How can local governments strengthen financial resilience in a time of uncertainty? In this episode of Voices in Local Government, hosts Joe Supervielle and Angelica Wedell bring you a special live recording with Public Money Pod. You’ll hear featured public-sector leaders share real-world insights on building strong financial foundations, planning for the long term, and fostering trust across teams and communities.

Key Takeaways for Financial Resilience and Success:

• Proven strategies to improve financial resilience in your municipality
• How city managers and finance directors can best collaborate and work together
• Tools for long-range planning and adapting to new fiscal challenges
• Real examples of budget solutions that reflect community priorities

Featured Speakers:

• Justin Marlowe – co-host of Public Money Pod, research professor at the University of Chicago, director of the Center for Municipal Finance
• Liz Farmer – co-host of Public Money Pod, award-winning journalist and fiscal policy writer
• Dave Schmiedicke – finance director, City of Madison, WI; former Wisconsin state budget director
• Will Jones – city administrator, Mequon, WI; president, Wisconsin City/County Management Association 

Voices in Local Government Podcast Hosts:

Joe Supervielle and Angelica Wedell

Resources

• Public Money Pod by the Center for Municipal Finance
• ICMA: A Budgeting Guide for Local Government 3-Part Series 

Transcript

Transcripts are generated using a combination of speech recognition software and human transcribers and may contain errors. Please check the corresponding audio before quoting in print.

 

Welcome to Voices in Local Government, an ICMA podcast. We are your hosts, Joe

Supervielle. - And I'm Angelica Wedell. We're bringing you real world discussions on

today's top local government topics. So Joe, we recently went to the ICMA Local

Government Reimagined Conference in Milwaukee And this episode features a special live

recording from the Public Money Pod podcast. And we talked about public money.

We talked about municipal budgeting, finance, and how it needs to be done for

communities today right now, the most pressing issues, the topics that really matter

for not only Wisconsin communities, but also municipalities anywhere.

They talked about the things that really matter the most right now. And so the host

of Public Money Pod are Justin Marlowe. Justin is a research professor in the

University of Chicago Harris in the School of Public Policy. He's also a director

for the Center of Municipal Finance over there. And then Liz Farmer is the co -host

and Liz is an award winning journalist and a fiscal policy writer and you may have

heard of Liz from the long story short. And so they got together with two Wisconsin

local government finance leaders. These are Dave Schmiedicke who is the finance

director with the city of Madison and then Will Jones the City Administrator for

Mequon. And they really talked through those details about public finance,

city management, how those things work together. And so, Joe, you took a listen to

the episode to prepare for this today. And what were some of the things that really

stood out to you when you were listening in? Yeah, thanks, Angelica. I was

disappointed. I couldn't make it to Milwaukee myself, but really glad to be able to

listen to this episode. And first thing actually stood out was I was just impressed

by Justin and Liz doing this live. I'm not ready for that kind of pressure. I like

recording with you, but live we'll have to see about that. But the episode itself

was great. How is this paid for is a question we've asked on almost every podcast

episode we've done or blogs or PM Magazine because when these come up where these

innovative ideas happen that that's the natural question. Oh that sounds great but

how are we going to pay for it? So it was great to have a full episode just kind

of focused on that and they cover a lot but I think one of the keys and just the

starting point was building that trust between CFOs and CEOs or whatever the title

might be the city county manager and the head of the finance department whatever the

specific title is but Building the trust and navigating economic uncertainty, which is

obviously a top of mind with every organization, local government or otherwise, here

in 2025 and probably going to be for a while. But it was just nice to listen into

that deep dive and hear what it takes to build financially resilient communities and

leading effectively through change. And I know that sounds like cliches, but the

guests did a great job of actually giving real examples. And as you said, they're,

they're practicing in Wisconsin, but it wasn't, it wasn't specific to that. This,

this can be any location, it can be any size jurisdiction, size budget,

size population. As always, you can kind of scale it up or down based on where you

are for the listener, but it's timely and helpful for everyone listening. So you

were actually there though, what's it up to you? I also agree that the, the part

about the relationship between the city, city manager and the chief finance officer

was something that I think is really important for any local government, any

organization, you need to have a really strong relationship, how that breaks down,

and how the public plays into that as well, how you communicate initiatives and

things, and how you're really collaborating and working together was, I think, really

excellent content and something to think about for everyone. I also appreciated

talking about trust and transparency and communication again.

These are things that were big themes throughout the entire conference, but especially

throughout this interview. I think it's very important right now because so many

jurisdictions, at least in the United States, are facing fiscal shortfalls at this

time. And so Trust, transparency, and communication are absolutely vital when it comes

to handling something like a budget deficit and handling how we're going to

communicate to our councils, our residents, and bringing everyone together if we're

having to talk about something like budget cuts, which are difficult everywhere.

Yeah, we heard stories from both Schmiedicke and Jones about their own communities

about their own budget balancing stories and what they're doing to build community

resilience what they're doing to modernize their budgets and What those best practices

are in their cities how those best practices are even changing and influencing the

whole region around them. And so they're really looking at what are the current

needs today, what's going on fiscally, what's going on locally, and then making sure

that the city budget is reflecting those needs and serving them as best as possible.

