CHAPTER 13:

BUDGETING AND COSTING OF GOVERNMENT SERVICES

OUTLINE Type/Task Status (re: 13/e) 13-1 revised 13-2 13-3 13-4 13-5 13-6 13-7 13-8 New 13-10 13-1 13-2 13-3 revised 13-1 13-2 revised 13-3 13-4 13-5 revised 13-6 13-7 13-8

Number Questions: 13-1 13-2 13-3 13-4 13-5 13-6 13-7 13-8 13-9 13-10 Cases: 13-1 13-2 13-3

Topic

Interrelation among processes Governmental budgets Performance budgeting Total quality management Revenue budgets Cost accounting systems Purpose for determination of costs Sources for allowable federal costs Service efforts and accomplishments Activity based costing Activity-based costing Indirect costs and federal grants GFOA Distinguished Budget Award

Explain Explain Explain Describe Identify Explain Explain Identify Define Explain Evaluate Evaluate/report Internet Examine Multiple choice Evaluate Evaluate Compute Compute/report Prepare schedules Evaluate

Exercises/Problems: 13-1 Examine the budget 13-2 Various budgeting issues 13-3 General Fund annual budget 13-4 Police department budget 13-5 Allowable costs 13-6 Total program costs 13-7 Allocating administrative costs 13-8 Activity-based costing

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CHAPTER 13:
Answers to Questions

BUDGETING AND COSTING OF GOVERNMENT SERVICES

13-1. Illustration 13-1 is a graphic representation of the activities in a process that include planning, budgeting, measuring and evaluating performance, and reporting on results. Briefly, the government sets a direction for the organization through a strategic plan, plans programs and activities, designs performance measures, budgets in such a way that shows resources used are expected to result in accomplishments, monitors operations, and then evaluates and reports on actual results compared to the plan. These steps are repeated in a cycle that provides feedback to stakeholders to whom the managers are accountable that is then incorporated into the next strategic plan. 13-2. Governmental resources should be managed to provide the services needed by residents of the area served by the government. Governmental managers are accountable to the elected board or council as well as the public, including citizens (whether they pay taxes or not), and public interest groups for prudent management of these resources. Since resources are limited, administrators need to be able to demonstrate that the budget as designed promotes efficient and economical delivery of services desired by the residents. Legislative bodies must be convinced that the proposed budget is responsive to the needs of the community because the legislators are elected officials. Legislative action is required in order for resources to be raised and appropriated for the uses specified in the proposed budget. Finally, the budget must provide for activities mandated by higher jurisdictions, and also service of debt issued in prior years, even though taxpayers may not find such requirements desirable. 13-3. A benefit of performance budgeting is that it relates resource inputs to units of work accomplished (outputs) and thereby permits evaluation of an organizational unit's performance. Performance budgeting is not without costs, however, since it suggests the need for an accrual accounting system, and possibly a well developed cost accounting system, in order to determine the costs of programs or activities. Incremental budgeting, sometimes called line-item budgeting, simply uses the current year's actual results and adds expected increases and expected decreases for each account (i.e., that which might result from downsizing operations). Often percentage increases are added "across the board" to all line items based on the expected rate of inflation. Thus, it is low cost but does not provide information about performance. 13-4. Total Quality Management (TQM) can be regarded as a method for improving the ability of an organization to continuously adapt to changing customer needs and demands. Faced with unprecedented public demand for more efficient and effective governmental performance, many public officials believe that TQM will help make government services more responsive to "customer" needs, and thus help to improve both the fact and the perception of better government.

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Ch. 13, Answers, 13-4 (Contd)

TQM in government is often linked to analyses of whether particular service functions are best provided by the government or by a private service provider. Such analyses help make government more efficient and effective through competitive market forces rather than the low performance incentives associated with the government as a monopoly supplier of services. On the other hand, the decision to privatize or to continue providing services by the government requires essentially the same kinds of data needed by program-planning-budget systems (PPBS) and other rational budgeting approaches, except that the central focus is on customer-related data. In short, it seems that the former rational budgeting approaches are being supplanted by a combination of managerial tools such as TQM, activity-based costing, and service efforts and accomplishments reporting. 13-5. Factors to consider in preparing revenue estimates include: Sources and amounts of revenue for recent years past. Prospective changes in rates for taxes, licenses, fees, etc. Prospective changes in valuation for property taxes. Actual or probable changes in legislation that would increase or decrease revenues from each source, or would add (or eliminate) one or more revenue sources. Changes in volume of business activity that might bring in more or less in tax collections.

