"Priority Based Budgeting helps us align our resources to be the most efficient and effective in providing services." - City Manager Rebecca Fleury
The City of the Battle Creek is the second Michigan community (along with City of Kalamazoo) to
take on an entirely new way of budgeting. Through priority based budgeting, staff review the entire city organization, identifying all programs, their costs, and their relevance through prioritizing each. This process has been implemented by over 120+ local governments across the United States and Canada and is recognized as a best practice by organizations like the International City/County Management Association (ICMA); the Government Finance Officers Association (GFOA); the Alliance for Innovation and the National League of Cities (NLC).
Organizations that use priority based budgeting believe it increases the level of accountability and transparency and better communicates how resources are allocated through the budget process to achieve priorities of the community.
This is a new process for the city, and not a small one to begin, but moving in this direction was a goal City Manager Rebecca Fleury brought to the organization when she was hired in 2014.
“Understanding what our community thinks are our most important services is key to good governance,” Fleury said. “It is vital to the City Commission and this administration. Priority based budgeting helps us focus on these and align our resources to be the most efficient and effective in providing services. PBB is a transparent way to ensure, as public servants, we are being good stewards of the tax dollars with which we are entrusted.”
City receives visual budget representation
The City of Battle Creek now has a visual representation of its 2015-2016 budget in the form of a Resource Alignment Diagnostic Tool.
The city began the transition about a year ago to priority based budgeting in an effort to address fiscal health and wellness. The City of Battle Creek is the second Michigan community to take on this new way of budgeting, which increases accountability and transparency, and better communicates how resources are allocated through the budget process to achieve the community’s priorities, referred to as community results in the PBB model.
A Fiscal Health Model provides a visual tool to help facilitate budget discussions. City staff can create live scenarios that give elected officials an instant picture of the financial impacts of their decisions. The model allows for a clearer understanding and better communication on various budget scenarios.
The model can be used to help departments prioritize city programs, understand the impacts of those programs and better understand the ongoing and one-time funding sources involved.
The city’s new diagnostic tool was discussed and demonstrated during a City Commission workshop and will become available later in the budget process.
To get to this point, city staff worked to develop the city’s “result maps,” which detail the factors that influence the way the City’s results are achieved (goals). Staff then created a program inventory for each department and assigned costs and values to each, which was used to develop a diagnostic tool.
Staff’s last step was to score each program against the community results and basic program attributes to determine the program quartile, 1 through 4, with 1 being those programs most important to achieving the community results and 4 being less so. A healthy quartile map shows the majority of resources being allocated to quartile 1 and 2 programs. Battle Creek displays a very healthy pattern in resource allocation, but further analysis is required to fully understand the information provided by the diagnostic tool.
The city’s identified programs – what the city does – totaled 1,061, with 839 community programs and 222 governance programs. The City Commission and staff will review these programs and the cost to provide them during the fiscal year 2017 budget process, currently under way.
“This is a great starting point,” said City Manager Rebecca Fleury. “This model provides a tremendous opportunity for the city to reevaluate and discuss the value of the programs on which we’re spending money, and how they can help us achieve the community results.”
Click here to learn more about priority based budgeting in Battle Creek!
Contact Erik Fabian (email@example.com) to learn how Denver-based Center for Priority Based Budgeting can help your local government create its own Resource Alignment Diagnostic Tool and Fiscal Health Model to bring prioritization and a higher level of efficiency to your budgeting process.