Victoria Davis December 11, 2015 PUBA 502 Budget Analysis for the City of Fairfax, Virginia The City of Fairfax, Virginia was established in 1805, and was heavily developed after World War II. It is home to George Mason University, and is heavily connected to Washington, D.C. as part of its Metro Area. Fairfax has won the Government Finance Officers Association’s Distinguished Budget Award in 2015, and has won this award for twenty years in a row. Their budget document for 2015 shows great care and consideration for both the citizens of Fairfax and the large staff of public administrators that keep the city running smoothly. It is clear that this budget document wins awards annually due to its incorporation of performance management techniques, especially including strategic planning and the use of performance measures. They outline their goals, their external and internal environments, and breakdown each department in terms of its budget and how that budget will contribute to the city’s overall objectives. Careful consideration is given to how objectives will be reached by both long term and more immediate efforts and investments. There is some room for improvement regarding performance measurement, but overall this budget is outstanding. Fairfax opens its budget with sixteen major budgetary themes that “reflect[ their] efforts to address community priorities, to maintain desired quality of life, and to provide infrastructure, services, and facilities that will support the community’s needs.” These themes include having a stable financial outlook, a huge effort to service the city’s debts, internal cost containment, and the 1.2 cent real estate tax rate increase and how it will benefit public works. This list of major
budgetary themes sets the tone for the remainder of the document, and prioritizes some of the major changes and issues facing the city for the current year. The beginning of the document also outlines the preparation process for beginning the annual budget. The preparation process consists of three steps, the first of which is formulating budget requests. There are set guidelines in place from year to year, and agencies submit requests for the coming year. There is, of course, no zero-based budgeting, and the funding for these departments does not change drastically from year to year. The second step is the City Manager’s Executive Review, and subsequent proposal to City Council. The City Council then reviews and adopts the budget after a minimum of two public hearings. The review process and inclusion of public opinion demonstrates the concern the City of Fairfax shows to “address community priorities” as mentioned in the budget’s introduction. It also demonstrates how the initial agreement takes place from year to year. Because the budget is an annual process, the city could fall into a rut of continuous planning, but the rest of the document suggests that this is not the case. The fact that they also have rules and procedures for how the budget is passed shows that they are aware of the requirements and expectations they must meet to move the budget forward. The budget document explains how it fits into a larger strategic planning process. The city says that the budget guides decisions through the year, rather than having strategic planning be the only guiding factor for how the budget is distributed. Despite the fact that this does not line up exactly with the in-class readings, the budget document is honest in that it admits the serious budget constraints the city faces, the challenges that are created by fluctuations in revenue, and how the city works to overcome those difficulties in order to stay in line with its overall goals and main priorities. The budget document is primarily a fiscal plan, and a guideline
to revenues and expenditures for the coming year, but it also focuses on the city’s objectives, its long range planning, and keeping the various agencies accountable to the public. Fairfax considers its budget a “framework for decision making and financial management.” One of the budget’s major strengths is its continual analysis of what the long range strategic issues are, and how those goals can be met by short term, intermediate, and long term planning on the part of the city. For instance, the budget is subject to quarterly review and adjustment by city council to ensure that it is working in the short term. It is also coordinated with the City’s Comprehensive Plan, which is the long-range city policy plan for the next fifteen to twenty years. They strive to diversify revenue for long term stability, and have it independently audited annually with a heavy focus on balancing and budgetary efficiency to avoid increasing the burden of debt to the city. The City Council puts forth its five goals for Fairfax in the beginning of the budget document, which are part of a wider strategic planning vision for the city. The strategic issues outlined for the city are economic development, meaning balanced expansion and retention, along with increased business and economic security; governance, meaning open communication, public participation, and a professional and trained city administration; neighborhoods, meaning “strong, safe, and secure neighborhoods” and “robust” city services; transportation, or safe and efficient transportation and improved infrastructure; and development and redevelopment, or striving for that which “expands our sense of place, supports our changing demographics, prioritizes housing affordability.” These goals are widespread and require effort on the part of each city agency, and all agencies are expected to perform functions that contribute to at least one of these goals.
