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Michigan Municipal LeagueCenter for Priority Based Budgeting
Priority Based Budgeting: Identification of Public Values and Public Priorities
through Citizen Engagement in the Government Budgeting Decisions
Priority Based Budgeting Workshop Ann Arbor, Michigan
Dr. Sheryl MitchellApril 9, 2014
MML/PBB Workshop 04.09.2014 -- S. Mitchell2
Agenda
Overview of the Study
What is PBB?
PBB and Engaging Citizens
Values Based Budgeting Framework
Questions
Friday, April 21, 20233
University of Michigan - Center for Local, State, and Urban Policy - Michigan Public Policy Survey 2013, Michigan local government fiscal health continue gradual improvement, but smallest jurisdictions lagging
Overall, 29% of
jurisdictions say they are
better able to meet their
financial needs this year,
while another 29% say
they are less able to do
so.
Declining property tax
revenues are still
reported by 48% of all
local governments in
2013
Demands for public services (e.g.,
infrastructure and public safety)
continue to increase, with half (50%)
of all jurisdictions across the state,
and 71% of the largest jurisdictions,
saying they have increased
infrastructure needs this year.
Government officials express
ongoing concerns about their
jurisdictions’ fiscal health, with
30% feeling it will be worse a
year from now and 28% feeling
they will be better.
Michigan
S. Mitchell4
Why?
Fiscal crisis is not a temporary trend, but the “new normal” (NACo, 2012, p.1)
Persistent fiscal challenges faced by state and local units of government over an extended period due to:
Economic downturn Housing and mortgage foreclosure crisis Long-term unfunded pension obligations
Bureaucratic paralysis – government uncertainty as to how to address current fiscal realities and still meet the expectations of their constituents (Fabien, Collins, & Johnson, 2008).
Crisis in trust - lack of inclusion, access, and transparency, by government leaders fosters citizen distrust
S. Mitchell5
Traditional governmental budgeting methods are generally an accounting exercise that are incremental in nature and do not provide decision-makers with a tool to identify strategic priorities to guide budgeting decisions
Crisis in government - The traditional approaches to government budgeting an organizational culture that is prone to uncertainty of its purpose, strategy, priorities, integrity, and focus
Crisis in Government
UNCERTAINITIES EXISTING WITHIN GOVERNMENT ORGANIZATIONS Purpose Why What is our core purpose? Why do we do want we do? Strategy What What are the desired results/outcomes? What do we do to
achieve them? Priorities Where Where do we focus our resources? Integrity Who Whose values do our priorities reflect? Who is included in
the decision making? Are decisions transparent? Capacity How When can we engage in partnerships for delivery of
services/programs? Focus Which In which direction can we align resources and service
delivery in a budgetary decision-making process that is grounded in the values and priorities of the citizens?
MML/PBB Workshop 04.09.2014 -- S. Mitchell6
Priority Based Budgeting (PBB) offers a new government budgeting process
PBB provides the alignment of expenditures with the values and priorities of the community
There is limited understanding relative to PBB and the role of citizen engagement
From Problem to Opportunity
MML/PBB Workshop 04.09.2014 -- S. Mitchell7
Purpose of the Study
The purpose of this study was to understand and explore the Priority Based Budgeting (PBB) process
Learn how PBB can be used by government leaders to effectively engage citizens in identifying public values and priorities
Discover if the PBB process, by reframing dialogues and focusing on values and priorities, can provide guidance for budget expenditures and thereby align resources with public values and priorities
MML/PBB Workshop 04.09.2014 -- S. Mitchell8
Classic Public Administration
Public administrations are a vehicle for expressing the values and preferences of citizens, communities, and society as a whole. Top-down vertical hierarchy for power and decision-making. A closed environment; allowing for minimal discretion.Citizens feel excluded from the process that gave all of the decision-making power to elected officials, administrators and lobbyists – who serve to promote their own self interest and not that of common good (Bourgon, 2007).
