32
Budgeting for Outcomes - Why Start the Journey? 2016 VGFOA Fall Conference October 27, 2016
Budgeting for Outcomes - Why Start the Journey?
2016 VGFOA Fall Conference
October 27, 2016
The City of Roanoke – Who we are
Our Journey
The Implementation Story
Going Forward with Performance Management
WINS from BFO
Lessons Learned
Agenda
2
Roanoke, Virginia
3
Chartered as an independent city in 1884
96,681 residents
43 square miles
Council-Manager form of government
7th largest employer in MSA
FY 2017 Budget:
Operating: $281,092,000
CIP: $151,772,159
4
Declining local tax revenue through the recession
Cuts in funding from Commonwealth
Increasing capital and operational needs (general fund and school division)
Reduced budget by millions in last 8-9 years
Reduced number of positions by more than 10% in last 8-9 years
Affordable Care Act requirements
Retirement contribution for employees
Medical claims and premiums increasing for city and employees
Compensation increases in jeopardy
Roanoke has faced challenges
5
Incremental budgeting
Modified zero-based process using Excel
Costing of services
High, Medium and Low priority designation
Budgeting for Outcomes
New City Manager
The next evolution
Our Journey
6
Provides structured process for linking spending to outcomes
Provides logical methodology for prioritizing activities and programs
Facilitates collaboration and flexibility
Gives managers opportunities to innovate
Avoids gimmicks like across the board cuts
Offers opportunities for employees to participate on front-line of budget development
Why Budgeting for Outcomes?
7
Focus on Accountability, Diversity, Customer Service
Young professionals
Resiliency approach
Shift culture to sense of individual responsibility and empowerment
Equip all employees with tools needed to make change happen
We have to Change the Culture to Change the Game
8
A Sampling of BFO Governments
States Washington
Iowa
South Carolina
Michigan
Louisiana Dept, of Culture, Rec & Tourism
Oregon Dept. of Education
Manitoba
School Districts Jefferson County, CO
Billings, MT
Cities Azusa, CA Los Angeles Spokane, WA Dallas, TX Ft. Collins, CO Grand Rapids, MI Redmond, WA Savannah, GA Roanoke, VA
Counties Snohomish, WA. Mesa County, CO Polk County, FL Jefferson County, CO
9
Fast-track in 1st year (6 month implementation)
Council acceptance and setting of priorities
Input from budget “power users”
Process design
System design and development
Organization education and buy-in
Team development
Training and complete roll-out
Report development throughout the process
Process changes each year based on feedback from Council, administration, priority teams
Our Journey
10
Focus on funding programs and activities that support priorities and strategies
Budget requests pertain to programs likely to produce desired results efficiently
Budget debate and discussion focuses on how revenue can be spent to get best results
Decision drivers are getting better results for the community based on evidence of effectiveness
BFO Focus
11
City Council
Budget Committee
Departments/Divisions
Priority Teams
Citizens
Budget and Technology staff
Key Players
12
1. Identify available revenue – all of it
2. Set high level priorities
3. Allocate all revenues to the priorities (optional)
4. Create “Request for Results” – include strategy maps with indicators
5. Invite/prepare offers with performance measures
6. Rank offers
7. Decide what offers to “buy”
8. Present the budget
BFO Steps
13
14
Economy
Livability
Safety
Infrastructure
Human Services
Good Government
Education
Cultivate a thriving business
environment and innovative
workforce opportunities to ensure
the prosperity of our community.
Foster an environment for
lifelong learning which
encompasses cradle to
career and beyond through
shared services and
community involvement.
Provide effective government
which maximizes resources
to ensure an open,
responsive, and innovative
service to the community.
City of Roanoke Priorities
Foster a caring community
that utilizes a regional and
collaborative approach which
encourages self-sufficiency
while providing a social
safety net to citizens when
they are most vulnerable.
Assure community safety needs are met
and promote a safe and desirable
region.
Maintain and build quality
infrastructure that supports
healthy residential
neighborhoods, successful
commercial areas, and
accessible public facilities
and amenities.
Enhance Roanoke’s
exceptional vitality as an
attractive, diverse, culturally
inclusive, vibrant and active city
in which to live, work and play.
Infrastructure Maintain and build quality infrastructure that supports healthy residential neighborhoods,
successful commercial areas, and accessible public facilities and amenities.
Environment
Technology,
Buildings and
Equipment
Neighborhood
Improvements
Transportation •Clean Air, Land and
Water
•Sustainability
•Stewardship
•Conservation
•Regionalism
Indicators:
•Meeting Regulations/Legal Mandates
•Citizen Survey Results
•Environmental Trends
•Proactively evaluate and maintain infrastructure
•Functional –
Planning/Design
•Safe and Well
Maintained
•Multimodal
•Regionalism
•Safe and Well
Maintained
•Attractive Streetscape
•Plan Implementation
•Adequate Storm Water
Systems
•Collaboration &
Communication
•Accessibility (Proximity /
Maintenance)
•Functional (Useable /
Reliable / Accessible)
•Enduring (High Quality)
•Sustainability
BFO Dashboard
16
OFFERS 17
Sample Offer 18
Sample Offer 19
SELLERS 20
Expenditures 21
SCORECARD 22
Team Review 23
MEASURES 24
Manage PMs 25
Track PMs 26
Council Employees Citizens
• Decision points clear • Citizen and
employee input valuable
• Easier to explain to
citizens
• Feel more knowledgeable and involved in process
• Education about the organization
• The value of
participation/team effort
• Decision making
from a broader organizational perspective
• Transparency valued • Education about
programs and services as well as the use of public funds
• More confidence in the budget process
Benefits from different levels & perspectives
28
Rallying the organization behind common purposes
Gaining efficiencies through collaboration
Excellent source of data for planning and process improvements
New leaders will emerge
Level of discussion and debate at organization level will be elevated
Understanding and cooperation between departments increases substantially
WINS from BFO
29
Be flexible!
Recognize magnitude of staff resources necessary for implementation
Put the best and brightest on teams – don’t choose by title
Retain some continuity on teams between fiscal years
Using measures and indicators as a component in financial decisions is a WIN for the community
Communication is key throughout the process
Lessons Learned
30
Harvard Business Review 12/11
