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Amending Title 21 of The Philadelphia Code, entitled Miscellaneous, by requiring the Mayor to submit to Council, with the Mayor's proposed annual operating budget, program-based budgeting detail that identifies both the cost of performing specific functions funded by appropriations made by the City as well as the effectiveness of such functions, following procedures to be adopted by the Finance Director, all under certain terms and conditions.
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WHEREAS, The City of Philadelphia faces ongoing budgetary pressures due to multiple factors including the broad-based economic downturn, thereby increasing the need for the operations of City government to be efficient, effective, and deliver the most value possible to citizens; and
WHEREAS, Testimony during this year's budget hearings highlighted potential areas for increased efficiency and cost-savings in the operation of City government, including through the implementation of technology; and
WHEREAS, For example, the Human Resources department testified that it was able to eliminate three full-time positions, saving over $100,000 per year, by moving to an on-line job application system; and
WHEREAS, Additional, significant efficiency savings can be realized through methods including systematizing work-flow processes, increasing the use of technology, and moving toward a paperless City government, reforms that should be accelerated with the City's planned IT investment over the next five years; and
WHEREAS, The City's ability to take advantage of these potential savings is constrained by the extent to which job titles, Civil Service classifications, and job descriptions do not necessarily reflect the actual job functions of City employees - making it difficult to determine which functions are essential and which ones should be eliminated, including through the use of technology; and
WHEREAS, The lack of complete interoperability between the various systems used to develop the annual budget and Five-Year Plan and manage the City's payroll also poses an impediment to maximizing efficiencies and savings; and
WHEREAS, Furthermore, due to these system constraints, the substance and structure of the budget detail presented during the annual operating budget hearings does not identify the cost of the various functions performed by City government (for instance, the amount spent per year on cleaning and sealing vacant lots, picking up trash, maintaining recreation centers, and so on) or any revenue generated by the same; and
WHEREAS, From both a budgeting and a management perspective, it is essential to have information about the job functions that comprise a particular service or program, as well as the true cost of delivering that service; and
WHEREAS, Program-based budgeting would enable the City to make strategic decisions based on cost and priority, rather than the typical default mode - increasing most departmental budgets year over year without sufficient understanding about whether the additional funding is needed and how it will be spent; and
WHEREAS, Program-based budgeting has been implemented both in the private and public sectors (including Washington and Iowa states, Dallas, TX and Somerville, MA) and generated both budgetary savings and improved services for citizens; and
WHEREAS, Philadelphia should utilize program-based budgeting to maximize the efficiencies, savings, and improved service delivery enabled by its ongoing and significant technology investment; now, therefore
THE COUNCIL OF THE CITY OF PHILADELPHIA HEREBY ORDAINS:
SECTION 1. Title 21 of The Philadelphia Code is hereby amended to read as follows:
TITLE 21. MISCELLANEOUS.
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CHAPTER 21-1800. PROGRAM-BASED BUDGETING.
§21-1801. Required Submission of Program-Based Budgeting Data.
(1) Beginning with the submission of the proposed Fiscal Year 2012 operating budget ordinance, the Mayor shall submit to Council, together with the Mayor's proposed annual operating budget ordinance, complete program-based budgeting data for each function for which appropriations are made in the proposed budget, including both cost and performance data, following the program-based budgeting procedure adopted by the Finance Director pursuant to § 21-1802.
(2) Council shall not enact an annual operating budget ordinance for Fiscal Year 2012 or thereafter until it has received such information from the Mayor.
§21-1802. Adoption of Program-Based Budgeting Procedure.
(1) To satisfy the requirements of § 21-1801, the Finance Director shall, by regulation, adopt a program-based budgeting procedure. Such procedure shall provide a method to determine, for each function performed by a City department or by a non-City entity receiving funding from the City to perform a specific function, the cost of performing such function as well as a method for measuring the effectiveness of the function.
(2) The program-based budgeting procedure shall determine the component costs of each function performed with City funding, including:
(a) Direct salary costs, including the number of full-time equivalents (FTEs) performing the function;
(b) Fringe benefits costs;
(c) Space rental and maintenance costs, listed separately for each building or other facility used;
(d) Materials, supplies, and equipment costs;
(e) Fleet costs;
(f) Energy costs; and
(g) Any revenue generated by performing the function.
(3) The program-based budgeting procedure shall determine and specify the funding source(s) - including general fund, grant funds, enterprise funds, or any other funds - from which appropriations are made by the City for performing the function.
(4) The program-based budgeting procedure also shall determine metrics for measuring the effectiveness of each function funded by appropriations made by the City, which shall include specific performance goals. The program-based budgeting data provided with the proposed operating budget ordinance for Fiscal Year 2012 and each year thereafter pursuant to § 21-1801 shall include data regarding the performance goals for the current fiscal year, the projected performance for the current fiscal year, and the performance goals for the next fiscal year.
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Explanation:
Italics indicate new matter added.
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