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101 Nat'l Civic Rev. 3 (2012)

handle is hein.journals/natmnr101 and id is 1 raw text is: Last year, the National Civic League, the University of Southern California, and the University of San Francisco entered into a partnership to conduct a set of four case investigations on lo- cal government agencies in the Los Angeles area. The goal was to explore the impact of leadership in designing strategy to ad- dress several long-term structural changes in the economic and institutional environments that have shaped the current fiscal challenges facing most local jurisdictions in California. The cases Los Angeles County, the cities of Long Beach and Brea, and the Whittier Union High School District were se- lected through a process that involved, among other things, ask- ing for recommendations from statewide associations, including the California State Associations of Counties and the League of Cities, as well as through discussion with researchers and se- nior executives with twenty or more years of local government experience. Members of the research team Shui-Yan Tang and Mark Pisano of USC, Richard Callahan of USF, and Gloria Rubio-Cortes and I from the National Civic League interviewed a wide range of current and past officials from each of the jurisdictions and drew on official statements for borrowings, annual budget documents, as well as published strategic plans and related documents, news articles, and academic research publications. In October 2011, the research team presented initial findings of the investigation to a panel of experts consisting of researchers from the California State Library, Public Policy Institute of Cal- ifornia, several (current and retired) county and city adminis- trators, and several elected officials. The panel provided the re- search team with valuable feedback on the presented findings. Based on ideas generated from the October 6 event, further dis- cussions among team members, and additional interviews for the cases, the team has now completed the narrative and anal- ysis for each case. All four cases, along with an overview of the research process, are published in this issue of the National Civic Review. During this yearlong research process, a number of common themes emerged: 1. Leaders must understand the full meaning of fiscal sustain- ability. The research found that local officials differ in their understandings of what constitutes fiscal sustainability. For some, the term simply refers to the ability to balance the budget from year to year. Yet we were reminded by mem- bers of the review panel that annual budgetary balances may be achieved by forgoing investments needed to maintain key infrastructures or by cutting back on social and human ser- vice programs that are essential for the community's long- term health. One definition of sustainability refers to abil- ity/capacity to keep options open for future generations. A Publication of the National Civic League 2. Trust is a journey. In an era of low trust in government, from local to federal, earning and retaining trust emerged from the research as an important theme. The leadership of the Whit- tier Union High School District exemplifies the practices of building and rebuilding trust in the community in both ed- ucational quality and the effective management of financial resources. Leadership practices of transparency, meaningful engagement, and effective communication increase trust. 3. Leaders change the organizational culture to advance fiscal integrity. Organizational culture developed across the cases from practices that ranged from leadership commitment to fiscal integrity, to redefining roles, to engaging key stake- holders as problem solvers, to developing administrative ex- pertise, and shifts toward risk-adverse fiscal models. 4. When it comes to innovation, effectiveness, and efficiency, leadership is about minimizing government by both reduc- ing the cost of services and developing innovative ways to maintain services. The leadership in each of the four case studies wrestles locally with the national discussion on the right size of government. An additional tension in this na- tional debate, noted in the experts' panel review, is whether the economic downturn is temporary, calling for fiscal strate- gies that bridge the gap in revenues until an upturn, or if the downturn is permanent, calling for long-term reductions in the size of government and levels of service. 5. Fiscal literacy on the part of elected official and staff is es- sential but declining. The complexity of the budgeting pro- cess is increasing because of the structural changes that were identified in our research. Changes within the inter- governmental financial flows and the variable economic con- ditions are making budgeting more difficult and placing increased stress on budgeting decisions and assumptions. These challenges require an increasing fiscal literacy. The ju- risdictions in the case studies were dealing with these issues but were concerned with the effect that term limits would have. In 2011 the board of the National Civic League reaffirmed its commitment to make the issue of local government fiscal sus- tainability a priority of the organization. As we do so, we will be publishing more reports and case studies in the National Civic Review and other venues. We hope this issue will spark an ongoing dialogue about the fiscal challenges facing Ameri- can communities and how institutions can adapt to meet them. We would also like any readers of this issue to reach out and let us know of interesting examples of local governments addressing the challenge of fiscal sustainability. In conclusion, I would like to thank the John Randolph Haynes and Dora Haynes Foundation for its generous support of this research project. Michael McGrath Editor 0 2012 Wiley Periodicals, Inc. Published online in Wiley Online Library (wileyonlinelibrary.com) National Civic Review * DOI: 10.1002/ncr.21071 * Spring 2012 3

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