2009_0309_Packet - Laserfiche WebLink

Home

., Outcome-Based Bud etin._ Over.v.iew The concept o� outcome-based budgeting is not new, but it has received added en�phasis in the past few .. years fn response to the numeraus financial uncertainties facing goverr�ments, as we[I as the ever-increasing �.. demat�d for se�xvices and accauntabiIity. �.w '�V�hile many versions of Outcorne-based budgeting exist, they are all premised on the funciainental concept . of allacating sufficient f�nds to achie�e a desired outcome. For example, if we estabIished a goal af having . the Fire Depa�tment arrive at �he scEne of a f�e within 3 minutes of the 911 ca11; then we would determine , what tllat Will cost aild allocate an appropriate amount of budget dollars: This is in contrast to how we ,, typically allocate new dollars, which is to take what we allocated �ast y�ar, add so�ne perce�ntage increase, e. and rnake our best effort. In addi#ion to aligning resources with outcomes; outcome-based budgeting can also ensure that those services that matter the most are properly funded. It is canceivab�e t11at the City is providing a high level of . service for a program that creates nominal value, at the expe�lse of another that creates greater value. A�7 outcome-based budgeting approach wo�ld help demonstrate how the City can achieve the greatest value ,,,� overall. Generally speaking, th� steps Lzilder this new budgeting process are as follows: �<; 1) Establish what the customer (taxpayer} is willii�g to pay overall for s�ervices � 2) Establish the City's program pri�rities (outcomes} and rank them .. 3) Systen�atically allocate resources sufficient to achieve priority (outcorne) #�1, then outcome #�2, ete. For Step #2, it is suggestec� that the City Council assign pragram priorities in the foIlowin� general order: 1) 2) 3} 4} 5) Federal and staie mandates Adherence to the City's Financia! Policies Strengthening funding mechanisms for the replacement of City assets Ad�quately funding non-discretionary services Providing funding for higher-valued discretionary services e:.. It should be noted that the ranking process can go t��rough many iteratians and in most situations shouldn't .. be done in a vacuum. For example, we may establish aii outcome of having a hrgh quality and safe park , system. To achieve this, �e would ]ik�ly ne�d to assign a l�igh furid�ng priority forparks anc� police patrol. � In acEdition, we inay find after onIy one or two iterations that a program with st�ong intrinsic val�e isil't _, funded aC an appropriate level. Thr�ugh th� next iteration; we can go back and assign a new budget amaunt to it and readjust other progranls accordin�iy. The ranking process shauld remain fluid until a fina! ,,, cansensus is reached. But once it's finished, it's impartant to move forward, �. � .. Step #3 is repeated until we've exhausted all available funding. Under this process, we would expect to ru�i out of money before we run out of priorities. When the funding is exhaustied, w� suspend all unfunded . p�ogran�s. For those pragrams that dan't receive ati� f�ndit�g, i�'�s imp�rtant to keep in mind that wl�ile they create value, they create less tl�an those that were funded. Page 2 of 3