(Unedited) Podcast Transcript 455: Finding Resources to Do Big Things

This week we’re joined by Chris Fabian of Resource X to talk about his work on priority based budgeting. We discuss how cities create budgets that reflect their policy goals and what it takes to find resources for big ideas.

You can listen to this episode at Streetsblog USA or find it in the hosting archive.

Below is a full unedited AI generated transcript:

Jeff Wood (1m 25s):
Chris Fabian, welcome to the Talking Headways Podcast. Well

Chris Fabian (1m 49s):
Thank you very much. I’m really pleased and grateful to be here.

Jeff Wood (1m 53s):
Well, yeah, we’re so glad you’re here. Before we get started, can you tell us a little bit about yourself?

Chris Fabian (1m 57s):
Sure. My name is Chris Fabian. I live in Denver, Colorado and I’m c e o of a local government organization called Resource X or Resource Exploration. This is the latest manifestation of quite frankly, how we’ve been working on the exact same problem for over a decade. And that problem is how to ensure that local governments have the resources readily available that they need to fund priorities and outcomes that they really want to deliver. And it’s a very exciting problem for us to be working on consistently. And we have a means to an end, which is called priority based budgeting, a way to rethink the way that the budget works in order for local governments to find out that maybe they have more resource availability than they might’ve thought to begin with.

Chris Fabian (2m 51s):
And if we can succeed at that, then we can re-channel and reprioritize resources towards priorities in need, and that’s what we do.

Jeff Wood (2m 59s):
Awesome. I wanna go back a little bit further before Resource X maybe and kind of understand like what your interest is in local governments and cities and did it start when you were a kid or was it something that blossomed when you were older? I’d love to hear more about that.

Chris Fabian (3m 13s):
Yeah, that’s a great question. I think about that myself. Like for all of us, at some point in our career we were either, you know, you think about being Indiana Jones or a superhero, and then at some point you’re in local government working on the budget. And the question is like, what happened in the middle to justify this incredible pivot? You know, our dad worked in local government in Berkeley, Michigan, and he was a council member, ultimately executive director of a nonprofit environmental health organization. And maybe that’s where it started. I’m not totally sure, maybe it was watching a lot of episodes of the West Wing when we were growing up and that seemed to be a pretty gripping and fun show to watch.

Chris Fabian (3m 54s):
Or maybe it was just innate, not quite sure. But I got my start in engineering of all places and was working on water and wastewater treatment plants and water rights. And in the midst of doing that work, I met a city manager who I had not been exposed to before. That’s an interesting profession. The engineering firm I was working at had hired a city manager to teach the company about how local governments actually work. This was an engineering firm who supported local and state governments overall. And so it was beneficial to them to have a city manager’s perspective on, you know, how does funding actually get appropriated to fund the projects that the engineering firm is trying to win.

Chris Fabian (4m 35s):
In the midst of getting to know this individual, we did some water rate studies for a community or we’d do a fleet analysis for another community. And I liked that it was kind technical work and as we would free up money or find certain efficiencies for Laramie, Wyoming, or Inglewood, Colorado, my interest was always where does that money go? You know, I hope that we did some good, if we saved a million dollars in one place or another, does it get refunded? Do taxpayers, does it go to improved compensation for police officers? Do they fund something interesting with it? And, and I guess that that was the rabbit hole that went down to try to continue to find out where does the money go and ultimately does their work have any impact?

Jeff Wood (5m 21s):
Yeah, oh my gosh, that’s such a great story. I mean, it’s so interesting to think about like the budgets and, and how they all work and all the line items that you have to go through in order to figure out what that money’s going to. Was there something in some of your first jobs that kind of struck you as like, oh my gosh, this is a whole thing we can do, make it so much bigger and do so much more for places going forward?

Chris Fabian (5m 43s):
Yeah, I’ll say as we did kind of go down the rabbit hole, so to speak, looking for where did the savings go, you couldn’t help but broaden your perspective on what a local government does. So while we might have saved money in a fleet operation and we were really narrowly focused on how do they spend money on vehicles, you start to zoom out and figure, well, what do they use vehicles to do and what services are being provided where people need to drive? And then you get into heavy equipment and all sorts of things. So you can’t help but find yourself looking at the bigger picture, how resources are being used. And I guess that’s what started to excite me personally, was that bigger picture of how does a local government actually make these decisions on who gets what and what priorities they’re they’re trying to fund.