- Yeah, you touched it a little bit, but how to adapt or how to adjust in economic

uncertainty, but as it ties to the shifting federal policies as well and that's kind

of tough to talk about specifically today because as we're recording it could be a

little different tomorrow next week, next month, but that's also part of it. It's a

moving target maybe, another cliche, but I think captures how people feel about it,

but just the way the guests talked about balanced budgets and long term planning and

how the master plan of the city or county in general, how that fits into a

financial strategy, not just budget. Oh, here's the budget for the year and approval

process and then it adjusts and it's just a never ending cycle, but an actual

financial strategy, which is just interesting to me because I don't know much about

that topic. It was, it was great to learn about that from them. And also at the

very end, I always like regardless of the topic of the topic when the guests can

kind of project into the future a little bit, not necessarily make predictions, but

just talk about the future of the profession. And I think that helps the audience

get some ideas maybe where they're at in their own career, what they need to do

for continual learning or further education, professional development, all that, to

keep up on it as things progress and evolve. So it was a great episode. I'm really

thankful again to Liz and Justin for sharing with us and glad to get their episode

on our feed, but obviously the listeners who find this helpful are interesting. Just

Google search or look in wherever you're listening to your podcast and search for

Public Money Pod and you can find it and subscribe to their show as well. So glad

to have it. Glad to hear it and glad to share it with the audience. - It's very

educational and thank Again, I want to echo Joe in saying thank you to Public Money

Pod, and thank you for coming to the conference and doing this live recording with

us, sharing it with us, and sharing it with all of the attendees that were there,

and many thanks to everyone who came to the event and who's looking forward to

coming to future ICMA conference events. There's a few of them throughout the year,

so come visit our website, icma.org, to learn more about some of those as well.

But I think that gives us a nice overview about what this episode is about, what

this interview is about, and what's going down here with public money. So why don't

we go ahead and get right into it.

Well, welcome back to the Public Money Pod, a production of the Center for Municipal

Finance at the University of Chicago's Harris School of Public Policy, and we are,

of course, proudly sponsored by BAM Mutual, Odyssey Advisors, the Government Finance

Officers Association, MuniPro and DebtBook. I'm Justin Marlowe,

and we have a special episode of the Public Money Pod for you this week. Liz and

I have an opportunity to do a live session of the Public Money Pod in front of an

audience at the International City County Management Association, ICMA's local

government reimagined conference that just took place in Milwaukee, Wisconsin. We had

a great session, we were able to talk to two wonderful guests simultaneously, Dave

Schmiedicke, who is the finance director for the city of Madison, Wisconsin, also a

former state budget director for the state of Wisconsin, and we are also able to

talk to Will Jones, who is the city administrator for the city of Mequon, Wisconsin,

and the Milwaukee suburbs. And it will also, as it turns out, a certified public

finance officer. So both of these gentlemen bring a lot of experience to bear at

the intersection of finance and management, both at the state and local level. We

had a really great conversation. The conference really focused on what the future of

local government will look like. And so naturally, a lot of the themes that were

drawn out, both in this panel and at the conference as a whole, were things like

resiliency, what it means to build trust in communities, what a good working

relationship between a CFO and a CEO looks like, and what sorts of things are

keeping local government professionals up at night in a world of real uncertainty,

with federal policy being what it is, state policy being what it is, the economic

being what it is. So it was a great chance to hear from two really, really

seasoned experts. We had a great time, great audience. Thanks so much to ICMA for

the invitation to participate. We really hope you enjoyed this special episode of The

Public Money Pod.

Well, welcome everyone to a live taping of the public money pod. I'm Justin Marlowe,

joined as always by my Intrepid Co -host. Came all the way from Maryland, first time

in Milwaukee, purveyor of long story short, Liz Farmer, Liz, welcome. - Thank you,

Justin. And I have to say, it's exciting to see you in your natural habitat.

I expect it, if you need any tips on Wisconsin in general, maybe specifics on

things to go do and see, snag him after the meeting. And so, yeah,

there you go, I put you on the spot. - No, I appreciate it, glad to be back.

Native Wisconsinite, I went to graduate school here in Milwaukee, lived here for four

years, got married right up the block. So it is great to be back. And just like I

was saying, you come back and you slip into some words and some phrases that you

don't use outside of Wisconsin. In fact, that was tell a couple people if you're if

you're from here It's not Milwaukee. It's Milwaukee. It's so anyone who's on to miss

walkie And we're saying as you go up I 43 you hit all of the you hit P walkie

and color and When you get to two rivers, of

It's the one word, you know, it's a little Wisconsin geography for everyone, so

we're glad to have Liz here. We're going to take her to Culver's a little later,

give her a proper introduction to what life in Wisconsin is all about. It is really

a pleasure to join you here at Local Government Reimagined. We really appreciate the

invitation to be with you. Thank you all of you for all the work that you do in

our communities. It often goes unnoticed, but We certainly see it and appreciate it

in the work that we do. And what we wanted to do in our time here today, given

the conference themes, of course, talking about resilience, talking about trust,

talking about what it means to build thriving communities, given that we focus on

public money. And if you haven't, be sure to check us out. like,

subscribe, leave a five -star review, all that good stuff. What we want to do is

kind of explore some of those themes within the context of public money. And so in

doing that, we want to make sure that we get some really terrific guests to talk

about that intersection from their perspective. And we got two really, really good

ones. In fact, they're local, so worked out really, really well to have folks here

who can provide some local perspective, but also we think some insights that will be

very applicable in all of your communities. We have, joining us first of all, we

have Dave Schmiedicke, finance director for the city of Madison, Wisconsin, former state

budget director for the great state of Wisconsin. Professor Schmiedicke teaches over at

La Follette at the University of Wisconsin. Really great perspective to be able to

tell us about how things have worked, maybe in a slightly larger jurisdiction, but

also somebody who's been very much the intersection of the state and local fiscal

federalism relationship over time. We also have Will Jones from the city administrator

for the city of Mequon, current president of the Wisconsin City Manager's Association.

