2012.03.22 CC Agenda Packet
AGENDA
EDMONDS CITY COUNCIL
Council Chambers, Public Safety Complex
250 5th Ave. North, Edmonds
THURSDAY, MARCH 22, 2012
6:00 p.m. - Call to Order and Flag Salute
1. (5 Minutes)Approval of Agenda
2. (5 Minutes)Approval of Consent Agenda Items
A.Roll Call
3.Audience Comments (3 minute limit per person)*
*Regarding matters not listed on the Agenda as Closed Record Review or as Public
Hearings.
4. (2 Hours)
AM-4656
Budgeting by Priorities Presentation
5. (5 Minutes)Mayor's Comments
6. (15 Minutes)Council Comments
ADJOURN
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AM-4656 Item #: 4.
City Council Meeting
Date: 03/22/2012
Time:2 Hours
Submitted For:Shawn Hunstock Submitted By:Shawn Hunstock
Department:Finance
Review
Committee:
Committee
Action:
Type:Information
Information
Subject Title
Budgeting by Priorities Presentation
Recommendation from Mayor and Staff
N.A.
Previous Council Action
N.A.
Narrative
Mike Bailey, Finance Director for the City of Redmond, will give an overview of the Budgeting by
Priorities process used in Redmond, lessons learned after using this process through multiple budgeting
cycles in Redmond, and will provide tips for how to make this successful here in Edmonds.
Attachments
Budgeting for Outcomes Presentation
Form Review
Inbox Reviewed By Date
City Clerk Sandy Chase 03/15/2012 01:08 PM
Mayor Dave Earling 03/15/2012 03:57 PM
Final Approval Sandy Chase 03/15/2012 04:00 PM
Form Started By: Shawn Hunstock Started On: 03/15/2012 12:56 PM
Final Approval Date: 03/15/2012
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Mike Bailey, Finance Director
Budgeting for Outcomes
Creating a budget focused on
community priorities
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Overview of
Budgeting for Outcomes
2
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1.Determine the “price of government”
–More on this later
2.Determine priorities
3.Assign a portion of the “price” to each priority
4.Determine best way to deliver results by priority
a)Results Teams develop strategies / “RFOs”
b)Program staff submit “offers”
c) Results Teams rank / scale offers
5.Resulting budget is offers focused on strategies to
accomplish priorities
3
Overview of
Budgeting for Outcomes
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City of Redmond Budgeting by Priorities Process
Each Results Team develops a
Request for Offers to support its
priority. Each RFO includes 3
indicators, a cause-and-effect
map and purchasing strategies.
On redmond.gov by April 16
Results Teams use rankings to
develop recommended
purchases to advance priority.
Present to Mayor on July 24
City Council confirms priorities
based on input from citizens in
focus groups and open meeting
Offer
Results Teams rank the offers
based on contribution to the
factors on the cause and effect
map.
Offer
1
2
3
Results Team
Results Teams (including city
staff and citizens) are formed
around each priority
Infrastructure Environment
Business Government Safety
Community
Citizens review RFOs, come to
April 24 meeting to submit their
suggestions to departments
Offer
1
2
3
Based on rankings and
feedback, Departments revise
and resubmit offers by July 7.
Results Teams rank offers
again, this time including
mandates
Offer
Offer
Offer
Mayor uses Results
Teams
recommendations to
develop Budget
FINAL
BUDGET
Council reviews budget,
holds public hearings
(Oct 21 & Nov 18) and
adopts final budget in
Nov/Dec
Priorities
1 2 By June 20 By July 21
WE ARE
HERE
Mayor presents
Budget to Council
on Oct 14
Starting April 25, departments
review RFOs and data and
decide on offers to write up for
submittal to Results Teams on
June 6.
