inclined to target revenues currently
shared with municipalities and to
push services previously provided
by the state onto cities to shore up
their own revenue deficiencies.
• Reform Pension Plans. Many states
and cities have done a good job of
modernizing their public pension
systems to improve unfunded ratios
and provide cost controls to ensure
future sustainability. However,
other states and cities have failed
to tackle their pension problems
and are facing abysmal funding
ratios of less than 50 percent. This
leads to a crippling situation in
which a large portion of future
operating budgets must be allocated
to these legacy costs, leaving less
money for ongoing operations.
The sooner a public institution
deals with this crisis, the better.
David A. Richardson has most recently provided
financial management consulting services to several
Illinois municipalities, including Dixon, after the
city’s former treasurer was charged with stealing $53
million in city funds. In 2011, Richardson retired from
the Village of Streamwood after serving for 27 years
as finance director/treasurer. Prior to Streamwood,
he served as a manager for a CPA firm specializing
in providing audit services to local governments.
Richardson holds a bachelor’s degree in accounting
from Illinois State University and a master’s degree in
public administration from Roosevelt University. He
is a CPA and a Certified Public Finance Officer (CPFO).
• Modernize Revenue Streams.
Revenue structures for many
cities throughout the country are
antiquated, with overreliance on
politically unpopular property
taxes and consumption-based
sources, such as sales taxes. The U.S.
economy has moved from being
production-based to service-based.
As a result, revenue growth has
been stymied because most services
are exempt from taxation. Local
government leaders must develop a
dialogue with state leaders to address
this evolution in the economy.
financial and administrative controls
were compromised to perpetrate
major thefts demonstrate the need
for regular evaluations of internal
controls. Any changes to a city’s
operating structure should be
reviewed thoroughly in advance
with outside auditors. Regular
reviews of internal controls can
help ensure the ongoing safety
of the organization’s assets.
Cities will continue to operate in
a difficult new normal financial
environment for some time.
Communities that ultimately avoid
financial distress and achieve success
will adhere to the steps outlined. Cities
must also communicate their positions
and take bold action that is consistent
with the changing interests of their
stakeholders when necessary. J
• Embrace Technology. The
growing use of technology should
have a significant impact on
controlling future government
service costs, especially expenses
related to personnel services.
We unlock existing equity and
convert it into working capital.
• Consolidate Services.
Intergovernmental cooperation has
been a major factor in providing cost
efficiencies for local governments.
Purchasing cooperatives for
insurance, water delivery,
wastewater reclamation, public
safety dispatch, and emergency
services and disaster response are
just a few examples of successful
Consolidating services will be an
even bigger part of controlling
future municipal expenditures.
Utica Leaseco, LLC specializes in providing asset-based financial
solutions in the form of sale/leaseback transactions for complete operations
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• Maintain Internal Controls. Several
recent high-profile cases in which
Utica Leaseco ¸ 44225 Utica Road ¸ Utica, MI 48317
Info@UticaLeaseco.com ¸ www.UticaLeaseco.com