Fiscal Sustainability, local government has an elephant that keeps getting bigger...
Today's soap box comes to you after reading an article published by the country's leading organization representing city officials. It featured 19 “thought leaders” and their predictions for local government in 2019. If you don't have time to read the article, do not fear, I can tell you what WASN'T mentioned:
I wasn't even surprised that fiscal sustainability was barely mentioned. It’s briefly discussed in regards to benefit packages and recruitment efforts, but no real mention of the costs of development, aging infrastructure, debt obligations, and overbuilt environments that plague our country. This is the biggest issue facing local governments, yet more often than not, we can't even hear crickets from the majority of “thought leaders” in the industry. Even more alarming than the lack of alarms being set off, is the missing data, transparency, and understanding of the infrastructure liabilities facing taxpayers that is almost universally shared by government officials. As a taxpayer I am concerned, and you should be to.
The habitual tendencies and thought processes are the same. Let's hand out incentive packages that don’t pay for themselves, ignore infrastructure demands by kicking the can down the unfunded roads we built, and if we just keep counting on a mantra that only works in movies, if you build it they will come. These actions or lack thereof should be characterized as intentional neglect of duties. It is a lack of respect displayed for the office for which one might hold, the people, places, and institutions that oaths were taken to protect. Saddling future leaders and their residents with these issues is almost criminal, after all, its the elephant in the room that just keeps growing. The refusal to prioritize and take action towards fiscal solvency should keep leaders up at night.
The hard questions have to be asked. When will reality be accepted? What are the true impacts we aren't talking about? How can we change our behavior moving forward? Where is the accountability to the people? If we can't afford our present how can we plan to sustain our future? Business owners, corporations, and nonprofits have to calculate costs for carrying debt, maintenance, and current and future liabilities. Yet we don’t we demand the same of our government. We just sit silently and watch the freight train barreling at us.
Infrastructure in government accounting is placed in the asset column. I am not one to say whether this accounting practice is flawed or not. However I do know that the failure to collect, account, project and quantify the costs associated with infrastructure maintenance and replacement isn't a flaw, its a missing piece of the equation. I am certain that the data used for accounting purposes is incomplete. We aren’t taking the economic benefit the infrastructure brings, what we call an asset, against its real costs, the liability. Maintenance costs and useful life predictions on current roads, water and sewer systems, and the personnel costs to run all of it must be a part of the equation. Yet generally speaking "we" just put the “value” of the infrastructure in the asset column and go about our day.
Frightened yet? Well generally that’s the way we’ve always done it. Every mile of concrete, every inch of the water lines, every acre-foot of treatment pond, and every cubic yard of landfill labeled as an asset and no mention of the liability or how to pay for it.
Do the math. Most of your local officials won't.
I am thankful to those communities, industry experts, and real thought leaders who are striving to turn the ship around. It’s a thankless duty. This job, the one your predecessors left for them, knowingly or not, will change the face of local government. There is no other choice. The blissful ignorance that those who have gone before enjoyed is now a burden that is almost impossible to overcome. I’m proud of those leaders that have chosen to stand up and do what's right. We need more like them. We need leaders willing to face this head on. But, every year “thought leaders” pass the buck.
Sarah O'Brien lives in Smithville Texas and has worked in local government. community development, destination management and downtown revitalization across the State of Texas. She is a motivational speaker, consensus builder, and visionary problem solver who helps organizations and communities understand their purpose and achieve collective impact.