Literature Review
MML/PBB Workshop 04.09.2014 -- S. Mitchell9
Priority Based Budgeting (PBB)
Figure 2.4. PBB process model. From “Anatomy of a Priority Based Budget Process” by Kavanagh, S.C., Johnson, J., & Fabian, C. (2010). Anatomy of priority-based budget process. Government Finance Review, 26(2), 8-16.
PBB Steps:
1.Identify Available Resources
2.Identify Priorities
3.Define Priority Results
4.Prepare Decision Units for Evaluation
5.Score Decision Units Against Priority Results
6.Compare Scores Between Different Programs/Services
7.Allocate Resources
8.Create Accountability for Results
9.Create Service Efficiencies and Innovation
S. Mitchell10
Existing PBB Studies
The Center for Priority Based Budgeting (CPBB), the primary consultant and subject matter expert for PBB has only been in existence since 2008.
Oettinger (2011) - Study of 12 communities that first implemented the PBB model used a case study analysis with the purpose of understanding the motivating factors to use PBB, the short-term impact, and the long-term budgeting outcomes.
Findings: Increased trust and transparency between the government and citizens. The approaches to planning were more strategic and enabled communities to prioritize expenditures. Limitations of this study: only one budget cycle within each of the participating communities.
MML/PBB Workshop 04.09.2014 -- S. Mitchell11
Existing PBB Studies
Middleton (2013). Priority based budgeting: A model for the City of Oakland’s long term fiscal sustainability. Study of five cities.Compared with the budgeting models of budgeting for outcomes, performance based budgeting, and participatory budgeting.
Findings:Identified that PBB emphasizes: prioritizing services, doing the important things well, questioning the past patterns of spending, spending within the financial means of the organization, acknowledging and respecting the true cost of doing business, and providing transparency in identifying community priorities and their impact.
Civic engagement was recognized as a major component of the PBB model.
MML/PBB Workshop 04.09.2014 -- S. Mitchell12
Data Collection In-depth semi-structured telephone interviews (45-60 minutes
each)
Interviews conducted Summer 2013
Interviews were electronically recorded and manually transcribed
Attended national CPBB conference (generated field notes)
Published case stories, articles, field notes, and other archival data
Interviews generated 195 single spaced pages of transcripts
Data collection / coding of data continued until theoretical saturation was achieved
MML/PBB Workshop 04.09.2014 -- S. Mitchell13
Study Participants
City State Unit of Govt / Organization
Title Gender Education Seniority w/ Org.
Edmonton Alberta, Canada
Province Chief Financial Officer Female Diploma, Accounting-Bus/Mgmt
2 years
Boulder Colorado
City Budget / Finance Manager Female
Masters
8 years
Arvada Colorado City City Manager Male Masters 2 years
Cincinnati Ohio
City Budget/ Finance Manager Female
Masters
15 years
Tualatin
Oregon
City
Budget/ Finance Manager Male
Bachelors
5.5 years
Chandler
Arizona
City Chief Financial Officer Female
Bachelors, CPA
6 years
Douglas County Nevada County County Manager Male Masters 4 years
Douglas County
Nevada
County
Assistant County Manager/ CFO Female
Masters
n/a
Douglas County
Nevada
County
Budget / Finance Manager Female
n/a n/a
Wheat Ridge
Colorado
City
Budget / Finance Manager Male
Masters
2 years
Fort Collins
Colorado
City
Budget / Finance Manager Male
Masters
7 years
Walnut Creek
California
City
Assistant City Manager Female
Masters
12 years
10 PBB Practicing Governments
MML/PBB Workshop 04.09.2014 -- S. Mitchell14
Study Participants
City State Unit of Govt / Organization Title Gender Education Seniority w/ Org.
Boulder
Colorado
National Research Center
CEO Male
Ph.D.
