Performance Measurement as a Budgeting Tool

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Performance Measurement as a Budgeting Tool

• City of San Jose
• Monday, September 22, 20031015 a.m. to 1145
  a.m.Ballroom A

ICMA Annual Conference 2003
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Objectives for Today

• Brief Introduction to Investing in Results
  (IiR)
• Application of IiR in Balancing San
  Joses Budget
• Results Achieved and Upcoming Challenges for this
  Work in Progress

Performance Measurement as a Budgeting Tool ICMA
Annual Conference 2003
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Who We Are

• San Jose, California population 923,000
• Combined Operating / Capital Budget of 2.9B
• 7,500 employees
• 23 departments and offices
• City Council consisting of a Mayor and
• 10 District Council members (term-limited)
• Council / Manager form of government
• 9 Collective Bargaining Groups
• 1 City Labor Alliance (CLA)

Performance Measurement as a Budgeting Tool ICMA
Annual Conference 2003
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Current Environment

• San Jose has lost 90,000 jobs since 2000
• State budget balancing could impact General Fund
  revenue by as much as 58 M (9)
• Decade of Investment fueled by three G.O. bond
  and Airport revenue bond issues
• All employee contracts expire next year
• Mayor in last term of office
• 10 Mini-Mayors

Performance Measurement as a Budgeting Tool ICMA
Annual Conference 2003
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Performance Measurement as a Budgeting Tool ICMA
2003 National Convention
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IiR - Vision and Mission
Vision The City of San Jose is a Customer
Focused, Results Driven Organization
Mission Deliver the Highest Quality Service in
the Most Cost-Effective Manner
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Annual Conference 2003
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What is Investing in Results (IiR)?

• IiR is a merger of initiatives
• Performance-Based Budgeting
• Continuous Improvement
• PublicPrivate Managed Competition
• Customer Service

Performance Measurement as a Budgeting Tool ICMA
Annual Conference 2003
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Principles of IiR

• Involvement and Partnership
• Elected Officials
• Customers
• Employees
• Meaningful, Useful, Sustainable
  Performance Measures
• Commitment, Capacity, Communication
• Learning Before Scorekeeping

Performance Measurement as a Budgeting Tool ICMA
Annual Conference 2003
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Service Delivery Framework Performance Measures
Vision For Quality of Life
7 City Service Areas
75 Core Services
100s Operational Services

• Neighborhood Pride
• Efficient Transportation
• Competitive Business Environment
• Safe Community
• Customer Driven Government
• Personal Growth and Enrichment
• Clean and Sustainable Environment

• Mayor Council policy setting and investment
  direction
• Big-picture of community conditions
• Strategic business plans
• Cross-departmental management accountability
• Aligns to vision

• Departments key lines of business
• Translation of CSA plans to action
• Departmental management accountability
• Aligns to CSAs

• Front-line service delivery
• Make improvements
• Work unit management accountability
• Aligns to core services

Performance Measurement as a Budgeting Tool ICMA
Annual Conference 2003
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Balanced Set of Performance Measures

• Quality

• Cost

• Cycle Time

• Customer Satisfaction

Performance Measurement as a Budgeting Tool ICMA
Annual Conference 2003
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7 City Service Areas
Transportation
Recreation Cultural
Aviation

• CSAs provide a forum for
• Strategic business planning
• Connecting policy to action
• Recommendinginvestments

Strategic Support
Public Safety
Economic Neighborhood Development
Environment Utilities
75 Core Services
Performance Measurement as a Budgeting Tool ICMA
Annual Conference 2003
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Balanced Budget Strategy

• Advances Corporate Priorities and addresses our
  Triple Bottom Line

• Identifies Customer Priorities Delivers on
  Results
• Engages our Workforce Positively
• Stays in Balance

Satisfied Customers
Engaged Employees
Balanced Budget
Performance Measurement as a Budgeting Tool ICMA
Annual Conference 2003
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Customers as Partners

• Strong Neighborhood top ten priority lists
• Bond Projects
• Council Economic Development Sessions
• Manage Expectations

Balanced Budget
Engaged Employees
Satisfied Customers
Performance Measurement as a Budgeting Tool ICMA
Annual Conference 2003
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Employees as Partners

• Employees at all levels involved in meeting
  identified priorities
• CSA/Core/Operational service teams identify
  efficiencies/find capacity
• Labor a partner from the beginning

Satisfied Customers
Balanced Budget
Engaged Employees
Performance Measurement as a Budgeting Tool ICMA
Annual Conference 2003
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Employees As Partners
Performance Measurement as a Budgeting Tool ICMA
Annual Conference 2003
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City Service Areas as Partners

• CMO partners with CSAs in collaborative approach
  to meet reduction targets
• Alternative funding sources
• Creative use of one-time sources
• Contracting-In

Satisfied Customers
Engaged Employees
Balanced Budget
Performance Measurement as a Budgeting Tool ICMA
Annual Conference 2003
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IiR Results Accomplished

• Performance-Based Budget developed and
• implemented in 3 years
• Balanced set of results-based performance
  measures developed for 7 City Service Areas
  (CSAs) and 75 Core Services
• Community Surveys conducted in 2000 and 2001
• Employee Surveys conducted in 2001 and 2002
• No grievances filed on IiR process

Performance Measurement as a Budgeting Tool ICMA
Annual Conference 2003
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Budget Results Accomplished

• Budget document changing from departmental focus
  to a functional, service delivery focus
• Budget hearings organized by CSA
• Council questions beginning to focus on CSA
  Business Plans and performance data vs. inputs
• 95M shortfall balanced with no layoffs
• Avoided catastrophic service cuts so far
• Rainy day reserves largely intact
• Counter-cyclical capital investments continue

Performance Measurement as a Budgeting Tool ICMA
Annual Conference 2003
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Cultural Changes Accomplished

• City Council Agenda organized by CSA
• Council Committees named by Outcome
• Aligning Boards Commissions to IiR Model
• 2004-2005 Budget Document to be organized by CSA
  and related Core Services (Departments
  disappear!)
• CSAs and performance data becoming part of the
  vocabulary

Performance Measurement as a Budgeting Tool ICMA
Annual Conference 2003
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Balancing Our Budget Challenges for 2004 and
Beyond

• Our Local General Fund shortfall at least 55
  M for 2004-2005
• Solutions used to date will not get us through
  to recovery in 2-5 years
• All City employee contracts expire in 2004

Performance Measurement as a Budgeting Tool ICMA
Annual Conference 2003
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Balancing Our Budget Challenges for 2004 and
Beyond

• About Adapting not Coping
• Service impacts of Stealth cuts will begin to
  appear on radar screen
• Opportunities for structural changes in service
  delivery
• Continuing culture changes
• Economic Development Strategies incorporated into
  CSA Business Plans

Performance Measurement as a Budgeting Tool ICMA
Annual Conference 2003
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Change is Hard
I know evolving from hunting and gathering to
agriculture is tough, but hey, no one said change
is easy!
Performance Measurement as a Budgeting Tool ICMA
Annual Conference 2003
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