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The Fab Five: 5 Michigan Cities Move to Priority Based Budgeting.

July 1, 2019

At a time when revenues are growing at a slower pace than expenditures, you can’t add new revenues. You have to come up with new and creative methods to achieve the results of our community. Priority based budgeting simply says we are going to distribute the funds we have toward the priorities of our community." Now, we can truly say, we’re spending dollars to achieve results the public told us were important.”

 

"In the local government innovation space, getting the best results for residents is paramount. One of the biggest obstacles cities face in doing so is often not a lack of innovative ideas, but rather the challenge of distinguishing ideas that are delivering results from the ones that are not meeting goals — and then investing funding and scaling work accordingly." 

 

 

Michigan is becoming a hotbed of local government innovation. These five cities are reprogramming local government through their application of priority based budgeting (PBB).

 

We are excited to announce that the City of Ann Arbor is the latest Michigan city to join the PBB community. Ann Arbor joins City of Battle Creek, City of Kalamazoo, City of Lansing and City of East Lansing as PBB communities in Michigan.

 

 

Priority based budgeting is a leading best practice in local government and a powerful lever for change. The budget is a mechanism to translate our ambitions, our visions for the future, and our policies into the actions of service delivery, fueled by resources (people, time and money). 

 

With over 220 communities across the US and Canada applying priority based budgeting using data and evidence to transparently and exponentially improve results for citizens and the community, the question is “how far can we take PBB in order to dramatically and rapidly improve our communities?” These Michigan communities are showing us how.

 

City of Kalamazoo (Joined PBB in 2014)

 

"Data-driven decisions will be filtered through the Priority Based Budgeting process, bringing strategic alignment into everyday activities." - Kalamazoo 2018 Proposed Budget

 

The City of Kalamazoo was the first City, and first local government to launch Priority Based Budgeting in the State of Michigan. Following an education session on Priority Based Budgeting hosted by the Michigan Municipal League (MML), City Manager Jim Ritsema launched PBB in the

City to “evolve the way that we see, think and ‘touch’ the City’s budget.”

 

In September 2017, we wrote about the City of Kalamazoo's development of their PBB driven Imagine Kalamazoo 2025 Strategic Vision and Master Plan.

 

We wrote, what is the value of Imagine Kalamazoo 2025? According to the city, "The responsibilities of the city are wide-reaching: utilities, transportation, land use, housing, policy, regulation, and more. The "dots" don't always connect, as each group works to meet its own obligations with its own resources and goals. A strategic vision - common priorities, resources, goals and stories - provides the framework to connect those dots, to align and evaluate our policies and actions, and to make the most of our resources."

 

The city states, "This budget reflects our commitment to become a High Performance Organization and encompasses the community’s values and goals included in the Imagine Kalamazoo 2025 (IK2025) Strategic Vision. The results of our efforts are already paying dividends; for the first time in memory, two consecutive Budgets and Five-Year Fiscal Plans reflect the development of staffing capacity, equipment and capital investment to realize high-impact services and projects without draining critical reserves or budget cutting. Moreover, this Proposed Budget reflects support from the Foundation for Excellence (FFE) to stabilize our budget, reduce property taxes, and implement aspirational projects and programming. The City is moving swiftly through a period of intense and intentional transition, from surviving to thriving!

 

City Manager James Ritsema goes on to say, "In the Adopted FY 2017 Budget Transmittal Letter, I promised that we would adopt a “vision-driven trajectory”:

 

“Our budget is the natural result of continued negotiation between the expected role that the City plays in promoting and preserving the quality of life that our citizens desire and deserve, in the context of the realities presented by our economic and cultural environment. In order that our activities remain fresh and relevant, and our budgeting process propels continuous improvement in our outcomes, we need to constantly reground ourselves in the vision and values of our organizational leadership and the community at large.”

 

"In 2017, the City completed the Imagine Kalamazoo 2025 Strategic Vision (IK2025), the City’s guide to shape future planning and organizational direction. This Vision is the culmination of 18 months of studying, listening, and careful planning. From this process, a new Master Plan has been adopted and will actualize the IK2025 Vision through its extensive and intensive action plan"

 

Additional Kalamazoo PBB Resources


Data-Driven Decisions through Priority Based Budgeting in Kalamazoo, MI!

 

Creating a Vivid and Clear Vision for the Future in the City of Kalamazoo, MI

 

City of Kalamazoo Priority Based Budgeting Website

 

 

City of Battle Creek (Joined PBB in 2014)

 

The City of the Battle Creek is the second Michigan community to take on an entirely new way of budgeting.

 

Through priority based budgeting, staff is reviewing the entire city organization, identifying all programs, their costs, and their relevance through prioritizing each.

 

This process has been implemented by over 220 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.”

 

What is PBB?


Priority Based Budgeting is a way for us to look at our budget in a new way, as we consider the services we provide to neighbors. PBB is a method in which we, as a city, can achieve fiscal health and wellness. We do this by identifying the role of government in Battle Creek. 

