MOVING FROM LINE ITEM TO PERFORMANCE BASED BUDGETING

MOVING FROM LINE ITEM TO MOVING FROM LINE ITEM TO PERFORMANCE BASED PERFORMANCE BASED

BUDGETINGBUDGETING

Presented by: Dan Elsass

March 12, 2003

04/19/23 UW-Extension-Local Government Center

10.05155 VERNON C0. UWEX DEPARTMENT 2002 EXPENDITURE BUDGETLine Item Description 12/31/1999 12/31/2000 06/30/2001 Year-End 2001 2002 Dept. Admin. Rec. 2002 Adopted

5048 Repairs & Maint. 2,354.27 2,321 2,111.58 2,550 2,550 2,550 2,5505111 Salaries-Regular* 0 0 18,509.62 43,050 43,164 43,000 43,1645112 Salaries-Part-time* 0 0 2,571 3,000 3,000 2,700 3,0005113 Salaries-Overtime* 0 0 0 0 0 0 05131 Contract Services 0 0 28,687 59,095 60,277.00 60,277 60,2775151 FICA* 0 0 1,533.17 3,293 3302 3302 33025152 Retirement* 0 0 2,073 4,882 4,834 4,834 4,8345153 Health Insurance* 0 0 4,332.60 10,367 10,986 12,336.00 12,3365154 Life Insurance 0 0 77.88 170 170 170 1705223 Applause 0 0 820.5 820.5 0 0 8005225 Telephone 3,408.05 3,208.20 1,373.58 5,150 5,150 5,150 5,15054242 Comp.-WISPlan 673.2 1,280.29 745 1,450 1,450 1,450 1,4505309 Educational Res. 1,794.73 1,376 1,582.32 2,250 2,250 2,250 2,7505310 Office & Comp. Sup 2,724.88 3,350.90 3,272.02 4,500 4,700 4,300 4,7005311 Postage & Envel. 819.79 417.83 478.5 1,050 1,050 900 1,0505325 Regis. & Training 1,811.42 1,552.05 773.38 1,300 1,300 1,300 1,3005327 Fee Programs 3,097.24 -73.57 5,853.38 0 0 0 #8005329 Dues & Subs. -2,651.99 608.53 189.97 400 400 200 4005333 Mileage 3,432 5,135.89 4,024.47 4,375.00 4,750 4,375 4,7505335 Meals 395.92 705.19 129.43 550 550 400 5505336 Lodging 499 397.45 190.39 600 600 450 6005398 Van Expenses 539.18 1,978.27 217.43 900 900 900 1,1505803 Computer Purchase 6,288 4,351 1,263.90 2,670 2,670 2,670 2,6705810 Capital Outlay 999.28 956.5 0 0 0 0 0

Total Expends. 75,540.12 152,422.50 151353 153,514 157,753


HOW TO CHANGE TO A PROGRAM HOW TO CHANGE TO A PROGRAM BUDGETBUDGET

• List Major Programs in Order of ImportanceList Major Programs in Order of Importance

• Only list 5-10 Major Programs Whether Short Only list 5-10 Major Programs Whether Short term or Ongoingterm or Ongoing

• Rearrange spending and personnel costs by Rearrange spending and personnel costs by programprogram


INCLUDE THE FOLLOWING FOR INCLUDE THE FOLLOWING FOR EACH PROGRAM:EACH PROGRAM:

• A brief description of the programA brief description of the program

• Its authorization and funding sourcesIts authorization and funding sources

• Client groups to be servedClient groups to be served

• Number of FTE employees involvedNumber of FTE employees involved

• Organizational chartOrganizational chart

• Past accomplishments and new initiativesPast accomplishments and new initiatives


Account #__________ Department ______________ Program _________________

BUDGET ANALYSIS BY PROGRAM____________________________________________________________________________________________

PROGRAMS

Positions

Salaries

Fringe Benefits

Operating Exps.

Capital Outlay

Contracted Serv.

Consultant Fees____________________________________________________________________________________________ SUB-TOTAL

Indirect Cost Alloc.

____________________________________________________________________________________________

TOTAL EXPS.____________________________________________________________________________________________

REVENUES

____________________________________________________________________________________________

County Share____________________________________________________________________________________________


Account #5134 DepartmentUW-Extensiont UW-Extension Program Grape Project


PROGRAMS__________________________________________________________________________________________Years 2001 2002 2003

Positions 1.5 1.5

Salaries 48,000 49,400

Fringe Benefits 14,880 16,320

Operating Exps. 3,839 3,200

Capital Outlay 0 0

Contracted Serv. 0 4,000

Consultant Fees 0 800____________________________________________________________________________________________

SUB-TOTAL 66,719 73,720

Indirect Cost Alloc. 0 0

____________________________________________________________________________________________

TOTAL EXPS. 66,719 73,720____________________________________________________________________________________________

REVENUES 3,839 8,000

Net Expends. 62,970 65,720

County Share 0 0 0____________________________________________________________________________________________


PERFORMANCE BASED PERFORMANCE BASED BUDGETING--WHY DO WE DO IT?BUDGETING--WHY DO WE DO IT?

