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    Monday
    Oct102016

    The China Factor in America's State and Local Economies

    As the world's second-largest economy falters, pensions and tax revenues here are feeling the pinch.

    BY  AUGUST 2016

    Earlier this summer, New York state’s pension fund announced a mediocre year. Investment earnings were essentially flat, and as a result the fund lost $5 billion because its other receipts -- contributions from government and from current employees -- didn’t cover retiree payouts.

    The New York pension system was the victim of a global event that began halfway across the world a year ago this month. In August 2015, the world’s second-largest economy officially began to stumble. China’s central bank stunned investors by devaluing the yuan, lending credence to what outsiders had long been suspecting: China’s years of astounding annual economic growth -- at times cresting at double digits -- was slowing down.

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    Sunday
    Oct092016

    Is Kurt Summers the Future of Chicago Politics?

    The city’s young treasurer has turned a moribund office into a hive of activity, fueling speculation that he has higher aspirations.
    BY  JULY 2016

    On a cool late-spring evening in the Wild 100s of Chicago, an area on the far South Side known for its gang wars, Kurt Summers Jr. is addressing a small crowd gathered inside a once-gleaming 1920s retail building. There used to be a beauty school here; later the building housed a counseling service and a check cashing store. But even those businesses are gone. This community, built by middle- and working-class Dutch families 15 miles from downtown, never recovered from the closing of the South Chicago steel plants in the 1970s and 1980s. Today, it’s a symbol of violent crime and urban decay.

    But to Summers, who grew up on the South Side, violence is only a symptom of the community’s real dilemma. “We don’t have a violence problem in Chicago, we have an economic problem in Chicago,” he tells the crowd of about two dozen residents, who applaud in agreement.

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    Saturday
    Oct082016

    Alabama’s One-Man Pension Show

    He’s not the governor. He’s not a lawmaker. But thanks to the way he runs his state’s pension plans, David Bronner may be the most powerful man in Alabama.
    BY  MAY 2016

    The office suite of David Bronner, head of the Retirement Systems of Alabama (RSA), rivals those of governors in much bigger and much richer states. Perched on the top corner of a building completed in 2008, Bronner’s spacious office is full of the framed photos, cartoons and assorted knick-knacks indicative of a long career in politics. A large rug in front of his desk prominently displays RSA’s circular logo. Bronner’s real trophy case, though, can be seen through his floor-to-ceiling windows and adjoining balcony: the panoramic view of downtown Montgomery, which shows just how much he has changed the skyline of this city of 200,000 people. Five mammoth concrete-and-glass buildings, much like the one his office occupies, stand nearby. The green-capped buildings are designed primarily to house state agencies, yet they’re outfitted with flourishes fit for big-city law firms, from fountains, marble, granite and towering lobbies to polished metal cauldrons at major entrances. Beyond them stands the city convention center and the adjoining hotel that Bronner also oversees.

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    Friday
    Oct072016

    Purchase Power: A Special Report on State Procurement

    Procurement is at the heart of almost everything a government does. But states vary widely when it comes to how well they manage the things they buy.
    BY  | FEBRUARY 17, 2016

    Governments buy a lot of stuff. Every year, one out of every three dollars governments spend goes toward purchasing something -- from photo copier ink to new vehicle fleets -- to help provide services. This very large chunk of the budget would seem to make procurement the most obvious area to look for new ways to save taxpayer money. Yet for the billions spent every year in state procurement, many central offices have long remained mired in old techniques. They’ve been unable to take a big-picture view when it comes to spending, and they’ve only dabbled in using data and new technology for more efficient purchasing.

    The examples of what can go wrong are many. Take Mississippi, which has a high reliance on no-bid contracts. In 2014, the commissioner of the Department of Corrections (DOC) resigned and became the subject of a federal investigation for allegedly taking $2 million in bribes in exchange for steering prison contracts to a former lawmaker. In Colorado, an audit last year found poor oversight of more than one-third of the contracts surveyed in the state’s health exchange. The lack of follow-through to make sure vendors were complying with contract requirements was partially responsible for more than $400,000 in questionable costs.

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    Monday
    Feb012016

    The Evolving Job Description (and Requirements) of a CFO

    Chief financial officers used to be concerned with just balancing the books. But today’s CFOs have taken on a higher role.
    BY  FEBRUARY 2016

    Kenneth Rust is a key player in redeveloping an old post office in downtown Portland, Ore. Denise Olson is pushing new technology to save Phoenix money on procurement. Jim Beard figured out how to update and expand Atlanta’s water and sewer systems while avoiding a scheduled rate hike.

    These tasks require different kinds of know-how, but Rust, Olson and Beard all have the same job title: chief financial officer. It’s a position that has morphed in recent decades. Where CFOs were once primarily in charge of numbers -- making sure the books were balanced, bills paid and audits clean -- they now are called on to be strategists with an eye to developing the city’s economy. And where CFOs came to the job touting experience in a local or state finance department (and perhaps a stint as city controller as well), they now hail from more varied backgrounds. Just as in the private sector, many public enterprises are looking for CFOs with talents that include creative thinking, communication skills and long-range planning -- and for good reason. Today, just about everything a municipality does is either under the CFO’s purview or at least under his or her watchful eye. “Almost every major decision the city makes,” Beard says, “I get to be in the room.”

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