Yolo county uses best practices to guide long-term planning.

• Author: Newens, Howard

The Great Recession underscored the urgent need for long-term planning for many local governments, including Yolo County, California. In undertaking this planning work, the county discovered that it needed to be on firmer fiscal footing in the present before attempting to make any projections into the future. It was clear that recovery and growth would not be possible without first strengthening the county's financial infrastructure. This article describes how Yolo County used the best practices contained in the CIPFA-GFOA Financial Management Model for this purpose, particularly the best practice related to long-term planning, which turned out to be the key driver of change.

BACKGROUND

Even before the onset of the recession, the county was on a slippery slope. Public safety expenditures had steadily climbed since the aftermath of September 11, 2001. Reserves were spent with no firm plan or policy to replenish them. A number of funds incurred deficits, and the general fund came to the rescue until it could no longer bear the burden and itself went into negative territory. As general purpose funds became increasingly scarce, the county became increasingly dependent on state and federal funding. Executive management was aware of the trend, and the board was informed. Nonetheless, absent a clear direction and coordinated planning, staff continued to react to events and solve budget challenges as they arose, with scant attention to the distant future.

Several years of austerity, however, strengthened the county's resolve to discard its short-term blinders, and a new county administration championed the search for long-term fiscal stability. Following much introspection, county officials identified three factors that destabilized the county's financial condition:

* No focus on the long-range implications of current decisions.

* No measurements county officials could use to gauge the efficacy of past decisions.

* No safety cushion to help mitigate the effect of incorrect decisions or unforeseen events.

County staff turned to the Government Finance Officers Association's long-term financial planning model (available at no charge on the GFOA's website at www.gfoa.org) to address the first and third deficiencies, and adopted the GFOA's financial management self-assessment tool, the FM Model, to correct the second deficiency. Long-term financial planning is itself one of 52 best practices contained in the FM Model, but it deserves special attention. This two-pronged approach is described below, along with useful tips the county picked up along the way.

PRACTICAL CONSIDERATIONS

If we do not set our own course, the pressure of current events will dictate our destiny. The County of Yolo chose the path to financial sustainability; the board of supervisors adopted it as a strategic goal and approved a plan to achieve it, which is being implemented. And the county is seeing a turn-around in its financial condition. As of late summer 2013, Yolo County is halfway through this effort. In the process, it has learned some lessons that are distilled in the following ten useful practices.

1. Translate Concepts into Actions. Achieving financial sustainability is a lofty goal, but one that turned out to be too abstract--it didn't generate enough enthusiasm to spur the county to action. Breaking the concept into familiar principles, and then into practical objectives, created greater acceptance. In turn, these objectives feed into a board-approved tactical plan, which comprises specific, measurable, time-based actions that staff intends to carry out in order to achieve the county's strategic goals. Exhibit 1 describes the county's framework for implementing financial sustainability.

2. Get and Maintain Sponsorship at the Top. Planning is an integral part of governance and must be initiated from the top, but it doesn't come naturally to elected officials. Long-term planning was a tough sell until the catalytic assistance of the Great Recession. County officials seized the opportunity and invited the board to launch a culture of planning throughout the organization. Board focus was maintained through frequent updates on all projects with long-term import such as capital improvement planning, information technology strategic planning, creation of reserve policy, and OPEB funding. The board gradually took ownership then gave directives to set the course.

3. Plan Continuously. As U.S. Army General George S. Patton said, "A good plan today is better than a perfect plan tomorrow." The county did not have sufficient resources to undertake the participatory and consensus-driven plan prescribed by the GFOA model, so it embarked on the planning project with the resources at its disposal. County officials broke the project into manageable segments and took immediate action, not waiting for a perfect plan to come to fruition. The county's plan is in a perpetual draft stage; it is being implemented as it is being developed and continuously amended.

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