"The City of Duluth, MN faced structural challenges in its budget, given some of the city’s particular needs and obligations. Priority based budgeting helped the city align its revenues, expenditures, and values."
The ResourceX Blog
Because We're Doing Budgeting Differently
"It’s an approach that can advance innovation while offering financial and operational advantages for the typical, day-to-day services that local governments operate."
Premise and Problem Statement
The American Rescue Plan (ARP) infuses $350 billion into local governments, easing the immediate financial trauma facing most every community across the country, and providing options to overcome shortfalls and simultaneously rebuild for a stronger, more sustainable future.
The City of Riverside, CA started implementing Priority Based Budgeting (PBB) in July 2020. They intentionally designed their implementation to last approximately six months.
The City is strategically implementing PBB to address the following challenges:
- Identify all programs and services that the City provides;
- Understand where the City is allocating its resources and how that aligns with the City’s strategic plan;
- Take initial steps to realign resources to support City Council’s priorities
- Enhance transparency on allocation of resources based on the who, what, where, and why;
- Understand what we do, why we do it, and how much it costs;
- Identify how to fiscally adjust as needed while minimizing the impact on the most critical programs and services;
- Improve efficiencies in city operations; cross-departmental functions; elimination of duplicate programs and services; partnerships in program delivery;
- Instill a culture that embraces the interconnectivity of strategic planning, organizational performance and resource alignment
Riverside is still working to institutionalize the use of PBB in their organization, and has made great strides with respect to how to use their insights to transform their financial position.
Where Riverside has truly excelled is with their executive sponsorship and leadership out of the city manager's office. They have a great, diverse project management team with representatives from all over their organization, who have been effective at communicating the why, where they are going, and their specific and strategic goals.
The following is from the city's priority based budgeting page of their municipal website:
"The scoring matrix ties into the city’s priority-based budgeting process, which aims to better identify the cost of city services, help link funding decisions to commission priorities, and help identify potential efficiencies."
The City of Flagstaff, AZ is now in their second year of Priority Based Budgeting (PBB). In the first year, Council and City leadership developed key community priorities and objectives. Additionally, the City developed their initial program level data platform (inventory, costing and scoring).
"The Priority-Based Budgeting tool is a great resource to find the solutions
to guide our city forward into a financially successful future."
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