PBB in Sacramento: "This type of consideration is essential in order to ensure that the Proposed Budget reflects the Council’s and community’s priorities"

From the City's Budget Book:

Priority Based Budgeting (PBB) – After four consecutive years of reductions, the City continues efforts to achieve budget stability and sustainability. Understanding the correlation between Council’s priorities and the allocation of resources will provide an additional tool to consider in the budget development process.

PBB recasts the budget into programs and their relationship to desired outcomes instead of line items in a budget. PBB results can be utilized to consider funding decisions relative to specific programs and services based on the extent to which that program/service meets priorities. It can also be used to reconsider funding for programs that may be well intended but do not significantly support community priority outcomes.

To the extent that the City is able to correlate resource allocation with Council’s priorities, there may

be an opportunity to consider the reallocation or reduction of allocated resources in future budgets.

This type of consideration is essential in order to ensure that the Proposed Budget reflects the

Council’s and community’s priorities.

MAJOR NEWS: ICMA has identified Priority Based Budgeting as a leading practice for local governments

@ICMA Twitter

http://icma.org/en/results/management_strategies/home

ICMA has identified Priority Based Budgeting as a leading practice for local governments.

It is proud to partner with The Center for Priority-Based Budgeting to bring education and technical assistance to you in implementing these effective and proven methods in your organization.


You can increase your budgeting effectiveness through The Center for Priority-Based Budgeting's creative solutions for local governments. Its mission is to share experience and technical knowledge of government financial operations and budget development with organizations that are seeking to achieve sustainable fiscal health and wellness.

PRESS RELEASE: ICMA Launches New Center; CPBB's Priority Based Budgeting Designated as Leading Practice for Local Governments

http://icma.org/en/icma/newsroom/highlights/Article/102368/ICMA_Launches_New_Center


PRESS RELEASE: ICMA is pleased to announce the launch of the Center for Management Strategies. The new Center will focus initially on High Performance Organization Theory and Priority Based Budgeting/Fiscal Health and Wellness—leading practices for local governments. ICMA has identified the Commonwealth Centers for High Performance Organizations and the Center for Priority Based Budgeting as preferred providers in these critical approaches to organizational management.

ICMA member Cheryl Hilvert will serve as the director for the Center for Management Strategies. A retired local government manager with over 31 years of service, Hilvert most recently was city manager of Montgomery, Ohio, where she served for over 14 years. Prior municipal experience included positions as city manager and assistant city manager for the city of Fairfield, Ohio; Economic Development Director for the City of Forest Park, OH.

The Center for Management Strategies joins the Center for Performance Measurement, the Center for Sustainable Communities, and the Center for Public Safety Management. Focused on improved efficiency and effectiveness in local government management, ICMA Program Centers identify and develop leading practices, offer education and training on these practices, and provide technical assistance to local governments as they implement leading practices.

More information on the Center for Management Strategies can be found at http://icma.org/managementstrategies or by contacting Cheryl Hilvert at chilvert@icma.org.

Power of Tool Brought to Light in Cincinnati

"The Tool is critical as we develop our 2013/2014 Budget and will help us analyze programs and services for cost savings, revenue enhancements and budget reductions. It will allow us to more strategically allocate resources, and provide citizens more transparency, as well as a clearer understanding of the budget decision as we move forward."

Download Cincinnati's awesome story from the Ohio City/County Manager's August 2012 newsletter here: http://www.ocmaohio.org/index.php?option=com_docman&task=cat_view&gid=48&Itemid=70&limitstart=5


Cincinnati’s Priority-Driven Budgeting Initiative

As we adjust to the “new normal” of limited resources, Cincinnati, like cities across Ohio, has been faced with the dilemma of how to maximize the efficiency of its funding allocations. As part of the solution to that dilemma, the City of Cincinnati has undertaken a Priority-Driven Budgeting initiative with the assistance of the Center for Priority Based Budgeting.

