2. Budget Process ProblemsGoverning Board Perspective Process too time-consuming No time for long-range issues Number crunching and budget details obscure the “big picture”
3. Budget Process ProblemsGoverning Board Perspective Most budget processes build in inflationary increases, so… ….Process focuses on difficult “cuts” even when overall revenues increase.
4. Budget Process ProblemsCEO Perspective Built-in rules for bad budget behavior: Spend it or lose it Line item padding Fictional revenue
5. Budget Process ProblemsCEO Perspective Budget-balancing waits for departments’ budget requests Departments look to general fund contingency for unanticipated needs
6. The Aikido Method of Budgeting "Aikido focuses not on punching or kicking opponents, but rather on using their own energy to gain control of them or to throw them away from you. It is not a static art, but places great emphasis on motion and the dynamics of movement." Source: What is Aikido? From www.aikidofaq.com
7. The Aikido Method of Budgeting Features: Two-Year Budget Spending Targets Bottom-Line Results Carryover Savings Program Departmental BWC, Contingency
8. The Aikido Method of Budgeting Other Budget Policies: Continuing expenses should be covered by continuing revenues. Cash balances in the general fund should be sufficient to cover expenses until property tax is received in November. New development should pay for itself.
9. The Aikido Method of Budgeting CEO Perspective Starting the budget cycle--Net Budget Targets: Same $$ (net) as past year, except… …allowance for pay & benefit increase Some tweaking (rare)
10. The Aikido Method of Budgeting CEO Perspective Departments can ADD: Carryover savings from current year Departmental revenues Departments have full flexibility on line items
14. The Aikido Method of Budgeting Results “Big Picture” budget balancing while departments work on the details Incentive for finding new or expanded revenues Eliminates almost all budget tricks
15. The Aikido Method of Budgeting After Budget Adoption Strong incentive for savings Revenue doesn’t get lost in “general fund black hole” Departments watch the bottom line Departmental contingency accounts for emergencies, one-time needs
16. The Aikido Method of Budgeting Governing Board Perspective Cycle linked to Board elections Board goal-setting session at front-end of process
17. The Aikido Method of Budgeting Governing Board Perspective Time free for policy issues during “off year” Forecasts Capital Improvement Planning Program Priorities & Effectiveness
19. The Aikido Method of Budgeting Governing Board Perspective Departments manage their own budgets—no need to grovel for unanticipated needs Typically some discretionary $$ left for allocation by Board (especially one-time revenue)
20. The Aikido Method of Budgeting Governing Board Perspective Two-year budget forces the agency to match ongoing costs with ongoing revenues: cash carryover is not available to offset the second year costs.
21. The Aikido Method of Budgeting Results for City of Sandy PERS, medical insurance costs dealt with up-front Building department fully self-supporting…and with a $300,000 contingency account
22. The Aikido Method of Budgeting Results for Sandy (continued) Strong growth in non-tax revenues: (user fees, permit fees, and grants) No layoffs Healthy general fund cash balance
23. The Aikido Method of Budgeting Results for Sandy (continued) No easy solutions for general fund programs that don’t have revenue: Park maintenance Finance, administration See www.ci.sandy.or.us for the on-line budget “document”
