An Inspiring Role for Local Government in Economic Development

As seen on ICMA's Center for Management Strategies
February 22 2013 | 7:00 AM | Tags: Fiscal Health, Priority Based Budgeting

“the next decade will be a time in which the fiscal woes of federal and state governments will leave local and regional governments on their own, struggling to balance the need for innovation against the necessity of making tough choices… it will also be a decade in which local government will lead the way in developing creative solutions to extraordinary problems. There are a number of reasons to be optimistic about this coming decade of local government”
-       Bob O’Neill, The Coming Decade of Local Government, Governing Magazine

http://icma.org/en/results/management_strategies/resources/blogpost/1023/An_Inspiring_Role_for_Local_Government_in_Economic_Development

In our work facilitating the identification of community priorities, economic development and job creation are clearly among the very top in every place we apply the process. From the City of Edmonton, Alberta (where they espouse the necessity of a “Diverse Economy”) to the Town of Cary, North Carolina (“Economic Vitality and Development”) to Lehigh County, Pennsylvania (“Economic Health”), what we do in local government to strengthen the local economy could not be of greater interest.

With this in mind, we recently picked up Gallup, Inc. Chairman Jim Clifton’s book “The Coming Jobs War,” mainly because it promised to be “What every leader must know about the future of job creation” on it’s cover! Coupled with Bob O’Neill’s powerful observations on “The Coming Decade of Local Government,” and our own unique experiences implementing Priority Based Budgeting all across the Country; we offer the following story about an interesting institution in Fort Collins, Colorado and what it shows us about the role of local government in economic development.

First, consider the following thoughts from Clifton’s book:

• “If you were to ask me, ‘From all the data you have studied so far, where will the next breakthrough come from?’ my answer would be: From the combination of the forces within big cities, great universities, and powerful local leaders. Those three compose the most reliable, controllable solution. The cornerstone of these three is cities. All cites count and can contribute” (Page 63)

• “What we need more than anything in our quest to win new good jobs in our cities is that rare talent to start new companies or to create business models that work, that grow organizations – big ones, small ones, medium-sized ones, sustainable ones” (Page 84)

• “Last year, I attended a meeting at the National Academy of Sciences in Washington, D.C. A group of leaders and CEO’s of the biggest government and university labs in the country told me that they have inventions – some as big or bigger than the Internet – now on their shelves, done and ready to go. [They] have an oversupply of discoveries, breakthrough, and inventions gathering dust because they don’t know how to turn them into something customers want.” (Page 85)

• “The heroes for this moment in history will come from those who guide, advise, encourage, and mentor a small business to success” He calls them “Super Mentors” (Page 74)

And finally…

• “Super mentors can be almost anyone, but they are not the innovators nor the entrepreneurs. They are the ones who light fires under the innovators and entrepreneurs…they do things like help entrepreneurs get a banker or a good lead, give advice, lend a hand or a shoulder at critical moments…[they are] an essential aspect of originating new jobs.” (Page 74)

Enter: Fort Collins’ Rocky Mountain Innosphere

The Rocky Mountain Innosphere (RMI) started in 1998, (as a recent article in the Coloradoan pointed out) “connecting startup companies with advisers.”

Remember Clifton’s concept of “Super mentors,” and the need for innovators to find a successful business model?

This from the Innosphere’s website: “RMI provides entrepreneurial startup companies with resources such as assistance with raising capital, access and connections with academic and government institutions, a network of advisors and mentors including several who are in residence, discounted professional service providers and educational and networking opportunities for realizing business success.”

The Innosphere is exactly the type of environment Clifton says is crucial to job creation.

Kevin Duggan from the Coloardoan continues, “the Innosphere works with 30 to 35 client companies a year, providing education, mentoring from business executives and networking. It connects companies with potential investors and the capital they need to grow.”

