How To Manage City Finance Effectively: A Conversation With Rick Cole

Rick Cole is the chief deputy controller of Los Angeles and a councilmember in Pasadena, California. He’s known for tackling challenging city budgets and has been honored for his work as a public official several times, including with a Excellence in Management Award.

Cole joins Chuck Marohn on this episode of the Strong Towns Podcast to discuss city finances and how they can be improved. Their conversation includes the following topics:

• What does it mean for budgets to be value statements?

• How do you direct city finances in a truly effective way?

• What role should the public play in a city’s financial decisions, and how can city staff and officials enable their productive participation?

• And more!

• Click here for a computer-generated transcript.

  Chuck Marohn 0:00

  Hey, everybody. This Chuck Marohn, welcome back to the strong towns podcast. Years ago, when I was the Chicken Little writing the strong towns blog in the middle of nowhere, with a handful of people reading it, I kept coming across this guy named Rick Cole. He would write things, op eds, their editorials. There were statements and people quoting him. And I thought, Who is this guy? He seems to be the only person I know that gets it like I just utterly fascinated. I've gotten to know Rick Cole. I would call him a friend, and today he is also a guest on the strong towns podcast. Rick, welcome to the podcast,

  Rick Cole 0:47

  Chuck. I'm honored. I'm so pleased by how a strong towns movement is taking off like a wildfire throughout our country. Well,

  Chuck Marohn 0:56

  you've been a big part of of of that and of making that happen, and certainly you've been a big part of helping me understand city budgets better and city finance better. I was gonna like read a bio for you, and then I thought this kind of silly. I know you've been a mayor, you've been a city manager, you've been on a city council, you're working in the city of LA right now. Can you just give our audience a little bit of your background.

  Rick Cole 1:22

  Well, in high school, I was thrust into community leadership because Pastino was the first city West Mississippi to have court ordered desegregation of our schools, and the adults did not acquit themselves well in in that crisis. And so students who were more attuned to the value of what we now call diversity, had to step forward. And so I was thrust into, you know, showing up in print as a junior in in high school and being in the local newspaper offering a a different plan for integrating our high schools from what we were hearing from the school board, I studied to get a degree in journalism, but I was so unhappy with the direction of my hometown in Pasadena, that I managed the campaign of my high school government teacher, who got elected city council. Two years later, I followed him, joined the city council, served for 12 years and immersed myself in in the minutia of local government, and saw that the slogan, think globally, act locally has real resonance, that at the local level, you can, not only can make a significant difference, but you can Do it in the context of working with real people. It's not an abstraction. And you can talk to people who have different viewpoints from you. You have to talk to people with different viewpoints, and particularly in today's polarized world. I cherish that ability to talk across some of these divisions in our society. After I served on the council and served as mayor of my hometown, which is the greatest honor I think, pretty much anybody can have, except maybe, I don't know, winning a Super Bowl or something, and I pursued a career in city management. I was the city manager of three different, very different Southern California cities over a span of 20 years. During that time, I briefly returned to LA City Halls. My third time, I was deputy mayor, the second time, in charge of the budget, and we had to close a 260, $5 million structural deficit right out of the box, and I had to deliver a balanced budget on behalf of the mayor. Then I went back to being a city manager, and then I served, and we got to work together when I was executive director of the Congress for new urbanism, a through line for me has been the way we build has a huge impact on the way we live, our quality of life, our standard of living, and New Urbanism has been the such an inspiration to both of us, the brilliant minds that shaped that movement. And then, couple of years ago, a young man, 33 years old. He was then 30. So he's had in the ring for LA controller seven candidate pool. He put a billboard up as the first opening shot in his campaign. Of this a bar chart of the city's budget, and the headline was, is Mayor gar said his budget good for you, and it showed the tremendous amount of money we were spending on police versus some of the other priorities in the city. And no commentary, just just the facts. I was so impressed by that that I reached out to him. His campaign manager asked me to endorse him. I thought, What the hell? Right? I mean, yeah, I will. No one at City Hall will ever speak to me again. But you know, that's okay. And then he got more votes. Than any candidate for any office in the history of Los Angeles, because it turned out that people were hungry for a young man who was willing to speak truth to power. He had only set foot in City Hall twice, and both times were for protests, and so now he is the third highest elected official in the city of Los Angeles, and for the last two years, he has been sounding the alarm on a looming fiscal crisis. When we came into office in December of 2022 the city was celebrating record high reserves. The problem was that was based upon federal dollars from COVID a one time artificial stimulus. It was based upon the strong bounce back from the COVID dip that wasn't going to continue indefinitely. And it was based upon what we'll talk about in our conversation today, a systemic under investment in our infrastructure and in our people and in our systems that goes back decades. And so we began in January of 2023 issuing stern warnings about trouble ahead. And those warnings became increasingly frankly stark as the magnitude of the coming crisis began to to dawn, we we didn't get any In fact, we got hostility and derision from from the people who believe that that they knew better. But ultimately, unfortunately, those warnings have proven not to be true, and last week, the city administrative officer acknowledged that next year's budget will be a billion short, nearly a billion short out of an $8 billion total budget, a little less than 8 billion. We've run in the red last year, and this year we've drawn down our record reserves. We cut them in more than half, and we're in still in a reasonably good economy, the price of eggs not withstanding. And if we hit a hit a recession, the news will be even worse. So they're they're literally talking about 1000s of layoffs in the city government. And the one thing I didn't add is that inspired by by Kenneth Mejia, he's my boss. He's the city controller. Inspired by his amazing underdog victory, I decided to run for city council in Pasadena. So I'm back on the city council after being gone for 29 years. Will

  Chuck Marohn 7:32

  you give me a beautiful tour of Pasadena a couple years ago when I was there and I'm I'm very grateful for that. It's nice to see you back on the council. Are you having fun? I see you on LinkedIn, sharing stuff, it now and then, about what you're what's going on in Pasadena.

