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The Price Tag Budget

City manager announces a major shift in the budgeting process.

City Manager Jim Hartmann is in the process of radically changing how the city puts together its yearly budget, putting a price tag on every activity at City Hall. The plan, which the city manger’s office calls the “Managing for Results Initiative,” will be a departure from the current organizationally based budget process. In a June 8 memorandum to senior managers in city government, Hartmann announced the goals of the initiative.

“These budget changes relate to a migration to a program and activity-based budget and financial management with an emphasis on clearer statements of goals and objectives and appropriate measures of results,” Hartmann wrote in the June 8 memo. “The implementation of this new Managing for Results Initiative will be a significant effort, but you will receive assistance and training in the coming months, and I expect the long term benefit to the city will be well worth it.”

Budget Director Bruce Johnson said that the new budget document will have less of a focus on institutions and more of a focus on action — pegging each activity with a specific price tag. Currently, when members of City Council want to know the price of a specific activity, they have to request a budget memo from the Office of Management and Budget.

“One example would be a program designed to prevent teen pregnancy,” Johnson said. “Council members would be able to look at the budget document and see how much that specific activity costs and then decide if they wanted to continue doing it.”

Johnson said that his own department, the Office of Management and Budget, is responsible for several activities: putting the budget together, presenting the budget, responding to inquiries during the budget process and monitoring expenditures. As leader of the department, Johnson will be responsible for putting a price tag on each of those actions.

“For some activities, you’ll be able to compare to other jurisdictions,” Johnson said. “Each program will have an outcome measure.”

<b>RESULTS-BASED BUDGETING</b> will give city leaders and the public much more information about how and why government works. Performance measures will show how effective each activity is, making a line-by-line cost-benefit analysis easier for City Council members. Ultimately, Hartmann’s new system has been designed to maximize data collection and show the cost of government.

“It’s going to be quite a bit of a change for department heads,” said Councilman Paul Smedberg. “They are going to have to justify what they spend and how they spend it.”

Smedberg, who campaigned on a platform of requiring the city to conduct accounting audits and efficiency reviews, says that Hartmann’s new results-based initiative is an admirable reform.

“I think it’s a great step,” Smedberg said. “In conjunction with the audits and the efficiently studies, it will be a good way for us to get a hand on what we are doing and why we are doing it.”

<b>HARTMANN PLANS TO</B> incorporate this year’s change into a multi-year effort to radically change the city’s budgeting process. In the June 8 memo, he said he plans to spend the next few years creating a business plan for the city. The city manager has invested the full capacity of his resources and all of his political capital to make this change happen, and City Hall insiders say that his performance will be judged by its success or failure.

“This plan will encourage program planning, evaluation and management based on results such as service quality, efficiency and community impact,” Hartmann wrote in the memo. “In addition, I will be expecting departmental senior managers to use the restructured budget and performance measures and indicators continuously to improve city operations for which they are responsible.”

Budget director Johnson said that the new process will require a lot of work in a relatively short period of time. He expects to present the new budget to City Council on Feb. 13.

“I’m already sort of running on deadline,” he said.