In the News · Cities Today
US cities pilot new financial risk tools
Salt Lake City and two other US local governments are helping test a new financial planning tool that uses computer simulations to determine how much money governments should hold in reserve to withstand economic shocks and unexpected costs.
Cities Today, a publication covering cities and local governments worldwide, reports that Salt Lake City and two other US local governments are helping test a new financial planning tool that uses computer simulations to determine how much money governments should hold in reserve to withstand economic shocks and unexpected costs.
The project is part of a wider initiative by the Government Finance Officers Association (GFOA), which has launched a technology subsidiary, GovFi Solutions, to develop financial planning and budgeting tools for local governments. Vista, California, and Jefferson County, Wisconsin, are also participating alongside Salt Lake City, and the reserves pilot, developed with The Resiliency Company, is the most advanced of three initial initiatives.
“Our aim is to make that analysis more accessible and easier for governments to update as circumstances change, while expanding what the tools can do,” said Shayne Kavanagh, GovFi’s Chief Innovation Officer.
The coverage also describes GovFi’s two other projects in development: a framework called Three Clocks, built with MadisonAI, which translates financial reports into insights about annual affordability, longer-term trends and obligations to future generations, and a partnership with Polco to develop budget simulations and interactive budget books.
Kavanagh also sees opportunities for artificial intelligence to reduce the cost of developing specialist software and help finance officers interpret complex information: “AI-assisted coding can reduce the time and cost required to develop and test software. That could make it practical to address needs that previously would have been too expensive to serve, particularly for smaller governments.”
Participating governments will help identify operational challenges, test applications and evaluate their usefulness. For the reserves pilot, success will be measured by the credibility of financial risk assessments, staff time required and whether governments use the findings in budget discussions or financial policies. “Success does not necessarily mean a smaller rainy day fund,” Kavanagh said. “It means a better-supported judgment about how much to hold and why.”
Read the full article at Cities Today.
About GovFi Solutions
GovFi Solutions, Inc. is a public finance venture and for-profit subsidiary of GFOA. Working with practitioners, founders and technology partners, GovFi validates problems, helps develop and pilot solutions, and supports promising opportunities through commercialization, partnerships and selective investment. GovFi is governed by its own board of directors.