By: Pamela Arends-King, City of Tustin
I hope all of you had a wonderful Thanksgiving with your family and friends. This fall has been very busy with attending the Washington Finance Officers Association conference in September, the Oregon Municipal Finance Officers Association conference in October and in November I attended the Alaska Government Finance Officers Association conference in Anchorage.
It was very interesting to be in Alaska in the late fall. I have been to Alaska in the summer when it is basically bright twenty-four hours a day, but with winter round the corner the sun came up around 9:30 am and set around 4:30 pm. Luckily I was able to attend the conference during a “heat wave”. Normally in November there is at least six feet of snow on the ground, but due to the hurricanes Anchorage was experiencing temperatures were in the high 30s and 40s Fahrenheit. I was able to go a day ahead and tour the surrounding area, see some glaciers and visit an animal conservatory. The landscape was spectacular! The animal conservatory was very interesting. It raises animals that were orphaned at birth. The conservatory had herds of muscot, elk, caribou and wild wood bison. When the herds get big enough they are shipped to their natural habitat and released. There were baby moose that were only four months old that were at least seven feet high and brown bears, black bears and a grizzly bears. The black bears and brown bears are kept separate as the brown bears are known to eat black bears. Both species of bears have twenty acres to roam around in. It was great to see them play and I was surprised to see them come when their names were called. Since they are predators, Alaskan state law prohibits them from being released into the wild, so those bears will live at the conservatory for the rest of their lives.
The conference was excellent and I enjoyed learning how the local municipalities and agencies raise funds. There is no state income tax. The state receives the majority of its revenue through the oil industry and property tax. The local agencies get a portion of the property tax and they have the ability to raise taxes through sales tax, transient occupancy tax and property tax. I also enjoyed talking with the attendees. Many of them are part of communities that are only reachable by air or sea and they shared how that affects their day-to-day lives. One individual has lived in an area so remote that, until the delivery process and internet shopping improved, her and her husband received supplies every six months by barge. Other people said they moved from the lower 48 to Alaska for job opportunities in municipal finance with the added bonus of the adventure of living in Alaska.
I wish all of you and your families a Merry Christmas, Happy Hanukah and a Happy New Year.
Executive Director’s Message
By: Melissa Dixon, CAE
Happy December everyone! I’ve always looked at December as my month…my birthday is right before Christmas, so I like to imagine all the lights and decorations are at least partly for me. (Takes the sting out of December birthdays being an afterthought!) I love this time of year, and I hope you’re all enjoying it too.
I wanted to make you aware that the Membership Committee has created an online volunteer form, to make it easier for you all to get involved in the leadership of your organization. It can be found under “Membership” and then “Get Involved” on the homepage. We’re in the process of developing our committee rosters for 2015, and would love to get some new folks in the mix! Check out the form, and let me know what you’re interested in.
Thank you all for your continued support of CSMFO. I hope you have a safe and happy holiday season with your loved ones.
Registration is open for the 2015 CSMFO Annual Conference
2015 CSMFO Annual Conference
“The Changing Tides of California Finance”
By: Tim Seufert, NBS
Registration is now open at www.csmfo.org/csmfo-2015-annual-conference/ for the 2015 CSMFO Annual Conference, running from February 17-20, 2015.
The educational plan for the conference is robust, including many preconference options. For the Tuesday, February 17, there are two preconference sessions available:
- IT and budgeting for finance managers (9am to 3pm): Phil Bertolini, Deputy County Executive/CIO, Oakland County, Michigan will address IT-relevant issues for CSMFO members. This proved to be a very popular session last year (but this won’t be a repeat of last year!), and will likely fill up.
- Everything you wanted to know about revenues but were afraid to ask (11am to 3pm): This will drill down on the basics of municipal revenues, as well as recent trends and developments. Veterans Michael Coleman (League), Lloyd deLlamas (HdL), and Tim Seufert (NBS) will be the panelists.
On Tuesday, there will also be a golf tournament starting at 8:30am at the Black Horse Course in Seaside, a tennis tournament starting at noon at the Monterey Tennis Center, and a Carmel Valley wine tasting and tour starting at 12:15.
On Wednesday, February 18 at the “Early Bird” time, we have two educational programs, as well as additional time in the Exhibit Hall:
- GFOA update (9am to 11am): Stephen Gauthier from the GFOA will present on important topics near and dear to many CSMFO members; his presentations are always popular and well-attended with lots of practical information to bring back to your organizations
- Government partnerships to deliver services and improvements (8:30am to 11am): There will be an informative hands-on tour and discussion of three innovative Monterey-area public/private projects that demonstrate the benefits of forming partnerships. Scheduled tour stops include the Monterey Presidio, a water recycling facility and the Monterey Conference Center itselfThe Exhibit Hall will open at 10am, earlier than usual. This will make for an opportunity to have quality time with the vendors about their services and products
The lunch and keynote speaker will kick off the conference promptly at 11:45am on Wednesday. The educational sessions during the conference will feature a broad range of topics, from accounting and financial reporting to budget and financial planning to treasury/debt management, as well as leadership development and innovation and information technology.
