My high school Latin teacher, Mr League, used to ask “Do you get the BIG picture…or just the pretty picture?” where only getting the pretty picture meant you were failing to place an answer in its appropriate context and, consequently, missing the point. The picture of the budget we have been receiving has certainly not been the big picture, so it meets Mr League’s definition of a pretty picture, but the budget outlook is not pretty at all.
One way to look at setting a budget is to take the current year budget and fiddle with it. In good years, we add a little to existing budget lines; in leaner years, we cut some amount from each department. This is the approach we’ve been using and we’ve been only looking at one fragment at a time: adopting fees one meeting, considering staff furloughs at another, community events in kind support at another.
Two problems here. First, looking at small segments of the budget at a time without any useful overview means we make changes without understanding how one decision may impact the whole (the Welcome Center Coordinator position example). Second, by using last year’s budget as the starting point we are assume that the current structure of government and allocations of funds are correct and higher priority programs are cut just as much as less desirable ones.
Another way is to budget for outcomes:
(1) Determine how much money is available. The budget should be built on expected revenues (including property taxes, other taxes, fees and charges, local government aid, grants), any new revenue sources we could identify and use of fund balance or reserves. What is “available” depends on where we set the property tax levy (and how much we are willing to increase property taxes to fund government and debt service) plus EDA and HRA levies; it also depends on how much local government aid is actually available or how much we choose to subtract each year in order to eliminate our dependence on state aid by anticipating its absence. “Available” also depends on how much of our fund balance we are willing to use to fund the operating budget as well as how we seek and use one-time or variable revenue such as grant funding.
(2) Prioritize results. The outcomes that matter most to citizens should be defined by elected leaders. Some objectives can be pulled from the Comprehensive Plan and other city plans which were developed with citizen input. Others should come from our Council goals. Finally, what other input have we received through our budget open house, correspondence or other forums?
(3) Analyze what strategies, programs, and activities will best achieve desired results (and what personnel are needed to staff them). There is much to be done here. Here’s where city staff can consider how the current city organizational chart and personnel fit with the identified outcomes then analyze how Northfield might share resources, outsource functions and eliminate ineffective programs. Here’s also where the Council should evaluate the current line-up of boards and commissions to see if they are organized effectively to provide the support the Council needs.
(4) Budget available dollars to the most significant programs and activities to maximize the benefit of the available resources. Here’s where we look to fund what is most important as well as look for the best return on our investment.
For 2012 budget:
(5) Set measures of annual progress, monitor, and close the feedback loop. These benchmarks should state the expected outcomes and how they will be measured.
(6) Check what actually happened.
(7) Communicate performance results. Stakeholders should be informed of the results in an understandable format.
(8) Repeat steps (1)-(7).
A few other thoughts:
Enterprise funds: some city services are not funded through the general fund, but through enterprise funds which collect the fees for service billed monthly and dedicated to the operation and improvement of that service: water, wastewater, garbage, stormwater, and the liquor store. Since these are designed to be self-supporting, we could take these off the table for now while we focus the discussion on the general fund spending.
All or nothing thinking: some budget discussions at the Council have fallen into a pattern of one Councilor (like me!) suggesting priorities (the Library, for example) which is countered by “But we can’t cut public safety!” No one is suggesting eliminating the police or imposing service reductions in the same way we have for the library (like limiting hours – no police protection on Sundays, for instance). Instead, we must all think about how we spend strategically and reduce wisely to meet goals. Tough choices will need to be made, including choices to eliminate programs or departments which do not serve our priorities, but the choices may be relative rather than yes/no (but at some level, choosing to do some things means not doing others).
Ad Hoc Finance Workgroup: We established this group at the August 3 meeting and will make appointments on August 17 – the line-up of financial professionals and related stakeholders (colleges representatives, for instance) is impressive – they should be able to look at 3 and 4, as well as setting benchmarks by which we can check our work.
Transparency and Accountability, an ongoing effort.