  Rick Cole 7:47

  Well, I'm on the Finance Committee, which, which is really how I learned Municipal Finance. Maybe I'll have a chance to tell that story, and and it's not my first rodeo. I feel like I can make a difference, God willing. I've

  Chuck Marohn 8:02

  got a few questions here, but I want to take this where you are most interested in going to because I I do think you have a lot of stories to tell that people would find fascinating. You once wrote that budgets are moral documents, and I don't think most people think of a budget as a moral document. Can you, I want to give you a chance to elaborate on that and talk about it. I know that budgets are different than financial reports and long term trends, and budgets can lie. I want to get into that a little bit too, but talk about, you know, we don't often talk about the work we do at city hall in moral terms. I want to start there, because I feel like there's an important conversation around the role of local government, the responsibility we have, the difficult decisions that we make day after day after day, and the consequences that those have. Why would you say a budget's a moral document?

  Rick Cole 9:04

  Well, I hope that that my life and my career and my service are grounded in my faith that we are here to serve. A budget is not just rows and rows of incomprehensible numbers. A budget ultimately is, and this is not original with me, is a statement of values, of what you think is important, right? And you put your money where your mouth is, that's the cliche, and that's what a budget is, is we decide what is important and what is not important, and sometimes those things are embedded in an unconscious way that we don't we don't think of it that way, which I think is a mistake. Particularly there is the tendency, particularly pronounced today, to do what we did last year, plus a little bit more right in terms of spending, right? So, so there are these assumptions that that the money. That that is going out to pay for supplies or invest in new infrastructure or repair old infrastructure, or goes to to fund nonprofits to perform a service, all of those things are sort of taken for granted. Well, that's that's just what we do. That's what we've always done, and we're going to need to continue to do that. There was a fad, and I'll call it that, perhaps a little bit more serious than that. In the 1970s President Jimmy Carter was was a proponent of what he called zero based budgeting and and it basically said, why do we take for granted that we've spent money the way we spent it last year? Why don't we start over and think, if we were starting from scratch, how do we spend our money? Let me just give you a very quick sort of take this from the abstract. If you were starting out today to figure out how to respond 24/7, to medical emergencies, you probably wouldn't invent the fire department, but in Santa Monica, because of the tremendous success over the last few decades of our strong building codes, which which specify, you know, fireproof materials, fireproof doors, sprinklers in big commercial and in residential buildings, and because people don't smoke in bed anymore, and we inspect, you know, old buildings on a regular basis. Of the 15,464 calls, emergency calls, 911, calls to the fire department. And guess how many of those were for fires? 15,464

  Chuck Marohn 11:42

  Oh, I mean less than 10% so less than 1500

  Rick Cole 11:48

  Sure. Guess that's a pretty normal guess. The people have been paying attention. What if I told you it was 47 five? Yeah, you literally could work for the Santa Monica Fire Department for three months. You know, doing your shift and never stop smoke, right? So that means that that 80 to 90% are what are called medical emergencies, and there are genuine medical emergencies. But also it's people who are having trouble breathing. It's also some senior citizens who are kind of lonesome. It's also rest homes that call the fire department to get an obese patient back in the bed, rather than risk workers comp claims by their employees. If you were inventing a service to address lonely people, people with chest pains, heart attacks, rest homes that want some assistance putting people back in their beds you would not assign for extremely well trained, extremely competent firefighters who are very well paid, by the way, to use a vehicle that gets two and a half miles to the gallon and won't fit on narrow streets, it would

  Chuck Marohn 13:07

  cost a million dollars. Yeah, 1,000,004

  Rick Cole 13:11

  is the last engine that we bought in in Los Angeles, Pasadena. Excuse me, but we'd had a fire department, and we need we still had 47 fires, and those fires could have killed people, could have spread as as we saw, we've just recently had the experience with a catastrophic wildfire. So we need, we need fire protection, but the the spending gets embedded. And so back to your question about is it a moral document? Let's figure out not only what to spend our money on, but how to spend it so that it's most effective. It is not our money, it is the people's money, and we have an obligation to make sound choices that are grounded in moral choices about what's right. The story

  Chuck Marohn 14:00

  you just told about firefighters gets to to me what I feel like we struggle with at all levels of government, but particularly at local level of government, which is making structural changes, when, when, when our budgets are, you know, every year we see this, this kind of conversation about everybody's got a budget deficit. And then they go through this magic period of time where they meet, and public officials are talking and finance officers are talking, and then, oh, wow, the budget's balanced. And you don't get a lot in the in the media, in the, you know, online or wherever. You don't get a lot of the sausage, like, how did that happen? You just are told like the budget's balanced. That idea of a structural imbalance where basically, like, your underlying expenses are rising faster than your income is one of those things that is just really, really hard to deal with. Can you? Can. You talk a little bit about how hard it is to make those changes, because I think in the abstract, we all see it and understand it. I mean, if you talk about the fire department, if you said, Hey, we're going to go to a much lower cost, much quicker response, much I'm going to say more appropriate kind of people responding to the elderly person who's lonely or has shortness of breath or what have you. We're we're going to create a different thing to do that. That will mean a, having a budget line item for that, and B, dramatically decreasing the fire department budget. How hard is that?