Changes in economic conditions, etc. Anticipated changes in federal and state policies, programs, and revenues and expenditures patterns.

13-6. In essence, the ability to relate the costs of programs, functions, organizational units, and activities to outputs and outcomes is what makes a budgeting approach "rational." Measuring the full cost of providing government services is useful for performance measurement, setting user fees and charges, privatization decisions, competition initiatives, and activity-based costing. Thus, it follows that a good cost accounting system, as well as information systems to provide data on outputs and outcomes, is essential to rational budgeting. 13.7. Each government and not-for-profit entity should be concerned with effective and efficient utilization of resources. While the cost of rendering services and performing programs and activities is only one element that managers, legislators, and taxpayers need to know, it is essential for demonstrating accountability for resources received from a diverse set of providers. For governments, in particular, the full cost of programs must be

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Ch. 13, Answers, 13-7 (Contd)

calculated and compared to the budget for those programs. In could be said that governments are not concerned with the bottom-line, but rather with every line. 13-8. OMB Circular A-87 is the source identified in Illustration 13-8 in the text for state and local governments. The circular lists allowable and unallowable costs. It is available at www.whitehouse.gov/omb. Agencies that have a number of grant programs, or large amounts of money to grant, also may publish guidelines for the use of grantees. 13.9. Service efforts and accomplishment (SEA) measures include: (1) input measures measures of service efforts, (2) output and outcome measures measures of service accomplishments, and (3) efficiency and effectiveness measures measures that relate efforts to accomplishments. The GASB has conducted research on SEA since its 1994 Concepts Statement No. 2 in order to provide guidance on effective ways to report on nonfinancial performance measures that may be useful to users. In its 2005 user guide, Government Service Efforts and Accomplishments Performance Reports: A Guide to Understanding, the GASB presents suggested criteria for performance measures that describe characteristics expected to lead to more useful information for users of financial reports. The GASB does not suggest values for these measures. 13-10. In essence, conventional cost accounting systems were developed for a production technology that produced generally simpler, less diverse goods and services in a simpler, less competitive, and slower changing environment than is common today. Governments, no less than businesses, must compete for increasingly scarcer resources while satisfying higher and more diverse customer expectations. Both government and business are being held to higher standards of expected performance in terms of more efficient and effective use of resources in producing goods and services. In such an environment, it is important that costs per unit of output be measured with reasonable accuracy more specifically, at a cost that represents the total resources consumed in producing that unit of output. Activity-based costing (ABC) focuses on identifying the primary cost drivers for each set of activities used to produce a good or service. In doing so, ABC reduces significantly the need for arbitrary allocations of indirect (overhead) costs using allocation bases that often lead to overcharging costs to high volume outputs and undercharging costs to low volume outputs. Solutions to Cases 13.1. This case will challenge students who may not have taken a managerial cost accounting course, or who may not have applied activity based costing (ABC) to service

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Ch. 13, Solutions, Case 13-1 (Contd)

organizations. This problem can be used to stimulate discussion in preparation for studying health care organizations later in Chapter 17. a. Activities in a hospital may include doctor and nursing care; lab and radiology services; therapies, such as physical or speech; pharmaceutical treatments and medical supplies; blood; food service; and housekeeping, such as linen service. However, these are the traditional department categories and activities may cross traditional functional areas. Following the guidance in Illustration 13-9 the most likely candidates for drivers may be labor hours, machine hours of lab and radiology equipment, quantity of pharmacy items used, and pints of blood. Hospitals will experience problems similar to other organizations adopting ABC, i.e., coming to a consensus on activities when personnel in different divisions have different perspectives; accounting information systems changes to collect data by activities; integration of the budget with the accounting and reporting system; and comparability across time periods. Students may be aware of the diagnosis related group or DRG system of cost accounting in place (see Chapter 17) that may not be directly comparable to costing based on activities.

b.

c.

