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RIE I' Finance and Budgeting 129 important, the system, while complex in structure, is straightforward in Ian- guage and thereby gives the city commission, Dayton's legislative body, an op- portunity to simultaneously discuss policies and dollars. Zero-base budgeting During the late 1970s yet another budget system was re- ceiving attention. This was the concept of zero-base budgeting(ZBB). First de- veloped by a private industry(by Texas Instruments), the concept was adopted by a number of state agencies and governments. Perhaps the most famous ex- ample of the adoption of zero-base budgeting was Georgia under then Governor Jimmy Carter. The essence of ZBB strikes at the heart of traditional "nonrational" budget making: the practice of taking last year's budget as a given and adding a little for inflation and expanding programs. Under ZBB, last year is a closed book; everything must be justified as though it were a new program. The major steps and elements of ZBB are as follows: I. The isolating of"decision units." 2. The analysis of the decision units and the documentation of the analysis into ?; ti "decision packages." . ._. 3. The ranking of the decision packages in order of priority by management. 4. The final compilation of the budget. based on the rankings.0 A decision unit is a cost center or activity that makes sense as an analytical unit. For each unit,goals and objectives must be specified,costs estimated, and _ performance criteria identified. Of critical importance is the definition of differ- ent levels of service so that decision makers can choose the level of service that the community wants to support. Under ZBB it thus becomes possible to choose levels of service that are lower than last year's. or at least to prevent automatic cost increases. In addition. it may be possible to perform the service in an alternative way. One cannot predict the degree to which ZBB will be adopted by local govern- II ments. But it may be an attractive system to both mature cities with shrinking tax bases and rapidly growing cities whose service demands may grow at an exceedingly rapid rate if they are not well managed. i Capital improvements programming The 1909 Burnham plan of Chicago is the traditional benchmark for the beginning of modern city planning. The plan is usually mentioned together with the City Beautiful movement. What generally is not said is that the plan contained a discussion of how bond issues would be required to finance the ' plan's public works proposals. One urban historian has noted that Chicago built 5300 million (about $2 billion in 1980 dollars) of public improvements to imple- ment the plan in the first fifteen years.10 In retrospect, it was an astonishing achievement. While the Chicago experience taught the significant principle that public ex- penditures are an important link in implementing comprehensive plans, it was not until the late 1920s that the concept of capital improvements programming began to emerge as a c•ontinrting element of municipal planning and fiscal man- agement. A number of cities began to realize that the planning of capital im- provements was a distinctly different process from annual budgeting. In es- sence, as capital improvements were increasingly financed by public borrowing it was necessary to undertake financial analyses that projected the community's ability to pay in the future: that analyzed and projected ways in which debt was to be amortized,-and that analyzed the choices to be made when the number of potential,=::mp-rovements exceeded the financial capacity of a community. The expo_,. �_ti __-A cities in the Great Depression of the 1930s, when numer-