Strategic planning and data-driven performance based budgeting for Haverhill, MA by MBA students from Brandeis University. A way to base funding on priorities and measured results!

1. A Prospect for Haverhill
Performance-Based Budgeting For A Better Tomorrow
Ariela Lovett, Maria Bennett, Biructait Mengesha,
Lena Muntemba, and Elaine Theriault
October 3, 2017

2. PRESENTATION AGENDA
• Introduction to project
• Project methodology
• Current budget process
• Performance-based budgeting
• Best Practice Cities
• Implementation
Introduction

3. FROM QUEEN SLIPPER CITY TO PROSPECT CITY
Introduction

4. FRAMING QUESTIONS
1) Will performance-based budgeting improve Haverhill’s
budget development and approval process?
1) Is performance-based budgeting actually feasible in the
current context of Haverhill city government?
Introduction ImplementationIntroduction

5. Stakeholder Interviews External Research
Best Practice City
Interviews/Research
MBA Framework Analysis
PROJECT METHODOLOGY
Introduction

6. SNAPSHOT OF HAVERHILL CITY GOVERNMENT
• Mayor-Council government
• Strong mayor government
• 9 City Councilors
• 20 City Hall departments
• Key stakeholders:
• Mayor
• City council
• Department heads + staff
• Residents
Introduction

7. HAVERHILL’S CURRENT BUDGET PROCESS
ImplementationIntroductionCurrent Process

8. FEEDBACK FROM STAKEHOLDERS
Desires:
• More transparent budget process
• More involvement in budget process
• Strategic plan for the city
• More resources, more staff
• More leeway to add to budget
All of this and...
• Minimal increases to budget to keep taxes low
Current Process

9. HAVERHILL’S CURRENT BUDGET PROCESS
Traditional
Budget
Process
Previous Year
Expenditures
Expected Revenue
Mayor’s Priorities
Relies heavily on prior year estimates
PBB 101

10. PERFORMANCE-BASED BUDGETING 101
Performance-
Based Budget
Process
Resources allocated based on expected outcomes
Previous Year
Expenditures
Expected Revenue
Mayor’s Priorities
Citywide Priorities
Citywide Goals
Key Performance
Indicators
PBB 101

11. Challenges
➢ Requires strong buy-in from
management
➢ Needs committed staff and resources
➢ Long implementation timeline
➢ Commonly misunderstood as pay-for-
performance
Benefits
➢ Effective use of limited resources
➢ Ensure accountability among those
responsible for management
➢ Facilitates budget decision-making
➢ Preferred by Government Accounting
Standards Board (GASB)
PERFORMANCE-BASED BUDGETING
PBB 101

12. ● Outcome-driven budget decision-making
● Transparent budget process for all stakeholders
● Quality service to residents
Performance-Based Budgeting Has Potential To
Transform Haverhill Budget Process
CONCLUSION:
PBB 101

13. BEST PRACTICE CITIES
These cities have successfully implemented performance-based budgeting for at least three years
Cities Interviewed:
Bellevue, Washington citizen engagement
Conroe, Texas strong mayor
Lowell, Massachusetts Prospect City
River Falls, Wisconsin small capacity
Rock Hill, South Carolina connecting daily performance to strategic plan
Sunnyvale, California leading expert
Best Practice Cities

14. BEST PRACTICE CITIES
Key Lessons Learned:
Requires full-time or part-time staff commitment
Does not require a huge financial commitment
Adoption is an incremental process
Pilots are crucial to success
Provides for a more interactive budget process
Best Practice Cities

15. ROAD TO PERFORMANCE BASED BUDGETING
Criteria for Recommendations:
• Takes advantage of Haverhill City Hall’s strengths
• Reflects insight from “best practice cities”
• Considers Haverhill City Hall’s capacity constraints
• Increases transparency
Establish City Priorities
1. Collect...
2. Evaluate...
3. Understand...
4. Identify…
5. Publicize...
Phase
Step
Implementation