Chris Fabian (6m 32s):
I’ll add one more thing. It was around this time of this problematic question. We were asking ourselves, does our work have any meaning? Are we doing something worthwhile in our work? There was a group called Public Strategies Group, their authors of the book, reinventing Government, and they had come out with a book called The Price of Government, and they were onto this idea of budgeting for outcomes at the state level. And we reached out to this organization because we thought that’s really interesting. Their premise was the budget is a culprit in obscuring the answer to our question are the resources being used to fund something meaningful?

Chris Fabian (7m 14s):
The budget was a confusing element, like things get messed up in the budget and nobody really wanted to take that on. And they had imagined what if we could see the budget not from a departmental or a line item perspective, but from a an outcome perspective overall. And we reached out to this organization, we became one of their partners early on in some of the work in the city of Fort Collins, Colorado and Snohomish Washington, and thought, wow, they’re, they’re really trying to pursue something that is exciting and interesting. And then maybe it was the engineer in me that said, I bet we can help come up with a different way to answer the same question that they’re trying to answer.

Jeff Wood (7m 53s):
Well, that was another question I have for you is, is like, if I’m a regular resident of a city or town, could I go into a budget and easily understand it, right? Like if the folks who are working on it maybe don’t understand it as well either, then what about, what if you’re just like a citizen pays taxes, right? Right. And your, your money’s being spent. Oh,

Chris Fabian (8m 9s):
I, I really identify with where you’re coming from. So think about we have a, a tension in at least our, in the United States and certainly across the world about those who might be thinking that taxes are a good thing and those who might be thinking that taxes are a bad thing and they’re conservative or they’re progressive. And I recognized that tension and I thought, wow, if sometimes the folks in local government don’t understand where the resources are going and think about the resident’s perspective and how hard it is to really understand if the resources are being allocated in the best way possible towards outcomes that really matter.

Chris Fabian (8m 49s):
And therefore, I I have definitely wondered for a long time, can we help resolve or minimize or diffuse a lot, lot of that tension and pressure about one side of the political perspective or spectrum versus the other. If we could bring better understanding to how resources are allocated, because it, it’s hard to even form an opinion on does the local government have enough tax resources or not enough without really understanding like, what are we funding today towards what end? That’s my thought on it.

Jeff Wood (9m 19s):
Yeah, and also, I mean, it is probably shaped by local news and also, you know, the priorities of people that are, that are pushing certain agendas or others, et cetera. I feel like there’s a lot of, you know, words to paper put out there about how we spend our money, but there’s always something behind it, I imagine.

Chris Fabian (9m 34s):
Yeah. And how we’re spending our money today begs the question, what options do we have? What levers could we pull to allocate the resources differently to try to be in the, in more in the direction of what a community wants or needs? And so to your point about maybe a newspaper article or a somebody who has an agenda can really frame how a local government is allocating resources at this very moment. I’m always interested in, okay, so what are your options in our experience? You find out you have way more options than what you thought.

Jeff Wood (10m 7s):
I have another question for you that’s, I feel like discussed a fair amount and it’s about the goals and priorities that you were talking about earlier, which is like, there’s a saying that a city or any public agency’s like true priorities show up in their budget. And I’m wondering if you who have worked on many budgets believe this is accurate or not.

Chris Fabian (10m 24s):
So I I’ve definitely heard this phrase, the the budget is a moral document. You hear that, you hear yes, the priorities are reflected in the budget, that’s where it’s at. And while I believe that to be true, I’ve gotta say it is often the case that when we reflect back how the resources are being allocated based on the programs that are invested in and the priorities that are actually being accomplished, how often it is that this is a surprise moment. Sometimes priority based budgeting is like a mirror when you first do it to say, we’ve looked at your budget, you believe that it’s a moral document, you believe your priorities are reflected, we’re showing it back to you. And oftentimes departments elected officials might be a little surprised at what they see, which, what’s the implication there?

Chris Fabian (11m 13s):
The implication is our intentions are that the priorities are reflected, but again, the devil’s in the details. We have to really get into it to understand how are you funding those priorities. That’s not a trivial question to answer. How are the resources actually being invested into priorities that matter to create a measurement device that answers that question will prove or disprove that statement that you made. The budget is the reflection of your priorities.

Jeff Wood (11m 43s):
Yeah. So I’m wondering then going to the next kind of logical step, like what is a priority based budget then? Like, you know, if you are going to put the budget into a, a Framework that actually pushes a city or or an agency of any kind towards, you know, spending on their priorities, what does that priority based budget look like and and how could it be created?