Great to have some more local ICMA representation here. Will comes to us from having

had a long career in city management, including in Chicago land. And also, I think

particularly relevant to what we're doing here today, He's also a certified public

finance officer. So I can talk a lot about that intersection of city management and

local public finance. Gentlemen, welcome. It's a really pleasure to have you here.

Look forward to the conversation. - Thank you so much, thank you. - Public money pod

fashion, as always. Liz gets the first question. - Yes, thanks, Justin. Although I

just realized, you know, for those of you who may not know that our interviews are

edited and it's usually because I'm the one who has to like stumble over her words

and re -ask a question so I realize I better step up my game here a little bit.

But our first question is just about that intersection like Justin mentioned between

administration and public finance. It's something that we've touched on a lot of

times in the public money pot it's part of why we do what we do is to bring that

conversation to a

is, you know, the theme around trust, transparency, kind of meeting each other where

they're at. So a CFO in particular with a CEO, may not be a city manager,

it may be a strong mayor in the case of the city of Madison where I worked or

with the governor when I was state budget director, you know, really understanding

what their goals are and how you can assist with those goals.

And then on the transparency side, I think it's really about, I like to use the

phrase speaking truth to power. You know, it's really about kind of stepping forward

and maybe somebody might, you know, that CEO or whomever might have an idea is

like, look, I need to tell you everything that can happen associated with that idea

and not to say you may not end up not doing it but you need to think about these

possible outcomes with that and so I think that's a you know a big part of a good

relationship of you know how do we match what we're able to do financially with all

of the considerations we might have with state laws and limits and things like that

with, you know, the outcomes that we want to see in a community,

for example. So I think those are some of the elements, you know, with that.

Thanks, Liz. And thank you all for being here this week.

Welcome to Milwaukee on behalf of the Wisconsin City County Management Association. So

glad you all made the trek here and looking forward to a great couple of days as

the weather improves. Relative to your question, Liz, in my experience,

and I've served as an acting finance director way back early in my career, so I've

kind of worn both hats now as a city administrator.

As Dave said, understanding the perspectives that each role brings to the

relationship, understanding the challenges that are inherent to each of the two

professions, and understanding the perspectives. And if you look at finance,

it's a very technical field. The work is technical, it's precise. The world of city

management is more free form, shall we say, it's more adaptive work, you're in the

political realm. And so being able to marry sort of the amorphous with the exact,

takes time, takes communication, takes collaboration, and certainly takes trust and

transparency. The other thing that I have found that works well in fomenting a

strong relationship between the CEO and the CFO is during budget time.

If the OO can take the role of, shall we say, heavy and take some of the load

off the CFO in terms of interacting with the departments, vetting certain requests

that come in at budget time either from elected officials or from the departments or

from the community. It allows the finance director and the finance staff to really

apply their efforts and their energies to getting the budget right, to getting the

budget balanced and not having to be the good cop and the bad cop all at the same

time. And I have found working with various finance directors throughout my career

that that's a very valuable role that the CEO can play because we all know budget

season lasts really 12 months out of the year. And There's the development side,

there's the close the book side, there's the financial reporting side, and then boom,

you're into updating the capital plan. So those have been some of my experiences.

Lastly, you know, it's said in city management circles, it's probably the most

important relationship between the chief elected officer, let's say the mayor or the

president, and the administrator or the manager. That's crucial to moving a community

forward and getting things done. I would posit that a strong number two relationship

in that organization is the relationship between the CEO and the CFO, because we all

know nothing gets done without money. And if the books are right and the

organization is in a strong financial position, that's how people like us in this

room can actually lead our communities, lead our organizations and get things done.

So I guess then the follow -up to that is, what's a great way for that relationship

to not work? What makes for a bad CFO /CEO relationship and how can you maybe avoid

some of those pitfalls? Well, maybe I'll jump in here. One of the things that is

very important, paramount, frankly, if and when I'm in the market for a chief

financial officer is communication skills and for a CFO to be able to communicate

effectively with other members of the organization, let's say department heads and

other staff, and being able to communicate effectively with the elected officials,

come budget time, and other community stakeholders that come into contact with the

organization. Accounting, again, and finance, very technical professions.

Not everybody brings the communication skills, both written and verbal, and from a

presentation standpoint to the table. And as we get into further and further into

the 21st century, those skills are more and more important relative to the CFO's

role. And then having that trusting, transparent relationship is huge.

Making sure that you have strong processes, strong procedures, strong policies in

place really helps to sort of guide the work. And if you've got a strong base,

an infrastructure, a financial infrastructure, if you will, in place relative to

internal controls, et cetera, that's gonna support a strong relationship between the

CFO and the CEO. And more often than not, in communities where you don't have those

strong underpinnings financially, that's where there's a lot of stress, maybe between

the CEO and the CFO. Dave, what did I miss? - That was a great list. I mean,

in terms of, I'm pretty comprehensive. I think if you're

not a good listener in that relationship,

I think you're gonna have problems. And particularly from the CFO to the CEO side,

if you as a CFO coming in saying, "Well, this is how it should be done." And you

know, you can't do anything and these are the rules and if you don't leave any

room for discussion, dialogue, how do we accomplish things but more coming at it

from what we just can't do that, that's a bad idea. I think then the relationship

I think sours pretty quickly so I think you have to have a lot of humility in the

job, both working with the CEO, but also with your peers as department heads,

with the community, staff, and so on, in terms of let's be curious about this.

