Question

Outcome based budgeting

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Unknown
Unknown asked

The City of Richmond is in the process of implementing outcome based budgeting. We are interested materials or advice concerning how to explain outcome based budgeting to a) City Council and b) the general public.

Thanks!


Answers

 
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Christal Laswell

I am also very interested in any material you should find. Our City Manager had the Leadership Team read the book "The Price of Government" and present on 3 techniques we would recommend implementing within the organization. One of which I presented on was Outcome based budgeting and its overall concept. I have attached that part of my presentation for you. The book was really helpful actually so I went ahead and scanned the appropriate pages for any of you that are interested and have attached it.

The City of Fort Collins follows outcome based budgeting pretty closely. Visit their website at http://www.fcgov.com/bfo/

I also found a document that the David Osborne wrote (Author of Price of Government) that seems to also be a great guide. On page 2 of the document it lists examples of sates, counties, school districts and cities that have utilized this budgeting method. I hope this seems to help!!

If you all find additional information, feel free to share... It would be greatly appreciated! Have a great day!

 
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John Garvison

I applaud your jurisdiction for attempting this, however there are many pitfalls. Mainly, the largest one is that going to a outcome-based or zero-based or whatever you want to call it, is going to upset the current apple cart. Many departments and people are going to be upset if their department or program is seen as not being overly cost-effective. The elected officials need to be able to rely upon the data to determine if departments are doing more with less, and then they can put resources to the areas where they are most effective.

The State of Washington has attempted something similar, the Priorities of Government, and during the boom times it appeared to work, but now that revenues are down, the Legislature and the Governor have abandoned it because to truly be effective it will affect certain constituency groups.

I did my thesis on performance-based budgeting for my MBA, and it is a tremendous tool for government, but it adds a large amount of time on the front-end of the budgeting process, and without stakeholder buy-in it is doomed to failure. Don't get me wrong, I love it, and when I was an elected official myself, I attempted to utilize portions of these ideals, but I ended up offending too many constituency groups, so other elected official's in my county were afraid to utilize it.

 
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Brian Wolverton

If you do find something, I'd love to see it. I've researched outcome-based budgeting quite a bit and I still don't get it entirely.

In the private sector, the concept makes a lot of sense. Your budget doesn't drive your production, your demand does... so you budget for the desired outcome, which is where the supply and demand curve meet. In government, I suppose you can do the same if you identify a) what outcomes the governing body/public desire, b) what level of outputs it takes to produce those outcomes, and c) what level of inputs it requires to yield said output. Then you can show some specific examples, but I think starting with the business model will engage people because folks get that.

Through that analogy, you can lead into some flowcharts and get your point across, I think.

 
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Christal Laswell

Unless I missed it, I did not see where I could post multiple docs to one comment/answer so here is the second attachment.

Attached Price of Government, chapter 3

Christal, one of many new or enhanced Knowledge Network features we are working on. Thanks for being active.

 
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Christal Laswell

"Buying Results Citizens Want at a Price They are Willing to Pay" - David Osborne

 
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Robert Belleman

I am interested in learning more about outcome based budgeting. For years, the City of Bay City has struggled to balance its budget with ever declining revenue. This year, I encouraged the City Commission to prioritize its services so to direct our limited resources to those priorities. Instead, the City Commission maintained status quo in funding everything with significant reduction in force. I hope outcome based budgeting would increase my success in prioritizing our services.

 
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Paul Rosen
Paul Rosen said

Many great comments about the process both positive and negative, and all true! I've implemented Outcome Based Budgeting in two jurisdictions now and have many insights. One of the best I can give you is that the process is driven by data and performance measures. If your government does not have a long history of robust performance measurement gathering and reporting culture, you would be doing yourself a disservice to use outcome based budgeting.
Make sure your organization can report accurate, reliable data. This is the information that will be used to make decisions. If the data you are using is inaccurate, your organization will be making bad decisions. Eventually, people will see this flaw and abandon both good performance measurement and outcome based budgeting.

Tessa Anderson

Tessa Anderson

Do you have a template for performance measures? I work for Chesterfield and we are looking for a scorecard of some sorts to give to departments.

 
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John Garvison

Paul makes a very good and salient point. Data drives this type of budgeting model. this is where the time consuming part of this type of budgeting model comes into play. If you normal budgeting process takes 3-4 months, then if you are implementing an outcome-based or performance-based budgeting model, stretch the time necessary to prepare for the budget to 11-12 months. This sounds daunting, but to truly do it right and provide your elected board with the data they need to make tough decisions, you will have to do it.

The other thing is that there are services that a government provides that are not efficient, Parks & Rec, Senior Centers, etc, but your elected board will want the data on the performance of these areas, but they will not cut them regardless of what the data shows. If you go into this process knowing that there are some untouchable political items, it will help you in the entire budgeting process.

I hope it goes well, it is a very difficult process to implement, but once implemented, it provides reams of data for elected officials and other stakeholders.

 
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Erin Langston

The City of Dallas does a similiar process. Below are links to pdf attachments to Council budget workshops. The intro material is at the beginning of the presentation and a bit brief since this process has been followed for several years now.

Most recent:
http://www.dallascityhall.com/council_briefings/agendas/index.html
Look at June 23rd Agenda dates for a LARGE pdf to Council

Another briefing:
http://www.dallascityhall.com/council_briefings/archive.html
Look at May 19th budget workshop

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Jun 30 2010
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