Changing Attitudes and Community Engagement

Local prosperity is like two sides of a coin. On one side, you have what the public sector does and the other you have what the private sector does. You can’t build a prosperous community without both. Like sides of a coin they are bound together. Public engagement is the glue that holds the two sides together. Proper engagement, whether for budgeting, long range planning or community development will transform the way both cities and their stakeholders work together for mutual benefit.

Done correctly, local leaders can build processes that harness the energy and initiative of households and businesses to build the tax base that will sustain the services needed by the private sector. The private sector also needs to reimagine its role and assume its place through a renewed civics.

Even with an economic recovery, many communities around the country face resource limits but expectations for services remain high. Local leaders like city managers, mayors and council members can take the lead in working with their communities to build an environment that will support both private and public pursuit of prosperity. Some local leaders are already pursuing a number of technical reforms, but these will not deliver the same long-standing results as community engagement. These include trying to do a better job with service delivery through more effective operations, adding on complex management systems and planning process and transparency in the form of open data.

We have talked before about community engagement here and here. In the remainder of this post we will discuss existing attitudes and how they should change to use community engagement to rebuild civics as a collective practice.

Currently our communities are too often characterized by assumptions and behaviors like the following.

Residents can:

  • Act like consumers and not citizens
  • Think local government is solely responsible for quality of life and economic development
  • Assume their responsibilities end with paying taxes, and sometime voting

City staff can:

  • Unveil policies and programs without a prior public discussion of options, implementation and consequences
  • Think the public is an obstacle to getting their job done
  • Assume private interests are automatically trying to cheat the public or others

These need to change and the root of that change can be found in better engagement by all. Sustainable communities will be ones where public and private activities are coordinated, complementary and mutually supportive. This can only happen with a more robust public engagement process.

For all but the most charmed cities, we believe prosperity in the next few years will require a renewed civics. That means residents and business owners will shift from being passive consumers of municipal services to partners with local government in securing successful community outcomes. They can reclaim their role as citizens and participants in local political life. At the same time, local leaders can coordinate a process from which a new community vision can emerge. City staff play their part by becoming consultants on how residents and businesses can make the most of local services and participate in collective outcomes.

Some examples of the changed attitudes and behaviors include:

  • Management and staff appreciating that community members have skills and assets that can help at each stage of the policy and operational chain.
  • City staff cultivating a mindset that expects the best of local families and businesses (without abdicating their responsibility to protect life and property.) Staff can start looking for ways to help the private sector solve shared problems.
  • City staff learning to craft important policies in a more participatory process that starts with open data and analysis. This process will maintain public participation in evaluating options and creating the implementation plan.
  • Citizens accepting that social, economic and community outcomes depend on their actions too. Public provision can’t possibly achieve meaningful gains in areas like neighborhood vitality, safety, sanitation and health.

Unless your city has all the revenue it needs and your community goals are being perfectly achieved, you are probably not taking advantage of all your community’s potential unless you tap it through real community engagement.

Placemaking for Sustainable Development


Communities everywhere are looking for ways to strengthen their economic competitiveness and to do so in less wasteful and more sustainable ways. Placemaking and branding are sometimes considered too ephemeral to be a development strategy, yet, they are very cost effective. Given the importance of retaining and attracting talent, placemaking can be the centerpiece that helps coordinate and give other development tools coherence.

What is Sustainable Placemaking

Local leaders should think about placemaking as a process of facilitating the collective private initiatives of businesses and residents in each neighborhood. This may seem counter to the common notion that placemaking is a way of making your community more attractive to those fickle and footloose creatives. We believe that the sustainable success of every community will come from those who are already there and those who may want to join them in raising families and building local businesses. So the primary goal of placemaking is to do things that make the community better for those already there.

Placemaking and branding isn’t about turning a community into something it is not. It is about helping communities make the most of what they have, nurturing a shared vision that attracts local private interests to make their unique contributions. The community will experiment and generate businesses to meet the needs of the local neighborhoods. Some will fail, but others will survive and over time the business community will be fine-tuned to the needs of local and visiting customers.