16. Establish City Priorities
1. Collect citizen input
2. Evaluate capital assets
3. Understand stakeholder
interests
4. Identify city priorities
5. Publicize priorities
ROADMAP FOR IMPLEMENTATION
Develop Approaches to
Achieve Priorities
1. Build capacity
2. Outline dept. roles
3. Identify dept. roles and
activities in budget
4. Explore possibility of
benchmarking
Develop Budget that
Reflects Approaches
1. Develop guidelines for
budget proposals
2. Solicit stakeholder input
3. Publicize budget
information
Implementation

17. Estimated Time of Arrival
Pre-FY ‘19 July - Dec 2018 Jan - July 2019 July - Dec 2019
Implementation - Analyze 311 calls
- National Citizen Survey
- Extend GIS mapping
- Work with post-
secondary institutions
- City priorities retreat
- Publicize priorities
- Begin pilot
- Hire a data analyst
- Taxonomy priorities
- Implement
appropriate
management tools
- Request proposal
additions from pilot dept.
- Explore benchmarks
- Develop 2-year
budget
- Publicize budget and
performance data
- Edit proposal
requirements
- Build data dashboard
- Solicit citizen input
Implementation
Implementation
Implementation

18. ARRIVING AT A BETTER TOMORROW
Better serving residents
Making informed decisions
Following a shared vision
Implementation

19. Thank You
Question & Answer

20. Appendix

21. Performance-
Based
Budgeting in
Action
Citywide Priority
Safer Neighborhoods
Departmental Goals
Reduce Police response time to critical emergency by 15% by June 30,
2019
Department Key Performance Indicators (KPI)
Average monthly police response time to critical emergencies
Police Department’s Budget Proposal Desired Outcome
Reduce police response time to critical emergency
Performance Metrics
Evaluation of Police response time to critical emergencies, community
feedback
Police Departmental Budget Proposal
Adding 9 Police Officers to patrol unit will allow the Police Department to
meet its goal of reducing its response time
PBB 101

22. BEST PRACTICE CITIES
Criteria for Selection:
Successfully implemented performance-based budgeting, in various forms, for at least three years
Small city with a population of around or less than 150,000 residents
Open budget information that is communicated clearly on the city’s website
A city that was mentioned as a best example for outcome-oriented or performance-based budget in
the sources we read for our literature review
Willing and available to speak with us within the timeframe of this project

23. BEST PRACTICE CITIES
Interview Questions:
What are the city’s priorities?
How do you allocate resources?
Who is responsible for managing the performance-based budgeting initiative?
What technology is used?
What challenges have you faced?
What do you wish you had known before implementing this new budgeting process?

24. Best Practice City
Bellevue, WA: Citizen Engagement
About Bellevue: A city outside of Seattle with 139,814 residents and a strong council-manager
government; it has championed PBB for nearly a decade.
Why Bellevue likes PBB: By engaging in a biennial process of budgeting-for-outcomes, Bellevue focuses
on citywide priorities and monitors whether the city is meeting its residents’ expectations. The city
conducts an annual citizen survey and aligns citizen priorities with those of City Hall and City Council.
Challenges of PBB: Ensuring that the collected data is quantifiable.
Lessons Learned: Use Open Budget to communicate city priorities and to make the budget interactive
and understandable. Rather than simply posting their budget report, Bellevue uses Open Budget to
categorize expenses and revenues into outcomes, proposal, and fund, which is helpful to residents. In
addition, strong buy-in from city council and upper management is crucial to successful implementation.

25. Best Practice City
Conroe, TX: Incremental Change
About Conroe: A city of 71,879 residents with mayor-council government, growing rapidly in both
population and land size; its $133mil GFOA-awarded budget focuses on quality resident services while
maintaining low tax rates.
Why Conroe likes PBB: Conroe is beginning its transition to PBB by incorporating strategic planning,
goals, and objectives. Adding goals and objectives to department budget requests allows decision-makers
to weigh a department’s request against the department’s purpose – with limited funds, decision-makers
need to understand the value of each department.
Challenges of PBB: Allocating sufficient time to create department performance metrics and marrying
department goals with citywide goals.
Lessons Learned: Take it one step at a time – start with one or two departments that can be easily
measured, and when a successful habit is formed, begin with another department.

