Norm Van Eeden Petersman  00:00

Goodday. Hello. I'm Norm with Strong Towns, and I'm excited to welcome you to this Bottom Up Shorts. Today with me is Aaron Caldwell ofFayetteville — I always say Lafayette and Fayetteville, and one dayI will get them right. It is Fayetteville, Arkansas, which is thehost city of the Strong Towns National Gathering, which will betaking place May 18th through 20th. We are going to be descending onthe city of Fayetteville, and I'm really excited because Aaron and awhole bunch of other friendly people are going to be there to welcomeus to their community.

Aaronis a professor of biostatistics, as well as a small-scale developer,because he's working on a project on his own property developingadditional housing within the community. Aaron is involved with theStrong Towns local conversation group, as well as taking on effortsto identify across the region, through the tool the Finance Decoder,what the community's finances on a broader scale look like, and tospark some important conversations in doing that. So Aaron, welcometo Bottom Up Shorts.

Aaron Caldwell  00:06

Yeah,thank you for having me. That's a very nice introduction. As I said,I don't really consider myself a developer, but as one of my friendspointed out, I am developing a property. So by all technicaldefinitions, I guess I'm a developer. It's sort of like if you'veever had to walk somewhere, you are a pedestrian even if you don'tcall yourself that. The moment you picked up that hammer and startedon a project — or even did the dreaded thing of going down to CityHall and saying, “Hey, could I potentially do something with myproperty?” — that definitely starts that clock and gives you anew label, which I should say in Fayetteville is maybe a little biteasier to get projects started.

Norm Van Eeden Petersman  00:06

Idefinitely want to give a shout out to the incredible work that'sbeen underway there. But Aaron, can you talk about some of theactions you're taking to help make your community stronger?

Aaron Caldwell  00:06

Yeah.I should start off, as you mentioned, by saying I'm a professor. I'mnot very good with my hands, if you will. There are a lot of peoplethat are great at driving nails and working in physical, laboriousjobs, and I have a lot of respect for them because I can't do it. Sothe way I'm able to contribute is through looking at data andinterpreting it. That's what I do for my day job, all day every day,usually more in the public health realm. But I thought, why can't Ideploy those same skills towards my city, my region, and try toprovide a better perspective and information to the public aboutwhat's actually going on in your municipalities — county level, oreven state level — governance-wise, when it comes to infrastructureand fiscal decisions.

SoI've really just been looking at what's a better way of trying tobring understanding to the world people are actually inhabiting herein Northwest Arkansas. One of the main things I've been working onwith Andy Posterick down in Fort Smith — otherwise known as Andy in the Fort on YouTube—is a Financial Decoder for the region. We originally were going to do every city in the region, going through all the ACFRs. Luckily, the state of Arkansas has a great audit website, so I can go in and download every single ACFR for prettymuch the past 20-ish years. But what we quickly found out is notevery city files an ACFR that follows GAAP principles, so we wereunable to apply the Financial Decoder to most of the region. But wewere able to select five of the larger cities and one moderatelysized city in Siloam Springs, and do the Financial Decoder from 2024 all the way back to 2009—just that post-recession period. We're putting together a detailed report on what the financial state of the region is and what the trajectories look like.

We've also recently—our local conversation, me and Nathan McCloskey—been working on some information regarding an upcoming bond issue forFayetteville, and taking a Strong Towns lens to those fiscaldecisions for local voters, which has been a really interestingexperience. In that bond issue there's critical infrastructurealongside the more fun things, and we're trying to give a perspectiveon where some of those fun things may be unaffordable luxuries forthe community in the long run. So yeah, that's a 10,000-foot view ofwhat I've been working on.

Norm Van Eeden Petersman  00:06

I appreciate that. I'm going to draw on your skills as a teacher—do you mind offering just a quick explanation of what the FinanceDecoder is? You used two acronyms: ACFRs and GAAP. I don't think weneed a whole Finance 101 talk, but just for audience members, because I think we haven't talked about the Finance Decoder in a little bithere on the podcast. Do you want to just introduce folks to what it is and why it matters?

Aaron Caldwell  05:00

Yeah.The Finance Decoder is a tool — and I should also say I'm not anexpert in finance; I'm an expert in statistics, not finance. It'sbeen really helpful from Strong Towns to deploy this tool toessentially look at a city's finances, to get a — I would say maybenot a complete picture, but a systematic view of a municipality'sfinancial situation through using the Annual Comprehensive FinancialReports that all cities are required to report. As I mentioned, inArkansas we don't necessarily comply with Generally AcceptedAccounting Principles — GAAP. So some of the numbers just don't fitinto the decoder framework, simply because that city declares they'regoing to report one number instead of another, and we're just unableto navigate it.