Chris Fabian (12m 3s):
I’ve heard it described most recently as a map, a map between resources and the priorities that you’re striving to accomplish that’s a priority based budget. So city of Duluth, Minnesota, we were just presenting with them last week and they said their elected officials had spent a great deal of time creating a vision for 2035. This is the kind of thing that local governments do. We create a long-term vision. On the other hand, you have your budget at the line item level filled with your chart of accounts and each and every line item where resources are being allocated or appropriated monitored. And somewhere in the middle we need a map. They described it, a translation device is how Albuquerque, New Mexico has described it like a Rosetta Stone.

Chris Fabian (12m 46s):
So the priority based budget is maybe a lens to take on the one hand the information around line items and translate it in terms of the investment into those priorities. Overall, that’s a priority based budget. Technically local governments do line item budgeting or they budget at a line item level is what that means. And that’s line item. Budgeting hasn’t been around since like the beginning of creation. Like at some point in the history of humankind line item budgeting was a a very novel idea, Hey, we should really track and account for certain cost categories.

Chris Fabian (13m 26s):
And I use the word account accounting was the primary function to really understand how we’re using the resources to spend on paper or vehicles or supplies or postage. And where priority based budgeting sort of found its relevance was if you look at a line item budget and you ask yourself a simple question like take any line item, take your favorite line item postage, take

Jeff Wood (13m 53s):
Miscellaneous

Chris Fabian (13m 54s):
Or whatever staples, and you say, how does that line item help us accomplish a priority like equity? Or how does that line item help us accomplish a strategic priority like building a safer community? What inevitably happens is you find yourself making up some sort of middle story. So you say vehicles and you say, well, well we have these vehicles and why do we need them to create a safer community that’s a priority. Well, I’m sure that some vehicles are used for police patrol, so I just made up a, a connection in the middle and police patrol is something we do to create a safe community. All right, that’s interesting. What about something else that leads to a safe community that’s vehicle related?

Chris Fabian (14m 35s):
Well, we have inspectors that go out and they drive their vehicles to go to a construction site or a building and inspect it for safety. Okay, that’s great. So now here’s two examples where I’m, I need to make up some sort of context in the middle to, to take the line item vehicles and connect it to the priority of a safe community. And that connection in our experience is what are the vehicles, what are the line items being used to do? And the answer to that question is, programs and services programs and services are the, are the vehicles metaphorically the means to an end to deliver?

Chris Fabian (15m 16s):
So you, you take line items, you invest in a program or service, which is people or stuff providing something in order to achieve an intended outcome. And a priority based budget is leveraging the line items of your budget and filling in the gap between what are you doing with those line items and the priorities that you’re trying to accomplish.

Jeff Wood (15m 37s):
How complicated does that get though? Because you know, you might have one person on one side saying that, you know, the inspector’s vehicle would be, you know, there’s value in that because they go inspect buildings that won’t fall down in earthquake or et cetera. But then you also have folks that are like, well why can’t those inspectors like take the bus? Right? Like those types of different priorities that maybe like different folks have for safety to a certain extent. And so I’m, I’m curious like how complicated does that get to get from A to C through that B connector that you’ve talked about?

Chris Fabian (16m 7s):
I like it. So let me try this. So the program and service is the connecting point between the line item vehicles, the program, what you use the vehicles to do in order to deliver a priority like safe community. Now to your point, we can scrutinize how that program is being delivered and say you’re now you’re getting to some interesting meat, which is how is the program delivered? We could do it ourselves, we could use our own vehicles, we could use the bus, we could walk. Those are choices in how you use the resources in order to provide the program that delivers the outcome.

Chris Fabian (16m 50s):
And I think those questions are definitely incredibly relevant from an efficiency standpoint or how the program is delivered. So we get into the how, and I think this getting back to your complexity, do we need to provide it? Does our local government need to provide this? Can we partner to provide it? Is somebody else providing it? Do we charge for it? Do we use general government resources and subsidize it? Do we use our own vehicles? Can we use another means of transportation? So those are all questions of how do we use the resources creatively in, I like your example, in order to provide that program and deliver the priority.

Jeff Wood (17m 29s):
Another interesting one that I read about in one of the resources that your brother sent me was that, you know, if you’re a transportation department, for example, and this is something I’m, I think feel like my listeners will be interested in, is if you’re a transportation department and you have a Vision Zero goal Yeah. And you’re, you need to budget towards that vision zero goal, maybe you’re investing more in street scapes and street design than say some other investment that doesn’t reach that same goal. And so I think that that’s an important distinction as well is like you can actually align these budget priorities with the goals and priorities that you actually have for your city. And I think a lot of folks get frustrated with things like Vision Zero because people say and pronounce that we’re gonna have a Vision Zero program, but then nothing actually happens.