  Rick Cole 15:37

  If it was easy, more cities would do it. Everybody would join, yeah, I like the variation on the cliche in God, we trust. All others bring data. And so to me, while in the private sector, sometimes managing by the numbers can get toxic, right? You don't make your numbers. You're fired. And that, of course, sometimes leads to people fudging their numbers, which is toxic in the public sector, but we are no danger of making too many decisions by our numbers. In fact, it's the exact opposite. It's by anecdote. It's by popularity, it's by tradition that we make most of our budget decisions. When Oakland, which has always been a fiscal basket case, was going through a round of cuts some years ago, the city attorney said, you know, we can only afford core services. We can no longer afford anything that isn't absolutely essential, and our definition of essential is, can the people who don't want it cut fill the council chambers yelling at us? So that means you can't lay off recreation workers, because they'll all come in yellow T shirts with the kids and the parents of of the programs that they're serving. But no one comes down in red T shirts from the bridges or the roads or the street lights. So they don't make a squawk. They just silently corrode, fall apart, fall on people's head at a cost of $17 million which is something we recently paid out when a piece of a street light literally fell on someone's head and and so those decisions are not made rationally. They're made by by politics, by emotion. And so bringing data doesn't mean some cold, bloodless again. We need to, we need to be guided by our values. But our values should not be. We spend money on things we think will do a good job. It should be we spend money on things that we think are so important that we want to make sure we're doing a good job. The reality is, is that that's that's not, I think there's a valuable vocabulary here, Chuck inputs, outputs and outcomes. Inputs is how much money you spend on something. So I can run for office and say, you know, in my last term, we doubled the amount of money we spent on preventing domestic violence, right? And that makes me a hero to a certain constituency of people who's like now that's what we need, is somebody who will go there and understand how important it is that women not be victimized, that there not be violence in the home, that we not perpetuate all of that sounds great. We doubled it from 50 million to 100 million and re elect me. That's an input. The output is, well, what do we actually do? Right? We put on 17 seminars. We did public service announcements, we did counseling with victims. We did interventions with troubled families. We offered anger management classes to people who who were reported to the authorities. That's an output, and that's useful. The outcome is, did we reduce domestic violence, right? Did we actually have an impact, or did we do a bunch of activity that felt good, sounded good, employed people in Elio masonary activity, but didn't actually move the needle. And if that's the case, then we don't say, well, let's stop spending money on on trying to prevent domestic violence. Let's figure out, well, something might have worked. Let's do more of that. Some of this clearly didn't work. Let's do less of that, and let's see if we can measure that. Not easy to do, which is why we largely don't do it. But if you can actually target your spending to producing results, that's a very powerful tool, and that's the crisis we're facing in Los Angeles County. County. That's clearly a challenge in Los Angeles County, where we spend billions on trying to reduce or prevent homelessness, and yet, homelessness has been steadily going up. There was a slight decline this past year, and in November, voters voted to double the amount of money that they're paying in taxes for homeless services. And they did it. They doubled that money. They voted for it despite their skepticism, because they were assured that this time is going to be different, and this time we're going to actually have accountability measures. That's what's missing, is we talk about how much money we spend, we do not spend nearly enough time on figuring out how effective it is, what outcomes it's producing. What I found coming into Azusa, where my predecessor put five tax measures on the ballot on the same election because we were in such desperate financial shape and and four of them went down to flaming defeat in the and the one that barely passed immediately went to court, and we couldn't collect the money. So when I came in, I said, we can't go to the voters and say, we spend all your money we're broke. Give us more. We had to be able to make a case to the voters with the money we had, here's what we accomplished, and if you give us more, here's what we'll do even more of make them an offer they can't refuse. Make them an offer that they're investing in something that will actually produce results that they desire. And and we won that election, and then we went again the next cycle, and we won again. And the next cycle, we want again. We weren't trying to soak people. We were trying to give them the option of investing in things that would make their life better and that they would freely say, Yes, I'm willing to pay slightly more in order to get better service.

  Chuck Marohn 21:57

  Let me ask you this question, because I started with budgets as a moral document, and you've talked about now what I think most people just say is good, responsible governance. I know one of the tensions that we have right now across the United States feels like a debate between one team that says, we just have really bad governance. Governance is bad. Take a chainsaw and, like, hack it all down and get rid of it. And there's another team that seems to be saying, Hey, give the programs more money. We need more money. Don't cut a program. Don't do this. There's this space in between those two conversations where we actually talk about, how do we deliver on the things that we say we're going to do? It feels like there's a trust gap there. And I think I think rightfully so, because I look around at even like cities, and I see us not delivering on what voters would just say are essential services. I mean, there's a central role of government. How do you put that in the context of our current if we would just want to call it craziness as a as a culture, I I feel like we're trying to figure out how to deal with some long term structural issues that are now coming to a head. And I, I struggle with both kind of dominant political narratives. I sense you do as a little bit as well. And I would like to give our listeners a sense of how to think about this, or like, what questions to ask, or what to be looking for, or how to approach this. If the idea is, you know, you brought up homelessness, I'm assuming that you believe we should reduce homelessness if we're doing a program that doesn't do that, why are we doing that program? But then, do we just hack that program? Or do we ask Carter questions? What? What? How should we approach a problem like that? That's a systematic problem.

