Tuesday, August 30, 2016

CPBB Teams with Toledo Regional Chamber to Bring Priority Based Budgeting to the City of Toledo, Ohio

"The Toledo Chamber’s jointly funded venture with the City is the first of its kind public-private partnership in the world to bring Priority Based Budgeting into a community."

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 over 120 cities, counties, school districts and special districts across North America to completely redefine their community.

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 community’s 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."

The CPBB is now working with the City of Toledo to bring priority based budgeting to the city. What is extremely unique about this venture is that this project was made possible with partnership and financial assistance from the Toledo Regional Chamber. This represents the very first P3 (public-private partnership) priority based budgeting project in North America!

The City of Toledo is now the 3rd municipality in Ohio to implement priority based budgeting, joining the City of Cincinnati and the City of Blue Ash in this innovative approach to ensuring a city’s long-term financial sustainability and will ultimately allow the City of Toledo to also serve its residents in the most effective, efficient and fiscally responsible manner possible. 

This is first part of a three-part blog series documenting the Priority Based Budgeting process that the City is undertaking, culminating in the launch of online tools that will enable a “new lens” on how the City can use it’s resources for good.

In this first article, the focus is on: “What is Priority Based Budgeting, Why do Communities implement this practice, and where is the City in the midst of its implementation.”

At its core, Priority Based Budgeting is a process to ensure that your community is getting the best bang for the taxpayer dollar. At the end of it’s work, the City of Toledo will have the data, powered by a sophisticated software model, to marshal and re-direct all of a community’s resources (our taxes, our people, our public and private institutions) to dramatically improve how we achieve safer communities, healthier people, sound infrastructure, efficient service delivery, thriving local economies and the Results that serve the betterment of society.

Priority-Based Budgeting was declared a Best Practice by the International City/County Management Association (ICMA), urging every local government in the world to approach resource allocation decisions in the context of what matters most to it’s community. In 2009, the Center for Priority Based Budgeting was created as a mechanism to help local governments implement PBB, as nothing else existed within local government public finance that truly is scalable, transferable and effective. And our work in assisting over 120 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.

At the beginning of 2015, over 80 communities across North America have implemented Priority Based Budgeting (PBB), impacting over 11 million citizens across the US and Canada. Now in 2016, over 120 cities, counties, school districts and special districts will be practicing PBB, using the process and tools to reshape the way all of a community’s resources are leveraged to achieve Results, and inviting citizens further into an authentic role of influence and participation.

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.

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.  

The City of Toledo has just launched its implementation of Priority Based Budgeting, with the development of its Program and Services Inventory. In essence, the City is hard at work defining “what are the vast array of services that our government provides, and how much do each of them cost?” Not surprisingly, for most cities they will identify hundreds of services, and some identify over one thousand! Government is complex, and its service offerings are vast!

This is a crucial first step in the process, and creates the base layer of information upon which the remainder of the process will build. From here, the City will establish and define the very “Results” that define why the City government is in business – why it is relevant, in the eye’s of it’s taxpayers, as a service-providing entity collecting and making use of the citizen’s resources. Each city service will go through a rigorous evaluation process, quantifying the degree to which these services contribute to your community’s objectives – in essence, are they being spent efficiently on programs that make the City safer, it’s citizen’s healthier, it’s economy stronger, and it’s infrastructure more effective. In the next blog, we will continue to document the City’s progress towards these ends.

A final word…

The Toledo Chamber’s jointly funded venture with the City is the first of its kind public-private partnership in the world to bring Priority Based Budgeting into a community. Certainly across the United States, as cities become more adept at gathering and measuring data, at putting data to use to create safer and healthier cities with thriving economies, indeed as cities are becoming “smart cities” it is this kind of multi-sector collaboration that is driving an optimistic future.

There was an era when local government took on the responsibility of upholding our basic societal contracts, and our core civic duties, as it was the only institution capable of doing so. With the proliferation of non-profit organizations, and mission-driven organizations in the private sector, it has become clear that there are many, many stakeholders in our cities whose aim is also to enhance our safety, our health and well-being. It is through public-private partnerships like the City’s with its Chamber in this case that will profoundly reshape the way your City optimizes the use of its citizen’s resources towards a better Toledo. We couldn’t be more proud than to be part of this team.

1 comment:

  1. As former General Director of Budgets in Toledo (Spain), it warms my heart to see innovation in this sister town