A sampling of the confirmed sessions are as follows:
- GASB: David Bean, Director of Research and Technical Activities, , will discuss what you need to know about recent and possible future GASB standards
- Water rates: We will have a session on the drought and its effect on water rates
- The economy: We will have an update on recent trends in the economy and outlook for 2015
- CalPERS: An update from Alan Milligan, Chief Actuary, and Cheryl Eason, CFO, is planned
- Debt Management: We will have a session focusing on Post-Issuance Compliance and the impact of the Municipal Advisor’s Rule
- Treasury Management: We will have a session focusing on current market development and how those trends will likely impact the investment market
- Leadership Development: Two sessions with Neil Kupchin are on tap, including one on developing the next generation of high performers
On Thursday, the day will start with a Fun Run/Walk, and end with a fun and festive reception and banquet, complete with lots of diverse entertainment! Friday begins with a full breakfast and wraps up at 11:45am.
The conference occurs at the Monterey Conference Center in downtown Monterey, California. Lodging will be at the Portola Plaza Hotel. Hopefully, everyone has made their hotel reservations as the rooms are booking fast. The hotel can be reached at (888) 222-5851 and the email address is firstname.lastname@example.org.
Come early and stay late to take advantage of all there is in Monterey, and beyond.
CSMFO 2015 Board of Directors Election Results!
- President-Elect: John Adams, City of Thousand Oaks
- Board Member North: Karan Reid, City of Concord
- Board Member South: Brent Mason, City of Riverside
Conference Scholarship Program – December 8 Deadline!
The CSMFO 2015 Annual Conference Scholarship Program submission deadline has been extended to December 8, 2014. To be eligible for consideration recipients must meet the following requirements:
- Scholarship recipients must be a government member of CSMFO in the year the conference is to be held.
- Recipient must not have received a scholarship from CSMFO in the past 18 months.
- An agency shall not receive scholarship more than 3 times in 5 years.
- Applicants must make a financial hardship statement on the application.
- Scholarship recipient must be the only attendee from their Agency to attend.
- To encourage involvement in CSMFO Committee and Chapters, applicants are to express their involvement or desired involvement with CSMFO on the application form.
- Scholarship recipient will be a room monitor for 2 break-out sessions or otherwise volunteer at least 3 hours at the Annual Conference as identified by the Host Committee.
- Scholarship recipient is eligible to receive conference registration and up to two nights of hotel accommodations. The recipient will be responsible for travel to/from conference, additional nights of hotel accommodations, and all other incidentals.
SEC Promises More Municipal Market Enforcement
By: Juan Redin, Associate, Fulbright & Jaworski LLP
In the last few years, the United States Securities and Exchange Commission (the “SEC”), has engaged in several specific initiatives to combat what it describes as “widespread violations of the federal securities laws” by municipal issuers. In July 2012, the SEC issued a comprehensive report that signaled its increasing interest in municipal disclosure practices. This report outlined various recommendations to enhance the disclosure provided to investors in the municipal securities market. Such recommendations included legislative, regulatory, and municipal market initiatives – all aimed at improving disclosure practices.
The most recent SEC initiative aimed at municipal securities market enforcement was the Municipalities Continuing Disclosure Cooperation Initiative (“MCDC”). Under the MCDC initiative, issuers and underwriters had the opportunity to self-report inaccurate statements made in official statements about the issuer’s compliance with its continuing disclosure undertakings. To entice issuers to participate in the MCDC initiative and self-report materially false statements, the SEC enforcement division recommended lenient settlement terms, including no payment of civil penalties by the issuer. Underwriters participating in the MCDC initiative were required to consent to an order imposing a civil penalty of $20,000 per materially false statement, but capped the penalties at no more than $500,000 for the largest underwriting firms.
Enforcement is Here to Stay; May Target Individuals
Although the MCDC initiative filing period for underwriters and issuers has concluded, the SEC’s growing enforcement of the municipal market is “here to stay.” On November 10, 2014, Andre Ceresney, the director of the SEC’s division of enforcement, stated that the SEC will continue to look for opportunities to hold individuals personally accountable for violations of securities laws. In Mr. Cerseney’s perspective, “the most effective deterrent is individual liability.”
Given the reality of increasingly heightened scrutiny and enforcement of the municipal securities market by the SEC, how can issuer representatives and staff avoid individual liability? The following are some recommendations.
