Funding the services citizens want Polk county's BFO process.
When Polk County, Florida, was creating its budget for fiscal 2008, it faced a serious challenge in the form of property tax reform. At the time, the county didn't know that the combination of Florida property tax reform--which resulted in a structural change to the way counties receive ad valorem revenue--and economic reductions in property value would make the next five budget cycles very difficult for Polk County, and for all Florida local governments. The result has been a reduction of approximately $78 million in Polk County's budgeted ad valorem revenue from fiscal 2006 through fiscal 2010. With an additional loss of $11 million for fiscal year 2011, Polk County's property tax revenue has decreased by 35 percent.
Polk County management was already considering a process that would focus budget expenditures on citizen's expectations, even before the recession started. The county's primary goal was to focus its budgeting process on the programs and services provided to citizens. This would allow management to avoid line-item and across-the-board cuts, which assume that all programs are equally important. To find out what citizens wanted, the county began involving them in the process.
A county commissioner learned about Budgeting for Outcomes (BFO) at a governing conference several years ago. (1) Its philosophy is to base the priori ties of government on what citizens value, and to provide the results at a price citizens are willing to pay. Polk County hired a consultant to help it strategize and implement this innovative budgeting concept. The county's BFO process included research to learn what citizens expected and to determine how the county could meet citizens' highest priorities with the revenue available.
While Polk County already had a number of ways of getting information from its citizens, these methods were not adequate for BFO. The first step in the new process, then, was holding focus groups in each of five county districts to determine what results or outcomes citizens expect from their government. The consultant led these meetings without any government officials present.
Focus groups identified seven results or outcomes they believed the community expected from county government. They were:
1. Safety. Citizens want to feel safe from crime, fire, and the effects of emergencies and natural disasters.
2. Economic Development. Citizens want well-paying jobs and business opportunities to be available in Polk County, and they want county residents to be appropriately trained and educated to take advantage of them.
3. Good Government. Citizens want to be able to trust that their government is well run and a good steward of their tax dollars.
4. Basic Needs. Citizens want all county residents who are at risk because of their health or economic status to have their basic needs met and to become as self-sufficient as possible.
5. Natural Resources and Environment. Citizens want clean and plentiful natural resources and a healthy environment.
6. Recreation and Cultural Arts. Citizens want safe, plentiful, and diverse recreation and cultural arts opportunities.
7. Growth. Citizens want the county to grow in a manner and at a pace that residents find livable and that allows them to move around the county safely and without excessive congestion.
BUILDING THE PROCESS
Results Teams. Once citizens' needs were prioritized, the county's next step was to create seven results teams--one for each priority area. These teams identified strategies for obtaining the desired outcomes and establishing key indicators for success. They also developed requests for offers (which are similar to request for proposals in the purchasing world) that county divisions would use to submit their proposed budgets. Each results team was initially composed of one citizen, three county staff members who knew about the programs being evaluated, three county employees who were not subject matter experts, and one budget analyst. (In the second year of BFO, county commissioners decided to expand citizen involvement to three citizens per team.) To maintain objectivity, the teams did not include department directors or anyone from the county manager's office.
Each results team developed a road map for program offers in its area of interest. These road maps--the requests for offers--defined the indicators of success, priorities, and purchasing strategies for each result area. Requests for offers let prospective departments and divisions know each team's intended results.
Departments and divisions were instructed to submit their proposed program budgets in the form of proposals, or offers, which would address a specific priority result area. These program offers were to link up with the purchasing strategies that the results teams had identified in the requests for offers. Results team members then ranked program offers based on how the programs would contribute to the desired outcome. Results teams were not engaged in funding decisions the first time around.
Guidance Team. During this process, the county commissioners created a guidance team--composed of five citizens, one appointed by each commissioner--to ensure the integrity and credibility of the process. Guidance team members did not make decisions, but they met at each critical step in the process to ensure that results teams followed BFO guidelines.
Priority Rankings. Each department and division was asked to rank its programs from the highest to the lowest priority. Once the results teams ranked the programs submitted to each result area, they met with the Board of County Commissioners in a daylong work session to discuss their priority rankings. The commissioners then applied their own rankings to all the programs in each result area.
In the first round of ranking programs, management elected to break the programs down into manageable pieces in order to better communicate the function of each program. This procedure adds one more level of review to ensure that the county maintains the services citizens see as most important, and it helps communicate what service or levels of service will still be provided with the available funding.
