Linking strategic planning and budgeting in Scottsdale, Arizona.

• Author: Clifford, Craig

Six action elements guiding the city's multiyear budget process provide the tools for integrating its community-based planning with its long-range financial plans to create an economically balanced, sustainable community.

The City of Scottsdale has a long tradition of innovation and managing its destiny using citizen-driven plans that span years and even decades. The city manager has promoted the organizational philosophy of linking community-based planning with sound, long-range financial planning to provide for public services within an economically balanced, sustainable environment.

In 1994, Scottsdale formed a cross-departmental team to challenge the city's annual budget process with the objective of streamlining and transforming it into a more effective long-range financial planning and decision-making tool which would integrate more effectively with the city's other strategic planning elements: the general plan, comprehensive financial policies, and the "City Critical" objectives and strategies. Specific goals identified by the team were to

* eliminate redundant and nonvalue-added work,

* promote stakeholder participation,

* decentralize budget decision making,

* strengthen strategic decision making,

* provide expenditure flexibility,

* emphasize long-range planning, and

* save staff and council time.

The team began with benchmarking the budget process to other municipalities. This preliminary research indicated that a multiyear, rather than a one-year, budget approach would be a better tool to support strategic, long-range planning efforts. Brainstorming ideas for improving the process, the team probed the current budget process to identify aspects that they felt worked or did not work and the result was development of a "should-be" process map and a list of tactical changes to be implemented in conjunction with moving to a multiyear budget process.

The focus of the team was on the goals, as it visualized what the process outcomes should be. A significant help in this effort was the Government Finance Officers Association (GFOA) Distinguished Budget review criteria, which emphasize four major categories for an outstanding budget: policy orientation, operations focus, financial planning, and effective communication.(1) The resulting strategic budget process in Scottsdale is consistent with the recently released work of the National Advisory Council on State and Local Budgeting (NACSLB)(2), which identifies key characteristics of a sound budget process: a long-term perspective; linkages to broad organizational goals; a focus on results and outcomes; effective communication with stakeholders; and incentives to government management and employees.

To achieve the objective of transforming the budget process into a more strategic planning tool, two overriding principles emerged from team brainstorming and discussion:

* thinking long-term to ensure a balanced approach and fiscal stability, and

* providing linkage and congruency between needs assessment, fiscal capacity, and results and outcomes.

These two principal assumptions were considered essential to successfully changing departmental staff's view of the budget process: rather than a short-term, work-intensive, numbers-crunching exercise, it should be viewed as the big picture - strategically planning for the future.

The strategic budget process map identified six sequential (linked) action elements spanning an entire year that are important to its success:

* listen to stakeholder input: citizens, boards, commissions, council, and management

* review/develop policy and critical objectives by city council and management

* develop strategies to achieve critical objectives by management and staff

* link financial resources to strategies which help achieve policy and critical objectives - preparation of a balanced multiyear budget proposal

* communicate plan and expected results and outcomes to stakeholders

* measure accountability to objectives via result and outcome performance measurement.

Diagrammed in Exhibit 1, these elements became the building blocks for implementing Scottsdale's strategic budget process. How they have been applied in practice is detailed in the following sections.

Input From All Stakeholders

Listening to input from stakeholders, one of the critical elements identified by the NACSLB, is an important component of the budget process in assessing citizen satisfaction with services and establishing priorities for addressing community needs in the coming budget year(s). This communication is also important for civil dialog and cooperative development of the community.

Stakeholders in Scottsdale are defined as all parties that have an interest in the city's sustainable future, i.e., individual citizens/families, citizen boards and commissions, city council, developers, business owners, credit rating agencies, and professional staff. The city employs a variety of sources to gain feedback regarding the direction in which stakeholders would like the city to move. Many documents are provided that help plan the city's future: a community visioning document, the Annual Citizen Survey, board and commission surveys, citizen budget committee recommendations, council and staff input. These formal written inputs supplement regular public meetings, telephone, e-mail, and other forms of citizen dialog.

Citizen/Community Input. Scottsdale employs a statistically valid citizen survey every year to help determine satisfaction with city services and programs and to identify the issues that need the most attention. The survey begins with demographic questions so that detailed analysis of satisfaction with programs can be made in a demographic or geographic context; e.g., one geographic area of the city responded with less satisfaction with parks services or female respondents were more concerned than men with crime and public safety. This input is reviewed by staff and council with the expectation that departments will conduct focus groups or more detailed survey follow-ups as necessary to help plan future direction. The survey has been conducted for a number of years in much the same format to provide trend information. Local statisticians under the direction of professors of mass communication and media research at Arizona State University have conducted the survey in most years at a nominal cost.

Important characteristics of Scottsdale's survey are brevity, so it is not too burdensome for respondents to participate; trend identification to determine if service is getting better, staying the same, or getting worse; pinpointing major concerns/issues to learn customer priorities; ranking of key service areas; and statistical validity for reliable data and year-to-year comparisons.

Professional Staff Input. One of Scottsdale staff's core values is to "take ownership" - an expectation that city...