Interested students may examine the health care industry journals listed at the end of Chapter 17 for articles describing organizations that have experimented with ABC. 13-2. Note: Students can review (or print) the full text of OMB Circular A-21 Cost Principles for Educational Institutions from the OMBs Web site www.whitehouse.gov/omb DATE : TO: FROM: RE: __________ University Administrators Your name, Staff Accountant Allowable costs for federal research grants

The following costs on your list appear to be allowable facilities and administrative (indirect) costs according to OMB Circular A-21 Cost Principles for Educational Institutions: (2) (5) (6) Library books [Sec. F(8)] Clerical salaries [Sec. F(6)] Utility bills [Sec. E(2)(d)(5)]

However, the following costs appear unallowable because they do not support the research activities of the university:

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Ch. 13, Solutions, Case 13-2 (Contd)

(1)

Holiday lights put on the presidents university owned home (Note: a midwestern university was criticized in the press in the 1990s for charging this type of expense to the indirect cost pool, even though the amount was relatively small). Cost of a boat used for entertaining faculty and guests (Note: a west coast university repaid the federal government a large sum of money in the 1990s for gatherings, including the presidents wedding reception held on a universityowned yacht, that were initially charged to the facilities and administration indirect cost pool [Sec. J(17)].) Advertising new programs [section J(1)]

(3)

(4)

If you need any more information, please let me know. 13-3. As will be true with all Internet assignments, Web sites change frequently, and so it is hard to predict what students will find. Encourage students to explore all parts of a Web site, send e-mail inquiries to indicated people, and use search engines (including those available within an organizations Web site). The publics expectation that information about their government will be on the Web is increasing at a rapid rate. The GFOAs Web site has a section that describes its awards program, including the Distinguished Budget Award. Students should explore the publications section to see if there might be a specific GFOA publication on the program. A GFOA publication entitled 2004 Results Annual Report for Fiscal Years Beginning in 2003: Distinguished Budget Presentation Award does list all recipients and can be obtained by writing or calling the GFOA. If the table of contents of the bi-monthly journal Government Finance Review is available, students may find articles relating to the awards programs. Some examples are Sunnyvale, CA; Indianapolis, IN; and Glendale, AZ. By searching the Internet using those cities as key words, students can find these cities Web sites. In Sunnyvale, Californias Web site, there are many references to the performance budget systems and, in fact, the Goals, Policies, and Action Statements as well as the current budget is available through its Web site. Making this information accessible to the public may be one reason why this city received a Distinguished Budget Award. Solutions to Exercises and Problems 13-1. Each student should have a different budget, so answers will vary. Class discussion of different practices noted by the students is generally interesting and profitable. For more information on the criteria used in the GFOAs Distinguished Budget Presentation Award program, go to www.gfoa.org and see Award Programs.

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Ch. 13, Solutions, (Contd)

13-2. 1. 2. 3. 4. 5. 13-3. a.

c. d. d. b. d.

6. 7. 8. 9. 10.

c. c. a. d. b.

There is no indication that Southwest City uses a program budgeting structure since even the stated goals are those of the Street Department. Despite the statement of goals and inclusion of output measures, the budget itself uses a lineitem format. If, however, accrual cost accounting data are collected aside from the modified accrual budget data, the information in the budget could easily be used for performance budgeting. There is some indication that the City uses incremental budgeting because the 2007-2008 budget is approximately 110% of the 2006-2007 estimate (with the exception of capital outlay) and the 2006-2007 budget is approximately 110% of the 2005-2006 actual results. Because the budget provides quantitative indicators or measures for both inputs (e.g., tons of asphalt used) and outputs (e.g., feet of drainage ditches cleared), some indication of Street Department performance might be gleaned from the budgetary data by comparing the nonfinancial input and output measures, together with departmental staffing and expenditures data, to data for similar size cities with similar demographics, or to prior years' data for Southwest City. The data in the budget provide no indication, however, of how many personnel hours, and at what cost, were spent on each activity; nor is there an allocation of supplies expense, depreciation, etc. to each activity. Thus, one cannot link specific inputs to specific outputs and therefore cannot assess the performance for each activity conducted by the Street Department. In a relative sense, it might be useful for the city council, the chief administrator, and departmental managers to note whether the levels of outputs are more or less than in prior years, even though that would still not indicate whether the performance in any given year was efficient or effective.

b.

c.