After listing the goals, the budget gives a brief explanation of the internal and external environment and the challenges it presents to the city in its “Economic Condition and Outlook.” The local economy is considered “sluggish” but improving due to new stores and residential developments. They have projected an increase in revenue over the coming year, but they have a budgetary contingency plan set up in case the revenue does not meet expectations. A three year forecast of many relevant data points are given, and cost comparisons with other local jurisdictions, D.C. metro, and Fairfax County are provided. Looking outside the city itself to make meaningful comparisons about the city and its functions is a critical part of external environment assessment. An internal environmental assessment is given. The budget includes a brief history of the General Fund Balance, as well as a breakdown of changes in revenue and expenditures. Colorful and informative pie charts are provided to show the changes, and to ensure the document is readable. They show everything from changes is the numbers of students and teachers, to recommended infrastructure changes to give a comprehensive picture of what the city is looking at in terms of specific, imminent needs. The organization chart of the city is provided, including who answers to whom within the various agencies, and the general public is included within the accountability chart to show that, ultimately, the public is the final authority on what happens in the city. Charts and graphs are provided to show a several-year history and 2016 projection for generated revenue by category, with the primary revenue sources listed as local sales tax, business and professional license taxes, restaurant and hotel tax, increased state aid, and real estate tax, which is determined by year based on projected city income.
Following the discussion of the internal and external environment, the budget then breaks down the previously listed City Council goals in greater detail, and how the major city departments can contribute to these goals. For example, the third goal, “Neighborhoods,” must include improved schools, social services, public works, and public safety. The General Fund Overview spends several hundred pages breaking down each function, department, and division to show what the department does, its specific goals including how it fits into the City Council’s five major goals, its objectives, services and products, any notable budgetary variations from last year, then outputs and performance measures. This demonstrates the integration of strategic planning and performance measurement on the part of Fairfax by incorporating the city’s goals into bite-sized agency contributions that are then measured. Not all of the agencies provide equally good data and measures to the budget, and some have serious issues. However, all of the agencies provide some data and at least have a clear purpose and contribution to the overall goals. A good example is the City Clerk, who contributes to the “Governance” goal by recording the Council’s actions, maintaining original contracts and deeds, and providing user-friendly customer service. Outputs are listed that line up with these goals, such as “number of City Council agendas prepared” and “number of FOIA Requests filed with the City Clerk.” Outcome measures are then listed and explained. For example, “Percent of agendas and reports on the website within day of publication,” is listed as a decent outcome indicator, as it shows the timely recording of agendas prepared, which is one of the City Clerk’s goals. One issue is that the Clerk’s outcome indicators are all at or very near one hundred percent, so they may be aiming too low. However, it is explained in the “results” section that the
timeframe for the release of agenda information is governed by state law, and they are currently in compliance. The main weakness of the budget is its inconsistent use of relevant outputs and outcome measures, as some departments provide much more telling measures while others provide none at all. Some incongruity is to be expected, as departments have different tasks, amounts of discretion, and address different things, but to be truly effective they should at least attempt to provide some outcome measures. In some cases the output measures do not even coordinate with the objectives. For example, the Community Relations office must publish a newsletter called “Cityscene” monthly, and its outcome measure is the number of newsletters published for last year. Better outcome measures could be how many copies were distributed as compared to last year or some analysis of the quality of the magazine. The city manager listed an outcome measure that was achieved “100%” for several years back, and projected the same result in the future for “info requests from the public answered within ten days.” A goal that would actually motivate an improvement in performance would be a more useful measure, for instance “info requests from the public answered within seven days” could still look good for the department, but would motivate a more timely response. Strengths of some of the department budgets are their thorough analysis of what their group does, and how well. For example, the Economic Development team utilizes a chart comparing vacancy rates over several years with others, including Fairfax County and the D.C. metro area. This enables them to get a clearer picture of how the city is performing both against others, and as a part of a larger geographical area. Another example is the Fleet Maintenance division, which uses mechanic to vehicle ratio and percentage of vehicle availability to the
