By: Jesse Takahashi
Have you heard the saying, “Enjoy it while you can because it won’t last forever?” Last month, CSMFO had a webinar featuring Beacon Economic’s Director of Research, Jordan Levine, who presented the latest economic update for California. It was a fact-filled webinar with the bottom line message that the economy is firing on all cylinders right now and appears that it will continue, at least in our state, for the foreseeable future. This is welcome news as it should afford our cities the ability to accumulate additional financial resources to pay for enhancing or creating new programs and services as well as to catch up on much-needed deferred maintenance and capital projects. Some of the highlights from the presentation were that calendar 2014 ended on a strong note with payroll and employment numbers still increasing, consumer spending at favorable levels and job growth better than anticipated. It has been a broad-based recovery since 2010 with the San Francisco-San Jose region leading the way with 20% growth compared to 12% statewide; however, the Inland Empire and Central Valley areas have also seen healthy levels of growth during the past year. Hotel and transportation categories are also continuing to fare well due to sustained demand in business and personal travel. Residential housing markets are still strong as well with prices still rising as demand exceeds available supplies. Over the next few years, Beacon forecasts additional growth in new building permits as employment is expected to remain strong and the economy continues to grow at modest levels. Mr. Levine concluded by saying now is the time to tackle some of the long-term challenges facing our agencies such as local permit regulations, infrastructure needs, affordable housing issues and working towards an improved taxing structure. All in all, it was a positive outlook and one that we should enjoy while it lasts!
GASB 68 is coming sooner than you think
If you haven’t already heard, the California Committee on Municipal Accounting released last month an implementation guide on GASB 68 Pension Accounting and Reporting that is effective for most of us this fiscal year. You can get this information from the following link:
http://www.cacities.org/GASB68-ImplementationGuide. Also, for those of you that are CalPERS members, a webinar on this topic will be held on May 14, 2015 at 10:00 a.m. to discuss the latest updates on the role of CalPERS and what agencies will need to do to obtain the necessary information for reporting and disclosure in their financial statements. We should also be prepared to answer questions that may come up from our governing bodies on the implications of reporting this new liability in our financial statements. So, be sure and take advantage of the resources out there helping to educate and implement this latest GASB Standard.
See you in Philadelphia at GFOA—stop by our reception Monday night
It’s almost time to head out to the 109th Annual GFOA Conference at the end of the month, which will take place May 31 through June 3 in Philadelphia PA. This year’s theme is Innovation and Resilience. I am very much looking forward to meeting with fellow finance officers from around the country to share and exchange ideas and knowledge about the issues particular to our respective jurisdictions and learn how others are addressing them. Philadelphia is a great city rich in history and offering a host of activities for those planning to attend. As has been our tradition, CSMFO will be hosting a reception at the conference for all of our member delegates to stop in and meet up for some good food, drink and networking opportunities while in Philadelphia. It will be held on Monday, from 5:00 – 6:30 p.m. at Sampan Restaurant, 124 S 13th Street. It is just a few blocks from the Convention Center and surrounding conference hotels. So, before you head out to dinner, please stop by for some appetizers and a drink and say hello to fellow CSMFO members. If you do plan to attend the reception, we would ask that you please send a quick RSVP to Melissa Dixon at firstname.lastname@example.org letting her know. Looking forward to seeing you in Philadelphia!
Executive Director’s Message
By: Melissa Dixon, CAE
The 2016 Annual Conference Host Committee is meeting at the Disneyland Hotel on May 28. Unfortunately, I won’t be extending this trip to allow for any play-time, but I will get to go into the parks–on a tour with some Disney representatives to show us where we might hold a private event for Thursday night at our Conference. The Committee has been throwing around some ideas, including:
-Doing the event completely at the hotel
-Having dinner at the hotel and then doing desserts in one of the parks
-Doing the event completely in one of the parks (depending on location, this may have to take place after the park closes)
What are your thoughts on this? If you could plan the Thursday night event, what would it look like? If you’d like to have a private event in one of the parks, would you rather Disneyland or California Adventure? Any preference regarding where in the parks–Cars Land, Adventureland, Mad T Party, Big Thunder Ranch, something else?
I’d love to hear your thoughts on this in advance of the meeting later this month (email@example.com). I look forward to sharing your thoughts with the Committee!