Placemaking is important to making our cities and towns more sustainable because it increases the power of local businesses and residents to succeed in ways that reinforce local assets and nurture uniquely appropriate ventures to each community. These kinds of neighborhoods will have a much easier time satisfying their needs with locally grown businesses employing local residents.

The private sector does most of the placemaking. Local government can still help coordinate, reform regulations and provide small scale incentives that help guide private efforts in ways that multiply the impact. We recommend a bottom-up approach where local leaders engage the community to encourage competitive experimentation. These experiments can take a variety of forms, but they share a few things in common. First, they are the idea of residents and businesses, not outside consultants. Second, they should be small scale.

Placemaking only works at a fine-grained level. Generally, the place is somewhere that can be explored on foot. This reinforces people’s perception of the area as a place. It is hard to create a sense of place if you have to drive from venue to venue. Cities and larger districts can be supported by branding efforts. Branding can help communicate the assets of a place, but is secondary to place making. We always recommend that when working on a placemaking effort that the stakeholders actually walk it. They should also watch how others walk it.

Two Placemaking Tactics

Once you have engaged your community, it is okay to give them some broad parameters or concepts if they have trouble identifying some immediate initiatives. Two options include improving local connectivity and events.

Building connections helps local residents take advantage of existing assets. Most neighborhoods have separated land uses. In many cases, however, these land uses are nearby. Yet, they lack the physical infrastructure that would permit households and businesses to more easily access each other. There are often relatively low-cost ways to lower the barriers to connecting uses. This can increase value for residents and businesses. Ask what connections the community thinks would be most valuable. You can also observe pedestrian patterns to see where people are trying to overcome a failed public infrastructure. The presence of dirt paths along roadways or through abandoned parcels is a clear sign that pedestrians are trying to make connections. Painting crosswalks and other visual ques that let drivers know the route is used by pedestrians improves safety. Where low-cost interventions improve connectivity, and increase use, in the next round, the community may decide to reinforce these links with more permanent fixes like better signage, lighting and sidewalks.

Placemaking can be facilitated by regular events. Events can help build social capital in a community. These need not be extravagant. Indeed, they should start small with little cost. Gather the stakeholders and ask what they would like to do. With a small budget, several experiments can be tried by different interests in the neighborhood. The successful ones can be singled out for additional support. In every case, however, these programs will be more sustainable if they grow organically. Planning a first time, major blow-out event is a good way to build excitement that is hard to maintain the following year. Financial sustainability is also hard to maintain when you start with a big budget in year one.

Placemaking strategies are focused on helping a neighborhood identify its strengths and opportunities and make the most of its assets. Every neighborhood is unique and they will vary in their successes. Regardless of its potential, every neighborhood can become a sustainable, identifiable place. This gives its residents a sense of pride and makes a net contribution to the social, economic and fiscal sustainability of its home city.

Sustainability Questions for Communitywide Engagement

Every city can improve its fiscal sustainability. Fiscal sustainability means the providing the services that meet the needs of households and businesses without taxes and fees that harm competitiveness relative to other cities. A core practice to improving sustainability is building a culture that uses the fiscal impact approach through its decision-making processes. This includes its budgeting, planning, capital programs, operations and economic development. Improving sustainability, however may not mean any given city can still maintain the level of services it offers today over the long run. Local leaders need to start a deliberate process where they engage city government and the private sector. That process will help the community come to terms with the capacity of its economy to support its needs. It will also result in types and levels of public services that strengthen and complement the efforts of households and businesses to create value.

High levels of comprehensive municipal services are a relatively recent development. Before WWII, most smaller cities and towns provided very modest services. Fire departments in most communities were volunteer. Police departments were small. Infrastructure was crude. Post war suburbanization, expanded retail sales and federal grant programs for water infrastructure gave most cities the resources to provide a high and consistent level of services to most Americans living in metro Politian areas. That type of easy economic prosperity is available to fewer cities today.