How can we understand these issues better? We may come at it from a certain

perspective, given maybe the background we've had or something like that, or as Will

was saying, we've got all these accounting rules, and if you're sort of hung up on

all of that, rather than how do we create, how do we have curiosity to create that

sort of narrative of, okay, as the CEO or as the mayor or the governor,

whomever, what is the story that you want? What is the outcome that you want from

all of this. And how do you want to make those investments and how do we make

that all work?

If that's not sort of built, that's where I think the bad relationship comes in and

can develop, yeah. - What you've said resonates so much just with all the interviews

and interactions I've had over the years, particularly with people who are working in

distressed cities, where I was having a recent conversation with someone who's working

in a distressed city, and just kind of talking about everything you described.

I mean, you have different groups, different people in that city who don't believe

what the other group is saying, and when you kind of do the forensic, when you

look at that and kind of peel back like how did this happen. It's so much of what

you described.

So what kind of specific advice do you have, or specific steps can people take,

either to rebuild trust or to strengthen it where it already kind of exists?

- Start, I can jump in. - I mean, - I think rebuilding trust really starts with,

like I said earlier, that humility, that transparency, sort of laying out here is,

here's what the numbers look like, but also taking that expertise that you may have

or should have and say, and here's where we can try to build from that.

Here are some of our options. Here's areas maybe where we can streamline costs on

one end of the equation, but or here's where we can maybe generate some revenues

towards those goals of, you know, what are we trying to accomplish as a community?

And so I think that that rebuilding trust is around transparency, around good

communication, humility, humility, the listening, again, really trying to connect with

the community. We recently in Madison, and for those of you who aren't in Wisconsin,

we have probably in Wisconsin, you know,

a heavy reliance on property taxes. And we're very constrained by the state in terms

of what we can do with both with our revenues and the types of revenues that we

can have. And so, you know, the growth in our revenues typically doesn't match the

growth and the cost to deliver services. So many places around the state, both

school districts and cities and others are going to vote a referendum to increase

property taxes. And we just did that in Madison

Back in November at the November election and we started the year before that,

you know As soon as that last budget got done saying, okay, we've got to build

that narrative. We've got to create the information That the community needs to

understand it both our counsel sort of starting with them and then the community at

large and Really explaining, you know, And we kind of went through this over and

over again explaining in really basic terms what we do as a city,

how the money comes in, and how that money gets used,

how property taxes are calculated. You'd be surprised. Most people have no idea how

their property taxes are calculated, or the fact that it's not just the city on the

tax bill, it's the school district, it's the county, it's and so on. So those sort

of really kind of basic things and and really listening to what what people have to

say in relation to that usually you know some anger around it or frustration or

things like that and so you know I think that's how you kind of work to build

trust along those those lines and, you know,

we spent a lot of time with that and really educating the council and then

educating the community generally and ended up with a positive outcome on that.

That's really impressive. Especially the explaining how property taxes are calculated,

that is a granular level of math that I think that you're right,

most people don't really pay attention you know, they just see the dollar amount. So

that's really cool that you all went to that, that's kind of specific level of

communication. - Well, it kind of had to. Those were the questions we were getting

and really trying to explain that. And, you know, again, as somebody who does this

all the time and think, well, you know, these are the numbers, this is how it

works. And, you know, we talk internally about it's like, yeah, that's still not

quite enough, you know. boiling it down, so it was a good exercise to go through.

So it's April. We just had an election here in Wisconsin on Tuesday.

We heard. [LAUGHTER] Luckily for me, my mayor and my two older persons who were up

for re -election were running unopposed. So I've got a rather small to -do list as

they re acclimate back for another term. But in any other year, I might have a new

older person coming on board here in April. And one of our jobs as staff is to

onboard our elected officials so that they're ready to go as we move into budget

season come July, August, September, and October. Because statutorily,

we're all on a January one fiscal year here in Wisconsin. And getting our newly

elected officials up to speed quickly is a priority. And so we spend a full day

with any new elected official in Mequon, and that's probably not news to a lot of

the folks in this room. But we spend the time, requisite time, and we bring in all

of our department heads, including the CFO, to give newly elected officials an view

of the budget process and what to expect going into the third and the fourth

quarters of a particular fiscal year. We also do a budget planning workshop annually

with our council in order to lay out some of the challenges that we're seeing

economically, sort of a broad environmental scan, if you will, of some of the key

factors that are going to influence development of the annual budget. We participate

actively in GFOA's three award programs. And from an elected official standpoint,

that's a really easy thing to grasp and to promote and maybe pound your chest about

a little in terms of demonstrating to your constituents and the community at large

that you are a very well -managed city or community financially.

And sure, it's a couple hundred bucks, it's a little extra work for the finance

department to put together the documents and get them into GFOA, but we actively

participate in the budget awards program, the financial reporting program and the

popular annual financial reporting program, which really kind of gives us that blue

ribbon seal of approval year in and year out.

So those are just some of the things that we do to foster trust. And then we pay

a very close attention in Mequon to the tax rate. And trying our best to maintain

a level or stable tax rate as government financing locally here in Wisconsin goes,

we're able to increase our tax levy by net new construction. So whatever the

increase in development activity in the community is from one year to the next,

that's the percentage by which you can raise your tax levy. It's rather restrictive,

it's one of the most restrictive levy limits in the entire country, and so that

brings with it its own challenges. But our elected officials historically have been

very focused on the tax rate, and we do what we can to mirror that focus,

and I think in turn that builds trust. when there is a time or there is an

occasion where a real need exists and we need to actually break open the purse and

write another check.