Mayor’s
budget
Confirm City Priorities with
Community
4
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General Review - Redmond
•Biennial budget with 6 year forecasts
•All funds, all operations, all capital
–Used the same filter for the entire budget
•Initially used Guidance Team
–dropped in round two
•Project team of Finance Director, Budget
Manager and Deputy City Administrator
•Citizens on each results team
5
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• “The Price”
–All resources (eliminate the double counting)
–In context (we use total personal income)
–Policy perspective
•Still debate tax and rate changes but now in
context of the POG
• Discussion now about the “price”
– Allows policy level “balancing” of the sources
•Council can now choose
The “price of government”
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The “price of government”
7
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
All Revenues
Taxes & Fees
Taxes Only
Property Taxes
Sales Taxes
Other Taxes
Notes: Compares ratio of total city revenues to total personal income
Data for "taxes only", "taxes & fees", and "all revenues" are cumulative -
individual tax types data is not cumulative
Estimates
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8
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
All Revenues
Taxes & Fees
Taxes Only
Property Taxes
Sales Taxes
Other Taxes
Notes: Compares ratio of total city revenues to total personal income
Data for "taxes only", "taxes & fees", and "all revenues" are cumulative -
individual tax types data is not cumulative
Estimates
Price of Government
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The “price of government”
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City Council budget workshop – initial briefing on 11/12 biennial budget
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Next - Determine community priorities
•Often involves citizen
input
•Council finalized
•Basis for evaluation
10
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Assign a portion of the
“price” to each priority
An “art form” balancing past
practice with intended emphasis
1.First time was based on a
combination of history and
intended focus
2.Second round informed by the
experience in the first round as
well
3.The amounts allocated to each
Results Team either creates
more or less pressure to
balance
11
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– “Results Teams” for each priority develop “maps”
illustrating how to achieve results (see example)
•These form the recommended strategies
•The Results Teams use a variety of sources (including internal
city expertise) to arrive at recommended strategies
–Results Maps (and Request for Offers - RFOs) become
the budget instructions for staff
•The Results Maps get translated into a set of written guidelines
to guide budget writers on offers
• Example: “we are looking for offers that highlight community
engagement”
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Overview of
Budgeting for Outcomes
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Overview of
Budgeting for Outcomes
Results Map for “Sense of Community” priority
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Overview of
Budgeting for Outcomes
Results Map for “Safety” priority (2009/2010)
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– “Offers” are proposals responding to RFO by program
• Much like budget programs but should be “zero based”
–Results Teams rank offers to achieve maximum results
•A dialog between the offer writer and the Results Team helps
to assure each is understanding the other correctly (remember
we have a wide variety of staff involved and citizens)
– Budget “buys” the best results through the ranked
offers and stops buying when the “price” is met
•Results Teams advise the mayor via their rankings of the
offers and their comments about the merits
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Overview of
Budgeting for Outcomes
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Overview of
Budgeting for Outcomes
Ranked offer summary for “Sense of Community” priority
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Overview of Budgeting for Outcomes
Ranked offer summary for “Sense of Community” priority
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Benefits of BP (BFO)
•Real citizen engagement
–Initial setting of priorities involved lots of citizens
•Less engagement in second round
–Citizens on results teams
•Public view
–Transparent (too many people involved not to be!)
–Focuses debate on policies / programs (not costs)
–Understandable (about priorities – not bureaucracy)
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“The Value Proposition”
•How can you demonstrate results from the
resources you are given?
–Performance measures are a required
element of each budget “offer”
–Measure should focus on results (or some
element that contributes to the ultimate result)
–Measure should focus on end customer
(not process)
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“The Value Proposition”
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Performance Management
•System of measures that compliment the
BFO
– “Dash board” responds to priority level
•Sense of safety
–Supported by budget offer measures
•Safe thoroughfares
–Supported by tactical measures
•Accident rates, average speeds, etc.
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Relationship between
Performance and Budget
• Council seeks “scalability” relationship
–If I change resource in an offer what are the
consequences?
•Impact on performance as illustrated by measures
•Impact on related functions (interdependencies)
– If performance isn’t as expected / needed
what should change?
•Informed by data / not an absolute
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Budgeting for Outcomes
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Managing the Politics
•Council
–Should focus discussion on priorities, results
maps (RFOs), offers and performance
–Difficult to connect offers to line items
–Public perception is positive (which every council likes!)
•Departments
–Less direct control by department directors
–More vulnerability in budget process
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Communications
•External
– Citizen engagement isn’t automatic
–Local media perception (this is complicated)
– Giving the council “talking points”
•Internal
–Equipping your staff to be evangelists
–Email, all employee meetings, chain of
command, consistent messages
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Capital Investment Strategy
•Lessons learned – capital didn’t work well
•Created 7th Results Team
– Made up of “Long Range Planning Division”
–Connected to Comprehensive Plan and Vision
–Used filter of Six Community Priorities
•Passed capital requests through to Capital Team
•Used their RFO and Priority RFO to evaluate
•Much better alignment for strategic decisions
–Focus on vision
–Resulted in interim Capital Investment Strategy work
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Organizational Learning
•Across department lines (Results Teams)
•Transparency (even in tough times)
• Director’s Role
– “Budget battle” not about winning a bigger slice
– Directors as “first team”
– Directors “own” budget (they know the budget now too)
•Senior Managers next
•Ten year plan for future development
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Ten Year Plan for Development
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Conclusion
•In our budget:
–Price of Government context for revenues
(not per capita or what our neighboring cities use)
–No departments / no line items
–Offers by priority
•Scalability descriptors
–Performance measures by priority and by offer
–Expense allocations by priority (not fund or department)
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