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Performance based budgeting in haverhill for a better tomorrow by brandeis university mba students 100317

John Michitson
John Michitson

Strategic planning and data-driven performance based budgeting for Haverhill, MA by MBA students from Brandeis University. A way to base funding on priorities and measured results!

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A Prospect for Haverhill Performance-Based Budgeting For A Better Tomorrow Ariela Lovett, Maria Bennett, Biructait Mengesha, Lena Muntemba, and Elaine Theriault October 3, 2017
PRESENTATION AGENDA Introduction to project Project methodology Current budget process Performance-based budgeting Best Practice Cities Implementation Introduction
FROM QUEEN SLIPPER CITY TO PROSPECT CITY Introduction
FRAMING QUESTIONS 1) Will performance-based budgeting improve Haverhills budget development and approval process? 1) Is performance-based budgeting actually feasible in the current context of Haverhill city government? Introduction ImplementationIntroduction
Stakeholder Interviews External Research Best Practice City Interviews/Research MBA Framework Analysis PROJECT METHODOLOGY Introduction
SNAPSHOT OF HAVERHILL CITY GOVERNMENT Mayor-Council government Strong mayor government 9 City Councilors 20 City Hall departments Key stakeholders: Mayor City council Department heads + staff Residents Introduction
HAVERHILLS CURRENT BUDGET PROCESS ImplementationIntroductionCurrent Process
FEEDBACK FROM STAKEHOLDERS Desires: More transparent budget process More involvement in budget process Strategic plan for the city More resources, more staff More leeway to add to budget All of this and... Minimal increases to budget to keep taxes low Current Process
HAVERHILLS CURRENT BUDGET PROCESS Traditional Budget Process Previous Year Expenditures Expected Revenue Mayors Priorities Relies heavily on prior year estimates PBB 101
PERFORMANCE-BASED BUDGETING 101 Performance- Based Budget Process Resources allocated based on expected outcomes Previous Year Expenditures Expected Revenue Mayors Priorities Citywide Priorities Citywide Goals Key Performance Indicators PBB 101
Challenges Requires strong buy-in from management Needs committed staff and resources Long implementation timeline Commonly misunderstood as pay-for- performance Benefits Effective use of limited resources Ensure accountability among those responsible for management Facilitates budget decision-making Preferred by Government Accounting Standards Board (GASB) PERFORMANCE-BASED BUDGETING PBB 101
Outcome-driven budget decision-making Transparent budget process for all stakeholders Quality service to residents Performance-Based Budgeting Has Potential To Transform Haverhill Budget Process CONCLUSION: PBB 101
BEST PRACTICE CITIES These cities have successfully implemented performance-based budgeting for at least three years Cities Interviewed: Bellevue, Washington citizen engagement Conroe, Texas strong mayor Lowell, Massachusetts Prospect City River Falls, Wisconsin small capacity Rock Hill, South Carolina connecting daily performance to strategic plan Sunnyvale, California leading expert Best Practice Cities
BEST PRACTICE CITIES Key Lessons Learned: Requires full-time or part-time staff commitment Does not require a huge financial commitment Adoption is an incremental process Pilots are crucial to success Provides for a more interactive budget process Best Practice Cities
ROAD TO PERFORMANCE BASED BUDGETING Criteria for Recommendations: Takes advantage of Haverhill City Halls strengths Reflects insight from best practice cities Considers Haverhill City Halls capacity constraints Increases transparency Establish City Priorities 1. Collect... 2. Evaluate... 3. Understand... 4. Identify 5. Publicize... Phase Step Implementation
Establish City Priorities 1. Collect citizen input 2. Evaluate capital assets 3. Understand stakeholder interests 4. Identify city priorities 5. Publicize priorities ROADMAP FOR IMPLEMENTATION Develop Approaches to Achieve Priorities 1. Build capacity 2. Outline dept. roles 3. Identify dept. roles and activities in budget 4. Explore possibility of benchmarking Develop Budget that Reflects Approaches 1. Develop guidelines for budget proposals 2. Solicit stakeholder input 3. Publicize budget information Implementation
