As discussed elsewhere in this report, cities experienced challenges with the pilot related to some team members’ skills not aligning well with city priority areas and the inability of some federal staff to move beyond a monitoring role with the city. In our discussions with city and federal stakeholders, two additional challenges were observed specific to the approach’s design.
The pilot did not provide financial support or regulatory flexibility. Cities in some cases were frustrated that the engagement did not include financial assistance or grant flexibility that would allow cities to have regulations relaxed. Regarding financial assistance, one city stakeholder noted that it was a challenge to temper the expectations of city staff that funding for the engagement would be directed to the city or that team members would help the city apply for grants; another noted frustration that, while team members were helpful in planning new initiatives, they were unable to offer much help in finding funding sources to get those initiatives off the ground. Regarding the relaxing of federal regulations, one city in particular was disappointed that its top priority, the relaxing of a requirement that prohibited local hiring preferences, could not be addressed through the engagement. City staff felt that the flexibility they requested was in line with the goals of the pilot and that in order to be successful SC2 teams should be able to drive some of this flexibility. It was suggested that the SC2 approach could be enhanced if experimental regulatory changes could be tested in SC2 cities and then, if successful, shared across the country as a successful new approach.
The pilot did not account for how federal money flows to cities. Cities noted that in some agencies, such as HHS and ED, federal money is directed to cities through state governments, which limits the influence of the federal agency in a city regardless of how committed to the SC2 approach the agency may be. One pilot city drew attention to its status as a “blue city in a red state,” meaning that the city was controlled by Democrats while Republicans controlled the state government. As such, regardless of city priorities, in many cases it is the state that makes decisions about how federal dollars are allocated, limiting the ability of the city and federal government to use the pilot to plan and coordinate the use of federal resources.