Most interestingly, and back to the decade of local government, RMI is not a city program, although the cities of Fort Collins and Loveland are contributors to the partnership. If anything, RMI is the holy grail of the “shared service model” that you hear about from ICMA’s Center for Management Strategies. “The incubator is a private nonprofit corporation. Its operations are funded through private donations and annual contributions from the state government, Colorado State University, local banks, Loveland and the City of Fort Collins.”

Priority Based Budgeting and The Role of Local Government

We come full circle in this discussion to Bob O’Neill’s “Decade of Local Government,” and our own work in Priority Based Budgeting with the City of Fort Collins.

The City of Fort Collins, just like every other city and county we’ve helped to implement PBB, also strives to achieve (in their words) “Economic Health.” It’s a priority (just as you can see from their website, here).

But City leaders were brilliant enough to realize that creating the type of nirvana of job creation that Clifton has envisioned, need not come in the shape and size of a City program.

Most interestingly, the City’s share of funding to support RMI scored well in the PBB process – it’s was a high priority. However, using the filters of the PBB Model, it was clear that this was a program that others could offer and were offering in the form of business support (in other words, the City need not be the only player in providing this service), that the City wasn’t mandated to do, and was unlikely to pay for itself. Through the lens of PBB, this points precisely in the direction of a partnership. The role of government, even in a high-priority program, is not always to be the direct service provider; it can be a key partner!

We’re honored to be part of the work of the City of Fort Collins – a leader in the pursuit of results-based resource allocation. And we’re so excited to be working in this “Decade of Local Government” when there is so much to explore and accomplish.

Special thanks to Darren Attebery (City Manager, City of Fort Collins) and Mike Freeman (CEO, Rocky Mountain Innosphere) for inspiring this post.

Walnut Creek's Enviable "State"

http://www.contracostatimes.com/weird-news/ci_22582320/walnut-creeks-enviable-state


Walnut Creek's enviable 'State'

By Dana Guzzetti, Correspondent, Contra Costa Time

WALNUT CREEK -- The state of the city is pretty solid with folks who live here, it appears.



"Walnut Creek residents are overwhelmingly satisfied with our quality of life," Mayor Cindy Silva said as part of a lengthy 2013 "State of the City" presentation at the Lesher Center for the Arts during which she shared city accomplishments and challenges. She cited a city-commissioned report. "Ninety-six percent say the quality of life is excellent or good."



She praised the four-year effort of past councils, city employee concessions and volunteers in balancing the city's $135.5 million 2012-14 budget with no General Fund debt and $9.9 million in reserves.

"Fiscal sustainability is the city council's number one priority," Silva said while warning of unfunded state and federal mandates that cost $11 million last year (includes CalPERS adjustments).

3 of Top 20 Best Run Cities Have Implemented PBB; Including #1!

24/7 Wall Street has published it's report on the The Best (and Worst) Run Cities in America. Congratulations to The City of Plano, Texas for topping the list as #1: The Best Run City in America! The City of Chandler, Arizona and the City of Chesapeake, Virginia were #12 and #13 respectively. Three of the top run cities in America have implemented Priority Based Budgeting, including the #1 city!

Most fascinating is that "fiscal stability" is among the top factors influencing their definition of "effective governance."

According to the Report:

"All those factors, of course, are directly affected by how a city is managed. Mayors, school boards, and city councils all have a role to play in that regard. All of these groups must work with the resources available to keep budgets balanced."

PBB Fit for Washington? Montana Rep Daines Applauds City of Billings

Daines says federal government could learn from Billings' budget process

http://billingsgazette.com/news/local/daines-says-federal-government-could-learn-from-billings-budget-process/article_d0b9d86e-f568-5b10-90c4-1fec7f45906b.html#ixzz2JfEqs4dD

Congress could learn a lot from Montana about governing, new U.S. Rep. Steve Daines told Billings city officials Thursday.

Daines, making his first on-the-job stop in Billings since taking office Jan. 3, told Mayor Tom Hanel and city administrators that the federal government needed a Montana approach to budgeting. He praised the city’s approach to cutting costs.

