Local governments in the United States are, today, caught in the worst fiscal crisis ever facing the nation. However, they have entered this crisis ill-prepared. Being largely dependent on federal and state funding, and with shaking local tax bases and meager self-generated resources, local governments’ fiscal sustainability as well as their ability to meet the ever-growing demands of localities has been questioned. A number of cyclical, structural, and social pressures enforce local governments to improve their performance and to seek a more sustainable system. In search of excellence and sustainability under the current crisis, local leaders should understand that today’s problems cannot be solved by employing yesterday’s solutions, for old boundaries are breaking down. Thus, in order to survive and stay sustainable, local governments need to adopt new practices and strategies. The importance of local sustainability and high performance lies in the fact that communities are the platform of national economy, and their sustainability determines the sustainability of the entire nation.