Economic prosperity is the foundation of sustainable city finances. Economic change in recent decades has separated communities into a small number of big winners and a larger number of losers and also-rans. While most U.S. cities have not experienced the absolute economic decline seen in older industrial cities, most have underperformed compared to the small pack of very high growth metro areas. Most communities are facing an ongoing struggle to maintain roads and other infrastructure, pay staff and cover retirement benefits. There are a few options cities try to address this challenge. They raise taxes and fees. They cut services. They make often wasteful bets on economic development subsidies. Eventually service levels will adjust to the ability of the local economy to support them. The challenge and opportunity for cities is to get to that point as quickly as possible. This frees more resources for private initiative. It also improves the effectiveness of the services government continues to offer. The best way to make this transition is to do so deliberately and before a crisis forces a city to make foolish and damaging fiscal choices.

Rationalizing public services with the capacity of the local economy can happen through a thoughtful and inclusive process. This is more likely to happen when cities are proactive and begin before economic circumstances force them. This does not mean a painless process. It is likely, however, that starting this process now will build a stronger community that is more heavily engaged in local government decisions. This type of community building will help implement the policies that result from the deliberate process to become a fiscal impact culture. To start, local leaders can begin a citywide dialogue around collectively answering three questions.

How do we want to define sustainability as a community? The concept of sustainability needs to be defined in ways that all stakeholders can understand. There is no absolute right answer since sustainability is a relative term. Time frame is one variable. A community can set goals that strive for shorter or longer-term sustainability. Effectively answering this question also means refining the community’s vision of itself and its role in the regional, national and perhaps even international economies. Every community aspires for more and better. That was relatively easy during America’s long history of rapid economic growth. Today, in a mature national economy, and one with opportunities for local growth more limited, communities need to take a realistic look at what they can be. This does not mean there is no hope or role for aspiration. It does mean that successfully reaching a vision will require one that is more imaginative than just more of what they already are.

What is the community will to rationally examine service levels, economic capacity and pick an appropriate balance? Once a community has established a creative, realistic vision, it is in the position to explore the role of its services in achieving that vision. Though most Americans are accustomed to the full set of municipal services, not every city will be able to maintain all these services at the level they currently provide. Communities will need to be much more creative is thinking about how they want to achieve the functions of traditional services. For instance, reduced risk from fire is an important goal. Achieving that goal can be helped by changing the building code to increase the fire resistance of buildings and mandating sprinkler systems. These regulations lower the need for firefighting capacity in the long-run. This does not mean eliminating the fire department, but it does mean rethinking how this and every other major municipal service is delivered and funded.

What is the community’s capacity to carry out this process? This is actually the most important question for local leaders to ask and it should come first in their process. We introduced it last since answering it requires a little understanding of the other two questions. This question requires local leaders to evaluate their own motives. It means assessing the culture of their municipal government and the availability of the right skill sets, time and other resources. If motives, culture and resources are up to the task then a city will be able to start the process of building a fiscal impact culture that enables sustainability.

A community that goes through an inclusive discussion of these three questions will gain many benefits. The most important and enduring benefits of this process include shaping a realistic, creative and shared vision for what the community wants to be, rationally rethinking the purpose of local government and identifying the benefits the community wants. This experience will help local leaders build the administrative infrastructure and city culture that makes sustainability the centerpiece of all its major decisions. Then when it comes time to take up a specific tool like fiscal impact analysis or cost-benefit analysis to inform local decision making, it will be in the best position to put those tools to proper use.

Taking these steps may be a frightening prospect for city leaders, but the potential benefits outweigh the risks. It may be far easier than the alternative where economic crisis, either local or national forces changes in even more painful ways. With growing service costs, taxpayer unrest and an uncertain economy, taking these steps may be the only way for local leaders to effectively accomplish the goals they have set for their community in the long run.

Measuring the Costs of Sprawl


Cities are complex and that makes it hard to measure the costs and benefits of sprawl. Most real cities have a mix of neighborhood types built over generations. Real estate markets are highly regulated. Passionate voices in the debate can exaggerate claims. Still, there is growing evidence that some neighborhood types cost cities more to serve. These findings can guide city planning, but the built environment changes very slowly. Strategies beyond smart growth are needed to help communities become more sustainable in the short run.

