While previous accounting numbers and percentage comparisons are important, other data is needed.  Specifically, metrics and other drivers of the budget process.

What's a driver?
An example.  If a company manufactures widgets.  Each widget requires 3 hours of labor and $40 of materials.  If the company is attempting to project the budget resources for next quarter (labor and materials), the forecasting must start with the drivers.  In this case, how many widgets are estimated for the next quarter.  The estimate is an additional 100 units per week for 10 weeks with $20/hour (base rate including full-time employee benefits).

Additional Resources
Materials: 100x$40 = $4,000 cash required per week, $40,000 of cash for materials for the 10-week period.
Labor: 100x2 hours = 200/week, 200/5 days = 40 additional labor hours a day, 5 full-time equivalents
Labor Expense A: $20x200 hours = $4,000 per week (temporary employees with temporary benefit cost)
Labor Expense B: $15x200 hours x 1.5 = $4,500 (using 25 employees on a Saturday, without benefits loaded).

While there is a 50% incremental for overtime, there is no additional for benefits (health care, etc) because it is fixed for the employee.

The drivers in the previous example:

• 100 additional units per week.
• 8 hour shift, Monday -- Friday.
• No overtime, new employees for a temporary period.

The metrics are:

• Labor required per unit (for labor requirements).
• Material cost per unit (for cash flow requirements).
• 8 hour shift, Monday -- Friday.

For a town, the metrics and drivers are:

• Metric: Time to process a deed; Driver: Number of deeds processed (day/week/month).
• Metric: Time to mow the turf/grass on a field per square foot; Driver: Number of square feet per field.

If there is a significant increase in deeds processed over the last few years and/or additional fields to be mowed ... then the labor required needs to be reviewed against overtime or a new employee (FTE, or part-time).

Businesses serve its customers to increase sales, provide effective customer service, and maximize profits.  Business use metrics such as:

• Minutes per customer service call
• Customer satisfaction ratings
• Product margin; by product, product category, manufacturer
• Return on investment (ROI)
• Order returns (percent), by product category, product, manufacturer

The Town needs to maintain drivers and metrics to operate an efficient and effective government.

Several years ago, I found a webpage defined a number of metrics for municipal government. There are few Town departments that calculate and publish metrics.  The best department is the Department of Public Works.  Gene Allen does an exceptional job on road maintenance/repair and provides amazing numbers for the Board to determine the decisions of how much road repair/maintenance funds to give.

In the several years on a financial board for Smithfield, his analysis provides the members with objective, quantitative values for repairing and resurfacing Town roads.  In every year at his presentation, Board members will say ... "Gene, if you had $x dollars to spend, how will the metrics of the Town's road change?  Which roads could you repair"?

It is the BEST discussion that occurs.  It makes it "easy" for us that if we can identify an area to save funds and deploy it to road repair which will eliminate some roads to deteriorate more and require more funds to repair in the future.

I truly wish that the Town and departments/SPSs would emulate the supporting "story line" that Mr. Allen compiles and presents to the BFRB ... so that the Board can compile a solid, prudent recommendation for Smithfield.

All I want ... and I believe all balanced-minded taxpayers is value for the taxes and fees they pay.  That the budgeted funds are being spent in the most efficient and effective manner ... with clear, objective facts.  Not just hours of operation, revenue and expenses.  Even in a "small" budget such as Smithfield, there are many places to "allocate" funds.  Thankfully, after asking for the "RUBS" to be eliminated in the last decade, we are FINALLY doing it for FY2026.  Finally!

Here is another listing of metrics used for municipal governments.

More discussion on the RUBS, performance audit and other items from a fiscal perspective in future blog articles.  Thanks for reading.