Magazine article Government Finance Review

The Best Way to Predict the Future Is to Create It: Financing the Future Shows How

Magazine article Government Finance Review

The Best Way to Predict the Future Is to Create It: Financing the Future Shows How

Article excerpt

The Best Way to Predict the Future Is to Create It Financing the Future Shows How Financing the Future: Long-Term Financial Planning for Local Government Government Finance Officers Association 2007; 256 pages; $40/Members, $60/Nonmembers

From the start, Financing the Future: Long-Term Financial Planning for Local Government by Shayne Kavanagh places long-term financial planning for local governments (LTFP) in context: it is a vital component of a long-term strategic approach to governance. Armed with the knowledge of the long-term challenges that local governments are facing, Kavanagh's version of Lester Thurow's "tectonic plates," financial managers can use LTFP to assess current assets and work with the local government organization including elected officials, citizens, and other stakeholders - to adjust the operations of the organization to transform into an even stronger and healthier organization. If these sound like lofty goals, Kavanagh is deft at getting the reader to accept them and to see how it is possible for the typical organization to become a strategic organization.

Several consequences follow from such a perspective:

* LTFP is for managers and elected officials who think strategically. The whole point is to gain - and keep - a long-term eye on the condition and direction of the local government.

* The goal is to provide a tool that helps local governments consistently deliver the types of services that citizens want at the levels they are willing to pay.

* The role of the finance director is transformed from a monitor of transactions and fiduciary compliance to a vital member of the executive management team.

* LTFP is to be used in tandem with other planning processes.

* The annual budget should systematically implement the long-term financial plan.

* The dividends from investing in LTFP arise in the value added of knowing how to steer the local government through the short-term turmoil that every manager faces. Governments that practice LTFP will more readily examine the financial implications of strategic - and tactical - decisions and initiatives, and appreciate their impact on the long-term financial obligations of the local government.

The book is a comfortable combination of pep talk and coaching with practical how-to supported by a strong reliance on key case studies and academic research. One challenge for the local government finance director is getting the city manager and/or mayor to read this book. Once they get started, they are likely to be hooked by the compelling presentation of challenges and opportunities for moving a community forward with LTFP.

Although focused on financial management, the language of the book is very accessible to city managers and elected officials. The pages are laced with highlight boxes that explain terms of art or provide specific data to support arguments. Chapters provide plentiful clean, clear tables and illustrations to elucidate key concepts and linkages. In addition, the GFOA has created a companion Web site for LTFP ( that offers extended resources and gives the book a dynamic flavor into the future, including a practitioner exchange.

The book entices reluctant managers and officials into LTFP by walking a path that explains concepts and components in general terms while providing case examples and research to show the variety of ways local governments have implemented and used LTFP The skeptical official can take comfort that there is no "one best way" and at the same time be assured that there are clear principles that should be followed to maximize the value of LTFP to an organization. …

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