Variety of Urban Densities

Variety of Urban Densities

Practical and Rhetorical Definitions

Sprawl and smart growth are not helpful terms for development and planning. The debate has rendered them stereotypes that have more emotional appeal than practical application. To its opponents, “SPRAWL” means a gluttonous waste of land where buildings are widely scattered across the land with no logic. It destroys valuable farm land and drives nature back on its heels. Likewise, foes of “SMART GROWTH” pronounce that it robs people of their property rights and compels them to live in hovels or like sardines crammed into dark towers.

In fact, most cities were built over generations and centuries. They have neighborhoods that represent the best and worst types of sprawl and smart growth. Real estate markets are heavily regulated by state and local ordinances. There are always people who think their property rights are being restricted no matter their favored urban form. In addition, real estate markets are distorted by federal laws that influence home and commercial financing. Given these complexities, ideal studies of the costs and benefits of neighborhood form will look at small sections of a city and carefully measure the many qualities that account for neighborhood form. Unfortunately, most research so far has looked at entire cities. They also tend to use density as the measure of sprawl.

Density is an Incomplete Measure of Sprawl and Smart Growth

Research that focuses on density alone can’t give good guidance to city planners and builders. As we saw recently, other qualities are more important to the attractiveness and efficiency of neighborhoods. Things like distance between uses, lot and building sizes, sidewalks and the road networks define whether a neighborhood is sprawling or not. These are really qualities of neighborhood design that determine if density causes problems like congestion and higher costs or whether it promotes efficiency and housing value.

Up to the early 20th Century, U.S. neighborhoods had a density of over 30 units per acre. This was accomplished with row houses and small apartments mixed among single-family homes. These are not generally considered sprawling communities. A typical single family neighborhood by the mid 20th Century had 4 to 6 units per acre. These are generally considered sprawling. At the same time, new urbanist or traditional neighborhood design approaches can deliver mostly single family communities that have densities up to about 25 units per acre. These communities successfully combine the connectivity and efficiency of smart growth with the privacy and open space benefits of traditional suburbs. With the limits of density as a metric in mind, what do we find in the cost of sprawl literature?

Sprawl Cost Studies

There is a growing body of research that confirms sprawling neighborhoods and, or, lower density neighborhoods increase municipal infrastructure and service costs. The following results are drawn from reports you can find here, here and here. Sprawl increases delivering municipal services. Many case studies and nationwide reviews reveal savings that range from 5 to 40 percent. The most detailed and objective studies find at least 5 to 10 percent savings. We should consider these as absolute minimum savings from smarter development regulations. There are diminishing returns to the benefits of density. Service costs fall the fastest when the population density increases from 500 per square mile (essentially rural) to about 2000 per square mile. Memphis and Tulsa have densities at 2,053 and 1,992, respectively. There are additional, but smaller savings moving to 4000 people per square mile. Denver (at 3,923) and San Diego (at 4,020) are examples. Many northern Dallas council districts and suburbs in southern Collin County are also built at about a 4,000 per square mile density. There appear to be slight additional savings for additional increases in density.

Need for Immediate Solutions

Cities with a lot of room to grow have a lot to gain from policies that let the market deliver less sprawling neighborhoods. There are also opportunities to gradually redevelop sections of existing communities with smarter development. Cities should provide the flexibility for the large minority of households who want to live in a more traditional, low-density urban neighborhood. From a property value standpoint, many cities can also benefit from permitting, but not subsidizing, much higher densities where the market demands it. Given the long life of a neighborhood, however, it will cost too much and take too long to radically or quickly rebuild our cities. We need more than land use changes to deliver immediate sustainability benefits.

We have spent several weeks studying sprawl and found opportunities for building better cities. In the short run, all cities will need to do more than just change their land-use regulations. Cities need to engage the businesses and households that call them home. Our cities need serious discussions about the services residents want and their willingness to pay for them. Those discussions are the foundation for reforming city operations to improve municipal effectiveness and save money today.

Planning for Fiscal Sustainability


We are continuing our series of posts on building a more sustainable community. This week we introduce a framework for long-range planning that can tie together the elements we have introduced over the last several weeks.