Estimated Time of Arrival Pre-FY 19 July - Dec 2018 Jan - July 2019 July - Dec 2019 Implementation - Analyze 311 calls - National Citizen Survey - Extend GIS mapping - Work with post- secondary institutions - City priorities retreat - Publicize priorities - Begin pilot - Hire a data analyst - Taxonomy priorities - Implement appropriate management tools - Request proposal additions from pilot dept. - Explore benchmarks - Develop 2-year budget - Publicize budget and performance data - Edit proposal requirements - Build data dashboard - Solicit citizen input Implementation Implementation Implementation
ARRIVING AT A BETTER TOMORROW Better serving residents Making informed decisions Following a shared vision Implementation
Thank You Question & Answer
Appendix
Performance- Based Budgeting in Action Citywide Priority Safer Neighborhoods Departmental Goals Reduce Police response time to critical emergency by 15% by June 30, 2019 Department Key Performance Indicators (KPI) Average monthly police response time to critical emergencies Police Departments Budget Proposal Desired Outcome Reduce police response time to critical emergency Performance Metrics Evaluation of Police response time to critical emergencies, community feedback Police Departmental Budget Proposal Adding 9 Police Officers to patrol unit will allow the Police Department to meet its goal of reducing its response time PBB 101
BEST PRACTICE CITIES Criteria for Selection: Successfully implemented performance-based budgeting, in various forms, for at least three years Small city with a population of around or less than 150,000 residents Open budget information that is communicated clearly on the citys website A city that was mentioned as a best example for outcome-oriented or performance-based budget in the sources we read for our literature review Willing and available to speak with us within the timeframe of this project
BEST PRACTICE CITIES Interview Questions: What are the citys priorities? How do you allocate resources? Who is responsible for managing the performance-based budgeting initiative? What technology is used? What challenges have you faced? What do you wish you had known before implementing this new budgeting process?
Best Practice City Bellevue, WA: Citizen Engagement About Bellevue: A city outside of Seattle with 139,814 residents and a strong council-manager government; it has championed PBB for nearly a decade. Why Bellevue likes PBB: By engaging in a biennial process of budgeting-for-outcomes, Bellevue focuses on citywide priorities and monitors whether the city is meeting its residents expectations. The city conducts an annual citizen survey and aligns citizen priorities with those of City Hall and City Council. Challenges of PBB: Ensuring that the collected data is quantifiable. Lessons Learned: Use Open Budget to communicate city priorities and to make the budget interactive and understandable. Rather than simply posting their budget report, Bellevue uses Open Budget to categorize expenses and revenues into outcomes, proposal, and fund, which is helpful to residents. In addition, strong buy-in from city council and upper management is crucial to successful implementation.
Best Practice City Conroe, TX: Incremental Change About Conroe: A city of 71,879 residents with mayor-council government, growing rapidly in both population and land size; its $133mil GFOA-awarded budget focuses on quality resident services while maintaining low tax rates. Why Conroe likes PBB: Conroe is beginning its transition to PBB by incorporating strategic planning, goals, and objectives. Adding goals and objectives to department budget requests allows decision-makers to weigh a departments request against the departments purpose with limited funds, decision-makers need to understand the value of each department. Challenges of PBB: Allocating sufficient time to create department performance metrics and marrying department goals with citywide goals. Lessons Learned: Take it one step at a time start with one or two departments that can be easily measured, and when a successful habit is formed, begin with another department.