One of the themes of the conference is resilience. I wonder if we could talk

specifically about what we mean when we say financial resilience. What does it mean

to build a community that's financially resilient? What if you could reflect back on

your experiences in your particular communities about number one how do you define

resilience from a financial perspective and number two what are some concrete steps

that you have been able to take to build that that resilience however defined

thoughts on that day yeah resilience can mean a lot of things right and you know I

think we you know - We'll talk about GFOA and the best practices and I think a

lot of that we try to feed into how we look at resiliency,

but it kind of really starts with what are the services that residents expect and

then how can you maintain those services going forward or expand them as you know

if you're a growing community as the population grows. And so I think financial

resiliency is kind of connected with that ability to meet what's happening in terms

of growth of the community, the service levels and things like that within the

constraints that we'll alluded to in terms of, I mean, we all face them in

different ways in terms of how much we can raise revenues and things like that. So

some of that resiliency might be around things like, you know,

colloquially the rainy day fund or our fund balance. What should that level be? GFOA

has some, you know, best practice around that, for example. And so some of that

resiliency might be, well, what is the type of tax base you have? So in Wisconsin,

that sort of double edged sword, the property tax is very stable, right? We may not

be able to go up much, we're very reliant on it, but it doesn't tend to change

too much. Whereas in other parts of the country that might be more reliant,

let's say, on sales taxes or commodity type taxes, how is that economy going to

affect them. They may need more reserves, for example, and how do you take a look

at that? Resiliency too, I think, in terms of the workforce that you have with the

city, what sort of benefits do you have? What are those future costs associated with

it? We've had a lot of talk around other post -employment benefits as an issue.

Now, in Madison, we don't have a big issue with that because we don't offer that

to employees other than, you know, certain, like, police and fire and teamsters to

some extent. But in other communities, those issues around not only OPEBs,

but the retirement benefits themselves and how, you know, that type of resiliency in

terms of how do you maintain that workforce? How do you attract a workforce and

keep that in place? So I think looking at, you know, not just the sort of dollars

and cents of where our revenues come from and what our total might fund balance

might be, but how does that relate to our economy? How does it relate to the

services that people expect and how does it relate to the workforce that we need to

attract and maintain to deliver those services. So I think looking at all of those

factors looped into what are our long range planning,

whether it's financial, but also things like comprehensive land use planning and

things like that and how do we relate those, I think are all a part of that

resiliency equation. - Yeah, I'm gonna kind of pick up the baton here on the long

-range planning from Dave.

But before I go there, ensuring that you have a structurally balanced budget whereby

recurring revenues are meeting recurring or growing expenditures is hugely important.

When I first arrived in Mequon just over 10 years ago, the habit was to borrow

from fund balance to plug holes in the operating budget, which immediately creates a

deficit in the following fiscal year. So you're already behind the eight ball, and

you're 12 months out from even passing the next budget. And so we've been able to

turn the battleship on that front, and we now have a structurally balanced budget,

which I believe gives us the day -to -day and the year -to -year financial resiliency

to absorb additional costs, obligations, et cetera. But longer term,

we've got a five year capital improvement plan, which is probably part and parcel to

what many organizations around the country do. We've created our first ever strategic

plan, which is less financial in nature, but it also helps us to bring the council

and the staff together in terms of tying goals and objectives for the organization

and for the community to our budgeting process. And since we've established our first

ever strategic plan, it's been very interesting to see our elected officials who had

never operated with a strategic plan reference the strategic plan during budget

discussions, during budget deliberations, and even as we're getting ready to go into

budget so that's been a very helpful document and now as we're moving into 2025 one

of our goals is to develop a long -range financial plan which is not so focused on

the capital per se which I think we've we've kind of checked that box but we

want to make sure that we're looking out and looking around the corner to see what

we need to be doing from a revenue standpoint because we are somewhat limited here

in Wisconsin To make sure that we can maintain our operating expenditures With

inflation at 3 % 4 % And that we're not in a position whereby we're reacting versus

being proactive in terms of Passing and adopting future budgets.

So long -range planning and getting those plans in place, in my experience,

helps to build the culture to be thinking strategically and not just year to year

when it comes budget time.

- Yeah, so many comments on that, but I'll keep it to the phrase structurally

balanced budget. I am such a nerd, I get excited when people start talking about

that, 'cause I'm like, yes, yes, it so matters. And the state I live in,

Maryland, is dealing with some of those very things from, basically putting off

previous decisions.

And it always comes around.

But I think the long -range planning at peace is particularly,

you know, this is a common thread and one of the things that might be difficult

about that is how do you look far into the future but then also kind of make some

shorter term goals and hash marks to keep your eyes on along the way. And I think

evaluation and looking at where are the risks, are they changing is probably a part

of that. So how do you look at, you mentioned the economy, workforce, all these

things that you've talked about, how do you look at the risks to the budget when

it comes to those things and how often should you be looking at those or

reevaluating? Well I would say that that's a continuous process in terms of managing

and evaluating potential risks, but I'll go back to the longer range financial

planning discussion for just a moment. We in Mequon and other places where I've

worked have put a lot of effort and some time and certainly some expense into

developing specific master plans for various systems that were responsible for

otherwise managing across the community. I'll give you two examples. In March, in

Mequon, we approved our new five -year park and open space plan, which lays out a

laundry list of goals, objectives, even pricing for all of our parks and our

preserved open spaces within the 50 square miles that Mequon encompasses as a

community. So that's a five -year planning document that we'll be referencing as we

go into budget and we develop our parks budget. We adopted a bike and pedestrian

way master plan which will set the tone for improvements that are non -motor vehicle

in nature over the next 10 to 20 years. And that's a valuable planning tool in

terms of looking at opportunities to pick up sidewalks, bike paths, walking paths,

et cetera. When we go into a neighborhood and we do road reconstruction projects,

or we do resurfacing projects across our 212 -mile road network.