“Washington desperately needs these kinds of ideas,” Daines said. “I think the priority-based budgeting approach  — something we do in business — and we’re seeing that with the city of Billings, is something I want to take back to Washington.”

County explores new means to prepare budgets

DECEMBER, 13 2012
BY KURT HILDEBRAND
KHILDEBRAND@RECORDCOURIER.COM

The county's code enforcement office wasn't doing very well. It had lost both of its officers, and the county was under pressure to enforce a variety of rules.

But one of the rules it wasn't under any pressure to enforce was the home occupation permit. The cost of the permits wasn't covering the cost of the program. There wasn't any controversy dealing with home businesses in the county.

So, according to County Manager Steve Mokrohisky, Community Development Director Mimi Moss and her staff decided to ask commissioners to delete the requirement, allowing the code enforcement officer to pursue a far more profitable task.

“That's something they did on their own,” he said.

But it also serves as an example of how priority based budgeting works.

Priority based budgeting doesn't necessarily pit emergency services against the library. It drills down to actual programs offered by the county, 702 to be exact, ranks them based on scores, and allows commissioners to determine their relative merit.

Participatory Budgeting Meets Priority Based Budgeting in Douglas County

Citizen engagement in the budget process has been increasingly of interest in our work at the Center for Priority Based Budgeting over the last few years. The logic follows that the more citizens can authentically contribute and influence the decisions being made by their government, the more ownership they might take in their community. Trust increases with transparency. Compassion comes with trust. The benefits are undeniable.

Still, organizations ask us, "but what about the risks inherent in citizen engagement? What is the right role for citizens?" We're asked, "to what degree is it appropriate, safe, meaningful, realistic and effective to have citizens participate in decision making?" Pete Peterson, one of the nation's leading experts in the field and Executive Director of Pepperdine University's Davenport Institute of Public Policy pushed us to recognize the difference between citizen engagment as a means to an end, or an end in of itself.

In our work, we continue to strive for answers to these questions - they are the right questions. With the potential for such great outcomes, if we can answer them correctly and involve citizens in more meanigful and influential ways, we are moved to try and answer the questions.

For at least a glimpse at what is possible, and an inspirational glimpse at that, we are pleased to share with you Douglas County, Nevada's experience in putting citizens in the driver's seat of their Priority Based Budgeting process. Special thanks to Peak Democracy - our partners in the development of the County Budget Challenge.

Click Here for the Article Just Published in the Carson Valley's Record Courier

NOVEMBER, 30 2012

BY SHEILA GARDNER - SGARDNER@RECORDCOURIER.COM

Mandee Guariglia has lived in Carson Valley for 14 years. She and her husband have two boys, and she works part-time. Despite her busy schedule, Guariglia took time out Thursday to participate in the Douglas County budget challenge at the Minden library branch.

“It sounded like a good idea, to put your voice where you want taxpayers money to go,” she said.

City of Cincinnati Releases Most Comprehensive and Transparent Documentation of Priority Based Budgeting's Impact on City Programs

The City of Cincinnati, Ohio has released their 2013 Recommended Budget, addressing a $34 million deficit through cuts and cost shifting, savings, new revenues, embedded growth, and one-time sources.

The City’s use of Priority Based Budgeting (through their Priority Driven Budgeting initiative) establishes one of the greatest advancements in the use of the process to guide policy direction. The City’s response to Council’s policy direction provides one of the most comprehensive evaluations of city services across the entire organization.

Many organizations have approached us with a strong desire to bring their elected officials into a constructive and transparent discussion about the budget – Cincinnati has set the bar high in this respect. In the most direct way possible, the City used Priority Based Budgeting to guide policy-oriented discussions.  One of the benefits of the process is that it creates specific roles for elected officials to participate and succeed. When elected officials can focus on key policy questions that impact resource allocation, when they’re provided input and transparency in the way their policy questions are answered, and when they can make decisions based on policy impacts, then they’ve played a successful role in budgeting.