TheFinancial Decoder gives us a bunch of different metrics to measure acity by: how much debt is it in, how much debt is it in relative toits annual revenues. One of the numbers I really like is the ratiobetween current assets and liabilities, to get an idea of howunderwater your city is. If anybody does their household financeslike I do, you think a lot about net worth — I think of this as ametric of the net worth of a municipality. Another nice thing, whichI feel like is the most Strong Towns-y part of the decoder, is theNet Book TCA. I can't remember what TCA stands for — Total Cost ofAssets, maybe — and how it may be declining over time, which istypically what you see in most cities. That essentially means thatyou're not keeping up with maintenance because you have moredepreciating assets. That's a little bit of an oversimplification,but that's the best I can do from my non-finance background.

Norm Van Eeden Petersman  05:00

Well, I love it because I've got a philosophy degree, which makes me useless with numbers. The consequence of it too is that you work withnumbers and are able to navigate this and probably do higher-level analysis of it, even if it's in a sub-discipline or a different realm. The truth is, I think one of the cool things is just helping to demystify the question of what is the actual financial condition of our community.

I'llshare just quickly—down in Pacifica, California, I did a Finance Decoder for their city because I was giving a presentation there.Their city staff were presenting forward projections saying, “Wehave a huge crisis. Our revenues are not going to meet our expenses,and we're going to have these huge budget shortfalls.” Folks getalarmed, and the staff simultaneously felt they had to share thiswith courage, but they were also getting slammed as if they were theincompetent individuals that brought this about. The Pacifica FinanceDecoder tells that story of a system-wide decline, rather than thework of any personality. As you do that work in your region as well,it helps to dispel the myth that some places are just better managed.They may be really well managed, but if they're managing a reallyinefficient machine, that is not going to yield long-term value.

Inyour work, maybe share a little bit about the project you're workingon on your site, if you're willing to, and how it fits within thesmall-scale development ecosystem. That is part of buildingadditional nodes of new prosperity — additional nodes of storedvalue on any given site across the community — and the real benefitthat can bring.

Aaron Caldwell 05:00

You're referring to my development background? Yeah.

Norm Van Eeden Petersman 05:00

You're doing good work, but it's also good for the community.

Aaron Caldwell 08:30

100%. Let me first start by saying I really am serious when I say I don't consider myself a developer, but I am developing—I'll give that as a caveat. The background of my story is that I've lived in a lot of places. This is my first time, out of nine states I've lived in, moving back to one. When we moved back, my spouse and I decided—with the housing crisis going on, and this was before I even knew about Strong Towns—we felt really moved to build a house, simplybecause we thought: if we have the ability to, we should add to the housing stock, not compete for what's remaining. As silly as that may sound now, that was our approach. We were able to find a part of town that has been arguably neglected over the past half century, which is more the south side of Fayetteville. There's a whole history there if you want to look it up, especially about the ongoing effort for a Black historic district in South Fayetteville, which is where weselected our land.

The original plan was just to put a single-family home on a very small lot, but we've been able to work with Wes Bates and Conrad CMC, as well as Tommy Davis Flowers, whose family has been working—I think—to develop her land for 40 years now, and has been impeded on multiple fronts. I don't think necessarily nefariously—other people may have different characterizations—but it's certainly been more difficult than it should be, at the very least.

So we've all been working together to literally just build homes. One of the nice things is we have amazing city staff, so we've actually even worked out that the little half-acre of land we've been trying to develop has been rezoned so that it can also be mixed use —commercial as well. That leaves a lot of opportunity for the future, maybe after I'm long gone from that property, which is hopefully—knock on wood—not anytime soon.

Yeah, that could be a whole podcast about that whole set of three projects and navigating the mess that is small-scale development in the United States writ large.

Norm Van Eeden Petersman  10:52

What stands out to me is: you said you moved back to the state—first time out of nine states—and said, “I'm going to return, make a home, create a home,” doing all of that work, and Strong Towns has been a part of that journey. Do you want to share just a little bit about what made you the person who is observing, noticing, and contributing to local discussions? You're part of the Strong Towns AnyTowns sessions frequently, talking through the various challenges popping up in Fayetteville. Do you want to share just a little bit of your backstory? I find a lot of people can really connect because their story is similar in some ways.

Aaron Caldwell 10:52

Yeah. I really don't remember a single moment—I think I was just exposed to enough Strong Towns content and started searching for it from there. I don't have one experience of “Oh, I saw this video.” My background is that my mom liked to call us growing up “corporate gypsies”—my dad kept getting promoted and we kept getting moved. I've moved around and seen a lot of America: Delaware, New Jersey, Nebraska, Michigan, Kansas, Texas, Massachusetts, Arkansas—and never really felt a place that was home. Fayetteville is that first place that's home for me.

