In a recent budget workshop held by the Venice City Council, discussions centered around the city's financial planning strategies and employee compensation systems, highlighting the need for a more effective budgeting approach.

One of the key topics was the potential shift to zero-based budgeting, a method where all expenses must be justified for each new period, rather than simply adjusting previous budgets. City Manager Reed expressed his familiarity with both zero-based and performance-based budgeting, noting that while both methods can be effective management tools, they require significant commitment from the council and staff. He emphasized that zero-based budgeting could help identify unnecessary expenditures that have persisted over time, but it demands a thorough and often tedious review process.

Reed also discussed the importance of performance-based budgeting, which focuses on aligning funding with specific performance metrics. He acknowledged that while this method increases the workload for staff, it can lead to better management and accountability in budget allocations. The council's interest in line-by-line budgeting reflects a desire for greater transparency and control over financial decisions.

Another significant discussion point was the concept of merit pay within the city’s compensation structure. Reed advocated for a merit-based system, which he currently applies to directors, suggesting that it could foster a competitive yet fair environment among employees. He noted the challenges of implementing such a system, particularly the need for objective assessments and trust between management and staff.

Additionally, Reed shared insights from a scholarly article he authored regarding the city's employee turnover rate, which stands at 5-6%, notably lower than the average for public agencies. He attributed this success to the city's investment in employee development and a supportive work environment, which he believes enhances job satisfaction and retention.

As the council continues to refine its budgetary processes and employee compensation strategies, these discussions underscore a broader commitment to improving financial management and fostering a positive workplace culture in Venice. The council's next steps will likely involve further exploration of these budgeting methods and the potential implementation of merit pay systems, aiming to enhance both fiscal responsibility and employee engagement.