The following comes from the City’s 2013 Recommended Budget:

Council Policy Direction 

(Click here to see the detailed policy direction from City Council, as well as staff’s response, using Priority Driven Budgeting)

In June, the City Council received the results of the Priority-Driven Budgeting initiative and provided this budget policy motion with direction for formulating the 2013/2014 Operating Budget: “That the Administration construct a budget based on the following factors:

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.
• Recommend changes to mandated programs that exceed the minimum requirements of the mandate.
• Identify functions that can be shared with other political jurisdictions.
• Identify functions that, rather than eliminate them, can be made self sufficient through the establishment of a fee structure.”

The Diagnostic Tool provided data to start discussions about the programs and services we provide to help the City analyze programs and services for cost savings, revenue enhancements and budget reductions. All of the analysis conducted allowed the City to more strategically allocate resources, and provide citizens more transparency, as well as a clearer understanding of the budget decision as we move forward.

While it is the first year Cincinnati has engaged in priority-driven budgeting to this extent, it provides a foundation for examining the services and programs the City provides that are important to the people the City serves.

Click here to see a detailed program listing – the budget status of every City Program in PBB terms: the status of each program in terms of which are increased, decreased, receive no funding change, become reorganized, or are under review.

Relevance First - Wisdom from the Results Based Budgeting Act of Alberta, Canada

http://icma.org/en/icma/knowledge_network/blogs/blogpost/925/Relevance_First__Wisdom_in_the_Results_Based_Budgeting_Act_of_Alberta_Canada

The Center for Priority Based Budgeting is honored to contract with the Province of Alberta, to help implement Results Based Budgeting as the process has been initiated across the entire Provincial Government. It is the largest initiative CPBB has ever been involved with, and we’ll be anxious to share the stories and lessons we learn along the way.

“Result-based budgeting is about outcomes. The process is a comprehensive three year review that will look at all government programs and services, ensuring each one aligns with the outcomes that Albertans have identified as priorities. This review will ensure that government programs and services are meeting their intended goals and are being delivered in the most efficient and effective way possible. 

Results-based budgeting is not about reducing budgets to meet an arbitrary spending reduction target, although savings are expected. It’s about budgeting to achieve results, rather than adding incrementally to the prior year’s budget. The focus is as much about effectiveness as it is about efficiency. Significant value will not come from simply making an ineffective program run efficiently.”

- Results Based Budgeting "Report to Albertans," November 7th, 2012

Center for Priority Based Budgeting Unveils the Breakthrough Approach Equipping Communities to Survive in Tumultuous Fiscal Environment

The National League of Cities letter urging Congressional Leaders to responsibly address issues related to the "fiscal cliff," brings into focus the consequences of "indiscriminate cuts" and points out the "devastating impact" on local governments.

The Center for Priority Based Budgeting is honored to present at this year's NLC conference in Boston, as part of the Leadership Training sessions on Thursday, November 29th. During this session, we will be sharing the tools and techniques of Priority Based Budgeting through Fiscal Health & Wellness that have equipped communities with an entirely new way of ensuring scarce resources are allocated to the most relevant and effective programs they offer.

Douglas County, Nevada Launches Participatory Budgeting - Citizens Influence County's Entire Budget Process

Douglas County, Nevada launches participatory budgeting with residents - advancing their implementation of Priority Based Budgeting with CPBB's and Peak Democracy's "$500 Exercise."

Residents can try their hand at county budgeting

by Sheila Gardner
sgardner@recordcourier.com

http://www.recordcourier.com/article/20121109/NEWS/121109876/1062&ParentProfile=1049

For years, pundits and politicians have argued that government should be run like a business, tossing about terms like “zero-based and priority-based budgeting, and across-the-board cuts.”

What about bringing the process down a notch, and running it like a household budget: Setting aside a certain amount for expenses which must be covered, and cutting the luxuries in lean times?