To comply with SEC requirements, issuers are recommended to:
- Adopt continuing disclosure compliance procedures that designate a specific responsible officer, and maintain continuity as staff members retire, change positions, or transfer. The SEC also recommends that issuers obtain specific training regarding continuing disclosure obligations.
- Determine outstanding issues that are subject to SEC rules.
- Identify disclosure requirements, including filing deadlines, contents of annual reports, and listed event notices that must be filed by reviewing the applicable continuing disclosure agreements. A form of the continuing disclosure agreement is generally included as an appendix to the official statement used in connection with the applicable series of outstanding bonds.
- Request current auditors to include as supplemental information the operating and financial data (e.g. assessed valuation and top taxpayers) required to be included in the continuing disclosure annual report in the issuer’s audited financial statements.
- Hire an outside consultant to file and/or verify continuing disclosure filings, if necessary.
- Follow-up with outside consultants and request receipt of continuing disclosure filings and submissions. Issuers should verify continuing disclosure submissions when using outside consultants for assistance. Issuers remain responsible for their filing obligations.
Starting in 2009 all continuing disclosure filings have to be submitted through the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access (“EMMA”) website, which should make the review of past compliance much easier. Issuers should review EMMA procedures and become familiar with filing new reports, as well as searching for prior filed reports.
Common mistakes to look for when reviewing compliance
- Late filings – Continuing Disclosure Agreements specify when annual reports must be filed. Filing deadlines may vary from 90 to 270 days after the end of the issuer’s fiscal year. Special attention is needed when an issuer has more than one issue of bonds or securities outstanding. The Continuing Disclosure Agreement in connection with each issue of bonds may not be identical. Each Continuing Disclosure Agreement may have a different deadline to submit the annual report.
- Annual report not filed under corresponding issue; CUSIPs – One of the most common mistakes for issuers that have more than one issue of outstanding bonds, is to file an annual report under the wrong issue of bonds. As briefly explained above, each issue of bonds has its own corresponding continuing disclosure requirements and its own Continuing Disclosure Agreement. Continuing Disclosure Agreements are not always identical – they may have a different filing deadlines or different types of required supplemental information.
For example, one Continuing Disclosure Agreement may require a copy of the issuer’s adopted budget and the largest local secured taxpayers, while another Continuing Disclosure Agreement may only require a summary of the adopted budget and does not require the largest local secured taxpayers. An issuer must be careful to file the specifically required information under the appropriate series of bonds, and corresponding CUSIP numbers, through EMMA.
For a checklist with the steps to verify EMMA submissions, including screenshots from EMMA, please contact email@example.com.
Upcoming CSMFO Webinar
“Creating and Managing Reserves for Your Agency” 2:00 – 3:30 p.m.
Wednesday, December 17, 2014
- How to create and use reserves in your water agency.
- Types of reserves commonly implemented, when they are suitable, and the appropriate levels.
- Other strategies to consider, including emergency and drought surcharges.
- Sanjay Gaur, Senior Manager, Raftelis Financial Consultant
- Todd Rydstrom, Asst. General Manager & CFO, SF Water, Power & Sewer
- Kathy Cortner, Chief Financial Officer, Mojave Water Agency
Welcome New CSMFO Members!
- Diane Agar, Manager – Accounting and Budget, Pittsburg, East Bay Chapter
- Mark Averell, Purchasing Manager, Modesto, Central Valley Chapter
- Christina Burgess, Accountant, Victorville, Desert Mountain Chapter
- Dawn Burns, Accounting Technician, Chino Valley Independent Fire District, Inland Empire Chapter
- Elizabeth Carlock, Accounting Supervisor, Chino Hills, Inland Empire Chapter
- Gina Daniels, Financial Services Manager, Madera, Central Valley Chapter
- Alain Datcher, Graduate Student, Pepperdine University, Central Los Angeles Chapter
- Denae DeGough, Accountant I, Mountain House CSD, Sacramento Valley Chapter
