Branson City Hall – not unlike the performers in theaters across the town – is trying to stand out from the crowd when it comes to building its annual budgets.
Branson Finance Director Jamie Rouch is leading a roughly two-year effort to put the city’s budget priorities first, instead of leaning on a line-item system that is the norm for municipalities locally and around the country.
According to the consultants hired to implement its priority-based budgeting system, the city is becoming the first in Missouri to begin the policy-based approach.
Many communities operate under the guidance of a strategic plan, and those plans typically spell out a series of goals or values community stakeholders have identified as being most important to achieve going forward. With priority-based budgeting, those goals or values are considered first when budgeting.
“You budget those resources to make sure those goals get accomplished,” Rouch said. “Gone are the days when you could just take a line-item budget and increase it by 5 percent. You just can’t do that and be successful.”
Joplin native Jon Johnson, co-owner of Colorado’s Center for Priority Based Budgeting, said Branson is among roughly 60 municipalities nationwide beginning to tackle priority-based budgeting. City officials connected with Johnson’s firm through the Government Finance Officers Association.
On May 15, Johnson visited Branson to hold an orientation with city officials, and now, he said the legwork to establish the system has started. His firm is receiving roughly $40,000 from Branson over the next two years to work through the process.
Johnson, a 30-year public finance director who worked most recently for Jefferson County in Colorado, launched his business less than four years ago with a local-government peer as a way to help other institutions and officials direct public resources toward items that were most important to their constituents.
“When you have a shortfall in your household budget, you don’t cut everything across the board by 10 percent – the mortgage payment, the groceries, the dining out tab and the Netflix subscription. You would find out what things you have to preserve and what things you might have to spend less on,” Johnson said.
In Branson’s previous line-item budgeting process, for example, Rouch said money appropriated for the Fire Department this year would be carried over to 2015 and increased or decreased based on the overall revenue available. Given the city’s unique reliance on tourism for revenue to fund public services, she said its established strategic plan and community goals are all the more important in its budgeting process.
“We need to make sure we are budgeting to meet the needs of our city, specifically,” Rouch said of the city that drew 7.4 million visitors last year.
In appropriating Branson’s roughly $70 million annual budget, Rouch said the city of 10,000 needs to operate as a city of 80,000 during the tourism season, and priority-based budgeting provides such flexibility. For instance, through development of committees for environment, arts and culture, safety and transportation, the process will determine appropriate funding levels to meet goals in the city’s Community Plan 2030.
Rouch expects the new system to be in place by 2016.
Locally, several Springfield-area communities budget by line item or some variation. Nixa and Ozark use line-item budgeting, as do Marshfield and Rogersville, though they call their systems “fund-based,” which Johnson said refers to budget silos, or municipal departments with separate funds, such as the general revenue fund.
Springfield Finance Director Mary Mannix Decker said the city of Springfield uses a hybrid between line-item and priority-based budgeting where expenses are carried over, but priorities in key areas are routinely examined.
“While we ask departments to budget money in specific line items like office supplies and travel, that is primarily an aid to help them monitor their budget,” Decker said. “When council looks at budget increases each year, they look at what they have identified through conversations in the community, through the city’s strategic plan, as priorities for our community.”
Currently, Springfield City Council members plan to review the city’s $311 million proposed operating budget in the coming months as they look to add staff to the Springfield Police Department. The proposal is down in fiscal 2015 from $316 million in the current fiscal year, due primarily to a reduction in available grants.
The budget decrease has council members scrambling to meet one of its priorities: putting more police officers on the street.
While the fiscal 2015 budget could be approved as early as June 9, during the next couple of months council members plan to dig deeper through a series of meetings to find funds for the Police Department. Officials say they can later adjust the budget that is currently on deadline to be approved by the end of the fiscal year on June 30.
Decker said Springfield’s approach gives city officials flexibility.
“If a department has spent more than they ought to in travel, but they’ve spent less than they budgeted in office supplies and, overall, they balance out, we just leave it to the departments to manage at that detailed level,” she said.
To execute priority-based budgeting, Rouch said individual programs and services are examined to determine how well they meet the city’s objectives – a process now underway in Branson.
Improving public safety is a stated goal of the Branson Board of Aldermen, she said, so as city leaders work to develop the budget, if vehicles are needed for officers, that expense could be weighed against a program to encourage seat-belt usage.
For each of the city’s priorities, a committee comprising department personnel and stakeholders is formed to determine how money should best be appropriated.
“With public safety, we wouldn’t necessarily have the police chief or fire chief sitting on that committee [just] because that’s their budget,” Rouch said, adding the committee would determine funding priorities based on information provided by department leaders.
Johnson said often communities have similar priorities, but different ideas of what achieving their goals looks like.
“When we did this process in Cincinnati, Ohio, its definition of a safe community is going to look a lot different than Branson, Missouri’s. And it looks different than Walnut Creek, Calif., or Grand Island, Neb.,” Johnson said.
He said adoption of the system comes with a benefit of promoting transparency in government.
For example, in Cincinnati, 972 programs were identified through the process, each with associated costs.
“It allows both people in government and citizens to begin to see things in a different way. It also leads to more consensus on budgets and a better understanding of how resources are being used,” Johnson said.
Looking forward, Decker said she wouldn’t rule out priority-based budgeting.
“I wouldn’t say we aren’t interested. The landscape for communities moving forward is going to be very challenging financially,” she said.
Rouch said it was too soon to project any specific savings gained through the system, but she’s confident waste will be eliminated.
“This should remove any fluff and stuff,” Rouch said.
