FIN 2017-05-16 Item 2C - Discussion - Plan for Budget Process Improvements

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INFORMATIONAL MEMO Page 6 • Questions past patterns of spending by putting all resources on the table to encourage more creative conversations about services. • PBB starts with revenue available rather than last year's expenditures as the basis for decision making. • Identifies the true cost of programs and services, which increases transparency. • Focus is on the results the program or service produces for achieving community priorities. • PBB demands accountability for results that were the basis for a program or service's budget allocation. • PBB is a `best practices' recommendation from Government Finance Officers Association (GFOA). Cons: • Labor intensive to accurately identify and cost out programs and services. • Due to its goal- oriented nature, PBB focuses on a quantitative rather than a qualitative evaluation. • Without decentralized accounting and systematic reporting mechanism would be ineffective and inefficient. Performance Measures It is City Administration's goal to enhance the use of performance measures in our next budgeting process and will be reviewing and assessing different tools this year. The use of performance measures allows policy makers, managers, and citizens to evaluate the quality and effectiveness of government services. Performance measures include inputs (resources used), outputs (program activities), efficiency measures (ratio of inputs to outputs), and outcomes (the actual results of programs and services). Performance measures quantitatively evaluate the return from resources spent on programs and services. Generating information about program results and outcomes and should be an integral part of any budget process. Performance data is a tool to be used for rationality to planning and budget discussions time have met strategic goals. 90 H: \Temp - Ana 1 \00.docx decision - making purposes. The data can bring by demonstrating how the use of resources over