Jeff Wood (18m 10s):
It’s somewhat, you know, it’s sometimes it’s platitudes.

Chris Fabian (18m 13s):
Yeah, I like, I like where you’re going. So we have supported the city and county of Denver, Colorado, Flagstaff, Arizona, both communities come to my mind as I’ve heard commitments towards the goal of Vision Zero in the transportation department overall. And I like how you were just framing it. So you take Vision Zero and we have to kinda create the logic model. I’ve heard that phrase used before. What’s the logic model on how do you get to achieve Vision Zero? Is it program delivery? Is it projects in your capital budget? Is it policy or design for how you approach street design overall?

Chris Fabian (18m 54s):
So you, you can easily start to come up with, and I know that you and your listeners would have so many concrete examples of how you deliver Vision Zero, what are the strategies, what do you provide? And then the next question is what’s the price tag? So you have programs and projects and policies and the price. So then ultimately how do your resources align with the designers who are planning your streets or the projects to slow traffic and add signage and signalization and, and those sorts of elements overall. But I, I like what you did starting with the priority, the goals and backing into, all right, we have several choices for how are we going to deliver or execute on this outcome that we’re looking for.

Chris Fabian (19m 40s):
And then ultimately how do you fund it?

Jeff Wood (19m 42s):
Yeah, and I, I should say that I’m, I’m coming from a little bit of an unfair advantage because we just had Kerry Watkins and, and David Ederer on the show and I actually haven’t released that episode yet. So we talked about the Safe Systems Pyramid and that’s actually a different way of thinking about safety and I think that your budgeting process could actually fit into their Pyramid very well. But the episode isn’t out yet. It’ll be out by the time your show is out. But I hope folks will be listening to both episodes and combine the two because I think it’s really important. What’s the process for getting folks on the same page? There’s different department heads that are, have control over budgets. They probably have a good big say over what happens. You have these lofty kind of overarching goals, you probably have departmental goals and things like that. I’m wondering how you get everybody on the same page and talking the same language.

Chris Fabian (20m 25s):
Wow, that’s such a great question. So a basic answer is that there is a recipe to this design overall where each department investigates the programs that they provide. Actually we, we anymore, we give departments a list of programs that they most likely provide based on just having looked at so many local governments. And of course we see unique programs offered by any given city or county who we’re working with. But by and large you’ll see a lot of overlap on what is a program, what is a service in our definition. So departments walk through this mapping exercise to identify what are the programs they provide, how do they align items, support the delivery of those programs overall.

Chris Fabian (21m 7s):
And then those programs get scored or, or connected to the various strategic priorities that the organization is trying to accomplish. So from a process standpoint, departments are on the same page and speaking this language using the vocabulary of programs supported by line items and how do programs connect to the priorities that they’re trying to accomplish overall? Now that’s the basic answer. So putting the, the data together is any more a very repeatable exercise and, and we’re even predicting it for organizations, which is a whole nother topic and very interesting and cool. But I think what where you made my mind go at least was so same page from a department.

Chris Fabian (21m 51s):
Sometimes we find that a department is doing their best to make their departments successful. And so they have their own priorities, they have their own objectives and their own vision, which is very worthwhile in a local government organization. However, it’s not one department’s perspective on the priorities. The harder question to get to is what are the priorities across all of the overall, I was recently in the city of Fort Worth, Texas and they’re in the midst of doing priority based budgeting in a phased approach. So they have a group of departments who’ve started and then they’ll have a second phase starting in the fall.

Chris Fabian (22m 34s):
And I, I went to the city to be a fly on the wall in the middle of their budget hearings. And each department gets up and they describe what it is that they’re asking for in the budget for the year ahead. And any given department, whether it’s the library or human resources or police or public works, they all have incredibly exciting stories to tell. Things that ambitions, things that they’re trying to accomplish overall. And you sit back and you, and you think about, well just for that department they have their game plan together and it’s very exciting to think about what the library’s gonna do. But then you turn your attention to the city manager who’s listening to all of these presentations and you quickly recognize what a challenging job that is because that individual has to hear all of the great objectives from every single one of the departments and try to to use your words, get them all on the same page for what is the highest priority and what is, if we had to draw the line somewhere where we couldn’t fund anything anymore, how would we come up with the answer to that?

