City of Santa Monica
California

Staff Report
3447

Council Retreat to Set Priorities for the FY 2019-21 Biennial Budget Using the Cities Framework for a Sustainable City of Wellbeing

Information

Department:City Manager's Office, AdministrationSponsors:Director Gigi Decavalles-Hughes
Category:08. Administrative Item

Recommended Action

Recommended Action

Staff recommends that the City Council:

1.  Select 3-6 Framework Priorities from the list of sub-outcomes to guide the budget process for Fiscal years 2019-2021;

2.  Affirm transition to Framework Priorities from the Strategic Goals structure; and

3.  Add Advancing a New Model of Mobility as a new sub-outcome under Place and Planet to the Framework for a Sustainable City of Wellbeing.

 

Staff Report Body

Summary

The Council holds an annual retreat as a unique opportunity for Council, community members and staff to convene and collaborate on a focused subject.  This year’s goal is for the Council to use the Framework for a Sustainable City of Wellbeing (adopted in 2017 and revised in 2018) to identify the Framework Priorities. This will happen at the retreat after taking into account community, boards/commissions/committees, and staff input regarding where resources should be focused. 

 

The new Framework Priority structure, starting on July 1, 2019, will supersede the current Strategic Goals structure, and will ensure similar efforts are aligned with the outcomes established in the Framework.  The selection of Framework Priorities will guide staff as the City prepares the FY 2019-21 Biennial Budget. The overall goal this year is to ensure that government works better at lower cost by focusing resources on the results that matter most.

 

Lastly the Council is being asked to consider a refinement to the Framework by adding “Advancing a New Model of Mobility” as a new sub-outcome. While this objective has been a Strategic Goal since 2015 it has not previously been an expressed sub-outcome of the Place and Planet Outcome Area. Staff believes this is an oversight that should be corrected at this stage of budget formulation.

 

The Framework for a Sustainable City of Wellbeing

 

 

Financial Stewardship

The City of Santa Monica has an award-winning budget program that reflects traditional municipal best practices. It has worked well to ensure we support quality services to the community, a well-maintained infrastructure and a healthy balance sheet that has earned Santa Monica an AAA bond rating from all three of the national credit rating agencies.  However, traditional revenue streams are growing at a slower rate as the economy shifts to online services and alternative transportation models; pension and healthcare costs are projected to increase significantly; and the threat of a recession looms ahead. 

 

The City is taking measures to position Santa Monica for a 21st century economy, including pursuing an Economic Sustainability Strategy; establishing a Pension Advisory Committee (including community and workforce members) that’s made recommendations to the City Manager about options to eliminate the unfunded pension liability; and moving to a performance-based budget.  Sustaining Santa Monica’s solid financial footing is critical not merely to retain the city’s AAA rating, but also because City government, in partnership with the community, is the engine that delivers the services, creates the policy, and drives the change we want to see in our community.  Protecting our financial health ensures we can continue to provide funding for public safety, affordable housing, protect rent-burdened seniors, install bike lanes, attain water self-sufficiency, expand our parks, provide homeless services, and the other key programs and policies that support a Sustainable City of Wellbeing. 

 

On January 22, Council reviewed the City’s 10-Year Financial Forecast for the General Fund.  The Forecast shows that continuing operations in their current state will lead to shortfalls beginning in FY 2020-21 that will escalate to $31.5 million by year 10, equal to 6% of ongoing revenues.  Council directed staff to proceed with developing a fiscally sustainable budget strategy, including finding a way to reduce the pension liability and moving to a performance-based budget, to be used in the development of the FY 2019-21 Biennial Budget. 

 

 

A Re-Imagined Budget Process

The transition to a reimagined, performance-based biennial budget will provide Council, staff and the community with a data-driven methodology by which to prioritize the allocation of resources. By developing metrics to analyze what works, resources can be more reliably directed to areas that help achieve measurable outcomes. The Framework for a Sustainable City of Wellbeing is organizing structure for targeting the results that matter most to the City Council and the community. 

