Thursday, November 10, 2016

Strategically Aligning Dollars with Priorities in Washington County, WI


"This budget is really exciting for me. It represents the beginning of some things that I've wanted to do since becoming administrator here two budgets ago: more transparently articulate the policy decisions within the budget to the public and use County priorities to make funding decisions." - County Administrator Joshua Schoemann



Washington County, WI is the first County Government in Wisconsin to implement priority based budgeting. CPBB co-founder Chris Fabian stated in March 2015, "To see Washington County take the lead in Wisconsin is a true mark of their leadership, their dedication to financial transparency and accountability to their citizens, and to optimizing their approach to allocating their precious resources to the outcomes that matter most and impact their community to the highest degree."

And now Washington County, Wisconsin has developed a reputation as best in it’s class among those PBB communities ushering in this bold evolution. In it’s first year of implementation, the County successfully implemented the process, and has already undertaken a merger of it’s Health Department with a neighboring County, realizing substantial savings. Regionalization of services and public-private partnership (“P3’s”) are among the greatest sources of opportunity for PBB communities (at the 2016 PBB Conference, the PBB data-mine demonstrated $409million in opportunities among PBB communities alone in 2016).

The County has recently released its 2017 Recommended Budget. County Administrator Joshua Schoemann states, "This budget is really exciting for me. It represents the beginning of some things that I've wanted to do since becoming administrator here two budgets ago: more transparently articulate the policy decisions within the budget to the public and use County priorities to make funding decisions." 

Excerpts from Washington County, WI 2017 Proposed Budget

This budget is another excellent step toward financial sustainability for the County. In an ongoing era of tax levy freezes, the resources of our citizens, and thus our County, are limited. Therefore, if we hope to provide excellent citizen service we need to eliminate deficit spending and direct our limited resources appropriately, being less concerned about the quantity of services we provide and more concerned about the quality of those services.

As you know, we committed to a number of significant goals in 2017 including maintaining the tax rate, reducing the need to access fund balance (County reserves) to balance the budget, replenishing the health insurance fun and funding a 3rd consecutive pay plan adjustment for our employees. I am pleased to report that not only did we accomplish all of these goals but we took a major step forward in transitioning our budgeting to align dollars with priorities through the use of priority based budgeting. We developed, and utilized for the first time, our “fiscal health tool” during the budget process to demonstrate the impact of 2017 budget decisions on the long term fiscal health of Washington County. 

The actions taken in the 2017 Budget represent a continuation of a plan for fiscal sustainability and the County’s commitment to delivering high quality services, while keeping taxes low. 

IMPLEMENT PRIORITY BASED BUDGETING 

In addition to working towards our budget goals, Washington County faces a significant challenge each year as our operational costs go up roughly $1.5 million while the State imposed property tax levy caps limit the amount of possible new tax collections. This means that each year we start the process seeking this amount just to cover the same slate of items from the prior year. Last year, we committed to changing our strategy in Washington County by avoiding across the board cuts and pay freezes for employees in the face of increasing health insurance costs. We have spent the past two years implementing priority based budgeting including identification and cost analysis of roughly 1300 programs in order of priority from lowest to highest. The below charts demonstrate the County’s 2016 approved spending toward our community priorities. These priorities are fully outlined in the Strategic Results portion of this budget document. 



Our priorities, and the affiliated rankings of every program against these priorities, assisted in the guidance of major expenditure and revenue decisions included in the proposed 2017 budget. The significant budget changes are presented below.

Lower Priority Decisions

·       The Human Services Department made significant efforts to reduce low priority areas in order to realign dollars to higher priority programs. Several non-mandated programs comprised of tax levy contributions to local organizations scored as low priorities, and funding was repurposed.
o   Homeless Coalition - $25,000 in county levy support.
o   Big Brothers Big Sisters - $7,200 in county levy support.
o   Friends of Abused Families - $17,800 in county levy support.
o   Boys and Girls Club - $5,500 in county funding.

