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The Official Blog of Forecast5 Analytics

Jody Smith
WRITTEN BY
Jody Smith

Analytics, Local Government, Transparency, CFOs

Three Major Money Related Issues Facing City or County Finance Officers

Posted on Feb 8, 2017 4:09:38 PM

After more than thirty-five years serving in finance or budget related positions in three Iowa cities, I can attest that demands of the job are ever-increasing.  The number and complexity of challenges facing the modern city or county finance office will most likely increase as accountability and transparency demands for local government increases. Trying to match short term demands with long term strategic goals for your ever-changing organization is not easy. The good news is that we are all facing one version or another of the same problems. The top three issues I currently see are 1.) unreliable/unpredictable state funding levels, 2.) increasing program costs, and 3.) transparency 

Unreliable/Unpredictable State Funding

We all know that government revenues can be subject to wide fluctuations.  This is especially evident at the state level where revenues “promised” to local governments historically have been re-appropriated for a “higher” state need.  Funding, such as backfill for commercial property tax revenues that your entity was or may be counting on often “disappears” and that may happen after the budget for the ensuing fiscal year has been adopted.   While creating many issues with an operation or strategic budget, this can create even greater issues for long term planning and resource allocation. As policymakers and team members come to the finance officer looking for clarity about what resources are available for the coming or future budget year(s), our best response should be supported by having modeled differing state funding levels and comparing the effects.  Can you quickly and easily build one financial model to show the financial impact of a 2% general fund revenue increase, no general fund revenue increase or possibly the loss of backfill funds “promised” by the state?

Increasing Program Costs

Years ago, when a program or a service was initiated (perhaps serving hundreds) the cost was deemed acceptable/reasonable but the cost to deliver that program, now, are not going down.  In fact, costs are increasing while the number utilizing the program/service may be minimal but the recipients/users are very vocal and influential. Maybe it’s a program being delivered at a couple of locations that could be delivered at one location or perhaps other revenue and/or expense modifications could get the program back to what is deemed acceptable.  While it is difficult to build consensus around changes to programs and program delivery, creating a breakdown of the associated costs - and where the resources would go if changes are made - is hard.   How do you find the time to create these various scenarios to communicate them to appropriate individuals or groups?   

Transparency

Is this a “buzz word” that will soon go away?  I don’t think so…and I don’t think it should.  We, at the local government level, can and should be leaders in providing citizens clear and concise information as to how their “tax dollars” are being collected and used.  It is important that your transparency “strategy” takes into account all stakeholders. Certain individuals might like to see the details, but for the majority it is important to utilize visuals and tie the charts, graphs and tables to a simple narrative. Is your current software capable of easily compiling requested information in various formats and pushing it out to an internal or public website?

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Jody Smith is a Senior Account Advisor for the Municipality market with Forecast5 Analytics. Jody has been involved with local government for more than 38 years. He has served as Deputy City Manager and Director of Finance for the City of West Des Moines, served as a member of the ICAP Board of Directors, and is Chairman of Community Relations for West Des Moines Water Works. He received a Bachelors in Politico-Economic Systems and History from Buena Vista University and an Associates Degree in History from Iowa Lakes Community College.

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