Taking Fiscal Sustainability to the Next Level – Fiscal Resiliency and the High 

Performance Organization Western Canada Finance Officers Association

Joe Casey, Deputy County ManagerHenrico County, Virginia USA

October 9, 2014

County of Henrico, Virginia   Proud of our progress; excited about our future.

Past – Present - Future

OverviewSustainability Evolving to ResiliencyGFOA Resiliency Task Force Resiliency Benefitso High performance organizationo Economic developmento Quality of life

We’re the Federal Govt and We’re Here to “Help”100 Resilient Cities Project

Great Moments in Resiliency

ustainability Evolving to Resiliency

Great Moments in Non‐Resiliency

“The odds of a meltdown are one in

10,000 years”

Vitali Sklyarov, minster of power, two months before the Chernobyl

accident

Sustainable Community

(stable, maintaining)

-2001 GFOA Conf

esilientmmunityasticity,

agility)

Go from Living to Loving Life

spire for Long‐term Margin “Resources” > NeedsFiscally Sustainable Fiscally Resilient

Yr 1 Yr 2 Yr 3 Yr 4

Needs Resources Available

Lo wRisk 

0

1

2

3

4

5

Yr 1 Yr 10 Yr 20 Yr 30

Needs Resources Availablesources = Strong infrastructure, fund reserves, pro‐active s, speed to address with mindful elected officials, quality‐

Less 

Evolve

Sustainability = LandingResiliency  = Launching

y Ingredient to “Resources” and Launching is Citizen’s Trust

Defined via Miriam Webster’s

Sustainability ResiliencyAble to be used without being completely used upMethods that do not completely use up or destroy resourcesAble to last or continue for a long time

• Ability to become healthy or successful again after something bad happens

• Ability to return to original shape after being pulled, stretchedor pressed

Evolve

siliency: Don’t Forget ow our itizens ew New Words

“As we look ahead, we need to strive for an environment, and a civilization, able to handle unexpected changes without threatening to collapse. Such a world would be more than simply sustainable; it would be regenerative and diverse, relying on the capacity not only to absorb shocks like the popped housing bubble or rising sea levels, but to evolve with them. In a word, it would be resilient.”‐ James Cascio

Applications from this 

Human Crisis Intervention Program can apply to resilient 

communities

Sometimes a Cartoon Can Teach Better

Local Govt Sustainability – Resiliency Comparisonustainability - Good

verallPlans 5 yearsPreparedness for common threats

calReserves and low debtConservative estimates1- 5 year plansPriority service focus

Resiliency - Great• Overall

o Plans 50 years = LT visiono Mitigates risk, positions

for high-continuous QOL

• Fiscalo Connection to future

needs >25 yearso Flexible to meet

changing timeso Continuum of service

d i i

Evolve

Great Moments 

in Resiliency

GFOA Resiliency Task Force

Great Moments in Non‐Resiliency

“Who the hell wants to hear actor’s talk”

Harry Warner, Warner

Brothers, 1927

GFOA “White Paper”

• Diversity• Redundancy• Decentralization• Transparency• Collaboration• Fail Gracefully• Flexibility• Foresight• Redundancy

GFOA Resiliency Goal

Decline Distress Recovery Financial HealthStabilization

Financial Resiliency

Financial SustainabilityRelapseFiscal First Aid

Longer-Term Therapies

Long-Term Financial Planning

Political Management

Bankruptcy, Receivership

Monitor, Manage, and Adjust Treatment

Bridging TransformReform

Time

Stages of Financial Recovery

Initial Diagnosis

Detailed Diagnosis

1

2 Recognition

Generic Treatments3

4

5

6

Recovery Plan7

8

9

0

11

12

13

Task Force Readings –Heath Brothers

Book Report in a Slidee innovative

Customer service agent knows best how to serve customer eep it simple in finding the core of the idea

“The single most important thing that we must do tomorrow is _”Weed out superfluous and tangential elementsForced prioritization (What’s the “lead” of the story)

ore Shining ScorecardSimple (simple = core + compact), unexpected, concrete, credible, emotional, story

eing DecisiveDoing This AND ThatTransition from “Should I do xyz or not” to “What’s the best way to improve upon abc”Overcoming confirmation biasOverconfidence – people think they know more than they do about the future

ook’s Decision‐making Process Point ‐ Counterpoint

You encounter a choiceo But narrow framing makes you miss options

You analyze your optionso But the confirmation bias leads you to gather

self-serving informationYou make a choiceo But short-term emotion will often tempt you to

make the wrong oneThen you live with ito But you’ll often be overconfident about how the

future will unfold

FOA Task Force ThemesAcceptingo Reflective governments accept uncertainty and

change as they learn from past experiences and evolve

Organizingo Robust and redundanto Flexible and resourcefulo Inclusive and integrated

Organizing Themes –Robust and Redundant

obusto Well-conceived, designed and implemented to

withstand adverse impacts o Anticipates potential failures with counter measureso Avoids over-reliance on a single assetedundanto Spare capacity purposely created to

accommodate disruption and demando Diversity via multiple ways to achieve a given need

or fulfill a particular functiono Intentional, cost-effective, efficient and prioritized

