4/6/2022
1 RiversideCA.gov
City Council
April 18, 2022
City Manager’s Office
Finance Department
PRIORITY BASED
BUDGETING UPDATE
RiversideCA.gov
BACKGROUND
Priority Based Budgeting (PBB) is a budget-
decision methodology and data-analytics
software created by Resource Exploration
(ResourceX). PBB supports the decision-making
process to assign resources to programs and
services that align with the City’s strategic plan
and helps to ground the decision-making
process for the upcoming budget cycle within
the constraints of the existing fiscal environment.
1 2
4/6/2022
2 RiversideCA.gov
BACKGROUND (CONTINUED)
• August 2020, the City Council approved a
Professional Services and License Agreement for
Priority Based Budgeting Software with ResourceX
and a team of City staff was formed to develop a
PBB model for the City of Riverside.
• September 2020, a team of approximately 50 staff
from all City departments began development of
the City’s PBB model, which consisted of five primary
tasks: Program Inventory, Cost Allocations, Program
Scoring, Peer Review, and Program Insights.
RiversideCA.gov
WE ARE HERE
ER25 & PBB IN CONTEXT:
Deliver the
Outcomes
of the Policy
Direction
Generate
the
Information
& Systems to
Implement
Understand
the Policy
Direction
A Framework for Where We Are & Where We Are Going
3 4
4/6/2022
3 RiversideCA.gov
CITY COUNCIL APPROVED FOUNDATIONS
Understand
the Policy
Direction
Step 1: Develop and
Approve Envision
Riverside 2025
Strategic Plan (ER25)
Step 2: Embrace
Priority Based
Budgeting as Tool
to Implement ER25
RiversideCA.gov
CITY STAFF DEVELOPED (“Super Users,” DLT, ELT)
Step 3A: Established and Set Into
Motion Leadership Team, Cross-
Cutting Working Teams, &
Priority Working Teams to
Implement Envision Riverside
2025 Strategic Plan (ER25)
Step 3B: Organize and
Engage City Staff Teams
to Use the Priority Based
Budgeting Tool to Define,
Refine, Organize & Score
Line-Item Budget
Programs with ER25
Program
Insights
Program
Scoring
Peer
Review
Program
Inventory
Line
Items
Generate
the
Information
& Systems to
Implement
5 6
4/6/2022
4 RiversideCA.gov
CITY STAFF DEVELOPED
Step 4A: Identify Unfunded Critical Needs and
Supplemental Budget Requests consistent with ER25 that
were not part of the Line-Item Budget evaluated as part Steps 3A and 3B of the Priority Based Budgeting process Step 4B: Evaluating and Developing
Recommendations Regarding PBB
Quartile Programs, Unfunded Critical
Needs, and for Decision-Making and
the Priority Based Budgeting Tool to
Define, Refine, Organize & Score
Line-Item Budget with ER25
Generate
the
Information
& Systems to
Implement
Is/Does the Program:
• Legally required/CC directed?
• Essential for public health,
safety, welfare?
• Specifically implement ER25
Cross-Cutting Threads/Priorities?
• Established or New and Need
Right-Sizing or Transition to a
New Version of Itself?
RiversideCA.gov
CITY COUNCIL DIRECTION
Step 5: Present the 1st Annual Report on ER25
Implementation to the City Council and
Receive Policy Direction for Year 2 based on
Outputs from Step 3A
Deliver the
Outcomes
of the Policy
Direction
Step 6: Present FY 2022/23 – 2023/24 Biennial
Budget to the City Council and Receive
Direction on Recommendations from Step 4B
Future Steps: Refine and Repeat Based on
City Council Direction
7 8
4/6/2022
5 RiversideCA.gov
PRIORITY BASED BUDGETING PROGRAMS
Programs
Programs
Line-Item Budget - PBB
Mandates
and Envision
Riverside 2025
RiversideCA.gov
RESOURCE ALLOCATION LIFE CYCLE
Strategic Plan
Defines our priorities,
includes workplan for
achieving goals.
PBB Tool
Provides data for
funding decisions.
Performance
Measurement
Measures whether workplan
and resource allocation are
producing the desired results.
Line-Item Budget
Incorporate funding
decisions into the line-
item budget.
Fund what
matters and
what works.
9 10
4/6/2022
6 RiversideCA.gov
STRATEGIC PLAN
Fund what
matters and
what works.
Provides the framework for all parts of the
Resource Allocation Lifecycle.
• Cross-cutting Threads
• Strategic Priorities
• Goals and Indicators
• Operational Workplan (Actions)
• Performance Metrics
STRATEGIC PLAN
RiversideCA.gov
PBB TOOL
Fund what
matters and
what works.
A decision-making tool that provides relevant
data to facilitate informed decision-making
about what to fund.
• Programs: What do we do? (Programs)
• Costing: How much does it cost? (Costing)
• Scoring: Is what we do aligned with our
strategic plan? (Scoring?)
• Insights: Are there actions that could be
taken to improve program effectiveness,
efficiency, and alignment with the Strategic
Plan?
PBB Tool
11 12
4/6/2022
7 RiversideCA.gov
LINE-ITEM BUDGET
Fund what
matters and
what works.
Identifies resources available to fund City
activities and sets the boundaries for what we
can afford to do.
• Revenue Projections
• Baseline Budget
• Budget Targets
• Long-term financial planning
• Ensure that proposed funding is
sustainable
• Strategies for financial health and
sustainability
Line-Item Budget
RiversideCA.gov
PERFORMANCE MEASUREMENT
Fund what
matters and
what works.
