Lessons from Performance Management Leaders: A Sample of Larger Local Governments in North America
By Shayne Kavanagh, Senior Manager of Research

In 2012 the Government Finance Officers Association (GFOA) received a research grant to conduct a study on performance measures of larger North American cities and counties, this funded comprehensive interviews and surveys of ten organizations already using a performance management system.  Through these organizations the GFOA was able to further study eight sections of performance management systems. The sections are the development of performance measurements, staffing & training for a performance measurement system, analytical approaches, using performance measurement for decision making, validation of measures, elected officials’ perspectives of performance measurements and performance measurement challenges & defects. Each section outlines the value the participating governments perceive to experience with performance measurement and some of their believed keys to success, essentially providing  guidance to other organizations looking to implement performance management systems.


A Risk-Based Analysis of General Fund Reserve Requirements
A Case Study of the City of Colorado Springs
By Shayne Kavanagh, Senior Manager of Research

The City of Colorado Springs recently contacted the Government Finance Officers Association (GFOA) in regards to how much is necessary to maintain in reserves, a question lingering among other governments. Initially developed for consulting purposes this case study works to educate others about risk-based assessment of reserve requirements. The case study first identifies general risk factors that traditionally impact reserves of municipal governments. Then specifically identifies primary risk factors; revenue volatility, infrastructure upkeep and vulnerability to extreme events, which influence the reserve levels Colorado Springs and the level of exposure to these risks. Finally the case study briefly covers other less weighty secondary risk factors before providing the GFOA’s specific findings and recommendations to continue to improve the financial health of Colorado Springs. GFOA does not provide a “one-size-fits all” approach to reserves but rather provides Best Practices which recommends, at minimum, regardless of size, maintain reserves equal to about 16 percent of revenues.


Containing Health Care Costs
By Shayne Kavanagh, Senior Manager of Research

As employee health care benefits continue to rise, employers are faced with the relentless problem of finding extra money to fund them. This paper provides six leverage points, along with specific strategies for each, for public employers to manage and contain the cost of employee health care benefits. Leverage points include, changing the level of benefits provided, managing participants’ choice of providers, sharing the cost with employees, reducing the use of health care services by employees, right-source health benefit services, and maximizing the value received for the health care dollar. The best option for any given employer varies with size, political environment and the needs of the employees, however different combinations of these leverage points, and other specific strategies in this paper have demonstrated positive results across various governments in the United States. 


Strategic Spotlight: Containing Healthcare Costs
Proven Strategies for Success in the Public Sector

In these spotlights, the GFOA has identified various effective strategies ranging from wellness programs to increasing co-pays that can help the public sector contain healthcare costs while still managing the quality of employee health-care benefits. Each handout provides a brief definition of the strategy, surveys and comments from those who have and have not applied the strategy and other important points. A more in depth look at these strategies can be found in the full report titled, “Containing Health Care Costs”.


Zero-Base Budgeting: Modern Experience and Current Perspectives
By Shayne Kavanagh, Senior Manager of Research

Zero-base budgeting (ZBB) builds a budget from the ground up, starting from zero, but the “textbook” version of this type of budgeting is rarely seen in practice; instead two modified versions are used more frequently; zero line-item budgeting and service level budgeting. This paper provides clarification on this commonly misunderstood budgeting method and explains the differences between the “textbook” version and these two variations. The paper then describes potential advantages and disadvantages of ZBB; giving public officials a better idea of whether this type of budgeting is right for their circumstances. If ZBB does not fit a situation, provided are options for alternative planning and budgeting methods that often achieve similar results.


Anatomy of a Priority-Driven Budget Process
By Shayne Kavanagh, Jon Johnson and Chris Fabian

Traditionally governments have chosen incremental budgeting but a more strategic alternative, priority-driven budgeting, presents the idea that resources should be allocated according to how effective a program or service achieves the goals and objective that are of greatest value to the community. This type of budgeting is not a one-time event but should be the “new normal”. This paper demonstrates how this approach can be achieved through eight major steps. The steps are as follows; identify available resources in order to understand how much should be budgeted, identify priorities in terms of measurable results that are agreed upon by all stakeholders, define your priority results more precisely, prepare offers/programs for evaluation, score offers/programs against priority results, compare scores between offers/programs,  allocate resources and finally make sure those who receive the allocations are held accountable for producing the results they promised. 


