Playbook: add value to your budgeting process: try some nontraditional approaches to detailing expenses.

With limited financial resources and rising expenses, budget time is often equated with gloom and doom. But with some value-adding resources, budgeting can be fun and exciting (or at least it can be less painful).

Creating traditional budgets are easy, right? We normally follow the four-step process. First, we see what we did last year. Then we make some changes for this year; add five percent for growth and inflation, and finally we hope the budget gets passed. It may not be pretty, but it gets the job done.

Basing the future year's budget on what you did this year is a great start. However, it becomes easy to fall into the trap of doing the same thing over again, and not fully financially evaluating the programs or services you are providing.

So next time you prepare your budget, why not take a look at some "non-traditional" approaches as budgeting companions to add value to your budget and its process? In doing so, you may find the budget to be more informative, less painful and maybe more fun.

"Zero-based" budget

With zero-based processing, forget about last year, pretend your program is brand-new, and see if you can provide a detail of expenses for what you would need to fully accomplish the program. When you start from scratch, take a fresh approach in building a cost structure and identify potential revenue to support it. This technique will help you better develop a complete picture of what the program actually needs to cost and not just what it has been costing. And although this approach can be time-consuming and has the potential of unintended omissions, it will make you rethink what it really takes to get the program accomplished.

"Performance-based" budget

Let's say that the goal for your city is to reduce youth crime, and there is $300,000 available to spend. One obvious approach would be to spend the money to hire more police officers. However, another approach could be to invest the money in new recreation activities that would help to get kids off the streets and thus reduce crime.

With performance-based budgeting, you throw out the notion of accomplishing programs (i.e. police department) and focus on how you can accomplish the outcomes (i.e. reducing crime). This technique will also help you tie your budget into your annual strategic plan.

Remember that at the end of the day, the goal of budgeting is to come up with a financial blueprint for the year, and both of these value-adding tools should help in the process of determining how to use your resources.

FUN FACT

Who invented the annual budget?

a) Ancient Romans 

b) King Henry VIII

c) Benjamin Franklin

d) Woodrow Wilson

Answer: (a) Ancient Romans. Although no one knows for sure, many people claim it was the Romans who first invented the annual budget as they attempted to coordinate the Empire's diverse financial enterprises, limiting expenditures to estimated revenues and levied taxes.

Rob Batarla is NRPA's director of finance. He has more titan eight years of accounting and finance experience, most recently as director of finance for the International Association of Fire Chiefs.