Douglas County officials are inviting the public to participate in the “budget challenge,” an online program on the county's website that allows participants to try their hand at dispersing $500 among county services.

Priority Based Budgeting - Local Government's version of BIG DATA?

We're just back from a week of life-changing, wildly beyond-belief events that were collectively referred to as the ICMA Conference. Gratitude doesn't begin to encompass what we're feeling.

At the closing of his key-note address, Jim Collins urged us all to "be useful." To be part of the launch of ICMA's Center for Management Strategies, to see Priority Based Budgeting declared a Leading Practice, to see our own community's practitioners (from Fort Collins, Wheat Ridge, Walnut Creek, Cincinnati, Blue Ash, Post Falls, Boulder, Chandler and others) being recognized for their achievements and what they've been able to do with PBB to make significant and lasting cultural changes in their communities...well, what we're feeling is that we're part of something bigger than ourselves - we're partners in something truly "useful!" Wow...

Among the many reflections, however, one of the most unusual and yet eye-opening was a comment that what is making this work so "useful," is the possibility that Priority Based Budgeting might be local government's version of BIG DATA.

New to the term, we looked it up: BIG DATA - a collection of data sets so large and complex that it becomes difficult to process using on-hand database management tools. The challenges include capture, curation, storage,[4] search, sharing, analysis,[5] and visualization. The trend to larger data sets is due to the additional information derivable from analysis of a single large set of related data, as compared to separate smaller sets with the same total amount of data, allowing correlations to be found to "spot business trends, determine quality of research, prevent diseases, link legal citations, combat crime, and determine real-time roadway traffic conditions."

(And for further interest, here's a podcast from the Harvard Business Review: http://blogs.hbr.org/ideacast/2012/10/big-data-solves-big-problems.html)

What a possibility!

PBB as BIG DATA

In our work, our communities are showing us how the PBB model is unlocking previously undiscovered answers to questions they've been asking for a long-time:

•        What is the local government uniquely qualified to provide, for the maximum benefit to citizens for the tax dollars they pay?
•        What is the community truly mandated to provide? What does it cost to fulfill those mandates?
•        What are the appropriate programs to consider establishing or increasing user-fees?
•        What are the appropriate programs to consider partnerships with other community service providers?
•        What services might the local government reach consensus about “getting out of the business” of providing?
•        Where are there apparent overlaps and redundancies in a community where several entities are providing similar services?
•        Where is the local government potentially competing against businesses in its own community?

We chose "a Unique Lens" as the tagline for our non-profit for exactly this reason - our communities are seeing things we haven't seen before, as if they had a new tool with which to see their world. Our entire September 2012 PM Magazine article struck the same note: "Challenges facing local governments today literally requires a new way to see. It’s as if our vision has been blurred by the extraordinary stress of managing in this complex economic environment. Whether attempting to rebuild in a post-recession climate, or persevering through another year of stagnating or declining revenues, the challenge remains: how to allocate scarce resources to achieve our community’s highest priorities. Through the new lens of Fiscal Health and Wellness through Priority Based Budgeting, which provides powerful insights, local governments are making significant breakthroughs.”

Is this BIG DATA in play?

We don't know, but we're excited. Thanks to Walnut Creek's Lorie Tinfow for your never-ending insights into what you're seeing form our work together. Leave it to the Stanford grad to bring BIG DATA into the conversation - as it's been from the first day we met you, you have changed us forever, again!

The new lens of priority-based budgeting makes it possible for elected officials, citizens, decision-makers and staff to agree and:
•        To see how to align scarce resources with the highest priorities of our communities.
•        To see the most appropriate service provider for the programs we offer.
•        To see what services residents are willing to pay for.
•        To see public and private-sector partnerships ripe for leveraging.                                                                    
•        To ultimately see a new way of determining which  services our local government is best suited to provide—services that have the greatest impact for the resources within the community’s means.