Performance metrics measure the effectiveness
of our actions and funding decisions in
achieving the goals defined in the strategic
plan.
• Indicators – The areas that we expect will be
impacted by the actions.
• Performance Metrics – The specific
measurements by which we identify whether
we are positively impacting the indicators.
• Provides data that will identify the need
for adjustments to the operational
workplan.
PERFORMANCE MEASUREMENT
13 14
4/6/2022
8 RiversideCA.gov
PBB – Year 1 (2020)
Program Costing
Utilizing the 2019/20
adopted budget, each
department identified
resources generated and
used by program
activities.
Data Attributes:
Revenue Generated
Personnel Allocations
Program Cost
(including overhead)
Program Inventory
Each department
identified what they do.
Data attributes:
Program Name
Program Description
Program Insights
Departments created
Insights (ideas) about how
programs could be
enhanced to achieve
greater effectiveness or
efficiency,
Data Attributes:
Insights
Program Scoring
Programs were scored in
alignment with the City’s
strategic plan:
Department Scoring
Peer Review Scoring
Data Attributes:
Community Program
Score
Governance Program
Score
Basic Program Attributes
RiversideCA.gov
PBB – Year 1 (2020)
City Program Alignment with Strategic Plan
Number of Programs Quartile Definition
93 programs MOST aligned with strategic plan
234 programs MORE aligned with strategic plan
172 programs LESS aligned with strategic plan
107 programs LEAST aligned with strategic plan
606 Total Programs
15 16
4/6/2022
9 RiversideCA.gov
PBB – Year 1 (2020)
• Program improvements needed:
• Duplicative programs – Need to remove department program silos and create citywide programs.
• Program definition – What constitutes a program versus a task; group related programs.
• Scoring improvements needed:
• Leverage subject matter experts to better define scoring guidelines • Better understanding of Insights, set specific goal, engage executive leadership
LESSONS LEARNED
RiversideCA.gov
PBB – Year 2 (2021)
Program Costing
Utilizing the 2020/21
adopted budget, each
department identified
resources generated and
used by program
activities.
Data Attributes:
Revenue Generated
Personnel Allocations
Program Cost
(including overhead)
Program Inventory
The PBB Super Users Team
identified citywide
programs.
Each department
reviewed and
consolidated programs,
removed tasks.
Data attributes:
Program Name
Program Description
Program Insights
Goal established: Identify
opportunities for new
revenue generation
and/or expenditure
savings, with the goal of
identifying resources to
fund critical unfunded
needs. ELT/DLT workshop
to vet and recommend
insights.
Data Attributes:
Insights
Program Scoring
Subject matter experts
were leveraged to
enhance scoring
guidelines. Programs were
re-scored.
Data Attributes:
Scores for:
Community Program
Governance Program
Basic Program Attributes
Quartile Results
17 18
4/6/2022
10 RiversideCA.gov
PBB – Year 2 (2021)
City Program Alignment with Strategic Plan
Number of Programs Quartile Definition
76 programs MOST aligned with strategic plan
214 programs MORE aligned with strategic plan
151 programs LESS aligned with strategic plan
82 programs LEAST aligned with strategic plan
523 Total Programs
RiversideCA.gov
PBB – Year 2 (2021)
• Costing improvements needed:
• Including overhead in program costing gives the incorrect impression that elimination of a program would result in savings equal to program cost, but overhead would likely remain.
• Scoring improvements needed:
• Programs that are clearly a Council and community priority may not score well.
• Insights improvements needed:
• Future ELT/DLT workshops require modifications to improve efficiency and outcomes.
• Insights take time to implement, and some will require Council input, so immediate financial impact is not feasible.
• Add opportunities for community engagement and feedback.
LESSONS LEARNED
19 20
4/6/2022
11 RiversideCA.gov
FY 2022-2024 BUDGET DEVELOPMENT
=
Brainstorm Insights/ideas
about PBB Programs
Evaluate ideas and recommend
Insights for final consideration
Select Insights to implement in
FY 2022/23 budget cycle
Submit requests for
Critical Unfunded Needs
Review and rank requests within
quartile based on order of priority
Determine which needs to fund
this year vs. in future years
Funding available through PBB Insights to
allocate to Critical Unfunded Needs
Final List of Critical Unfunded Needs to fund in
FY 2022/23 ranked in order of priority
RiversideCA.gov
FY 2022-2024 BUDGET DEVELOPMENT
Departments identified
additional unfunded needs
Unfunded needs vetted by
City Manager’s Team
Departments reviewed
Insights recommended by
the ELT/DLT for feasibility
Baseline Budget,
budget targets
Departments will begin
actions triggered by Insights
Quartile 3 & 4 programs
reviewed
21 22
4/6/2022
12 RiversideCA.gov
PBB – Year 2 (2021)
• Staff at every layer of the
organization was engaged in PBB.
• The Strategic Plan is an integral
component of PBB and so the
knowledge about and understanding
of City priorities has permeated every
layer of staff.
• Department silos have been
remarkedly reduced through
collaborative workshops.
• Staff has adapted to the need to
frame funding needs through the lens
of the strategic plan and PBB.
RiversideCA.gov
NEXT STEPS
Departments will begin
actions triggered by Insights
• Actions to remediate
lessons learned
• Implement insights
• Address scoring shortcomings
• Figure out more effective
methods for workshops
23 24
4/6/2022
13 RiversideCA.gov
RECOMMENDATION
That the City Council receive an update
on the Year 2 Priority Based Budgeting
process.
25