  Rick Cole 24:02

  Two things, Chuck and it's a it's an urgent question at every level of government. So first of all, I think strong towns is doing an amazing job of of helping people see a third way and how, and helping people see that there is a third way, that means we're not getting rid of government, but we're going to make government more effective. Let me back up a second and say, you know, as a city manager for 20 years, about half of America's towns have a strong mayor. About half of them have a city manager. Form of government. The difference for those who don't follow this is in a mayor and strong mayor form of government. The mayor hires the police chief, the mayor prepares the budget. The mayor is the chief executive officer in big cities. That's not a reality, in that they have people who do the managing, right but, but they, but they're the ones who hire those people, and so they're, in that sense, they're the. Executive in city manager forms of government, typically, the city council and the mayor are part timers. They have other jobs, and they preside over a professional manager who who does the job that you know, strong mayor form of government would be the mayor. They're the CEO of the government. And while the politicians and the mayor get much more attention. It's actually the city managers who who, on a day to day basis, run the governments. And if you talk to my fellow city managers in the International City Managers Association and ask them, Well, what is what is government, local government do, they would look at like, this is stupid question, you know. Well, we provide police, we provide fire, we provide libraries, we provide parks. Some cities do all of them. Some do a few of them. Some do you know, have the county provide some of those services? But, but what, what in essence, a government exists for, is for providing services. I think that's both historically and contemporaneously, 100% wrong, and so that makes me an outlier in the profession. Our job is to make the city safe, not to run a police and fire department. Our job is to make a city prosperous, not to have an economic development department. Our city is to make sure that people are reasonably housed, not to run a housing department, but that's what my colleagues think. And you know, I think it's like the third highest viewership of any TED talk was Simon Sinek, who did the 20 zillion views of talking about most organizations, public and private, they talk about what they do, right? We provide fire, we provide police. They sometimes talk about how, you know, we provide it through this way that they almost never talk about why, and all of the things that we currently do, police, fire, libraries, they were all invented by, actually municipal entrepreneurs. They were started to address real problems between 100 and 150 years ago, as cities were changing from small hamlets into metropolises, even at the local level, that there was a big change. Do you know when fire departments, municipal fire departments, were invented in

  Chuck Marohn 27:22

  America. I've seen like, pictures of fire trucks and stuff from like 1890 that kind of era. But I don't know if I had to guess. I would guess 1900 I would guess that's about the time maybe, well,

  Rick Cole 27:36

  so most people think it's, you know, goes back to Ben Franklin. Ben Franklin organized a volunteer bucket brigade in Philadelphia. Okay, it was not run by the government. It wasn't paid for by taxes. It was all volunteer. Interestingly, there was two other forms of fire protection in early American cities. One was private companies that you paid insurance to. So you've heard of the Fireman's Fund? Yeah, you paid the company, and they hired young men and had horses and wagons, and they would come and put out your fire if you paid your bill, if you hadn't paid your bill, they wouldn't come. And so there also were bandit outfits that would show up when there was a fire, and demand payment to fight the fire.

  Chuck Marohn 28:25

  You want me put that out

  Rick Cole 28:28

  Exactly, yeah. How much are you willing to and this was, of course, in the time before ATMs. So, yeah, credit card, so you had to go. I heard

  Chuck Marohn 28:35

  of this in in ancient Rome, where the rich people would have their own fire brigade, and when a home would go up and flames, they would send them out. And their theme was to negotiate a payment for the house, right? Hey, we're gonna, we'd like to buy your property. It's on fire, you know, you can either watch it burn down, or you can sell it to us for pennies on the dollar, and then we'll put the fire out. Yeah, yeah.

  Rick Cole 29:01

  So that was the that was the state of play until 1852 okay, half of Cincinnati burned down. The person who owned the factory that burned down, that created this conflagration, decided to go into business, and he decided he's going to change his product. He was going to build better fire engines, right? These are not, these are horse drawn fire engines. But he was going to design a better pumper and manufacture it, but he had to have customers.

  Chuck Marohn 29:30

  Oh, okay, I see where you're going. So

  Rick Cole 29:33

  we went to the city government, and he said, you know, you've just lost half your city. Clearly, this is a problem. You need to create a fire department. And you know, when I tell this story, I often the joke is, I say you can look up the 1852 it's actually, it happened the year later, 1853 you can look up the the city council meetings on YouTube. You know, they're they're still recorded there. And. And if you listen to the 1853 Cincinnati council meetings, you know some guy will come up and say, I'm not paying a bunch of guys to sit around a fire station. I pay my insurance. What's the goddamn government doing getting involved in the fire business? Yeah, that's private enterprise. Obviously, I have no idea what was said in those council chambers in 1853 but you can imagine that it was an innovation, right? It was problem solving. It wasn't well, everybody has a fire department, so we have to have a fire department. And budget last year was 14 million. So it now has to be 14 million plus 5% because everybody gets a raise and and fire engines cost more and all that it was. They actually invented a fire department from scratch in one city. And then everybody said, Wow, that's a cool idea. We need that in in Milwaukee. We need that in Memphis. We need that in New York. And ultimately, it became embedded my point in telling this story about and I'm not picking on firefighters, right? Yeah, I love them, and and, and I admire them, but today, we have to face the challenges of what is the best way to fight fires, which may not be sending people out to fight them and maybe preventing them, and we ought to be spending more money. So the same model applies to policing. Very controversial in our society, again, the dialog between those who want to defund or abolish the police and those who say that the police can do no wrong and we should just continue to shovel money in their direction versus there clearly is a space for unarmed response. What we ask? I've been to more police roll calls than I can count, and I've never encountered whether rookie officer or a grizzled veteran who didn't say we are asked to do too many things by the people at home in bed, right? They ask us to roll out when a frazzled dad is worried that his daughter hasn't come back and it's 11 o'clock and the curfew was at 10, and where the hell? And the police officer, you know, who's got 17 calls backed up, has got to come out and and talk to this dad, and maybe the daughter comes home and there's a whole scene. They've got to intervene in in domestic arguments. They've got to intervene when a bank robber in full body armor, you know, is is holding up a bank or inside a school, shooting children. We ask police officers to do all of that and to do it all well, and we second guess them if they do it poorly, as we should. But you should not be assigning them to so many things, particularly because they're hellishly expensive, because we have to train them, we have to ensure them, we have to to equip them, and we have to pay them to do a job that that has incredible demands on it, including putting your life on the line. And so just thinking about, does it make sense? Not from an ideological standpoint, oh, we hate cops, so let's, let's have non cops. Or, you know, we just want to save money, but, but let's actually fine tune the answer to the problem and be able to think fresh in fresh way. You've done amazing work, personally and through strong towns, at rethinking the whole approach to traffic management and traffic safety. Rather than thinking the job of the traffic department is to speed cars as quickly as possible to their destinations, is think about a more balanced system, a safer system, a system that allows us who drive to also be able to walk and be able to bike and have our kids bike to school. Rethinking those things and not just accepting the way things are been. The thing though, that I think strong towns is extraordinarily important on in this space between the let's just Shovel more money into the law of government, or let's just dismantle government instead of making government actually work. And that is budgeting, and that's the new frontier for strong towns. And it couldn't come at a better time because of the fiscal distress and because of this artificial clash between these two polarized alternatives, and this society has systematically disinvested in its future. It is not building either maintaining its existing infrastructure or fine tuning our obsolete infrastructure into what's needed in the 21st century. And that's a trillion dollar, multi trillion dollar problem that we are going to spend generations trying to untangle in. The sooner we do it, the better. It's like what Napoleon said about planting trees. His troops were sweating in Egypt, and he turned to his adagent and said, We've gotta plant trees and but in general, it will take 20 years for these trees to grow. And Napoleon famously said, that's why we have to plant them today.

