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HomeMy WebLinkAboutItem 01 Priority Based Budgeting Results Validation Workshop AGENDA ITEM SUMMARY Meeting Date: 6/10/2013 Meeting Type:Work Session Staff Contact/Dept.: Bob Duey, Finance Staff Phone No: 726-3740 Estimated Time: 90 Minutes S P R I N G F I E L D C I T Y C O U N C I L Council Goals: Provide Financially Responsible and Innovative Government Services ITEM TITLE: PRIORITY BASED BUDGETING RESULTS VALIDATION WORKSHOP ACTION REQUESTED: Conduct a “Results Validations” workshop to confirm that the City’s current Goals are complete and provide an opportunity to address any Goals that may not have been identified. ISSUE STATEMENT: The City seeks to move from its current traditional budgeting practice to a Priority Based Budgeting process. Over the next 6 months the consultants are expected to lead the City through a defined step by step process which will allow us to identify our key programs, build result maps, score programs, and allocate cost and resources. At this first work session, the consultants will be on-site to listen and receive direction from Council concerning the adopted Council goals and the interpretation of how the success of these goals may be evaluated for prioritizing of resources. ATTACHMENTS: Attachment 1: Council Briefing Memo Attachment 2: Strategic Plan Dashboard Attachment 3: Priority Based Budgeting Article DISCUSSION/ FINANCIAL IMPACT: In 2008, the City of Springfield’s 3-5 year financial outlook was positive with aggressive plans calling for the retirement of a special levy for public safety and continued development growth. Since that time a prolonged economic downturn has resulted in the elimination of 60 positions at the City and only a slight sign of improvements to the City’s revenue forecast. Management, needing better guidance on how best to recommend the allocation of limited resources, has selected a program being promoted by the International City/County Managers Association (ICMA) called Priority Based Budgeting to help gather data. First working with Council and its own goals, management is planning to spend about a 6 months mapping City services and program costs to help identify which services are best able to meet those stated goals. Upon concluding this first phase of the effort, staff will report back to Council prior the preparation of the FY15 Proposed Budget. The Center for Priority Based Budgeting has a contract for $38,000 to assist the Finance Department facilitating this city-wide effort. M E M O R A N D U M City of Springfield Date: 6/3/2013 To: Gino Grimaldi COUNCIL From: Bob Duey, Finance Director Paula Davis, Budget Analyst BRIEFING Subject: Priority Base Budgeting Goals Validation Work Session MEMORANDUM ISSUE: The City seeks to move from its current traditional budgeting practice to a Priority Based Budgeting process. The Independent Contractor is expected to lead the City through the defined step by step process which will allow us to identify our key programs, build result maps, score programs, and allocate cost and resources. At this first work session, the consultants will be on- site to listen and receive direction from Council concerning the adopted Council goals and the interpretation of how the success of these goals may be evaluated for prioritizing of resources. COUNCIL GOALS/ MANDATE: Provide Financially Responsible and Innovative Government Services BACKGROUND: Priority Based Budgeting is a strategic alternative to traditional budgeting. The philosophy of priority-driven budgeting is that resources should be allocated according to how effectively a program or service achieves the goals and objectives that are of greatest value to the community. It is a flexible step-by-step process to budget scarce resources. Priority Based Budgeting represents a fundamental change in the way resources are allocated, requiring accountability for results that are the basis for a service budget allocation. The program Springfield is beginning in 2013 has been designed by the Center for Priority Based Budgeting and is being supported by the International City/County Manager’s Association (ICMA). This first year represents a change in budgeting philosophy that is designed to provide greater integration between our Council’s Community goals, our City’s and department’s strategic plans and decisions concerning resource allocation during the budget process. The base developed during this first year lends itself to expand during subsequent years to include greater community involvement and a greater understanding of measuring progress towards success. During this work session Council will review the Council Goals that city staff will use to accurately prioritize programs by reflecting the organizations stated purpose. During this meeting the various department strategic plans can be utilized to help in clarifying the intent of any of the current Council goals. The current goals are: Attachment 1, Page 1 of 3 Provide Financially Responsible and Innovative Government Services Encourage Economic Development and Revitalization through Community Partnerships Strengthen Public Safety by Leveraging Partnerships and Resources Foster an Environment that Values Diversity and Inclusion Maintain and Improve Infrastructure and Facilities Promote and Enhance Our Hometown Feel While Focusing on Livability and ouncil goals help to identify the very fundamental reasons that a local government exists, epresent OUNCIL KICK-OFF y management to assist with this process have requested to meet with he consultants will present to Council this first evening the entire process that will be followed and ouncil’s involvement in the second half of the work session is an extension of the Council’s y IME-LINE/ACTIVITIES – YEAR 1 as formed (5-8 members) and a Core Team (20 to 30 June 10 Environmental Quality C articulating all the ways it serves the needs of the community. They are meant to answer the question, “What are we, as an organization, in business to do?” Council goals are overreaching in nature and are truly unique to our community, in that they attempt to r why our local government exists and why it offers the types of unique services it does to the community. C The consultants selected b Council prior to the Core Team’s all day workshop for two primary reasons. The first is to further explain the processes to be used and the products to be delivered by the end of the project. The second is to hear from Council first hand their interpretation of a successful outcome for Council goals. T over the next six months, the milestones that have been established and how the results will be provided back to the Council early in the budget process for FY15. The information to be provided is unique to the City, is completely transferable to the City staff for continued use, provides a tiered approach to look and current services provided and resources available. The information provided can also be used to evaluate future or proposed services and how they are able would be evaluated toward meeting Council goals. C current goals setting process where the consultants and wanting to hear from Councilor’s first hand their interpretation of a successful outcome for Council goals. The consultants are not looking to change or expand the current goals but want to obtain a better understanding of wh the goals are important to the Council and be in a better position to guide the projects Core Team in the development of evaluations tools that will be used to help link service activities to stated desired outcomes. T During April a Steering Committee w members) was established to help more fully develop the projects deliverables and to familiarize everyone with their roles and expectations of the overall project. Once these teams were established, the key milestones for the next 8 months were developed as follows: – Conduct a Results (Council Goals) Validation workshop with Councilors to confirm that the organization’s current results are complete and provide an opportunity to address any results that may not have been identified June 11 – Conduct an all day workshop with Core Team to produce a Results Mapping which provides a “roadmap” that guides the City in the direction of results oriented Attachment 1, Page 2 of 3 Attachment 1, Page 3 of 3 July 26 resource allocation and decision making – Core Team members complete an exercise within each of their respective hese th through July 26th) departments to develop program inventories, utilizing the templates developed in the earlier workshop and calculating program costs that will be used in evaluating how t programs contribute towards achieving identified results. (June 12 September 06 – Core Team members working with their departments will complete a Program Scoring process that will evaluate each program on its contribution towards achieving identified results by using standardized program scoring criteria. Also begin process of identifying additional basic program attributes that may also identify additional program characteristics that influence the priority of a program, beyond the program’s ability to influence results. (August 5th through September 6th) October 18 – Core Team members will complete a Peer Review process of engaging City’s internal stakeholders in evaluating program scores and recommending program score adjustments where appropriate. (September 9th through October 18th) November 08 – Deliverance of final product from Consultants to the City to include Resource Alignment Diagnostic Tool, interpretive analysis and additional training on continue use of collected data. January 2014 – Presentation of final analysis of project to City Council in preparation FY15 of ts dmap” that guides the City in the direction RECOMMENDED ACTION: No action necessary. The results of the discussion between the City Council and the Consultan on Monday evening will be shared with the Core Team in an all day work session Tuesday to produce a Results Mapping which will provide a “roa of results oriented resource allocation and decision making. Attachment 2 – Page 1 of 14    CITY OF SPRINGFIELD STRATEGIC PLAN TARGET DESCRIPTIONS  APPENDIX A – 7/18/11    Descriptions are organized by Goals.  