Search results

Since 1934, the federal government has provided a process for municipalities to declare bankruptcy, and approximately 500 governments have done so. In recent years, an average of less than one city government declares bankruptcy each year. In this article, the authors identify five factors that contribute to financial distress for cities which, if left unattended, can lead to municipal bankruptcy. This discussion is followed by an examination of the events that led to the bankruptcy of the City of Prichard, Alabama, once a prosperous suburb of Mobile. The authors conclude that this municipal bankruptcy occurred, in large part, because Prichard failed to face the factors of financial distress identified by the authors in the years prior to filing for bankruptcy.

An annual citizen survey can be a valuable component of the municipal budgeting process for cities that elect to institutionalize the process as a way to translate citizen feedback into budgetary priorities. This article explores uses of citizen surveys in identifying latent needs of the community that may not be detected through public hearings or other citizen participation methods. The authors suggest that properly developed and conducted citizen surveys can provide decision-makers with research data that will lead to more responsive public spending and debt financing decisions. The article concludes with a case study of Auburn, Alabama, a city that has successfully used citizen surveys in its budgeting system for the past seventeen years.

Much of the literature on targeting of federal grants to the most needy local governments concentrates on the explanations of population and need. The author proposes that a third explanation, the aggressiveness and competence of city staffs, should receive attention from scholars also. The last major categorical grant program aimed at distressed urban areas, the Urban Development Action Grant program, is examined to find evidence of differences in the rates of submitting applications and successfully receiving funding among the eligible large cities. In a competitive grants program, federal targeting success will be limited because it is dependent on the initiative and capability of local officials to apply.

This paper analyzes the impact of economic downturns on the revenue and expense sides of city financing for the period 2003 to 2009 using a convenience sample of the audited end of year financial reports for thirty midsized US cities. The analysis focuses on whether and how quickly and how extensively revenue and spending directions from past years are altered by recessions. A seven year series of Comprehensive Annual Financial Report (CAFR) data serves to explore whether citiesʼ revenues and spending, especially the traditional property tax and core functions such as public safety and infrastructure withstood the brief 2001 and the persistent 2007 recessions? The findings point to consumption (spending) over stability (revenue minus expense) for the recession of 2007, particularly in 2008 and 2009.

The authors surveyed city administrators in the six-county Chicago region to test an innovation management capacity process model. Innovation management capacity is conceptualized as the function of council-staff functionality, managerial leadership capacity, and staff team management. The empirical results from 220 city administrators in 53 cities support the hypothesis that the number of municipal innovations is positively correlated with innovation management capacity, controlling for structural, socioeconomic, and demographic variables. However, this study does not find a statistical relationship between innovation effectiveness and innovation management capacity. The authors posit two possible explanations for these results and propose an alternative innovation management capacity process model for testing in future research.

Private provision of public services has always been a factor in local government. In 1736 Benjamin Franklin and a group of civic leaders founded a fire company in Philadelphia because such a service was needed and the city could not provide it. Local municipalities often cannot provide the labor, equipment, and expertise to build roads, to do data processing, or to run hospitals but rather arrange with someone else who has the expertise to perform these tasks. However, during the 1970s rapid inflation, shrinking tax bases, and “no growth” budgets made the public provision of even what is popularly perceived as essential government services seem more like a tight‐rope walk than responsible government.