Best Practice City Lowell, MA: A Prospect City About Lowell: A post-industrial city of 110,720 residents with a council-manager form of government; focused on four pillars: public safety, education, economic development, and quality of life. Why Lowell likes PBB: Using a STAT program for PBB is a great opportunity to get departments and senior city officials in the same room to check on progress, pitch ideas, and see trends. Lowell practices include: sharing a one-page memo with City Councilors monthly; releasing monthly PowerPoints to City Council and the public; and occasionally holding review sessions during neighborhood meetings to show residents what City Hall is doing. Challenges of PBB: Buy-in is essential. Making sure departments understand that the City is trying to make their lives easier, not be a watchdog. Lessons Learned: PBB requires full-time data analyst(s) devoted to the initiative (often its only additional expense). It takes a few years to get up and running and is a year-round process. Pilots are crucial to implementation, as cities need to show how the initiative will save money.
Best Practice City River Falls, WI: Working with Small Capacity About River Falls: A small city of 15,339 residents and 129.4 city employees, a strong-mayor form of government, and a median household income of $48,936. Its GFOA-awarded biennial budget allotted $82.9mil for 2017-18. Why River Falls likes PBB: The city felt it was time to mature and establish a direction. They were approached from multiple stakeholders, asking why arent you doing this? Given their small capacity, the city needed a strategic plan to determine what to focus on and what to say no to. Challenges of PBB: Refining performance measurements so that they capture more value, rather than just what can be easily counted. Lessons Learned: Strategic planning is much easier on everyone when a city does a biennial budget (or two one-year budgets simultaneously). Bring on a Fellow to ease the workload, and contract with the National Research Center to administer a citizen survey. Finally, make the budget readable for citizens by adding narrative.
About Rock Hill: A city of 72,397 with a manager-council government; its ICMA-awarded budget of $225.7mil emphasizes quality services, quality places, and a quality community. Why Rock Hill likes PBB: It helps to avoid mission creep, in both good and bad financial times. With limited funds, PBB encourages cities to stay within what will achieve their goals. Moreover, its a great way for departments to tell their story. Challenges of PBB: Benchmarking with other cities, and ensuring that performance measurements arent too easy. Lessons Learned: Start with a strategic plan, and then ease into the performance budgeting - a shared vision makes everything easier. Also, prepare for a long road ahead. Best Practice City Rock Hill, SC: Connecting Strategy to Daily Operations
Best Practice City Sunnyvale, CA: A PBB Role Model About Sunnyvale: A Silicon Valley city with 151,760 residents and a manager-council government; it has championed PBB for almost 30 years. Why Sunnyvale likes PBB: It provides clarity on the cost of providing a service, and demonstrates why requested funding will be useful. Challenges of PBB: Sunnyvale is currently improving transparency and making information more interactive. Lessons Learned: Submit a budget every two years, and spend several weeks reviewing the long-term financial plan every year. Develop a strong budget analyst department to support different areas of the capital improvement plan and different departments. Identify champions in each department, and work with managers to help them understand reporting requirements.
HAVERHILL DEPARTMENTS INTERVIEWED 311 Constituent Services Community Development Block Grant Economic Development and Planning Finance Fire Department Health and Inspections Human Services IT Consultant Police Department Public Works Solid Waste & Recycling
Resources Budgeting Best Practices: National Advisory Council on State and Local Budgeting (1999). Recommended Budget Practices: A Framework for Improved State and Local Government Budgeting. Government Finance Officers Association. Retrieved from: http://www.gfoa.org/sites/default/files/RecommendedBudgetPractices.pdf Geraghty, L. & Klosek, K. (2016). Performance-Based Budgeting. Retrieved from https://www.gitbook.com/book/centerforgov/performance-based-budgeting/details. Sample Budgets: Refer to the cities of Rock Hill, SC; Lowell, MA; and Bellevue, WA Sample Strategic Plans: Refer to the City of Lowell, MA (http://www.lowellma.gov/716/Comprehensive-Master-Plan.) Grant Opportunities: Massachusetts Community Innovation Challenge Grant - previous cohort of recipients included Amesbury, Lowell, Somerville, Woburn, and Worcester

