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Home My WebLink About04/23/2024 05. Discussion on Local Government Budget Methodologies 1 ,1,......,...,, ,....:,": a, ga BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 5. For Meeting of:April 23, 2024 ITEM TITLE: Discussion on Local Government Budget Methodologies SUBMITTED BY: Rosylen Oglesby,Assistant City Manager SUMMARY EXPLANATION: A budget methodology is an approach used to develop a fiscal budget. There are several approaches to the development of budgets, each uses a different name for the particular method. This presentation will present and discuss various approaches to budgeting and their advantages and disadvantages. This a follow up to and earlier request from Council to discuss the topic of zero-based budgeting and other models. Mr. Mike Bailey, well-known nationally and throughout Washington State as an expert in municipal government finance, will be presenting. ITEM BUDGETED: No STRATEGIC PRIORITY: Public Trust and Accountability APPROVED FOR SUBMITTAL BY THE CITY MANAGER RECOMMENDATION: ATTACHMENTS: Description Upload Date Type a */‘ ZERO BASED BUDGETING In Washington Local Governments Mike Bailey AGENDA / i Definition The History A 1 It's Problems The Pivot rni Best Practices The End ZERO BASED BUDGET - DEFINITION • A Budget Method • Theoretically starts at "zero" • No presumption that last year's budget should inform this year. • A proverbial "blank sheet of paper" • Every expense has to be justified - staff as well ! • Budgets take the form of "decision units" • In that era - a lot of paper was involved ! Contrasted to "Incremental Budgeting" 3 THE HISTORY ZERO BASED BUDGET IN GOVERNMENT • Zero based budgeting - (ZBB) • Popular in business starting in the 1960s • Federal Government - 1970s • Jimmy Carter promised to use it to balance federal budget • Had previously used it in Georgia • As we all know - the federal budget didn't get balanced • Use of ZBB was small and has declined over the years 1- Zero Based Budgets, Modern Experiences and Current Practices, GFOA — June 2011 5 IT ' S PROBLEMS ZERO BASED WANED BECAUSE IT ISN ' T PRACTICAL • There is some value in what already exists (i.e. last year's budget) • A tension exists between benefiting from this value and not lettin . it distract from better decisions about the future • It wasn't worth all the extra effort • As I said, a lot of paper and effort is required - by everyone • The benefits were limited • While permitting a fresh view of the future budget - no related "value" for the money spent was defined • More on this later ZERO BASED WANED BECAUSE IT ISN ' T COMPREHENSIVE • Does not address alternative service delivery • Governments in fiscal distress should analyze alternative approaches to service delivery • It doesn't address service levels • The focus is on line-items in the budget, not levels of service • This is the wrong conversation - budget should be about val e • It doesn't address efficiency • Efficiency of government services is often a concern • Without corresponding efforts (e.g. performance evaluation) it is insufficient to address efficiency THE PIVOT "Or to alternatives VERSIONS OF ZERO - BASED BUDGETING Priority Based Budgeting Performance Management • Identify community priorities • Services should illustrate value to • Associate city services with priorities community Customer's perspective • The construct is purchasing services • with public funds. • Stratify services in context of priorities • Can be "zero-based" • "Purchase" the highest priority services with the available funds • Services are reevaluated each year • "Scale" services to afford more Budget conversations are • fundamentally different \ --- \ The Budgeting Priorities Don't cut the budget s, Redmond WASH N G T O N Build the right budget • S 1 < } �. mow, , THE PRICE OF GOVERNMENT �_ t1 a • l - • 4 AND e PRIORITY BASED BUDGETING Healthy and Safe and Sustainable Resilient A method to: � x.. � + • Engage the public in this work *_t • Gain trust • Speak their language ; � • Make hard choices ll CO) (it isn't always a revenue problem) Vibrant and Strategic and Connected Responsive Healthy and We value a healthy environment that supports Sustainable an active community Environmental Climate action goals Places and programs preservation responsibly achieved through green that support an active 0 balanced with growth practices and policies and involved community 0 • Percentage of drinking • Community-wide • Recreation expenditures per capita owater quality tests that greenhouse gas • Percentage of residents and employees in ea meet compliance emissions(metric Redmond that have convenient access to regulations tons) outdoor sports and fitness facilities from their • Freshwater Water residence or place of employment o Quality Index t CI Objective 1:Use the City's environmental and park plans