Mayor David Alvord of South Jordan City, Utah, strode into priority-based budgeting during the 2015-16 budget process, in the interest of making the city’s budget more reflective of actual needs. The effort was effective in furthering the delivery of public services and achieving fiscal goals. (Diagram provided)

The Center for Priority Based Budgeting began in 2009 with the experiences in government finance and budgeting of Jon Johnson and Chris Fabian, co-founders. At various levels of government they had wrestled with the following questions, which are still front and center for most finance officers of cities and counties today:

• What is my community in business to achieve? Why do we exist?
• What is the local government uniquely qualified to provide, offering the maximum benefit to citizens for the tax dollars they pay?
• How does my community compare to others in terms of service delivery and cost to deliver services to citizens? How can I compare this data?
• How can community leaders create a culture of innovation within my local government?
• What is the community truly mandated to provide? What does it cost to fulfill those mandates?
• What programs are most appropriate to fund by establishing or increasing user fees?
• What programs are most appropriate for establishing partnerships with other community service providers?
• What services might the local government consider getting out of the business of providing?

As a result, Johnson and Fabian created a results-driven organization. Over the last two years the CPBB has partnered with 48 local government communities in the implementation of priority-based budgeting, fiscal health assessments or both. Of the 100 communities they’ve partnered with to date, 70 percent have been cities and 30 percent counties.

The tools CPBB offers for the budgeting process include:

• Online fiscal health: A new approach to analyzing an organization’s financial data uses the Online Fiscal Health Diagnostic Tool to attain insights into its economic conditions and reveal key solutions.
• Online program inventory and costing: This minimizes the hard work of identifying and articulating the services provided by an organization and calculating the costs of providing them. It is the foundation for cost of service analysis, rate analysis, outsourcing/ insourcing and privatization and efficiency studies, as well as translating a line-item budget directly to a program budget.
• Fleet replacement analysis: CPBB has developed an approach to optimizing and minimizing the total cost of ownership for fleet resources. “When should a vehicle be replaced? When should an organization lease a vehicle instead of purchasing? How does an organization develop and optimize shared, or pooled, vehicles?” Erik Fabian, chief creative officer at CPBB, asked. “The data reveals the answers to these key questions and is easily accessible.”
• Online priority-based budgeting: This is a major process the center offers, and it incorporates a variety of other tools:

» Resource Alignment Diagnostic (RAD 2.0) model online: Allows easier access and user-friendliness for staff, elected officials and citizens. Filters data various ways; generates program lists; creates reports for your website, for the budget book, for your elected officials and for citizens.

» The power of comparisons: Compares your organization’s ability to align resources with results to all other PBB communities. You can customize the comparisons in various ways.

» ModelMaker: Th is program updates and edits unique data in real time. Program inventory, costing and scoring, peer review and quartile calculations are processes that don’t require the exchange of spreadsheet templates. All of an organization’s data is stored within the online PBB system, and progress can be tracked from year to year.

» Index summary: CPBB’s landmark metric is the PBB Index. PBB communities over the years have consistently asked: “We now understand our own alignment of resources, but how do we compare with others?” The index is a single, quantifiable number that distills an organization’s PBB data to indicate how well it is aligning resources towards results versus any other community. Progress, in terms of better aligning resources with results, improves the index year after year.

» PBB return on investments plots: Determine what particular programs your departments are offering that are the best bang for the taxpayer buck and which are the programs on the other end of the spectrum that are worthy of reconsideration. This is a guide to resource allocation decisions at a program level that allows comparison with other PBB communities that are similarly striving to stretch and wisely allocate funds.

» The five policy questions: After completing the PBB process, participants frequently ask, “With all of these options to reallocate resources, where do we start?” The five policy questions enable communities to start applying the findings of the PBB process. Among them are, what programs are you offering that are perfect for considering a partnership? And what programs is your organization offering that are not achieving results, aren’t mandated or that other public or private sector agencies currently offer?

According to Fabian, some of the CPBB tools are seeing heavy participation.

“We are mostly overseeing PBB, with more and more demand for the fiscal health diagnostic and program inventory and costing aspects.” The Online Fiscal Health Diagnostic Tool “can be an entry point,” he added. “After that you’ve learned about your financial position and can start to address what you’ve discovered using the online priority based budgeting to fix the issues and get an analysis of how you’re allocating your resources.”

Various types of challenges could face a community embarking on such a major financial process. Fabian stated that the biggest challenge for participating communities is embracing change itself.

“It’s a new way to look at the world and resource allocation, so it’s hardest for organizations committed to the status quo. Some will say, ‘We want to address the questions, but our appetite for change is minimal.’ Costs haven’t been a problem.”

CPBB has worked with cities as large as San Jose, Calif., which has a population of about 1 million, and as small as Victor, Colo., population 394. Fabian and Johnson want towns of any size to be able to use PBB tools and will work to fit the processes to the desires and resources of the community. Citizens are frequently involved in the PBB processes, either electronically through surveys or via town hall meetings, or both.

What has been the biggest surprise to CPBB staff in the process of working with communities and various PBB tools? Fabian said it was hearing from elected officials that the process diffuses politics in the decision making.

“Politics will always be a part, but it depoliticizes decisions to be looking at them from the same point of view. It avoids much political divisiveness when parties can see where they are aligned in terms of results. In addition, through work with PBB cities and counties are more able to see about partnerships with nonprofit, private and public sector organizations and very obvious ways to be able to achieve the same results with less money. A city doesn’t have to be everything to everybody. It can partner with other organizations and save money.”

The annual CPBB conference takes place in Denver, Colo., Aug. 4–6. The theme is “Driving the Data-Focused Future of Communities.”

Erik Fabian, chief creative officer, said that the annual gathering is referred to as an “(un)conference” where the brightest and most curious minds in local government gather to share experiences, ideas and lessons in innovation.

“These ‘user-group experiences’ are the foundation of our events and provide the perfect platform to explore how leading PBB implementers are ‘Driving the Data-Focused Future of Communities.’”

Center for Priority Based Budgeting Summer conference

The theme of this year’s event is “Driving the Data-Focused Future of Communities.”

“Referred to as an (un)conference, we annually gather the brightest and most curious minds in local government to share experiences, ideas, and lessons in innovation, said Erik Fabian, chief creative officer. “These ‘usergroup experiences’ are the foundation of our events. And it provides the perfect platform to explore how leading PBB implementers are ‘Driving the Data-Focused Future of Communities!’”

This year’s conference will showcase leading public and private sector innovators who are inspiring data-focused excellence in local government.

Program highlights are scheduled to include:

• Keynote — The to-be-announced keynote speaker is a member of the 2013 Time Magazine list of 100 most influential people, a TED Talk speaker and a leader in global innovation.
• Emerging Local Government Leaders will be a conference partner. ELGL will facilitate a panel discussion on the critical 13 percent issue.
• Brian Elms, manager of the city of Denver’s internal innovation incubator Denver Peak Academy, will discuss data-informed decisions in local government.
• A new topic will revolve around “Reinventing Criminal Justice,” with an innovative organization retrial.
• “Optimizing the Approach to P3’s in Community Development” — This topic will be a SAFEbuilt panel discussion.