By Stephanie Davis
The Director of SPIA’s Graduate Certificate in Public and Non-Profit Financial Management describes how she implemented financial resilience principles as a county Finance Director, and how SPIA’s certificate program teaches these concepts to students.
Balancing the need for effective and efficient public services against tight financial constraints is a continuous challenge for local government managers and elected officials. Local governments can and should build resiliency—financial policies assessing the long-term, systemic implications of current projects and budgets—into day-to-day decision-making at all levels, up to and including the governing elected body. Threading resiliency into all aspects of financial management—including budget development and execution, debt management, purchasing, investments, accounting, risk management, and auditing—can help communities weather economic uncertainty in the short and long terms.
Shortly after I started as Finance Director of a suburban county (population 28,000) in central Virginia in 2002, we faced a financial crisis that demanded not only short-term solutions but a culture change in the way we were planning for our financial future. Elected officials had not previously considered the connections between all the parts of the local financial system: general fund balance, expenditures, revenues, cash flow, and debt affordability. During eighteen months of presentations, education, one-on-one meetings and workshops, our financial advisors showed the Board of Supervisors how each component in the overall system of financial management impacted the others. As a result, the Board began making decisions on tax rates, debt issuance, and one-time capital expenditures while considering the impacts on cash flows, debt affordability, and reserve levels. Over time, with consistent adherence to new financial policies, the county was able to meet fund balance recommended levels, maintain sufficient cash flows throughout the year, and finance capital projects on a schedule conducive to debt policies and affordability. The result was an upgrade of the county’s bond rating. Even today, these financial policies have resulted in another bond rating upgrade and have supported recovery after the Great Recession.
My experience as a county finance director—and that of many instructors who have served as local government administrators—has helped infuse the concept of resiliency into SPIA’s graduate certificates in Local Government Management and Public and Nonprofit Financial Management, which I now direct. Both certificates offer master’s level courses designed from the perspective of the local government manager. Through the use of the Government Finance Officers Association’s framework for implementing financial resiliency, students learn how to incorporate financial resiliency as a strategic goal and how to establish objectives to meet it. Key resiliency concepts, including operating within means, using proactive tools, protecting the ability to provide services, and taking a long-term approach to financial management, are foundational elements of SPIA’s certificate programs.
SPIA’s certificates in Local Government Management and Public and Nonprofit Financial Management integrate best practices and proven strategies through the use of case studies, practitioner-shared experiences, and engagement among students. Students learn about the uniqueness of the political and administrative role of the local government manager, the need for effective economic development and planning initiatives for the vitality of the community, the organizational structure of local government, and the varied ways localities can provide services through public-private partnerships, collaborations with other local governments, and partnerships with nonprofit agencies. In our course focusing on local government finance, students are required to participate in a local government budget public hearing, develop a local budget and capital improvement plan, engage in discussions with municipal financial advisors about debt management and financing, and learn about managing risk to mitigate financial liability in both the short and long terms. By imparting these critical skills, SPIA’s graduate certificates in Local Government Management and Public and Nonprofit Financial Management prepare current and future local government to effectively manage financially resilient communities.