Interested in this topic and want more details and information? The next Local Government Resources Call, titled “Budgeting for Uncertainty,” will cover this in more depth. Join us on July 16, 2025, from 11 a.m. - 12 p.m.
One thing we can continue to count on is that change is constant. Whether at the local, regional, state, or even federal level, as administrations change hands, it often comes with change, and this can include impacts to the funding landscape. Between policy changes, systemic changes, and budget challenges, funding mechanisms that are typically in place at the state and federal levels are beginning to shift rapidly.
While navigating change is not something that is new to governmental entities, it can still be challenging in this instance, particularly if programs and services are dependent upon grant funding for ongoing operations. While shifts in the funding landscape are not what we tend to think of when we think of a typical disaster such as a fire or a flood, to support governmental continuity and meet the needs of communities, shifts in funding can present significant disruptions. Government entities may be forced to modify the systems in which they operate, adapt to completely new systems, and make difficult decisions, often with evolving information.
Fortunately, many principles used in disaster management, including pre-disaster and resilience planning techniques and approaches can be applied to better prepare communities financially for disruption.
Ways Governments Can Prepare for Financial Disruption
Assess Risk & Understand Vulnerability
Just as we would want to understand our risk to hazards such as how prone our communities are to wildfire, or how likely our community is to be impacted by a flash flood, we can build financial resilience by understanding the vulnerability of our services and programs to funding disruption. Are there mechanisms in place to fund critical programs through sources that are not grant funded such as tax revenues or loan programs.
Monitoring trends and forecasts for economic conditions can also be particularly useful. Just as we might monitor conditions that indicate increased potential for severe storms or even severe drought, economic indicators may help us to better predict, and plan for, the possibility of decreased funding. This can help us be proactive in making budget decisions that address lack of revenue.
Build Flexible Systems
We cannot truly anticipate or predict every impact a disruption may have on our community, but we can develop processes that allow us to pivot and adapt as needed when responding or recovering from a disruption. When considering financial resilience, it’s important to build in flexibility - this can look like not committing to overly rigid budget plans or having the ability to allocate discretionary funds that can be redirected in the event of an emergency or changing conditions.
Prepare for the Rainy Day
If we are prepared ahead of time, it makes it that much easier to overcome and recover from a disruption. Whether it is a natural disaster or a funding disruption, having a reserve that can be tapped into for emergency funds can be critical in ensuring minimal impact to ongoing operations, services, and programs.
It can be helpful when determining budgets to utilize scenario planning to consider different funding scenarios that could be possible. Being able to articulate or visualize potential situations as it relates to the funding landscape can aid in making strategic decisions when it comes to allocating funds.
Build Capacity through Institutionalizing Resilience
If an organization operates from the perspective of resilience, this can help to ensure that they are able to be proactive and adaptable in the event of a disruption. If all processes center and integrate resilience principles (i.e., being flexible, seeking solutions with multiple benefits, incorporating the long-term view, risk reduction strategies, etc.), this builds a foundation that has benefits later on. Governmental entities should seek to center these principles in their plans, operations, and budget considerations so that should they experience a disaster or disruption, they are able to respond and recover more quickly and effectively.
How to do it:
- Collaboration across teams can be helpful in bolstering capacity by leveraging support and resources across departments all working toward a common goal.
- It can also look like establishing a resilience officer to help with coordination across departments and supporting them in integrating resilient budget practices holistically.
- Establish clear policies related to budget and funding, and effectively articulate how and when funds can be used, or even re-directed, during an emergency or disruption.
Resources for Navigating Funding Uncertainty
Local Government Resources Call
The Department of Local Affairs is committed to supporting local governments in providing updates and information as it becomes available related to navigating the evolving funding landscape at the federal and state levels. One way we are doing this is through the bi-monthly Local Government Resources Call, which provides updates and helps connect local governments to resources and information. The next call is on July 16, 2025, from 11 a.m. - 12 p.m., and will be covering the topic of Budgeting for Uncertainty in more depth.
Pre-Disaster Recovery Planning Resources
The Colorado Resiliency Office provides technical assistance and resources to support local governments in proactive disaster recovery planning. This includes our resiliency resources hub, pre-disaster recovery toolkit, and information on connecting to lead recovery entities at the State.
Government Finance Officers Association Resources
The Government Finance Officer Association (GFOA) also offers a wide range of resources under the umbrella of “Finance First Aid.” This includes a library of materials and information, recommendations on best practices, reviews, a financial foundations framework, and more!
Local Community Funding Guide
DOLA’s Division of Local Government also maintains the Local Community Funding Guide, which is a statewide comprehensive resource that tracks funding opportunities relevant to local governments.
The Colorado Resiliency Office
Learn more about the Colorado Resiliency Office, including additional opportunities for technical assistance and resources.