Chris Fabian (23m 46s):
Where does that line get drawn? And that’s the rest of the virtue of priority based budgeting is trying to get a fair process to calculate what budget proposal is actually a higher priority than another budget proposal. How do you rank them, how do you score them overall? And that’s part of the Framework

Jeff Wood (24m 7s):
Through this process. Do you see people’s minds change over the time period of, of what they feel is important and what they feel is less important? Or is it like, is it a iterative process? Is it something that everybody puts their names in the hat and then the city manager decides like how does it change over time from the beginning of the process to the end of the process?

Chris Fabian (24m 27s):
That’s a great question. You’ll see the alignment overall of departmental budget requests with overall priorities, the appreciation and open-mindedness that there are numerous priorities that the organization is striving to achieve. You even take a police department who for the most part when we start our work, is very focused on, on public safety, the safety and wellbeing of residents and visitors and a and property in a community overall. And a police department might not always be well-versed in thinking about the impact that their programs have on other priorities outside of public safety.

Chris Fabian (25m 8s):
For example, economic vitality, absent a police presence downtown, maybe you don’t have the feeling of personal safety. But a police department is not used to talking about the impact of their programs from an economic vitality lens. They’re not used to talking about their programs from a transportation lens and how police patrol on your streets actually leads to more orderly traffic flow. But they, they think about public safety, they think about the safety priority, not necessarily equity, all the other priorities that they might impact. And so over time, I think the appreciation that any given department head will gain in their work is the cross-cutting impact that their programs have on not only one priority but all of the priorities of the organization.

Chris Fabian (25m 57s):
You take a library and you think about like what’s the purpose of the library? Why do we continue to maintain a library system? And you quickly go towards enrichment and lifelong learning and access to information education anymore. Libraries have an impact on economic vitality from a workforce and training perspective or a mental health perspective as they’re providing safe places for the public to have shelter and have access to resources overall. So point being we’re trying to wrap up is over time I think departments get out of their narrow perspective on the priorities that they’re most used to talking about and really start to broaden their appreciation for everything that the city is really designed to achieve.

Jeff Wood (26m 44s):
I’ve seen a lot lately on participatory budgeting and I’m wondering if you’ve come across that as well and how that might fit into the process.

Chris Fabian (26m 52s):
Absolutely. So participatory budgeting, it’s not like one or the other participatory or priority based participatory budgeting. And I, I won’t claim to be an expert. We’ve seen it in Philadelphia, we’ve seen it in a few communities where we’ve worked, where residents are invited in or people who don’t work for the local government per se and given a, a finite set of resources, maybe not the entirety of the budget overall, but at least a meaningful chunk. And the goal is how would these residents prioritize these resources? What would they want to achieve? And sometimes participatory budgeting is geared towards a specific objective. Over the last few years we saw enhancing equity in communities was something really important to start to really understand the voice and perspectives of various neighborhoods, people living in various neighborhoods, people from various vulnerable populations to have the opportunity to say, here’s what I would want if given these resources overall.

Chris Fabian (27m 53s):
And I think the exciting connection with a priority based budget is that the more that we can really truly understand what the priorities are from the perspectives of your, of those who are trying to serve the overall residents in our communities, the better priority based budgeting works because it’s a simple Framework to measure the alignment of resources to programs that impact those priorities. And the question is always, do we have those priorities, right? You do your best with elected officials, their perspectives, presumably they ran on a platform that is representative of the voters who put them into office, the department’s perspective because there’s such subject matter experts and what really needs to be delivered.

Chris Fabian (28m 35s):
And then the more that we can really be in touch directly with residents, then you have their voice at the table and influencing this process overall.

Jeff Wood (28m 45s):
So the way that I’ve actually found out about you all was through an article in grist about Pittsburgh and their work on aligning their budget towards climate priorities. And I’m wondering, you know, what was that process like? And I’m curious also about the results.

Chris Fabian (28m 59s):
Pittsburgh is one of our most exciting stories and I think with any organization who adopts priority based budgeting, the success is in how they make it their own. And they priority based budgeting is a tool. Priority based budgeting is a vehicle a means to an end and therefore it gets better to the extent that the organization has clear specific outcomes that they want to try to accomplish with it. In Pittsburgh’s case picture, it was right in the midst of the initial days of Covid and as the pandemic was, you know, raging on and we didn’t have vaccines yet, we certainly didn’t have federal assistance or ARPA had not been imagined yet.