So having these master plans and IT is another one. We have an IT master plan.

We've got a buildings master plan. We've got a right -of -way assets master plan

with, I think, bridges, streets, and sidewalks. Those are all tying into our annual

budgeting process. And those support the larger plans, the long -term financial plan,

the five -year capital plan, and the strategic plan that I talked about that are

more umbrella -like in their focus. And so we're leaning or resting our head on a

lot of plans as we go through the annual budgeting process. Dave? Yeah.

I mean, I think Will laid it out really well. I mean, in In Madison, every

community in Wisconsin has to do a comprehensive plan every 10 years.

And so in Madison, you know, often prior to the last round that we did that,

that would be done by the planners, you know, to kind of create the plan. It would

sit on the shelf and nobody would really pay much attention to it other than maybe

would guide name or something like that. But this last time, which we did it back

in 2017, 2018, and we called it Imagine Madison.

And we identify seven elements of a great city-- things like transportation,

cultural things, parks, and so on. And There was a lot of outreach to the

community, you know, we invested considerably in that, and we linked it to our

budget process. And at the same time in the budget process, we've been doing

something called Results Madison. So that idea of transforming maybe an incremental

budget process to an outcomes oriented and results oriented. What do our residents

want, and how can we take data to help evaluate how we're performing relative to

that. So it kind of starts with that imagine Madison, and then we're still building

out the results Madison piece of it to really sort of get those linkages as Will

was talking about between what's our vision as a community and that long -range

vision how do we bring it down to how each of the services that we deliver is

performing relative to what the residents are expecting and then how do we translate

that into that annual budget process you know it's a very much a work in progress

but it was really a great step that we took to you know really link that that

long -range land use type plan to our financial type and service delivery activities.

And so some of those things are being looked at on a 10 -year, 20 -year period. How

does that then feed into the facilities that we might need, you know, and we're

building that as well, which is also long range. And then what do we need to do

to deliver those services in terms of the annual budget and so I think you're

looking at that at different points in time and then you're trying to inform all of

that with well what's happening on the ground with the economy you know the state

what the state is doing what the you know we now have a lot of things happening

at the federal level and how do we integrate all of that so it happens,

I think, on a number of different levels, at a number of different points in time

throughout the process. So it's kind of continuous, kind of long range, kind of a

mix of all those things. One other thing I'll add that's been very helpful in MEC

-1 and certainly is applicable here in Wisconsin. We have used the fact that we

oversee a water utility and a sewer utility two enterprise funds that are subject to

rather stringent regulations via the Public Service Commission to help drive some of

the progress on our general fund budget. And because we can take a step back,

we can look at a sewer utility or a water utility like a business, we can do rate

modeling, we can do proformas, we do cost projections both capital and operating

and we can set rates such that we're operating that business in the black and then

carry that over with our elected officials to the operating budget side and say,

"Hey, look, what we're doing over here on the sewer side, we're keeping rates low,

we're getting stuff done, we're making sure that's a high -performing utility." Same

thing with the water, we need to do that on the general fund side, which is more

as Dave pointed out earlier.

audience thinking, "This all sounds great, and so then why doesn't everyone do it?"

Some of those challenges I'm sure are political leadership and getting community buy

-in and things like that. But from a finance perspective in particular, how much has

that work changed in your collective experience just because of things like new

technological innovations or the access to information that we maybe didn't have 10,

15 years ago when we were trying to do the same sort of work, and again with an

eye toward somebody in a community coming to this, they want to do this, they maybe

have the support to do it, just in terms of concrete steps that can be taken with

respect to collecting information, doing the analysis, are there new tools available

Or is it still, at the end of the day, just the really hard work of kind of

going out and generating, you know, developing those relationships and generating the

kind of support that you need for it?

Well, you know, I'm not the finance director per se. I work closely with our

finance department and our finance and personnel committee in Mequon, but we rely on

a lot of outside professionals across the board financially speaking to help us move

forward on many of these initiatives. We've got an outside auditor, we've got an

outside financial advisor, we've got an outside investment advisor, just to name a

few, we've got a banking relationship. And those are some of the professionals with

the real core expertise in those particular disciplines that can help you drive the

establishment of a long -range financial plan or a five -year capital plan. They can

help you take a fresh look at how you're managing and deploying your idle cash in

order to take advantage of higher interest rates and generate additional income for

your bottom line. They also have a lot of recommendations annually coming out of the

audit process. And if any of you have not taken a recent look at the statistical

section within your annual financial report. It's a wealth and bevy of information

that can help you think strategically about where you need to take your community,

both from a planning perspective, as well as a financial management perspective.

Typically, in Mequon, we carve out two or three projects a year from a financial

standpoint, whether it's insurance, auditing, Revaluing property, banking,

we re -bid those contracts. We really do a deep dive. We get smarter and ultimately,

more often than not, we're winding up in a better place, either from a price

standpoint or a service standpoint. And then that trickles through to the finance

department and then across the organization. So if you haven't started yet,

start small and just keep building year over year, Dave? - Yeah, no, I think those

are really great points and we can certainly crunch numbers faster,

right, than we could before and probably all of you or many of you have enterprise

resource planning, ERP type systems where you're really kind of integrating as much

as you can, everything that's happening in terms of payable, accounts receivable,

purchasing, payroll, and so on.