 

This involves:

  • Determine results - "What are we in the business to do?"

  • Clarify results definitions - "What do those results mean to us?"

  • Identify programs and services - "What exactly do we do, and what does it cost?"

  • Value programs based on results - "What is of the highest importance?"

  • Allocate resources based on priorities - "What can we 'see' differently?"

The City of Battle Creek has determined our results through focus groups, surveys and workshops with staff and city commissioners.


Results are "high-level and over-arching reasons the organization exists in the eyes of the community," are comprehensive, and remain consistent and unchanged over time.

 

For more information check out the City of Battle Creek Priority Based Budgeting Website.

 

 

City of Lansing (Joined PBB in 2019)

 

On March 25, 2019, the City of Lansing, MI released their Executive Budget Recommendation for

fiscal year 2020. In the lead up to developing this budget, the City (led by the Neighborhood and Citizen Engagement Department) held eight participatory budget sessions in the fall and winter of 2018 - 2019 to gather citizen budget input in an effort to increase fiscal transparency.

 

 

In February of 2019, the City partnered with ResourceX to initiate priority based budgeting. In anticipation of a very short turn-around time, the City focused on developing a program inventory (an inventory of every program the city delivers) and program costing (developing the true cost of delivering each program) to incorporate into the Executive Budget Recommendation (pages 9 - 20).

 

With the City's focus, and support from ResourceX, Lansing set a record for development of a program inventory and cost and accurately developed this data in less than two weeks! 

 

 

 

In his Executive Summary, Mayor Andy Schor writes, "Now having had a full year as Mayor, this budget represents my goals and vision for the City. As I sought the office of Mayor, I indicated a desire to institute priority based budgeting. This system allows for better communication of how taxpayer dollars and other resources are spent, and aligns them to priorities. I am pleased to present the first step towards that goal. Pages 9-20 of this budget document, for the first time, presents graphic presentations of the programs and amounts for those programs proposed for this coming fiscal year."

 

Additional reading: City of Lansing, MI Moves Towards Priority Based Budgeting

 

 

City of East Lansing (Joined PBB in 2019)

 

At its meeting on Tuesday, March 26, 2019 East Lansing City Council approved a contract with ResourceX for its Priority Based Budgeting (PBB) product.

 

PBB is a form of strategic budgeting that determines the priority and value of City services by assigning scores to each City program based on results, mandate level, cost recovery, the population served, demand and degree of reliance.

 

The process identifies the true cost of each City department and the services the department provides, while determining how impactful services are in achieving desired outcomes.

 

Information derived from the PBB process will assist the City Council in making important decisions during their budget deliberations and provide a more transparent and inclusive budgeting process for East Lansing community members.

 

This new, transparent approach to the budgeting process will help us align our resources with the priorities of our community, while determining the true cost of our services and identifying areas where efficiencies can be made and new revenue can be generated,” said East Lansing City Manager George Lahanas.

 

The approved contract with ResourceX includes the software, on-site implementation and staff training; three months of ongoing support; and OpenPBB - a community-facing data dashboard that increases transparency and allows community members to see how money is being spent.

 

Initial implementation of the PBB software is expected to take approximately two to four months.

More than 200 cities, counties, school districts and non-profit organizations across the country have partnered with ResourceX to implement PBB, including Battle Creek, Mich.; Kalamazoo, Mich.; and several others: https://www.resourcex.net/partners.

 

Community members can learn more about ResourceX and PBB at https://www.resourcex.net.

 

Find out more here: City of East Lansing to Implement Priority Based Budgeting

 

 

City of Ann Arbor (Joined PBB in 2019)

 

On June 17th, Ann Arbor Council approved their commitment to priority based budgeting. In preparation for their PBB initiative, the city teamed up with ResourceX and NRC to launch a

comprehensive citizen engagement survey through the Citizens Priority Survey.

 

In October 2018, the city launched a Priority Based Budgeting Survey for the City of Ann Arbor. The goal of the community survey will be to obtain meaningful and broad citizen input to assist staff and City Council members in developing the city's budget and spending priorities for fiscal years 2020 and 2021. 

 

Each year, the City of Ann Arbor creates a budget to estimate revenues and expenditures. In
2018, the City desired to obtain feedback from residents as a part of the upcoming budget
process.


The Ann Arbor Community Budget Priorities Survey was offered online and publicized by the
City of Ann Arbor using a variety of means. The survey was open for data collection from
October 5 through November 19, 2018. A total of 2,022 completed surveys were obtained. View full survey results here.

 

Additional Information:

 

City Launches Budget Priorities Online Community Survey

 

Ann Arbor Budget Priorities Survey Results

 

About ResourceX

 

ResourceX provides the software solution and powerful analytic tools to implement a priority based budget using data and evidence to transparently and exponentially improve results for citizens and the community.

 

To learn more about priority based budgeting contact us to schedule a free webinar!

 

www.2019PBBSummit.com

 

 

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