Did you notice the CSMFO staff wearing CSMFO sweaters and polo shirts at the Annual Conference? CSMFO is now offering those items, plus fleece jackets, available for purchase through Land’s End.
The California Society of Municipal Financers Officers (CSMFO) is a community of individuals who dedicate their lives to civil service and promote excellence in financial management through innovation, continuing education and professional development. Those who volunteer to support the CSMFO mission—on a committee, at the chapter level or as a member of the Board—will tell you the value they receive from their active involvement with CSMFO is immeasurable.
For those individuals who are ready to take on a greater role and begin contributing to the strength of the government finance profession, we invite you to volunteer for one of the many opportunities available, and CSMFO will make every effort to fulfill your request. We also understand you may have questions about these volunteer opportunities before you commit, and we encourage you to reach out to CSMFO’s Executive Director, Melissa Dixon, who would be happy to answer your question or direct you to the appropriate CSMFO leader.
MGO Survey Results
By Scott P. Johnson
Partner, MGO Advisory Services
It was great seeing everyone at the 2015 CSMFO Conference in Monterey. We appreciated spending time with familiar faces, meeting new colleagues, and discussing the issues and opportunities facing our industry. There was quite a bit of interest in our survey on Government Sustainability, that MGO conducted, so we decided to share a brief summary of the results.
GOVERNMENT SUSTAINABILITY: Challenges & Solutions
Over the past few months, my colleagues and I at MGO have been reaching out to government executives throughout the state to discuss the trends and issues driving our industry. As you might suspect, the conversations have touched on a number of diverse topics, but we’ve been seeing one common theme emerging: Government Sustainability. What can government executives do to navigate today’s challenges and ensure a stable foundation for the future?
Building on that theme, we couldn’t pass up the opportunity to conduct an informal survey of government executives at this year’s California Society of Municipal Finance Officers (CSMFO) Annual Conference in Monterey. Here’s a quick snapshot of what we found.
Risks to Sustainability
Survey Question #1:
In your opinion, what issues pose the greatest risk to the fiscal sustainability of your organization?
Not surprisingly, the most common responses focused on revenue shortfalls or revenue inconsistency. Interestingly, multiple respondents named federal and state entities as a specific source of risk. The second most commonly cited risk was inability to attract and/or retain quality staff.
Given some of the on-going publicity surrounding distressed governments and recent news of isolated instances of fraud and abuse, there were surprisingly few responses in reference to longer term risks, such as pension and other retirement benefit liabilities or internal controls. It’s possible that the issues respondents deal with directly in their day-to-day operations (e.g. staff competency) are more likely to be “top-of-mind” than issues deemed to be looming in the background.
Struggling Functional Areas
Survey Question #2:
In your opinion, what functional areas of your organization struggle most with efficiency and effectiveness.
Responses to this question were as diverse as you might expect. Virtually every possible administrative function made the list, but the two most common responses appear to be unrelated:
- Human Resources
- Billing & Collections
The inclusion of Human Resources appears to be consistent with the finding that “staffing” is perceived as a risk area. Not surprisingly, respondents appear to relate a deficiency in retaining and recruiting quality staff with a struggling HR department. Another key component of this deficiency is the frustration on the length of time it takes to recruit and hire new staff (generally six months or longer) due to antiquated hiring practices and compliance requirements for hiring public sector employees.
The frequency of “Billing & Collections” is particularly noteworthy given that the sample is made up of Municipal Finance Officers identifying a business element within their own department. This may suggest that there are unique process or technology challenges associated with the B&C functions; or there may be common external economic factors creating a unique challenge. Regardless, it appears to be a common concern.
Strategies & Solutions
Survey Question #3:
Has your organization employed any budget balancing techniques or strategies?
Answers to this question were extremely diverse, and spread fairly evenly across the multiple choice options:
- Adding new services or fees
- Employee concessions and/or cost sharing agreements
- Implemented or updated a cost recovery plan
- Private/Public partnerships
- Reducing or eliminating services
The key take-away from this question seems to be that we’re dealing with a very resourceful, creative group of government executives. These are leaders, faced with significant challenges, implementing a wide range of strategies and best practices.
