 100 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.

 

Register here!  January 13th at noon PST, join ELGL, CPBB and South Jordan City Executive Leadership as we explore and discuss priority based budgeting, the power of the online priority based budgeting tools and a case study of PBB implementation from South Jordan City, Utah!

City of Kalamazoo, MI Evolves the Way They "See, Think & Touch" the City's Budget!

"The Priority Based Budgeting process is the tool which injects and integrates our strategic planning into our everyday activities." -  Kalamazoo City Manager James Ritsema

In March of this year, we wrote about two organizations who were empowering citizens with civic engagement through priority based budgeting. One of these organizations we wrote about was the City of Kalamazoo, Michigan.

We wrote, At the Center for Priority Based Budgeting (CPBB), we're constantly impressed and amazed at just how innovative local government communities can be. Through our concepts of Fiscal Health and Wellness through Priority Based Budgeting, we've partnered with communities to define exactly what the community is in business to achieve and then prioritize scarce resources (tax dollars) to meet those community results. This work has allowed nearly 100 cities, counties, school districts and special districts to completely redefine their community.

When implementing the priority based budgeting (PBB) process, civic leaders have the option of engaging residents in an effort to define the results the community wishes to achieve.... or not. The citizen engagement component to this process can be time consuming and challenging, but often lead to a more robust set of community results that are fully supported by the community residents.

The City of Kalamazoo, Michigan, is deep in the process of implementing priority based budgeting while engaging with citizens in an effort to collaboratively define the future of the community. This program, Imagine Kalamazoo, is the city's citizen engagement platform where citizens can weigh in and help define the future of Kalamazoo.

Priority Based Budgeting in Kalamazoo 2.0

Just last week, the City of Kalamazoo released their proposed budget for fiscal year 2016-2017. This is the first budget for the city since implementing priority based budgeting (Kalamazoo implemented PBB in 2015 after their budget was developed and approved).

In the Fiscal Year 2016 - 2017 Proposed Budget Transmittal Letter, City Manager James Ritsema

writes: "Priority-Based Budgeting (PBB): the administration has instituted Priority-Based Budgeting for the first time in the Proposed Fiscal Year 2016 - 17 Budget. This will evolve the way that we see, think and “touch” the City’s budget. Instead of abstract line items, compartmentalized, bureau-centric thinking, and incremental budget cuts, PBB provides a tool that refocuses decision-making around well-defined programs, which are prioritized to maximize scarce resources towards achieving the Community’s desired and required results, including a safe community, effective transportation systems, environmental stewardship, and so on.

PBB also involves continuous improvement in efficiencies by way of new technologies, better organization, and leveraging partnerships or handing off functions to other overlapping entities, in order to lower costs and improve outcomes. In 2016, the City will be identifying meaningful and accurate measurements to ensure that high-priority programs are achieving results. The City is retasking an analyst position in the Management Services Department to serve as our new Budget Manager, a position which will provide transformational leadership to fully realize the promise of Priority Based Budgeting, as well as promoting best practices in citywide budgeting."  

City Manager Ritsema also discusses how to bring "visions and values of our organizational leadership and community into focus in the form of strategic plans." The following is quoted from the "From a "Priority-Driven" to "Vision-Driven" Trajectory" section of his Proposed Budget Transmittal Letter.

From a “Priorities-Driven” to “Vision-Driven” Trajectory

Our budget is the natural result of continued negotiation between the expected role that the City plays in promoting and preserving the quality of life that our citizens desire and deserve, in the context of the realities presented by our economic and cultural environment. In order that our activities remain fresh and relevant, and our budgeting process propels continuous improvement in our outcomes, we need to constantly reground ourselves in the vision and values of our organizational leadership and the community at large. The City utilizes a number of collaborative bodies and processes to bring these visions into focus in the form of strategic plans. 

In 2016, the City will be engaging all of its planning resources to “reset” the City’s vision under the auspices of the Imagine Kalamazoo 2025 project. As the name suggests, the result of this process will be a new shared community vision, expressed through the many strategic plans that the above graphic depicts.

This upcoming year presents us with an opportunity to move beyond transitional management tactics and fully engage the organization and the environment with our new strategic tools. This includes identifying sustainable revenue for ongoing operations and programs, building on the high-performance organization model that is sparked with innovation and fueled by an ethos of continuous improvement. The Priority Based Budgeting process is the tool which injects and integrates our strategic planning into our everyday activities, by aligning the allocation of resources with the vision and values of the Imagine Kalamazoo 2025 initiative.  

One of the things that stands out to us about Kalamazoo's implementation is their complete dedication to infusing PBB into the culture of the City, and the fabric of the community. When we first met their implementation team, City Manager Jim Ritsema brought his senior leadership team along with City Council members in a passenger van, traveling all the way to Ann Arbor for a Michigan Municipal League day-long training. From that moment, it was clear that their dedication level was extremely high, and so were there expectations for how this process could help transform the community.

Led by Laura Lam, Community Planning and Development Director, Patsy Moore, Deputy City Manager, and Jeff Chamberlain, Deputy City Manager, the City successfully implemented one of the most comprehensive and extensive citizen engagement initiatives associated with PBB. Chief Financial Officer Tom Skrobola led the City's Fiscal Health modeling initiative, and then turned around to lead the PBB process. And all throughout the process, the City's elected officials were involved and engaged, participating in the strategy and guidance of the process.

Hats off to Kalamazoo for all that they endeavored to achieve, and their dramatic success in executing such a comprehensive implementation in a single year. We at CPBB are proud to be associated with your tremendous leadership in local government!

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

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.

  

 

CPBB Fiscal Mission Control Center