HomeMy WebLinkAbout1994-12-15 Finance Committee Minutes Special Budget Committee special Buaqet c:onmittee
Dec�nber 15, 1994
• city Coarmittee M�snbers Present: w. Cohen (Chair), E. Ba.rrett
Coun�cil N1�snb�rs Present: M. Frank,el, C. PoppPx, C. Sullivan
Staff Present: R. Farrar, J. Quart�raro
Others Present: Doug Clend,�uiing
Nteeting was called to o�r at 5:02 p.m.
1. Di.scussion of City Budget Fonmat
Cohen opened meeting, and will have Frankel review hi.s m�rb on
zero based budgeting distributed at the Council meeting of Deceqnb�r
12, 1994 and then chair has his awn ite�ns to �view with Coamnittee.
Frankel aclrnawledged wr�rk of Arthur Tilley in the preparation of the
me�rr� distributed. Given the lack of future state and federal
funding, this is the best time to reorganize City. Ev�rything within
the meqrr� is self-explanatory. All departments start with zero and
must su�niit� justification reports. City moust get togeth,Px and w�rk
on the budget togeth�r. Past Yyudgets ha.�e been repititiaus, and
councillors still do not c�et answpxs to questions. He has concerns
about the n�rs of itE�n.s which ccsrie as abave the current budget.
� DePartments heads 3maw better than oth,ers what they need.
Cohen ccmm�nted that he had read and loolaed at oth�r budg+et
processed, that the budget pmcess is n,ot a new it�n, and that last
year lve had many of the sa�rie con,cerns. City mac�e an att�ript to
chang+e process through review of Public Works and Parks/Recreation
• budgets. That process did not focus far e�ugh back in tYie process.
he would prefer to use the tenrt resource based budg�et.
1. City Council needs to agree on a mi.ssion stat�r�nt for the
City for the next year or 5 years. This needs to be a broad
stat�nt for the FY96 budg+et to be n�asured a�nGt.
2. Each ctiepart.m�nt nseds a mission stat�r�exit which must be
recon�ciled to the City's mission stat�rent. Does the City need to d�
a particular service
S�I.livan c�nted that Husson has department mission state�nents
which must reconcile with the school's.
Cohen noted that Bangor Hydro has four focus teams. Each �t
takes each and ev�rY P�lram and reconciles th�re prograQn to the
focus teams. Th�re two sets of budgets, O&M and Capital. Capital
is d�efined as ar�ything which is c�epreciable under accounting tezms.
.
Staff can not increase but can decrease resources in their O&M
budgets. Personnel decreased are shifted to an allocation pool for
reassigrmnalt. Start with last year's budget, and budget
reallocation. Then prepare the r�ew budget based ass�ning same aYriount
• of funds. What adjustments wc�uld be mad� to ��n consistent with
reconciliation of mission stat�nts.
PoppPx c�nted that the approach wr�uld work well at year 3, but
first need a mi.ssion stat�nt. The Council February planning
meeting does not revisit haJ the City is achie�ring the goals laid out
in th,e prior y+ear. He wants programs to start with zero resources
and wr�rk the way up to the mi.ssion statgrent, and prioritize needs.
Cohen noted at BHE use four classifications prioritizing: continu:ing,
emergency, high and law. There are published definitions for each
, classification , and classifications are measured. against the
published docimientation. Ex,ecutive team (4 me�nbexs) came up with
definitions. N�rt 22 �t heads had to justify their requests,
and the 22 dPpart�rents heads reviewed and rated all submissions. Haw
te�r�.s and the mission are defi.ned leads to th+e autccare.
Sullivan noted that we would be defi�n� "what is a City?"
Frankel cca�nted that department heads iroust tell Caun�cil what they
want and what th�ey are drea�ning about. Cohen co�rmented that m�st
have a published mission stat�rit to measure their dreaans against.
Popper c�nted that the first year will be th,e w�rst. First,
Council and staff must agree of the mission and second, apply that
• mi.ssion to the budgeting decision.
Cohen noted that to make a budgeting decision Council must always
ha.�e an understanding of mi.ssion be undertaken. that deci.sion
includes pa.yback definitions and increased efficiency. Anticipates
resistan�ce to talking about a resource allocation pool. Intuitively
he thinks• that Police and Public Works are understaffed, but first Y�e
must have a way to measure personnel resources.
• Popper noted that unions would hav+e to be cooperativ+e in maving
personnel, and that mission statc�nts may change. Cohen n�ted that
the first year is the coarsest and that aver ti.me process will
improve.
Sullivan questioned wha.t th+e solution is when ther� is a lack of
personnel and a lack of fun+ds? Cohen responded that the mi.ssion
statement would be refined in tenns of service lev+els, and a d,ecision
about wheth�r to provide �the best of a lesser lev+el of service wauld
be made. Popper illustxated, that if the City wants to pick up
trash, but it i.s not a priority, people wi.11 pay a per bag fee for
pickup. Cohen c�nted that nnist give staff the ability to
detennine what service wr�uld be if it functioned at 25� of currerit
levels. What wuuld the ques or waiting time be, are there waiting
a�G? Council must decide what is an acceptable level of service. .