The goals are not sufficiently specific to serve as standards for evaluating departmental performance. Three of the goals are stated in terms of a nonspecified "increase." Thus, if the number of repairs for old utility cuts, miles of street shoulder repaired, or manhours spent on trimming overhanging limbs and brush are increased even slightly, departmental managers can claim they were efficient or effective. If the goals were stated more specifically, such as to increase the number of utility cut repairs or miles of shoulder repaired by 10 percent, they would commit management to achieve a measurable level of performance. Interestingly, the goals represent a mixture of inputs, process, and outputs.

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For example, the goal to "increase manhours spent on trimming overhanging limbs..." is stated in terms of an input. The goal to "pursue an aggressive weed
Ch. 13, Solutions, 13-3 (Contd)

and grass control program..." is process oriented and simply describes an activity. What is meant by "aggressive" could be subject to varied interpretations. Other goals are stated in terms of outputs. The goals might be better stated in terms of outcomes desired by the citizens. For example, to reduce the number of accidents, number of traffic fatalities and injuries, etc. TQM could play a role in determining citizens' desires regarding streets and highways. 13-4. a. This is a classic example of incremental budgeting. From the perspective of the new town manager, who apparently is interested in applying zero-based budgeting concepts, the police chief's argument that last year's budget should be the base, without further justification, is weak and not likely to be accepted. Yes, generally speaking, the town manager is to be applauded for attempting to implement a rational budgeting approach. Politics, however, may be more important than economics in this particular case. One would need to know if the town council hired the new town manager to improve the performance of town government, including the budget process, or is the town manager acting on her own without knowing what support she can expect from the town council. As discussed in part b, the town manager would be naive to undertake budgetary reform without the backing of a majority of the town council. If the police chief has held his office for a long period and is well respected in the community, the town council may direct the town manager to back off. In this case, the new town manager not only will have lost some credibility with the council but will be less effective in dealing with the police chief, and other town officials as well. As suggested by the information provided, the town presently uses incremental line-item budgeting, probably organized along departmental lines. Although the new town manager's effort to impose zero-based budgeting discipline into the budgeting process is laudable, development of a program budget would further enhance the performance of the town government. A well-designed program budget would utilize citizen participation to formulate broad goals from which more specific objectives would be derived. A budgetary structure and performance measurement system could then be developed using features from one or more of the approaches discussed in Chapter 13 (PPBS, ZBB, TQM, or SEA). Such an approach would contribute to more rational allocation of resources, specifically targeted toward attainment of the identified goals and objectives.

b.

c.

d.

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Ch. 13, Solutions (Cont'd)

13-5.

BURTS ANNUAL SALARY EMPLOYER'S CONTRIBUTIONS TO RETIREMENT AND HEALTH PLANS, 25% SALARY AND KNOWN FRINGE BENEFITS NUMBER OF WEEKS WORKED IN 2008: 52 WEEKS MINUS 3 WEEKS VACATION AND 1 WEEK SICK LEAVE CHARGE PER WEEK (ROUNDED) NUMBER OF WEEKS WORKED ON HHS GRANT NO. 9227 CHARGE TO HHS GRANT NO. 9227 FOR BURTS SALARY AND FRINGES

$68,000 17,000 85,000

/ 48 = $ 1,771 X 12

$21,250

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Ch. 13, Solutions (Cont'd)

13-6.

TOWN OF CHIPPEWA STATEMENT OF UNIT COST OF SOLID WASTE REMOVAL YEAR ENDED JUNE 30, 2008 RESIDENTIAL COMMERCIAL

BY TOWN EMPLOYEES: SALARIES AND WAGES MATERIALS AND SUPPLIES EQUIPMENT USE OVERHEAD: 90,000 X $0.948 68,000 X $0.924 TOTAL COSTS UNITS COLLECTED UNITS COSTS: PER TON PER CUBIC YARD BY CONTRACTORS: CONTRACT COST OVERHEAD: $78,900 X 20% $48,000 X 15% TOTAL COSTS UNITS COLLECTED UNITS COSTS: PER TON PER CUBIC YARD

$ 702,000 39,000 300,840 85,320 ________ $1,127,160 / 165,000 $ 6.831

$481,000 36,090 201,470

62,832 $781,392 / 248,000

$ 3.151

$ 78,900 15,780

$ 48,000

7,200 $ 94,680 / 23,000 $ 4.117 $ 1.840 $ 55,200 / 30,000

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Ch. 13, Solutions (Cont'd)

13-7. a.