national average, even though Fairfax county’s numbers fall below that average. They use their “results” section to discuss their use of contractors and overtime hours to do the extra work, and explain their attempts to get funding for another mechanic on staff. This is an honest and accurate approach to measuring performance on the part of the Fleet Maintenance division. They gave their actual numbers though they were low, explained why, and proposed a solution to the problem. The Department of Public Safety provided similar measures, such as the number of arrests and parking summons for several years, showed that the number decreased, and explained their staffing struggles supported by a breakdown of personnel over time. They used their performance measures to make their own case for additional funds to help them improve their services. The City Attorney did something similar by providing some output measures, with an explanation of why it is difficult to translate their outputs into outcomes. They also explain their difficulty in predicting budgetary needs for the upcoming year, as “Litigation continues to be the one area that it is virtually impossible to predict…” The variety of levels of effort that the different agencies put into the performance measurement part of the budget document is its biggest weakness. For every super detailed agency, there is one that provides nothing. For example, the library only provides its incoming dollars and a few expenses, and no measures, goals, or objectives. More complete outputs and outcome measures would strengthen this budget. Fairfax follows the General Fund breakdown with more details about the secondary funds the city has in place. The Capital Budget is a five year budget for capital improvement, which is updated and re-evaluated annually. It contributes funds towards non-recurring projects, such as
construction improvements, park development, land purchase, and debt servicing. For instance, the capital budget is contributing to roof replacement at Lanier Middle School and a Records Management System upgrade. They use this capital fund to “come to grips with the problem of balancing, needed or desired, physical improvements with available funding.” This fund is an interesting strategic planning tool because it allows for prioritization, coordination, and assists with balanced development of the city. The budget gives information about the projects the fund will contribute to in the coming year, including estimated funds, and a detailed project plan with a picture of the project, statement of need, year adopted, the origin of the project, changes from the previous year, and the origin of the project. This is a great way to show how the city is working to improve areas that do not receive annual funding, and to show a long-term strategic effort. The Stormwater Fund acts in a similar way to the Capital Budget. By raising the real estate tax two cents, the city will be able to fund a variety of infrastructure projects such as the replacement of failing galvanized storm drainage systems totaling $490,000 over five years. The Cable Grant Fund is also used for various equipment replacement needs, and this money comes from the franchise agreement with Cox Communications and Verizon. The budget is responsive to the citizens of Fairfax by showing the public value created by the city’s choices and financial management. Finally, the budget discusses the Old Towne Service District tax, the transportation tax fund increase, and detailed information about the city’s debt service. They conclude with a detailed plan of salaries for each city agency, a schedule of rates and levies, and a glossary of terms used throughout the document.
Overall, the Fairfax budget is incredibly thorough in explaining how all of the funds are generated and distributed throughout the city offices. A resident of this city could feel confident that their city had a short term and long term plan to address the pressing goals and challenges it faces. By keeping their “five goals� broad and having each agency contribute a plan of how their department can directly contribute to one or more of those goals, Fairfax ensures that everyone is on the same page and can improve public value by providing the best services possible. Many agencies need to work on their use of performance measurement, and using those measures as a tool for motivation rather than making themselves look good. Several departments do actually do this, but the city would create more public value if they all did. The breakdown is thorough and demonstrates real effort on the part of the City of Fairfax to incorporate strategic planning and performance measurement efforts to make the best city possible with the resources available.
City of Fairfax, Virginia Adopted Budget FY 2015-2016 https://s3.amazonaws.com/gfoa/Budget/2015/FairfaxVA.pdf