Good afternoon, everyone. Welcome to the National League of cities. Im the ceo and executive have you in what we call cities in america. The National League of cities is an organization that represents the 19000 city, towns and villages in america. Today, we thank you for being here because we are releasing the 34th annual city fiscal conditions report. Each person in this room is here for a reason. If you are interested in what is happening in cities all over america, perhaps you enjoy digging into data and understanding the physical nature of the data on our community and you really want to hear about the pressure that city leaders face everyday and balancing their budgets, dealing with issues in the various policy issues and the federal impact on those issues or you just want to make sure you are in the right place at the right time dealing with and learning about what america will be dealing with as it relates to the fiscal impact of our economy. For all of these reasons at its core the city fiscal conditions is about the connection between the needs of community and the ability of local government leaders to address those needs in the community. I am often asked why is this such an important report and it really is because if you think about what is happening in the city halls, the towns, the communities in america, city officials, town leaders, village leaders that are the ones that are dealing with the issues at first. This years city fiscal conditions report we will be able to see where all cities and communities are not the same across the nation. They may be facing different issues in create reality around the outcomes in this report. Some of cities may be forced to choose between resurfacing main street or repairing an old fire truck. Others may have to decide between reforming their healthcare and retirement system or shrinking Public Safety budget. These are all traces the local leaders deal with everyday and unfortunately, the reality of dealing with these issues are part of what government is and about what leadership is. My hope is that all of us who support cities, towns and villages across the country contribute to sharing this information that you will learn today but also what is your role in making our communities better as a person and as a leader in your professional or personal life. Today we will do a deep dive into the report findings and hear from a panel of experts, moderated by kim hart, managing editor at actios, focused on cities. Before we do that we like to get a tee up of what is in the report and be able to understand the approach and how the report was developed. I am pleased to introduce the report authors. Kristi mcfarlane who is the National League of Cities Research director could come on up, kristi. [applause] mike who is the dean of the college of urban planning and Public Affairs at the university of illinois of chicago and director of the Government Finance research center. [applause] without further ado, welcome to the National League of cities and we look forward to learning about what is going on in our nation. Thank you, kristi and mike. Thank you, clarence. Thank you all for being here. Another year and its pretty hard to believe that mike and i pinch ourselves each time we say it. Now here we are. How many of you have read the city fiscal year report for the past couple of years . Awesome. That is pretty much all of you. Thank you. I think the key point to mention although i know youve heard the headlines around a recession and will get to that in a bit but city fiscal conditions and the trends we see with city Fiscal Health is that there are slowmoving ships. If we see big junctures and big changes and trends relating to city finances we know we need to go back to the drawing board prayed what we will talk about today is the trends we have been been in conditions again over the past 34 years and most recently since the prior recession and we will talk about how what we are seen aligns with the realities we saw in city fiscal conditions around the time of previous recessions. Before we get into topline results i how this report developed. Worked with the finance officers from around the country to survey them and ask about fiscal policy and core budget actors both positive and negative and we also asked finance officers and budget directors provide us with tangible physical data and information whether budget documents but mike and his team as well as our colleagues here the National League of cities supplement that data for the largest 200 cities by going to online documents and collecting that data by hand. We are proud of the report this year and proud of the partnership we have with you i see and we will jump right in. Some of the topline fiscal trends are beginning to align with some of the negative Economic Trends weve seen in past downturns. We will go into these in more detail but mental revenues are not only slowing but general Fund Revenues are not only slowing but budgeted to decline for the first time in seven years. Expenditures are continuing to outpace revenue and property tax receipts are showing signs of weakening, notably in the midwest. I will turn it over to mike who will go into a deep dive on our yearoveryear changes in general Fund Revenues and expenditures. Thank you, kristi. As you can seat with this graphic underscore this is the underscore for the municipalities but only the general fund and the general fund of this composition and the purpose of the general fund of various from city municipality municipality to serve look safety, transit rotation and Everything Else. It does not tend to include although there are some exceptions but does not tend to include the Capital Improvement fund and would certainly include the [inaudible] but for the most part the general fund does account for summer in the neighborhood of 55 of all municipalities. It is the general fund and most of what the city