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Performance based budgeting in haverhill for a better tomorrow by brandeis university mba students 100317

  • 1. A Prospect for Haverhill Performance-Based Budgeting For A Better Tomorrow Ariela Lovett, Maria Bennett, Biructait Mengesha, Lena Muntemba, and Elaine Theriault October 3, 2017
  • 2. PRESENTATION AGENDA Introduction to project Project methodology Current budget process Performance-based budgeting Best Practice Cities Implementation Introduction
  • 3. FROM QUEEN SLIPPER CITY TO PROSPECT CITY Introduction
  • 4. FRAMING QUESTIONS 1) Will performance-based budgeting improve Haverhills budget development and approval process? 1) Is performance-based budgeting actually feasible in the current context of Haverhill city government? Introduction ImplementationIntroduction
  • 5. Stakeholder Interviews External Research Best Practice City Interviews/Research MBA Framework Analysis PROJECT METHODOLOGY Introduction
  • 6. SNAPSHOT OF HAVERHILL CITY GOVERNMENT Mayor-Council government Strong mayor government 9 City Councilors 20 City Hall departments Key stakeholders: Mayor City council Department heads + staff Residents Introduction
  • 7. HAVERHILLS CURRENT BUDGET PROCESS ImplementationIntroductionCurrent Process
  • 8. FEEDBACK FROM STAKEHOLDERS Desires: More transparent budget process More involvement in budget process Strategic plan for the city More resources, more staff More leeway to add to budget All of this and... Minimal increases to budget to keep taxes low Current Process
  • 9. HAVERHILLS CURRENT BUDGET PROCESS Traditional Budget Process Previous Year Expenditures Expected Revenue Mayors Priorities Relies heavily on prior year estimates PBB 101
  • 10. PERFORMANCE-BASED BUDGETING 101 Performance- Based Budget Process Resources allocated based on expected outcomes Previous Year Expenditures Expected Revenue Mayors Priorities Citywide Priorities Citywide Goals Key Performance Indicators PBB 101
  • 11. Challenges Requires strong buy-in from management Needs committed staff and resources Long implementation timeline Commonly misunderstood as pay-for- performance Benefits Effective use of limited resources Ensure accountability among those responsible for management Facilitates budget decision-making Preferred by Government Accounting Standards Board (GASB) PERFORMANCE-BASED BUDGETING PBB 101
  • 12. Outcome-driven budget decision-making Transparent budget process for all stakeholders Quality service to residents Performance-Based Budgeting Has Potential To Transform Haverhill Budget Process CONCLUSION: PBB 101
  • 13. BEST PRACTICE CITIES These cities have successfully implemented performance-based budgeting for at least three years Cities Interviewed: Bellevue, Washington citizen engagement Conroe, Texas strong mayor Lowell, Massachusetts Prospect City River Falls, Wisconsin small capacity Rock Hill, South Carolina connecting daily performance to strategic plan Sunnyvale, California leading expert Best Practice Cities
  • 14. BEST PRACTICE CITIES Key Lessons Learned: Requires full-time or part-time staff commitment Does not require a huge financial commitment Adoption is an incremental process Pilots are crucial to success Provides for a more interactive budget process Best Practice Cities
  • 15. ROAD TO PERFORMANCE BASED BUDGETING Criteria for Recommendations: Takes advantage of Haverhill City Halls strengths Reflects insight from best practice cities Considers Haverhill City Halls capacity constraints Increases transparency Establish City Priorities 1. Collect... 2. Evaluate... 3. Understand... 4. Identify 5. Publicize... Phase Step Implementation
  • 16. Establish City Priorities 1. Collect citizen input 2. Evaluate capital assets 3. Understand stakeholder interests 4. Identify city priorities 5. Publicize priorities ROADMAP FOR IMPLEMENTATION Develop Approaches to Achieve Priorities 1. Build capacity 2. Outline dept. roles 3. Identify dept. roles and activities in budget 4. Explore possibility of benchmarking Develop Budget that Reflects Approaches 1. Develop guidelines for budget proposals 2. Solicit stakeholder input 3. Publicize budget information Implementation