19 years
Phoenix
Arizona
Alliance for Innovation
Director Female
college, non-degree
10 years
Denver
Colorado
Senior Advisor-CPBB; Former Mayor and Council Member - Northglenn, CO
Former Elected Official; Senior Advisor
Female
Masters
Washington
DC
International City/County Management Association (ICMA)
Director Male
Bachelors, Senior Executive Institute
22 years
Denver
Colorado
Center for Priority Based Budgeting
CEO Male Masters
3 years
Denver
Colorado
Center for Priority Based Budgeting
CEO Male Bachelors 3 years
Denver
Colorado
Center for Priority Based Budgeting
Staff(Master’s Thesis)
Female Masters 1 years
Chicago
Illinois
Government Finance Officers Association (GFOA)
Director Male
Masters
12 years
Non-Governmental Unit Participants
MML/PBB Workshop 04.09.2014 -- S. Mitchell15
Interpretation of Findings
PBB - Citizen Engagement and Transformation
PBB process has been found to be an effective tool in engaging citizens, identifying public values and priorities, and reframing dialogues to provide guidance for prioritized budget decisions.
By engaging a cross-section of citizens in deliberative dialogues, PBB creates a shared sense of community, builds trust, and provides transparency in the sharing of information.
PBB serves as a catalyst for changing the government budget paradigm from one that is based on exclusivity, incremental decision-making processes, and has disconnected lines of communication.
Friday, April 21, 202316
Transformation Traditional Budgeting PBB
Organizational
Deficit based Strengths-basedFactional community Sense of shared communityGovernment is Epic Center Government is subset of the community
Entitlement OwnershipFosters disengagement and hostility Improves civility
Lack of strategic vision Focus on shared vision, goals, and purpose of government
Bureaucratic Collective voiceHierarchal governance Shared governanceDetached from ordinary citizens Inclusive of ordinary citizens
Silos, fragmented departmental decisions Whole system engagement: external and external stakeholders
Vision/Values: Government elite (elected officials and top administration)
Vision/Values: all stakeholders, including citizens, employees, and nongovernment organizations
Lack of public trust Public trustStatus quo Civic innovation (collaboration, engagement,
technology)
Narrow, short-term planning Long-term financial planningDysfunctional governance: mutual distrust, lack of cooperation/respect between elected leaders and staff
Healthy governance: collaborative interactions, mutual trust, consensus decision-making, openness
Isolated Public / Private partnerships
Rule driven Mission driven
Interpretation of FindingsPBB – Organizational Transformation
MML/PBB Workshop 04.09.2014 -- S. Mitchell17
Transformation Traditional Budgeting PBB
Process and Procedures
Customer service Collaborative, co-creationInstitutionalized spending patterns Examine legal mandates, existing policies,
procedures, and programs
Budget input: Public hearing with nominal citizen participation
Budget input: authentic and expanded opportunities to participate
Problem oriented Aspiration focused
Incremental budgetary decisions; “across the board cuts”
Priority based budgetary decisions; Strategic
Reactive, “cure” Proactive, anticipatory, “prevention”
Linear, sequential Continuous improvement
Inadequate information for rationale decision-making
Data driven, rational decision-making
Deficit spending Incorporate reserve policy as part of budget
Build up costs – make cuts difficult Linked – expenditures to results/priorities; improve links between results and services; facilitate dept. cooperation
Hidden or unnecessary costs Identifies efficiencies - validate offers or find better choices
Cuts or taxes - Choose to cut services or raise taxes, and get blamed (or blame someone else)
Help determine priorities - Choose the best offers in order to get the most results for citizens based on public values
Inputs oriented Results oriented
Interpretation of FindingsPBB – Process / Procedure Transformation
MML/PBB Workshop 04.09.2014 -- S. Mitchell18
Interpretation of Findings
Transformation Traditional Budgeting PBB
Communication
Directive Facilitative leadershipMonologue Dialogue
Loudest voice is heard Diversity of viewpoints and backgrounds
Limited participation Open access
Downward communication Interdepartmental; inclusive of elected officials, citizens, and non government organizations in dynamic conversations
Citizens Involvement: Inform, Consult Citizen Engagement: Include, Collaborate
Information guarded Transparent
Debate what to cut Debate how to get better results; capacity building partnerships
Non-responsive; one-way communication
Responsive; government is listening, learning, and working with citizens
PBB – Communication Transformation
MML/PBB Workshop 04.09.2014 -- S. Mitchell19
Interpretation of FindingsEmergent Themes
Public Values - PBB process reframes dialogues to transforms the values and priorities of citizens and government leaders into budgetary decisions.