  Chuck Marohn 35:26

  I've never heard that Napoleon quote, that's good, la you started this, this conversation saying has a 12 and a half percent budget gap, a billion dollars in an $8 billion budget, huge, huge gap. How should people hear that? There's going to be a tendency to look at that and say, well, the mayor is obviously incompetent, or the City Council is obviously incompetent, or let's find a person to blame. Or, you know, reciprocally, people in LA aren't paying enough taxes. They the rich people are getting by, or there's a tax break here or a tax break there. I don't know what the dialog would be, but, you know, this is the kind of things we default to, one of the things that we have postulated. And then I think, as we've done this fiscal decoder and started looking at city budgets over time, and really the financial reports and how the net financial positions of cities changes over time, it's really hard to point to any one administration, any one set of, you know, budget decisions. All of these things are long term trends to a place that's really difficult. How do we talk about a budget deficit in LA in a way that gets us to something productive? Because it, to me, it seems like it can't be one where you start with blame and finger pointing, unless you're pointing the finger at kind of all of us. Because all of us, to a degree, even, as residents have said, I want this level of service. I don't want to pay those taxes. Solve this problem for me this year. And you know, what we're looking at is decades of solving that problem, right?

  Rick Cole 37:14

  Chuck, you've put your finger on on a challenge. And I don't have a glib answer, but I have an answer Yeah, is critical to to understand. So again, I would turn to a historic anecdote. The pharaoh of Egypt literally hired the guy who invented geometry to tutor his son. So he brought Euclid from Greece. Your job is teach my son geometry. As you might have mentioned, the spoiled future Pharaoh was not big on doing his homework and asked if there was not a simpler way to learn geometry. And Euclid, again, famously said seared there is no royal road to geology. There's no shortcut, yeah, even if you're the pharaoh of Egypt. And in 1776 we embarked upon an imperfect experiment in self government, and we have defaulted on that. We now expect to go about our lives and have politicians solve our problems and only have to vote every couple of years, and even not even necessarily have to bother to vote, just somebody else will take care of this, and we can go about our business, and we have no responsibility to actually be involved in our local government, our state government, our national government, other than cast a vote and hopefully, you know, throw out one bastard and throw in a different one, and the next one will, you know, if they, if they fail, that's their fault, and we throw in another bastard, right? You know, just right, or a different party, or or what have you, self government actually involves a lot more responsibility. People actually have to have some understanding. Now that doesn't mean they have to go to the planning commission every Wednesday and watch the city council meeting and and, you know, they don't have to join the League of Women Voters and but they need to have some level of of competency, and the government needs to not dumb it down and and release them from responsibility. To me, the analogy that's really helpful is we've all used a vending machine, and what happens Chuck if, if you put your money in and you don't get what you want from the vending machine,

  Chuck Marohn 39:37

  you get ticked off. I guess. You know, some people might start rocking it back and forth, or put your money in again. I don't know. Yeah, well,

  Rick Cole 39:45

  exactly, you know, people often will shake the machine. Will will pound on the machine, rocket. Yeah. I once made this analogy in a rural audience, and the guy in the back said, Well, up here we shoot it!

  Chuck Marohn 40:02

  yeah, can see that.