  • 17. Estimated Time of Arrival Pre-FY 19 July - Dec 2018 Jan - July 2019 July - Dec 2019 Implementation - Analyze 311 calls - National Citizen Survey - Extend GIS mapping - Work with post- secondary institutions - City priorities retreat - Publicize priorities - Begin pilot - Hire a data analyst - Taxonomy priorities - Implement appropriate management tools - Request proposal additions from pilot dept. - Explore benchmarks - Develop 2-year budget - Publicize budget and performance data - Edit proposal requirements - Build data dashboard - Solicit citizen input Implementation Implementation Implementation
  • 18. ARRIVING AT A BETTER TOMORROW Better serving residents Making informed decisions Following a shared vision Implementation
  • 21. Performance- Based Budgeting in Action Citywide Priority Safer Neighborhoods Departmental Goals Reduce Police response time to critical emergency by 15% by June 30, 2019 Department Key Performance Indicators (KPI) Average monthly police response time to critical emergencies Police Departments Budget Proposal Desired Outcome Reduce police response time to critical emergency Performance Metrics Evaluation of Police response time to critical emergencies, community feedback Police Departmental Budget Proposal Adding 9 Police Officers to patrol unit will allow the Police Department to meet its goal of reducing its response time PBB 101
  • 22. BEST PRACTICE CITIES Criteria for Selection: Successfully implemented performance-based budgeting, in various forms, for at least three years Small city with a population of around or less than 150,000 residents Open budget information that is communicated clearly on the citys website A city that was mentioned as a best example for outcome-oriented or performance-based budget in the sources we read for our literature review Willing and available to speak with us within the timeframe of this project
  • 23. BEST PRACTICE CITIES Interview Questions: What are the citys priorities? How do you allocate resources? Who is responsible for managing the performance-based budgeting initiative? What technology is used? What challenges have you faced? What do you wish you had known before implementing this new budgeting process?
  • 24. Best Practice City Bellevue, WA: Citizen Engagement About Bellevue: A city outside of Seattle with 139,814 residents and a strong council-manager government; it has championed PBB for nearly a decade. Why Bellevue likes PBB: By engaging in a biennial process of budgeting-for-outcomes, Bellevue focuses on citywide priorities and monitors whether the city is meeting its residents expectations. The city conducts an annual citizen survey and aligns citizen priorities with those of City Hall and City Council. Challenges of PBB: Ensuring that the collected data is quantifiable. Lessons Learned: Use Open Budget to communicate city priorities and to make the budget interactive and understandable. Rather than simply posting their budget report, Bellevue uses Open Budget to categorize expenses and revenues into outcomes, proposal, and fund, which is helpful to residents. In addition, strong buy-in from city council and upper management is crucial to successful implementation.
  • 25. Best Practice City Conroe, TX: Incremental Change About Conroe: A city of 71,879 residents with mayor-council government, growing rapidly in both population and land size; its $133mil GFOA-awarded budget focuses on quality resident services while maintaining low tax rates. Why Conroe likes PBB: Conroe is beginning its transition to PBB by incorporating strategic planning, goals, and objectives. Adding goals and objectives to department budget requests allows decision-makers to weigh a departments request against the departments purpose with limited funds, decision-makers need to understand the value of each department. Challenges of PBB: Allocating sufficient time to create department performance metrics and marrying department goals with citywide goals. Lessons Learned: Take it one step at a time start with one or two departments that can be easily measured, and when a successful habit is formed, begin with another department.