Chris Fabian (29m 43s):
Here is the city of Pittsburgh doing their best like so many other local governments to be good stewards and manage de declining resources. Those were very scary times in the initial days of c OOO v I d where sales tax revenues and property tax revenues, sales tax in particular tourism resources were on the decline. Many organizations were striving to just maintain current services, core services as you call ’em. So budget cuts were the norm and here comes the city of Pittsburgh looking for an opportunity to really scrutinize budget strategy in these tough times.

Chris Fabian (30m 28s):
But the, the twist was the city of Pittsburgh was working with Bloomberg’s American Climate Challenge Cities program where through the initiative mayors of, of certain communities who are very committed to climate goals, were looking for answers for how do they fund them. You have a climate action plan and we have an inventory of emissions, we have a, a vision zero for carbon neutrality, zero zero emissions overall. And the city of Pittsburgh reached out to us to say we have a climate action plan, we’ve just put it together. It is not free, it’s very costly. We have all of our initiatives identified for what we want to do.

Chris Fabian (31m 8s):
We have a price tag around these initiatives. What we don’t have is any realistic connection to how are these initiatives gonna get funded. When you talk to Grant Urban, who was their chief resilience officer at the time, he described that in his discussions with the budget office in Pittsburgh. They called these projects related to the climate action plan. Unicorns meaning they are fiction, they do not exist, they’re not going to come about anytime soon. And so the why the value proposition for priority based budgeting in Pittsburgh was we have to challenge ourselves to look at our budget, which is already decreasing in the midst of covid.

Chris Fabian (31m 51s):
Our departments have already gone through the, the work to offer up reductions in their budget. Mayor Peduto at the time, it’s Mayor Gainey now who has carried the torch. Mayor Perdu at the time said, we not only have to preserve the status quo as best as possible, but we have to dig deeper to find resources to reallocate from our own budget in order to come through and fulfill our obligations from the climate action plan. I remember being in a, in a staff meeting, so you got chief of staff Dan Gilman and the department heads and one of the department heads raise their hand and said, so let me hear you straight. We just reduced our, our budget to barely make it through covid.

Chris Fabian (32m 35s):
We’ve got vacancies that we’re not filling, we’ve reduced various supplies and services and are you saying that you want us to reach deeper and offer up more ideas for creative ways that we can save money so that you can fund your climate action plan? And the answer was, well you’re close. It’s our climate action plan as a city, this is our priority. And yes, that is the answer we’re going to study where every dollar goes towards every program to come up with new partnership opportunities, new entrepreneurial revenue generation opportunities, things that we can stop doing altogether if it meant that we could free up resources if reallocate them towards funding our unfunded climate action plan.

Chris Fabian (33m 18s):
The whole point being, and this most exciting part to me is that even in the midst of economic downturn like covid, but not just covid, we experienced fiscal pressures with inflation as well. Sometimes local governments say, well we’re gonna do our best to hold onto core services. And what I like about what Pittsburgh said is that’s not good enough. We have much more bold ambitions to accomplish and if we as local governments don’t find a way to get the resources towards those goals, look behind us, it’s not like there’s a private sector entity going, I can’t wait to get into the climate action business or the equity business or the supporting homeless populations business.

Chris Fabian (34m 0s):
If local governments can’t tackle it, then the priorities will potentially not get accomplished and that’s not the outcome we want. Therefore, when communities say we’re gonna reexamine and rethink our budget to free up resources to find funding, you create agency, you are assertive. Not quite the words I’m looking for, but I think you get what I’m talking about. Take control of your own destiny. Right.

Jeff Wood (34m 24s):
So then Pittsburgh went through this process and what’s the outcome like? I mean I’ve read, you know, they save $50,000 by a limiting paper contracts and using DocuSign instead and like little tiny things that they kind of went through the budget and found spots where they could actually save money. Yep. But from a climate perspective, like what is the overarching like result of their budgeting process?

Chris Fabian (34m 46s):
Yeah, and I like how you were describing it. You take the little things like $50,000 on saving on paper and they saved on postage by rethinking how they’re sending out utility bills and how people pay and reexamining how pay stubs get delivered and do they need paper for that? And you take every little small cost savings measure and you add ’em up across all programs, across all departments, across the entire organization. And next thing you know, for the city of Pittsburgh, they had identified over $40 million in resource reallocation opportunities plus new, new revenue generation. When they started their work, their fear was we have $0 for our climate action plan.