Context and Scope

The Government Finance Officers Association provides a good introduction to long-term financial planning. Their definition of long-term planning as a combination of forecasts and strategy is useful in the context of fiscal sustainability. Forecasts are our best educated guesses of how key economic and finance variables are likely to change. Strategy is simply considering how those forecasts may impact our goals and identifying actions to improve the chance we get outcomes we want. This is all easier said than done.

Every city has an annual budget process, but planning adds new dimensions and takes time. It requires more than just looking further down the road. It also requires a more open and transparent process where city staff can support local leader decision making and help the public understand the costs and benefits of different levels of public services.

Though planning takes time, any community can afford some level of forecasting and strategic assessment. The key is finding the right balance. One option is to include phasing the process in over a few years, adding more functions. Another approach is to do long-term forecasts for select departments every few years so that all city operations are addressed at least once every two or three years.

The most important factor is that long-term planning become part of the annual budgeting process. The forecasts can help assess risks and needs in the upcoming annual budget. The extra value comes from the longer-term forecasts and how their results can inform changes in overall financial policy. These forecasts can also identify the need be proactive with operating procedures and capital projects.

Key Elements of the Planning Process

Using the GFOA outline, here are our recommendations for how to set up a long-range planning process:

  • Time Horizon – five years is adequate for operational planning. Economic forecasts are unreliable beyond five years. If a community wants to consider longer term consequences they should identify a number of long-term scenarios with varying economic conditions and service assumptions. They can then simulate how these would impact their budget and key fiscal sustainability indicators.
  • Scope – The plan should cover all major funds. The general fund is the priority, but enterprise fund analysis can be just as important to maintaining the viability of those fee-based operations.
  • Frequency – Communities should evaluate at least some of their economic, revenue and operating drivers annually. This helps make the long-term approach a recognized and expected part of the process for decision-makers and the public.
  • Content – The plan should include all types of financial indicators discussed last week: economic and demographic, revenue, spending and operations, debt and infrastructure.
  • Visibility – The plan needs to be a highly visible part of the annual budgeting process. As we pointed out previously, community engagement is key to making these key decisions with public input.

Willingness to pay for services and decisions on priorities require solid public involvement up front. If not, a community may find it difficult to sustain those efforts down the road.

Engagement and City Staff

If communities are going to become more fiscally sustainable, dialogue is at the foundation of the process. We recommend community engagement at each phase of the process. Citizen advisory councils can help staff and local leaders communicate the complexities to the public. By carefully nurturing this translation process, city staff and local leaders can make sure that citizens can constructively contribute to the discussion.

Running a more open and transparent process may raise staff concerns. Staff may worry about their ability to deliver effective and efficient services if the public has greater access. The opposite may be true, however. Current budgeting practices wait too long to engage the public. Cities build a proposed budget and have a big reveal when elected officials and engaged citizens can react. This process involves too much confrontation and can feed public cynicism about government and bureaucrats. In the public reaction, sometimes the political consequences are that staff knowledge and experience is ignored and decisions are made based mostly on emotion.

That technical knowledge found in city halls across the country can be better used in a well-coordinated long-term financial planning process – if that process is inclusive and transparent. Staff can support public decision making with their skills and experience. They become like consultants to local leaders and the public in the planning process. They can help others understand the costs and benefits of short term budget decisions. They can also help local leaders understand the long-term consequences of major changes in the economy and city services, (or be the translators of that information if provided by outside consultants.) In this way, a more open, long-range planning process should strengthen the role of city staff, help local leaders make better decisions and lead to results that are more satisfying to the entire community.

Next Week

Next week, we begin a series of posts looking at some of the major causes of current city financial stress.  Axianomics can help your community implement a long-term financial planning process. Let us know what you want to accomplish.

More Community Engagement for Sustainable Planning


Last week, we emphasized the importance of citizen involvement to build a fiscally sustainable community. This week, we focus on specifics to help local leaders and the public move away from reacting to day-to-day challenges and toward a longer-term discussion on priorities.

Stuck in the Present

Local leaders and the public will benefit from an ongoing two-way engagement. Currently, both sides tend to react to limited feedback. Local leaders mostly only hear complaints about specific service problems. Average citizens have a limited concept of municipal operations and tend to lump all public services under “government” no matter what level of government is responsible. For these reasons, current communication tends to support reactionary responses.

