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Current Budget Process Because the Council is familiar with the current budget process, this memo won't spend a lot of time revisiting it. To summarize; under the current budget process the City Council will set some general spending targets, and ask Staff to present a budget within those targets. Under this approach, Staff will assume that the priorities and goals established by previous Councils will remain in effect. Furthermore, it will be assumed that the current budget is the "right" budget, and that programs and service levels will remain largely intact. City Staff will rely heavily on their experience and training to make spending recommendations. These recommendations will reflect budgeting best practices, but will also be customized for local needs and preferences. The City Council will receive a recommended budget sometime in = mid-July, followed by a series of budget worksessions. These worksessions can incIude Staff ` presentations, Q&A sessions, and public input. Following these worksessions, the Council will be asked to adopt a preliminary, not-to-exceed budget and tax levy by September 15, 2006. A Final budget and tax levy will be adopted in late December, following the Truth-in-taxation hearing. Alternative Budget Process — Budgeting for Outcomes As an alternative to the current budget process, Staff has identified a different budgeting approach that has been gaining popularity among local governments. This process is called 'Budgeting for Outcomes' and is focused on aligning budget monies to desired ontcomes. Budgeting for Outcomes follows the following steps: 1) Set the price of government 2) Set the priorities of government 3) Price the priorities, i,e. allocate available resources 4) Develop a purchasing plan for each result Each of these steps is described further below. Step # 1- Settin� the Price of Government The concept of 'setting the price of government' is described in the book entitled 'The Price of Government', authored by David Osborne and Peter Hutchinson. The underlying concept of the hook is that consumers, over time, demonstrate that they are willing to spend a relatively stable percentage of their personal income for government services. Government's role is to recognize what this amount is, and then make resource allocation decisions within that finite amount. As prescribed in the book, the price of government is calculated by dividing the total revenues received by the local government, by the total amount of personal income within the City. This calculation can easily be converted to a per-capita basis. For example in 2005, total budgeted revenues were $32,684,430. Total population was 34,080, which results in per-capita revenue received by the City of $959. The per-capita ir►comc during this same year was $36,865. �