Chris Fabian (35m 31s):
So to get to 40 million, it doesn’t solve their climate action plan. They need many more resources. That is absolutely to be sure, but to, to go from, we think every dollar is accounted for, it’s already spoken for. We have zero, we’ve cut to the bone. Those are the the phrases that we tell ourselves sometimes in local government, we’ve already been through our low hanging fruit. We don’t have any more to get from that point to, well our first cut at this we found $40 million and then some for reallocation opportunities to me is tremendously hopeful and optimistic and they can keep going and that, you know, you fast forward to today and that is their continued use of priority based budgeting is to constantly reexamine their business models for providing programs and services overall.

Chris Fabian (36m 22s):
Now where we at Resource X, you mentioned before your Pyramid your systems

Jeff Wood (36m 28s):
The Safe Systems Pyramid, yeah. Yes,

Chris Fabian (36m 29s):
Exactly. And you say, well maybe you have a part in that. That’s the part that we wanna play. If we can fix the, the readily available resources part, then we know full well there are the Grant Urbans of the world and the Patrick Cornell’s in Pittsburgh is who I’m describing, Wil Bernstein and Jen Olinger who have serious vision for how to use those resources and put them to use in the climate action plan. Or when we’re working for a chief equity officer and we’re in Los Angeles and Bils is looking for you, find us the resources and we know where to invest them to achieve this particular objective. That’s where we have a partnership with those who are bringing about the impact and we’re part of that resource engine overall to, that leads to the impact.

Jeff Wood (37m 14s):
Another interesting connection to a previous show that we’ve done was we had David Slicers on from Yale to talk about his book in a bad state. And you know, the discussion was basically on these dips in the economy and how, you know, there’s bailouts and there’s moral hazard related to those. And the interesting part is that, you know, a lot of local governments have to cut and create this austerity during times downturns, whether it’s covid or you know, the Great Recession or things like that. And a lot of places in rural areas specifically haven’t even recovered yet from the recession. And now they get hit by covid. There’s a lot of, you know, damage that’s been done to local governments across the country. But I find your, your solution very interesting in that, you know, maybe they don’t necessarily have to go through this period of, they might have to cut some things, but they might have not have to go too deep into their austerity if they can find these solutions where maybe they haven’t rethought their budget in quite a while and there are these savings like a DocuSign, like, I mean that’s not like a, that’s not like a a a management consultant coming in and being like, you know, nickel and dimming.

Jeff Wood (38m 14s):
It feels like an actual real savings, right. To a certain extent. Oh,

Chris Fabian (38m 18s):
I, I really like how you, you put that, I mean our goal is, when you said real savings, it makes me think of we’re trying to create win-wins where you’re spending your current budget differently in a way that is reasonable, is practical to free up money and, and reallocate it towards things that you couldn’t fund before without necessarily having to ask the public for more resources if they can’t afford it. Now in many cases, party based budgeting helps frame what you’re asking the public to fund. We love that. Is that what you’re at least clear Jeff? I would also say, think about this for a second. Second I’ll show you. We have a challenge coin. And the challenge coin identifies four levels of mastery.

Chris Fabian (38m 59s):
It’s kinda like our own Pyramid so to speak, but we did it in a circle. Level one is, okay, so you actually know where the resources are going from a programmatic perspective and you can measure your investment and outcomes. It’s like yesterday, if someone asked you how much does it cost you to do snow removal or pothole repair, you didn’t really have the answer. You had a line on a budget today, you have an answer to that question at a program level and you know how those programs achieve outcomes. That’s great. Second level is now that you have this prioritized understanding of resources to programs to outcomes, you start to try to get better. You have a baseline and you wanna improve it. So you ran a 10 minute mile and now you wanna run a nine minute mile.

Chris Fabian (39m 42s):
How are you gonna do that in priority based budgeting language? It’s, you have a lot of investment into programs that really have very little to do with our outcomes. They’re not mandated, demand is going down, they don’t pay for themselves, their connection to our priorities is minimal and a partner could do it, let’s study those programs, bring the investment back, spin it up, reallocate it to its higher priority programs and there and boom, we have a resource reallocation and I don’t care if you reallocate 1% of your budget, that’s gonna be an awesome day for your community that you stop doing one thing in order to do something else that has a higher impact. And that’s what we want. So that’s level two. Level threes suggests or asks how far should you go?

