Bloomington Transitions to Outcome-Based Budgeting ahead of the 2027 Budget

​Mayor Thompson's administration implemented Priorities-Based Budgeting (PBB) to the 2026 budget but felt the results could improve. PBB focused on values, not results. Facing new revenue limitations, the administration is transitioning to Outcome-Based Budgeting (OBB) for the 2027 budget. OBB shifts the budget question from "what are our priorities," to "how will we know if these priorities worked?"
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What Is OBB? How Does It Work? 
OBB is the process of aligning resources with available funding and puts an emphasis on expected outcomes. While it follows a similar vision alignment like PBB, it stresses measurable outcomes and transparency. This strategic budgeting process:

• Rewards innovation.
• Measures performance.
• Makes the budget process more transparent.
• Creates a comprehensive budget document.
• Allows for flexibility and alternatives, with long-term planning opportunities.

Roadmaps and Applications from Case Studies
Cities like Baltimore, MD and Winder, GA have successfully implemented OBB in their budget process and continue to each year. While their cities are bound by different populations with different needs, their roadmaps are very similar:

1. Engage with public to articulate policy and service expectations of the council, residents, and customers. 
2. Narrow expectations to agreeable priorities. Ensure that expectations are meaningful and measurable. 
3. Collaborate with operational staff that will be providing the expected service and finance teams on calculating cost estimates to provide the service and the fully burdened personnel costs. 
4. Identify available funding resources and connect streams of revenue to expected costs. Be sure to prepare alternative revenues to consider.
5. Bring municipality leadership together to present fully burdened cost projections, available resources, funding gaps, and alternatives (presenting alternatives in comparative format is recommended).
6. Once the budget is approved, leadership may now train, equip, and lead operational staff in achieving desired outcomes and also develop standards to evaluate progress. 

With the OBB need for enhanced collaboration, cities have used mixed leadership structures and teams to manage implementation. Baltimore has a mayoral leadership team which leads budget talks and assembles Results Teams made up of mayoral staff, city department staff, budget and performance staff, and two citizens. Results Teams are tasked to coordinate with city agencies and articulate outcome priorities and costs. Creating these teams makes organizational sense when applying OBB framework to a population of 568K people. The city of Winder with a population of 21K, has a Chief Administrative Officer (CAO) spearheading the incentive with assistance from the ICMA and city leadership. OBB relies on flexible and honest leadership for successful outcomes, and a structure that has capacity to meet population needs. 

What the City Should Consider
While this approach is incredibly comprehensive and transparent, it is inconvenient. It incorporates everyone into the budget discussion, takes in-depth understandings of programs, services, staff, revenue, and other expectations into account, and enhances collaboration. While these are all good things a city should have in its budget process, it is extremely time consuming and labor intensive. With that considered, the City Council Fiscal Committee has started timeline conversations now to prepare for the ambitious 2027 budget. The next questions should address how to organize roles during this budget process.  How will Bloomington delegate leadership roles to move OBB forward?

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