Web-based Participatory Budgeting Invites Citizens to Directly Influence Priority Based Budgeting Process

http://transformgov.org/en/Article/102315/Delray_Beach_FL_Launches_Open_City_Hall_Online_Forum


The $500 Exercise gives the participants a way to communicate which of the City's Results are most important, relative to one another. All of the City's Results are important, but some may be more important than others - the exercise is designed to learn the answer to this question. By placing more of the $500 in one Result over another, the participant instructs the City as to which Results are most important, relative to all of the other Results.

Ultimately, the programs with the highest scores from this process are recognized to be the most relevant programs the City is offering, as compared to and differentiated from the programs with the lowest scores. Why? Because a higher score simply indicates that the program has a high degree of influence on everything the City is trying to achieve.

Summing it up, the $500 exercise has a direct influence on determining the overall priority and relevance of the City's programs. By extending this process to the citizens of Delray Beach, citizens are now placed in a role of influence unlike any other budgeting process – their "investment" of the $500 helps the City realize which Results are most important, and further guides the process of prioritizing the services offered by the City. It is a crucial role, and a true definition of participatory budgeting!

Early Bird Registration Ends Friday for ICMA's Annual Conference - Center for Priority Based Budgeting Presents 2 Workshops - PLUS: More on ICMA's Center for Management Strategies

http://icma.org/en/conference/registration_housing/registration_info?utm_source=Spotlight-Conference&utm_medium=Web&utm_content=1st%2BEarly%2BBird


Communities today struggle to develop meaningful and fiscally prudent budgets under financial pressures previously unknown. Most organizations believe that the responses they have made to the current financial crisis represent a permanent change in the way they will approach their budgeting processes. This session will explore innovative and proven tools and techniques needed to achieve both short-term relief and long-term sustainability through a unique and creative process called priority-based budgeting. Traditional responses such as across-the-board cuts, tax increases, sales of assets, pay freezes, and furloughs have not provided adequate solutions to address an organization's fiscal distress, but the question remains: what is the solution?

This session will discuss how local governments across the country have turned to priority-based budgeting to help align budgets and resources with the goals of their communities. This holistic approach to better inform budget decisions will ensure that a community identifies and preserves those programs and services that are highly valued and makes budget decisions in accordance with its findings. Priority-based budgeting has already helped 30 local governments from coast to coast deal with their fiscal realities through a step-by-step process that clearly aligns an organization's goals with the way it allocates its resources. This process was described in a 2010 Government Finance Officers Association white paper, "Anatomy of a Priority-Based Budget Process." This session will present case studies from Chandler, Arizona; Boulder, Colorado; Christiansburg, Virginia; Douglas County, Nevada; Grand Island, Nebraska; and Monterey, San José, and Walnut Creek in California, to illustrate how the process has been successfully used to address a community's unique budgetary issues.

Practice Groups 10 (Budgeting) and 11 (Financial Analysis)
Workshop Leaders: Chris Fabian and Jon Johnson, Cofounders, Center for Priority-Based Budgeting, Denver, Colorado

How Elected Officials Guide Policy Direction with Priority Based Budgeting

We're often asked about how city council members, county commissioners and all elected officials use the Priority Based Budgeting model. How deeply do they get into the details?

The City of Cincinnati has accomplished something remarkable by keeping Council focused at the policy level.

Council has generated policy questions that the model can help answer, and guided staff to answer these questions as part of the budget development process. It's a perfect application of the process!

Here is an excerpt from the Policy Guidance:

http://www.cincinnati-oh.gov/noncms/council/uploads/20120626.html

MOTION, dated June 25, 2012, submitted by Vice Mayor Qualls, Councilmembers Thomas, Young, Seelbach, Simpson, Sittenfeld, Quinlivan, that the administration construct a budget based on the following factors:
1) Use the information from the Priority Driven Budget process to recommend elimination or reduction of functions based upon whether other organizations or entities are serving the same populations or providing the same function. If this is the case, the administration should outline a method of transitioning individuals to the other services or programs.
2) Recommend changes to mandated programs that exceed the minimum requirements of the mandate.
3) Identify functions that can be shared with other political jurisdictions.
4) Identify functions that, rather than eliminate them, can be made self sufficient through the establishment of a fee structure.