  Rick Cole 40:05

  So that's one way we look at all sort of that's our unconscious view of what government is. It's a giant vending machine you put your tax money in, and you invariably don't get what you want, right? You want potato chips and you get a candy bar. You want to Coke, and you get diet seven up, and you're always pissed off, right? Right, right. Conservatives, like, I'm paying too much money. And liberals, you know, I'm not getting enough services. And and so we have a tendency to rock the machine, bang on the machine some rural areas to shoot it. Take a chainsaw to it, as is happening in Washington. This is where strong towns ethos really speaks to me. There's an older tradition in America that goes back to our frontier, when a family who needed to have a barn so their cows wouldn't freeze, and they had some place to store the wheat. Over the winter, they had to build a barn. And typically, an individual family didn't have the ability to build a barn on their own, and so we had what were called barn raisings and and, you know, we can idealize the frontier. It was a tough place to live, and people didn't always like each other, right? Maybe in the old country, you had a different religion, and, you know, but, but I need you to help build this barn, because when it comes time for me to for you to build a barn, I'm going to help you. And so you help me, and we'll do this together. And at those barn raisings, everybody had a role. Not everybody was was was a carpenter. Somebody had to fry the chicken, somebody had to take care of the kids, somebody had to say a prayer. But everybody was part of this. And when you have a barn raising, people don't, don't kick the barn, they don't say that damn barn, because they're they're actually their blood, literally, sometimes their blood, sweat and tears, have gone into creating this thing as a community. And I think that we need to to neither metaphor is an exact fit for for a local government. But I think we need to be less focused on the vending machine of you put your tax money in and somehow, miraculously, the machine produces exactly what you want in the quantity you want when you want it. But rather, you are a partner that self government means you have skin in the game. And there was a when I was on the city council, the first time there was a really disturbing incident in which a nanny and a couple of very small children were held up at gunpoint in one of our parks. And of course, the neighborhood was absolutely as they should be, freaked out and demanding, you know, more police presence and and there was a problem that one of the reasons why this crime had occurred was there was a blind spot in the park because the city had not torn down a building that had been damaged by fire, had not gotten around to it, just put a fence around it so you couldn't see so so this, this incident happened where no one in the neighborhood would have, would have seen it. And so, of course. The neighbor said, well, and the city needs to get around to finally tearing this thing down. It's been years. So I went to the city manager, and I said, you know, we need to do this. And he said, Oh, sure, I make sense. I'll put it in the capital program. And I went back to the neighbors and I said, you know, it's in the capital program. They said, Well, it's great. When's it going to be built? Well, I said, Well, you know, be funded next year, and then we have to do a con. What? Yeah, and so I went back to the city manager, and I said, Can we borrow a truck and some hammers and some nails and some ladders and some crowbars on a Saturday, and don't tell the attorneys. And he led me a truck and a kid to drive it. You know, work part time at the yard on a Saturday. And in two Saturdays we, we tore that took down, yeah, and it was a barn D raising, right? Those people then they had, they had a stake in that part, right? It wasn't the government was going to make the park safe. They had some responsibility for their it was down their part. And I think there's, there's real opportunity. You asked about, you know, how do we regain some of this trust? I don't think the trust is going to come from angels. You know, it's Madison said in the Federalist Papers, if men were angels, we would not need government. And so expecting angels to to get elected to be mayor or governor president is unrealistic. We have to take some responsibility ourselves. And I think again, strong towns is about grassroots, bottom up. Do people understand that ordinary people understand the intricacies of municipal budgeting? No, but when I got on the council. At 29 I started asking some very pointed questions about how we were spending our money, because I got elected to make change and takes money to make change, and I learned later that the finance director went to the city manager, and he said, this kid is asking a lot of impertinent questions, and it's uncomfortable, and we really have two choices, we can ignore him, or we can educate him. And to my great benefit, the city manager said, Well, that's educating. So they sent me to a five day course called finance for the non finance executive, okay, Wharton, School of Business extension, it was in some you know, air conditioned hotel ballroom, you know, and five days of of staring at a screen and learning how to read a a balance sheet, a profit loss statement, to learn about fund accounting, five days I knew enough to be dangerous. Became chair of the finance committee and and learned that that you could decode the secret language of municipal finance, that once you understood some of the basics, you could you could apply values to those numbers. I always tell new elected officials. The story about Willie Sutton. Do you know Willie Sutton? Oh,

  Chuck Marohn 46:24

  yeah, it brought the banks, yes, yeah. The

  Rick Cole 46:28

  the fourth or fifth time he got arrested, or reporter said, well, Willie, why do you keep robbing banks? You probably know the answer,

  Chuck Marohn 46:35

  yeah, that's where the money is. I love that. So

  Rick Cole 46:41

  when it comes to local government, budgets and municipal finance, that's where the money is. That's where our values are put to the test. It's an existential question, right? You have to balance the budget. It's the law. You can't bankrupt your city, although that has happened, but that's the first job is to keep your city out of bankruptcy court. And so you need to learn Municipal Finance and citizens can and should. They don't have to, again, go to, to obsessively, to every single local government meeting, or become, you know, local government hobbyists. But when I knocked on over 5000 doors in my last campaign last year, I found people were incredibly thoughtful, incredibly caring and surprisingly reasonable given the polarity politics. But what I also found was they were woefully ignorant about the first thing about their local government. There's been a disappearance of local media. You know, the League of voters is not what it used to be. The Rotary Club is not a place where you, you'll, you know, hear the mayor give a talk if anybody's in your rotary club, if it hasn't folded up. And so strong talents, I think, is a hugely powerful model of getting people back involved, starting with going out and observing and seeing one thing wrong, and then figuring out how to make a difference in that one thing. Can I ask you about

  Chuck Marohn 48:14

  the responsibility of people who work for a city? Because I do feel like a lot of there is a comfort zone. I think that city planners, city finance officials, city engineers, Parks and Rec people. I mean, go down the list of people who work for cities. There's a comfort that I think they get when, in a sense, their job is traffic engineers too. But I mean, the idea is, you know, as a taxpayer, I pay my taxes and I purchase government, and then government delivers to me good parks, good roads, good sidewalks, you know, all the services that I want. That abrogates, I think, that participation that citizens should have in their place, and I think makes us lesser cities. But I feel like there's two sides to that equation, and the one side is the people who live in a place not having ownership of it, and the other side is kind of this, okay, I exclusively own this. Now you can't go out with a crowbar and tear down that building, because that's the purview of the park the parks department, and this is in their capital budget, and they'll get to it when they get to it. How should people who work for City Hall make the case that being in a sense, more participatory in their role would actually help them do their job better. Because I think we agree on that, that like there's a paternalism that tends to come out of, I'm the city planner, ergo, I know, I'm the city traffic engineer. Ergo, I know, you know, just pay. Taxes, and I'll take care of it.

