MEMORANDUM
To: Mike Wildgen
City Manager
From: Regan Gerlt
Management Intern
Debbie Van Saun
Asst. City Manager
Re: outside agency funding review options
Date: February 8, 2005
Reviewing the funding requests from outside agencies and providing direction regarding fund allocations is part of the annual budget process for the City Commission. In this memo, a summary of how this process has been handled in the past will be presented, along with additional options for City Commission consideration as we embark on the 2006 budget process. (Note – this memo deals with the non-alcohol outside agency funding requests; it is assumed that the Special Alcohol Fund Advisory Board will continue to process funding requests and submit recommendations to the City Commission for the Special Alcohol Fund)
Background
At one time, funding requests from outside agencies were reviewed solely by staff and recommendations made to the City Commission regarding allocation levels. These allocation recommendations were typically close to or slightly less than that which was requested by the various agencies, in an attempt to fit funding for established programs/agencies within the financially challenged general fund. On occasion, the City Commission would approve funding for a program/agency that was “new” to the process. A few years ago, the City Commission, at the request of Commissioner Hack, the City Commission began a review process with the various agencies requesting funding that mirrored the annual meetings with department heads to discuss budget needs. There were overwhelmingly positive comments from the agencies to this increased opportunity for exposure to the decision makers. In 2002, at Mayor Rundle’s request, a “Mid Year Funding Request Policy” was adopted by resolution in order to “establish policy and guidelines for the consideration of funding requests from outside agencies during the year after the completion of the annual budget process.” Past commissions have used that process to evaluate and act on a variety of mid-year funding requests.
In February, 2004, staff prepared a memo for City Commission that summarized the outside agency review process, shared results of a survey on how other area cities handled this process, and provided some options for consideration. Ultimately, a committee of two commissioners (Highberger and Hack) reviewed the “discretionary” funding requests for the general fund, while staff reviewed the “non-discretionary” general fund requests and the other funds (guest tax and special rec). Recommendations were made to the City Commission from staff and the Highberger/Hack committee, and subsequent direction provided.
Additional Research
Earlier this year, staff researched a funding proposal that was under consideration by the City of Wichita, designed to dedicate a potion of the city’s annual budget to the arts. A summary of that plan is attached, and involves dedicating an established amount annually (in mills) to fund art organizations within the community. The various applications for funding are classified into three tiers, based on past City funding and size of the organization’s operating budget. Under the plan, each organization within the highest priority tier would continue to receive the fund allocation set in the base year (e.g. 1999) and additional revenues produced above the benchmark amount (due to increases in assessed valuation ) could go to the second and third priority tiers. This system also uses a point system to evaluate the ongoing viability of each organization (program outcomes, financial stability, etc.).
Examples of existing City advisory boards/committees that review and process funding requests into recommendations for City Commission action are:
Ö Special Alcohol Fund Advisory Board,
Ö Community Development Grant Review Board, and
Ö Neighborhood Resources Advisory Committee.
Options
The fundamentals of a funding review/recommendation process could contain the following:
· establish a committee to review the discretionary funding requests, make recommendations, and monitor agency outcomes;
· establish criteria for reviewing agency funding requests;
· establish a funding level within which all allocations must fit;
· distinguish the discretionary agency requests from the non-discretionary with established criteria (e.g. a non-discretionary agency would be one providing services that might normally be provided by the City if not for the establishment of the agency, such as the Humane Society.
Summary
Staff would offer the following suggestions for consideration:
· The committee could consist of City/County elected officials (many of the same agencies requesting “discretionary funding” are also applying for county funding) and/or City/County staff. The committee could also have interested party members from the public, such as a member or two from the United Way board.
· The criteria that might be used to evaluate funding requests include the agency’s ability to meet outcomes, program deadlines and reporting requirements, etc. (Other eligibility requirements that could be imposed are provided in the previously referenced February, 2004 staff memo)
· The total available funding level could be established for 2006 using the 2005 funding level plus any estimated increase in assessed valuation.
· All non-discretionary agency requests would be reviewed by City staff, funding levels would be established for these agencies, and the total deducted from the available funding, leaving a set amount for the funding of discretionary agencies.
The committee would review and evaluate all the discretionary requests, and establish funding allocation recommendations using established criteria. Staff would assist the committee in summarizing this evaluation information, but it should be noted that there is currently limited staff time available for compliance assurance within this process.
Any “new program” request by an established agency (i.e. one receiving funding the previous year) or by an agency previously unfunded by the City would compete with all other discretionary requests for the limited “additional” revenue each year.
We look forward to discussing this information with the City Commission at the February 16, 2005 study session and proceeding based on their direction.