Chris Fabian (40m 23s):
Like what are the results that really are driving the need for investment that you can’t fund today and how much more can you fund it? So that’s a Pittsburgh story. They have a climate action plan, they need a lot of resources. So Pittsburgh is spinning up as much as they can to reallocate substantial amounts of resources towards funding that result that makes their future better, the best of the best communities and priority based budgeting will find ways to reallocate 10% of their operating budget. And to us that’s, that’s huge. That’s enormous. That’s level three is knowing what results are gonna drive your need to reallocate and level four. Finally, I wind myself back to your original question about austerity and rural communities and what to do.

Chris Fabian (41m 6s):
Level four is about, well we can look at our own organization and and try to reprioritize our current budget, but you can imagine an end point where the trade-offs aren’t getting better. You’re just pulling resources away from one really high priority thing to invest in another high priority thing. So you’re no better off necessarily by doing a resource reallocation. What do you do then? Is that the end of priority based budget and you’ve succeeded And our clients have demonstrated that. No. Where things get really interesting at level four is understanding that you’re but one organization in a region and there are many other entities who also have resources where those resources may very well be positioned to accomplish the same goals you’re trying to accomplish.

Chris Fabian (41m 53s):
And so even in times of austerity, we have seen where organizations can band together and say, maybe I can’t provide the program that this community needs, but maybe our nonprofit community can, maybe the private sector, maybe another local government. How do we really understand what everybody else is doing and map out the programs that they’re providing and the outcomes they’re striving to achieve in order to create more of a network to towards the accomplishment of the impact we want.

Jeff Wood (42m 22s):
I have one more question for you. And I asked this question for folks quite frequently because I think it’s an interesting question. Is there something that surprised you from your process of working with cities over the last decade or so?

Chris Fabian (42m 34s):
Hmm. I’m constantly surprised. A simple answer is I love getting into the program inventory work because I’m constantly amazed and surprised by the vast number of programs and types of, of programs that local governments are providing. Maybe what has surprised me as well in the midst of coming to understand that is how many assumptions we we make about where resources go. And we don’t necessarily understand the whole time all the businesses that we’re in. I think I’ve come to appreciate that local governments, unlike the private sector, which might be focused on numerous product lines, local governments, if you call their product lines, you know, priorities or departments or the programs within it’s hundreds, maybe more than that.

Chris Fabian (43m 28s):
And I guess that is like incredibly, it’s partly surprising and partly amazing to think about what it takes to be at the helm of leadership. Running a local government that is into everything from mental health services to lawn mowing in the parks to facility maintenance and Transit oriented development. Those aren’t product lines that are like different chassis of a vehicle and and different makes and models. It’s so vast and incredible and all of these programs have real meaning to people in the community who benefit from them.

Chris Fabian (44m 11s):
And maybe that’s a surprising thing overall. I’ll add one last thing if I, if I can. And it’s related to this thought. So we’ve been doing this for a little over 10 years. We’ve seen hundreds of thousands of programs from various local governments and I mentioned earlier that we started to get into predictions for departments, predictions of the, the programs they provide. We are predicting the cost of providing those programs and the alignment of programs, therefore the investment of any given community into various outcome areas or priorities based on their line on a budget. Because we’ve seen the trends that we can, we can make a prediction and what we’re wondering is, does a city have a genome?

Chris Fabian (44m 55s):
There’s a big leap, but does a city much like you, or I have our own genome, our own d n a and genes that make us partly who we are does a city’s use of resources towards the programs that they provide, have an analogy to a city genome and the outcomes that it’s investing in overall. And we’re interested in that. And that is maybe a topic for another podcast, but in terms of of a surprising outcome, we see differences. There are big differences from one city to the next to the next in terms of what programs they provide, how much they’re funding each program, and therefore what priorities are really being accentuated in Duluth, Minnesota versus Benicia California and everywhere in between.

Chris Fabian (45m 48s):
That’s

Jeff Wood (45m 48s):
Awesome. Well, Chris, where can folks find you if you wish to be found?

Chris Fabian (45m 52s):
So our website, resource x.net is our main home, our hub. Feel free to email me as well. I’m Chris Fabian, C Fabian at resource x.net. I’d love to have these discussions. We’ll be at I C M A, you mentioned University of Texas, Austin earlier, and we’ll be at the I C M A conference in Austin in a couple of days. Well maybe by the time this podcast runs, that will be the past. But you can find us at a lot of conferences overall. But please, we welcome the discussion. We’re explorers, that’s in our name, resource Exploration, resource X. We’re explorers of resources towards the ultimate end goal of impact and that’s how we found you.

Jeff Wood (46m 28s):
Awesome. Well Chris, thanks so much for joining us. We really appreciate your time.

Chris Fabian (46m 32s):
Thank you so much Jeff.