Goal:  Provide Financially Responsible and Innovative Government Services  • The Number of City Employees per 1000 Citizen Population   The City of Springfield is estimated to have a total population of 58,000 citizens.  In the FY 2010 the  City set a target of 8 or fewer City employees for every 1000 citizens.  Operating at or below this  ratio illustrates the Cities commitment to lean and efficient practices.    The current FY 2011 baseline is 7.1 City employees for every 1000 citizens.  The target of 8 or fewer  City employees for every 1000 citizens has been met and exceeded by the current baseline.  The FY  2012 target has been set at 8 City employees.  This measurement is tracked annually by the City Manager’s Office.  • Percent of New Employees Hired at Mid‐Step or Lower   The ability to hire new employees at step 1 or 2 indicates that our compensation system is current  with market forces.  If our compensation is too low, we are forced to bring in new employees above  the mid‐step of our pay grades.      There is currently no baseline data to report because the City is changing the structure of our  compensation plan.  The FY 2012 target is 90% of new employees.  This measurement is tracked annually by the Human Resources Department.    • Annual Employee Satisfaction Survey to Determine Level of Understanding and Utilization of  Benefit Package   The City of Springfield’s benefit package is generous, although quite complicated.  Because of the  complexity of the package, the perception exists among our employees that it is inferior.  In order  for our employees to appreciate and effectively utilize their benefits, they need to have clear and  easy access to information.  The Human Resources department will be updating online information  and holding trainings to help employees learn what is available to them.    There is currently no baseline data to report and the FY 2012 target is a survey rating of “Good.”  This measurement is tracked annually by the Human Resources Department and updated during  years when the employee survey is administered.   • Maintain Workers’ Compensation Experience Rating at 1.0 or Lower  1.0 is the average Workers’ Compensation claim frequency and cost rating for comparable  organizations.    That rating impacts our premium costs.  A rating of less than 1.0 is desirable.    The City of Springfield’s 2010 rating was .97.  The FY 2011 target was .95, and we exceeded it with a  rating of .87.  The 2012 target is .93.  This measurement is tracked annually by the Human Resources Department.                    Attachment 2 – Page 2 of 14    Goal:  Provide Financially Responsible and Innovative Government Services (cont.)  • Employee Survey Responses are Generally Positive   Starting in 2007, City of Springfield employees filled out an annual survey asking for feedback on  their work environment, job satisfaction, and City goals.  The feedback from the survey is used to  improve the work environment and bring attention to positive areas and areas needing  improvement.    In the FY 2010 the City set a target of a 90% overall positive rating.  The FY 2010 was not by the FY  2011 baseline and no survey was performed during the fiscal year 2011.  The new target for FY 2012  will be a 70% overall positive rating.   This measurement is tracked annually, pending survey funding by the City Manager’s Office.    • Days to Complete Comprehensive Annual Financial Report   The City of Springfield is required to produce a Comprehensive Annual Financial Report by  December 30, 184 days after year‐end close.   In FY 2011 the target was to complete the CAFR in 180  days after year‐end close.  The actual days needed to complete the CAFR was 175.  Completing on or  before this target shows how well the division and activity is being managed.    The current baseline is 175 days to complete the CAFR.  The FY 2011 target was met and the FY 2012  target is 175 days.  This measurement is tracked annually by the Finance Department.      • Percent of Monthly Reports Posted by 8th Workday of the Following Month   The Executive team and managers of the City of Springfield need timely, relevant and accurate  financial information to manage budgets.  Producing the monthly reports by the 8th day of the  following month allows Finance to monitor month‐end close process.    For FY 2010 baseline and FY 2011 target are set at 100% and was met in both years.  The target for  2012 is again 100%  This measurement is tracked annually by the Finance Department    • Number of Solicitations and Contracts Drafted or Reviewed   The City of Springfield contracts for millions of dollars worth of goods and services annually.  In  doing so we must understand a variety of markets, develop and include the supplier community,  and be responsive to all statutory and code requirements in order to provide a fair, transparent and  competitive process resulting in the most prudent use of taxpayer funds. In FY 2010 the City set a  target to review 100 contracts. We collaborate with end users throughout the entire procurement  cycle and to plan effectively, we need a better perspective about the numbers and time spent  drafting and reviewing both solicitations and contracts.  In concert with legal counsel we review to  mitigate risk and for legal sufficiency.  Solicitations and contracts demonstrate our ability to get the  right product, delivered at the right time and place, from the right source, at the right price  illustrating our ability to offer financially sound and stable government services.    There is currently no baseline data to report and the FY 2011 target was 150 solicitations and  contracts drafted or reviewed.  FY 2011 is on target to reach 150 and the target for FY 2012 is again  150.   This measurement is tracked annually by the Finance Department              Attachment 2 – Page 3 of 14    Goal:  Provide Financially Responsible and Innovative Government Services (cont.)  • Operating Reserves In the General Fund are no Less Than 15% of Operating Expenses   The City of Springfield General Fund exists to provide a wide range of basic services and reserves are  a critical part of the health of the fund.  In the FY11 Finance set a target of operating reserves to be  no less than 15% of operating expenses.  Targets below this percentage have been deemed un‐ acceptable to meet on‐going obligations and mitigate risk associated with unforeseen events.    For FY 2011 the actual percentage of operating reserve to operating budget in the General Fund was  21%.   The FY 2011 target was met.  The target for FY 2012 is 20%  This measurement is tracked annually by the Finance Department    • Revenue Forecasts are Within 2% of Actual Revenues   Revenue forecasting is a critical part of developing the City of Springfield’s annual budget.  Revenues  set the stage for the upcoming year’s budget deliberations.      The FY 2011 Target was set at 2%.  This target assists us in maintaining the stability and  sustainability of our funds and key programs.  For the FY 2011 year the difference of General Fund  budgeted revenue to actual year‐end revenue was 1.7%.  This target was met.  The target again for  FY 2012 is 2% of budgeted revenue.    This measurement is tracked annually by the Finance Department    • Net Enterprise contribution to the Ambulance Fund   The Ambulance Fund is an enterprise fund which supports ambulance operations in the City through  revenue‐generating activities. The Account Services Program provides ambulance billing services for  20 government entities in addition to the City of Springfield. The FireMed Program provides  management of an ambulance membership program through a partnership with the City of Eugene  and Lane Rural Fire & Rescue. The FireMed Enterprise Program provides management of FireMed  membership programs for other cities and districts throughout Oregon. All enterprise programs are  designed to provide a return above the cost of program operation.    The Fire and Life Safety Department set a FY 2011 target of $360,000 in net enterprise contribution  to the Ambulance Fund.  The FY 2011 baseline is $(data not yet available).  This target has/has not  been met by the current baseline.  The FY 2012 target has been set at $360,000.  This measurement is tracked annually by the Fire & Life Safety Department.    • Information Technology Infrastructure is Available   IT infrastructure must be online and available for it to be useful to citizens and staff.    The FY 2011 target was 99.9%.  The current reported baseline is 99.9% of needed infrastructure is  available.  The 2011 target was met.  2011 outages included backhoe‐induced fiber outage at U of O,  a Commercial Power outage, and a train‐induced fiber outage at PW Maintenance yard.  A FY 2012  target of 99.9% has been set.  This measurement is tracked annually by the Information Technology Department.    • Workstations are Available to City Employees   Workstations should be returned to service as soon as possible for staff productivity reasons.  The FY 2011 target was 99.5%.  The current reported baseline is 100% of needed workstations are  available to City Employees.  The 2011 target was met.  A FY 2012 target of 99.5% has been set.  This measurement is tracked annually by the Information Technology Department.      Attachment 2 – Page 4 of 14    Goal:  Provide Financially Responsible and Innovative Government Services (cont.)  • Help Desk Calls Receive a Response Within 5 Minutes of Request   Responding to Help Desk calls promptly improves staff efficiency and alleviates customer stress.   The FY 2011 target was 85%.  The current reported baseline is 85% of Help Desk calls receive a  response within 5 minutes.  The 2011 target was met.  A FY 2012 target of 85% has been set.  This measurement is tracked annually by the Information Technology Department.    • New Information Infrastructure Meets Expectations   New infrastructure such as PCs and Servers should meet customer expectations for performance  reliability.  The FY 2011 target was 95%.  The current reported baseline is 100% of New Information  Infrastructure meets expectations.  The 2011 target was met.  A FY 2012 target of 95% has been set.  This measurement is tracked annually by the Information Technology Department.  • Applications Will Receive Periodic Upgrades Within Vendor‐Recommended Maintenance Cycles  Application upgrades are necessary to maximize functionality and improve the reliability and  supportability of the software.  The FY 2011 baseline was 75%. The current reported baseline is 80%. The 2011 target was met. A FY  2012 target of 75% has been identified.  This measurement is tracked annually by the Information Technology Department.    • Enhancements and Customizations to Existing Applications Will Meet Customer Expectations  Software and application enhancements improve efficiency and staff productivity.  The FY 2011 baseline was 85%. The current reported baseline is 100%. The 2011 target was met.  Data includes 2 upgrades and 12 new reports. A FY 2012 target of 85% has been identified.  This measurement is tracked annually by the Information Technology Department.    • New Applications Meet Expectations  New applications are significant endeavors that require substantial analysis and design work.  The FY 2011 baseline was 85%. The current reported baseline is 78%. The 2011 target was not met.  Data includes 9 new applications.  A FY 2012 target of 85% has been identified.  This measurement is tracked annually by the Information Technology Department.    • Infrastructure Enterprise Funds Meet Operating and Capital Requirements   The City’s infrastructure includes streets, drainage/stormwater, and wastewater. This measurement  method tests the ability of the City to respond to emergencies and other unplanned needs, such as  those triggered by development requests, and to cover unforeseen revenue shortfalls such as those  triggered by business closures. Maintaining prudent operating reserves is a standard practice for  Public Works departments.    A new baseline for FY2011 is 91% and the FY2012 target will be set at 100%, although this target  may prove unattainable without further action to increase revenues for the Street Fund. The  Structural Balance Ratio will be separately calculated for each of the three utility funds to allow the  department to measure each infrastructure system more accurately.  The ratios will be combined at  the Council level to give an overall measurement of City infrastructure in general.  This measurement is tracked annually by the Public Works Department.        Attachment 2 – Page 5 of 14    Goal:  Provide Financially Responsible and Innovative Government Services (cont.)  • There is Adequate Land Supply to Meet the City’s Employment Needs for the Next 20 Years  The Development Services Department is in the process of conducting a Residential Lands study, a  Commercial and Industrial Buildable Lands study and taking the steps necessary to adopt the 2030  Plan.  Completing the study is critically important to the success of our long range planning efforts  and responding to a City Council and community directive.    The FY11 target is implementation of the plan.  Springfield’s own Urban Growth Boundary was  passed by the Lane County Board of Commissioners and established on July 6th, 2011.  This target  was met.     This measurement is tracked annually by the Development Services Department.                                                                                  Attachment 2 – Page 6 of 14    Goal:  Encourage Economic Development and Revitalization through Community Partnerships   • There is Growth in the Level of Glenwood Urban Renewal Investment   The Glenwood Urban Renewal area’s goal is to increase the level of both public and private  investment within its boundary through new construction, renovations, and a variety of programs.   At times, this level of investment may exceed the levels of other non‐urban renewal areas.  Staff will  monitor the impacts of urban renewal investments by comparing the assessed values within an  urban renewal area to the assessed values of the Springfield area in its entirety.  The goal initially  will be to bring growth in assessed values within the district even with that seen City‐wide.  In later  years, the goal may become to see the growth in assessed values in the district exceed that seen  City‐wide.  The current, FY 2011 baseline is an increase in assessed value that is 3.5% less than the City wide  increase.  The FY 2011 target was set at 0%, bringing the plan area assessed value increase in line  with City‐wide growth.  The FY 2011 target was not met.  The FY 2012 target is set at 0%.  This measurement is tracked annually by the City Manager’s Office.     • There is Growth in the Level of Downtown Urban Renewal Investment   The Glenwood Urban Renewal area’s goal is to increase the level of both public and private  investment within its boundary through new construction, renovations, and a variety of programs.   At times, this level of investment may exceed the levels of other non‐urban renewal areas.  Staff will  monitor the impacts of urban renewal investments by comparing the assessed values within an  urban renewal area to the assessed values of the Springfield area in its entirety.  The goal initially  will be to bring growth in assessed values within the district even with that seen City‐wide.  In later  years, the goal may become to see the growth in assessed values in the district exceed that seen  City‐wide.  The current, FY 2011 baseline is an increase in assessed value that is 3% less than the City wide  increase.  The FY 2011 target was set at 0%, bringing the plan area assessed value increase in line  with City‐wide growth.  The FY 2011 target was not met.  The FY 2012 target is set at 0%.  This measurement is tracked annually by the City Manager’s Office.     • Room Tax Recipients are Meeting Their Set Outcome Measures   The City of Springfield has the ability to administer a community grant program, funding small  projects that benefit local, tourism generating, organizations.  This program is funded with transient  room tax dollars.  Upon award of funds, staff works with the organization to assure completion of  the project and attainment of set outcome measures.  The current   baseline is 0% of Room Tax program recipients are meeting the outcomes. This is due  to the program being unfunded.  The FY 2012 target has been set at 100%, assuming the programs  full funding.  This measurement is tracked annually by the City Manager’s Office.     • The Infrastructure Needed for Growth is Identified and Planned (Streets, Wastewater, and  Drainage systems)   This measurement method tests whether or not the City is adequately prepared to respond to the  needs of growth and future economic development opportunities by anticipating what  infrastructure is necessary to be available.    The new baseline for FY2011 is 67% and a FY2012 target will be set at 95%.  This measurement is tracked annually by the Public Works Department.        Attachment 2 – Page 7 of 14    Goal:  Encourage Economic Development and Revitalization through Community Partnerships (cont.)  • Target areas are Planned and Zoned for Redevelopment to Attract New Business and Attractions  and/or Eliminate Blighted Areas  The target areas currently being planned and zoned are the Downtown and Glenwood.  The  completion of refinement plans and development plans for future development is in response to  City Council and community desires as expressed in the establishment of the two Urban Renewal  Districts and the Downtown Slum and Blight area.  The FY11 target for planning and zoning of target areas of 62% completion has been met. The FY12  target is 100% completion.   This measurement is tracked annually by the Development Services Department.    • Opportunities for Affordable and Decent Housing are Increased Through Partnerships with Non‐ Profit Housing Developers and by Providing Assistance to Low and Very‐Low Income Citizens  Throughout the Community  Activities undertaken to create opportunities for affordable and decent housing include construction  of affordable home‐ownership housing, creation of multifamily rental housing, infill development  and acquisition of land in which to develop affordable housing.  The activities and the product of the  activities create jobs, add to the City’s property valuation and revitalize neighborhoods through infill  development.  For your convenience, included below is the HUD definition of “Decent Housing.”  The FY11 target of 10 was exceeded by 4, with 14 units being produced to assist low and very low  income citizens in Springfield.  The FY12 Target is 5 units.  This measurement is tracked annually by the Development Services Department.    DECENT HOUSING AS DEFINED BY HUD ‐ § 5.703 Physical condition standards for HUD housing that is decent, safe,  sanitary and in good repair (DSS/GR). HUD housing must be decent, safe, sanitary and in good repair. Owners of  housing described in § 5.701(a), mortgagors of housing described in § 5.701(b), and PHAs and other entities approved  by HUD owning housing described in § 5.701(c), must maintain such housing in a manner that meets the physical  condition standards set forth in this section in order to be considered decent, safe, sanitary and in good repair. These  standards address the major areas of the HUD housing: the site; the building exterior; the building systems; the  dwelling units; the common areas; and health and safety considerations.                                            Attachment 2 – Page 8 of 14    Goal:  Strengthen Public Safety by Leveraging Partnerships and Resources  • High Priority Calls are Dispatched Within 60 Seconds of Receipt   High priority calls include situations where there is an immediate threat to life or safety, or  situations where a crime is in progress.  