By: Pamela Arends-King, City of Tustin
At the April 24, 2014 Board meeting, Teri Anticevich and Janet Salvetti of M&AMS, Inc., provided an update for the Annual Conference held in February in Palm Springs. We anticipated and budgeted for 780 attendees, but the actual registration count was 878 and the Conference netted just over $100,000. The net revenue we received is very important because it will be used to help fund educational and training programs, such as our free webinar series. Again I want to thank all the members that attended, the Program Committee, Smith Moore & Associates, the Host Committee and M&AMS, Inc., for all your efforts and contributions that made the Conference a resounding success. I also want to thank our commercial attendees and sponsors. With your support we are able to raise the funds to provide our members with quality education and training programs year-round.
The GFOA Annual Conference is being held in Minneapolis, MN from June 18th through the 21st. I have to admit I was a little disappointed…I attended school in Minnesota and my son is currently attending the University of Minnesota, so I go there quite often! However, Minneapolis is a beautiful city and I always enjoy visiting it. I encourage all of you that are attending to take the time to explore it. Hopefully the weather will be pleasant (but according to my son, winter is still lingering!).
CSMFO will be holding a reception during the GFOA Conference on Monday, May 19, 2014 from 5 pm to 7 pm at Mona Restaurant & Bar located at 333 South 7th Street. It is within walking distance from the convention center and hotels within the downtown area. Our Executive Director, Melissa Dixon, sent an email last week announcing the reception. I hope all of you attending the conference will join us for drinks, food and socializing/networking.
Executive Director’s Message
By: Melissa Dixon, CAE
Each year, the CSMFO leadership gathers in the fall to create a Strategic Plan. In 2013, they also created an Action Plan to help move the objectives forward and keep everyone on task for the year. At the April Board of Directors meeting, we had a check-in to see what progress has been made on the Plan to date. Here are some of the highlights:
The Membership Benefits Committee has met several times, and has split into sub-committees to deal specifically with areas of Retention, Expansion, and Engagement (plus a fourth catch-all group for General/Miscellaneous). Collectively, they are establishing retention statistics, to establish a baseline from which to measure growth; looking at opportunities to promote membership to county offices; creating tools for chapter chairs to keep the chapter membership up to date on CSMFO activities; and updating and then distributing a membership brochure.
The Career Development Committee is meeting monthly and has begun tackling their directives. Some of these include polling the membership and creating webinars from Annual Conference sessions based on member input; developing a Finance 101 track; increasing the number of webinars planned for 2014; and collaborating with MISAC and potentially CSDA to provide new offerings to our members.
The Administration Committee is looking at reserve levels, in addition to creating guidelines with respect to how CSMFO collaborates or reciprocates with other organizations regarding their annual events.
Resources to Make Finance Officials’ Lives Easier
Form 990s: Financial Transparency for Nonprofit Partnerships
Contracts and other collaborative arrangements with nonprofit organizations are a key tool for many local agencies in delivering vital services. However, as some local agencies find out the hard way, financial problems and other issues with a nonprofit partner can cause embarrassment or worse for the agency. What tools do local agency staff have to learn about their would-be nonprofit partners?
A key tool is a federal disclosure document that most nonprofits must file annually with the Internal Revenue Service. Known as a “Form 990,” the form reflects the fact that these entities exist for the public benefit (which is why they enjoy a special tax status). Form 990s enable the public to receive an accounting of a nonprofit’s activities throughout the year. They also represent a policy judgment that such organizations should be open and transparent in their activities.
Organizations’ Form 990s are available online from National Center for Charitable Statistics, Guidestar and the California Registry of Charitable Trusts (all of which can be sources of other good information on a nonprofit organization’s activities). As part of their commitment to transparency, some organizations either post their 990s on their websites or include a link to the above organizations’ websites.
In addition, a nonprofit organization must provide copies of these forms to anyone who requests them.
Form 990s contain an almost overwhelming amount of information. To help local agency staff know what to look for in the document, the Institute for Local Government (itself the 501(c)(3) affiliate of the League of California Cities and California State Association of Counties) has prepared some suggestions on what to look for. The guide is available without charge from the Institute’s site: www.ca-ilg.org/understanding-form-990s.