But also, I think-- and we're trying to do this as a part of building out our

capacity for sort of evidence -based decision -making, and that we've created data

training sort of programs for

staff and cohorts around that and so that folks who maybe are you know,

they're the ones responsible for doing payroll in an agency and Well the way we

collect all that payroll data is on spreadsheets, and I spend eight hours a day

Putting that in every once every two weeks Well, I went into this data training

cohort, and I learned Python, and I now can do that in an hour,

you know, and it's those sorts of things that are small, but the more you can kind

of build out that technical capacity throughout the organization, you know,

it really helps, and a lot of places around the country have done these sorts of

things, you know, Denver is a leader in it in terms of their, I can't remember the

name of their academy, but in terms of training staff around that, and then the

staff then has the capability of like, yeah, this is how we can do things better

to serve the residents better. And so I think those types of tools are really kind

of coming into the fore now and have been in place for a number of years, but

that idea of kind of building out that capability and training staff around that so

they have those tools rather than maybe it just residing in a finance department or

something like that. To be clear, this is Python, the training language, not a

snake, not a reptile. That's right. That's right. Any ambiguity about that?

It's code. That's right. I don't know where did that name come from? Someone can

tell me after this. Stay tuned for a follow -up episode of the Public Money Poverty.

We talked a little bit about the economy, economic risk. I think there's an--

obviously, there's been a lot of uncertainty around the economy and what decisions at

the federal level may or may not ultimately trickle down to local government. Across

the country, that's going to mean different things for different places. But I guess

how are the the federal funding cuts and or threat of cuts kind of affecting,

you know, your environments right now and how should people be kind of looking at

that? Yeah, I think, you know, obviously a lot of disruption happening.

I was just talking with our city engineer the other day and he was like, oh yeah,

just as just as things were kind of calming down with the supply chain,

with the pandemic, now we have tariffs, you know, and it's like how, you know, how

do you manage in that environment, you know, for the city engineer, like letting

projects, what are our estimates for building, rebuilding a street or putting in a

sewer pipe or whatever it is. And so, you know, I think that's one element of it.

Another element is, you know, what's happening in Congress with continuing the tax

cuts from 2017 and You know, that's something like four trillion dollars that needs

to be kind of found and you know there's a menu of things to try to address that

and the budget reconciliation work that's going on right now, but one of those

things that's on that list is the tax exemption for municipal bonds. And,

you know, state and local governments do upwards of 90 % of the infrastructure

spending in this country really fueled by that tax exemption.

And, you know, some estimates have been made around if that tax exemption goes away,

that's $6 ,300 for every household in this country of higher cost and so those are

I mean those are the types of things before we even get to the cuts that are

happening that are really basic to the work that you know we all do as

municipalities counties states and so on in terms of those investments and so the

other thing I think about the federal budget is like if you look at like you know

the level of reliance It's relatively low, but it's targeted in certain areas.

And so in the education area at the local level, it's really about special needs

types of kids, the sort of add -on types of things for maybe reading recovery and

things like that. And then it's also school nutrition programs, which are tied into

in a place like Wisconsin and other agricultural states, those pay farmers to provide

those commodities to schools so that kids have what they need every day in terms of

nutrition. So that's another area is public health. Another big area is public

transit, which is a key infrastructure issue throughout the country.

So while it's not a big part of our everyday budgets, it's a big part of certain

key elements of what happens every day in our communities as well as those

investments that, you know, help economies remain strong and continue to grow at the

local level. So those are some things that we've got to think through on all of

those levels as these changes are happening. From a smaller community perspective,

Mequon's about 25 ,000 plus population. We've been living through a rather major

freeway reconstruction project here, 43, which runs Milwaukee to Green Bay.

A portion of that has been under reconstruction over the last four years, it

encompasses the entire length of Mequon, about five and a half miles in total,

with six overpasses /interchanges being rebuilt. So that's been a lot of federal money

being invested in and around Mequon. We're actually happy to see that project come

to a close here in the next several months and get it wrapped up. And those of us

who drive on it are happy to see it come to a close. It's a long time. And then

we're working on, you know, just making sure that we're doing everything we need to

do from a dotting eyes and crossing T standpoint relative to ARPA funding. We have

dedicated and allocated all of our funds by the December 31st deadline last year.

Now we're following up with the April 30 reporting deadline, which is looming for

many governments across the country. And then our charge is to make sure all of

that money gets expended by the end of 2026. We had a two and a half million

dollar allocation in Mequon. We've dedicated that to mostly one time projects. So

we're in the process of now overseeing construction and getting those funds spent.