Delray Beach Unveils Major Innovation in Participatory Budgeting - Tool Designed for Citizens and Linked to Priority Based Budgeting

http://www.americantowns.com/fl/delraybeach/news/community-invited-to-take-city-s-budget-challenge-10236982

This new innovative communication tool, which promotes civic participation from anywhere and at any time, is being offered to our citizens with the expectation that it will provide the City with valuable input prior to final decisions being made on the FY 2013 Budget.

The City's new on-line Budget Challenge has been set up to provide citizens with six (6) results (or priorities) that the City continuously strives to achieve. Given a $500 budget, your role as a taxpayer is to assign a "value" or determine how you would fund the results/priorities within the upcoming FY 2013 Budget that you think are most important to our community's needs. These limited funds, which represents the limited revenues that the City Commission is faced with, may be distributed equally to each of the 6 results/priorities or among each sub-result based upon what you believe are the most important to ensure Delray Beach's continued success.

Powerful reflections on the use of Priority Based Budgeting from Cincinnati Councilwoman Simpson

http://www.thecincinnatiherald.com/news/2012-07-07/Commentary/

"However difficult these cuts appear, we have a powerful tool to help us make thesedecisions. Over the past few months, the City, along with the Center for Priority-Based Budgeting and The Novak Consulting Group, met with citizen groups and community organizations, conducted surveys, and solicited opinions to identify what the community views as six strategic priorities for our city government. Last week, the consultants produced software categorizing each city program according to these priorities. This citizen-driven process will guide us over the coming months as we consider these tough decisions."

City of Cincinnati Begins Putting Priority Based Budgeting to Use

http://news.cincinnati.com/article/20120625/EDIT/306250087/Budgeting-system-will-help-prioritize

The city’s budget deficits are expected to continue through 2016, with projected annual expenditure growth (2.8 percent) outpacing revenue growth (2.4 percent), leaving the budget structurally unbalanced.


Council anticipated this and established a new budgeting system: priority-driven budgeting. It is a fundamental change in the way resources are allocated. It uses a collaborative, evidence-based approach to measure services against community priorities. For the first time, it “breaks down” departmental budgets into functions and measures those functions against community priorities. It also identifies functions that duplicate services offered by other entities.

Priority-driven budgeting will not eliminate the pain associated with the operating budget cuts, but it will permit the administration and council to be more strategic – to use a scalpel instead of a hatchet when making the cuts.

Great Update on the City of Sacramento's Work in Priority Based Budgeting

http://sacramento.granicus.com/MetaViewer.php?view_id=22&event_id=1953&meta_id=384908


After five consecutive years of reductions, the City continues efforts to
achieve budget stability and sustainability. It is clear that we can no longer continue to use short-term solutions for what is clearly a long-term problem. As such the development of the budget will continue
to necessitate difficult decisions. Completion of the PBB process will provide a tool for Council to consider allocation of dollars based on expected results/outcomes.

Consistent with the City Manager’s Performance Goals, Strategies
and Metrics as presented on January 10, 2012 the PBB effort has involved employees and the
community through outreach meetings as well as an on-line survey. The information received through
this process and from Council will assist in identifying opportunities for closing future year budget
gaps.

ANNOUNCING The First-Ever Priority Based Budgeting Conference - San Diego CA, June 28-29 2012

http://www.pbbconference.org

Nothing like this has ever been done - an entire conference devoted entirely to Priority Based Budgeting for Government.

The Key Questions of the Day:
- how do you convince elected officials to embrace this process? 
You'll hear from Past President of the National League of Cities, and former mayor Kathie Novak speak on that issue.

