With a Full Year of Data, Chattanooga Begins First Budgeting-for-Outcomes Cycle

The city this year will take more time to vet requests, require concrete performance measures and make use of about 18 months' worth of data collected citywide, according to Chattanooga's chief financial officer.

by Louie Brogdon, Chattanooga Times / February 2, 2015

(TNS) The city of Chattanooga has taken the first step in building its second full performance-based budget, and officials say they have learned much since their first bout with budgeting for outcomes.

Chief Financial Officer Brent Goldberg said the city this year will take more time to vet requests, require concrete performance measures and make use of about 18 months' worth of data collected citywide.

It's good the city is getting an early start: There's plenty to do.

The budget wish lists from seven city departments and 34 outside agencies total $243 million. Goldberg said only about $219 million will be funded in fiscal year 2016, which starts July 1. That's $3 million more than the current budget.

So between now and May 19, when Mayor Andy Berke presents his budget to the City Council, about $25 million will be shaved. The proposals will be vetted by results teams, returned to organizations for changes, reviewed by the results teams again, then sent to the administration for finishing touches.

Each proposal will be analyzed and weighed to see how it furthers the administration's goals of making streets safer, growing the economy, improving education, bolstering technology, strengthening communities and making the government more efficient.

The Berke administration hopes to avoid criticism over the budgeting process such as it received in the past. Last year, city councilmen Larry Grohn and Yusuf Hakeem decried what the city was basing the budget on vaguely defined outcome. Council members also criticized the administration for paying $100,000 to a consulting firm to help implement the program.

But city spokeswoman Lacie Stone said Friday that no consultant was hired for the 2016 budget process and last year's expense was "a one-time cost."

Ultimately, the idea is not to tell departments they will not be funded if they don't meet goals, Goldberg said. The purpose of performance measures is to show the city what it's doing right and what it needs to change.

"The aim is to make departments use data to change the way they do business. That's just a foreign concept in government," he said.

"In general, the past performance does not dictate future funding. We can't do that in the public sector. But it does have bearing on how we manage people, departments and policies."

This year, the city is better prepared, Goldberg said. And when Berke took office, he expected that completely changing the way the 175-year-old city creates its budget was going to be a learning process.

For fiscal 2014, the Berke administration asked every department to cut 3 percent of its budget and prioritize that pot of money based on the mayor's five performance categories. The idea was to start a "culture change" in city government, Goldberg said.

In the current fiscal year, the entire budget was made with budgeting for outcomes, but the goals were loose and the city didn't have much of the data it does now, he said.

"Last year, we created a budget for people to understand. But now we've got to start using data to make goals they understand," Goldberg said.

Some departments, such as public works, have used data since day one, because work depends on work orders, said Goldberg.

But other departments, such as Youth and Family Development, have not historically been data-driven.

"[YFD is] a significant portion of what used to be parks and recreation. While the recreation department was largely seen as a success by citizens ... it was all done haphazard and disorganized," Goldberg said.

That's all changed, he said.

The department now tracks the number of people who use city programs, how many children and adults visit locations, how many volunteer hours people log and how much time people spend on educational programs, such as the Lexia Reading Program.

Data has helped the city's Head Start program too, he said.

"Everything they were doing on a daily basis was geared toward federal compliance -- which has nothing to do with teaching children," Goldberg said.

The city started measuring time spent on activities for the children and found some eye-opening stats.

"They were spending almost two hours a day for handwashing in each class," Goldberg said.

Because there were no sinks in the classrooms, instructors were spending a great deal of time wrangling children and leading them out of the classroom, one at a time, to wash their hands.

"By spending $8,000 and building sinks, we added two hours of educational time in each classroom," Goldberg said.

The city also is looking to tighten up specific performance measures.

"A bad performance measure for [making streets safer] is, 'to improve road conditions.' That's great, but you can't measure it," he said.

Examples of "good" measures Goldberg gave were to target a 10 percent decrease in traffic fatalities at the five busiest intersections, or to fill potholes within 48 hours of getting complaints.

And Chattanooga is having similar experiences -- or growing pains -- as other cities that have used budgeting for outcomes.

Lawrence Pollack, budget and performance measurement manager for Fort Collins, Colo., said it's normal to tweak things year to year. Fort Collins has been using the budgeting method since 2006.

"Every year we make changes to the program. I would be really suspect of any organization who says, 'Yep, we've got everything perfect. We don't have to change anything,'" Pollack said.

He said budgeting for outcomes has become part of the "culture of improvement" in Fort Collins. And residents and government alike understand that the goal is to improve quality of life.

"Performance measures shouldn't be punitive. They should really be about improving the way we are serving the community and spending taxpayer dollars," Pollack said.

©2015 the Chattanooga Times/Free Press (Chattanooga, Tenn.)