1. Budgeting & Business Planning: What Managers Should Know
Shannon Szymczak, Corporate Budget Manager

2. Today’s Agenda Managing for Results Overview
Financial Accounting in Austin
The City’s Budget
Tools for Monitoring and Developing Budgets
Budgeting Exercise
Performance Measurement
Tools for Monitoring Measures
Examples of Decisions Made Using Measures
What the Corporate Budget Office Needs Regarding Departmental Budget Requests
Questions?

3. Managing for Results What is Managing for Results?
A business system that links resources (people, dollars) to results
A way to show the public how and why we allocate resources to the services they want
A way to show the public what we did with their money
A way to show if we are accomplishing our goals
Why Measure Performance?
To establish credibility and regain trust
To be clear about what you are doing and how much it costs
To help make decisions and allocate scarce resources
To demonstrate if and how you are achieving your goals
To have the information you need to tell your story

4. Managing for Results Performance Based Decision-Making
ACT
PLAN
Performance Based
Decision-Making
Performance Data
Citizen Expectations
Council Direction
Management Decisions
Business Planning
Goals
Program Objectives
Activity Objectives
Services
Performance/Operations Measures
CHECK DO
Performance Reporting
Performance/Operations
Performance Results
Program and Management Audits
Individual SSPR Evaluations
Performance Budgeting
Program Funding
Activity Funding
Supplies/Materials/Equipment/Facilities
Staffing
Aligned Financial System

5. Managing For Results History
Series of audits and improvements to the City’s performance measurement system
1992 Council Resolution
“performance measurement should be the City’s way of determining whether it is providing quality services at reasonable cost.”
Required City Manager to develop departmental service plans, submit a performance-based budget by FY 1995
City-wide implementation of MFR (Weidner)
Conversion of accounting structure to align with departmental business plans
Employee performance evaluation plans tie to departmental business plans (SSPR) (though some changes to SSPRs over the years)
See separate notes document.

6. Managing for Results History
Award – ICMA’s Certificate of Distinction in Performance Measurement (have received reward every year since)
Shift from top-down enforcement to departmental ownership of business plans and measures
2004 and beyond
Continued practice, refinement and innovations
Emphasis on the Customer
Tiered/layered measures and reporting
Focus on most important (reduced number of measures from >4,000 to ~2,000)
Today, Managing for Results is:
Integrated into the City’s culture
Expected by the Budget Office and City leadership that this is the normal way to do business
A common language we use when talking about allocating resources and evaluating performance
See separate notes document

7. Business Plan Structure
City Vision
We want Austin to be the most livable city in the country.
Department Vision
Department Mission
Goal - 3
Program
Service
Goal - 2
Goal - 1
Activity
SSPR
SSPR = Employee Evaluation
City Mission
To be the best managed city in the country.

8. Budgeting in the City of Austin
Performance-Based Budget
Establishes programs and activities that relate to a department’s mission and goals
Aligns financial system (AIMS/AMS Advantage) to the business plans to show full cost of programs/activities
Expenses are also budgeted within each activity at a detailed level (personnel, commodities, contractuals)
Fund
Dept.
Program
Activity
Roll-Across Units
Budget Unit
Object Code
1000
8500
2PBS
2CRC
N/A
3000
5001
General
Library
Public Services
Circulation
Not all depts. use but they help with internal reporting
Circulation - Branches
Personnel Regular FT Wages

9. All Funds Budget: $3.1 billion
BIG PICTURE:
All Funds Budget: $3.1 billion
FY 2013 Approved Budget

10. Five-Year Forecast – first step in budget
General Fund:
Revenue assumptions:
5.5% Annual Growth projections over 5 years.
Average growth of the previous 5 years was 5.9%.
Revenue growth in taxes, utility transfers; fluctuating development fees
Three tax rate options
Cost drivers (committed expenditures to provide same levels of service):
Public safety contracts (step, longevity, 2.0 officers per 1,000 population)
10% annual increases in health insurance costs (7% in 2013 only)
Non-public safety annual salary increases
Supplemental pension funding
Does not include $24.6M in unmet needs
Note: Chart is from the FY Year Financial Forecast; FY 2013 General Fund is balanced at $742.7 million