I've loved all these other places—don't get me wrong—but this is the first one where I'm like, “This is my roots.” When I made that commitment to come back here, it was with a feeling of: I don't want to move again, this is it. Because of that — both wanting to give back to this place that's finally given me a home, and also selfishly, because I want to live here and I want my children to live here—I need to make sure this community is livable for them. That was kind of my journey to wanting to develop as well as getting really involved in Strong Towns, because I feel like it's the most comprehensive citizen-level framework I've seen to get involved and maybe not make assurances that this is always going to be a great place to live, but at least make it the most resilient it can be.

Norm Van Eeden Petersman  12:07

Yeah. I often joke that as a Calvinist, my goal is just to make things a little less worse—which is a little bleak—but it is that recognition that we're in a predicament. Predicaments have outcomes, and we can try to make those outcomes modestly better. We're not promising radical transformation, but we can come back to some of the core fundamentals of building really prosperous, good places for people to enjoy and love for themselves—not just look to other people for validation that their city's okay. It's like, “No, I just love my place. I care about it and I want it to prosper.”

I'm going to flip the script a little bit on you, because normally I would ask for tips or suggestions broadly, but for anybody that holds a ticket for the Strong Towns National Gathering in Fayetteville coming up—what are a couple of things you would recommend they check out, or tips to navigate the space when they're in town in May?

Aaron Caldwell 13:48

Great.If anybody wants to get in contact with me, please—I'm easy tofind online. I will give you 1,000 things you can do when you're in Fayetteville. My number one thing is: use the Greenway and trailsystem. It is growing and ever-expanding. This is the first place I've lived where I can go whole weeks without ever using a car,because I use the Greenway system here and just pop on my e-bike andgo places. So for sure, check out that Greenway system. If you're arunner, that as well. If you're a mountain biker, bring a mountainbike and get out on those trails. Bentonville has kind of labeleditself the mountain bike capital of the world, so check that out as well.

The other thing I would say is get [to] downtown Fayetteville. Walk the area—there's a lot of beautiful small-scale development happening there, alongside some big stuff. The restaurant scene here—I won't say it's like Paris, restaurant-scene-wise—but man, for a 100,000-person city, we punch way above our weight per capita, restaurant-wise. Hammontree's, Feed and Folly, Ours as well, Maxine's—fantastic cocktails downtown. I'm happy to recommend many, many more places. I'm a Homer, so I've got plenty of love for this place.

Norm Van Eeden Petersman 15:06

Yeah, Aaron, you're on LinkedIn—search for Aaron Caldwell, look for theone that's the Assistant Professor of Biostatistics in the greater Fayetteville, Arkansas area. That's awesome. Definitely good ways for people to connect with you there. Also, if you're in the Strong Towns orbit, you've probably come across Aaron as well.

Aaron, as we close—what is it that gives you hope? You talked about whatmakes you love your place, but what gives you hope in your community?

Aaron Caldwell  15:06

The people. 100%. I think we have amazing elected leaders. I think we have—again, maybe me being a little bit of a Homer here—but I think we have some of the best city staff when it comes to the development space in the country. Just to name two: Britian Bostic and Jonathan Kurth are fantastic human beings and fantastic allies to developers in this community, and I cannot thank them enough. Then just the people on the community level in our local conversation: Clark Echols, Nathan and Ruby McCloskey, Nick and Maris at Caston—who have their own podcast, Fayetteville Forward, please check it outif you want to learn more about the region—Kyle and Keaton Smith. I have a list here, because there are so many people to thank. DavidCriswell, Andy Posterick down in Fort Smith, Cameron Kaya as well, who does more of our sustainable development advocacy. Then even some people up in Bentonville, like Rebecca DeClerk and her husband, who are running the Bench Press Project—a way to build your own benches for city bus stops, which also helps fund building morebenches for city bus stops in the region.

What gives me hope is that there is a tidal wave of very good, well-informed people who are doing 10 or 20 times what I'm doing in this community. So I feel good about our future despite all of our challenges.

Norm Van Eeden Petersman  15:06

Yeah, and it encourages me too. If there's a tidal wave in Fayetteville, that means the waves are already lapping on so many other shores as well. People are taking notice — certainly taking notice of code reforms that have happened, parking changes. Strong Towns has a great video on the Strong Towns YouTube channel on Fayetteville's parking reform, actually devoted to why it matters and why it was so important to the success and well-being of Fayetteville.

Aaron, awesome to have you on Bottom Up Shorts. Thanks for doing this today.

Aaron Caldwell  15:06

No problem. Glad to be here, Norm. Thank you.

Norm Van Eeden Petersman  15:06

Very good, everybody. Get your tickets. Come check out everything that Aaron has been enthusiastically sharing in Fayetteville, Arkansas, May 18th through 20th, at the National Gathering. Thanks again, Aaron, for being on the podcast, and to everybody that's listening—take care and take care of your places.

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This episode was produced by Strong Towns, a nonprofit movement for building financially resilient communities. If what you heard today matters to you, deepen your connection by becoming a Strong Towns member at strongtowns.org/membership.