spends most of what is in the news media. This is where city council has its biggest debates over the general fund. Second thing to note is these are yeartoyear changes and constant dollar terms. We use with the bureau of Economic Analysis refers to the state and local price inflator as a way of deflating or reducing the current into something more comparable across time and you can see on this graphic that this is showing yearoveryear changes and constant dollar revenues and you look to the right side of this which is the last few years expenditures have been robust on a constant dollar basis growing annually at 4 in 2015 to around two and 3 and revenues on the other hand has been declining since 2015 and it doesnt mean 2019 the revenues were in decline but the yearoveryear growth has been less. A point that is not in the report the point i wanted to make about the general fund as you can see in the years during the Great Recession, 2006, seven, eight, nine and ten for cities the fiscal recession hits primarily because of the lag in property tax receipts by couple of years. The revenue line comments by 2010 and its less than the prior year so i think an important point to make about the fiscal point of municipalities today is that if you add about the changes in the general fund over the last several years we have not returned or this can be the first year they return to a position where the general fund size is roughly what it was prior to the Great Recession so its taken a long time for municipalities, fiscal position, to return to what was 12, 13, 14 years ago. To contrast that the federal government fiscal position returned pre recession or doubles and the physical connection between what municipalities and the growth in the underlining economies and in this statistic that we only now have begun to proceed where we have been at the start of the Great Recession in 2006, 2007. Just to unpack that i think i mentioned and clarence mentioned that because we had such a great Response Rate we were able to break out the responses by publishing categories as well as regions. Looking specifically at how the citys very that are in the midwest, south, or northeast. In this chart you will notice the green dollar signs represent revenues and the gold reps and expenditures and you will notice that in all regions across the country revenues have increased in fy 20 however, the midwest is seen extreme decline around 4. 4. 4 . When we look at population, specifically general fund Revenue Growth and fy 18 through the smaller midsize cities but in the on the spending side clearly our cities saw this rise and that is to be did to the general factors putting budget pressures on other cities including pension, healthcare, wages and other sources but as well [inaudible] yes, i think its a really important chart to show for municipalities to compare themselves with other municipalities ive been associated with the fiscal Condition Survey since 1991 and we always get the question about can you compare the city to that city and primarily the answer is it depends. Some cities dont have access through the same general taxing authority as other cities. For example, very municipalities that have access to all three and considered to be the broadbased general tax on retail, sales or income and wages and on real estate. You you will hear from one of them today after we are finished and its the city of new york and a city that has such a large general fund and i think i was told it was 93 billion that and the rest of our analysis because it would overwhelm the data. That said, this demonstrates for than anything the volatility of each of the general tax sources across time and how they react to changes in the underlying National Economy. What you will see during the Great Recession is that sales, not surprising, sales tax and income taxed drop dramatically and immediately as the recession hit. By around 2014, 15 they begin to grow at a fairly robust level of around five, 6 a year for a couple of years will be found in the last two years, 2018, 2019 is even though theres a positive growth rate in all three general tax that all three have slowed rather considerably so that by 2019, which is a budgeted year, all the other data referred to what we pull from the Financial Reports so these are actual audited data from the prior years. When he 19 is what the cities have proposed and these are there in approved budgets and they might pretty close to what we think will be close to audited amounts. If you look in particular at sales and income taxes hovering around 1 growth anything about the growth in the National Economy or at least the way we measure the Gross Domestic Product which is the measure of the National Economy would expect those numbers that the growth would be pretty strong but in two of the cases sales and income meager and even in property taxes is not as large as you might have expected given the growth of the economy. Part of that is consumers what effects the fiscal condition of state, local governments is the reports on housing are fairly all around the place and there are some markets that are strong in markets that are weak and the growth hasnt been as robust in the postrecession years as it has been in the previous recession eras and part of that plays itself out in a very cautious market or at least buying and selling of real estate and probably has a much too with the Real Estate Property tax numbers have something to do with the fact that there is manufacturing, at least manufacturing increases not been as great as the losses were after the Great Recession so we are losing that land and plans to where it wouldve been tax before and real estate. That the average across the board and that varies by ninas apologies and some cities are doing quite well and others are struggling and even within the same city such as my city as chicago we are seen both areas of struggle and growth