Charlottesville City Council

DAILY PROGRESS FILE

Charlottesville City Manager Tarron Richardson (right) discusses the proposed Capital Improvement Program with the City Council at a work session.

Charlottesville is taking a new approach to budgeting this year under City Manager Tarron Richardson.

Department heads are working through a process known as zero-based budgeting, a new method for the city to craft its annual spending plan.

Zero-based budgeting, as the name suggests, starts at a base of zero. All spending then requires justification and analysis of need and cost.

“It’s basically building up a budget and justifying your expenses from zero and not building it from previous assumptions,” said Ryan Davidson, a senior city budget and management analyst.

According to Forbes, the method reframes spending choices as cost management initiatives.

The process is more prevalent in the private sector, but is used by some local governments.

“This has been around for a long time,” Davidson said. “Every organization does it differently.”

Former President Jimmy Carter implemented the process in the 1970s as governor of Georgia and then tried to bring it to the federal government, but it didn’t stick.

“An organization of that size doing zero-based budgeting — it didn’t work quite like he hoped it would,” Davidson said.

Davidson and city spokesman Brian Wheeler said the standard budgeting process previously has been based around examining expenditures from previous years and building off that.

“What we’ve told departments is you can’t just put in a number, that’s not going to work anymore,” Davidson said. “You have to provide some sort of justification behind that.”

Part of the process includes examining positions, which may raise the alarm about layoffs. Davidson wouldn’t rule them out, but said it’s not common among organizations using the budgeting process. Instead, positions will be assessed as they become vacant.

“A separate assessment any department head has to make is, do you have the right people in the place to do the business,” Wheeler said.

The new process also won’t necessarily lead to “all kinds of savings,” because some departments will cut spending but others might be able to justify an increase, Davidson said.

Davidson said implementing zero-based budgeting will take time to perfect.

“This is something that’s going to be a gradual process,” he said, “because this is the first time a lot of us have done this.”

The new process also can promote additional transparency in spending by allowing officials to amass more information about spending decisions. Davidson said it’s a more “labor-intensive” process.

Department heads were given an extra month to prepare their budget requests.

Davidson, however, said the additional information likely won’t be included in the final budget packet that is approved by the City Council because only two people prepare the more than 200-page document.

He said the additional information will benefit officials making spending decisions.

Wheeler said zero-based budgeting promotes a “more efficient use of taxpayer dollars.”

“As you’re building the budget, you’re looking at every aspect of the operation,” he said. “We can go to the public and show an effective use of money and make sure everything is justified. [The public] wants that level of confidence in their government.”

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City hall reporter

Nolan Stout is a reporter for The Daily Progress. Contact him at (434) 978-7274, nstout@dailyprogress.com, or @nstoutDP on Twitter and Facebook.

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