Budgeting Beyond the basics

1. Adding context, driving innovation and making better decisions through a more comprehensive budget process Budgeting Beyond the basics

2. Adheres to a GASB and GAAP Balanced and Sustainable A link between operations and policy objectives Funds community priorities Communicates effectively More proactive than reactive What makes a good budget??

3. Repetition implies inherent value Doesn’t explain outcomes Doesn’t report performance Doesn’t drive innovation Works best with stability Creates a reactive model Good for accountants Implications of line item budgeting

4. Look familiar?

5. Establishing Priorities and Desired Outcomes Understanding True Cost Measuring Performance Collecting & Reporting Meaningful Data No Silver Bullets; But Context, New Insight and Better Decisions Simple tools with big payoff

6. Consider the willingness of citizens to pay What does the tax payer get? Does the budget reflect citizen priorities? Are you achieving desired outcomes? Does your line item budget give you tunnel vision? Priorities and Outcomes

7. Goal:Allocate resources to programs and services that are effective at achieving the highest priority ends. Priority based budgeting

8. Traditional Priority Based Process

9. Establish a complete inventory of services (within or across departments) Identify the total true cost of the services Develop ways to measure the effectiveness of each service Review and discuss Priority Based Budget Shortcut

10. An example

11. What does it really cost?

12. Cost to sustain infrastructure Long term maintenance True operating costs What’s not captured in budget?

13. An example: cost of street repair

14. An example: recreation center

15. Five year plan vs. life cycle cost Any high dollar asset that is intended to be replaced is worth capturing Model leases, used and new purchases Other assets

16. “If you can’t measure something, you can’t understand it. If you can’t understand something, you can’t control it. If you can’t control something, you can’t improve it.” ~H. James Harrington Measuring performance

17. Outputs: simple measures of raw counts of activities or services Efficiency: relates outputs to resources used (inputs) Outcome: gauges impact, effectiveness and quality 3 types of measurements

18. Gain insight and context you wont otherwise know Test the efficacy of strategy Helps communicate results and value Drives innovation Why measure performance?

19. Delta has 17 sworn officers and a $1.73M budget (outputs) Delta spends $195.62 per capita on law enforcement (efficiency) Delta Officers spend approximately 33% of each shift on patrol (efficiency) 69% of Delta citizens are confident in the PD’s ability to maintain public safety (outcome) An example: police

20. External: What do other communities do? Internal: What do performance metrics look like over time? Benchmarking

21. An example

22. An example

23. Add context Translate/ Interpret information Use the data you have in a better way Collect important data that you don’t have Use simple models to vet important decisions Collecting and reporting data

24. You don’t know if you don’t ask The people you hear from don’t represent everybody Measure citizen satisfaction Facility use Gauge interest in new programs/ services Educate your citizens at the same time Citizen Surveys

25. An example

26. An Example

27. Creating meaningful information

28. Rec Center Budget: An Example Key Indicators:

29. Learn and educate

30. Good for the “what if?” Looks at more than one variable at once Provides “real time” analysis Puts potential outcomes in context Modeling

31. Moving beyond the line item… Consider priorities Work with true costs Measure and report performance Do more with data Summary