Building a Financially Resilient Government through Long-Tern Financial Planning
By Shayne Kavanagh, Senior Manager of Research

The current recession has taught governments that being sustainable is not enough; they must be resilient, able to thrive under conditions of adversity. This paper discusses how governments should be dedicated to long term financial planning; by focusing on these eight essential characteristics they can achieve a resilient system. These characteristics are diversity, redundancy, decentralization, transparency, collaboration, fails gracefully, flexibility and foresight.  Through achieving these characteristics governments not only create soft landings in times of economic distress but create value for the public through government action.

Less Time, Lower Cost, and Greater Quality: Making Government Work Better with Lean Process Improvement
By Shayne Kavanagh, Senior Manager of Research

Lean, the collection of principles and methods that focuses on identifying and eliminating waste involved in producing a product or delivering a service to customer, is a powerful tool for improving efficiency and employee productivity especially in the current times of revenue scarcity. This paper takes a look at the Lean process and breaks it down into three main steps. The first, planning a Lean initiative, suggest that high volume processes with low variability often have the highest potential for savings, but the participants and decision makers in these processes must be willing and open to Lean for these savings to be realized. The second step, executing a Lean event, includes training sessions and creating Value-Stream Mapping (VSM). The final step, the Lean follow-up, entails making sure all participants are being held accountable for completing their duties and performance measures are recorded so as to see if the Lean event is reaching its objectives. Lean is more than just a one-and-done event; it should become fundamental part of how work is accomplished.

Making the Grade: Long-Term Financial Planning for Schools
By Shayne Kavanagh, Senior Manager of Research

As school districts continue to be faced with new and complex challenges of longer nature, planning for the long-term is becoming of greater importance. Successfully navigating through these new and complex challenges requires a long-term plan that describes present and future educational needs of the community, actions the school must take to meet these needs, and how these actions will be funded. This paper lays out the The Government Finance Officers Association’s four phrase approach to long-term financing planning; the mobilization phase, the analysis phase, the decision phase and the execution phase.

Generic Retrenchment Techniques: Any-Time Responses to Fiscal Distress
By Joe Casey  and Shayne Kavanagh

During the early stages of a financial recovery, jurisdictions need to take action right away to begin to stabilize the situation – before the leaders of the recovery process will be able to conduct a detailed diagnosis of the causes of distress and develop a response tailored to the situation. At this point, the organization can turn to generic retrenchment techniques – techniques that are safe to apply with little or no foregoing diagnosis of the situation, which are especially useful at the start of the recovery process. This paper presents a number of generic retrenchment techniques, divided into categories such as personnel, revenues, supplies and materials, and more. The experiences of Hanover County, Virginia, are presented as an example.


A Performance Management Framework for State and Local Government: From Measurement and Reporting to Management and Improving

The National Performance Management Advisory Commission, a collaborative effort of 11 leading public sector management organizations, developed its final report,  A Performance Management Framework for State and Local Government: From Measurement and Reporting to Management and Improving.  The commission developed the framework to help state, provincial, and local governments, many of which are operating under severe resource constraints, to continually improve the results they provide to the public.  The report provides a model for public sector performance management, describes performance management concepts and practices, outlines the benefits of performance management, offers guidelines for governments to use in implementing performance management systems, and presents case studies from governments that practice performance management.

Generational Change: Task Force Report

Created in June 2009, the Government Finance Officers Association’s (GFOA) Generational Task Force was developed to address three main issues, recruiting, retention and retirement, presented by the shifting of the workforce to one that includes four diverse generations. This report, written by the Generational Task Force, provides governments with practical and supportive tool, along with case studies, that will help them meet new challenges regardless of their current state of preparedness. Evidence provided in this paper demonstrates how generations differ in work styles, motivation, technological skill and personal values, understanding these differences in key to productive interactions and performance among these varied groups.

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