11. General Fund Budget: $742.7 million
FY 2013 Approved Budget
13.0% Transfers & Other includes:
Support Services Fund Transfer
City Clerk, Mayor/Council, Mgmt. Srvcs., CPI, Law, HR, Audit, Financial Srvcs., SMBR, Government Relations
CTM/CTECC/Wireless Transfers
Other Transfers and Other Requirements

12. Budget & Financial Monitoring Tools: Controller’s Office Website
Access through cityspace
Direct link:

13. Budget & Financial Monitoring Tools: Controller’s Office Website
Nightly downloads from AIMS/Advantage (the accounting system)
Downloadable data
Searchable
Unit drill-down capabilities
Does not show Roll-Across units

14. Budget & Financial Monitoring Tools: Controller’s Office Website
Expenditure and Encumbrance drill-down capabilities
Downloadable and historical data allows for projecting future expenditures

15. Budget & Financial Monitoring Tools:
DXR Reports
Access through Controller’s Website
Program downloaded onto your computer

16. Budget & Financial Monitoring Tools:
DXR Reports
Accessing DXR
Features:
Monthly Detailed and Overview Financial Reports
Searchable

17. Budget & Financial Monitoring Tools:
Additional Resources
Your department’s Financial Manager is a valuable asset
He or she can provide you with information you need to monitor your budget
Other financial monitoring tools:
eCOMBS – login id required
Data Warehouse – permissions required

18. Budgeting Exercise

19. Performance Measurement
Layers of reporting for measures
Dashboard
Key Indicators
Performance Measures
Operational Measures
Internal Measures
Measure Definitions
Description – Why is the measure important?
Data Source – Where is the information from?
Calculation – What are the measure components?
Data Limitations – Vulnerabilities of the measure
Reporting Frequency
Staff contact

20. Performance Measurement
Performance Measure Standards
Have a clear relation to the activity
Understandable to a general audience
Reliable and verifiable
Able to track progress over time
Should help determine whether goals are being accomplished
Measure what matters
Types of Measures
Demand (citizen requests, need)
Output (count)
Efficiency (cost)
Result (percentage)
Family of Measures. Not all required for each activity, but each activity requires a variety of measures that can tell a story.

21. Performance Measurement Tools: ePerformance Measures
Internet:
Intranet:
Features:
Daily/Weekly download
Searchable
5 years of prior data
Drill-down of Department Mission and Measure info
Key indicator button
ePerformance – Online measure viewing database
Developed in 2005, updated in 2010
Increases transparency to public and front-line employees
Updated weekly, keyword or department search
Shows up to 5 years of prior year data to show trends

22. Performance Measurement Tools: ePerformance Measures
Performance & Operational measures
Read-only
Internet shows “Public” only
Intranet also shows “City of Austin”
Intranet shows more detailed descriptions

23. Performance Measurement Tools:
eCOMBS Measure module
ePerf gets its information from eCOMBS
All measure info and data are entered into eCOMBS
Data entry is exportable by fiscal year
Reports show business planning and activity pages

24. Performance-Based Decision Making
FY 2006 Strategic Add-Backs
Municipal Court in-person customer wait time
25 minutes in FY 2004, after previous years of staff reductions and increased customer call volume
Added 4 customer service staff in FY 2006 with a target of 15 minute wait
15 minute target achieved in FY 2007 and has been improving, target lowered to 12 minutes in 2012 & 10 minutes in FY 2013