  Rick Cole 50:01

  It even goes deeper than that. Chuck, yeah, and you're right. It is pervasive in the public sector, and I understand it, and I empathize with it, because it's not just I am the city planner, it's I went to school to learn city planning. I have spent years learning how to be a city planner. I go to city planning conferences. I read city planning books. I work 5060, hours a week. I come out to these community meetings where a bunch of Yahoos who think they know better than me are telling me a whole bunch of stuff. The discourse in many of those meetings is akin to junior high school elections, right? What do you want? I want longer recesses and coke in the drinking fountain, right? Yeah, and the professionals know that that's unrealistic, right? That's why they went to school. They know better, because they're experts and they're professionals. So when I was bare, I had to explain to the professionals, the professional planners that we had to face a vote of the people on our general plan, which is very unusual in California, usually the City Council adopts the general plan and it never goes to a vote because of a court order and a long tangled history, we actually had to put our general plan on the ballot, and a general plan in California is probably 250 pages, right? So we're asking you to vote yes on a document that's 250 pages, which you're never going to read, and someone who doesn't want you to to support it because of whatever agenda they have, all they have to do is find one sentence that sounds terrible, right? And say, vote no on the general plan, because it's going to, you know, cause your teeth to fall out and so, so I knew that in order, we had to have informed consent, right? So if you're a doctor, you know better than your patient, but in today's world, the patient is Googled, not only the disease they think they have, but all the medicine and the natural, you know, alternatives to traditional medicine. And so if you're going to agree to a to an operation that your doctor recommends, you're probably going to want a second opinion. You're probably going to want to know that the doctor sounds like they know what they're talking about, that you want to expect the doctor to to give you some alternatives. You know, here's the pluses and minuses of having operate. Not to say you're going to have an operation, but, but Chuck, you know, here are some alternatives. I'm going to recommend you get an operation, but I need you to know that at your age and with your health, you know, there's some dangers here. Okay, you know, I trust you, doctor. You've earned my trust. I saw that with the planners. We went through this process. They they were highly resistant to going out into the community for a variety of reasons. The first thing they said was, well, Rick, we go out in the community all the time, we get the same, same 30 people, right? So, so you think we're going to involve 1000s of people, you're dreaming. And if we did involve 1000s of people, Oh, my God, three minutes a piece, this is going to go on forever, and they're all going to, you know, yell at us, and then even if you and I said, No, come on, we're going to get them around round tables. We're going to have real dialog. We're going to involve them as as adults, not as people to yell at us. And then finally, they said, Yeah, but, but they're not experts, right? Recesses and coke in the drinking fountains, right? They want, they want to be able to drive as fast as they can, to their to their job, and then they want safe streets, you know, when they come home. So we involve 1000s of people, and at the end of it, we got an award winning general plan. We got 58% vote at the ballot box. Wow. And, and it's been, it's basically been unchanged for 30 years, and pasting, has become a preeminently successful city, sort of based upon the blueprint that we laid out 30 years ago and but here's the here's the payoff. So we went to the American Planning Association, me and the chief planner to accept the award for our great general plan. Yeah, and the chief planner got up and he said, When I started this process, I really felt like I was a unappreciated and maligned expert that, you know, I know what's best, and the public does not appreciate

  Chuck Marohn 54:33

  my, my expertise. Yeah, my my knowledge set right. And

  Rick Cole 54:37

  he said, going through this process now, I feel like a valued resource to the community that I am not calling the shots. I'm not telling them you don't know what you want. I'm helping them achieve what they want, because I have the knowledge and the expertise to help translate their aspirations and tell them. You know, that's a good idea, but here's why it might not work, and here are the downsides, and here are the costs. And that that that I'm a valued resource, and so I think we have to go back to self government. I don't know how you do that at a scale of 4 million people in the city of Los Angeles, but I know how you don't do it, which is telling people stay home, vote vote for me on your absentee ballot at your kitchen table, and I will take care of your problems. And that's again, my boss, Kenneth Mejia, 33 years old, youngest elected official, I think, probably ever in a city wide in in Los Angeles, he intuitively understands that he uses social media to break through the clutter. He doesn't mind using humor and and, and, you know, contemporary culture to get the message across and and to have people, you know, people thought controller, what? What a who knows control or even does, yeah, he had 1200 volunteers in his campaign. People said, you know, we've never heard of the controller before, but here's this, right, who's speaking truth to power? Who's whose campaign is about transparency and accountability, and we're going to roll up our sleeves and pitch in, and they've propelled him to a historic victory.

  Chuck Marohn 56:30

  It's amazing. I know we're running out of time. I want to ask you one last question. I'm thinking about the Napoleon quote you gave earlier, where you know we're going to need the trees in 20 years, so let's plan them right now. When it comes to cities and infrastructure, we've argued here for a long time that the big problem is not that we're not spending enough on infrastructure, but that our the productivity of our investments is so bad that spread out development pattern is really, really expensive and doesn't generate enough wealth or tax base to actually take care of itself. Some of the urgency of today, you know, we got to balance this budget. We got to figure this out. Often comes at the expense of that maintenance, that taking care of that stuff, you know, listening to you talk about, you know, the best time to plant trees was was 20 years ago. The second best time is today, right? The Napoleon, we need to get going. I feel like I found my way to CNU because I was trying to answer this question, how do we actually make the finances of our cities work? And the only kind of development pattern I found that came close to doing that was a development pattern that was reflected today in the the conversations that the new urbanists tend to have. How do we how do we start this shift? Because even in a great city like Pasadena, where you, you've got this plan, and I know you, you dealt with the highway through the middle of the town, and you kind of stopped the destruction of going on there, and you've rebuilt a lot of that stuff, and it is quite impressive. But you also, you know, are full of single family home neighborhoods, and a lot of those people don't want any change, but they're also in places that financially are really problematic long term. How do we have this conversation about something that you know, if you do it and I do it, won't make a difference today, but if you do it and I do it and a whole bunch of other people do it, 20 years from now, we'll be in a much different position. I think it's easy for me, theoretically, to talk about this. It's much harder for you on the city council, a city manager in your city, others to actually like, put this into practice. You're right.