As always, comments and suggestions are welcome on this resource. Please email email@example.com. The Institute’s mission is to promote good government at the local level with practical, impartial and easy-to-use materials.
Helping Local Officials Understand Agency Finances and Fulfill Their Oversight Role
Some local agency officials bring sophisticated backgrounds in financial management to their roles as elected officials. Others bring different strengths to their roles. Whatever the background, however, financial oversight is a key fiduciary duty of elected officials.
How can local agency finance officials help those less familiar with financial management perform their oversight duties? Oftentimes, the starting point is knowing which questions to ask.
To help finance officials help local officials know the right questions to ask, the Institute for Local Government offers a handy publication (aptly) called “Financial Management for Local Elected Officials: Questions to Ask.” Available for download without charge at www.ca-ilg.org/financialmanagement, this publication covers topics such as budget creation and monitoring, financial reporting and accounting, local agency financial policies and more.
In fact, individual sections of the publication are also available for download for financial officials’ convenience. So if a conversation about budgets is on the agenda, there is a section for that. As a bonus, each individual section also has an accompanying brief video with Bill Statler explaining the concepts in plain language.
Speaking of language, ILG also offers these publications in Spanish, which can be useful to share with Spanish language media and for public engagement efforts about local agency finances. These materials also include a glossary of financial terms. The recently updated publication Understanding the Basics of County and City Revenues is also available in English and Spanish (http://www.ca-ilg.org/document/understanding-basics-county-and-city-revenues).
Interested in using these materials and others from the Institute as part of your public information efforts about agency finances? The Institute welcomes links to its materials from agency websites. The resources are also designed to be used for candidate and newly elected official orientation materials.
As always, comments and suggestions are welcome on these resources. Please email firstname.lastname@example.org. The Institute’s mission is to promote good government at the local level with practical, impartial and easy-to-use materials.
LEED Building Certification: Added Cost or Sound Investment?
By Corey Lee Wilson at CLW Enterprises
With the implementation of California’s Assembly Bill (AB) 1103 energy benchmarking and disclosure law now in effect as of January 1, 2014, probably the single biggest barrier to building green is the perceived added cost. Consider this: The added cost is about 0.04% of the total cost to build and operate a facility for 20 years. This tiny investment can produce great returns on the other 99.96%.
Investment and Returns
Surveys of actual LEED (Leadership in Energy and Environmental Design) projects indicate that most LEED buildings add between 0.5% and 2% to construction costs. Initial land and construction costs account for only 2% of a 20-year life-cycle cost of a building. Combine a 2% green premium on 2% of the life cycle cost of a building, and LEED costs a tiny, almost insignificant 0.04% of the life cycle cost of a building! The other 98% cost of owning a building for 20 years includes 6% for energy, operations and maintenance, and a whopping 92% for salaries. The tiny 0.04% investment will produce big returns on this 98% for the life of the building.
Does green cost extra? Initially, yes, but there are few features in your facility that can provide return on investment (ROI) like LEED can. For instance, the tangible economic benefits to green (LEED and Energy Star) buildings include:
- Decreased operating costs of 13.6%
- Increased building values of 10.9%
- Improvement in ROI of 9.9%
- Increased occupancy of 6.4%
- Rises in rent of 6.2%
The most commonly cited studies on the incremental cost of LEED come from international construction company Davis Langdon, which compared fit-outs and renovations in LEED and non-LEED buildings. Overall, fit-outs and renovations of LEED-certified buildings carried a premium of 1.84 percent, or slightly more than $18,400 per $1 million of construction cost.
For example, compare a 100,000 square foot LEED building that saves $1.50 per square foot in energy costs to a similar building built to code – resulting in savings of $150,000 per year. In order to get $1.50 in energy savings, the building owner had to invest $400,000 on green / LEED related items – in other words, put down a $4.00 per square foot premium. As a result, it would take a little over 2.5 years to receive your investment back and then some.
Lower Operating and Maintenance Costs
For public agencies, the short- and long-term payback from lowered utility costs alone will typically exceed any construction surcharge to meet LEED standards. The average energy savings for LEED construction projects built in 2009 – weighted according to savings by type of project and share of certified floor area – can be greater than 32 percent, a study reported in GreenBiz Group’s 2011 Green Building Market and Impact Report found. Analysis of the same group of buildings also found that water use dropped 30 percent!
