City of Humboldt Open House Brings Priority Based Budget to Public

"Priority based budgeting will better allow the city to support its long-term strategic goals based on community values."

This article originally written by Becky Zimmer from the Humboldt Journal. 

The public had their chance to ask questions on April 5th at the public budget meeting at the Uniplex.

City Manager, Roy Hardy, made the presentation to a small crowd on what the 2016 budget is going to look like in terms of tax increases and social programs.

Unlike the budget draft that had a $3.6 million deficit, Hardy presented a $260,000 deficit to the public since now some more finite numbers have been decided, including some revenue streams that were not included in the draft budget.

"We're getting down to the final budget decisions that need to be made. It needs to be put in council hands."

When it comes to the amount of feedback the city has received from Humboldt residents, the waste management program has received the most feedback through social media.

"Council is going to have to look at that one very seriously," says Hardy. "There are a number of viewpoints that say yes, it is good, shows that we're becoming a city.... and on the other hand there are others that say how is this going to benefit me?"

Council has to look at the community as a whole when it comes to these split decisions.

Hardy says the waste management program will make Humboldt greener and cleaner so that has to play a big role in the decision.

The needs and wants are always going to be greater than the amount of money the city has to work with.

Priority Based Budgeting, which was brought in fully this past budget season, allows for the rating of

programs on a one to four scale. Looking at the rated programs, there is $12 million dollars that is doing what it needs to do in the one and two rated categories, says Hardy. Three and four ranked programs, which make up $2.3 million for analysis, does not mean the program needs to be scrapped. Hardy says it just means that the programs need to be evaluated more fully.

"In some cases, there are going to be some programs that score low but we still have to have them at the end of the day."

Some of these numbers can be deceiving since money can be spent on one program that fits many city goals.

When it comes to the different goals receiving money, Humboldt spends more money on being a safe, reliable infrastructure, and sustainable community.

That paints a picture that Hardy says the city did not have before.

The city can now see the correlation between dollars spent and the values that they want to focus on, says Hardy. Priority spending then takes it a step further and evaluates if the city is getting the, "best bang for the buck."

Creating new partnerships is something the city needs to look at going forward, says Hardy. With major projects coming up, including the Multiplex, Centennial Park, and more infrastructure work that needs to be done, regional partnerships and discussion needs to take place.

"Some of the services we are looking to provide are ones you won't find in a smaller municipality. We have to make the effort in saying what would be the benefit to the residents of your municipality if Humboldt had this type of facility or developed these programs."

Community grants is something that Hardy thinks the city should reevaluate when it comes to budgeting for programs, with exception to the Community and Leisure Services Department.

To get these programs running without city based grants, Humboldt would need help from other partnerships.

An example of the types of partnerships Hardy is mentioning are things like the LED sign west of the city. It is on city land but there were no tax dollars that went into the sign itself. The city gets the benefits of it without burdening taxpayers.

"That's a kind of partnership that takes on a different look, so those are the things that we're exploring with others." 

The CPBB congratulates the City of Humboldt on their innovative work implementing priority based budgeting. And their utilization of PBB to accelerate actionable decision-making, especially surrounding partnership opportunities.

To find out more about how City of Humboldt utilizes and applies priority based budgeting data, check out the following links:

City of Humboldt 2016 Public Budget Presentation

2016 City Budget Information

"Our Humboldt" Strategic Plan Incorporates Priority Based Budgeting

City of Humboldt Budget Page of Website

The Center for Priority Based Budgeting

“A Prioritized World” 

2016 Annual (Un)Conference

Denver, Colorado | August 2 - 4, 2016

Sheraton Denver Downtown Hotel 

  Register Now and Book Your Hotel!

3 Ways Governments Can Better Manage Their Finances

"Priority-based budgeting encourages governments to engage with citizens, measure their expectations, and factor this feedback into their budgetary decisions."

Written by Erin Latham and published by GovLoop

Many municipalities across the U.S. are caught in never-ending cycles of financial trouble. These governments find themselves burdened by budget deficits and massive debts that simply pile up over the years. Sometimes, the situation gets so out of hand that they have to file for bankruptcy — a rare but devastating last resort.

When governments fall into so deep a financial hole, it can be very difficult for them to climb out of it. It takes money to reverse the situation — but where does this money come from?