- is the process sustainable for the long-term? What happens when a new Council or new City/County Manager is in place - do they embrace the process?
You'll hear from the City of Walnut Creek, California (who first embarked on this process in 2009) who faced these exact issues, and sustained (and innovated) their process.

- we need to put citizens in the driver's seat of the budget; how can we integrate substantial citizen engagement into the Priority Based Budgeting process?
We're lucky to have Pete Peterson from the Davenport Institute of Public Policy, one of the nation's foremost experts on "legitimate citizen engagement," speaking on the topic, as well as Julia Novak, CEO of the Novak Consulting Group, describing how it's actually being implemented in the City of Cincinnati, Ohio.

- this isn't "just about the budget," our organization has other strategic initiatives underway; how does this process fit in with everything else we're trying to do?
Hear the City of Post Falls, Idaho, the first City in the Country to embark on Priority Based Budgeting, integrating it with their High Performing Government (HPO) initiative.


PLUS: The Fi rst-ever Priority Based Budgeting Conference for government just wouldn’t be
complete without a little excitement, innovation, and some requisite suspense. That’s why
we’ve chosen this venue to unveil two of our greatest breakthrough inventions together with
you at the conference with our partners at Peak Democracy and Project A: online citizen engagement in the style of Peak's Open Town Hall, and the much-anticipated web-based Fiscal Health Diagnostic Model.

More Insights from Vice Mayor Qualls - the Philosophy Behind Priority Based Budgeting

http://www.roxannequalls.com/home/the_budget/priority-based_budget.html


Priority Based Budget Philosophy

The Philosophy of Priority-Driven Budgeting

The underlying philosophy of priority-driven 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-driven budgeting are:

• Prioritize Services. Priority-driven 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-driven 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-driven budgeting puts all the money on the table to encourage more creative conversations about services.

• Spend Within the Organization’s Means. Priority-driven 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-driven 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-driven budgeting demands accountability for results that were the basis for a service’s budget allocation.

City of Cincinnati's Vice Mayor Qualls Provides Insight on Priority Based Budgeting

http://www.roxannequalls.com/home/the_budget.html

Priority Based Budget

A budget strategy for the new normal

Faced with large budget deficits in the last two years that could have triggered massive layoffs and service cuts, Cincinnati City Council has been forced to rely on one-time sources to balance the budget and protect pools, health clinics and the school nurse program. Employee health care costs and pension fund payments continue to consume huge portions of the general fund. For a closer look at city budget drivers.

Priority-driven budgeting offers a common-sense, strategic alternative to conventional budgeting. It creates a fundamental change in the way resources are allocated by using a collaborative, evidence-based approach to measure services against community priorities. By bringing together community leaders and citizens to determine strategic priorities, the city can align resources with what the community values most, and create service efficiencies and innovation.

Council approved the administration's recommendation to hire the Center for Priority Based Budgeting (Center for PBB) to help with the intensive citizen engagement that drives the new approach. Instead of using the traditional department-based approach, priority-based budgeting focuses on developing the budget around citizen-driven priorities.

City of Billings Brings Priority Based Budgeting into Budget Process

http://billingsgazette.com/news/local/city-council-gets-st-look-at-budget/article_57e9a430-2863-5659-abe5-63c2268e47d3.html

The City Council will hear a presentation on June 4 from the Center for Priority Based Budgeting on work that has been going on behind the scenes with city departments, Volek said.

“This is probably the most significant document that the City Council works on in a given year,” Volek said at the outset of her presentation. “It is an indication of your intent to provide services, an indication of your intent for staffing and an indication of an intent to the public of what the city of Billings will look like for the coming budget year.”

Each department has broken down its operation into a series of programs, attached the cost and staffing level for those programs and ranked them by priority, Volek said. All the work will be cross-checked by other departments that will review the rankings and check their accuracy.