Cities are at “the end of the government food chain” and face innumerable challenges that they cannot address without federal or other sources of funding and collaboration, according to ICMA President Pat Martel (city manager, Daly City, California), who join a panel of local government leaders to examine state and local government issues on February 2 at the National Press Club in Washington, D.C.
 

Governing Institute Director Julia Burrows with ICMA President Pat Martel following panel on local government issues.

The discussion was part of Outlook 2016: State & Local Government Market, an annual two-day event hosted by ICMA media partner Governing magazine. Panelists examined the economic projections, trends, and issues that will define the public sector market and U.S. communities for the next decade and beyond. Governing Executive Editor Zach Patton moderated the panel, which also featured Sallie Clark, President of the National Association of Counties (NACo)/Commissioner, El Paso County, Colorado; and Matt Zone, 1st Vice President, National League of Cities (NLC)/Councilmember, Cleveland, Ohio.

Panelists’ observations mirror much of what many local governments have been experiencing:

• Despite improvements in the economy, local governments overall have not fully recovered from the recession. Revenues are increasing but not nearly at the rate of increases in operational costs.
   

• Pension costs continue to contribute to the problem, with $3.6 trillion in funding obligations that must be met and that draw money away from infrastructure improvements.
   
• During the recession, cities and counties delayed maintenance on just about everything to survive. The question now is how to fund long-term investments in infrastructure improvements.
   
• Creating opportunities for local governments to have more of an impact on regulatory issues is paramount. Environmental programs such as water/storm water management are huge issues for cities and counties. Yet, they are often overlooked, and what get passed down from the federal government are statutory requirements in the form of unfunded mandates. Federal and state governments need to be realistic about what municipalities can do while at the same time committing to environmental improvements.
   
• In the aggregate, it’s about helping local government solve challenging problems rather than simply shifting the cost of new programs on to them. Mental illness, for example, is costing county jail systems lots of money; likewise, regulations affecting the ozone, storm water management, and transportation come with huge price tags. Counties are the safety net, and yet, they are not always invited to the table when they need to be or asked to comment on what legislation needs to look like as it goes through the pipeline—despite the fact that they are the ones who do the heavy lifting.
   
• If municipal bonds lose their tax-exempt status, it will cost local governments millions in funds required to finance roads, schools, and other essential services.
   

• Because the ability to fund innovation lies with the private sector, the real hope is that local governments can expand public/private partnerships (P3s) to provide the ongoing development and solutions they need to move forward. To obtain the GIS mapping software it needs and provide greater benefit at a lower cost, for example, El Paso County partners with the private sector. 
   
• NACo President Clark observed that local governments are not noted for turning on a dime, and that they need to partner with the private sector or contract out projects to more quickly move forward major undertakings (e.g., building toll bridges).  All of the panelists acknowledged the potential of public-private partnerships in making innovation possible, quickly effecting change, and creating solutions to service delivery problems.
   
• Workforce development is a huge challenge. Millennials don't believe in governing the way we have over last 30 years, and because government is no longer viewed as an employer of choice, it must compete with the private sector.
   
• Part of the solution will be investments in new technologies and technology improvements and upgrades. (Today in many organizations, the chief technology officer is the second most important person after the CEO.) But technology investment poses major challenges. At current funding levels, local governments find it difficult to invest in the technological solutions they need.
   
• To create sensible solutions, local governments will need to work cooperatively across borders and regions to explore cost sharing and elimination of redundancies. Within San Mateo County, for example, they’ve looked for opportunities to consolidate functions, such as police and fire dispatching, among many cities and the county, while El Paso County, Colorado’s public safety service combines city/county evidence storage, e-911 systems, ambulance contracting, and facilities management.
   

Public safety—specifically, developing trust and stronger relationships between police and the community—was cited as a particularly high-profile issue and one with which millennials are especially concerned. From the government’s perspective, issues around such things as body cameras and data storage policies are generally far more complex than people realize.

ICMA President Martel observed that municipalities that have invested in conscious community engagement over time have not experienced the same levels of unrest and violence as some of the communities we’ve seen in recent headlines. Demographic shifts are having a tremendous impact on communities, and, yet, too often those changes are not reflected in the people who get elected. There also seems to be a lack of intentional recruitment of diverse candidates. When people can't see themselves in the leadership of a city or county, they tend to be reluctant to trust it.

The panelists agreed: The only way local governments can address racial and economic inequities is to take responsibility for engaging the entire community in conversations during which they envision the kind of future that they want.

The Race, Equity, and Leadership (REAL) initiative, for example, is NLC's effort to equip its members with the capacity to respond to racial tensions in their communities and address the historical, systemic, and structural barriers that further inequity and racism in our nation's cities. And a new report resulting from a summit on the future of local government, police, and community relations—which was hosted by ICMA, the Major Cities Chiefs Association, NLC, and the National Civic League as convening partners--concluded that conditions such as consistency, fairness, and procedural justice are essential to building foundations of trust and legitimacy.