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CC 03-04-2025 Item No. 7. Baker Tilly Budget Review_PresentationMarch 4, 2025 Budget Format Review and Performance Measures Update Background and Introduction Baker Tilly Report Next Steps and Recommendations Agenda •Identified need to streamline budget and update performance measures •Engage Baker Tilly Background and Introduction Baker Tilly Advisory Group, LP and Baker Tilly US, LLP, trading as Baker Tilly, are members of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. Baker Tilly US, LLP is a licensed CPA firm that provides assurance services to its clients. Baker Tilly Advisory Group, LP and its subsidiary entities provide tax and consulting services to their clients and are not licensed CPA firms. Cupertino Budget Document and Performance Measures Improvements City Council Meeting Tuesday, March 4, 2025 5 Overview CUPERTINO BUDGET DOCUMENT AND PERFORMANCE MEASURES IMPROVEMENTS Project Assignment Approach & Methodology Key Observations Key Recommendations Strategic Planning & Performance Measures Next Steps 6 Project Assignment CUPERTINO BUDGET DOCUMENT AND PERFORMANCE MEASURES IMPROVEMENTS Review and improve budget document Enhance performance measures Ensure alignment with city priorities Improve transparency & accessibility 7 Approach & Methodology CUPERTINO BUDGET DOCUMENT AND PERFORMANCE MEASURES IMPROVEMENTS Reviewed city documents, budget reports, and performance data Conducted interviews with council members and city staff Benchmarked against peer cities’ best practices Analyzed alignment with strategic goals 8 Guiding Principles CUPERTINO BUDGET DOCUMENT AND PERFORMANCE MEASURES IMPROVEMENTS Budget and Performance Measures Strategic alignment Fiscal stewardship Community engagement Transparency Accessibility 9 Key Observations –Budget Document CUPERTINO BUDGET DOCUMENT AND PERFORMANCE MEASURES IMPROVEMENTS Detailed but difficult to navigate Requires better strategic alignment Capital Improvement Plan (CIP) not well- integrated Public engagement can be improved 10 Key Recommendations –Budget Document CUPERTINO BUDGET DOCUMENT AND PERFORMANCE MEASURES IMPROVEMENTS •Improve readability & streamline structureStreamline •Standardize departmental budget presentationDepartments •Integrate Capital Improvement Plan (CIP)Capital Planning •Enhance public engagement & transparencyPublic Engagement •Incorporate strategic planning into budgetingStrategic 11 Key Observations –Performance Measures CUPERTINO BUDGET DOCUMENT AND PERFORMANCE MEASURES IMPROVEMENTS Lack of alignment with city goals Metrics focus on workload, not outcomes No standardized update process Limited staff engagement in performance tracking 12 Key Recommendations –Performance Measures CUPERTINO BUDGET DOCUMENT AND PERFORMANCE MEASURES IMPROVEMENTS •Align with city’s strategic prioritiesPriorities •Differentiate performance vs. workload indicatorsOutcomes •Standardize reporting & updatesStandardized •Increase accountability & staff involvementAccountability 13 Strategic Planning and Performance Measures CUPERTINO BUDGET DOCUMENT AND PERFORMANCE MEASURES IMPROVEMENTS Strategic planning framework ensures alignment & accountability Performance measures should track progress on strategic goals Need for a citywide strategic plan Organizational Goals Vision Mission Core Values Organizational Strategies Organizational Priorities Personal Priorities 14 Key Implementation Concepts CUPERTINO BUDGET DOCUMENT AND PERFORMANCE MEASURES IMPROVEMENTS Implement budget document improvements Enhance transparency & community engagement Develop a structured strategic planning process Revise, align & track performance measures with city goals 15 Draft Implementation Action Plan CUPERTINO BUDGET DOCUMENT AND PERFORMANCE MEASURES IMPROVEMENTS Rec No.Recommendation Implementation Steps Priority Department Responsible Comments 1 Recommendation •Step 1 •Step 2 •Step 3 1 City Manager XXX 2 Recommendation •Step 1 •Step 2 •Step 3 2 Admin Services XXX 3 Recommendation •Step 1 •Step 2 •Step 3 3 Public Works XXX 4 Recommendation •Step 1 •Step 2 •Step 3 2 Budget Manager XXX •Identifies implementation steps, prioritization and assignment for each recommendation in the report•Considered “Draft” until City:•Identifies target dates•Affirms/modifies steps and assignments•Applies any resources required ($, time) •Priority 1 – Important to accomplish without delay/easy to accomplish •Priority 2 – Second tier; may involve complexity or time to complete •Priority 3 – Least urgent; may take longer to setup or execute 16 Draft Implementation Action Plan CUPERTINO BUDGET DOCUMENT AND PERFORMANCE MEASURES IMPROVEMENTS Priority 1 •Finalize proposed budget document layout (for FY 2026-27) •Implement CIP development assignments •Issue FY 2024-25 CIP Plan •Review fiscal policies •Refine community engagement strategies •Update budget educational content •Plan for OpenGov changes to mirror existing data for department details •Develop Citywide strategic plan •Finalize performance standards Priority 2 •Implement budget layout and content changes for FY 2026-27 •Implement OpenGov (or appendix) for details •Ensure quarterly tracking of CIP progress, priorities and alignment •Revise framework for fund transfers, enterprise funds and grant information Priority 3 •Remove selected sections from Community Profile •Standardize department summaries/priorities •Develop Special Projects policy for approval authority, timelines and reporting 17 Key Feedback from Audit Committee CUPERTINO BUDGET DOCUMENT AND PERFORMANCE MEASURES IMPROVEMENTS Pilot budget format for FY 2026-27 Include CIP Plan in proposed/final budget document Provide revenue/expenditure details in appendix or online Ensure original adopted budget is easily accessible Align performance measures with priorities (e.g., Econ Dev) Use graphics for budget clarity Reformat display of financial policies •Summarize purpose/effect •Add full policy hyperlinks •Summarize policy changes adopted by Council in budget Integrate Internal Audit functions within City Council budget Baker Tilly Advisory Group, LP and Baker Tilly US, LLP, trading as Baker Tilly, operate under an alternative practice structure and are members of the global network of Baker Tilly International Ltd., the members of which are separate and independent legal entities. Baker Tilly US, LLP is a licensed CPA firm that provides assurance services to its clients. Baker Tilly Advisory Group, LP and its subsidiary entities provide tax and consulting services to their clients and are not licensed CPA firms. The name Baker Tilly and its associated logo is used under license from Baker Tilly International limited. The information provided here is of a general nature and is not intended to address the specific circumstances of any individual or entity. In specific circumstances, the services of a professional should be sought. © 2025 Baker Tilly Advisory Group, LP Steve Toler Director M: +1 (650) 740-7007 E: steve.toler@bakertilly.com Chris Bigham Senior Manager E: chris.bigham@bakertilly.com Prachi Patel Senior Consultant E: prachi.patel@bakertilly.com •Review Draft Implementation Action Plan Timeline •Final implementation plan to be included in Proposed Budget Next Steps Approve recommendations outlined in the recent Budget Document and Performance Measures Improvements report as prepared by Baker Tilly Recommendations Questions?