The Department’s goal is to immediately dispatch available  resources.    The FY 2011 target was 90%.  The measured performance level was 76% of calls dispatched within  60 seconds of receipt.  The 2011 target was not met.  A FY 2012 target of 90% has been set.  This measurement is tracked monthly by the Police Department.    • Medium Priority Calls are Dispatched Within 5 Minutes of Receipt   Medium priority calls include situations where crimes have recently occurred and where suspect  information is available.  In these situations, a rapid response may increase the likelihood that the  offender is located.  The Department’s goal is to dispatch resources as soon as they are available.  The FY 2011 target was 75%.  The measured performance level was 80% of calls dispatched within 5  minutes of receipt.  The 2011 target was met.  A FY 2012 target of 75% has been set.  This measurement is tracked monthly by the Police Department.    • Low Priority Calls are Dispatched Within 10 Minutes of Receipt   Low priority calls include situations where evidence of a crime is located but suspect information is  not available.  A rapid response is not likely to increase the possibility of a favorable outcome, but  the Department’s goal is still to provide good customer service to the citizens who report these  incidents.  The FY 2011 target was 60%.  The measured performance level was 66% of calls dispatched within  10 minutes of receipt.  The 2011 target was met.  A FY 2012 target of 60% has been set.  This measurement is tracked monthly by the Police Department.    • Reported Abandoned Vehicles are Removed Within 30 Days   Prompt removal of abandoned vehicles improves neighborhood livability and increases feelings of  safety.  The Department’s goal is to initially tag and then follow up on reported abandoned vehicles  as quickly as possible.  The FY 2011 target was 95%.  The measured performance level was 98% of reported abandoned  vehicles were removed within 30 days.  The 2011 target was met.  A FY 2012 target of 90% has been  set.  This measurement is tracked quarterly by the Police Department.    • Crime Rate for Property Crimes is Decreasing   One of the most significant issues affecting quality of life for Springfield citizens has been a high rate  of property crimes.  Springfield property crime rates have been among the highest in the state, but  with the opening of the municipal jail and with the addition of the Levy funded police officer  positions, the goal of the Department is to reduce the prevalence of property and nuisance type  crimes in the community.  The FY 2011 target was 590 crimes or less per 10,000 residents.  The measured reporting level,  based on a population estimate of 58,469, was 608.  The 2011 target was not met, although  reported property crime levels were down significantly from FY 2010 (680 reports per 10,000  residents).  A FY 2012 target of 570 crimes or less per 10,000 residents has been set.  This measurement is tracked monthly by the Police Department.      Attachment 2 – Page 9 of 14    Goal:  Strengthen Public Safety by Leveraging Partnerships and Resources (cont.)  • Emergency Ambulance Responses are Within 8 Minutes  The City of Springfield provides medical emergency response throughout the city and surrounding  areas. The Fire & Life Safety Department operates three 24/7 ambulances. This measure is an  industry standard for emergency ambulance response. Since the initial baseline was developed,  better data analysis methods have been adopted, reflecting a more accurate baseline for FY10.  Further improvements in data collection systems, expected by FY11, will provide a higher level of  consistency in data available. Emergency ambulance service is one component of the total EMS  response system. Fire & Life Safety strives for excellence in delivery of emergency medical services,  and continuously monitors performance against these standards.   The FY 2011 target was 90%.  The current reported baseline is 83% of ambulance responses are  within 8 minutes.  The 2011 target was not met.  The FY 2012 target has been set at 90%  respectively, consistent with national standards for emergency and fire responses.  This measurement is tracked annually by the Fire & Life Safety Department.    • Fire Reponses are Within 5 Minutes   The City of Springfield provides fire emergency response throughout the city and surrounding areas.  The Fire & Life Safety Department operates three 24/7 ambulances and five first‐response  apparatus out of five fire stations throughout the city. This measure is an industry standard for  emergency response organizations. Since the initial baseline was developed, better data analysis  methods have been adopted, reflecting a more accurate baseline for FY10. Further improvements in  data collection systems, expected by FY11, will provide a higher level of consistency in data  available. Fire & Life Safety strives for excellence in delivery of fire emergency services, and  continuously monitors performance against these standards.   The FY 2010 target was 80%.  The current reported baseline is 66% of emergency fire responses are  within 5 minutes.  This target has not been met by the current baseline.  The FY 2012 target has  been set at 80%.  This measurement is tracked annually by the Fire & Life Safety Department.    • The Development and Municipal Code Standards are Enforced Without the Necessity of a Warning  Citation or Municipal Court Action   The Development Services Department responds to all citizen complaints regarding Development  Code and Civil Infraction Municipal Code violations.  In addition, code violations noted by staff in the  course of performing their regular duties are pursued.     The FY 2011 target was 70% and the FY 2011 baseline is 74%.  The FY 2011 target was met and  exceeded.  The FY 2012 target is set at 47%.   This measurement is tracked annually by the Development Services Department.    • Building Permit Applications Are Processed in a Timely Manner   Building Permit Applications Processed in a Timely Manner is a measurement of the City’s  responsiveness to the needs of the construction industry and to facilitate economic growth in the  community.    The FY 2011 target of 90% was met.  The FY 2012 target will remain at 90%.  This measurement is tracked annually by the Development Services Department.            Attachment 2 – Page 10 of 14    Goal:  Foster an Environment that Values Diversity and Inclusion  • Percent of Proposers on Public Works Formal Solicitations that Self‐Identify as Minority, Women,  or Emerging Small Businesses (MWESB) Based Upon a Listing Maintained by the State  and the  Percent of Awards to Firms on State MWESB List   This measurement method tests whether or not the Public Works procurement methods and  strategies encourage and support participation of diverse business entities in the planning, design  and construction of public improvements.   The goal for FY 2011 was to develop a proposed program to encourage and support participation of  these business entities in the planning, design and construction of public improvements. This goal  was met.  This is now a modified measurement and the first baseline will be established in FY 2012.  The FY  2012 target will be 10%.     This measurement is tracked annually by the Public Works Department.    • City Supports and Encourages Inclusion in Advertisements for Open Positions, Procurement and  Budgetary Objectives   An integral part of the Finance department’s ability to create a positive environment that values  diversity and encourages inclusion is through our external contact with the community in the form  of advertisements for open positions, procurement and budgetary objectives.  With each  advertisement we will look for and utilize at least one alternate media source.    There is currently no baseline data to report and the FY 2012 target is 100%.    This measurement is tracked annually by the Finance Department.    • Effective and Appropriate Language Services are Provided While at the Springfield Municipal Court   The Springfield Municipal Court team is key to providing effective and appropriate language services  to members of our community while at the Springfield Municipal Court.  The goal is to improve the  delivery of language services through availability of a certified Spanish language interpreter for court  proceedings and staff assistance through 20% Spanish bilingual staff during Court hours.  The FY 2011 target was set at 20% and the FY 2011 baseline is reports 20% of the court clerk staff  are deemed proficient in Spanish language skills.  This target was met.  The target for FY 2012 is  20%.    This measurement is tracked annually by the Springfield Municipal Court (Finance Department).    • Percent of Qualified Applicants Who Meet City’s Workforce Diversity Goals   According to 2008 population and demographic statistics, the overall percentage of non‐white  residents in Springfield is approximately seven percent, while the non‐white percentage of  employees is less than 3 percent.  This measurement will track our ability to attract a broader  community of applicants.    The non‐white applicant pool for FY11 was 17% with the original target set at 7%.  The FY11 target  was met.  The FY12 target is 20%.   This measurement is tracked annually by the Human Resources Department.                  Attachment 2 – Page 11 of 14    Goal:  Maintain and Improve Infrastructure and Facilities  • Planned Infrastructure Maintenance is Performed (Stormwater, Wastewater, Streets)  This measurement method tests the City’s ability to meet citizens’ needs with respect to maintaining  the investment in, and proper functioning of, existing system infrastructure.    The FY 2011 baseline is 100% of planned maintenance activities completed.  The FY 2012 target is  set at 100%.    This measurement is tracked annually by the Public Works Department.    • Preservation Projects are Completed on Schedule   The City’s infrastructure consists of streets, drainage, and wastewater systems.  