Poppex c�nted that can meld the �two (Frarilcel and Cohen) proposals.
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Cohen noted that the probleqn is starting at th+e staff level and
att.e�npting to cut p�sitions without a t of what th+e
position does. Need. top look at everyi:hing. Aslaed for staff
caa�nt.
• Barr�tt stated staff would present a b�udget in any mann,�r Council
wants and if it is poss3ble. If City does full blawn ze�ro-base
b�udgeting it will . »� hug+e acmunts of data, paper and titr�. If
the Council wants so�riething that staff physically can not do, he will
tell the Council. Popp�x questioned whether staff can produce budget
based on the current discussion, asswning there was agree�r�x�.t.
Ba.rrett responded that need irare clarity.
Quartararo questioned wheth�r B�IE had a budget manual available which
we could use to construct a process, instead of inv�nting frcen ground
up. Also, not:ed that has an inter-library loan request for book of
zero-based budgeting.
Cohen c�nted that at BI� starting this year's budc�et with a 3� cut
frca�t last year's budget. Capital requests are gauged against
ir�asur+enents.
Sullivan noted that if th�e City is short of pPxsonnel, this budget
process will be priority, and mu.st get resources necessary.
Popper questioned haw Si� does staffing analysis? Cohen responded
that BI� has an in-house program called "Budg�t Buddy" which requires
d+epartn�ent to project what each �nployee will be doing for th�e next
year. Any variances naist be doc�ited.
. Sullivan c�nted that at Husson, depart�nts im�st go before a board
of 4 to justify mission state�nts. Preparation of mission
state�nts can be tenacious, took one year for one cca�mittee.
Cohen ccem�ented that payroll budgets are naw ben�crmiarked to their
industry, and faund that B� is where is should be. Frankel
coarYr�nted that BHE is a service ccenpany, as is th�e City. WondQx what
ffi� payroll as a p�rcent of b�dg+et is ccanpared to City. Cohen
• responded he was not sure, }�t they added voice mai.l, an,d alttwugh
they are getting blistered with c�laints, they are keeping voice
ma;l . Frankel questioned why th�y are cont� 1"n�. Cohen responded
costs. Bench�narking at industry standards indicates that for a given
n�r of accounts, there should a fined n�nbe.r of representatives
and an expected n�rs of calls. '�he n�x of calls exceeds the
expectations, so th�y are looking at why there are so many calls.
Quartararo c�nted that the processes averlay policy considerations
and line ite�n budgets. There would be two b�udget presentations.
Also that zem base budc�eting requires the review of alterative means
of pravicling services, as well as the consequences of not perfo�n.ing
the activity. 7."hat was recently done wi.th privatizing rulabish
collection. Cohen c�nted that this is not a lirve by line review
but a policy review.
Sullivan c�.nt that we �ra�st all go ha�rie and write out what a city
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is. Cohen c�nted that h,e works bettex when responding to an itFsn
rather that trying to create the iteqn, and then work thmugh 2 or 3
drafts on the issues. Frank,�l questioned wlw wou].d write the
drafts. Cohen responded wY�cariever.
� Sullivan noted that doping the City's mi.ssion stat�rent is ult�mately
th+e responsibility of th�e City Council. The �t heads then
, work frcen that stat�nt on their awn mission stat�rents, which are
then appro�ved by the City Council.
, Cohen noted that this is philosophic based budget, and relies upon
work of Mike Harnner in process re�ngine�xing. He will get
info�nation fram SHE for staff. Sullivan noted he would g+et mi.ssion
stat�nt frcen Husson. Barrett noted he would get mission statem�nts
frcan other city's in about one we�k.
Sullivan noted that Council will hav+e to take a pretty grim view of
th,e budget. 7."h�re wi11 be no help f�can Augusta or Washington.
Counci.l may have to propose pay cuts, if City can not resolve other
alternatives. Husson went w:i.�tlwut pay increases for 4 y�ears. City
may have to close a departirerit. Cohen noted that after developing
b�dgets and reallocations, identify obstacles to budgets that exist
and ways to increase revenues. Popper c�[r�nted that na�st start frcan
scratch.
Barrett summarized:
l. he will set up a session for the City Council to define a
mission statc�nt for the City;
2. Cohen will get budget fonnat, manual and basic el�ments f�can
HHE to Quartararo,
• 3. City Manac�er will obtain mission stat�nents frcan other
municipalities, and,
4. Quartararo will act as staff p�rson assigned to th,e budgeting
process.
Frankel noted that he still wanted the staffing reports r�t.ed in hi.s
n�no. Popper ecannented that Coun+cil will need scerie sort of staffing
reports, all m�nb�rs are trying to wr�rk �taHrards a coar�rr�n goal. Cohen
• c�nted that in the City organization Council will rveed consensus,
while in the private sector one person makes the decision.
Frankel c�nted that City moust start new and do what is right. We
moust all go in with a positive attitucle.
Clendenning rec�ed that the City managpx purchase the book
Reirrventing Gaverr�nent for all councillors and deparGrent h,eads
inGtead of zero based budg+eting, as was done in Portland.
Adjourned 6:00 p.m.
John Quartararo
Recording Secretary
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