USC Price School of Public Policy

Fiscal Sustainability Panel

SPPD Faculty, Local Officials Address Fiscal Sustainability

By Matthew Kredell

Fiscal Sustainability Panel From left: Bedrosian Center Director Dan Mazmanian; Martin Plourde, Whittier Union High School District; Michael McGrath, National Civic League; Bev Perry, Southwest Megaregion Alliance; Greg Devereaux, County of San Bernardino; SPPD Senior Fellow Mark Pisano
Photo by Tom Queally

California’s local governments and major public institutions are facing a fiscal crisis with no clear road map forward. USC hosted a forum on building long-term fiscal sustainability in this era of budget austerity.

The event was presented by the Bedrosian Center on Governance and the Public Enterprise at the USC School of Policy, Planning, and Development, the American Society for Public Administration and the National Civic League.

SPPD faculty partnered with the National Civic League to study cases of exemplary leadership in fiscal sustainability within California.

Mark Pisano, senior fellow at SPPD, and Mike McGrath, chief information officer for the National Civic League — two supervisors of the project — discussed the first four case studies Oct. 6 to civic leaders and students at USC. SPPD professor Dan Mazmanian, director of the Bedrosian Center, moderated the forum, which also featured Bev Perry, former mayor of the City of Brea; Martin Plourde, assistant superintendent of the Whittier High School District; and Greg Devereaux, chief administrative officer of San Bernardino County.

“Looking at what we did in the past is not going to help us for what we’re going to be confronting in the future because everything is changing so fundamentally,” Pisano said. “The rules of the game for what is fiscal sustainability and how we achieve it are changing, and it’s changing the culture of government.”

In the first part of what is proposed to be a three-year set of California case investigations funded by the Haynes Foundation, the project team — which includes SPPD professor and Bedrosian Center research director Shui Yan Tang — looked at four civic entities that are answering budget challenges with innovative leadership.

The case studies focus on Los Angeles County, the City of Long Beach, City of Brea and the Whittier Union High School District.

In analyzing the results, Pisano offered the following guidelines for navigating these difficult economic times now and in the future: Don’t spend long-term money for the short term; if there’s going to be increases then something needs to be taken away elsewhere; trust, transparency and financial fluency are essential; use performance-based decision making to relate resources to what is being accomplished; create partnerships with other government agencies, non-profits and the private sector; use inventiveness and creativeness in bringing financial resources to the table.

“Most of the governments in California are not currently fiscally sustainable,” Devereaux said. “There are those cities and counties that don’t know their level of sustainability and many more that don’t want to know. I think that, unquestionably, these kind of case studies — the principles involved and the practices of what it takes to be sustainable — are valuable.”

From her experience as mayor of Brea, Perry pointed out that there is always money out there, money that cities wouldn’t normally get, that can be brought in with a little ingenuity. In one instance, Brea discovered it had an 800 megahertz radio band that could be used for public safety announcements. By selling use of the radio band to nearby cities that didn’t have one, Brea continues to make money.

In an example of partnerships with other government agencies, Brea reached an agreement to share command structures of fire departments with Fullerton so each city could employ fewer fire captains. Money was saved without reducing services.

“Brea is very entrepreneurial,” Perry said. “Sometimes it was risky but, if you want to bring in extra dollars, that’s what you do.”

School districts are a different entity because additional funds cannot be raised. The districts must figure out how to survive on the dwindling budgets they get from the state. In Whittier, Plourde said the district managed to roll back salaries by 3 percent and then freeze them, all while raising class sizes three times in the past five years.

In meetings with employee representatives, Whittier was open in presenting its numbers of what the budget currently looked like compared to what it would look like in four years with and without freezing salaries. Suggestion boxes were placed at each school asking how else the budget crisis could be managed.

“It’s really a matter of trust,” Plourde said. “As we’re continuing to be transparent and the trust is there, our associations know that, when we have money, we are going to be sharing it and that, when we don’t have money, we will need them to assist us in working together collaboratively to sustain us.”

Fiscal sustainability means that future generations will have the same benefits of current generations. To meet society’s needs going forward, Pisano said that government needs to redefine itself every year.

“It was good to bring together four levels of jurisdictions with the school district and cities of different sizes to see how the issue affects all of them,” said Nikola Hlady, a second-year master of planning student in SPPD, who is also interning at the City of Pasadena. “The way Plourde described how his employee groups and organization were able to develop a common bond where they would support each other in good times and share the sacrifices in bad times was an inspiring element.”