Collaboration and Culture Change.

• Author: Ludwig, Katie
• Position: FINANCE: THE CITY OF REDMOND, WASHINGTON

As soon as John Marchione took office as the mayor of the City of Redmond, Washington, in January 2008, he announced that the city was going to adopt a 'budgeting by priorities' approach to developing its next biennial budget, which was slated to go before the city council for approval in the fourth quarter.

Chief Operating Officer Malisa Files was the interim finance director at the time. When the mayor called her into his office and announced the change, "she gulped and said 0I

John and several members of the city council had read the classic book, The Price of Government: Getting the Results We Need in an Age of Permanent Fiscal Crisis by David Osbourne and Peter Hutchinson. He was intrigued by many of its ideas and decided that he wanted the city to focus on outcomes rather than just line-items in its budget.

Before he was elected as mayor, John had served on the Redmond City Council, so he understood how the city approached its budget. "The budget process we went through in 2006 was difficult," he said. "Do we increase by two percent or four percent? It meant nothing. It didn't tell you what more or less would happen, and you couldn't compare it to other choices you had in the budget. I wanted to have a logical way to make decisions instead of pulling numbers out of the air."

"Most leaders want to be thinking about the future; they don't want to get lost in the details. This kind of budgeting process gets you there," said current Mayor Angela Birney, who was elected in 2019 after John decided to not seek re-election. "It also helps you get away from particular personalities of particular departments. It pulls people out of that space and gets them thinking in a different way. I think that is important for improving the way in which cities function, and for getting rid of silos."

First step: getting buy-in

As a first step to implementing budgeting by priorities, John, Malisa, and a small team developed a plan to educate all city employees about the new approach. They also developed a process and mapped out the year. By the end of his first month in office, John was meeting with employee groups to discuss budgeting by priorities. "I remember hearing from the sewer guys, who said 'we're not going to be prioritized very high.' I explained that how much we buy of something is really the question," he said.

Malisa believes this outreach to staff was crucial to getting initial internal support. "In 2008, we began with putting together not only a team in Finance to carry this forward, but also a team across the city that was going to help us rethink the budgeting process," she said. "We brought in people who had been critical of the budgeting process before. We brought in staff from all levels--directors, deputy directors, all levels of the organization--to help us with it. And I think because we paid attention to the internal culture change, we got a lot of buy-in for the process."

The process of obtaining that buy-in was not always easy, though. "Department directors were the hardest group to convince about buying in to the new process," Malisa said. "They saw it as a lack of control because we have the staff teams looking at budget programs and deciding for themselves what would be in the budget. They saw it as, 'You're taking away my control of my budget programs.' Public Works saw it as a lack of control over the enterprise funds, which they had always had control over so they could decide how much rates were going to be raised. They were hard to convince, but then we got to the conversations with the council, which was not...