SECTION 1: GENERAL PRINCIPLES - Bureau of the Budget and ...



Baltimore City Innovation FundGuidance Document and Agency InstructionsSECTION 1: GENERAL PRINCIPLESIn Fiscal Year 2012, the Mayor established an Innovation Fund, with an expectation that agencies should be able to compete for loans from this special funding source year-round, outside of the fiscal year budget cycle. The Innovation Fund’s purpose is to provide seed money for agency investment that will lead to process improvements thereby reducing operating costs, achieve future cost savings, and/or generate untapped revenue. Proposals for loans from the fund are separate from normal operating budget proposals – the application process can be initiated at any time. Qualified ApplicantsProposals will only be accepted from City agencies or quasi-City agencies. Quasi-City agencies are independent entities that act on the City’s behalf, such as the Parking Authority, Baltimore Development Corporation, and others. A full list of quasi-City agencies is listed on the City’s website under “Government.” Grantees are not eligible to apply directly for Innovation Fund money, but can partner with eligible agencies.Investment CharacteristicsProposals must be for one-time investments only. Any follow-on funding will be available on a competitive basis in future years’ regular operating budget processes.The Fund will make Loans, as further described below. The Fund seeks proposals that demonstrate a positive return on Investment (ROI), through cost-savings and/or untapped revenue streams. Return on investment is the amount of benefit (usually monetary) realized by an investor – in this case the Innovation Fund – as the result of an investment. This is usually expressed as the profit made from an investment divided by the amount of investment. For example, if an agency receives $100,000 for a one-year project that generates $150,000, the ROI has been 50 percent. Proposals which do not demonstrate a positive ROI are not eligible for an Innovation Fund investment.Projects that achieve reduced operating costs or additional revenue should realize a cumulative return that exceeds the initial investment within three years. All loans must be paid back by the recipient on the terms set forth herein. Savings and/or revenue realized during the first two repayment years will be split evenly between the agency and the Innovation Fund. Savings and/or revenue during subsequent years shall go to the Innovation Fund, until it has been repaid 100 percent of the investment, after which time, 100 percent of the savings and/or revenue goes to the General Fund. Anticipated savings and/or revenue will be certified by the Bureau of the Budget and Management Research.Example: The City loans $600,000 to the Housing Department to implement an online permitting system. By reducing the staff required to interact with walk-in customers, ongoing operating costs would be reduced by $250,000 annually for a total of $750,000 in three years. Housing would keep $125,000 of the savings in each of the first two years.Loan AmountsProposals must be for $100,000 or greater. Funding for investments of less than $100,000 must be requested and justified within a regular operating budget proposal. Agencies are permitted to request any amount in association with a project, up to the uncommitted balance of the fund. These criteria are subject to change. SECTION 2: EVALUATION CRITERIAInnovation Fund project proposals are evaluated based on the following criteria. Proposals that achieve several of these criteria are exceptionally strong candidates for funding. Significant weight will be given to proposals that demonstrate a project’s potential to leverage financing and partnerships, as well as a spirit of collaboration and adaptability that will enable a project to be effective across multiple agencies. Disruptive ImpactThe Fund seeks proposals that disrupt the status quo way of addressing a challenge or delivering a service. Please note that not all innovative ideas are new. Applicants are encouraged to apply existing, proven ideas which have been funded and applied by organizations from organizations throughout the public and private sectors (e.g., philanthropic partners, educational institutions, business practices) but not used by our agencies at all, or to scale. Example: In Fiscal 2014 the Department of Public Works used an Innovation Fund loan to implement smart meters, which realize savings from increased energy efficiency. While smart meters are no longer considered cutting edge technology, having come to prominence decades ago with the rise of the internet, the agency’s coordinated implementation of these devises throughout city-owned buildings is an innovative achievement nonetheless. Long-term SustainabilityThe Fund seeks proposals that create sustainable improvements lasting for many years beyond the initial investment. Projects that provide a one-time boost to results, but then revert back to business-as-usual will not be eligible for funding. The Innovation Fund will not provide funding beyond the initial investment. If the investment is for a pilot or demonstration project, any follow-on funding will subject to a competitive process in future years’ regular operating budget cycles, and applicants should demonstrate how future funding may be secured from either the operating budget or external sources, or both.Potential for LeverageThe Fund seeks proposals that partner the City with other investors, such as foundations, businesses, and State and Federal agencies who want to join us in promoting innovative solutions to our toughest challenges. Proposals that demonstrate strong potential for such partnerships, such as proposals seeking to leverage external dollars through a “last-in investment” by the City will receive priority consideration.Customer Service FocusThe Fund seeks proposals that focus on providing excellent customer service. Applicants should think of customers broadly. Internal customers could include other City agencies or City staff members. External customers could include citizens, businesses, vendors, or other potential users of City services.Collaborative SpiritPreference will be given to proposals that support collaboration between two or more City agencies, or external partners – particularly those with a focus on implementation across multiple agencies and