Matthew Lue – Director of Finance, City of Columbia

Video Transcript 

Ryan James:

Hello and welcome to The 3rd Question, a public sector interview series with thought leaders from around the country. Today I am lucky enough to be joined by Matthew Lue. Matthew is the CFO at the city of Columbia in Missouri. Matthew, thank you so much for joining me today.

Matthew Lue:

Thank you for having me.

Ryan James:

Before we get into our three questions, why don't you tell our audience a little bit about who you are, your background, your role there at the city and what you kind of oversee and a little bit about the city itself.

Matthew Lue:

Okay. My name is Matthew Lue. I'm the Director of Finance for the city of Columbia. This is my second director of finance position for a city. My first stop was the city of Warrensburg. I have a master's degree in health care administration, that was my first career.

Ryan James:

And how big is the city itself?

Matthew Lue:

The city is about 123-124,000 people.

Ryan James:

Okay. And how many employees do you have there?

Matthew Lue:

We have right around 1500 employees, about 2100 with part-time.

Ryan James:

Got it. Great. Well, let's get into our three questions. So speaking to a CFO, balanced budgets are obviously the goal, but always a challenge in the public sector vertical. And I'm sure this last year, 2020, and probably even into this year, it's made it even harder. I've seen as I've talked to some of your peers everything from projects being delayed to the need to immediately finance certain things because of the pandemic and kind of everything in between. How would you describe where things are at for your city? But also as you talk to your peers, I'm sure you're thinking through what's coming. And what do you think of some of the new focuses around budget, some of maybe the challenges that are coming, but maybe also some of the financial opportunities?

Matthew Lue:

I think infrastructure is always an issue when it comes to budget. Making sure you're taking care of your infrastructure, you have the right amount of money allocated to new, existing. That's always a challenge. Another challenge like for a balanced budget is the fact that sometime municipalities put more in expenses than can actually be expended within a fiscal year. And so that's always a challenge for me, making sure you get the right expenses in in the right places.

Ryan James:

Yeah. What about from a technology side? Did the last year force your hand on having to invest in technology because of a home shored workforce?

Matthew Lue:

Somewhat it did, mostly Zoom licenses and making sure we had enough laptops for everybody. But the rest of our IT infrastructure was basically in place.

Ryan James:

Okay. And then as you kind of see obviously infrastructure being one of the main focal points, but what are some of those opportunities that you potentially see coming that from a financial perspective the city can take advantage of? I mean, I know that every municipality is looking for efficiencies and trying to find those efficiencies in various ways. What are some things you guys are focused on?

Matthew Lue:

Right now we are sort of, I think like many municipalities, larger municipalities, I mean it's like like driving the Titanic, it's very hard to turn around, very hard to make changes. And so we are really going through a time now where we're trying to go paperless, trying to make everything digital. And that's one thing that the pandemic did help us along with is seeing where our weak spots are. And I think paper was definitely one of them.

Ryan James:

I have heard that more than once in talking with groups. It seems like it was kind of a shot in the arm. The pandemics just forced the hand of, hey, we have to do things differently, but it'll create opportunities going forward.

Matthew Lue:

Yeah, that's correct. I read an article that said that the pandemic basically pushed business ahead about 10 years. So, we're in 2020, but actually in business terms we/re being a 2030.

Ryan James:

Awesome. Well, I'm going to kind of segue from that budget perspective. So, I've always heard that when making a financial decision, there's a lot of factors that come into it, a lot of criteria. Again, maybe it's just the immediate need is one of them sometimes. But when looking at decisions in general, I'm curious from a CFO's perspective, what are the criteria that you kind of stack? How would you stack rank some of the criteria? Is it ROI driven? Like it has to have a solid ROI or a total cost of ownership, a TCO business case? Or is it other things? When you're prioritizing budget dollars, how do you stack rank projects that are brought to you from a budgetary perspective from different departments, et cetera? Because there's only so many dollars, like you said, there's only so many dollars to go around. What are some of those criteria?

Matthew Lue:

So we look at, we are very much in line with what our city needs, with our constituents. And so the first thing we look at is if it's right for the city. Especially if it's something that's outward facing. Mostly inward facing things that we purchase, yes, return on investment is important, but cost of our ownership is as well. And I think you cannot have one without the other. And so we're probably about 50/50 on those, so 50% return on investment, 50% cost of ownership.

Ryan James:

Do you find in making decisions around the budget that, you talked about two different things there, the outward facing versus the inward operational. It's hard sometimes I would imagine when tax dollars aren't being seen being put to use for things like infrastructure, public safety, whatever those things might be, as opposed to, hey, we just have old systems we're running, we're trying to get off of paper and we have to spend X amount of dollars for that. How does that process work for your city or as you talk to peers in being able to justify some of those inward costs that aren't quite as outward facing?

Matthew Lue:

I think it's just like what you said. You have to explain to people that just like any other businesses we have to invest in ourselves. We have to invest in our processes and procedures. And so without that, you can't have those efficiencies that you would normally see. So I think just explaining that to citizens is a big part of it.

Ryan James:

And do you guys do that from a communication perspective? Is that done through city council meetings, through communication? I'm always curious on how different cities do those things, trying to find those best practices.

Matthew Lue:

We have a very engaged communities, so most of it is through the city council meetings. And then we have several budget meetings throughout the year. We actually have one coming up this next week, there's a budget work session to sort of talk about what needs to be in the 2022 budget. So those are the ways that we get public involvement.

Ryan James:

So a lot of good transparency there through those efforts.

Matthew Lue:

Trying to be. Trying very hard to be. Yeah.

Ryan James:

Awesome. Well, listen, these are short and quick interviews, but the third question that I've been asking, I guess this year, is around, you might've seen these in your day, a nice check, right? Well, this is a blank check or an infinity check to your city. It won't go very far. So I'll throw that out right off the bat. But the question is more around if you had the opportunity to have a blank check that can be used to make changes for your city, maybe it's eliminate certain deficits, fund certain things. What would you see as some of those key areas that you would use it for and why?

Matthew Lue:

I think this year, especially coming off the pandemic, people maybe not feeling as valued, I think, and just for my city itself, employees, employee benefits, employee wages, culture. Those are the things that I would spend the blank check on. I will make sure that our employees self value, that they know that we value them and that our benefits are in line with those of other sectors. And so that would be, that's where I would spend that blank check.

Ryan James:

Got it. Yeah, your most important asset. Every organization knows the most important asset is the employees. How employees go, so does the organization.

Matthew Lue:

That is exactly right.

Ryan James:

Well Matthew, I really appreciate you taking just a few minutes with me today to answer the three questions. For any of our viewers who want to see this interview and any others, they can go to the3rdquestion.com and subscribe there and be notified as we release these every couple of weeks. But it was great to meet you. Thank you for sharing just a few thoughts and I look forward to staying in touch with you in the future.

Matthew Lue:

All right. Thank you as well. Thank you for having me.