and that is what christie will pick up on. Thats an important point in terms of that variation. As mike mentioned particular changes in manufacturing while Residential Property has significant variation across country and that impacts property tax revenues particularly with a decline in property tax revenues for the midwest reported for fy 18 although they are reporting Revenue Growth in fy 19 in the midwest as well. Just to note, we dont have it here but in the report 19 talks about the differences by population and notably we will talk about later but the largest cities are the only group that anticipates lower tax receipts. And then, again, the ability to meet needs. We have seen variation over the years particularly looking at three quarters of the reporting that their community is better able to meet the financial needs and we talked about their suspects for next year as well. Yes, what is interesting about this and i appreciate it the cfo municipality are apparently optimistic about this years budget compared to the previous. We asked them about the next year and the numbers dropped a bit only 61 of cfos thought next year would be better than this year which i think, from my perspective at least, a fairly optimistic on their point parts but we will see what happens but these are really strong numbers in the eyes of the cfos. Then we question why they do anticipate the next recession and where will it occur . We are showing this information by population size because thats where it is striking. You will notice around two, three large city finance officers with budget directors with cities greater than 300,000 in population anticipate a recession in the next one, two years prayed this information is coming from folks who are day in, day out thinking particularly around large cities with access to forecasting and modeling tools and resources and potentially other cities may have. This is not necessarily that they are putting a recession into their forecast Going Forward but that the variables they use to inform their models are telling them in the next one, two years they will see revenue decline so for them thats a keen indication. Then you will see fewer Financial Officers that anticipate a recession in the next one, two years. This is an interesting question about everyones crystal ball eventually there will be a downturn whether a collapse again 2007 or more moderate than we experienced in the. Com bust of the recession of 1991 or a larger one in the late 80s but it still is interesting that we are getting that there are forecasting something that will happen soon and how they prepare for it is the important take away for this. Another is that i think we are probably getting differences based on the size of the staff you have that can take the time and look into the future to see what the future looks like or rather where we are trying to get to the end of the month to make payroll and do we have time to think through for another six months, 12 months, 24 months so part of it may be the capacity of the staffs to do that. We dont know when the next downturn will hit. We see there is variability across the cities of different sizes and regions and even different structures for that matter. In your experience, mike, what have you seen in terms of how cities perhaps compared for the recession based on what they learned from the prior recessions . What we used to publish and i dont think it is in this report but we do continue to track what [inaudible] does for the states and what the reserves are in general and how those reserves have changed over time and its a nice way of looking at how cities maintain an expenditure level to Keep Services going even when there is a decline in revenues. What weve been able to track since the early 1980s that there has been a continuous growth in the percentage of, in the reserves a percentage of expenditures that indicates the cities are not spending all they have which is smart and prudent and its in anticipation of something. In some cases we talk with the cfos and mayors and managers they are letting us know were not sure what our state will do which states do during recessions. Some cities do not want to go into the bond market which in todays, im not sure the wizened considering the borrowing rates but some only want to Purchase Capital facilities but the cash they have on hand and so the reserves are large and growth because of it. I think what we have seen this year the continued growth and reserves as a percentage of expenditures in the general fund just that cities are wellpositioned to whether a short downturn in their underlying economy and that is how they are preparing for it. It gives him an opportunity because there is still some growth in revenue to address those pressing needs. We always can take an opportunity to maintain and repair infrastructure rather than using it as a cash cow and pushing the cost off onto our grandchildren. It requires us to continue to make annual contributions to our pension funds. Im sitting here from chicago and there are a lot of cities that are challenged, no more than the city of chicago, but this is a time when you have reserves of that magnitude to begin to transfer those over to your pension funds. Also, we were talking before this about the needs of many communities to address a growing homeless now is the time to be thinking now is the time to be thinking about what to do and how to sustain it over time. Thank you, mike. With dad that concludes the report over the portion of the event today but we do want to open it up for a few questions from the audience. These questions should be specific to the report and the data from the report and you will have an opportunity to have conversation, dialogue and questions with the panelists as well but if there are any questions please, raise your hand, state your name and who you are with removal, microphone coming around for questions