How the City of Irvine moved past spreadsheets and the one-year budget treadmill
The City of Irvine, CA, was born from a plan, so it makes sense that this community of more than 307,000 residents likes to look ahead. With a diverse, highly-educated, and growing population, the City is continuously planning for the future.
Like many cities, Irvine’s Budget Office found that focusing on long-term priorities was challenging within an annual budget cycle. Simply put, when everything is on the table for discussion each year there isn’t time to be strategic.
For Irvine, the annual budget process was too near-term focused to accommodate long-term planning. Deputy City Manager Melissa Haley explained: “The short-term planning cycle can often present challenges. There is less time for planning and helping stakeholders in the community understand the goals and priorities.”
How Irvine Set Up the Budget for Future Success
To better prepare for the future and be more strategic with planning, the City of Irvine moved to adopt a two-year budget cycle starting with the 2019-2020 budget year. To take full advantage of the long-term planning opportunities, the Budget Office saw that this change required new technology and a new approach to planning. After undertaking the challenge, it has been a clear success and many of their insights from the successful evolution of Irvine’s budget process are transferable to other cities.
Facing uncertainty even in the best of budget years, Irvine’s leaders wanted to ensure that the budget was accounting for long-term needs. “With a more mature budgeting process we can take a holistic approach to better address the future needs of our growing population, as well as focus on telling the story of our budget to our stakeholders and community,” Deputy City Manager Haley explained.
Greater demand for transparency from residents underscored the need for a change, as well as a need to provide more data and context to stakeholders and the community. “Rather than spending the time on running an annual budget process, we are better able to use that time to anticipate issues and needs and make any changes,” explains Barbara Arenado, Deputy Director, Financial Management and Strategic Planning for the City of Irvine. Arenado added that “multi-year budgeting enables Irvine to provide greater transparency to residents and helps decision makers to be forward-thinking and see opportunities or issues ahead.”
How Can a City Move from Fixing Macros to a Macro View?
The move to multi-year budgeting was not as simple as flipping a switch. To inform the planning process, each department had to begin running a five-year scenario planning exercise annually. As expected, the City’s software and systems weren’t up to the task. They were using Excel spreadsheets and a budget input module in the Enterprise Resource Planning (ERP) system to manage the annual budget and planning process, which did not enable the strategic capabilities their process required.
The City has 1,300 employees which required financial leads across the City to manually add information into 70 to80 spreadsheets containing thousands of line items with one central person responsible for rolling up all that data. Data management amounted to an enormous challenge. “The constant need to fix macros and manually enter data for new line items reduced our professional staff to data input and data validation responsibilities,” described Jonathan Nih, Budget Officer for the City of Irvine.
To ensure accuracy, the City partnered with OpenGov to build a planning tool to fit the needs of the City. This tool added value all along the process. It empowered departments to automate data input and roll up items for internal department review as well as final budget office review. Permission controls within the shared, cloud platform provided both access and accountability across departments. Final budget data was then served to the public through the flip of the proverbial switch into a public portal that allowed residents to visualize data dynamically and improve their own understanding of the City’s finances.
What Are the Benefits of Cloud Software for Irvine?
One benefit of cloud software is accessibility with accountability. Access controls allow for everyone to see the data, and let administrators decide what level of data should be shared with which groups, to reduce the risk of erroneous inputs. Irvine’s Budget Office provides departments and stakeholders with clarity and enables collaboration through access to shared data while ensuring security. The result has been better analytics capabilities with a shared understanding of the outputs.
“Departments can now download and run reports to see trends in expenditures, analyze their own data, and run reports instantly,” said David Vo, Senior Management Analyst for the City of Irvine. “With the ability to input expenditures, run scenarios, and make adjustments more easily, we can relay the impact back to departments, which results in better planning and decision making across departments.” described Vo.
Additionally, with the pandemic and risks from extreme weather to climate events, accessibility from anywhere with internet access and automatic data backups to the cloud was critical to reducing the risk of disruption to the City’s operations.
What Are the Strategic Budgeting Results for the City of Irvine?
While moving to multi-year budgeting initially required a heavier lift in terms of planning and analysis, City staff quickly realized efficiencies with this new approach. “The Budget Office and key departments saw a 60% year-over-year time savings with the move to multi-year budgeting,” reported Nih.
Time savings from automating manual spreadsheet management accrued to more strategic activities for Irvine’s departments. “When you are planning for multi-year budgeting, you are trying to account for macro factors like population growth and infrastructure, which requires multi-year scenario planning across departments. OpenGov Budgeting & Planning allowed us to reallocate resources – who were previously focused on data validation and manually confirming calculations – to do more analytical and long-term planning work,” described Nih.
As all municipal financial officers well know, fiscal accountability is the reason for the budget. But in order to truly provide forward-looking transparency, cities have to rethink their processes and be more agile. “We need to show that we are spending tax dollars efficiently, and also be accountable for the long-term fiscal sustainability of our great City,” said Arenado.
What Were the Keys to Success and What’s Next for Irvine?
A key element of Irvine’s success was that the City partnered with OpenGov product leaders and software engineers to make the software fit the City’s multi-year needs with enhanced budgeting, workforce planning, and reporting capabilities.
To help inform internal decision making, Irvine is planning to revamp the budget reports through advanced reporting capabilities. “We are excited to explore some of the new features we are working on to further improve our budget process,” said Nih.
Irvine is also looking to improve its capital budgeting maturity to bring the same planning rigor, collaboration, and transparency to its capital improvement program budgeting process. “We want to make capital planning more centralized to improve efficiencies and clarity in the planning and approval processes, and even bring in community outreach during the budgeting,” explained Nih.
Melissa Haley serves as Deputy City Manager for the City of Irvine. She is a personable, collaborative leader who consistently delivers on time, within budget, and serves on projects that improve efficiency, reduce costs, and exceed expectations. Melissa has more than 16 years as a Public Affairs and Communications professional who directs, plans and organizes a comprehensive public relations program for the City of Irvine; and coordinates media and community relations activities to ensure publicity and outreach for City programs, services and events, including emergency management and crisis communication.
Barbara Arenado is the Deputy Director of Financial Management and Strategic Planning for the City of Irvine. As the Deputy, she oversees the Budget, Treasury, Accounts Receivable and Payable sections, including Long Range Strategic Planning and Fiscal oversite. She has developed short and long-term strategic plans to support the priorities of the City; including navigating the budget through the fiscal crisis caused by the pandemic. She is a proud Titan, with a Bachelors in Business Administration and Accounting from Cal State Fullerton and enjoys participating as Vice Chair of the Orange County California Society of Municipal Finance Officers. Over her career, she has held a variety of positions and has more than 25 years of experience in Municipal Accounting, Finance and Long Range Strategic Planning.
Jonathan Nih is the Budget Officer at the City of Irvine in California. He works in the Financial Management & Strategic Planning department, where he manages the City’s budget and continuously explores new and innovative tools to improve the efficiencies of the budget process. He has a passion for local government and helping the community, with over 10 years of municipal government experience working for other agencies such as the City of San Gabriel, City of La Puente, and City of Walnut. Jonathan earned his Masters of Business Administration and Bachelors of Arts from the University of California, Irvine.
David Vo is a Senior Management Analyst with the City of Irvine in California. He works in the Financial Management & Strategic Planning department, where he’s passionate about helping the community understand the City’s budget and finances. David earned a Bachelor of Science from the University of Southern California and an MBA from California State University, Fullerton.