to guide strategic investments and partnerships that support a healthy and sustainable environment and community Objective 2:Provide engagement,education,and outreach opportunities to promote actions that preserve the natural environment Objective 3:Measure performance to improve service delivery and program effectiveness a Objective 4:Support efforts that improve the sustainability of natural resources and the community's ability to connect with the natural environment 0 Objective 5:Maintain Redmond's quality of life and healthy local ecosystem through compliance to local,state,and federal environmental regulations Objective 6:Inspect,clean,and maintain infrastructure to prevent pollutants from entering streams and groundwater PERFORMANCE MEASURES Actual Er Target Measures 2019 2020 2021 --2022 2023 2024 Recreation expenditures per capita $75.25 $73.10 $48.46 $42.48 $75.00 $75.00 Number of people served through recreation 16,065 7,825 16,312 15,000 16,000 18,000 activities Number of hours indoor and outdoor facilities are 67,324 26,114 63,270 70,000 70,000 80,000 scheduled for use Community-wide greenhouse gas emissions(metric N/A 631,000 N/A 740,000 N/A 700,000 tons) City of Redmond government operations N/A 6,050 N/A 5,700 N/A 4,000 greenhouse gas emissions(metric tons) Community energy consumption(New) N/A N/A N/A N/A 5,300,000 5,200,000 Percentage of community-wide solid waste diverted 47% 45% 43% 49% 46% 50% from the landfill Number of business and multi-family complexes 201 232 197 200 220 230 participating in organics recycling Percentage of drinking water quality tests that meet 100% 100% 100% 100% 100% 100% compliance regulations Percentage of groundwater monitoring wells that 65% 56' 53% 57/° 57/°° ° 57% meet quality standards Percentage of high-risk sites provided with technical 100% 91% 100% 100% 100% 100% assistance Percentage of water system assets that meet the level of service standards 20% 0.02% 20%' 80% 20% 20% Healthy and Sustainable 2023-2024 Adopted Budget Budget Offer Summary Page# Budget 2023-2024 Budget Offer Title Lead Departmere Offer# Baseline 65 0000008 Community Recreation Parks $12,772,625 67 0000007 Environmental Sustainability Executive 654,634 69 0000002 Ground&Surface Water Management Public Works $5,954,105 71 0000009 Parks,Trails&Open Space Parks 15,153,982 73 0000003 Safe&Reliable Drinking Water Public Works 34,364,691 75 0000006 Solid Waste Management Public Works 2,500,097 77 0000004 Stormwater Management Public Works 17,672,590 17 Budgeting by Priorities Budget offer Healthy and Sustainable Department Name:Parks Id:0000008 Community Recreation Recreation creates community by offering programs and spaces that invite everyone to play,explore and learn while forging relationships with neighbors and instilling community pride. Recreation programs supported by community partnerships and the financial stewardship of the cost-of-service policy create opportunities for a diverse community to cultivate healthy living through active recreation and sports leagues,creative opportunities such as art and pottery,socialize through senior and teen groups,foster leadership opportunities through teen-led programs,and connect with their community through volunteerism.Our welcoming spaces bring generations together and encourage our community members to live healthy and vibrant lives through the diversity of spaces and places,such as our parks and open spaces within the City. Performance Measures: Outcome: Places and programs that support an active and involved community • Dashboard Indicator: Recreation expenditures per capita • Program Measure: Number of people served through recreation activities • Program Measure: Number of hours indoor and outdoor facilities are scheduled for use Baseline Program Description Programs:Provides community members of all ages with numerous,diverse,and accessible activities such as sports,camps,farm animals,outdoor education,art,and activities for people with all levels of ability. People:Connects community members through community centers,stakeholder groups,volunteer opportunities,and activities for all ages, including farm, environmental,arts,and sports programs. Places:Maintains inclusive and friendly spaces for gatherings and community building,including the Redmond Community Center at Marymoor Village,Old Firehouse Teen Center,Old Redmond Schoolhouse, senior services at City Hall Bytes Café,the farm at Farrel-McWhirter Park, Redmond Senior&Community Center,as well as the scheduling of City parks(including sports fields, picnic shelters,and cabins)and school district gymnasiums and sports fields. Service: Maintains the City's customer service philosophy and works in collaboration with City leadership to establish training and processes to support the City's commitment to serve consistently at all facilities. Budgeting by Priorities Budget