 

The move from a more traditional line item departmental revenue and expense budgeting approach will happen incrementally. Whether the metaphor is “walk before you run” or “put your socks on before you put your shoes on” the sequence puts identifying priorities first, then developing metrics to measure progress toward the identified goals.  The ultimate objective is to achieve the most important results at the lowest possible cost - a city government that works better and costs less.

 

The FY 2019-21 Biennial Budget process is the first step in a multi-year process towards a Performance-Based Budget that integrates performance management into resource allocation decisions. For the current biennial budget, the City Council adopted the Framework that spells out our most important community outcomes (rooted in our long-standing work and community commitment to sustainability and wellbeing).

 

Selecting Framework Priorities

As stated above, a key element of this re-imagined budget process is focusing resources around key community priority areas.  The Framework contains sub-outcomes that are associated with one of the seven outcome areas and has a definition and metrics that define success.  The goal of the Council retreat is to select three to six sub-outcome priorities (referring to these as Framework Priorities). The City can do anything, we just cannot do everything. Establishing Framework Priorities will enable the City to align resources and better focus on achieving the most important outcomes in service to the community. Following extensive outreach to residents, business owners, Boards and Commission members and staff, our reimagined budget process anticipates Council selecting the key Framework Priorities for the FY 2019-21 Biennial Budget by the end of the retreat. 

 

Community and Staff Engagement

Four data sets are being provided to Council by staff for their consideration:

1.     Community Survey Results (Attachment A) and Written Responses (Attachment B);

2.     Staff Survey Results (Attachment C);

3.     Leadership Team priorities; and

4.     Letters from Boards and Commissions (Attachment D)
 

As a result of the first three outreach efforts, the following seven sub-outcomes were identified as candidates as Framework Priorities:

·         Affordability

·         Built Environment

·         Ecosystem

·         Engaged Community

·         Keeping Neighborhoods Safe

·         Reducing Homelessness

·         Safe Driving, Walking, Biking and Transit

 

This input was not designed to represent a scientifically valid cross-section of the community but rather be an open-ended invitation for broad, voluntary engagement.  As such, it is intended simply as potentially useful background guidance and information supplementing all other forms of input into City government decision-making.  A complete set of survey results is attached to this report. The follow provides details on each of the areas of input.

 

Community Input

Staff undertook a three-pronged community engagement strategy as part of highlighting the reimagining of the budget process.  More than 2800 community members (primarily residents, but also respondents who work in Santa Monica, business owners, and property owners) participated in the SamoSays survey as of Monday, January 21st, the last day of the survey.  Staff also held community “pop-up” events at Farmer’s Markets and other community events to ask for input on the process.  Finally, the City Manager met with 43 community members who signed up online to participate in five informal briefings on the new budget process. It is worth noting that these are fresh ways to seek community input and hopefully attracted new voices into this process. The following is a chart of the top three sub-outcomes (there is a significant drop-off in the next highest outcome) and a word cloud of the freeform survey response questions.

 

 

             

Staff Priorities

Staff were also invited to participate in a staff version of the SamoSays survey.  This survey mirrored the community survey except that is also asked information about what department the survey taker worked in.  This survey was taken by over 500 staff members and the results largely mirrored those of the community. The following is a chart of the top three sub-outcomes (there is a significant drop-off in the next highest outcome) and a word cloud of the freeform survey response questions:

 

 

 

Leadership Team Priorities

At a Leadership Team meeting on January 9th, department heads, division managers, department performance liaisons, and budget coordinators met to discuss priorities.  At the end of the session, the Leadership Team identified its top five priorities, not in a ranked or prioritized order:

·              Keeping Neighborhoods Safe

·              Affordability

·              Engaged Community

·              Ecosystems

·              Built Environment

 

Boards and Commission Letters

To further inform the Prioritization process, Boards and Commissions were invited to participate in the SamoSays survey as well as submit letters to the Council.  Five Boards and Commissions submitted letters which are attached to this report:

·              Commission for the Senior Community;

·              Commission on the Status of Women;

·              Disabilities Commission;

·              Landmark Commission; and

·              Recreation and Parks Commission.

