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Home My WebLink About11/07/1990, C-8 - GOAL-SETTING PROCESS FOR 1991-93 FINANCIAL PLAN WONG DATE: QRJpWIJJ city Of San _ AS OB1SPO 11/7/90 MOGe COUNCIL AGENDA REPORT `�""u"� FROM: William C. Statler, Director of Finance SUBJECT: GOAL-SETTING PROCESS FOR 1991-93 FINANCIAL, PLAN CAO RECOMMENDATION Adopt a resolution establishing the process for Council goal-setting for the 1991-93 Financial Plan. DISCUSSION The need to establish a "goal-setting process" was identified at the May 3, 1990 Council/Management Retreat. The purpose of the recommended goal-setting process is three-fold: ■ Identify the key programs and projects we want to accomplish over the next two years. ■ Ensure that the Financial Plan and Budget includes the financial resources required to accomplish these key programs and projects. ■ Effectively integrate Council Work Program activities and priorities into the Financial Plan and Budget using a continuous, building block process. Although "Council Work Programs" have been adopted since at least 1986-87, the 1989- 91 Financial Plan process was the City's first meaningful attempt to integrate the Council Work Program into the budgetary process. Based on previous Council, Management Team, and staff discussions on this process, there is general consensus on two issues resulting from this experience: ■ Integration of the Council Work Program into the financial planning and budgetary process is highly desirable. ■ However, Council involvement in setting goals and priorities must occur much earlier than it did during the 1989-91 Financial Plan process. To address these issues, a draft "goal-setting process" was prepared by an "Action Subcommittee" composed of Council and staff members for discussion at the October 5- 6 Council/Management Team Retreat. Based on consensus reached at that time, Council approval of the goal-setting process as outlined in Exhibit A of the attached resolution is recommended. 91-93FP/11-7GSRP.YPF �� RESOLUTION NO. (1990 Series) A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO ESTABLISHING THE PROCESS FOR GOAL-SETTING FOR THE 1991-93 FINANCIAL PLAN WHEREAS, it is desirable to meaningfully integrate the Council Work Program into the financial planning and budgetary process; and WHEREAS, Council imiolvement in setting goals and priorities must occur early in the 1991-93 Financial Plan process; and WHEREAS, adopting a goal-setting process will assist in identifying key programs or projects that the City wants to accomplish over the next two years and ensure that the Financial Plan and Budget includes the financial resources required to accomplish these key programs and projects; i NOW, THEREFORE, be it resolved that the Council of the City of San Luis - Obispo hereby adopts the goal-setting process for the 1991-93 Financial Plan as described in Exhibit A attached hereto. On motion of , seconded by , and on the following roll call vote: AYES: NOES: ABSENT: the foregoing Resolution was passed and adopted this day of , 1990. Mayor Ron Dunin ATTEST: City Clerk Resolution No. (1990 Series) Page 2 APPROVED: GSty ` trative Officer yW rn� Director of Finance E GOAL-SETTING PROCESS FOR 1991-93 O PURPOSE OF THE GOAL-SEWING PROCESS A Identify the key programs or projects we want to accomplish over the next 2 years. B. Ensure that the Financial. Plan and Budget includes the financial resources required to accomplish these key programs and projects. C. Ensure that the Council feels "ownership" of the final Financial Plan and Budget document but that it is prepared using a continuous, building block process. BACKGROUND A. Purpose of the "Goals-Setting Process Committee" The need for a "Goal-Setting Process Committee" was identified at the May 3 Council/Management Team retreat. The purpose of the Committee was not to work on goals, but to recommend a 12rocesc for developing goals. "Goal-Setting Process Team" members included: Ron Dunin, Mayor Bill Roalman, Council Member John Dunn, City Administrative Officer Jim Gardiner, Police Chief Jeff Jorgensen, City Attorney Staff Support: Bill Statler, Director of Finance B. City Experience with Goal-Setting and the Budgetary Process 1. Charter Requirements The Charter addresses the budget and goal-setting process in two ways: a. Section 802 of the Charter establishes the CAO's authority and responsibility for preparing and submitting the annual budget to the Council. b. Section 407 of the Charter provides for the submittal by the Mayor of an annual work program to the Council for their consideration and approval. Since the mid-1980's, the resulting document has been known as the "Council Work Program". 2. Recent Experience Although "Council Work Programs" have been adopted since at least 1986- 87, the 1989-91 Financial Plan process was the City's first meanin >> attempt to integrate the CouncilWork Program into the budgetary process. Based on previous Management Team discussions, .feedback from the May 3 Council/Management Team retreat, and the Committee's further review and 61?4 discussion, there is general consensus on two issues resulting from our 1989- 91 experience: a. Integration of the Council Work Program into the financial planning and budgetary process is highly desirable, and the 1989-91 Financial Plan has a higher level of Council input and outcomes than previous budget documents. b. However, Council involvement in setting goals and priorities must occur much earlier than it did during the 1989-91 Financial .Plan process. GOAL-SETTING ISSUES A How specific should Council goals be? 1. Broad statements of community purpose and intent that the organization should focus on during the next 2 years; or 2. Specific programs and projects that Council Members would like to see accomplished over the next 2 years. After much discussion, it was the Committee's opinion that the second approach would be the most productive. B. How much direction and support should the staff provide to the Council in the goal-setting process? C. How can the goal-setting process be conducted to best address the following criteria for goals agreed upon at the May 3 retreat: 1. Legitimate to our beliefs (real, supported). 2. Agreed Uon by the participants. 3. Reduced in number for comprehension, communication. 4. Set forth in one document: Financial Plan and Budget. 5. Clear, understandable. 6. Established as a high pn_ori and a real commitment. 