This measurement  method demonstrates the degree to which current systems are safe and efficient and confirms  whether all necessary preservation and maintenance have been performed.    A new baseline for FY 2011 is 78% and an FY2012 target set at 85%.  This measurement is tracked annually by the Public Works Department.    • Number of Out of Service Signalized Intersections Repaired Within 48 Hours After Reporting   This measurement tests whether the City’s infrastructure transportation system operates in  accordance with State and Federal laws.  It demonstrates that the City is providing safe and efficient  facilities for the use of the citizens.  A new baseline will be established for FY2011 and an FY2012 target set at 90%.  This measurement is tracked annually by the Public Works Department.    • Capital Projects are Constructed to Meet Expanding Needs  This measurement tests the City’s ability to deliver infrastructure projects that have been identified  and planned. Success in meeting the target depends upon two factors: 1) the ability to commit the  resources necessary to accomplish the project (i.e. sufficient budget); and 2) the ability to expend  the resources necessary to complete the work. (I.e. sufficient staffing) Meeting the target  demonstrates that the City is prepared to respond to development needs in a timely fashion.   The FY 2011 target was 75% and the FY 2011 baseline is 73%.  The FY 2012 target is set at 85%.  This measurement is tracked annually by the Public Works Department.                                      Attachment 2 – Page 12 of 14    Goal:  Promote and Enhance Our Hometown Feel While Focusing on Livability and  Environmental Quality  • Student Success and Community Literacy is Supported   The Library creates and promotes reading & literacy initiatives both independently and in  partnership with other community agencies (School District 19, Willamalane Parks & Recreation,  Head Start of Lane County).  The FY 2011 target was 100%.  The FY 2011 target was not met. The current reported baseline is  91% participation in preschool, elementary and teen reading programs.  FY 2012 Target is 96%  participation.    This measurement is tracked annually by the Library.    • The Quality of Information Services is Improved   The library seeks to improve and expand its information resources through the wise use of existing  funds and by generating additional funds through grants and private fund‐raising.   The FY 2011 target was 100%. The current reported baseline is 95%.  The FY 2012 target is 100%.  This measurement is tracked annually by the Library.    • Access to Library Services and Collections is Improved   The library seeks to maximize citizen access to its resources through increased open hours, efficient  circulation practices, and making services available electronically through the library website.  The FY 2011 target was 100%.  The current reported baseline is 95%.  The FY 2012 target has been  set at 100%.    This measurement is tracked annually by the Library.    • Trash is Reduced and Community Recycling is Increased   This measure tests the City’s ability to influence a reduction in the load imposed on the Lane County  landfill by increasing recycling and reuse and reducing the presence of pollutants.  It requires Public  Works to track Spring Clean Up and Pollution Prevention activities, the amount of waste diverted  from the landfill by ton, and the number of citizens served, to give an aggregate percentage of  trashed reduced.  The FY 2011 baseline is 95% and the FY 2012 target is 100%.  This measurement is tracked annually by the Public Works Department.    • Percent of Current Year Stormwater Management Plan Activities in Compliance with the Six  Minimum Measure  This measurement tests the continuous process of developing and implementing specific City  actions to implement the City Council’s seven goals for managing the stormwater/waterway system  and as well as to influence private activity in order to protect the public health safety and welfare,  the environment, and to meet State and Federal requirements.   The new baseline for FY2011 is 100% and the FY2012 target is 100%.  This measurement is tracked annually by the Public Works Department.                Attachment 2 – Page 13 of 14    Goal:  Promote and Enhance Our Hometown Feel While Focusing on Livability and Environmental  Quality (cont.)  • Wastewater Infrastructure Systems Meet Regulatory Performance Requirements   The City is required to construct and maintain the condition and capacity of the wastewater  collection and treatment system in order to avoid sanitary sewer overflows. This measurement  method demonstrates that the City is protecting the public health and safety and the environment,  and complying with requirements of the Clean Water Act by preventing untreated sewage leaving  the collection system and exposing people and the environment to pathogens and other pollutants  contained in untreated sewage.   The FY 2011 target was zero overflows.  This target was met.  The target must remain at zero.   Therefore the FY2012 target is set at zero.  This measurement is tracked annually by the Public Works Department.    • Development Applications are Processed in a Timely Manner   The Development Services Department measurement Development applications processed in a  timely manner is a key measure of the City’s responsiveness to the needs of the community.     The FY 2011 target was set at 93% after a FY 2012 baseline of 95% was established.  The FY 2011  baseline is 100%.  The FY 2011 target was met and exceeded.  The FY12 target is now 100%.  This measurement is tracked annually by the Development Services Department.    • Revitalization of Low‐Income Neighborhoods is Supported   The revitalization of low‐income neighborhoods is supported is an important measurement because  it responds to a number of goals for the Community in the use of CDBG and HOME funds:  creating  partnerships with non‐profits and for profit developers, supports community and neighborhood  revitalization, provides assistance to low and moderate income persons, leverages funding for   community projects and promotes economic development.    The FY 2011 target was one project and in FY 2011 two requests were received for small business  development.  The FY 2011 target was met.  The FY 2012 target is one project.  This measurement is tracked annually by the Development Services Department.    • Citizen Requests and Inquiries are Given Timely Attention   The Development Services Department measurement Development citizen requests/inquiries are  given timely attention is a key measure of the City’s responsiveness to the needs of the community.     The FY11 baseline is 99%.  The FY11 target was 99%.  The FY11 target was met.    The FY12 target is 99%.  This measurement is tracked annually by the Development Services Department.    • Technology is Used to Make it Easier for Citizens to do Business in Springfield Through   e‐Permitting and On‐Line Access to Information (Accela)   In an effort to make doing business with the City easier and more accessible, the Development  Services Department offers e‐permitting on‐line.  This measurement compares the number of trade  permits issued in total to the percentage processed online.  This is a brand new service offered by  the City through Accela and staff will continue to promote this option to citizens in order to increase  awareness and effectiveness.  The New FY11 baseline is 45%.  The FY12 target is 50%.   This measurement is tracked annually by the Development Services Department.    Attachment 2 – Page 14 of 14    Goal:  Promote and Enhance Our Hometown Feel While Focusing on Livability and Environmental  Quality (cont.)  • Residents Perception of Springfield is Positive   When financially feasible, the City administers a City‐wide survey to gather data illustrating the  current social and political climate of the Springfield community.  This measurement is based on  those findings.    There is no identified FY 2011 baseline and the FY 2012 target has not been set.  This measurement is tracked annually, pending funding, by the City Manager’s Office.    • Neighborhoods are Healthy and Active   This is a new proposed measurement that will be based on identified barriers by University of  Oregon students through the City’s partnership with the University of Oregon as the 2011/2012  Sustainable City Year City.  Staff’s goal will be to work with students to identify barriers for youth  and residents within Springfield neighborhoods to healthy and sustainable living amenities.  These  barriers will then be analyzed to identify actions the City might be able to impact and measure,  improving the sustainability of the neighborhood.  This measurement will be subject to further  definition and review at a detailed level once staff has begun the partnership with the UO.  The FY 2011 baseline and FY 2012 goal will be identified through the SCY partnership.  This measurement will be tracked annually by the City Manager’s Office.    