 

Government leaders often create bigger problems for their municipalities when they try to supplement their budgets with cash reserves instead of raising taxes. This approach only temporarily stops the financial bleeding; it doesn’t solve the problem permanently. It merely defers the inevitable tax raise until the next year because current expenditures don’t match current revenue.

However, raising taxes also comes with its own set of hang-ups. If economic growth hasn’t kept up with projected growth surrounding debt limits, it becomes extremely difficult to keep increasing taxes year after year. Eventually, these constantly rising taxes will induce a mass exodus of residents, which will only make the situation worse.

The resultant shrinking tax base is a worst-case scenario for a local government balancing its budget. Not to mention that even after the economy begins to rebound, most governments cannot immediately respond because they need to wait until they have formulated and executed their annual or biannual budgets.

There’s no question that the cards are stacked against cash-strapped municipalities, but it certainly isn’t impossible for them to get back on track.

Making Better Budgetary Decisions

Governments that rely primarily on sales tax revenue are searching high and low for a quick and easy way to minimize expenditures without sacrificing the services they provide. Often, they’ll wisely look to their vast collections of business data for answers, but they’ll find themselves drowning in too much outdated, disorganized, and irrelevant information. In fact, anywhere from 70 to 80 percent of all corporate business intelligence projects fail for these very reasons.

When governments can’t glean useful insights from their mountains of data, it’s nearly impossible for them to build anything that resembles an effective budgeting road map.

Tech-driven strategic methodologies and cloud-based applications brought us into this era of big data, and they can also help us thrive within it. Here are three potential solutions to the public sector’s budgetary issues:

Priority-Based Budgeting. Join the growing ranks of local governments adopting priority-based budgeting in their attempts to overcome fiscal challenges and unsustainability. This methodology provides cities with a comprehensive review of every program they offer, along with their costs and their effectiveness, helping them prioritize and align available tax dollars to the most important programs.Priority-based budgeting also encourages governments to engage with citizens, measure their expectations, and factor this feedback into their budgetary decisions. The Center for Priority Based Budgeting has introduced intuitive web-based platforms that reshape the way communities can influence how their resources are leveraged. 

 

South Jordan, Utah, is one such city that has embraced this strategy, granting each member of its city council access to an online portal that displays the costs and performances of more than 500 programs. Jupiter, Florida, has also seen big results from priority-based budgeting, reallocating nearly $700,000 immediately after gaining the insights and feedback made possible by the methodology.  

 

Align Strategy With Fiscal Performance. In the modern era, you can ensure your fiscal health by making budgetary decisions and adjustments throughout the year — not just at the beginning of every new budget cycle. Newer cloud-based technologies enable governments to consolidate their data silos into one universal reporting and strategic planning platform that — through enhanced operational intelligence and embedded analytics — reveals the scope of their municipal needs and aligns them to their strategic priorities. This allows cities to not only make decisions on the fly, but also to better plan for the future and share their strategies with their residents.

 

Recently, one of my company’s clients aggregated its current and historic law enforcement time-tracking data into one cloud-based reporting solution. This enabled the city to explore how its law enforcement payroll costs corresponded to its population growth and other demographic information. Moving forward, it could use these data to successfully request additional personnel for the department. In the past, such requests were often denied because of their lack of statistical backing.
 

Intelligent Reserve Usage. Each local government needs an emergency fund, and these cash reserves should never be used for day-to-day activities. They should be used only for extraordinary circumstances, such as paying off debt.Incorporating executive and operational views of the organization through cloud-based reporting solutions provides governments with automatic liability reconciliation, real-time fund balance calculations, and historically based cash-flow projections — all of which provide vital pieces of operational intelligence when it comes to identifying the right time to use cash reserves.One county government I work with ended up saving $7 million in interest payments over time by taking this approach.

Local governments are no strangers to financial issues, and some of their common practices only make the problems worse. By consolidating their existing applications and data silos into one cloud platform that offers fresh and strategic budgetary methodologies such as priority-based budgeting, local governments can achieve more stability and visibility and can pave the way to a brighter future.

The Center for Priority Based Budgeting

“A Prioritized World” 

2016 Annual (Un)Conference

Denver, Colorado | August 2 - 4, 2016

Sheraton Denver Downtown Hotel 

  Register Now and Book Your Hotel!

City of Joplin, MO Seeks Public Input to Set Priorities for Budgeting!

“Priority Based Budgeting looks at many factors of the City’s operations” - City Manager Sam Anselm.