25. Performance-Based Decision Making
FY 2010 & 2012 Budget Reductions
Mitigating the impact of budget reductions
Projected revenue shortfalls in the General Fund
Cost drivers exceeding revenue projections
Menu of Potential Budget Reductions
Outlined more than 250 proposals each year, including service impacts if approved
Impacts addressed included affected performance measures
In 2010, ultimately approved more than 180 proposals, totaling ~$26 million and 100+ FTEs in reductions
2012 reductions totaled ~$12 million and 6 FTEs
Having the service and measure impacts helped make budget decisions
Sales tax revenue below original projections
Development revenue and interest earning below projections
2010 >$20 million budget gap
2012 <$10 million budget gap

26. Performance-Based Decision Making
FY 2010 – Examples of Potential Budget Reductions
NOT APPROVED in the Austin Public Library
Reduce the book budget by $155,000
Current: $1.9 million. Expenditures per capita $2.90 in 2009
Benchmark: Expenditures per capita is in the lower quartile for populations 500,000 to 1 million.
Reduction would reduce expenditures per capita to $2.63
Other impacted measures: Citizen satisfaction with materials; Number of orders placed, Number of volumes received
Eliminate 2 vacant Buildings/Grounds FTEs ($81K savings)
Current: 13 FTEs ~$600,000 budget
Positions would provide custodial services to 24 library facilities
The library system services 3.8 million customers each year; challenge to keep buildings sanitary with current staffing level
Impacted measures: Customer satisfaction with cleanliness of libraries; Citizen satisfaction with overall quality of libraries
Sales tax revenue below original projections
Development revenue and interest earning below projections
2010 >$20 million budget gap
2012 <$10 million budget gap

27. Performance-Based Decision Making
FY 2010 – Examples of Potential Budget Reductions
APPROVED in the Austin Public Library
Reduce funding for cataloging resources ($69K savings)
Current: 7 FTEs and a cataloging contract
Contract processed and cataloged 14,000 books, 8,300 DVDs & 2,200 CDs
Contract elimination would require FTEs to process in-house - slower time to process and catalog
Impacted measure: Number of volumes added to the collection (but actually increased from 155K to 160K in 2010; FY 11: 225K)
Eliminate 3 vacant Youth Services FTEs ($168K savings)
Current: 30 FTEs ~$1.9 million budget
Remaining staff would cover losses at two branches
Impacted measures: Number of youth program attendees (resulting from reduced number of programs and/or reduced relationships with parents; decreased from 98K to 95K); Number of star cards issued
Sales tax revenue below original projections
Development revenue and interest earning below projections
2010 >$20 million budget gap
2012 <$10 million budget gap

28. Performance-Based Decision Making
Austin Fire Department
Using Data to Reduce the Number of Fire Deaths
Percent of fire deaths in 60+ age group over a seven-year period out of proportion with population
2006 Citizen Survey: citizens 65+ were significantly more likely to not have a smoke alarm or not change the batteries

29. Performance-Based Decision Making
Austin Fire Department
Outreach efforts
Smoke alarm installation campaign for senior citizens
2008 drop in number of fire deaths
Slow up-tick in fire deaths as media attention and efforts wane
Continued community outreach to keep awareness high
“Do Your Part - Zero Fire Deaths!” community engagement project

30. Performance-Based Decision Making
Austin Police Department - COMPSTAT
Using measures to reduce crime; Initiated in 2008
Analyze crime both aggregated and in different areas of the city
Compare with prior year for the month and year-to-date
Staffing/patrol is shifted as needed to control crime hot spots
Bi-Monthly meetings to discuss strategy
Reports are public:

31. What the Budget Office Needs Regarding Budget Requests
Budget Requests Need Both Performance and Financial Data. For example:
Why is there a need? What are you doing now to accommodate the need?
Are you meeting your performance targets? What has past performance been?
What will the performance impact be of getting / not getting the budget request? How will citizens or customers be affected?
Is there a legal mandate driving the request? What is it?
Was this service included on the Citizen Survey? If so, what was citizen satisfaction?

32. Questions / Comments