·       The Parks and Planning Department reduced their property tax levy reliance by $270,000 in the proposed 2017 budget.
o   The Washington County Golf Course expects a profit in 2017 based on historical trends and an anticipated boost in usage related to the U.S. Open being held in the County. Based on this, $100,000 of Golf Course earnings will be transferred to park operations to reduce reliance on tax levy.
o   Increased revenues to move closer towards self-sufficiency. Parks increases include additional rental revenues for park properties ($35,000) and charges for mowing and snowplowing services to the Agriculture and Industrial Society ($75,000). Land Conservation increases include fee increases in the tree and prairie seed program ($10,000) and sanitary permit services ($25,000).
o   Reduced staffing levels by 2.80 FTE in lower priority programs through attrition and department restructures resulting in $212,000 of savings used to fund higher priority initiatives described above. 
o   Small program eliminations and changes related to the Get Moving Washington County website ($1,700) and water quality monitoring ($4,000).
·       Facilities reduced staffing levels by 2.14 FTE creating savings of $50,000 in personnel costs by contracting out cleaning services at the Public Agency Center and implementing changes to service levels.
·       Finance eliminated one Accounting Assistant position in anticipation of a workload reduction related to the implementation of a new time and attendance system.
·       The Aging and Disability Resource Center eliminated several low priority programs including the annual Senior Conference.
·       County Clerk eliminated the customer directory and referral program generating savings of $22,500.
·       Direct funding for the History Center was reduced by about $7,000.
  
Safe and secure community
·       Create a 0.33 FTE Communications Officer position, which represents nearly 700 additional hours to help avoid scheduling issues and overtime. This change results in $24,100 of additional personnel expenditures.
·       Create a 1.0 FTE Sheriff Deputy position at a cost of $82,762 in personnel expenditures.
·       Create a 0.50 FTE investigator to work on special assignments at a cost of $26,359 in personnel expenditures.
·       Create a 0.58 FTE Assistant County Attorney in the District Attorney’s office to prosecute cases more effectively and timely at a cost of $48,197 in personnel expenditures. 

Access to basic physical, behavioral and socio-economic needs
·       Net increase of 1.5 FTE in the Human Services Department to create a Youth Services Team to better manage children’s programming via cross-divisional services. This change results in $144,889 of additional personnel expenditures. 

Effective mobility and reliable infrastructure
·       Create a 1.0 FTE Project Manager in the Highway Department to provide in-house services for Highway and other County projects at a cost of $98,000 in personnel expenditures.
·       The 2017 Capital Improvement Plan (CIP) includes $3 million to support County Trunk Highway (CTH) infrastructure. 

Economic growth and vitality
·       The 2017 Capital Improvement Plan (CIP) includes $1.097 million for Economic Development Washington County. 

STRATEGIC RESULTS 

Washington County is the first county in Wisconsin to implement Priority Based Budgeting (PBB). PBB is recognized as a leading best practice in local government and provides a comprehensive review of the entire organization, identifying every program offered, determining the costs of every program, and evaluating the relevance of every program based on the goals the organization is trying to achieve. In 2015, the County Board identified four strategic goals for what the County should be for its residents, and a set of practices designed to achieve each goal. Below are those goals (the center of wheel) and the related practices (therim of the wheel) to achieve them.






FINANCIAL FORECAST & LONG RANGE PLANNING

Long-range financial plans provide direction to guide decisions that affect years beyond the current budget. Washington County uses long range financial planning to project the cost impact of current programs and gauge against projected revenues in an effort to identify and determine the extent of actions necessary to close the gap between revenues and expenditures.

The forecast was developed as part of the Priority Based Budgeting (PBB) efforts and utilizes an online Fiscal Health Tool to provide dynamic information for the planning process. The budget team and the County Board are able to view and modify this information in a shared way to assist in providing direction for future actions and planning of resource allocations in a way that reflects the Priorities identified during the early stages of the PBB process.

Prior year fiscal year-end results are reviewed and estimates are provided for the impacts of other County planning processes, including the Capital Improvement Plan. Assumptions are also made about funded programs and priorities, state/federal revenues and funding priorities, economic conditions, staffing levels, and other known objectives. Finally, the budget team works with staff in other departments to get expertise in developing key financial assumptions, which are used to project impacts to future expenditures and revenues for a five year period. 

Below is a summary of the County’s financial outlook, including all current 2017 Budget assumptions, which focuses on the County’s primary operating expenditures and the revenues that support them.


The difference between revenues and expenditures represent the budget deficit (reflected in parenthesis above). The deficit identified in 2015-2017 is the budgeted use of fund balance. The difference identified in 2018-2021 represent the structural deficit that will exist if expenditures are not reduced and/or revenues are not increased. The chart above has been presented to the County Board to make it clear that there are important decisions to come, and simply budgeting the use of fund balance is not a sustainable practice. The discussion that followed examined several ideas and decisions points and how they impact the deficit – in 2017 and in future years. The Fiscal Health Tool enables the County to quickly and easily demonstrate the financial impact of today’s decisions and reflect them in a graphical format as shown above.

Congratulations to Team Washington County for your exemplary implementation of priority based budgeting. Strategically aligning dollars with priorities is at the essence of PBB!




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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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