Elected local leaders get a general affirmation from success at the polls. Voter feedback is typically responding to high-level priorities promoted by the candidate. Municipal elections seldom depart from generic calls for fiscal responsibility, public safety or more economic development. It is difficult to communicate specifics while campaigning, so there is little detailed information on what exactly the voters are sanctioning the candidate to do. Typically council members and mayors begin exploring options once in office.

Professional city staff like City Managers, Department Directors have detailed knowledge on how to help elected leaders deliver on campaign promises. These staff, however are often overworked and struggle to maintain existing services. They spend much of their time “putting out fires” that are called out by public complaints. It is difficult for staff to have the time to maintain an ongoing dialogue with the public.

The public is also generally reacting to what they perceive as failures in a limited set of municipal services. Missed garbage pickup and slow street repairs are concrete experiences for citizens and can prompt a call or email to their council member or the city’s hotline. Unfortunately, the usual way citizens learn about the more arcane public policies is through a crisis. A good example in the media lately is the serious financial stress of public pensions such as the Dallas Police and Fire Pension Fund or the Illinois Teachers Pension Fund.

Even in circumstances where two-way conversation is possible, such as town hall meetings, the items under consideration are often only incremental changes in the budget. There are few instances where the public has the chance to reflect on long-term policies or discuss the overall vision for their communities.

Tools for Citizen Engagement

Building a community engagement process that shifts a city from reacting to proactive discussions about the future takes time. This is a cultural shift that will need to be implemented over the long-run. There needs to be education all around – for elected and professional leaders and the public. It is best if cities start with a specific issue or take advantage of the rare opportunities that come along with strategic plans or citywide comprehensive plans. Each community should thoughtfully explore how it wants to conduct the engagement process. Some helpful questions to ask include: Is this process for a one-time action like a city strategic plan or comprehensive plan or for ongoing feedback for a city service? Are citizen interests homogeneous or are there specific groups or neighborhoods that are more affected than others? What is the budget in terms of staff time and funding for conducting the engagement process?

With goals in hand, there are many tools for improving community engagement. One-way methods to communicate issues and options to the public include council briefings, reports on city websites (such as budget documents, performance measures or annual financial reports) and citizen surveys. Two-way methods include the notice and hearings process, town-hall meetings, focus groups and facilitated feedback sessions and social media.

Both one-way and two-way tools have a role to play. The important thing is to use the tool with the intention to shift the discussion to questions of long-term priorities and sustainability. This requires asking the public to consider the costs and benefits of city programs, services and investments. It also requires getting citizens to think explicitly about when those costs and benefits will happen. As examples, some choices have high up-front costs and offer benefits over the long-run. This includes investments in infrastructure paid out of current funds. On the other hand, using debt to fund infrastructure spreads costs among taxpayers today and in the future.

Everyday Language and Citizen Perceptions

Once cities select their communication tools, they can focus on the content. City budgets and operations are very technical. Successfully engaging the public means local leaders translating cityspeak into terms the public can understand. One approach is to recruit a volunteer community group to review presentations and reports to identify confusing terms and jargon.

The public also needs to understand the big-picture of city operations, not just the high-profile services they see every day. Police, fire, streets, parks and libraries are visible. The attorney’s office, fleet management and debt service are among the many mostly invisible city functions. Concepts like “overhead” are a useful term for summarizing support departments. Debt burden can be broken out by service area showing what past investments are being paid off. For example: 50 percent for streets, 25 percent for parks and 25 percent is for the new library.

Finally, local leaders can help citizens understand municipal services and finances in the overall context of local government. It is easy for tax payers to confuse what their money is funding. Simple summaries of total local property tax by school district, county and city government help citizens better appreciate exactly what they pay for municipal services. This can help citizens give good, specific feedback on exactly what is important to them.

Next Week

Next week, we will identify some specific metrics that local leaders can use to track and communicate the fiscal and economic health of their communities. For more information on how Axianomics can help your community start a community engagement process fill out our contact form.

