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CAO Leadership Series: Municipal Budget Development


3 Key Strategies for Optimizing Municipal Budgets

Speaking with CAOs and municipal leaders over the last several months, we have heard that they continue to face a daunting range of challenges in budget planning, among them:

  • Slow movement in municipal budgets in meeting evolving community needs and new operational complexities tend to be influenced by historical needs and change incrementally, which tends to prevent resources from running smoothly and adapting to modern needs,
  • Residual budgetary challenges from the impact from COVID on municipal reserves,
  • Rapidly changing infrastructure costs, and
  • Evolving IT system requirements in all aspects of municipal administration.

Happily, we have also heard from several of those same leaders about three key strategies that can be implemented to improve municipal budget development and ensure that resources are deployed effectively.

1. Getting Service Delivery Feedback and Looking “under the hood” for Opportunities

It is crucial to set realistic and achievable goals that are aligned with the municipality’s community needs, strategic plan, and fiscal position. In our discussions with CAOs, we find they continuously ask themselves what they want to achieve with their budgets and how they can allocate resources accordingly. Often, changing budget allocations requires changing how things work by:

  • Getting service delivery feedback from the community and key stakeholders to identify gaps and new priorities as communities change,
  • Conducting organizational and transformation change analyses, which can yield better ways of doing things, provide opportunities to redeploy staff, and ultimately free up funds for rapidly emerging needs.

2. Budgeting to Reduce Risk

To avoid costly surprises, towns and cities often need to spend money not just to manage risk, but actually reduce it. Physical infrastructure, data assets, and many other aspects of municipal operations present a variety of risks. Thinking about how dollars can be used effectively to reduce risk and avoid costly budget allocations later can change how CAOs think about their budget. Spending on cybersecurity, for example, can save painful costs later.

3. Improving Procurement

Improving budget control often starts with improving procurement. As CAOs and their senior teams find themselves wearing many hats (Chief Risk Officer, Chief Technology Officer), as circumstances sometimes demand, they tell us that when they know they need help, it is still hard to articulate scope and other aspects of RFPs, resulting in uncertainty, surprise additional costs, and delayed projects.

  • Procurement functions that can develop a procurement calendar, work with department leads, improve specificity, and provide sober second thoughts (or just second reads!) can help budgeting in subsequent years enormously. Smaller municipalities can also often benefit from shared procurement functions that can pool skills to create scale in a geography.

Optimus SBR’s Municipal Practice

Optimus SBR is an implementation-focused firm that specializes in turning policy into action. Our Municipal Practice, part of our broader Industries and Government Practice, has conducted a range of engagements for municipalities covering strategic planning, service delivery, change management, cyber security programs, learning and development, long-term care, community and economic development, and numerous others.

Let’s have a conversation today to help plan for the future!

Contact Us

Brad Ferguson, SVP, Industries and Government Practice

Philip Tetlow, Head of Relationship Management, Industries & Government Practice





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