Priority Based Budgeting
In 2016, the City continued efforts to implement Priority Based Budgeting. PBB introduced a new online tool which allows the city to easily manage all data and update programs, scores, and costs on-line. A review of the PBB program inventory resulted in a reduction of programs from 1088 to 514 with total direct program costs of $97.4 million and 610 full and part-time employees. This reduction was primarily due to the removal of redundant programs and combining programs across departments that were previously tracked separately.
During 2017, the departments will be identifying priority programs to measure outcomes and determine if the city is meeting the goals and objectives outlined in the new Imagine Kalamazoo 2025 Strategic Vision, estimated to be finalized in early summer 2017. This new vision will align with PBB by providing revised community result maps used for scoring. In preparation for the 2018 budget, all programs will be scored based on the updated community results, and staff will be using PBB to score and prioritize the city’s capital improvement projects.
On Wednesday, December 9, city staff will host a community budget meeting from 6:30-7:30 p.m. in the Community Room at Mayors' Riverfront Park. Staff will present an overview of the proposed 2016 budget and discuss on-going Priority Based Budgeting efforts.
On September 14, City Staff and representatives from the Center for Priority Based Budgeting joined the City Commission to provide an update on the PBB process and present the newly created Resource Alignment Diagnostic (RAD) Tool. The RAD Tool offers a new lens which can be used to analyze how dollars are spent and which programs are most effective.
*to search for a specific program or department, use the find function in Adobe Reader (Ctrl + F).
If you or your organization would like to know more about Priority Based Budgeting, please send an email to Plan@kalamazoocity.org. City staff are available to meet with community groups or attend organizational meetings to provide updates on the Priority Based Budgeting process and gather additional input in preparation of the 2016 budget.
The Priority Based Budgeting process:
Identifies results that are most important to our community
From February to May of this year, the City held a series of public meetings to obtain feedback from residents about what results they value most. Input was also received through ImagineKalamazoo.com. The results of the community prioritization exercise were incorporated into the PBB scoring process so that programs that influenced the most highly valued community results were weighted.
|Safe Community||Economic Vitality||Effective Mobility & Connected, Reliable Transportation System||Building a Strong, Well-Planned Community||Quality Recreational, Educational, and Cultural Opportunities||Environmental Stewardship||TOTAL|
* Participants had 10 dots to allocate towards the Results, so the numbers indicate the number of dots received
**Participants had $1000 to allocate to the Results, results are shown in the thousands
Identifies all programs that the City currently offers
In June, departments completed preliminary program inventories that identified all of the programs and services currently offered by the City. Departments are continuing to refine this list of close to 1100 programs.
Evaluates those programs based on their influence in achieving the results that have been identified as most important.
Departments scored all programs against set criteria that incorporated: mandates, reliance on the city to provide the program, cost recovery, portion of the community served, and change in demand. Programs were also scored based on ability to achieve community and/or good governance results. Peer Review Teams reviewed all department scores and made adjustments as part of a quality control process. Finally, programs have been placed into quartiles within the Resource Alignment Diagnostic Tool to demonstrate which programs are the most impactful against community and governance results (Quartile 1) and which programs are the least impactful (Quartile 4).
Allocates resources based on these results
Based on the outcomes of Priority Based Budgeting, the City intends to allocate future resources based on which programs most directly and efficiently achieve the goals the community has identified. For the 2016 budget, the City will use the Resource Alignment Diagnostic Tool to explore cross-departmental efficiencies and to identify less impactful programs that could be changed or eliminated.
The Philosophy of Priority Based Budgeting
The underlying philosophy of Priority Based Budgeting is about how a government entity should invest resources to meet its stated objectives. It helps us to better articulate why the services we offer exist, what price we pay for them, and, consequently, what value they offer citizens. The principles associated with this philosophy of budgeting are:
Prioritize Services: Priority Based Budgeting evaluates the relative importance of individual programs and services rather than entire departments. It is distinguished by prioritizing the services a government provides, one versus another.
Do the Important Things Well: In a time of revenue decline, a traditional budget process often attempts to continue funding all the same programs it funded last year, albeit at a reduced level (e.g. across-the-board budget cuts). Priority-driven budgeting identifies the services that offer the highest value and continues to provide funding for them, while reducing service levels, divesting, or potentially eliminating lower value services.
Question Past Patterns of Spending: An incremental budget process doesn’t seriously question the spending decisions made in years past. Priority-driven budgeting puts all the money on the table to encourage more creative conversations about services.
Spend Within the Organization’s Means: Priority Based Budgeting starts with the revenue available to the government, rather than last year’s expenditures, as the basis for decision making.
Know the True Cost of Doing Business: Focusing on the full costs of programs ensures that funding decisions are based on the true cost of providing a service.
Provide Transparency of Community Priorities: When budget decisions are based on a well-defined set of community priorities, the government’s aims are not left open to interpretation.
Provide Transparency of Service Impact: In traditional budgets, it is often not entirely clear how funded services make a real difference in the lives of citizens. Under priority-driven budgeting, the focus is on the results the service produces for achieving community priorities.
Demand Accountability for Results: Traditional budgets focus on accountability for staying within spending limits. Beyond this, Priority Based Budgeting demands accountability for results that were the basis for a service’s budget allocation
More information on Priority Based Budgeting is available from the Center for Priority Based Budgeting at http://www.pbbcenter.org/