ANATOMY of a Priority-Based Budget Process Attachment 3Page 1 of 9 April 2010 | Government Finance Review9 The traditional incremental approach to budget- ing is not up to the financial challenges posed b the Great Recession.An incremental approach is workable (but not optimal) in periods of revenue growth because the new revenue increments can be distributed among departments and programs with rel- atively little controversy.There is much more potential for acrimony,though,when allocating revenue decre- ments during times of revenue decline.Hence, the popularity of across-the-board cuts — they are perceived as equitable and thus attenuate conflict.Bu by definition,across-the-board cuts are not strategic They do not shape and size government to create value for the public. Priority-driven budgeting (PDB) is a natural alterna- tive to incremental budgeting.Using PDB,the govern- ment identifies its most important strategic priorities Services are then ranked according to how well they align with the priorities,and resources are allocated in accordance with the ranking.1 This article identifies the essential steps in a PD process and the major levers that can be pushed and pulled to customize PDB to local conditions.The fol- lowing organizations contributed to the Government Finance Officers Association’s research on PBD:the Cit of Savannah,Georgia;Mesa County,Colorado;Polk County,Florida;County,Washington;City of Walnut Creek,California;City of San Jose,California;and City of Lakeland,Florida. MAKING THE PROCESS YOUR OWN Designing a process that is fair,accessible,transpar- ent,and adaptable is a challenge.However,it is also an opportunity to customize a PDB process that fits you organization best.The GFOA’s research has identifie five key customization questions that need to be answered as you design a PDB process: ■What is the scope? What funds and revenues are included? What is the desired role of non-profit and private-sector organizations in providing public services? ■What is the role of PDB in the final budget deci sion? Is it one perspective that will be considered among many,or is it the primary influence? By wha method will resources be allocated to services? BY SHAYNE C.KAVANAGH, JON JOHNSON,AND CHRIS FABIAN Attachment 3Page 2 of 9 10Government Finance Review| April 2010 ■What is the organizational subunit that will be evaluated for alignment with the organization’s strategic priorities? Departments,divisions,programs? Something else? ■How will subunits be scored,and who will score them? The scoring mechanism is central to PDB. ■How and where will elected officials,the public,and staf be engaged in the process? Engagement is essential for democratic legitimacy. Jurisdictions can tailor the process to their needs so long as they stay true to the philosophy of PBD,which is about how a government should invest resources to meet its stated objec- tives.Prioritizing helps a jurisdiction better articulate why its programs exist,what value they offer citizens,how they bene- fit the community,what price we pay for them,and wha objectives and citizen demands they are achieving.PDB is about directing resources to those programs that create the greatest value for the public. STEPS IN PRIORITY-DRIVEN BUDGETING A PDB process can be broken down into a few major steps.In addressing each step,there are several options for answer- ing the five key customization questions 1.Identify Available Resources.The organization needs to fundamentally shift its approach to budgeting before embark- ing on priority-driven resource allocation. An organization should begin by clearly identifying the amount of resources available to fund operations,one-time initiatives,and capital expenditures,instead of starting out by identifying the amount of resources the organization needs for the next fiscal year Many jurisdictions start developing their budgets by analyz- ing estimated expenditures to identify how much money the organizational units will need to spend for operations and capital in the upcoming fiscal year.Once those needs ar determined,then the organization looks to the finance department or budget office to figure out how they will funded.When adopting a PDB approach,the first step is t gain a clear understanding of the factors that drive revenues. Jurisdictions perform the requisite analysis to develop accu- rate and reliable revenue forecasts of how much money will be available for the upcoming year. Once the amount of available resources is identified,th forecasts should be used to educate and inform all stake- holders about what is truly available to spend for the next fis cal year.As the organization begins developing its budget, everyone must understand and believe that this is all there is — that there is no padding beyond what is forecast.Sharing the assumptions behind the revenue projections creates a level of transparency that dispels the belief that there are always “secret funds”to fix the problem.This transparency establishe the level of trust necessary for PDB to be successful. In the first year of implementing PDB,an organization migh chose to focus attention on only those funds that appear to be out of alignment on an ongoing basis.This will usually involve the general fund,but the organization might decide to include other funds in the PCB process.Polk County,Florida, for instance,limits the scope to the general fund. Intended Result:A common under- standing throughout the organization about the amount of resources available,which limits how much can be budgeted for the upcoming fiscal year 2.Identify Your Priorities.PDB is built around a set of organizational strategic priorities.These priorities are similar to well-designed mission statements in that they capture the fundamental purposes behind the organization — why it exists — and are broad enough to have staying power from year to year.The priorities are very different from a mission statement,however,in one respect:They should be expressed in terms of the results or outcomes that are of value to the public.These results should be specific enough to be meaningful and measurable,but no so specific that they outline how the result or outcome will b achieved,or that they will become outmoded after a short time.Mesa County,California,has six priority results,which are expressed as citizen statements: ■Economic Vitality.“I want Mesa County to have a variety of industries that will promote a healthy and sustainable economy.” ■Well-Planned and Developed Communities.“I want plans and infrastructure that maintain quality of life.” ■Self-Sufficient Individuals and Families“I want a com- munity where citizens have opportunities to be self-suffi cient.” Designing a process that is fair,accessible,transparent, and adaptable is a challenge. However,it is also an oppor- tunity to customize a priority- driven budgeting process that fits your organization best Attachment 3Page 3 of 9 ■Public Safety.“I want to feel safe any time,anywhere in Mesa County.” ■Public Health.“I want a healthy Mesa County.” ■Public Resources.“I want Mesa County to have well-managed resources.” A strategic plan,vision,or mission statement can be the starting point for identifying the priority results.Grounding the priority results in these previous efforts can be helpful,as it respects the investment stakeholders might have in them and gives the priorities greater legitimacy. Developing the priorities is a critical point of citizen involvement.The governing board must also be closely involved.Familiar tools such as citizen surveys,focus groups, and one-on-one interviews work well,too. Intended Result:A set of priorities that are expressed in terms of measurable results,are of value to citizens, and are widely agreed to be legitimate. 3.Define Your Priority Results More PreciselyThe foundation of any prioritization effort is the results that defin why an organization exists.Organizations must ask what makes them relevant to their citizens.Achieving relevance — providing the programs that achieve relevant results — is the most profound outcome of a prioritization process. The challenge is that results can be broad,and what they mean for your community can be unclear.Take,for instance,a result such as “providing a safe community,” which is shared by most local governments.Organizations talk about public safety,or the provision of a safe community, as if it were an obvious and specific concept.But is it? In the City of Walnut Creek,California,citizens,together with city leadership,commonly identified issues of building safet specific to surviving earthquakes as an important influen on the safety of their community.In the City of Lakeland, Florida,however,not a single citizen or public official dis cussed earthquakes in their work to help define the very sam April 2010 | Government Finance Review11 Are Support Services a Priority? The jurisdictions that participated in the GFOA’s research offered two alternatives for funding support services.Some suggested creating a “good governance”priority that addresses high-quality support services.This gives support services a clear place in PDB and allows them to evaluate program relevance against the strategic results they are asked to achieve.Here is how the City of Walnut Creek,California, defined its governance goals ■Enhance and facilitate accountability and innovation in all city business. ■Provide superior customer service that is responsive and demystifies city processes ■Provide analysis and long-range thinking that supports responsible decision making. ■Proactively protect and maintain city resources. ■Ensure regulatory and policy compliance. Other participants envisioned moving to a system that would fully distribute the cost of support services to operating pro- grams.Thus,the impact of any changes in the funding of these services would be tied to the prioritization of the operating services they support. Attachment 3Page 4 of 9 12Government Finance Review| April 2010 result.Hence,the uniqueness and relevance we seek is estab- lished through the specific definitions of the community results.The process of defining results reveals the communi ty’s identity and the objective meaning of what is relevant. Strategy mapping is a powerful method for defining results2 It is a simple way to take a complex and potentially ambigu- ous objective — such as achieving a safe community — and create a picture of how that objective can be achieved. Sometimes referred to as cause-and-effect diagrams,or result maps,strategy maps can help an organization achieve clarity about what it aims to accomplish with its results. Exhibit 1 shows a result map from the City of San Jose, California.The center of the map is the desired result — a green,sustainable city — and the concepts around the result are the definitions.The definitions help San Jose clearly arti ulate,“When the City of San Jose _____ (fill in the blank wit any of the result definitions),then we achieve a green,sus tainable city.” The City of Walnut Creek approached the process of defin ing results knowing that citizens and community