But not only are annual energy costs significantly lower than those for standard construction, so are maintenance costs because LEED certification ensures the building and its systems are designed, constructed, and controlled as intended. The LEED process provides maintenance procedures and owner’s staff training that decreases lifetime operations and maintenance costs.
Impact on Productivity
Probably the greatest benefits of LEED buildings are the positive effects on occupants. LEED buildings provide better indoor air quality, thermal comfort and lighting, as well as a greater connection to the outdoors with more access to views outside and also greater use of natural daylight indoors. With 92% of a building’s operating cost applied to human capital, clearly building design elements that improve occupant performance are a great investment and this is a huge part of LEED’s return on investment.
Using a formula based on research data measuring before-and-after effects of sustainable improvements on employee behavior, public agency professionals can measure the cost of LEED against the benefits in human capital. Studies that feed data into the formula have found:
- Office building-related illnesses cause $60 billion in lost productivity every year.
- Increasing daylight levels raised overall productivity by 13 percent and improved mental function and memory recall by 10 to 25 percent.
- Workplaces with good air quality and ventilation showed productivity increases of 1 to 9 percent, and gains of 3 to 11 percent correlating to temperature control.
Whether the measurement is in terms of direct energy payback, lower maintenance costs, or an improved environment for employee productivity, the ROI of LEED is indisputable.
How to Measure the Return on Investment (ROI) of LEED
You’ve heard it before: You can’t manage what you don’t measure. So before you consider modifying an existing building to a LEED building, conduct an energy audit first to see if it makes economic sense.
You can do this by using the ENERGY STAR Portfolio Manager created by the EPA. This is an easy to use online tool you can use to measure and track energy and water consumption, as well as greenhouse gas emissions. Use it to benchmark the performance of one building or a whole portfolio of buildings, all in a secure online environment. All you need are your energy bills and some basic information about your building to get started.
Measuring ROI starts with a measurement of costs. Once it’s been determined that it makes economic sense to go green, owners should be certain their LEED consultant is able to audit their buildings and accurately calculate the cost of obtaining various levels of LEED certification, including both the implementation of improvements, and the cost of the certification process itself.
Estimating the financial gain is a trickier process, as market variables and qualitative benefits enter the equation. However, the challenge of calculating ROI is lessened somewhat by the steady stream of reports analyzing the cost of LEED in new and existing buildings and the financial payback.
If you would like to learn more about LEED certification and construction, please contact Corey Lee Wilson at CLW Enterprises at 951-735-2646 and/or email@example.com.
CSMFO MiniNews Chapter Chair Spotlight
Name: Kathleen VonAchen
Agency: City of San Mateo
Committee Chair of: Pennisula
Q: How long have you been in the municipal finance profession? Why did you choose this profession? How long have you been a CSMFO member? I have been in municipal finance for 13 years, and 9 years in state government budgeting. Being the daughter of a public high school teacher, I have always been interested in serving the public. My first exposure to public finance was as an intern for the House Appropriations Committee in the Kansas Legislature, and later as a research associate for the League of Kansas Municipalities. During these early tenures I saw first-hand how the political process influences government budgeting and priority-setting. I have been a member of CSMFO since I moved to California in 2007.
Q: Describe your first chapter meeting experience. My first chapter meeting was lunch at the Stockton Country Club where the speaker was the City’s debt financial advisor.
Q: What prompted you to come back and get involved? How did you become Chapter Chair? I worked for Janet Salvetti, so she encouraged my participation with the Central Valley Chapter. Following that first chapter meeting, I was asked if I’d be interested in being the chapter chair, a position I held for several years. My experience having been a chapter chair will assist me in fulfilling my new role as the chair for the Pennisula Chapter in the San Francisco Bay area.
Q: What are your goals for your Chapter for the coming year, and how do they relate to the organization’s overall goals? The Pennisula Chapter goal is to provide opportunities for networking and professional development for its 37 member municipalities.
Q: What advice would you give to people new to the profession and/or CSMFO? Get involved and get to know your colleagues in other entities. They will prove to be a great resource for information and professional support.
Upcoming CSMFO Webinars
“Latest Accounting Updates”
10:00 – 11:30 a.m. Pacific Time, Thursday, May 15 Webinar Topics:
- What do you need to know about latest accounting changes for your agency’s reporting?