organizations. Project ideas that are easily adaptable and scalable will be given significant weight during the evaluation process. Please note this criteria does not disqualify (and should not discourage) viable projects with an agency- or program-specific focus.Example: Recreation and Parks teamed up with Planning for project Camp Small in Fiscal 2016. The initiative supports the conversion of felled trees – trees are felled naturally and continually throughout the City – to useful products such as compost and building materials. This has yielded positive benefits to the City on several fronts by reducing procurement costs, increasing self-sufficiency, and establishing a culture of reuse and recycling. This impact has been felt by the agencies directly involved, as well as those benefitting from the project’s production. SECTION 3: APPLICATION PROCESSThe application process has four distinct, sequential junctures. These are explained in each step below.Step 1 – Project Idea EvaluationThe application process for the Innovation Fund begins, simply, with a project idea. At this initial stage, the agency will engage with the Innovation Fund by completing and submitting a short questionnaire, provided by BBMR. Additionally, the Mayor’s Office is committed to helping agencies identify and articulate ideas for submission, and will provide an Innovation Coach to any agency that requests one. Pending approval of the idea as a legitimate and achievable one, the agency will then submit a full-fledged project proposal, to be reviewed by an internal evaluation team. Step 2 – Full Project Proposal Agencies with actionable proposals will submit a detailed description of their project idea. An internal evaluation team, comprised of innovation-minded practitioners from throughout the City, will then determine the degree to which the proposed project achieves the above criteria: disruption, sustainability, leverage, customer-centricity, and collaboration. A qualifying proposal consists of the following:General Information: The agency will need to list the agency name, service name, contact information, and the dollar amount of the request.Proposal: The agency should describe the proposal in detail. The proposal should provide a clear case, with supporting evidence, for achieving measurable performance results and/or cost savings. A strong proposal will explicitly and realistically address the criteria described in Section 2.Plan: Describe the key personnel involved in the project, the timeframe for implementation, partnerships with other agencies or outside entities, how risks will be managed, and how the results will be evaluated. If this project is enhancing an existing project, identify the changes expected in the appropriate performance measures. If this project is new, identify the performance measures it will allow the agency to track as well as those measures that demonstrate a need to adopt this project.Example: The Parking Authority of Baltimore City (PABC) was awarded an $886,000 Innovation Grant from the City to upgrade 1,727 single space mechanical meters with single space smart meters. The project allowed PABC to increase parking management effectiveness, create stronger quality control of revenues collected, create efficient monitoring of single space meter revenue collections and meter uptime, generate increased parking meter revenues, and decrease time and personnel costs spent on managing single space mechanical meters.Step 3 – Financial Application If the proposal is approved, agencies will participate in the third step of the application process, which involves planning and detailing the financial and performance aspects of the project. In this step, BBMR assigns an analyst to assist the agency representative with the financial application, and will provide an Excel-based template. The financial application has two goals:Track Measures of Success: The agency should list the quantitative measures that will be used to measure success. Projects should be measured either in terms of improved results and/or dollars saved. The Innovation Fund Committee will be reviewing numerous proposals and will be looking for stretching (but realistic) targets, and a good overall “bang for the buck.”Develop Budget: The agency must estimate all planned expenditures of Innovation Fund dollars by object, with a specific description for each line item. These expenditures must include both one-time upfront costs and any “life cycle” costs that might be required after the initial investment, such as ongoing maintenance, upgrades, or shutdown costs. The agency is also required to provide information on any other sources of funding for the project and how those will be used. In addition, for savings projects, the application requires a forecast of the amount and timing of the expected savings and the expected ROI.Step 4 – Innovation Fund Committee Finally, proposals will be evaluated by an Innovation Fund Committee. The Committee will consist of five to seven members, from organizations belonging to the local public, private, and non-profit sectors, who are subject matter experts in operations and innovation. The Committee will meet annually to review projects that have successfully made it through the application process. SECTION 4: MONITORING & IMPLEMENTATION Agencies selected to receive an Innovation Fund loan will be expected to report on their progress on a quarterly basis, until the loan is repaid. Each project should be assigned a coordinator, by the respective agency; BBMR will assign an analyst to work closely with this individual throughout the life of the project. As part of the “Plan” that each application must include (Step 3, above), projects will be expected to adhere to self-imposed deadlines and timeframes. Project extensions must be accompanied by a formal request, for which BBMR will provide a template. Even after the project concludes and the Innovation Fund is repaid, agencies will continue to report their progress on an annual basis. BBMR will provide instructions on the format and content of these reports.Agencies are invited to use the Innovation Lab (located at 201 East Baltimore Street on the second floor) as a meeting space to develop ideas further. Reservations for the lab can be made by emailing Shonte Eldridge at shonte.eldridge@. ................
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