Oak Brook is again using zero-base budgeting for 2024, after the first year of its implementation proved successful for 2023.
“Given the exemplary results, we anticipate this being standard procedure for all budget years from here forward,” Village Manager Greg Summers said. “The village’s first zero-base budgeting efforts located numerous redundancies and other unidentified and unutilized line items, reducing allocated, but unnecessary, expenditures by over $500,000.”
Zero-base budgeting is a technique in which all expenses must be justified for the new year, starting from zero, versus beginning with the previous budget and adjusting it as needed. The goal of implementing it in Oak Brook was to bring better accountability, transparency and efficiency to the budgeting process.
“After reviewing prior village budgets (before 2023) , it was evident that no detail was provided for each account within a program or fund, and often staff was unclear what fell within each category,” Summers said.
He said that with the zero-base budgeting, all village departments are required to provide significant enhanced detail for each of the requested line items.
“Staff anticipated that resetting all line items to zero and adding back only known items with actual costs might inadvertently result in budget omissions that could have to be corrected throughout the year,” Summers said of the preparation of the 2023 budget. “Surprisingly, this was not the case, as the various departments were thorough and accurate in developing their budgets to ensure there were no such omissions.”
Village President Larry Herman said village officials and staff were pleasantly surprised at the number of unwarranted budget items that were discovered and eliminated, with savings that add up and compound over future years
He noted, for example, that it was identified the village had been paying more than $9,000 a year for a remote water level sensor on Salt Creek that was hardly being used, while the same data was available for free from other sources
“Another issue found through this process was double budgeting, for example new employee background checks were being budgeted both in the police department as well as in human resources,” Herman said.
Summer said there was an additional benefit found as each village department prepared their first zero-base budget a year ago.
“While the time investment was significant, as a tangential side benefit, department heads and their staff became familiar with each and every line item of their budget in a more detailed fashion than ever before,” he said. “The result has been even tighter control over expenditures and a greater sense of ownership in the process of identifying more affordable ways to conduct business.”
While there was an adjustment period in moving to zero-base budgeting, the change played out well.
“There was an adjustment period with the effort required to obtain actual cost quotes and enhance precision of the budget line items, but the department heads were enthusiastic to participate and understood the greater benefit that their extended effort would derive,” Summers said.
Chuck Fieldman is a freelance reporter for Pioneer Press.
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