Budget Process Review Committee Report

 

 

Introduction/Overview

 

In an effort to improve the County’s overall accountability for expenditures, Albemarle County Executive Bob Tucker established a committee to assist him in evaluating the short and long range processes that lead to the development of the annual budget.  The committee was envisioned as a group outside of the day to day operations of the County and with experience in other public and private sector organizations that could review and evaluate the County’s current processes and suggest areas for improvement.

 

This initiative is one of several efforts underway or planned for by the County aimed at exploring opportunities for improvement to ensure accountability for budgeting and financial management.  Other efforts include the newly established Program and Service Review Process and the recently approved Resource Management Study to be conducted by an outside entity over the coming months.  Collectively, these efforts will assist with ensuring that the County’s expenditures and processes are resulting in the provision of efficient and effective services that are aligned with its mission and values.

 

Committee Charge/Composition/Outcomes

 

Charge

Review the County’s financial planning processes that lead to the development of the annual budget and suggest any potential areas for improvement.  The County’s annual budget is driven by the goals established by the Board of Supervisors through the Comprehensive Plan and Strategic Plan as well as by State and Federal mandates.  The major processes that drive the development of the annual budget proposal include: 

 

 

 

Committee Composition

Board of Supervisors Members:   Ken Boyd, Sally Thomas

Community Members:    Anna Buchanan - Martha Jefferson Hospital, Budget Office

Mary Loose DeViney – Past Chairman of Chamber of Commerce and business owner                  

Bill Kehoe – Professor, UVA McIntire School of Commerce, Past Chairman of Chamber of Commerce

John Knapp – Economist, Weldon Cooper Center, University of Virginia

Pam Moran, Superintendant of County Schools

Colette Sheehy - University of Virginia – VP for Management & Budget

Deborah Thexton – Martha Jefferson Hospital, Administration                

Dale Varga - Albemarle Truth in Taxation Alliance (ATTA)

 

 

Staff Resources:            Bob Tucker, County Executive                           

Tom Foley, Assistant County Executive

Bryan Elliott, Assistant County Executive                                   

Laura Vinzant, Senior Budget Analyst

                                    Richard Wiggans, Director of Finance                             

Lee Catlin, Community Relations Director

 

Time Frame:                                         April – June 2008

 

Outcome:                                             Suggestions for improvement on financial planning processes

 


 

Final Work Product:                             Written report submitted to the County Executive with final recommendations for improvements based on group consensus

 

Scope of Committee Review/Major Topics Considered

 

During the course of four meetings, the Committee received information and provided comment on the following major topic areas:

 

 

General Observations

 

 

Specific Recommendations  -  Process Improvements

 

·         Align the Strategic Plan cycle more closely to the Long-Range Financial Plan cycle.  The current planning cycle for the Strategic Plan is four years (2007 through 2010).  The current planning cycle for the Long-Range Financial Plan is five years, updated annually.  The Committee recommends that the two cycles be more closely aligned to ensure that the financial impact of items in the Strategic Plan are incorporated in the Long-Range Financial Plan.

·         Provide more detailed information on the CIP to Board of Supervisor members in advance.  The CIP is reviewed by two committees (Technical and Oversight) prior to its submission to the Board.  The Committee recommends that the Board be given additional information prior to its approval of the CIP based on the material submitted to the Oversight Committee.

·         Require performance measures from all outside agencies (e.g. Libraries) While County departments are required to provide performance measures, not all outside agencies provide that same level of data.  The committee recommends that performance measures be required for all agencies requesting County funding.

·         Benchmark against the best, most effective/efficient jurisdictions.  As the County is focusing on its performance measurement and benchmarking efforts, careful analysis should be conducted to make sure that data are being compared to those jurisdictions that are acknowledged and recognized as the best performers in local government in the Commonwealth.  A suggestion was made to consider the University of Virginia’s “best in class” concept as a useful approach.

·         Assess whether the County has the ability to exercise discretion regarding how extensively mandates are addressed/to what level resources will be dedicated.  Such an assessment could include a review of what other jurisdictions are doing to meet mandates and a determination as to whether the County is appropriating resources above minimum levels to meet mandate requirements.

·         Review the process for determining what level of budget review outside agencies will receive. Currently, outside agency budget requests are reviewed under one of two different review processes. The Committee recommends that the two processes be reviewed to ensure that all agency budget requests receive an appropriate level of scrutiny.

·         The Committee recommends that when a new initiative (not only as part of the budget process) is being discussed by the Board of Supervisors, cost information should be included as part of that discussion at its earliest stages  This cost information will include both the one-time costs and the annual operating costs for the new initiative.

·         Identify required vs. discretionary costs during the budget process.  This will provide the Board with a better understanding of those costs that are outside of the Board’s control (e.g., current contractual agreements) and those costs that can be amended by the Board.

 

Specific Recommendations  -  Communication/Outreach Improvements

 

·         Better performance data, budget review information on the website with a focus on efficiency and effectiveness of services; “owner focused” approach.  While much information is available regarding performance, service levels, efficiencies, etc., it is not compiled and presented in a way that is easy to understand from a citizen’s perspective.  The committee recommended that more comprehensive and in-depth data, including information on the CIP, along with potential additional information concerning performance measures, be made available on the website in a format that is readily accessible to users.

·         Provide better explanation of different service levels between rural and urban areas of the County.  The Comprehensive Plan provides for differentiated levels of service between the County’s rural and development areas, with rural areas receiving lower levels of service, as an important part of its growth management strategy.  The committee feels that citizens would benefit from a clearer understanding of these services levels and how they impact resource allocation and other decision-making.

·         Publicize opportunities to designate tax-deductible contributions to support specific County priorities.  The County currently has a fund that allows residents to make tax-deductible donations directly to specific program and service areas that they are interested in supporting, and the Committee felt that better awareness of this fund could encourage more donations and provide more resources.  Committee members suggested that soliciting citizen leaders to lead efforts in this regard could add to the program’s success.

 

 

Other Issues to Receive Further Consideration

 

·         Consider including a section in the Comprehensive Plan about fiscal resources

·         Incentives to employees who identify cost savings

·         Consider instituting full cost accounting like the private sector uses instead of focusing on expenditures

·         Examine the County’s options to generate tax and non-tax revenue from all sources instead of relying entirely on the real property tax

·         Examine the cost/benefits of using debt financing as an alternative to pay-as-you-go financing

 

 

Summary

 

All members of the committee confirmed that the County’s general approach to long term financial planning processes and the annual budgeting process is “very valid” and includes similar fundamental elements to those used at other public and private sector institutions such as Martha Jefferson Hospital and the University of Virginia.  In the words of one committee member, “Bob Tucker and his budget staff are doing a good job and looking at all the right things.”  The committee did feel that there were improvements that could be made to the processes as outlined in the recommendations, and emphasized the following concepts in their guidance to County staff:

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