7. Translated into the objectives of employees at all levels in the organization 8. Created within a suMortive atmosphere where people aren't afraid to state their objections or their suggestions for improving goals. 9. Accel2te to the point where resistance to them is reduced or eliminated. D. What key questions should we be asking ourselves during the goal-setting and budgetary process? For example: 1. What should a budget be and what should it accomplish? i 2. Are there any special purposes we want our budget to serve? E. Is there an adequate understanding by the Management Team and Council of the basic purpose of the budgetary process: allocation of limited resources among competing needs, obligations, and services? F. How do we ensure an appropriate balance in budgeting for service levels between: 1. Top down (policy goals of elected officials communicated to senior management and the staff throughout all levels of the organization) 2. Bottom up (professional knowledge of administrative staff regarding the basic operational needs of the City communicated to senior management and elected officials) RECOMMENDED PROCESS A. Format 1. The group goal-setting process should occur in a "retreat like" format (although . it should be held locally). 2. Based on comments received at the May 3 retreat, an independent third party facilitator should be used. B. Establish Background for Goal-Setting — 1. What are the existing and potential financial capabilities of the City? 2. What are emerging financial trends in the national and local economy? .3. Based on these resources, trends, and existing program activities, is this generally the right time for: a. Moving aggressively forward on new programs and projects? b. Consolidating and focusing on current programs and projects? c. Reducing current program and project expectations? C. Presentation and Initial Evaluation of Goals 1. Council Members will be asked to respond to the following question: ■ What specific programs or projects would you like to see achieved in the next 2 years? It is requested that Council Members focus on their most important objectives, which might result in the submittal of 5-7 items. However, no formal limit is recommended on the number of items that can be submitted by individual �— Council Members. 2. To assist the Council in answering this question, the staff will prepare an 1 outline of possible activities based on current policies, programs, and goals. This listing is intended to be a "reminder" only; it is = intended to limit options or advocate specific programs or projects. However, this listing can help place the consideration of any new goals or programs in the context of the status and level of commitment to existing ones. 3. After Council Member submittals are received, they will be "ranked" by all Council Members (see example below). a. This "ranking" is intended to be an analytical tool of in identifying where there is consensus, where there is disagreement, and where further discussion will be useful in focusing on priorities and reaching consensus. b. The following is an example of how a ranking can help identify areas of agreement and disagreement. It is the starting_goint in setting goals,not the ending Point Under this ranking system, each Council Member would prioritize each submittal based on the number of submittals received. For example, if seven submittals were received in total (Projects or Programs A through G), they would receive a score of 1 through 7 from each Council Member (CM 1 through 5). CM CM CM CM CM Total Priority 1 2 3 4 5 Score Rankin A 1 2 2 3 5 13 3 B 3 5 5 4 6 23 4 C 7 6 4 5 3 25 5 D 2 1 3 2 1 9 1 E 4 4 1 1 2 12 2 F 6 7 7 6 4 30 7 G 5 3 6 7 7 28 6 In the above example, Project D would be the highest priority item, and Project F would be the lowest priority project 4. Although Council Members are encouraged to work on developing their goals as early as possible, they will not be "formally" presented and ranked until the day of the .goal-setting session. D. Discussion and Adoption of Goals 1. The discussion of goals should primarily involve Council Members, with staff serving as technical resources. 2. Discussion of Council goals will be assisted through the use of an "independent", third-party facilitator. 3. It is anticipated that this process will result in a narrowing of goals from those initially submitted to those that are the most important and meet the criteria of legitimate, agreed -0= and kw. 4. Based on the outcome of the Council's goal-setting process, staff will prepare ZI-8'7 a formal statement of key projects and programs that the Council wants to achieve during 1991-93. This document will: 4, a. Provide staff with direction in preparing their budget objectives. b. Provide the Council with a "yardstick" in reviewing the Preliminary Budget. c. Focus the organization's efforts on the most important goals and objectives to be accomplished, resulting in an allocation of resources that reflects this focus. 5. The major advantage of this suggested approach is that Council goals will be stated early, allowing them to be incorporated into the budget preparation process rather than "added on top" of an already prepared financial plan. ACTION SUMMARY A Retreat discussion of the Goal-Setting Process 10/3 B. Formal adoption of the Goal-Setting Process by Council 11/7 C. Preparation and distribution of goal-setting survey 11/90 including background on existing policies and programs as well as the City's existing and potential financial capabilities. D. Goal-setting session 12/90 1. Discussion of existing and potential financial capabilities during the next 2 years. 2. Discussion of environment for action-taking during the next 2 years. 3. Presentation, discussion and initial ranking of proposed Council goals ranked by all members. 4. Discussion of proposed Council goals in the context of existing goals, policies, and programs, their current status, and our level of commitment to them. 5. Consensus on goals. E. Formal adoption of goals in providing direction to staff in preparing the Preliminary Financial Plan and Budget. 1/91 F. Staff budget preparation integrating Council goals 1/914/91 G. Presentation to Council of Operating Program purpose and goals 2/91 H. Council review of the Preliminary Financial Plan and Budget 4/91-6/91 C- I. Council adoption of the 1991-93 Financial Plan 6/25/91 91-93FP1/2GSAPRCR.YPF n