The City of Joplin, Missouri is in their first year of the priority based budgeting process. And they're making excellent strides in their work! As part of this process, Joplin is conducting a citizen survey to collect public input and validate community results.

In order to gain as much public input as possible, City Manager Sam Anselm provided a comprehensive overview of priority based budgeting in Joplin via a live radio interview. And the city has been promoting the citizen survey through their website and social media. The following is from the City of Joplin's website.

What truly matters to citizens as they think about their city of residence? Is it recreation and leisure activities? Feeling safe and secure? Or perhaps having smooth streets that allow large amounts of traffic to travel from one place to another? There could be dozens of different answers, and the City is asking citizens to tell us THEIR answers related to the Joplin community by taking a short survey.

This survey is part of the new Priority Based Budgeting (PBB) process that the City of Joplin has adopted. PBB helps ensure that resources are allocated in the best way to meet the needs of citizens. It does this by asking the community and city council to determine what the priorities of the community are. The priorities are then given definitive and measureable results through programs offered by various departments. Through a rating system, money is allocated to the programs and areas that help the City achieve the community’s goals.

The survey asks Citizens how they would rank the priorities. By completing the two-question survey, citizens can influence how City resources are allocated to the areas that matter most to their community. The input received will influence how the City invests in and achieves each result. The priorities listed were determined through an analysis of City planning documents and in consultation with City Council and City staff.

“Priority Based Budgeting looks at many factors of the City’s operations,” said City Manager Sam Anselm. “By establishing goals and having the public rank these, it begins to identify service areas that our community sees as important. City Council, staff and the public then begin to review resources utilized in working toward these goals, as well as those that may not be related or providing results. The process gives our citizens a direct opportunity to engage and help set priorities for their community. This method helps to guide appropriate resources to these priorities so we can better meet the citizens’ needs.”

To take the online survey, click on the link at the end of this article. Citizens can also fill out a survey at Joplin City Hall. Surveys will be available at the Main Lobby desk and returned into the box near the surveys. Surveys should be returned by Monday, April 18.

To complete the survey....

The Center for Priority Based Budgeting

“A Prioritized World” 

2016 Annual (Un)Conference

Denver, Colorado | August 2 - 4, 2016

Sheraton Denver Downtown Hotel 

  Register Now and Book Your Hotel!

 

Analyze This! Your Fiscal Command Center w/ ELGL, CPBB + City of Shawnee, Kansas!

"To make smart, proactive decisions, municipal leaders need a fiscal command center for data-creation, data analytics and data-driven decision making."

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 April 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 April 20th at noon PST, join ELGL, CPBB and City of Shawnee, Kansas City Manager Carol Gonzales as we explore, discuss and demonstrate how establishing a Fiscal Command Center can empower your local government to make smart, proactive, data-driven decisions. In this training webinar, we'll specifically discuss:

• What is a Fiscal Command Center
• Creating an accurate and actionable data set
• Implementing and utilizing data analytics and data-driven decision making
• CPBB partner City of Shawnee, KS case study presented by City Manager Carol Gonzales – “The City's Work Plan includes projects for 2015 and 2016 and ties together the City’s work with PBB as well as projects that move the City forward in meeting Results. 

Register here!

 

Webinar Training Prep

It goes without saying that the vast majority of local governments No. 1 priority is to establish a vibrant community by establishing and delivering great results to its citizens. This outcome is typically met by efficient resource utilization and delivering high-quality services that exceed citizen expectations.

Sounds simple, right? But how exactly do you connect available resources, costs, and outcomes associated with specific services to communicating value (results) to citizens? 

Does your local government specifically know, for example, the true cost of your curbside recycling program (including all fees, rates and charges)? With what data would you work with, if you were tasked with analyzing outsourcing (or in-sourcing) vehicle maintenance? What if your organization was approached with a proposal to consolidate inspections services with another jurisdiction - what program data would you have on hand to evaluate and execute the right decision?

Assuming detailed program-by-program level cost data actually exists within your organization, where would you find it? In the budget, on a separate spreadsheet in the Budget Director's or Mayor's office? And again assuming this data exists, what else could you do with it? 

Could you make ready comparisons to other public-sector, or private sector service providers (to evaluate the efficiency or the appropriate sourcing of your programs); could you bring departments into the process of understanding and communicating better what they do, and how much it costs, on a program level; could you see clearly how your workforce is associated with programs (do you have retirement eligible staff serving a particular program, and are you aware of how you'll address succession planning?, for example); and will it allow you to transition your approach (or the department's approach) from line-item budgeting to program budgeting?