COPPER COUNTY TREASURER'S OFFICE SCHEDULE OF COSTS BY CLASSES GENERAL TOTAL ADMIN. BILLING COLLECTING $ 48,000 $36,000 $12,000 43,200 12,000 (9,600) 81,480 $175,080 (4,800) 29,732 $75,332 13,214 $35,614 14,400 $14,400 8,000 14,400 4,000 (4,800) 38,534 $64,134

SALARY OF TREASURER SALARY OF DEPUTIES (2) EXTRA HELP FEES ON COLLECTION OF DELINQUENT TAXES

UTILITY BILLS, STATIONERY, ETC.1 TOTALS

1

Since $20,600 of the $81,480 is to be allocated to collecting, the difference of $60,880 remains to be distributed

on the basis of salary costs exclusive of fees. Thus, the apportionment is on the basis of 50,400/103,200, 22,400/103,200 (where 103,200 = 48,000 + 43,200 + 12,000), and 30,400/103,200 respectively. The total allotment to collecting is $20,600 plus $17,934, or $38,534.

b.

GENERAL ADMIN. BILLING COLLECTING

UNITS OF WORK OF EACH ACTIVITY: THOUSANDS OF $ OF COLLECTIONS ($240 + $3,000) $3,240 NUMBER OF TAX BILLS PREPARED NUMBER OF TAX BILLS COLLECTED (51,280 - 740 + 625) UNIT COSTS $23.251

51,280 $ 0.695 51,165 $ 1.254

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Ch. 13, Solutions (Cont'd)

13-8. a. Process Model: Orangeville Animal Control Program

Complaint Received

Warden Responds

Activity #1

Dog Not Found Not an activity because no additional costs are incurred

Dog Found and Impounded Activity #2

Dog Returned to Owner Activity #3

Dog Adopted Activity #4

Activities, Resources, and Cost Drivers Activity #1: Responding to a complaint Resources required: Program director Labor (animal control wardens) Specially equipped vehicles Cost driver: Number of complaints Activity #2: Impounding an animal Resources required: Labor (animal control wardens) Specially equipped vehicles Cost driver: Number of animals impounded Activity #3: Care of an impounded animal that is returned to its owner Resources required: Contract-specified fee Cost drivers: Number of animals impounded Length of stay at kennel Activity #4: Care of an impounded animal that is adopted Resources required: Contract-specified fee Cost drivers: Number of animals impounded

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Length of stay at kennel b. Activity #1. Responding to a complaint requires animal control wardens and specially equipped vehicles. The individual cost elements to be considered are as follows: The annual salary for one animal control warden is $28,000. One specially equipped truck costs $24,000 and is expected to last for seven years, after which it will be sold for $3,000. The cost of operating the vehicle (gas, insurance, maintenance, etc.) based on program data from prior years, is $.30 per mile. The per-mile estimate is calculated by dividing the total vehicle operating cost by the total number of miles driven. A warden drives an average of eight miles in response to each complaint. This number is calculated by dividing the total number of miles driven by the total number of complaints. The program directors salary is $40,000. Because this activity is the basis for the other activities of the program, the program director can be considered part of it. The number of complaints in year 4 was 2,730.

Ch. 13, Solutions, 13-8 (Cont'd)

Thus, based on year 4s activity level, the cost of responding to a complaint is as follows: Yearly costs: Depreciation of the trucks (straight-line) Mileage ($.30 * 2,730 * 8) Wardens salaries Program directors salary Total yearly costs Divided by number of complaints Cost per response $6,000 6,552 56,000 40,00 0 $108,55 2 2,730 $ 39.76

Activity #2: Impoundment does not occur for every response. However, when an animal is impounded, the extra mileage required for delivering the dog to Donnas Kennels incurs costs beyond that of simply responding to a complaint. The important additional cost elements are as follows The average round-trip mileage for an impoundment is 40 miles, 32 miles more than the average mileage when no dog is impounded. The number of impoundments in year 4 was 440. Yearly costs: 13-13

Additional mileage ($.30 * 440 * 32) Additional cost per impoundment: Yearly additional cost Divided by number of impoundments Additional cost of an impoundment

$4,224 4,224 440 $ 9.60

The cost of responding to one complaint that results in an impoundment is as follows:

Ch. 13, Solutions, 13-8 (Cont'd)