Organizing Theme –Flexible and Resourceful

exibilityo Evolve in response to changing circumstanceso Anticipate the need to change for an orderly

change o Understand all implications of decisionsesourcefulnesso Rapidly find different ways to achieve goals o When the shock or stress abates, builds back in a

way that is best adapted to its new circumstanceso Restore functionality of critical systems, potentially

under severely constrained conditions

Organizing Theme –Inclusive and Integratednclusiveo Emphasizes broad perspective on what constitutes

“financial health” o Mitigates the stresses faced by one sector in isolationo Sense of shared ownership to build resiliencentegratedo Alignment with agencies for consistent decision-makingo Resource utilization supportive to a common outcomeo Shared vision between agencies defining resiliencyo Exchange of information between agencies enables

them to function collectively and respond rapidly

Can You Answer “Yes?”(Do you want to?)

Are you ready for change?Can you and everyone work together?Can you continue to serve the community, no matter what stress lies ahead?Is your community enduring?Are you ready for what comes next and can you stay ready?

rst Steps – What Can You Do in Three Slides (1/3)?

Incorporate opportunity costs into financial decisionsFind “bright spots” in your own organizationo Encourage experiments/creativity, but also

document those lessons“Playlist” for financial decision-makingo Develop guidelines of options to consider (via

idea generation)Taking the outside looking inside viewo When considering a decision, consider what

another person would do (go out to look in)

rst Steps – What Can You Do in Three Slides (2/3)?

rediction intervalso Show uncertainty in the forecast with range of

outcomesxperiments and tripwireso Test a decision on a provisional basis before

committing w/ early warning of impending problemre-mortemo Meeting that takes place before the decision has

been put into effect to imagine complete disaster

rst Steps – What Can You Do in Three Slides (3/3)?

Open and accurate data (good base data)o Providing transparency in information0-10-10 analysiso Decision thoughts in 10 days-10 months-10 yearsdentify core prioritieso Expressing values can help counteract short-term

emotions by highlighting what is truly importantBuilding relationships o Invest time in relationships with relevant individuals

before an issue reaches “crisis”

ICMA Practices -silient Themes for ManagersAdd value to the quality of public policy and produce esults that matter to their communities

Take a long-term and community-wide perspectiveCommit themselves to ethical practices in the service of public valuesHelp build community and support demographic and community valuesPromote equitable, fair outcomes and processesDevelop and sustain organizational excellence and promote innovation

acilitatorsof vision

communitybuilders

designers

voice inpolicy

ethics +values

reformers +f d

ICMA, Resilient Managers Are…

CMA – Resiliency Resource

Great Moments in Resiliency

Resiliency Benefits ‐ HPO

Great Moments in Non‐Resiliency

don’t like your boys’ sound. Groups are out; four-e groups with guitars, particularly finished”

ca Records letter to Beatles Manager Brian Epstein in in not wanting to give the Beatles a contract

Difference: Efficiency and effectivenessOutput measures (efficiency) mostly time and costOutcome measures (effectiveness) mostly “quality”o Surveys are key component to evaluate

High PerformanceNeeds Measures and Surveys

Source for HPO ‐Baldrige

Hard Questions, Harder Answers? 

What are your KEY organizational ERFORMANCE MEASURES, including KEY short-erm and longer-term financial MEASURES? ow frequently are these MEASURES etermined? ow do you use these data and information to

upport organizational decision making and NNOVATION?ow do you keep your PERFORMANCE

measurement system current with business eeds and directions?

aldrige Criteria for Performance Excellence

Tough ?: Sustainable Agree, Resilient Strongly Agree

rganizational: Are you making progress?eadership: Leaders use org’s values to guide us?rategic Planning: My org encourages new ideas?ustomers: I ask my customers what they need?easurement: I know how to measure work quality?orkforce: The people I work with are a team?ocess: I can get everything I need to do my job?

esults: My org helps me help my community?

ategic Focus Should be on Macro, Not MicroMacro: >5000 ft Micro: 1 ft

Leadership – SustainabilityResiliency further moves green line up and over)

Bottom‐line – “is it 

sustainable”

Sustainable success –

“inspire and empower”

“Going out of business”

Good for morale, but can you keep 

it going

rformance‐Business Strategy Focus 

“Driving results”

Purposeful Culture Focus “Inspiring commitment

Great Moments 

in Resiliency

Resiliency Benefits – Econ Dev

Great Moments in Non‐Resiliency

“What use could that company make of an electrical toy?”