Data-Focused Decisions

The truth is that very few governments are able to meet their No. 1 priority because they don't have the hard data required to make smart and transparent decisions throughout their organization.

Nor do they have the internal structure, a fiscal command center, where the critical data flows together and provides a visual platform for intelligent, transparent, data-focused decisions to be made.

To make smart, proactive decisions, municipal leaders need a fiscal command center for data-creation, data analytics and data-driven decision making. This command center presents an intuitive user-interface to identify the programs and services your organization provides, and translates your line-item budget into a program budget. The development of a program inventory and program costs is the foundational data-set to bring clarity and understanding, data-focused decision-making, in a time when it’s never been so crucial. And it’s never before been so easy to do…

Register here!  April 20th at noon PST, join ELGL, CPBB and City of Shawnee, KS City Manager Carol Gonzales as we explore, discuss and demonstrate how establishing a Fiscal Command Center provides a visual platform for intelligent, transparent, data-focused decisions to be made!

City of Battle Creek, MI Launches a "New Wave" of Online Priority Based Budgeting!

"Priority Based Budgeting helps us align our resources to be the most efficient and effective in providing services." - City Manager Rebecca Fleury

The City of the Battle Creek is the second Michigan community (along with City of Kalamazoo) to

take on an entirely new way of budgeting. Through priority based budgeting, staff review the entire city organization, identifying all programs, their costs, and their relevance through prioritizing each. This process has been implemented by over 120+ local governments across the United States and Canada and is recognized as a best practice by organizations like the International City/County Management Association (ICMA); the Government Finance Officers Association (GFOA); the Alliance for Innovation and the National League of Cities (NLC).

Organizations that use priority based budgeting believe it increases the level of accountability and transparency and better communicates how resources are allocated through the budget process to achieve priorities of the community.

This is a new process for the city, and not a small one to begin, but moving in this direction was a goal City Manager Rebecca Fleury brought to the organization when she was hired in 2014.

“Understanding what our community thinks are our most important services is key to good governance,” Fleury said. “It is vital to the City Commission and this administration. Priority Based Budgeting helps us focus on these and align our resources to be the most efficient and effective in providing services. PBB is a transparent way to ensure, as public servants, we are being good stewards of the tax dollars with which we are entrusted.”

City receives visual budget representation

The City of Battle Creek now has a visual representation of its 2015-2016 budget in the form of a Resource Alignment Diagnostic Tool created with the help of the Denver-based Center for Priority Based Budgeting.

The city began the transition about a year ago to priority based budgeting in an effort to address our fiscal health and wellness. The City of Battle Creek is the second Michigan community to take on this new way of budgeting, which increases our accountability and transparency, and better communicates how resources are allocated through the budget process to achieve the community’s priorities, referred to as community results in the PBB model.

The CPBB’s Fiscal Health Model provides a visual tool to help facilitate budget discussions. It will allow city staff to create live scenarios that give elected officials an instant picture of the financial impacts of their decisions. The model allows for a clearer understanding and better communication on various budget scenarios.

The model can be used to help departments prioritize city programs, understand the impacts of those programs and better understand the ongoing and one-time funding sources involved.

The city’s new diagnostic tool was discussed and demonstrated during a City Commission workshop Thursday night and will become available later in the budget process.

To get to this point, city and CPBB staff worked together to develop the city’s “result maps,” which detail the factors that influence the way we achieve our results, or goals, as a city. Staff then created a program inventory for each department and assigned costs and values to each, which the CPBB used to develop our diagnostic tool.

Staff’s last step was to score each program against the community results and basic program attributes to help determine the program quartile, 1 through 4, with 1 being those programs most important to achieving the community results and 4 being less so. A healthy quartile map shows the majority of resources being allocated to quartile 1 and 2 programs. Battle Creek displays a very healthy pattern in resource allocation, but further analysis is required as we fully understand the information provided by the diagnostic tool.

The city’s identified programs – what we do – totaled 1,061, with 839 community programs and 222 governance programs. The City Commission and staff will review these programs and the cost to provide them as we move through the fiscal year 2017 budget process, currently under way.

“This is a great starting point,” said City Manager Rebecca Fleury. “This model provides a tremendous opportunity for the city to reevaluate and discuss the value of the programs on which we’re spending money, and how they can help us achieve the community results.”

Click here to learn more about priority based budgeting in Battle Creek!

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