Strategic Planning and Program Budgeting Help the City of Indian Wells Improve Its Financial Foundation

Author: 
Shayne C. Kavanagh
Katie Ludwig
Year: 
2020

Local governments everywhere face pressure to improve their financial condition. In this article, we will see how the City of Indian Wells, California, strengthened its financial foundation. Though it is a community of only about 5,000 people, Indian Wells’ experience is informative for all local governments. We will also see how Indian Wells’ experience illustrates the concept described by GFOA’s Financial Foundations for Thriving Communities.

It is important to Indian Wells’ fiscally conservative citizenry that their city government is in good financial condition for the long term. However, Indian Wells’ budget process wasn’t always up to the task of getting the city government to where the community wanted it to be. Indian Wells had a traditional line-item budget that showed detailed spending plans for each department. Detailed line items are useful for helping public managers control spending but are not very informative for the average citizen. This is because line items divide resources into categories that are abstract to members of the public. Categorizations such as salaries, benefits, contractual services, etc., didn’t help the average Indian Wells citizen understand what services, exactly, city government was spending money on and why. Exacerbating the problem was the length of the budget. It was over 400 pages or, put another way, it approached one page in length for every 10 citizens! The public found it very difficult, if not impossible, to navigate both the kind and volume of information the budget provided.

Indian Wells still has departments for day-to-day management, but it does not organize the budget presentation around them. Instead, the budget is organized by programs that have meaning to citizens such as code enforcement, building and safety, resident amenities, etc. The budget presentation for each program describes important initiatives the program is undertaking, how many staff work in that program, measures of the work produced by the program, and the cost of that program. The cost of each program also includes an allocation for indirect general and administrative costs, thus revealing the true, total cost for the city to provide each program.