Community Engagement for Fiscal Sustainability


Last week, we looked at factors that influence local leader’s ability to put their communities on a more sustainable fiscal path. Today, we will look at how changing the public engagement process is essential to achieving better long-term fiscal outcomes.

Citizen Demands and Changing Economic Circumstances

The U.S. has a strong tradition of community input into local government decisions. Immediately after the American Revolution, local offices that were once appointed by colonial governors became elected positions. The New England Town Hall model practiced direct democracy even earlier. Historically, citizens participated in local politics by voting, campaigning or running for office, attending hearings and keeping up through the local press.

The current mix of municipal services came about through a long-term process of increasing citizen demands for government as the economy grew and changed. This took many decades. As the economy grew and became more complex with industrialization, communities across the country sought new city services: professional police and fire departments, better streets, water supplies and garbage disposal. City budgets grew with their local economies and the changing ideas about the appropriate role of government.

The scope of municipal services has changed very little in decades. Yet, economic and fiscal conditions are very different than in the era of growing local government. Today, many cities face ongoing financial stress. The reasons for this stress come on the spending and revenue sides of the equation. There are growing salary, benefit and retirement costs and a seemingly never-ending list of technology and equipment upgrades. At the same time, the tax base has stagnated, even in communities with growing economies. Growth in services, declines in manufacturing, internet sales and other factors have reduced the share of the economy subject to local taxation. In the face of these new constraints, demand for city services have not changed. Any hope of improving local fiscal sustainability must begin with new conversations with and among citizens.

Reexamining Demand and Costs for City Services

Many cities appear trapped in an incremental budgeting process. They practice an ongoing series of short-term adjustments to deal with what are long-term, structural challenges. The results gradually weaken city services, harm morale and recruitment and increasing citizen frustration. Incremental budgeting is a prudent strategy in good financial times. It slows spending growth. It also works during temporary downturns by managing painful cuts until funding returns to a growth trend. It is not a great strategy when communities face systematic financial stress. Incremental budgeting becomes kicking the can down as financial strain builds.

The solution is a deliberate engagement with the public that goes beyond the annual budget hearing. The challenge is to have conversations on priorities that help local leaders make tough decisions with the full support of their constituents and stakeholders. Local leaders need to begin a new community engagement process if they want to achieve lasting reforms. Historically, public participation in municipal finances was annual outreach for input on the proposed budget. That budget seldom represents a major departure from the previous budget. Town hall participation is usually very low. Programs facing cuts rally friend’s groups or neighborhood associations, but there is little real dialogue and the point of contention is simply a change in funding levels. There is no discussion of priorities in the context of long-term change. There is no really useful feedback to local leaders who what to build a more sustainable city.

Information for Change

The economy is always changing. Recent trends have been hard on local governments. Nationally, job and income growth is becoming more and more concentrated in fewer and fewer localities. Migration, rural to urban, and from north to south weakens the tax base in the cities losing businesses and residents. The destination cities face growing service demands and the risk of budget hangover down the road. State and national government finances are in little better shape so not much help can be expected from them. Cities need to develop a clear picture of their economic foundation and how that is changing. Local governments should be rethinking their services and operations with these long-term changes in mind.

Local leaders also need to develop good measures of the costs and benefits of municipal services. This is the only way to determine what a sustainable level of services might look like. Municipal services can be very technical, but this information needs to be collected and packaged in a transparent way so it can support a serious public discussion. Communities need this information to set priorities and identify when they need to look for alternative, lower-cost ways of achieving their goals.

Armed with this strategic economic and operational information, local leaders can start having conversations with their citizens. This type of engagement can change public perceptions of local government. The current approach wears down citizens and city staff and nurtures nothing but a mindset of diminished expectations. This can be demoralizing and wasteful for a community. When presenting a clear description of the long-term costs and benefits of city services, local leaders help citizens explore and articulate what is most important. The community can begin to feel empowered and in partnership with their government.

Next Week

Next week, we will take a deeper dive into community engagement and look at specific practices to build citizen participation and commitment. Part of the answer is helping citizens reimagine their role in creating a more fiscally sustainable place to live. In the meantime, let us know how we can help your community begin the journey to fiscal sustainability.