  Rick Cole 58:46

  I'm facing that right now. We have a stretch of Washington Boulevard in my district has a post office, an elementary school, a branch library, two churches, apartments and homes directly facing onto to the boulevard. It's maybe eight blocks that this stretch, and we recently recorded that the top speed, it's signed for 35 miles an hour. The top speed at 130 in the afternoon was 84 miles an hour. Oh

  Chuck Marohn 59:19

  my gosh, yeah, yeah, wow.

  Rick Cole 59:25

  At 130 in the afternoon, right? Not, not at two in the morning,

  Chuck Marohn 59:27

  right, right? This is deeply problematic. School is in

  Rick Cole 59:31

  session and, you know, and people are going to the branch library in the post office. We did a walk and talk with 100 folks to actually look at it, prompted by the death of a motorcyclist recently who tried to pull out onto the street and was mowed down, and on April 1, I was skittish about choosing that date, but it's the date that worked for the branch library. We're going to follow up and talk about the alternatives, and I want to be very straight with people a. Make over the street will be expensive. People say, Well, why don't we just have more cops, right? Well, that'll last for about 10 minutes, and then the cops are going to go somewhere else, and people will go back to driving 84 miles an hour. So we'll level with people. When I was city manager of azus, I mentioned earlier that my president put five taxes on the ballot. They four of them had failed. We were really in deep financial trouble. We we literally, my predecessor abolished the Public Works Department to save money. Wow, wow. And so, so I used a quote probably apocryphal as as perhaps the Napoleon one is as well from World War Two, where someone in the British War Cabinet said, we are out of money. We are going to have to think. And I think as a country, we are out of money, and rather than take a chainsaw to our existing institutions, we're going to have to think. And if we think deeply about these things, it means change, and change is difficult, and change involves trade offs and adults need to be responsible. Lord. Acton said, and everyone has heard this, power corrupts and absolute power corrupts absolutely. The corollary of that Chuck is that powerlessness corrupts and absolute powerlessness corrupts absolutely, and we corrupted our citizens to believe that government should be left to professionals, to politicians that they really have no place in government, that professional people, firefighters, police chiefs, library staff members, they're the ones who are in charge of the things that are important in our community, And we have elected officials to watch over them, and our job is to vote every two years or four years to, you know, to have the right people in charge. And it lets us off the hook. We are corrupted because we no longer have any responsibility. We have no power. And so when you give people power, some people will will exercise it irresponsibly, but the vast majority of people, when given responsibility, will actually try to do a good job. And we have to, we have to spread the load from a handful of people in government and running governments to that broader partnership that's the work of a generation. And by the way, it's not written in the in the sky. What the folks in 1776 imperfect as they were white male land owning, in some cases, slave holders. They were not angels, but they decided, We're not going to be run by by kings, we're not going to be run by priests. We're not going to be run by nobles. We're going to have the people. We the People. And eventually, over the last 250 years, we've broadened that to include everyone over 18, regardless of color or gender. It's not a perfect system. It never will be a perfect system. It is much easier to go back to be run by somebody else. Now it's corporations instead of priests and and dictators and and military chieftains and all kings and all that self government is, as Churchill said, the worst form of government ever invented, except for all the others. It's a privilege, and privileges have to be earned. Unearned. Privileges are immoral. To have the privilege because of birth or because of of luck. You have to earn the privilege. And it's a privilege to be an American, it's a privilege to live in a democracy, and we have to earn that. And that's hard work, and it involves time and work, and it's easy to say, not my job. Let those damn politicians deal with it, and I just reserve the right to gripe and complain and and yell at Fox News or CNBC or NBC or whatever that is, but rolling up your sleeves and getting involved, and that's why I think the strong talents movement is such a powerful force in our country. Let's, let's roll up our sleeves and make our communities better. That's hard work, slow work, but there's no easy way to get around it.

  Chuck Marohn 1:04:40

  We end every podcast by asking people to do what they can to build a strong town. You know, every time I get to hang out with you, every time I get to listen to you, I feel smarter, I feel born for I feel wiser, I feel like a better person. So I just thank you for your time again. You've been very generous. You are, whether you. Like it or not, one of my one of my mentors, and one of the people that I feel like I continually learn from, and it's just fun that we can share that with with 1000s of people now who get to hear this too, because, you know, get out there and build a strong town. We all have a role. And I, I've said many times, you know, your role might be to become the 20th city controller in Los Angeles at age, you know, 30, and that that might be what you do, but your role might also be to just go help your neighbor when they're struggling to do yard work, or your role might be to pick up trash when you go for a walk tonight. But do something do, do what you can. And I think when we empower the people around us, our cities become better places. We become better people. Think we become a better country. I've taken that from you and so thank you for that. Well,

  Rick Cole 1:05:53

  there's another role, yeah, which is to inspire a national movement. So God bless you. Chuck Morone for doing that.

  Chuck Marohn 1:06:00

  Thanks, friend. Thank you, Rick. We'll talk again soon. Thanks for your time. To everybody listening. Keep doing what you can to build a strong town. Take care.

ADDITIONAL SHOW NOTES

• Learn more about the Strong Towns approach to finance.

• Rick Cole (LinkedIn)

• Chuck Marohn (Substack)

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