stakeholders needed to be involved.Its rationale was that its prioritization efforts would be valid only if the community members were responsible for establishing the results and their definitions The city was successful in reaching out to the community (via radio,newspaper,city newsletters,and the city’s Web site) to invite any citizen who was interested in participating to attend one of several town hall meetings.After an orientation,citizens were invited to participate in a facilitated session where they submitted as many answers as they could to fill in the blank in the following question “When the City of Walnut Creek _______ ,then they achieve (the result the citizen was focused on).”The response from citizens was tremendous and generated a host of answers to the questions posed by the city.Members of the city government,who participated in the meetings,were then responsible for summarizing the citizens’responses by devel- oping result maps. When defining the results that establish relevance in you community,consider if some results might be more important than other results.This could have an impact on how pro- grams are valued and prioritized.Elected officials,staff,an citizens have participated in voting exercises where they receive a set number of “votes”(or dollars,or dots,etc.) that Exhibit 1:Result Map Green, Sustainable City Promotes and supports resource conservation through leadership,regulation,education, and incentives Minimizes use of natural resources through reuse and recycling Manages factors,facilities, and programs that mitigate the City’s environmental impact on air,land,and water quality Plans and designs the City’s growth to minimize emissions,energy usage,and other environmental impacts Promotes new technology and business solutions to environmental challenges Attachment 3Page 5 of 9 they can use to indicate the value of one result versus anoth- er.This process should not be perceived as a budget alloca- tion exercise (whereby the budget of a certain result is deter- mined by the votes attributed to it).Instead,participants are communicating and expressing that certain results (and therefore the programs that eventually influence these results) might have greater relevance than others. Intended Result:Revealing the identity of your community and the objective meaning of what is relevant to it through the process of defining results What about Capital Projects? A priority-driven budgeting process can be used to evaluate capital projects or one-time initiatives in the same way it is used to evaluate programs and services.For instance,the capital improvement plan can be ranked against the priority results. 4.Prepare Decision Units for Evaluation.Evaluating the services against the government’s priority results is at the crux of PDB.First,the decision unit to be evaluated must be defined. decision unit is the organizational sub- unit around which budgeting decisions will be made.For PDB,the decision unit must be broad enough to capture the tasks that go into producing a valued result for citizens,but not so large as to encompass too much or be too vague.If the decision unit is too small,it might capture only certain tasks in the chain that lead to a result,rather than the overall result,and might over- whelm the process with too many decision units and details. Traditional departments and divisions are not appropriate decisions units for PDB because they are typically organized around functions rather than results.Hence,research subjects took one of two approaches to this issue:offers and programs. Offers.Offers are customized service packages designed by departments (or cross-functional teams,or sometimes pri- vate firms or non-profits) to achieve one or more priori results.Offers are submitted to evaluation teams for consider- ation against the organization’s priority results. Offers are intended to be different from existing organiza- tional subunits for several reasons:to make a direct connec- tion between the subunits being evaluated and the priority results;to encourage innovative thinking about what goes into an offer;and to make it easier for outside organizations to par- ticipate in the PDB process.For example,multiple depart- ments can cooperate to propose a new and inventive offer to achieve a result instead of relying on past ways of doing things.A private firm could submit an offer to compete wit an offer made by government staff. How Many Offers Are There? Research participants that used the offer approach averaged one offer for every $1.5 million in revenue that was available in the priority-driven budgeting process. The drawback of offers is that they constitute a radical departure from past practice and might be too great a con- ceptual leap for some.This could increase the risk to the process,but if the leadership’s vision is for a big break from past practice,then the risk could be worth it.For example, Mesa County’s board is interested in having private and non- profit organizations fully participate i its budget process at some point in the future,so the offer approach makes sense for that jurisdiction. Programs.A program is a set of relat- ed activities intended to produce a desired result.Organizations that use the program method inventory the pro- grams they offer and then compare those to the priority results.Programs are an established part of the public budgeting lexicon,and some governments already use programs in their financial manage ment,so thinking in terms of programs is not much of con- ceptual leap.This means less work and process risk.However familiar the concept,though,the programs need to be suffi ciently detailed to allow for meaningful decision making. Generally speaking,if a program makes up more than 10 per- cent of total expenditures for the fund in which it is account- ed for,then the program should probably be broken down into smaller pieces.If a program makes up 1 percent or less of total expenditures,or less than $100,000,it is probably too small and should be combined with others. Also,the program approach might provide less opportunity for outside organizations to participate in the budgeting process.That’s because the starting point is,by definition,th existing portfolio of services.For that same reason,radical innovation in service design or delivery method is less likely. April 2010 | Government Finance Review13 When adopting a priority- driven budgeting approach, the first step is to gain a clea understanding of the factors that drive revenues. Attachment 3Page 6 of 9 14Government Finance Review| April 2010 Intended Result:Preparing discrete decision-units that produce a clear result for evaluation.Think about evaluating these decision-units against each other and not necessarily about evaluating departments against each other. 5.Score Offers/Programs against Results.Once the organization has identified its priority results and more pre cisely defined what those results mean in terms of meetin the unique expectations of the community,it must develop a process to objectively evaluate how the offers/programs achieve or influence the priority results.Scoring can b approached in several ways,but the system must ensure that scores are based on the demonstrated and measurable influ ence the offers/programs have on the results.In many organi- zations,such as the cities of Lakeland,Walnut Creek,and San Jose,programs were scored against all the organization’s pri- ority results.The idea was that a program that influenced mul tiple results must be a higher priority — programs that achieved multiple results made the best use of taxpayer money.Alternately,organizations such as Mesa County,City of Savannah,Polk County,and Snohomish County matched each offer with only one of the priority results and evaluated it based on its degree of influence on that result.Usin this scenario,a jurisdiction should estab- lish guidelines to help it determine how to assign an offer/program to a priority area and how to provide some accommodation for those offers/programs that demonstrate critical impacts across pri- ority result areas.Both of these approaches have been used successfully in PDB. There are two basic approaches to scoring offers/programs against the priority results.One approach is to have those who are putting forth the offers/programs assign scores based on a self-assessment.This approach engages the owners in the process and taps into their unique understanding of how the offers/programs influence the priority result.When taking thi approach,it is critical to incorporate a peer review or other quality control process that allows review by peers in the organization and external stakeholders (citizens,elected offi cials,labor unions,business leaders,etc.).During the peer review,the owner of the offer/program would need to provide evidence to support the scores assigned. A second approach to scoring establishes evaluation com- mittees that are responsible for scoring the offers/programs against their ability to influence the priority result.Owners o offers/programs submit them for review by the committee, which in turn scores the programs against the result.The PDB process becomes more like a formal purchasing process based on the assumption that those doing the evaluations might be more neutral than those proposing the offers/pro- grams.Committees could be made up entirely of staff,includ- ing people who have specific expertise related to the resul being evaluated and others who are outside of that particular discipline.An alternate committee composition would include both staff and citizens to gain the unique perspectives of both external and internal stakeholders Regardless of who is evaluating the offers/programs and assigning the scores,there are two key points.To maintain the objectivity and transparency of the PDB process,offers/pro- grams must be evaluated against the priority results as com- monly defined (see step 3).Also,the results of the scorin process must be offered only as recommendations to the elected officials who have the final authority to make resource allocation decisions. Organizations should establish the elected governing board’s role at the out- set.In some jurisdictions,the board is heavily integrated into the PDB process, participating in the scoring and evalua- tion step.They can question the assigned scores,ask for the evidence that supports a score,and ulti- mately request that a score be changed based on the evi- dence presented and their belief in the relative influence tha an offer/program has on the priority result it has been evalu- ated against.In other organizations such as Snohomish County,Washington,the PDB process is implemented as a staff-only tool that is used to develop a recommendation to the governing body. Intended Result:Scoring each unit of prioritization in a way that indicates its relevance to the stated priorities. 