Civic Innovation – PBB provides a paradigm shift in the government budgeting with an expanded platform for internal collaboration and external citizen engagement through the use of technology, social media, internet, and web-based platforms.
Multiple entry points / eliminating barriers
Transformation - PBB process is a catalyst for civic engagement, dynamic conversations, and positive approaches to changing the organization culture and community building.
MML/PBB Workshop 04.09.2014 -- S. Mitchell20
New Development
(1)Created a Values Based Budgeting Framework that extends and leverages the PBB process by incorporating
• Civic Engagement• Civic Innovation • Capacity Building alternatives in program and service delivery and• Citizen-driven Performance Measures
(1)Development of the Civic Engagement Framework, to illustrate that government entities serve numerous constituencies in addition to citizens and elected officials
MML/PBB Workshop 04.09.2014 -- S. Mitchell
21
Evolution of Budgeting
22
Values Based Budgeting Framework
Civic Engagement
Public Values and Priorities
Identify Available
ResourcesIdentify Priorities
Define Priority Results More
Precisely
Prepare Decision Units for Evaluation
Score Decision Units Against
Priority Results
Compare Scores Between Different
Programs / Services
Allocate Resources
Create Accountability
for Results
Create Service Efficiencies and
Innovation
CapacityBuilding
Civic Innovation
MML/PBB Workshop 04.09.2014 -- S. Mitchell
MML/PBB Workshop 04.09.2014 -- S. Mitchell23
Civic Engagement Framework
MML/PBB Workshop 04.09.2014 -- S. Mitchell24
Understanding PBB
The meaning of PBB that emerged from the responses defined PBB as a tool that can be utilized to engage the whole system, particularly citizens, in collaboration and meaningful conversations.
Through dialogues that are deliberative, PBB identifies public values and aligns government budgeting with public priorities.
•Strategic Process
•Long-term Financial Planning
•High Performing Organization
•Organization Transformation
•Citizen Engagement
MML/PBB Workshop 04.09.2014 -- S. Mitchell25
Propositions
MML/PBB Workshop 04.09.2014 -- S. Mitchell26
MML/PBB Workshop 04.09.2014 -- S. Mitchell27
Summary• PBB is a tool for engaging citizens in a strategic planning process that identifies a shared vision for a
preferred future within results oriented government budgeting.
• Public values and public priorities are a basis to strategically prioritize government budgeting decisions.
• PBB and citizen engagement build the social value of government entities by increasing access, inclusion, transparency, trust, respect, and accountability, which contributes to promoting a shared sense of community and opportunities for capacity building partnerships.
• The Values Based Budgeting Framework was developed to leverage the implementation of PBB.
• The Values Based Budgeting Framework shows how civic engagement and civic innovation can invoke dynamic dialogues to identify public values for government budgeting.
• The Values Based Budgeting framework leverages the implementation of PBB:
• To align public values with budget priorities,
• Supports capacity building for the delivery of public programs/services,
• Incorporates accountability through the adoption of measurable outcomes, and
• Creates sustainable capacity through continuous improvement.
MML/PBB Workshop 04.09.2014 -- S. Mitchell28
Recommendations
Create a Culture of Engagement
Identify Public Values and Priorities
Educate and Inform all Stakeholders
Seek Partnerships to Build Capacity for the Delivery of Public Services/Programs
Develop Strategies to Integrate Performance Measures into the Organization
MML/PBB Workshop 04.09.2014 -- S. Mitchell29
Questions
MML/PBB Workshop 04.09.2014 -- S. Mitchell
30
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