- How can you address these before your year-end close?
- What are useful resources to learn more?
* Eric Berman, CPA, CGMA, author “2014 Governmental GAAP Guide”
* Brett Miller, CPA, CPFO, Interim Director of Administrative Services, Hollister, CA
“What Finance Professionals Need to Know about HR”
10:00 – 11:30 p.m. Pacific Time, Thursday, June 26 Webinar Topics:
- What are the key things you need to know about HR?
- What are the critical issues where finance professionals and HR need to collaborate closely?
- How can you enhance working relationships for the benefit of all?
* Russ Branson, retired Admin. Services Director, Asst. City Manager, Roseville, CA
* Jon Holtzman, partner, Public Law Group
Welcome New CSMFO Members!
- Erin Nagle, Audit Senior Manager, Glenn Burdette, Central Coast Chapter
- Chuck Maurer, Tax Auditor, Oakland, East Bay Chapter
- Christine Andrews, Accountant I, Brentwood, East Bay Chapter
- Martin Koran, Controller, San Ramon Valley Fire Protection District, East Bay Chapter
- Amy Meyer, Shareholder, Norco, East Bay Chapter
- Christine Ace, CFO, Superior Court of California, County of Monterey, Monterey Bay Chapter
- Krystle Lindberg, Accountant Analyst, Cloverdale, North Coast Chapter
- Chris Becnel, Adjucnt Professor, Santa Rosa Junior College, North Coast Chapter
- Amparo Hargreaves, Auditor, County of Sonoma, North Coast Chapter
- Jessica Oconnell, Accounting Supervisor, Cotati, North Coast Chapter
- Scott Arbuckle, Section Manager of Financial Planning, Orange County Transportation Authority, Orange County Chapter
- Robin Harnish, Accountant, Dana Point, Orange County Chapter
- Anna Baca, Tax Auditing Specialist, Costa Mesa, Orange County Chapter
- Steve Toler, Assistant City Manager, Foster City, Peninsula Chapter
- Sharif Etman, Finance Manager, Campbell, Peninsula Chapter
- Kate Motonaga, Interim Finance & Administrative Manager, San Juan Water District, Sacramento Valley Chapter
- April Naatz, Finance & Administrative Services Analys, San Juan Water District, Sacramento Valley Chapter
- Joan Phillipe, City Manager, Clearlake, Sacramento Valley Chapter
- Heidi Schoeppe, Finance Manager, Albert A. Webb Associates, San Diego County Chapter
- Susan Boynton, Finance Tech, Encinitas, San Diego County Chapter
- Susana Ravé, Castaic Lake Water Agency, San Gabriel Valley Chapter
- Gayle Kirby, Financial Systems/Payroll Administrator, Santa Monica, South Bay Chapter
Inland Empire & CMTA Div 8 Chapter Meeting – May 15
– Speaker: Michael Coleman, Fiscal Policy Advisor for League of California Cities & CSMFO
San Gabriel Valley Chapter Meeting – May 21
– Speaker: Diego May, Co-Founder of Junar, Open Data Made Simple
Monterey Bay Chapter Meeting – May 22
– Speakers: Michael Coleman, Fiscal Policy Advisor for League of California Cities & CSMFO
Barbara Ware & David Clement of Senior Actuary
Channel Counties Chapter Meeting – June 5
– Speaker: Michael Coleman, Fiscal Policy Advisor for League of California Cities & CSMFO
Orange County & CMTA Division 9 Meeting – June 19
– Speakers: Carolyn Emery, Ken Lee & Ben Legbandt of Orange County LAFCO
Intermediate Governmental Accounting, San Ramon, CA
– May 9, 8:00 a.m. – 5:00 p.m.
- Susan Mayer
Intermediate Governmental Accounting, Newport Beach, CA
– June 4, 8:00 a.m. – 5:00 p.m.
- Susan Mayer
Introduction to Governmental Accounting, Ukiah, CA
– June 11, 9:00 a.m. – 4:30 p.m.
- Ahmed Badawi – Badawi & Associates
Introduction to Governmental Accounting, Menlo Park, CA
– June 25, 9:00 a.m. – 4:30 p.m.
- Ahmed Badawi – Badawi & Associates
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.