Taken as a whole, the survey suggests that our industry continues to navigate some difficult issues, but government executives remain optimistic. Most respondents rated their agencies above average in their response to sustainability risks. While challenges remain, with much work to be done to achieve long-term fiscal sustainability, there are a wide range of effective strategies and solutions. Most importantly, the survey shows that we have a lot that we can learn from one another.
About the Author
Scott Johnson has over 29 years of experience in government administration, with a focus on successfully managing municipal finances and budgets. He has led multi-billion dollar operations in government including the cities of Santa Clara, Milpitas, San Jose, Oakland, Concord and the County of Santa Clara. Scott is a past president of CSMFO and continues to be an active member of the organization. Scott is currently a partner with MGO, leading the Advisory Services sector, specializing in State & Local Governments. He welcomes any questions or comments via email: firstname.lastname@example.org.
May 13, 2015 – 2:00 p.m. – 3:30 p.m.
Advance registration required for this no-charge webinar: https://attendee.gotowebinar.com/register/5425628454069052418
Unfunded liabilities (pensions, retiree medical, and retiree supplemental) present a major challenge for local governments in California. Learn how you can make a plan to reduce these liabilities.
- Why you need a plan for unfunded liabilities.
- Benefits of a plan.
- How to develop a successful plan to reduce liabilities.
- Lori Ann Farrell, Director of Finance, Huntington Beach
CSMFO Color Commentator:
- Mary Furey, Finance and Administrative Services Director, Saratoga
Audience: all local government finance professionals
Welcome New CSMFO Members!
- Leslie Curtin, Customer Services Division Manager Modesto, Central Valley Chapter
- Lakisha Callum, Accountant Patterson, Central Valley Chapter
- Jaime Martinez, Budget Orange, Orange County Chapter
- Kathleen Long, Budget Orange, Orange County Chapter
- Louis McClure, Public Finance Orange, Orange County Chapter
- Suzanne Luster, Public Finance Manager Orange, Orange County Chapter
- Katrin Bandhauer, Assistant Finance Director Orange, Orange County Chapter
- Suzy Burns, Management Analyst Costa Mesa Fire Department, Orange County Chapter
- Matthew McDonald, Finance Director Redwood City, Peninsula Chapter
- Marcia Salter, Auditor-Controller County of Nevada, Sacramento Valley Chapter
- Mette Richardson, Finance Director Grass Valley, Sacramento Valley Chapter
- David Bilby, Finance & Purchasing Manager Chula Vista, San Diego County Chapter
- Victoria Danganan, Senior Accountant El Cajon, San Diego County Chapter
- William Baker, Vice President ICD (Institutional Cash Distributors LLC), South Bay Chapter
- James Robinson, Revenue Operations Inverstigator Beverly Hills, South Bay Chapter
- Monya Jameson, Finance Director North of the River Rec and Park District, South San Joaquin Valley Chapter
Monterey Bay Chapter Meeting – May 20, 10:30am – 2:30pm – Seascape Golf Course, Aptos, CA
Governor’s May Budget Revision
-Speaker: Michael Coleman
State of the State and the State of Local Government
-Speaker: Mary Beth Redding
San Gabriel Valley Chapter Meeting – May 20, 11:30pm – 1:30pm
Enhanced Infrastructure Financing Districts Including Current Issues with CFD’s and AD’s
-Speakers: Dennis Anderson, Director, Public Finance, Harris & Associates
Inland Empire & CMTA Div 8 Chapter Meeting – May 21, 11:30am – 1:30pm – Riverside Convention Center, Riverside, CA
Everything You Wanted to Know about Rates, Fees & Special Financing Districts (SFD), But Were Afraid to Ask
-Speaker: Tim Seufert, NBSDay & Company, LLP HdL Companies
Channel Counties Chapter Meeting – May 28, 11:45am – 1:30pm – Los Robles Greens Golf Course, Thousand Oaks, CA
-Speaker: Michael Coleman, Fiscal Policy Advisor for League of California Cities & CSMFO
Intermediate Governmental Accounting, City of Beverly Hills
– May 7, 8:00am – 5:00pm
– Instructed by Susan Mayer
Power of Fiscal Policies / Long Term Financial Planning, City of San Diego
– May 27, 8:30am – 4:30pm
–Presented by Bill Statler
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.