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How To Build Your Municipal Budgeting Process Around City Objectives

Most municipalities would be quick to say their budget is tied to their overall municipal goals, even if the tie is loose. But in a larger sense, your objectives should be coming from your city’s

Director & Rochesterian

 

Most municipalities would be quick to say their budget is tied to their overall municipal goals, even if the tie is loose. But in a larger sense, your objectives should be coming from your city’s specific strategic plan so that the right priorities are funded appropriately. In other words, your municipal budgeting process should be completely built around the objectives on your strategic plan.

Clearly communicate your municipal strategic plan with the help of the Balanced Scorecard.

Whether you heard about this process at a conference, you saw a municipality similar to yours pull it off, or you simply want to improve, this article is a great starting place. Take a look at these three steps to get started.

How To Build Your Municipal Budgeting Process Around City Objectives

1. Recognize the importance of tying budget items to your measures and objectives.

There are, without doubt, going to be some items that need to be funded due to state or federal mandates or local ordinances, and those items won’t necessarily be tied to your strategy. But any budgeted items that fall outside of this exception should be tied directly to your measures and objectives. That way, you’ll be able to actually highlight focus areas that are or aren’t doing well and why they need a particular portion of your city budget.

In some cases, you can have a “strategic budget” that is separate from your mandated budget. You can constantly push for your mandated activities to be accomplished more effectively to save money, and then have a separate strategic budget for all of your investments in municipal activities.

2. Compare previous budgets with your current strategic plan.

The positive thing about the budgeting process is that you have years of previous budgets to look at and draw upon. So one of the first steps you should take when building your budgeting process around city objectives is to compare past budgets with your current strategic plan and objectives. This should give you an idea of what you’ve dealt with previously in your budgeting and whether there are any recurring budgeted items that would tie in nicely to some of your current objectives. This begins the process of strategic alignment.

3. Explain the connection between your city budget and strategy to all departments.

When you present your city-wide strategic plan to each department, explain that funding requests should directly connect to objectives. Your strategic planning maturity will dictate how simple or difficult of an exercise this is. For instance, if you’re holding regular meetings to walk through your strategic plan, departments should be comfortable and well-versed in your strategy. If not, this is an opportunity to get buy-in.

Simply put, if you show that the strategic plan is going to dictate their funding opportunities, employees will start to pay more careful attention.

Still wondering if building your budgeting process around your objectives is important?

Consider these important points:

  • Your strategic plan gains automatic credibility when it directly correlates with your finances. If your budget doesn’t have anything to do with your strategy, your strategic plan is just a “stand-alone” document.
  • Citizen input will have already been considered before the budget is approved. Your finalized budget will need to be approved by your city council, who often takes citizen input into account. But if you’ve already created and integrated a strategic plan and included the community in its development, then allocating budget and resources tied to your strategy becomes a great deal easier. Essentially, you’ve already demonstrated that the objectives are important in the community—so the budget just ensures you’re putting financial resources behind them.
  • Departments will have an opportunity to check in more regularly with their goals. Throughout the year, departments look at their spending compared to the agreed-upon budget and sometimes have to re-evaluate their budgeting decisions. If your budget is directly linked to your strategy, departments can use this re-evaluation as an opportunity to look at their goals. For instance, is the spend rate influencing the outcome of a measure or a goal? Why or why not?

“What’s my next step?”

If you build your municipal budgeting process around city objectives with the right tools, you’ll actually be able to show that your citizens’ tax dollars are going to the right areas. The particular tool that will help with this is one that will also help attract businesses, citizens, and investments to your community—a community dashboard.

A community dashboard is a three-layer website that promotes transparency through a visually communicated strategic plan. Take a look at this free ebook for detailed information about what each “layer” should include, examples of sample community dashboards, and to-do lists to get you started.

How To Build Your Municipal Budgeting Process Around City Objectives
 

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