26. Best Practice City
Lowell, MA: A Prospect City
About Lowell: A post-industrial city of 110,720 residents with a council-manager form of government;
focused on four pillars: public safety, education, economic development, and quality of life.
Why Lowell likes PBB: Using a STAT program for PBB is a great opportunity to get departments and
senior city officials in the same room to check on progress, pitch ideas, and see trends. Lowell practices
include: sharing a one-page memo with City Councilors monthly; releasing monthly PowerPoints to City
Council and the public; and occasionally holding review sessions during neighborhood meetings to show
residents what City Hall is doing.
Challenges of PBB: Buy-in is essential. Making sure departments understand that the City is trying to
make their lives easier, not be a watchdog.
Lessons Learned: PBB requires full-time data analyst(s) devoted to the initiative (often its only additional
expense). It takes a few years to get up and running and is a year-round process. Pilots are crucial to
implementation, as cities need to show how the initiative will save money.

27. Best Practice City
River Falls, WI: Working with Small Capacity
About River Falls: A small city of 15,339 residents and 129.4 city employees, a strong-mayor form of
government, and a median household income of $48,936. Its GFOA-awarded biennial budget allotted
$82.9mil for 2017-18.
Why River Falls likes PBB: The city felt it was time to mature and establish a direction. They were
approached from multiple stakeholders, asking “why aren’t you doing this?” Given their small capacity, the
city needed a strategic plan to determine what to focus on and what to say “no” to.
Challenges of PBB: Refining performance measurements so that they capture more value, rather than
just what can be easily counted.
Lessons Learned: Strategic planning is much easier on everyone when a city does a biennial budget (or
two one-year budgets simultaneously). Bring on a Fellow to ease the workload, and contract with the
National Research Center to administer a citizen survey. Finally, make the budget readable for citizens by
adding narrative.

28. About Rock Hill: A city of 72,397 with a manager-council government; its ICMA-awarded budget of
$225.7mil emphasizes “quality services, quality places, and a quality community”.
Why Rock Hill likes PBB: It helps to avoid mission creep, in both good and bad financial times. With
limited funds, PBB encourages cities to stay within what will achieve their goals. Moreover, it’s a great way
for departments to “tell their story.”
Challenges of PBB: Benchmarking with other cities, and ensuring that performance measurements aren’t
too easy.
Lessons Learned: Start with a strategic plan, and then ease into the performance budgeting - a shared
vision makes everything easier. Also, prepare for a long road ahead.
Best Practice City
Rock Hill, SC: Connecting Strategy to Daily Operations

29. Best Practice City
Sunnyvale, CA: A PBB Role Model
About Sunnyvale: A Silicon Valley city with 151,760 residents and a manager-council government; it has
championed PBB for almost 30 years.
Why Sunnyvale likes PBB: It provides clarity on the cost of providing a service, and demonstrates why
requested funding will be useful.
Challenges of PBB: Sunnyvale is currently improving transparency and making information more
interactive.
Lessons Learned: Submit a budget every two years, and spend several weeks reviewing the long-term
financial plan every year. Develop a strong budget analyst department to support different areas of the
capital improvement plan and different departments. Identify champions in each department, and work
with managers to help them understand reporting requirements.

30. HAVERHILL DEPARTMENTS INTERVIEWED
• 311 Constituent Services
• Community Development Block Grant
• Economic Development and Planning
• Finance
• Fire Department
• Health and Inspections
• Human Services
• IT Consultant
• Police Department
• Public Works
• Solid Waste & Recycling

31. Resources
Budgeting Best Practices:
National Advisory Council on State and Local Budgeting (1999). Recommended Budget
Practices: A Framework for Improved State and Local Government Budgeting. Government Finance Officers Association.
Retrieved from: http://www.gfoa.org/sites/default/files/RecommendedBudgetPractices.pdf
Geraghty, L. & Klosek, K. (2016). Performance-Based Budgeting. Retrieved from
https://www.gitbook.com/book/centerforgov/performance-based-budgeting/details.
Sample Budgets: Refer to the cities of Rock Hill, SC; Lowell, MA; and Bellevue, WA
Sample Strategic Plans: Refer to the City of Lowell, MA (http://www.lowellma.gov/716/Comprehensive-Master-Plan.)
Grant Opportunities:
Massachusetts Community Innovation Challenge Grant - previous cohort of recipients included Amesbury, Lowell, Somerville,
Woburn, and Worcester