During the budget process, the county manager then used all the rankings --from the results team and board--to choose, or "purchase," programs. The highest-ranked programs were purchased first, followed by medium-ranked programs. The lowest-ranked programs were either recommended for elimination or reduced funding. Even if a pro gram is ranked low, portions of it might need to be continued, leaving only the highest priorities.
Exhibit 1 shows the steps in the county's BFO process. Polk County used this process for its fiscal 2007-2010 general fund budgets, with new rankings every two years. The county has achieved more than $17 million in budget reductions through the BFO process, with approval from the citizens on the results and guidance teams (see Exhibit 2). County commissioners and administration now better understand each of the programs in the general fund budget, and the citizens who participated better understand and appreciate their hardworking county employees.
COMMUNICATION AND TRANSPARENCY
Polk Government Television (PGTV) has been instrumental in the BFO communication process, allowing the county to televise and record many of the meetings and events. The county has also published all budgetary presentations, spreadsheets, and documents on its website. The county manager records messages to keep employees informed during the process and discusses much-needed budget reductions.
Even with the success of the BFO process and the transparency provided by PGTV and the website, Polk County wanted to further improve internal and external communications. Once BFO was integrated into the budget process, the next step was to begin managing how the county was performing in its result areas and communicating this information, a process known as managing for results. To this end, the county created its "Polk Performs" wehsite (at www.polk-county.net/ polkperforms), which contains a dashboard for each result area. Citizens can check the dashboard to review information on three or four top indicators of success for each area. See Exhibit 3 for the growth and infrastructure result area, which provides three indicators of success. These indicators show that citizens think Polk County is performing well on two indicators and maintaining services on the third.
Change is never easy, and Polk County's BFO process was originally met with anxiety and doubt. There were many concerns about bringing citizens into the process and slowing it down, but in fact, they were so helpful that each result team added two more citizens after the first year of BFO.
Implementing the BFO process, along with the recent additions and improvements made in the area of managing for results, will be a part of the county's budgeting process for the foreseeable future. The process provides structure for making budget reductions during difficult economic times, and as the economy improves, it will be useful in justifying additional funding for new or increased levels of service. Other benefits include making citizens aware of the services the county oversees and making the budget process more transparent. In addition, commissioners, county managers, and employees have taken a bigger role in the process, learning more about budget programs than ever before.
(1.) The Budgeting for Outcomes concept was derived from The Price Of Government. Getting the Results We Need in an Age of Permanent Fiscal Crisis, by David Osborne and Peter Hutchinson (New York: Basic Books, 2004).
FRAN MCASKILL is budget and procurement director for Polk County, Florida. TODD BOND is the county's budget officer.
Exhibit 2: Total BFO Reductions by Fiscal Year FY 07/08 FY 08/09 FTE FTE Results Areas Reductions Reductions Reductions Reductions Basic Needs $1,158,931 2.00 $351,088 0.00 Economic $415,000 0.00 $351,000 0.00 Development Good $1,305,820 7.00 $598,761 1.00 Government Growth and $387,939 8.00 $239,624 0.00 Infrastructure Natural $287,000 0.00 $150,000 0.00 Resources and Environment Recreation and -- 0.00 $372,427 0.00 Cultural Arts Safety $311,323 1.00 $457,840 0.00 Total $3,866,013 18.00 $2,519,740 1.00 FY 09/10 FY 10/11 FTE FTE Results Areas Reductions Reductions Reductions Reductions Basic Needs $71,000 0.00 $1,116,865 13.00 Economic $375,000 0.00 -- 0.00 Development Good $1,543,893 15.00 $2,165,940 8.00 Government Growth and $529,719 2.00 $683,529 9.50 Infrastructure Natural $276,425 0.00 $474,383 1.50 Resources and Environment Recreation and $2,493,078 1.00 $454,480 0.76 Cultural Arts Safety $41,426 1.00 $579,103 4.00 Total $5,330,541 19.00 $5,474,300 36.76 4-Year Total FTE Results Areas Reductions Reductions Basic Needs $2,697,884 5.00 Economic $1,140,000 0.00 Development Good $5,614,414 31.00 Government Growth and $1,840,811 19.50 Infrastructure Natural $1,187,808 1.50 Resources and Environment Recreation and $3,319,985 1.75 Cultural Arts Safety $1,389,692 6.00 Total $17,190,594 74.76
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|Title Annotation:||Aisle 5: Safety Economic Development Good Government|
|Author:||Mcaskill, Fran; Bond, Todd|
|Publication:||Government Finance Review|
|Date:||Dec 1, 2011|
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