But I think to Dave's point,

transportation funding is probably something that's gonna be impacted at the local

level, we have begun as we're going into these long -range and strategic planning

discussions with our council to socialize about other alternative revenue options or

sources that we have not otherwise considered in Mequon. Historically, like a hotel

/motel tax, like a vehicle registration fee that can be applied to someone's car as

alternative or additional supplemental sources of revenue that may offset a drop,

say, in transportation funding. And then on the school side, let's just imagine if

the Department of Education goes away, that'll have a cascading effect for school

districts across the country. We have a school district we share with Thienesville,

the Mequon Thienesville School District. They just went to referendum for an operating

referendum last fall, to the extent that schools, both locally or across the country,

see a drop in their funding, that may lead to an increase in referendum or tax

rates, which all of us on the municipal side need to keep an eye on because if

our needs grow and we're not able to meet them because the communities are exhausted

from approving taxpayer taxpayer referenda, rather, that creates a longer term

challenge for the municipal side financially. So a lot of stuff to keep an eye on,

certainly. Yep. You guys have one more question, and something we often like to ask

our guests on the pod. So what are you paying attention to in the next couple

weeks here. Obviously, there's a lot of that we just ticked off a long list of

developments at the federal level that we're all paying attention to. And

incidentally, as a quick commercial, if you're at all interested in the localized

potential impacts of changes to the municipal bond tax exemption, check out our

center, Center for Municipal Finance at the University of Chicago, we've done quite a

bit of work on that, including at the congressional district level. If you'd like to

see some of the impacts potentially would be congressional district by congressional

district. That's been a helpful resource, I think, for many as we've been thinking

about that debate. But aside from the immediate federal and other policy developments

that we've talked about, what are you paying attention to here in the next couple

of weeks? We leave here, go back to work. What's going to have your attention? And

I guess as related to that, then what would you recommend our audience be thinking

about in the next couple days, weeks, months here? - Well, Well, I'll give you two

quick ones that I'm paying attention to and maybe one thing for us to think about

which probably everyone in the room is thinking about but We just had that election

here in Wisconsin on Tuesday Act 10 which came to pass about 12 or 13 years ago,

which overturned collective bargaining locally for all but non -public safety related

professions is now likely going to be before the Supreme Court at some point after

Justice Crawford is sworn in August 1st. So I think that's going to have an

interesting and far reaching impact potentially on what local governments look like

and what they're going to be doing over the next couple of years if Act 10 or

portions thereof get overturned by the Wisconsin Supreme Court, if it comes to that

level. More locally and financially related, and this is just Will's observation,

it seems like oil prices, I'm sorry, gasoline prices have jumped about 50 cents in

the last six weeks or so. The price of oil is still around $72 a barrel.

That would not suggest $3 .30 here in Wisconsin, and I'm curious as to why gasoline

prices are going up and whether that relates to anything on the tariff side and oil

coming out of Canada, et cetera. Maybe it's some refinery work I don't know, but

the price of energy has a cascading effect on the price of everything else, much of

which we pay for on the municipal side. And then, I guess, you know, longer term

or bigger picture, You know, the future of our profession, as it relates to some of

the changes that we're seeing in society, the decline in civic institutions,

you know, you talk about education, you talk about the changing landscape in retail,

you talk about the assault on bureaucracy that we're seeing in some corners of

government. How is that going to affect our profession longer term? We had just some

elections to the north of us here this past week, and we've got members of the

state legislature that are writing endorsement letters for members, for people in

school board races and city and village trustee positions.

I've never seen that before, And I'm concerned, as I'm sure many in the room are,

about the creeping effect that large -scale national politics is going to continue to

play at the local level. And what that means longer, longer, longer term for a

profession such as ours, which is really based on professional management, apolitical

approaches to problem solving, and playing both sides equally for the benefit of the

community. So, over to you, Dave. - Yeah, again, that's a great list.

I think I'll just, it's hard not to ignore what's happening at the federal level. I

mean, that, I think, is going to dominate what we're trying to do in terms of

financial and other planning at the local level. And it hits on a number of

different levels. I mean, as you mentioned, ARPA earlier and you know we did some

things at the city to try to limit our exposure even though everything was obligated

we sort of thought well that new administration that's now in place could come in

and kind of change the rules and they absolutely have they just put out a notice

just a few days ago that said we're going to look at every type of expenditure

that you had in ARPA and we're gonna come and claw back money if you haven't done

something right. And who knows what that is, right? And I think many local

governments and states have relied on that money and relied on the guidance that was

provided from Treasury at that time. And so that sort of level of uncertainty is

kind of hard to navigate through. But I think, obviously, not a time to panic,

but to really kind of keep an eye on what's happening with all of that.

And then I think, how are things like tariffs and tax policy going to affect,

and reductions affect the economy, the prices of issues.

In Madison, we have the flagship campus of the University of Wisconsin where we are

a huge research university, huge amount of federal grants. They're looking at changing

what's called the indirect cost rate. So that could affect the ability of the campus

to, you know, the university to deliver all of its programs. How does that affect,

you know, our local economy in terms of jobs and so on.

So I think all of those issues, I think, are going to demand our attention over

the next days, weeks, and months as we kind of work through what is only what,

60 days, into a new administration, really. So it's going to be like, wow, what

more is going to happen. So a lot of things to think about there, right? For sure.

- For sure. Indeed, indeed. Woody both have given us a lot of things to think

about. Will Jones, Dave Schmiedicke, thanks so much for joining us on the public money

pot. Liz Farmer, as always, it's a pleasure. Thanks for making the trip. - Yes,

absolutely. - Great to have you. Thanks to ICMA for having us. We really appreciate

the invitation. Enjoy the rest of the conference. Thanks. - Thank you.

Thanks again to our Season 3 sponsors, Build America Mutual, Debt Book,

the Government Finance Officers Association, MuniPro, and Odyssey Advisors.

The Public Money Pod is a production of the Center for Municipal Finance at the

University of Chicago's Harris School of Public Policy, where we are proudly produced

by Alex Kroger. You can learn more about the Center and its work, including recent

and past episodes of the public money pod, at the Center's website munifinance.uchicago.edu, that's M -U -N -I -F -I -N -A -N -C -E .U -Chicago.edu.

 

Thanks again for listening. We'll catch you next time on The Public Money Pod.

 

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