offer Healthy and Sustainable Department Name:Parks Id:0000008 Community Recreation Budget Offer Summary Expenditure summary Year 1 Year 2 Total Ongoing-Sal/Ben $3,952,763.17 $4,422,217.79 $8,374,980.96 Ongoing-Others $2,176,558.00 $2,221,086.00 $4,397,644.00 Total $6,129,321.17 $6,643,303.79 $12,772,624.96 FTE Year1 FTE Year2 FTEs 24.25 24.25 PRIORITY BASED BUDGETING Benton Res4/4) 2023-2024 Renton Results \4.11r72onhnE us improve Summary and Detail Desired Results - Strategies - Key Performance Indicators - Metrics/Measures - Targets iIisu, Programs,Resources and Results Programs/services that support the City Service Area of Safety and Health have provided metrics/measures("Results")to indicate the outcomes of their efforts. Each metric is unique-some are simply counts of data points,others are more qualitative indicating customer satisfaction,and many intend to show efficiency and effectiveness. It should be noted for those that are marked "no data"indicate a metric for which information is not available. This could be due to a number ---.LILIQI.--"""1 of reasons including changes in staffing,programs and/or surveys not taking place(due to Covid-19 or other impacting circumstances),and/or tools and technology not c�olv000us impro'"'- available to collect the data. These metrics remain in this report as it is the intent of the program to provide the data when possible. City Service Area: Safety and Health Desired Result:I want a safe and healthy community. Strategies Renton is using to work toward and achieve the desired results: Encouragement of a self-reliant community through programs and education. Adopted 2023 2024 Timely responsiveness and"projection of effort,"when the community cannot help itself. FTE's 219.00 219.00 Recovery and restoration of the community after a disaster. Operating $59,152,716 $61,448,603 Encourage the community to comply with local,state,and federal lows. Percent of Operating Budget 29% 29% FTC's Budgeted Annual Budgets 250 m 219.0 119.0 196.J I96-1 202_5 203.5 707.9 707,1 560 1111111111 g `A9320 S0 2015 budget 2016 buds. 2010buds0 201640dp1 MOW*. 20204udpt 20216u4pt 2022 buds. 2029.dop0d 2024.4wOrd 201S budpl 701611.4o 20116o4p1 20111budpl 20106ulge 20201oudtlo1 20211.u1p0 20226ude 2022.dop412 222.dup1.1 City Resources budgeted to support the 2015 budget 2016 budget 2017 budget 2018 budget 2019 budget 2020 budget 2021 budget 2022 budget 2023 adopted 2024 adopted Safety anal Health City Service Area FTC's: 179.83 179.83 196.33 196.33 202.50 203.50 202.90 202.90 219.00 219.00 Dollars: S 36,336,698 5 37.824,001 $ 40,485,130 S 42,636,579 S 48,205,345 S49,645,700 $ 49,347,522 S 50,684,751 S S9,152,716 $61,448,603 1 �eoton Resit/ Renton Results Key Performance Indicators t`oo ear Due to tin of ovailabie data some indicators remain"7Bb"for 2022_ afryuous',rot.— City City Service Area- Safety and Health Desired Result I want a safe and healthy community_ Nois 2011 2017 Nun 2014 2320 2021 2022 results rest Resift uspias hewtu Rears Weft Readis Target Reii4enti report feeling sornewhaf Or very N . 1 • minim yen of 6?per€enL &wing the day in their nettasorhood. 90 next survey 2037 90 net savoy Rout survey mated sway wailed next wanly 2023 next sumer 2029 Reiiden'a rpMrt toefin3g samelwhat Or Warr Site during the right in thaF neirOadwOd. 70 nem survey 201.7 73 next survey 2010 curvM canceled survey canceled neM sunny 2023 next survey 2023 muWnum of 90 pennant to n iiwuty report feeling romew4et at very xee *ringer*day in the downtown arse 01 next survey 2027 30 nest savoy 2013 rurvey coney& suevery array& reed sinewy 2023 next Wyly 2024 3 minimum of 00 lament Cannrunity report feeling.sumewf,ct or eery sole •• doing the niEM in do downtown area 70 next novel 2017 73 next lunar 2019 navvy canceled surrey cantered next surrey 2073 next survey 2023 inn,non Of as percent average response time On nyinirtesl to Pnon3y r Was. 4.52 403 1.6i 4.66 i.03 4.44 3.1i 760 leas then 13 mmutei Number ot Emergency management Atcreditaiicn program(MAP)3tindards Mat ire met conpletery or partially met and Currently in progress.as a new 2019 new 2019 new 2019 new 2019 251 ..- vain -E portent Of total measure of emergency management excellence and Md4asen at Preparedness. Page 83 of current budget 22 AgI,Ir BEST PRACTICES AillIllIllhhhlhbhp GFOA BEST PRACTICES Outcome Based Budgeting Re-Thinking Budgeting • Focus on the community outcomes • Financial Foundations • Align budget services with outcomes 1. Establish a long-term vision 1. Strategies to make a difference 2. Build Trust and Open Communication 2. Evaluate based on impacts 3. Use Collective Decision Making 3. Does not inform efficiency 4. Create Clear Rules 4. No right answer — 5. Treat Everyone Fairly just informs discussion • Budgeting for Equity DISCUSSION / Q &A Mike Bailey, Finance Consultant baileyno6@a msn.com Linkedln: mike-bailey-5521b430/