Tracy Vesely has seen local government challenges from every angle. From revenue challenges in Kern County to legislative coordination of California courts to risk management for various cities, her experience has set her up to offer sound counsel on government operations and finance. We interviewed Tracy about her background and how it fits with Avenu’s vision.
How did you get into local government?
To fund my college education, I worked for a developer in the commercial real estate market. I loved the job and intended to stay in the field after graduation. However, marriage and a move landed me in county government. My start as a budget analyst in a county administrative office began my winding road to finance director. I never looked back. After 27 years I can tell you it was a great decision to stay.
What kept you in local government?
The paperweight Tracy received from a community organization in the City of Berkeley
I like to learn, be challenged professionally, and add value to an organization and community. My career in local government has checked all of those boxes. As a finance director I was involved in all aspects of city service delivery and policy, which has deepened my commitment to public service. During a difficult budget year while I was with the City of Berkeley, a community organization that faced funding cuts gave me a paperweight in the shape of a broken heart to remind me of them as we made budget decisions. It remains on my desk 14 years later as a reminder of the importance of public service and stable finances for public agencies.
How does joining Avenu help you fulfill your personal and professional goals? Why Avenu?
I have always enjoyed the diversity of the work in local government. Now, at Avenu, I have a chance to not only work in diverse areas but across numerous cities in several states. It is a more global vantage point, and a chance to bring value across jurisdictions. Avenu’s focus on helping local government deliver stable revenues and plan for the future aligns with my professional experience and mission.
What are the three big challenges facing city finances in the coming five years?
Sadly, there are probably more than three challenges facing city finances. Pension costs are an obvious and very real challenge as they continue to increase and put extreme pressure on public sector budgets, especially in California. Reducing services to fund pensions is not a desirable remedy, so we must figure out a way to control these liabilities in a sustainable way.
Another challenge cities face is the need to replace and improve aging infrastructure. Years of deferred maintenance, especially during the great recession, has pushed our infrastructure to critical levels. Cities will be forced to improve/repair streets, bridges and other infrastructure assets in a significant way in coming years. Many cities are experiencing infrastructure failures and facing fiscal crises to fund these basic needs. As pension and infrastructure costs rise, cities need to maximize their limited revenues.
Unfortunately, a third challenge is that these limited revenue sources are shifting and no longer providing the level of funding that cities need. Sales tax has historically been a reliable source of revenue growth for cities in most states. Changes in the economy, e-commerce, and an obsolete sales tax base are causing dramatic changes in the viability of these revenues. However, it will be interesting to see the impact of the Wayfair Inc. v. North Dakota Supreme Court case outcome.
How does Avenu help local government address these challenges?
Avenu offers software and services that local agencies need to maximize current revenue streams and maintain core services for communities. Avenu partners with cities and counties, using data analytics and expertise to recover tax revenue and assist with elements of tax administration. Raising or creating new taxes is exceedingly difficult, so Avenu can provide opportunities to assist some aspects of public agency operations to save money. For example, Avenu can take over management of the business license process and deliver a web interface that makes it easier for businesses to acquire a business license while reducing the overhead for a city associated with business license management.
As a former finance director, why would your public agency use a firm like Avenu?
Finance directors are pulled in multiple directions at once. It is often difficult to be an expert in a single topic. Avenu provides a partnership that assists finance directors and city managers with recovering and projecting tax revenues, and informing economic development efforts.
What are the key indicators that cities should look at to assess their fiscal health?
Probably the most obvious fiscal indicator is the health of the general fund. Continued deficits and recurring use of one-time/reserve funds indicates a structural deficit. A depleted general fund reserve and the need to use general fund revenues to subsidize other operating funds are also indicators of distress. It is imperative that cities engage in multi-year forecasting models for the general fund and other key operating funds.
With more pressure on city finances the role of the finance director has become more high profile. What are the key traits needed to succeed as a city finance director today?
A successful finance director needs to do it all. Today’s finance director, while a master of fiscal oversight, must move beyond this traditional role and understand almost all elements of city service delivery. A finance director needs to be a strategist and voice of reason who supports the city manager while working to ensure the city’s fiscal stability. This can be difficult when innovation and available resources do not line up. Finance directors are no longer just in the back office. They are a face and voice of the public agency and it is important to be a good public speaker that is able to communicate complex data in an easy to understand manner. Thick skin and an unflappable nature are helpful traits, too.