COUNTY OF SAN MATEO

Inter-Departmental Correspondence

County Manager’s Office

DATE:

November 23, 2010

BOARD MEETING DATE:

November 30, 2010

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

David S. Boesch, County Manager

SUBJECT:

Proposed Priority Budgeting Process for FY 2011-12

RECOMMENDATION:

Adopt a Resolution:

A)

Approving the Priority Budgeting process design and implementation timeline for the Fiscal Year 2011-12 Budget;

B)

Approving six Results Areas aligned with Shared Vision 2025 Community Outcomes: Healthy Residents, Safe Neighborhoods, Economic Self-Sufficiency, Livable and Connected Communities, Environmental Stewardship and Well-Managed Government; and

C)

Authorizing the County Manager to enter into agreements through 2011 to provide one-time support during implementation, not to exceed $300,000, with quarterly updates to the Board beginning in January 2011.

BACKGROUND:

On October 5, 2010 your Board held a workshop to explore using a different budgeting process for the remainder of the County’s five-year plan to eliminate a $100+ million structural deficit by Fiscal Year 2013. The workshop was facilitated by the Public Strategies Group, which has assisted more than 20 public agencies to move toward a “Budgeting for Outcomes” model. Board Members and Department Heads learned more about the principles of Budgeting for Outcomes and its use in other local and state governments, and engaged in conversation with each other about how it could potentially work here in San Mateo County. The Board directed staff to bring back a proposed design for consideration at a future Board meeting.

DISCUSSION:

Since October 5, additional sessions were held with Department Heads, Fiscal Officers and community members to provide more information on the Budgeting for Outcomes approach and respond to questions about how a new process would work. A Project Team with representatives from the County Manager’s Office, Controller’s Office and Human Resources Department worked on a preliminary Priority Budgeting design that was presented to Department Heads for feedback on November 15 and 22.

The proposed Priority Budgeting process includes many of the key elements of Budgeting for Outcomes that will strengthen and simplify the County’s Outcome-Based Management system. Priority Budgeting will:

●

Start with available resources, not last year’s budget

●

Replace the existing incremental process that funds individual departments, with a priority-based process that funds proposals that achieve the best results for the community and address the needs of our most vulnerable residents

●

Use Requests for Results (RFRs) to ask departments to submit proposals to provide services in one of six Results Areas: Healthy Residents, Safe Neighborhoods, Economic Self-Sufficiency, Livable and Connected Communities, Environmental Stewardship and Well-Managed Government

●

Prioritize proposals based on available resources, evidence and demonstrated results, and broad-based community input obtained throughout the process

●

Create an Innovation Fund and provide incentives for innovation, cross-departmental collaboration, community partnerships and employee engagement

Priority Budgeting Activity

Timeline

Department Heads and Board review Priority Budgeting design; New process communicated to internal and external stakeholders

November-December 2010

Community and employee engagement: forums, events, online surveys and tools to obtain input on priorities

January – June 2011

Board and Department Heads review Requests for Results (RFRs) before distribution to County departments

January

Board determines available resources for FY 2011-12, including plan for using Reserves; Board sets initial allocations to six Results Areas for use in priority-setting by County Manager

February

Board reviews initial ranking of all proposals by Results Area and provides feedback to County Manager and Department Heads

April

Departments modify proposals and re-submit for final ranking

April-May

County Manager submits Recommended Budget to Board

End of May

Recommended Budget Hearings

June 20-22

Final Budget Hearing – State Budget and Final Fund Balances

September

In order to implement and institutionalize the new process, it is recommended that the Board allocate one-time funding not to exceed $300,000, and authorize the County Manager to enter into agreements through December 2011, to build staff capacity in the areas of proposal writing, change management, program evaluation and process improvement; engage employees and residents in priority-setting through internal and external communications and outreach efforts; redesign internal service charges; and make improvements to performance reporting and budget and financial systems.

Implementing Priority Budgeting contributes to the Shared Vision 2025 outcome of a Collaborative Community by allocating available resources to proposals that achieve the best results for the community and address the needs of our most vulnerable residents.

FISCAL IMPACT:

An Appropriation Transfer Request (ATR) to move $300,000 from General Fund Reserves to the County Manager’s Office for one-time implementation costs will be brought to the Board in December. Quarterly updates will be provided to the Board beginning in January.

ATTACHMENT

Proposed Design - Priority Budgeting