6.Compare Scores Between Offers/Programs.A real moment of truth comes when scoring is completed and the information is first compiled,revealing the top-to-botto comparison of prioritized offers/programs.Knowing this,an organization must be sure that it has done everything possible prior to this moment to ensure that there are no surprises,that the results are as expected,and that the final comparison o offers/programs in priority order is logical and intuitive. Priority-driven budgeting is a natural alternative to incremental budgeting. Attachment 3Page 7 of 9 In the City of San Jose’s peer review process,the scores departments gave their programs were evaluated,discussed, questioned,and sometimes recommended for change.The city established a review team specific to each of the city’ results.The review teams first went over the result map t ensure that each member of the team was grounded in the city’s specific definition of the result.Next,the review tea were given a report detailing every program that gave itself a score for the particular result under review.The teams met to discuss:whether they understood the programs they were reviewing;whether they agreed with the scores;whether they required further testimony or evidence to help them better understand the score given;and whether the score should stand,or if the team should recommend increasing or decreasing it.All programs were evaluated in this manner until a final recommendation was made regarding the fin program scores. What made San Jose’s approach noteworthy is that in addi- tion to including peers within the organization to review the scores,the city also invited the local business community, citizens representing their local neighborhood commissions, and labor leaders.According to San Jose’s City Manager’s Office,“The participants found the effort informative as to wha the city does;they found it engaging with respect to hearing staff in the organization discuss how their programs influenc the city’s results;and,most interesting,they found it fun.” Lastly,it is important to recognize that community stake- holders could be apprehensive about engaging in an evalua- tion that could result in losing support for their program.Even though program directors,or citizens who benefit from a par ticular program,might understand why their programs weren’t ranked highly,they still won’t be pleased with that outcome. Organizations must ask if the end result of their efforts in pri- oritizing programs is simply that finish line when it is clea what programs should be cut.Organizations such as the City of Lakeland have used prioritization not only to balance their budgets in a meaningful way,but also to understand how pro- grams that might appear less relevant to the city as a whole might in fact be very relevant to other community stakehold- ers.These stakeholders might actually take responsibility for supporting or preserving a program.There are often opportu- nities to establish partnerships with other community institu- tions such as businesses,schools,churches,and non-profits Intended Result:A logical and well-understood product of a transparent process — no surprises. 7.Allocate Resources.Once the scoring is in place, resources can be allocated to the offers/programs.There are a number of methods for allocating resources.One method is to order the offers/programs according to their prioritization within a given priority result area and draw a line where the cost of the offers/programs is equal to the amount of revenue available (see Exhibit 2).Revenues can be allocated to each result area based on historical patterns or by using the priori- ty’s relative weights,if weights were assigned.Those offers/pro- grams that are above the line are funded,and those that are below the line are not.Discussion will ensue about the offers/programs on either side of the line and about moving them up or down,reorganizing them to move them above the line (e.g.,lowering service levels),or even shifting resources among priority results. An alternate method,used by the City of Lakeland,is to organize the offers/programs into tiers of priority (i.e.,quar- tiles) and then allocate reductions by tier.For example,pro- grams in the first tier might not be reduced,while programs i the lowest tier would receive the largest reductions.The pro- grams could be forced to make the reductions assigned,or the reductions could be aggregated as a total reduction amount for each department,based on the programs within its purview (with the implication being that the department would weight its reductions toward the lower-priority pro- April 2010 | Government Finance Review15 Exhibit 2:Drawing the Line Lower Priorities Higher Priorities Attachment 3Page 8 of 9 16Government Finance Review| April 2010 grams,but this would provide more flexibility in deciding th precise reduction approach).Of course,under any PDB process,the prioritization is always just a recommendation to the governing board,and there is give and take to negotiate a final budget PDB can be used effectively for evaluating priorities in all funds,not just the general fund.One option is to handle spe- cial purpose funds (where there are restrictions placed on how monies can be used) separately.For example,perhaps enterprise funds or court funds would be evaluated on a dif- ferent track or budgeted in a different way altogether.Another option is to rank offers/programs without respect to funding source,but then allocate resources with respect to funding source.Knowing the relative priority of all the offers/programs could generate some valuable discussion,even if there is no immediate impact on funding.For example,if a low-ranking offer/program is grant funded,is it still worth providing,espe- cially if that grant might expire in the foreseeable future? Intended Result:Aligning resource allocation with results of priority-driven scoring. CREATING ACCOUNTABILITY There can be a potential moral hazard in PDB;the owners of the offers/programs that are being evaluated might over- promise or over-represent what they can do to accomplish the priority result.Create methods for making sure that offers/pro- grams deliver the results that their positive evaluations were based on.Many of the GFOA’s research participants are striv- ing toward performance measures for this purpose.For exam- ple,an offer/program might have to propose a standard of evi- dence or a metric against which it can be evaluated to see if the desired result is being provided. Polk County has a conceptual approach to connecting pri- ority result areas to key indicators (see Exhibit 3).However, none of the research participants have worked this situation out entirely to their satisfaction.For those just starting out,the lesson is to be cognizant of the place for evidence in your process design,but also to be patient about when this part of the process will be fully realized. Intended Result:Making sure that those who received allocations are held accountable for producing the results that were promised. CONCLUSIONS Priority-driven budgeting is a big change from traditional budgeting.You should have strong support for the PDB phi- losophy before proceeding,especially from the chief execu- tive officer (who proposes the budget) and,ideally,from th governing board (who adopts the budget).If you move for- ward,study PDB carefully so you can design a process that works for your organization.Keep in mind the major levers and decision points mentioned in this article and use them to create a process that fits your organization❙ Notes: 1.Priority-driven budgeting is also known as budgeting for results,and the best-known method of implementing PDB is budgeting for outcomes (see “The City of Savannah Uses Budgeting for Outcomes to Address Its Long- Term Challenges”in this issue of Government Finance Reviewfor more information about BFO).BFO was the subject of The Price Of Government: Getting the Results We Need in an Age of Permanent Fiscal Crisisby David Osborne and Peter Hutchinson (New York:Basic Books) 2006. 2.Robert S.Kaplan and David P.Norton,Strategy Maps:Converting Intangible Assets into Tangible Outcomes(Boston,Mass.:Harvard Business Press) 2004. SHAYNE C.KAVANAGHis senior manager of research for the GFOA’s Research and Consulting Center in Chicago,Illinois.He can be reached at skavanagh@gfoa.org.JON JOHNSONis an independ- ent local government advisor on fiscal health and wellness issues,fol lowing a 28-year career as a government finance officer in Colora and Missouri.He can be reached at jjohnson.jfadvisors@earthlink.net. CHRIS FABIANis in partnership with Johnson as a local government advisor assisting organizations across the country as they implement the priority-based budgeting model the two developed while serv- ing as budget practitioners in Jefferson County,Colorado.Chris can be reached at cfabian.jfadvisors@earthlink.net. Exhibit 3:Connecting Priority Result Areas to Key Indicators Priority People in Polk County who are at risk because of their health or economic status will get their basic needs met,and are as self-sufficient as possible Indicators P Improving H Maintaining — Improving Basic Needs Poverty Level No Health Coverage County vs State Homeless Population Attachment 3Page 9 of 9