On June 3rd I had the good fortune to address a large audience at the Government Finance Officers Association’s 109th annual conference in rainy Philadelphia, during a session entitled “The Resilient Government.” I joined Bob Eichem, Chief Financial Officer of Boulder, Colorado, and GFOA’s outgoing president, and Mike Bailey, Finance Director of Redmond, Washington, to discuss the different strategies finance professionals can use to promote financial resiliency in their organizations.
Panelists discussing financial resiliency at the GFOA conference.
The ability for a local government to anticipate, react, and bounce back from major impacts has been a key theme for GFOA this year. President Eichem convened a task force to define resiliency, identify helpful tools and techniques, and establish best practices to help local governments be better prepared for major organizational changes. The research and findings of the task force were published in the April 2015 Government Finance Review and provide a good overview of the ideas that can promote flexibility and preparedness.
My part of the conference session focused on long-term financial planning and the critical role that multi-year forecasts play in understanding and preparing for potential impacts. A well-planned process, with thorough analysis and clear links to organizational strategy, can provide a solid foundation for local government to plan for disruption and make strategic resource allocation decisions. Part of my presentation highlighted the use of scenario modelling to determine the potential impact of external changes and allow policy makers to discuss contingency plans and priorities, by seeing what impact different external changes would have on the bottom line.
The outcomes of using a long-term planning process are manifold. It helps officials understand the current financial condition, diagnoses unrecognized or little-understood problems, build the case for action, and promote developing a mix of strategies to respond to crisis. It has other, related benefits as well, including building trust with citizens and imposing discipline on the decision-making process.
Later this year, GFOA will be publishing best practice guidelines generated by the Resiliency Task Force, which I served on.