 

Council and community members at the Retreat will undertake a similar facilitated process to identify up to six Framework Priorities.  This workshop will provide yet another data set the Council can incorporate into the ongoing community dialogue. 

 

Sub-Outcome Definitions and Examples

The chart below shows the definitions and other contextual information for sub-outcomes that ranked high on the priority lists of community members, City staff, and/or leadership team members.

 

Affordability

Definition

 

A city that strives to provide opportunities for people to afford to live within its boundaries.

Outcome Area

Economic Opportunity

How We Will Track Our Success

§         Percentage of residents that are housing burdened

 

Sample Activities

§         Provide affordable housing through direct cash benefit to support extremely low- and low-income families in order to sustain and secure housing

§         Short-Term Rental Enforcement Action

§         Provide affordable housing through vouchers to very-low and low income households

 

Built Environment

Definition       ·      

Maintain a built environment that (1) Provides sufficient open space to support natural function and wildlife habitats as well as active and passive recreation; and (2) Provides compact mixed use built areas that maximize affordable housing and enable mobility.  

Outcome Area

Place and Planet 

How We Will Track Our Success

§         Tracking of energy and water efficiency by building stock

§         Percentage of residents within a quarter of a mile of open space

§         Percentage of residents within a quarter of a mile of goods and services

Sample Activities

§         Park planning

§         Review of plans, documents, and technical reports for building permit issuance

 

Ecosystems

Definition       ·      

Maintain ecosystems in order to provide clean water from sustainable sources; marine waters safe for active and passive recreation; clean indoor and outdoor air; a sustainable food system that provides healthy, locally grown food; a sustainable climate that supports thriving human life and a flourishing biodiverse environment; comprehensive waste disposal systems that do not degrade the environment; and a sustainable energy future based on renewable energy sources.  

Outcome Area

Place and Planet

How We Will Track Our Success

§         80% reduction in greenhouse gas emissions by 2030

§         0 imported water by 2020

§         0 exceedent days

§         90% landfill diversion by 2030

§         Percentage of tree canopy coverage by neighborhood 

Sample Activities

§         Investigation of potential sustainability violations

§         Watershed maintenance

§         Tree Maintenance

§         Refuse, Organics, and Recycling Collection  

 

Engaged Community

Definition       ·      

Residents who can effectively engage with local government, who can make their voices heard by participating in the civic process  

Outcome Area

Community  

How We Will Track Our Success

§         Percentage of residents who feel like their voices are heard in the decision making process  

Sample Activities

§         Support to boards, commissions, task forces, and committees ·     

§         Volunteer engagement

 

Keeping Neighborhoods Safe

Definition       ·      

Providing services and engagement to ensure the safety of all of our neighbors  

Outcome Area

Safety

How We Will Track Our Success

§         Response times

§         Overall view of safety

§         Property crimes v. violent crimes 

§         Crimes per 1,000 residents

Sample Activities

§         Investigate crimes against persons

§         Integrate new technology to enhance crime reduction efforts

§         Investigate burglary of motor vehicles and theft from motor vehicles 

 

Reducing Homelessness

Definition       ·      

Prevent homelessness among low income residents  

Outcome Area

Economic Opportunity

How We Will Track Our Success

§         Percentage decrease in the population of people experiencing homelessness  

Sample Activities

§         Interdepartmental and Regional Homelessness Leadership and Coordination

§         Direct Client Services- Homelessness

 

Safe Driving, Walking, Biking, and Transit

Definition       ·      

Providing services and engagement to ensure the safety of all of our streets

Outcome Area

Safety

How We Will Track Our Success

§         Zero transportation related fatalities by 2026  

Sample Activities

§         Maintenance and repair of travel control devices ·      

§         Traffic enforcement and pedestrian safety

 

Shifting from Strategic Goals to Framework Priorities

In the summer of 2015, the City Council established five Strategic Goals. They were originally intended to be 3-5 year projects to accomplish specific results.  A summary of each goal and key milestones is attached (Attachment E).  These five goals were intended to focus our attention, resources and time to achieve the following:

·              Maintaining an inclusive and diverse community;

·              Establishing a new model for mobility;

·              Ensuring local control of the City land occupied by the Santa Monica

Airport;

·              Taking a leadership role in regional efforts to address homelessness; and

·              Fostering a community partnership to Learn and Thrive

 

During the first year of work:

·              Staff identified financial resources to jump-start discreet projects;

·              The City Manager tasked senior staff members with leading and developing each Strategic Goal; and

·              Strategic Goal Teams met on a regular basis.