  • 26. Best Practice City Lowell, MA: A Prospect City About Lowell: A post-industrial city of 110,720 residents with a council-manager form of government; focused on four pillars: public safety, education, economic development, and quality of life. Why Lowell likes PBB: Using a STAT program for PBB is a great opportunity to get departments and senior city officials in the same room to check on progress, pitch ideas, and see trends. Lowell practices include: sharing a one-page memo with City Councilors monthly; releasing monthly PowerPoints to City Council and the public; and occasionally holding review sessions during neighborhood meetings to show residents what City Hall is doing. Challenges of PBB: Buy-in is essential. Making sure departments understand that the City is trying to make their lives easier, not be a watchdog. Lessons Learned: PBB requires full-time data analyst(s) devoted to the initiative (often its only additional expense). It takes a few years to get up and running and is a year-round process. Pilots are crucial to implementation, as cities need to show how the initiative will save money.
  • 27. Best Practice City River Falls, WI: Working with Small Capacity About River Falls: A small city of 15,339 residents and 129.4 city employees, a strong-mayor form of government, and a median household income of $48,936. Its GFOA-awarded biennial budget allotted $82.9mil for 2017-18. Why River Falls likes PBB: The city felt it was time to mature and establish a direction. They were approached from multiple stakeholders, asking why arent you doing this? Given their small capacity, the city needed a strategic plan to determine what to focus on and what to say no to. Challenges of PBB: Refining performance measurements so that they capture more value, rather than just what can be easily counted. Lessons Learned: Strategic planning is much easier on everyone when a city does a biennial budget (or two one-year budgets simultaneously). Bring on a Fellow to ease the workload, and contract with the National Research Center to administer a citizen survey. Finally, make the budget readable for citizens by adding narrative.
  • 28. About Rock Hill: A city of 72,397 with a manager-council government; its ICMA-awarded budget of $225.7mil emphasizes quality services, quality places, and a quality community. Why Rock Hill likes PBB: It helps to avoid mission creep, in both good and bad financial times. With limited funds, PBB encourages cities to stay within what will achieve their goals. Moreover, its a great way for departments to tell their story. Challenges of PBB: Benchmarking with other cities, and ensuring that performance measurements arent too easy. Lessons Learned: Start with a strategic plan, and then ease into the performance budgeting - a shared vision makes everything easier. Also, prepare for a long road ahead. Best Practice City Rock Hill, SC: Connecting Strategy to Daily Operations
  • 29. Best Practice City Sunnyvale, CA: A PBB Role Model About Sunnyvale: A Silicon Valley city with 151,760 residents and a manager-council government; it has championed PBB for almost 30 years. Why Sunnyvale likes PBB: It provides clarity on the cost of providing a service, and demonstrates why requested funding will be useful. Challenges of PBB: Sunnyvale is currently improving transparency and making information more interactive. Lessons Learned: Submit a budget every two years, and spend several weeks reviewing the long-term financial plan every year. Develop a strong budget analyst department to support different areas of the capital improvement plan and different departments. Identify champions in each department, and work with managers to help them understand reporting requirements.
  • 30. HAVERHILL DEPARTMENTS INTERVIEWED 311 Constituent Services Community Development Block Grant Economic Development and Planning Finance Fire Department Health and Inspections Human Services IT Consultant Police Department Public Works Solid Waste & Recycling
  • 31. Resources Budgeting Best Practices: National Advisory Council on State and Local Budgeting (1999). Recommended Budget Practices: A Framework for Improved State and Local Government Budgeting. Government Finance Officers Association. Retrieved from: http://www.gfoa.org/sites/default/files/RecommendedBudgetPractices.pdf Geraghty, L. & Klosek, K. (2016). Performance-Based Budgeting. Retrieved from https://www.gitbook.com/book/centerforgov/performance-based-budgeting/details. Sample Budgets: Refer to the cities of Rock Hill, SC; Lowell, MA; and Bellevue, WA Sample Strategic Plans: Refer to the City of Lowell, MA (http://www.lowellma.gov/716/Comprehensive-Master-Plan.) Grant Opportunities: Massachusetts Community Innovation Challenge Grant - previous cohort of recipients included Amesbury, Lowell, Somerville, Woburn, and Worcester