Enhancing the finance officer's role in economic development.

• Author: MacGillivray, David
• Position: Management & Careers

Among many things the recessionary period emphasized is the tension caused by economic development within jurisdictions. Pulling in one direction is the need to use more public revenues to fund public services and infrastructure. Pulling in the other direction is the public sector's desire for a vibrant and healthy economy, requiring public financial incentives. At the center of these forces are primary questions on the use of limited public financial resources.

The finance officer is the organization's specialist in public finance resources. She or he has knowledge of trends, applications, commitments, and capacities. This individual's perspective is usually first toward the immediate and future financial strength of the public organization--the internal entity's financial health. Financial officers also understand that for their jurisdiction to be strong, the local economy must be strong.

In these times, successful economic development has become more challenging. Developers are in weakened conditions, their projects can be more difficult to implement, and lenders have raised the bar to access funding. Today, the developer looks to the public entity for financial assistance more than ever. And, in many cases, the jurisdiction wants to demonstrate its economic vitality by facilitating projects.

One can argue the role of finance officer in economic development should now become even more pronounced and visible than in the past. Yet many finance officers still find themselves on the outside looking in when economic development projects are being evaluated and decisions made.

THE CASE FOR INVOLVEMENT

Almost ten years ago, the GFOA's newest committee, Economic Development and Capital Planning, selected The Role of the Finance Officer in Economic Development as one of its first best practices. Committee members reflected the voices of membership who were looking for a seat at the table from the beginning of the economic development policy debate through negotiating the development agreement, executing the plan, and monitoring its performance.

This best practice sets forth the case for the finance officer's involvement throughout the economic development process. The committee first grappled with the frequent organizational cultural issue that viewed the finance officer as the gatekeeper to funding --the "no" person. In reality, many organizations adapt by simply going around the gatekeeper. The best practice attempts to change this cultural situation by asking the finance officer to engage in a positive and constructive way, using words such as "facilitate," "assist," "communicate"--all to provide the individual with a positive case for his or her participation in economic development.

Seven years after this best practice was adopted, many finance officers still have the same problem: no meaningful role in the economic development process, or late entry into the process. If such a strong case exists for their involvement, why are finance officers still looking for an enhanced role in this vital area?

THE THREE SIDES OF THE TRIANGLE

The next step is to look at the organization itself. Economic development frequently requires the involvement of three primary departments: central management, the development department, and the finance department. These three sides to the triangle should work together to yield the best possible economic development project for their jurisdiction. Each must participate and bring knowledge and strengths to the table. Differences of viewpoint should be encouraged, but this is easier to achieve when all parties know and possess a unified organizational perspective. If the finance side of the organizational triangle is shorter than the other two, what does the finance officer do to increase his or her participation?

The answer...