"The process of implementing PBB asks 3 key questions of the City: What do we do; How much does it cost; Why are we in business (as a city)?"
In May of 2019, the City of Flagstaff embarked on a journey to implement Priority Based Budgeting for the FY2021 budget cycle (through their partnership with ResourceX). Priority Based Budgeting (or PBB) is a leading best practice in municipal government and allows cities to re-envision how they utilize their budgets.
Specifically, PBB enables cities to create a balanced, stable and sustainable budget, to prioritize spending and reallocate resources from within, to launch new programs and envision an improved future by leveraging public/ private partnerships and breaking through “budget silos”.
The process of implementing PBB asks 3 key questions of the City:
1. What do we do?
The City creates an inventory of the various programs and services it offers. This could include anything from enforcing zoning laws to providing support services for substance abuse. Programs and services may serve the community (i.e. the fire department) or be needed internally to run the organization (i.e. the human resources or finance departments).
2. What does it cost?
Using the inventory created, the City allocates personnel time and operating costs to each program and service that the City offers to its residents. This allows the City to have an accurate picture of how much it actually costs to provide a program or service.
3. Why are we in business?
The City identifies the priorities of its residents and City Council and then aligns these priorities with the programs and services the City offers. In addition to priorities, the City also identifies “Basic Program Attributes” to determine if a program or service is mandated, the population served, the demand for the program or service and if another provider offers the program or service. Finally, the community’s priorities, in addition to the Basic Program Attributes are used to score the programs and services offered.
The final set of results that is obtained from going through the PBB process allows the City to know how much each program and service that it offers costs, as well as the prioritization of these programs and services. This information is an invaluable tool in that it will allow City leadership to make data-driven budgetary decisions.
Many cities and counties around the country have implemented Priority Based Budgeting with success, including Goodyear, AZ; Hermosa Beach, CA; Littleton, CO; Rio Rancho, NM; Shawnee, KS; South Bend, IN; and Toledo, OH.
Implementing and utilizing priority based budgeting is a multi-year process and involves the entire community, including the City Council, City staff and the residents of Flagstaff. The City is enthusiastic to start the process and utilize its results for the FY 2021 budget cycle.
We welcome Flagstaff, Arizona to the priority based budgeting community and movement. As Flagstaff and other communities begins to see Priority Based Budgeting (PBB) for what it is, a tool to free up resources and dramatically realign them towards the Results that will create a better future for your community, you'll notice that attention ultimately goes back to the policy-makers.
And the question in front of them centers entirely on "what Results" matter most for the success of your society? And aligning programs (and creating new programs) to achieve those results for citizens and the community.