Cost of responding to a call Plus additional cost incurred by impoundment Total cost for one impoundment

$39.76 9.60 $49.36

Activity #3 Care of an impounded animal that is returned to its owner introduces the following cost elements: The salary of the clerk/secretary is $27,000. The proportion of the clerk/secretarys time spent on dogs returned to their owners is 60 percent. The cost per day for care at the kennel is $10. The average number of days an impounded dog stays in the kennel before begin returned to its owner is seven. The number of dogs returned to their owners in year 4 was 264. Yearly costs: Clerk/secretary (.60 * $27,000) Care (7 days * $10 * 264) Total yearly cost Divided by number of dogs returned to owner Cost per impoundment of returned dogs $16,200 18,840 $34,680 264 $131.36

Activity #4 Caring for a dog that will be adopted introduces the following new cost elements: The proportion of the clerk/secretarys time spent on dogs that are adopted is 40 percent. The average number of days an impounded dog stays in the kennel before being adopted is 14. The number of impounded dogs that were adopted in year 4 was 176. Yearly costs: Clerk/secretary (.40 * $27,000) Care (14 days * $10 * 176) Total yearly cost Divided by number of dogs adopted Cost per impoundment of adopted dogs 13-14 $10,800 24,640 $35,440 176 $201.36

c.

The analysis reveals that the yearly cost of the program is allocated to the programs four activities as follows: Activity #1 $108,552 59.4% Activity #2 4,224 2.3% Activity #3 34,680 19.0% Activity #4 35,440 19.4% $182,896 100.1%

Ch. 13, Solutions, 13-8 (Cont'd)

Activity #1responding to a callaccounts for 59.4 percent of the animal

control programs cost. Only about one-sixth of complaints result in an impoundment. Although the salaries and depreciation included in this activity are fixed costs and would not be eliminated if activity #1 ceased to exist as an activity separate from activity #2 (i.e., if every call resulted in an impoundment), the money spent on this activity does little to help the program fulfill its purpose of keeping stray dogs off the streets. Although it is unrealistic to expect every call to result in an impoundment, exploring ways to make complaint response more efficient could make the whole program more efficient.

Activity #2locating and impoundingaccounts for only 2.3 percent of the

programs cost. Although the transportation costs involved in this activity have captured the publics attention, reducing these costs would not greatly affect the overall cost of the program. In fact, these costs will rise should the program become more efficient and more of the calls result in impoundments.

Activity #3care of an impounded animal that is returned to its owner

accounts for 19 percent of the programs total cost. Although caring for animals that will be adopted (activity #4) is more costly per animal than caring for animals that are returned to their owners, the total yearly cost of each of these activities is about equal because of the activity level within each activity. When searching for ways to reduce the cost of activities #3 and #4, city officials must remember that activity #3 is relatively self-funding, given than owners must pay a fine and reimburse the city for boarding expenses to get their animal back. In a sense, activity #3 is subsidizing activity #4 since people who adopt animals do not contribute enough to cover the costs incurred by the city.

Activity #4care of an impounded animal that is adoptednearly threequarters of the cost associated with this activity results from the cost for the animals stay at Donnas Kennels. Since this cost is variable, it is a good target for cost reduction. For example, shortening the stay of the animals from an average of 14 to an average of 7 days would save approximately $12,000 per year. This could be done by promoting adoptions or by having the animals put to sleep if they are not adopted within a given time frame.

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Conclusions: For most activities, changes may lower some costs while raising
others; e.g., promoting adoption may involve additional expense. Putting unadopted dogs to sleep also entails costs for the euthanasia procedure and disposal with the resultant lost adoption fees. Each alternative solution has to be examined carefully and a break-even analysis or other cost analysis has to be performed to assess the financial impact on the overall processes. Also, some of the solutions produced by an ABC analysis may not be viable alternatives. Many factors constrain what solutions can be implemented. Public relations,
Ch. 13, Solutions, 13-8 (Cont'd)

humanitarian, political and regulatory considerations exist; for example, the Orangeville community or the service provider may not accept the euthanizing of unadopted dogs. It is up to local government managers to identify these constraints and make sound financial decisions based on them. Adapted from Service Report: Introduction to Activity-Based Costing International City/County Management Association, Vol. 30, No. 2, February 1998, pp. 9-13. Reprinted with permission of the ICMA. All Rights Reserved.

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