 

Beginning in early 2017, the Strategic Goal Teams developed Plans of Action (“Plans”), which teams evaluated and amended as needed each year.  These Plans captured the background of each Strategic Goal; identified key outcomes to achieve; and developed a series of activities with metrics and projects with milestones to achieve the stated outcomes. 

 

Out of these plans, the City realized several accomplishments, including:

·              An historic Consent Decree with the FAA to shorten the runway, resulting in an immediate 80% reduction in jet traffic and to close Santa Monica Airport (SMO) no later than January 1, 2029;

·              Passage of Measures H and HH that provided a ¼ point of sales tax funding for affordable housing;

·              Deployment of several specialized homeless outreach teams to provide consistent and sustained engagement with people experiencing homelessness in Santa Monica and link them to services and housing;

·              Implementation of the region’s first bike share program and a nationally-recognized dockless mobility pilot to implement new modes of transit safely investment in street safety improvements

 

In Fiscal Year 2017-2019, with the introduction of the Framework for a Sustainable City of Wellbeing and its identification of high level outcomes the City aims to achieve, the City established SamoStat, a performance management program for the City designed to foster a culture of data-driven decision making.  The Chief Performance Officer trained over 300 staff on performance management principles and worked with the Finance Department to develop a roadmap to transition to a performance-based budget. 

On June 12, 2018, Council adopted the Fiscal Years 2018-2019 Budget that furthers the City’s transition to a fiscally sustainable and outcome-based method of allocating resources.  This approach focuses on using performance data to fully fund important, effective activities and eliminate or restructure programs that do not deliver high priority results.  This is an iterative process, with a plan of fully developing a performance based budget over a six-year period.  The new budget structure goes beyond an organized approach to accounting for programmatic expenses, and seeks to prioritize funding based on community priorities that align to the achievement of Framework outcomes. 

Over the next few months, after Framework Priorities are identified by Council, staff will work to develop a Plan of Action for each Framework Priority, which will be presented to Council as part of the budget presentations in June.  These Plans will identify proposed resource allocations to drive towards the achievement of outcomes, as well as measures of success and projects that are designed to achieve the outcomes. 

 

Evolving the Framework

The current Framework organizes work efforts around seven outcomes, each of which states the ideal state we hope to achieve.  The outcomes are further organized into sub-outcomes, which provide more specificity and definitions around efforts designed to achieve outcomes.  Each sub-outcome contains metrics which allow the City to, through quantifiable measurements, know whether we are on track to achieve our stated outcomes. 

 

The Framework is intended to evolve as the needs of the community and staff work to define activities and metrics progresses.  Over the past few months, staff worked to review the existing Framework and identified the need to refine the definitions of some sub-outcome areas and to better highlight Mobility.  Staff will suggest refinements to the Framework through the budget process but feedback from the public and staff have identified the desire to address long-standing Council and community emphasis on the issue of mobility.  Staff recommends adding “Advancing a New Model of Mobility” as an additional sub-outcome under Place and Planet at the Retreat.

 

Currently, outside of Vision Zero (safe transportation) included under Safety, the Framework did not explicitly include a sub-outcome dedicated to our overall efforts to create a new model of mobility.  Representatives of Planning and Community Development and the Big Blue Bus met with staff from the City Manager’s Office to develop an approach to enhancing the visibility of Mobility efforts in the Framework.  Like Homelessness, Mobility efforts map to several outcome areas.  However, the preponderance of the activities map to Place and Planet, including improving transportation infrastructure and protecting our ecosystems.

 

The Framework is intended not as a static structure, but one that while providing clarity and consistency about desired outcomes continues to evolve along with a diverse and dynamic community.