City's Finance Committee Switches to Performance-Based Budgeting

The Los Angeles City Council's Budget and Finance Committee took the first, small step Tuesday toward a dramatic overhaul of how the municipality budgets money to city departments for services like police, firefighting and road repairs.

The committee agreed to start phasing in a performance-based budgeting system, starting with the Planning Department and the Bureau of Street Lighting.

The motion by Councilman Mitch Englander was based on a recommendation by City Controller Wendy Greuel, who is running for mayor. Englander represents Council District 12 which includes Chatsworth.

Under the current system, the mayor and City Council allocate money to departments based on how they were funded the previous year, applying necessary cuts or extra revenue almost evenly across most departments.

"We simply take last year's budget, and we sort of dust it off," Englander said. "That's insane."

The new model would fund departments based on how well they meet certain performance measures throughout the year and would require general managers to do strategic planning, Englander said.

Councilman Paul Koretz raised some concerns about the model, saying city departments provide many services that are not easy to quantify or measure.

"Ultimately for a business, the ultimate goal is did you make money or not. We don't have as simple a result as that," Koretz said, arguing that some performance measures would cause city workers to rush their work and could lead to poor results or even injuries.

Councilman Tony Cardenas raised a separate concern about what kind of performance constitutes a need for more money in the budget.

"If crime goes down in a performance-based budget model, therefore do we give the department more money and more officers because crime's down?" he asked. "What if crime goes up? Do we therefore give the department more money and more officers in a performance-based budget?"

Despite the concerns, the budget committee unanimously agreed to ask the city's chief legislative analyst and chief administrative officer to report back with recommendations for performance categories during this year's budget process, which begins in April when Mayor Antonio Villaraigosa releases his proposed 2012-13 budget.

Englander said he hoped the first two departments would be funded using the performance-based budget model by the budgeting process in the spring of 2013.

-- City News Service