- Scott Dowell, Accounting Manager, Chico, Sacramento Valley Chapter
- Jesse Eckenroth, Accounting Supervisor, Rancho Mirage, Coachella Valley Chapter
- Caline Evans, Executive Administrative Asisstant, Santa Monica, South Bay Chapter
- Jennifer Fillinger, Accountant, Cucamonga Valley Water District, Inland Empire Chapter
- Elaine Fleming-Stanford, Principal Accountant, Corona, Inland Empire Chapter
- Ma Paulina Flores, Senior Budget Analyst, Huntington Beach, Orange County Chapter
- Jeremy Freelove, Senior Accountant, Sanitation Districts of Los Angeles County, San Gabriel Valley Chapter
- Emad Gewaily, Finance Manager, Coronado, San Diego County Chapter
- Davina Hatfield, Accounting Supervisor, Vacaville, Sacramento Valley Chapter
- Peter Hong, Management Analyst II, Irvine, Orange County Chapter
- Jevin Kaye, Accounting Supervisor, Hawthorne, South Bay Chapter
- Julie Kelly, Senior Fiscal Analyst, Superior Court of California, County of Placer, Sacramento Valley Chapter
- Jefferson Kise, Manager of Finance and Operations, Regional & Local Government Services Authorities, Monterey Bay Chapter
- Debbie Kukta, Treasurer, Burbank, San Gabriel Valley Chapter
- Kimberly Lashley, Accountant, Mission Viejo, Orange County Chapter
- Sabrina Lee, Accountant, Burlingame, Peninsula Chapter
- Christina Lopez, Accountant, La Verne, San Gabriel Valley Chapter
- Jim Malberg, Finance Manager, Elk Grove, Sacramento Valley Chapter
- Stephanie Manglaras, Accounting Manager, Santa Monica, South Bay Chapter
- Michelle Marquez Sr., Accounting Technician, Seal Beach, Orange County Chapter
- Brandon Merritt, Finance Analyst, Elk Grove, Sacramento Valley Chapter
- Jean Moore, Finance Officer, Alpine Fire Protection District, San Diego County Chapter
- Charlotte Newkirk, Accounting Supervisor, Hermosa Beach, South Bay Chapter
- Dave Nguyen, Senior Accountant, Azusa, San Gabriel Valley Chapter
- Donella Ouellette, Finance Supervisor, Elk Grove Water District, Sacramento Valley Chapter
- Margaret Padua, Manager – Revenue & Collections, Pittsburg, East Bay Chapter
- Joe Parker, Director of Financial Services, Placer County Water Agency, Sacramento Valley Chapter
- Kimberly Paul, Finance Officer, McCloud Community Services District Northeast Counties Chapter
- Monica Penney, Deputy Director of Financial Services, Placer County Water Agency, Sacramento Valley Chapter
- Andrea Pham, Jr. Accountant, Mission Viejo, Orange County Chapter
- Sarah Ragsdale, Business Manager, Mountain House CSD, Sacramento Valley Chapter
- Amanda Rinde, Accountant, Rancho Cordova, Sacramento Valley Chapter
- Jack Roberts, Senior Finance Officer, U.S. Air Force, Inland Empire Chapter
- Leticia Rocha, Accountant II, Santa Clara Valley Water District, Peninsula Chapter
- Alondra Rodriguez, Accountant, Ceres, Central Valley Chapter
- Soledad Ruiz-Nunez, Finance Director, City of Corcoran, Central Valley Chapter
- Xavier Sage, Accountant II, West Basin Municipal Water District, South Bay Chapter
- Cynthia Secada, Finance-Office Manager, Murphys Sanitary District, Central Valley Chapter
- Pamela Spero, Accountant II, Concord, East Bay Chapter
- Eric Swensen, Senior Accountant, Elk Grove, Sacramento Valley Chapter
- Kelly Taylor, Supervising Accountant, San Joaquin Valley APCD, South San Joaquin Valley Chapter
- Shannon Tickner, Recruiter, IntelliBridge Partners, Sacramento Valley Chapter
- Aileen Umali-Hermoso, Sr. Accountant, Ventura, Channel Counties Chapter
- Vicki Varnes, Payroll Coordinator, Chino Valley Independent Fire District, Inland Empire Chapter
- George Villa, Accountant II, Concord, East Bay Chapter
- Beth Vo, Budget Manager, Oxnard, Central Los Angeles Chapter
- Dane Wadle, Financial Analyst, Placer County Water Agency, Sacramento Valley Chapter
- Chris Woidzik, Finance Director, Avalon, Orange County Chapter
- Deborah Yamamoto, Senior Financial Analyst, Concord, East Bay Chapter
- Helen Zhu, Accountant II, Concord, East Bay Chapter
Central Los Angeles & South Bay Chapters Holiday Luncheon – December 10
Long-Term Infrastructure Planning
-Speakers: Dennis Klingelhofer, PE, VP Community Services & Public Finance
Orange County Chapter and CMTA Division IX – December 18
Maximizing Your Leadership Skills
-Speakers: Neil Kupchin
Power of Fiscal Policies/Long Term Financial Planning, highland, CA
– January 27, 8:30 p.m. – 4:30 p.m.
- Bill Statler – Director of Finance & Information Technology, City of San Luis Obispo
CSMFO provides government finance professionals with numerous resources for enhancing and advancing their careers. Visit the job opportunities page of the CSMFO website for a list of current job openings.