• Provide better public servicesProvide better public services

• Eliminate duplicationEliminate duplication

• Provide more cost efficiencyProvide more cost efficiency

• Produce results desired and understood by Produce results desired and understood by the publicthe public

• Improve decision-making by Board and Improve decision-making by Board and committeescommittees

BASIC LANGUAGE OF PERFORMANCE REVIEW

• Mission Statement -- What is each city or county department’s general purpose ?

• Program Descriptions -- How does each department fulfill this mission and what are its major activities?

• Goals -- Broad statements that describe a desired situation to be attained


BASIC LANGUAGE (CONT.)BASIC LANGUAGE (CONT.)

• Inputs Inputs -- Resources used to produce Resources used to produce services such as money, labor, facilities, services such as money, labor, facilities, technology, equipment, supplies, etctechnology, equipment, supplies, etc.

• Outputs -- The goods and services produced The goods and services produced or delivered by the departmentor delivered by the department

• OutcomesOutcomes -- The quantifiable or otherwise The quantifiable or otherwise measurable results or impacts of department measurable results or impacts of department actions (whether intended or unintendedactions (whether intended or unintended)

MORE DEFINITIONSMORE DEFINITIONS

• Performance GoalsPerformance Goals -- Clear, pre-determined -- Clear, pre-determined targets for measuring the value of program targets for measuring the value of program activitiesactivities

• Performance MeasurementPerformance Measurement -- The process of The process of assessing progress toward meeting goals; the assessing progress toward meeting goals; the quantitative and qualitative description of quantitative and qualitative description of performance; and indicators of work performed performance; and indicators of work performed or services provided.or services provided.


HOW TO SET SMART GOALSHOW TO SET SMART GOALS

• A A SMARTSMART Goal is defined this way: Goal is defined this way:

– SSpecific - Is the Goal clear and to the point?pecific - Is the Goal clear and to the point?– MMeasurable - Can you tell if it is accomplished?easurable - Can you tell if it is accomplished?– AAttainable - Is it a realistic target?ttainable - Is it a realistic target?– RRelevant - Is it a priority of the organization?elevant - Is it a priority of the organization?– TTrackable - Results are compared over time?rackable - Results are compared over time?


EXAMPLES OF SMART GOALSEXAMPLES OF SMART GOALS

Example #1:Example #1:

NOTNOT LIKE THIS: To satisfy all residents LIKE THIS: To satisfy all residents

regarding recycling issuesregarding recycling issues

LIKE THIS: To respond to all recyclingLIKE THIS: To respond to all recycling

complaints within 24 hourscomplaints within 24 hours


FURTHER SMART GOALSFURTHER SMART GOALS

NOTNOT LIKE THIS: To save all existing jobs LIKE THIS: To save all existing jobs

in the County Parks Dept.in the County Parks Dept.

LIKE THIS: To provide my County board LIKE THIS: To provide my County board

with at least 200 letters of support for with at least 200 letters of support for

each of the five major programseach of the five major programs

Parks provided in the past year.Parks provided in the past year.


USING “BENCHMARKS”USING “BENCHMARKS”

• Internal benchmarksInternal benchmarks

– Overall spendingOverall spending

– Growth in tax baseGrowth in tax base

– Growth in incomeGrowth in income

– New home startsNew home starts

– Miles within service Miles within service areaarea

• External comparablesExternal comparables

– Private sector wagesPrivate sector wages

– Neighboring citiesNeighboring cities

– Similar sized countiesSimilar sized counties

– State wide groupingsState wide groupings

– Statewide averagesStatewide averages


MEANINGFUL BENCHMARK MEANINGFUL BENCHMARK STANDARDSSTANDARDS

• Program $’s spent per capitaProgram $’s spent per capita

• Spending per $1,000 property assessmentSpending per $1,000 property assessment

• Percentage growth over timePercentage growth over time

• Adjustments for inflationAdjustments for inflation

• Other specific service standardsOther specific service standards


MEANS FOR DISPLAYING MEANS FOR DISPLAYING OUTCOMESOUTCOMES

• Use bar charts (ex.Use bar charts (ex.

Urban youth in 4-H) >Urban youth in 4-H) >

• Provide trend lines Provide trend lines based on first yearbased on first year

• Use per participant Use per participant costscosts

0

10

20

30

40

50

60

1st

Qtr

2nd

Qtr

3rd

Qtr

4th

Qtr

OurCountyCounty X

County Y

Class Exercise-Case StudyClass Exercise-Case Study

The Vernon CountyThe Vernon County

““Grape Growing Substitution Grape Growing Substitution Project”Project”


Account #5134 DepartmentUW-Extensiont UW-Extension Program Grape Project


PROGRAMS__________________________________________________________________________________________Years 2001 2002 2003

Positions 1.5 1.5

Salaries 48,000 49,400

Fringe Benefits 14,880 16,320

Operating Exps. 3,839 3,200

Capital Outlay 0 0

Contracted Serv. 0 4,000

Consultant Fees 0 800____________________________________________________________________________________________

SUB-TOTAL 66,719 73,720

Indirect Cost Alloc. 0 0

____________________________________________________________________________________________

TOTAL EXPS. 66,719 73,720____________________________________________________________________________________________

REVENUES 3,839 8,000

Net Expends. 62,970 65,720

County Share 0 0 0____________________________________________________________________________________________

Documents

MOVING FROM LINE ITEM TO PERFORMANCE BASED BUDGETING