William Ortin, president of Western Union Telegraph, in 1876, rejecting an

opportunity to purchase Alexander Graham Bell’s patent

on the telephone

Economic Development Competitive Common Traits

Expanding existing, recruiting new businessMaximize P3 for best ROI/acre strategieso Micro: Property-specifico Macro: Larger area or regiono Other QOL factors (higher education, safety)

Reinvestment of incremental revenueNational or Province constraints to overcome in competing with othersSimple goals: Expand tax base, economic stability, job retention and job creation

ilience in Balancing Residential Impact with Business Investment

Balanced strategies require focus on commercial component of tax baseo Require less services, result in “net surplus” to

offset “net deficit” of householdo Each household creates a local govt demand

If no proportional addition of resource provided, added demand results in lower level of serviceo Schools, roads, parks and libraries more

“crowded” or public safety more constrained

Economic Development Change in School of Thought

Old: “Economic development” and “Jobs”New: “Return on investment is < 4 years, improves jobs: labor force ratio to 1:1 goal, and fosters partnerships”

ROI Illustration of Incentives

0

2

4

6

8

10

12

Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr10

Tax IncentiveTax Received

5 Years total incentive $24; ROI within 4 years

Resilience: Planned reinvestment of 

future margin above service need into 

“resource” for QOL and other goals

Great Moments in Resiliency

Resiliency Benefits – Quality of Life

Great Moments in Non‐Resiliency

jobs environment safety

ducation healthcare infrastructure

OL Generally Accepted Attributes

QOL = Risk Mitigation via High to Moderate to Low

Risk= Threat x Vulnerability x Consequences

re the Federal Govt and We’re Here to “Help”

National Preparedness Goal – Five Mission Areas

revention: Preventing a threatened or an actual actrotection: Protecting people and assets against hazards that lows our interests, aspirations, and way of life to thrive

Mitigation: Mitigating the loss of life and propertyesponse: Responding quickly to save lives and meet needsecovery: Timely restoration of infrastructure, housing and

conomy, as well as health, social, cultural and environment

Three Core Capabilities Span All Mission Areas• Planning

• Public Information and Warning• Operational Coordination

Livable Communities ActDied in Committee 2009, 2011)Subtitle: “Creating Better And More Affordable Places To Live, Work And Raise Families”“With sustainable development, our communities will cut traffic congestion; reduce greenhouse gas emissions and gasoline consumption; protect rural areas and green spaces; revitalize existing Main Streets and urban centers; and create more affordable housing”Incentives to plan for livable communitiesFunding to implement sustainable development projectsPartnering with local communitiesInteragency Council on Sustainable CommunitiesCreates Office of Sustainable Housing And Communities

Livable Communities ‐Before You Celebrate……

Proponents OpponentsCoordinate and integrate housing, transportation, econ dev, energy and environmental needs$4 billion in grants for sustainable projects and livable communitiesBreak down current silos and integrate into a new inclusive planning process

• Federal intrusion and anti-Agenda 21 advocateso Another Federal office

created• Metro home prices higher• Metro transit costs higher

= greater environmental impact

• Metro population w/ > 3 million residents moving out of cities since 2000

undtable’s Four Pillars

Understand and communicate risk

Measure community resilience

Build partnerships 

Share nformation

• Resilience – ability to prepare and plan for, absorb, recover from, or better adapt to actual or potential adverse events

• Founded on three questionso What do you value?o What keeps you up at night?o What are you and your

community doing about it?• How community participates?

o Community meetings, programs and projects to reduce risks and support resilience

esilient America Roundtable of the National Academy of Sciences

ACO Resiliency Testimony

Great Moments in Resiliency

100 Resilient Cities Project

Great Moments in Non‐

ResiliencyWinner of the “Not My Job Award”

100 Resilient Cities(Rockefeller Foundation)

Resilience to RemoveShocks Stresses

Natural disastersEarthquakesFiresFloods

• High unemployment• Overtaxed or inefficient

public transportation• Endemic violence• Chronic food and

water shortages

00 Resilient City OverviewSupports 5 Pillars

nancial and logistical uidance for innovative ew positionpport for a robust silience strategyccess to solutions and artners from the ivate-public sectorsobal network of cities ho can learn from and elp each other

Constant Learning

Rapid Rebound

“Safe” FailureFlexibility

Spare Capacity

Pillar 1: Constant LearningThe ability to internalize past experiences linked with robust feedback loops that sense, provide foresight, and 

allow new solutions

Pillar 2: Rapid ReboundThe capacity to re‐establish function, re‐organize, and avoid long‐term disruptions 

Pillar 3: Limited or ʺSafeʺ Failurevents failures from rippling across systems

Pillar 4: FlexibilityThe ability to change, evolve, and adapt to lternative strategies in the face of disaster

Pillar 5: Spare Capacityures that there is a back‐up or alternative available 

when a vital component of a system fails

Is it Easy?

an Resilience Job Make it Easier?

Requisite #2: Before we go too far…….

If You Can Ever Dream we Can Think Alike, Try Again…

FINISHED FILES ARE THERESULT OF YEARS OF SCIENTIFIC

STUDY COMBINED WITH THEEXPERIENCE OF YEARS

Closing ‐ Great Moments in esiliency and Non‐ResiliencyWhat we ve to arn to do, e learn by ing.ʺ

Aristotle

Taking Fiscal Sustainability to the Next Level – Fiscal Resiliency and the High 

Performance Organization Western Canada Finance Officers Association

Joe Casey, Deputy County ManagerHenrico County, Virginia USA

October 9, 2014

County of Henrico, Virginia   Proud of our progress; excited about our future.