By Sam Mamet, Senior Consultant
Sam Mamet retired in 2019 as Executive Director of the Colorado Municipal League. Connect with Sam at www.sammamet.com or by email.
Municipal leadership has never been more important. Helping your citizens get beyond the moment and your community back on its feet is a challenge all cities and towns face right now.
As I have stated often over many years, no municipality is an island. What one does affects all others. This has never been more evident. The virus has its own immunity and it extends to politics, jurisdictional differences, rural, urban, Front Range, West Slope, Lower Arkansas Valley. What might have caused divisions in the past now unites us in the present and beyond.
What is a good framework in which to ponder all of this? You need to focus on the phases of recovery, financial impacts, and being creative. There are practical tips you can follow.
Phases of Recovery
- Here And Now – What is your city or town doing right now? Being in the moment is as real time as it gets. Practitioner tip: Who is on point; how is key information being disseminated; to whom; and how often?
- Reason For Being – What is your city or town’s key role moving forward? Practitioner tip: What does your municipal organization do best? Is it communicating, facilitating, connecting, healing? What role do both the Mayor and the rest of the governing body have? Is the municipal administrator on point?
- The Future – What does the strategic plan say? Practitioner tip: What your priorities might have been before the virus are likely not the same moving forward? Who is engaged in that conversation? Is your plan nimble enough to pivot quickly?
The municipal universe revolves around sound finances, and right now that has been turned on its axis overnight. DOLA working with CML and other local government interests recently released a report with some sobering findings. A key finding shows that responding cities and towns expect a 21% average general fund reduction. What is next?
Here are some key issues; you need to ascertain the answers.
- Reserves – Can they be accounted for in a precise and clear manner? You must look at all fund balances in your budget. Are any restricted? If you are able to use reserve funds, what would your plan be? Be mindful of TABOR reserve requirements. Practitioner tip: Engage your finance team, accountants, and auditors.
- Revenues – What is your revenue mix? Practitioner tip: Which revenues will be affected by a downturn more quickly than others? Ascertain your pain threshold.
- Operating budget – A mid-year budget adjustment may be in the offing. All funds will have to be examined carefully as to the effects of an economic downturn.
- Sales tax and fee impacts – Most directly affected will be sales tax revenues, the most important revenue source available to cities and towns in Colorado. It allows municipalities to be less reliant on state-shared revenues and more fiscally self-sustaining. On the downside, in an economic dislocation with so many parts of the economy affected, sales tax revenues will take a blow. By how much and for how long will be hard to predict; however, predict you must. Fees for services will also be dramatically affected. Remain especially cognizant of development fees. Practitioner tip: Engage a regional economist and some students from one of our great universities or colleges to do some short, mid, and long-term forecasting.
- Cuts – Elected officials beware. You may be called upon to make some very tough decisions. Will you cut and if so, will it be across the board or targeted? Will personnel be affected with hiring freezes or furloughs? Practitioner tip: Staff and elected leaders, here’s an emotion alert-tensions will arise. Stay in your lanes. Elected officials, please respect staff recommendations. Staff, respect that elected officials may well not see the world exactly the same as you. The goal is to reach consensus, be decisive, and then move on.
- Grants, loans, and document – State and federal funds will become available. Stay on top of these first and foremost through CML and DOLA. Practitioner tip: Assign a key staffer to report to council regularly on what is available and what your municipality is doing to secure these dollars. Beware of all disaster cost accounting: document, document, document. This was so very evident during the September 2013 flooding event.
- Public Facilities – How will you phase in the opening of your facilities and buildings following state and federal guidelines.
Thinking Outside Your Box
What can your city or town do to exhibit true leadership and effective governance? Trust levels remain high based upon recent April election results from over 100 municipalities across the state. Voters still say “yes” more than “no” to tax and debt proposals. Trust is part of your municipal DNA. It’s also your brand. Here’s how to burnish it further with a few suggestions.
- Small business loans and grants – Check with your legal counsel on the use of public funds for private purposes. A very important legal point. Engage with your economic development professionals and local business groups. Practice tip: Best practices matter so talk to CML and to other communities. Frisco, Aspen, Colorado Springs, Fort Morgan, Aurora, Montrose, Avon and many others are doing important programs. Also look at tax and fee payment extensions as well as your local sales tax vendor fee.
- Regional thinking – Carefully examine regional service delivery and merging services with other adjacent jurisdictions. Initiate regional and countywide Covid task forces. Some mountain counties are emerging as early good examples.
- Seek professional guidance – Data collection and analysis, facilitating strategic plan updates, and economic forecasting all demand attention with the use of outside consultants. Training and participating in statewide meetings facilitated by CML should remain a high priority.
- Mental health – Pay attention to your own personal needs and that of your colleagues. Practitioner tip: Reach out to a mental health advocacy organization in your area for support and assistance.
Municipal governance and leadership are being challenged. The skills required include vision, transparency, clarity, and resilience. My years of experience inform me that you are up to the task. Remain in good health and in good spirits.
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