November 2013 MiniNews

November 2013 MiniNews

  • Willdan Financial Services
  • Harris.
  • Cutwater Asset Management
  • NBS
  • Bartle Wells

Download the pdf version
*Please note that updates are continually made to the Job Board section of the MiniNews (PDF format) after its original release. Check the Job Board regularly.


President’s Message

By: Pauline Marx, City and County of San Francisco

Public/Private Sector Transition

“My graduate degree was originally called Master of Public and Private Management, but after struggling to explain the degree for 20 years, Yale changed the name of the degree to an MBA in 2000.  That intersection of public and private has been a keystone in my own career.”

After fourteen years with the City, Russ Branson recently left the City of Roseville where he served as Assistant City Manager and Treasurer and has moved to a consulting firm specializing in consulting services to government.   As our guest columnist this month, Russ comments on his public/private sector transition and how one can approach the same issues from both sides.

My Transition from the Public to the Private Sector
By: Russ Branson

Guest Columnist Russ Branson

I came to the City of Roseville nearly fourteen years ago and found my calling, but I left Roseville a few weeks ago as the Assistant City Manager/Treasurer to join Public Financial Management’s (PFM’s) Management and Budget Consulting group.  Stepping over that line has been interesting.  One week I am one of the top managers in a successful organization, the next I am looking up from the bottom (in a manner) of another successful organization.  There is a different energy and pressure in a consulting organization.  I have been there before.  Here is a little bit about my process in making this change.

Joining Roseville in 2000 was easy.  Roseville is a full service city near Sacramento.  With its own electric, water, wastewater, and solid waste utilities along with all of the typical municipal services (including libraries), golf courses, and after-school child care, money was plentiful and employees were happy.  What could go wrong?   Well, we all know the answer to that question.  But the interesting part for me is that the calling I found was not realized in the “good” times but in the difficulties of the recession that started in 2007.  Roseville’s story is a familiar one of plunging revenues and drastic budget cuts.  Layoffs, compensation reductions, early retirements, and throwing overboard whatever costs were not tied down to keep the ship afloat.  We were successful.

With budget cuts to the general fund of nearly 20 percent, we still found a way to move forward.  We were able to band together to make across-the-board cuts, even in the utilities.  While budget cuts are never without strain, there remained a remarkable team feeling throughout the City.  Somehow we were all in this together, and it felt good to play a key role in that sense of belonging.

Each year, we somehow managed—and sometimes it felt miraculous—to balance the budget.  In the FY2013 fiscal year, the City ended in the black, with general fund revenues greater than expenses.  Bailed out partly by a rising economy, but more by disciplined under-spending of budgeted expenditures.  Better than projected.

And it wasn’t just the budget crisis that we had to overcome.  It was the collapse of the auction-rate securities market at the start of the recession (be thankful if that didn’t affect you), major increases in electric utility rates after holding rates down for too long, and successfully negotiating compensation reductions with each of the City’s unions in 2008 and 2009.

Some of these successes were preceded by good decision-making when the main problem was what to do with all the extra revenue at the end of the year.   An OPEB trust was established with $34 million of that excess revenue, along with about $35 million placed in a “strategic improvement fund” that has been used by the City to move forward on strategic projects, even during the recession.  New civic buildings were funded with accumulated cash, some coming from impact fees from significant growth in the first half of the decade.

Now Roseville is coming through the downturn, but with challenges still to come.  Funding long-term liabilities and dealing with a labor force that is tired of reduced compensation and increased medical costs.  “We’re not out of the woods yet” was a consistent refrain, but it is getting better.

So, now I find myself at PFM.  A career change.  A challenge.  An opportunity.  Why change?  Why now?  Often we make decisions and aren’t always aware of our motivations.  Opportunity of course is what opens the door to the decision.  I have been thinking about this type of change off-and-on for the last three years.  The opportunity with PFM came up.  That opportunity turned into an offer.  The offer turned into a decision.

I have given my reasons for making this jump back to the private sector as people have asked.  I talked about opportunity, timing, and years left in my career.  All true, but not all of the truth.  I realize why I really made this career choice.  What I really loved about my job at Roseville was the ability to make a difference by solving difficult problems, sometimes seemingly insurmountable problems.  What I believe PFM offers me is the opportunity to continue solving difficult problems, not just in one agency but in many.  The work remaining at Roseville will get done.  There are competent staff in place to ensure that.

My new venture with PFM ultimately offered me something that I still wanted to pursue.  Specifically, PFM’s work on budget sustainability, fiscal recovery, and workforce consulting.  This is vital to still-struggling agencies and local jurisdictions.  And if the recovery stalls or falls back, it will be more vital still.  I also realize that it is not something I can do on my own.  I work best in a team of dedicated equals.  What attracted me out of Roseville was the team approach to problem solving that PFM pursues.  Beyond the deep and varied professional experience of staff nationally, PFM has strong roots and commitments to California public agencies.  PFM offers not just a platform from which to expand the management and budget consulting work, but also offers a depth of knowledge and commitment to the client that I do not believe is duplicated in this industry.  For me, to be a part of this is a privilege and an opportunity not be passed by.

At PFM I believe I will expand what I have developed the last 14 years.  I will continue to follow my calling.  I don’t actually see myself as leaving the public sector, but serving the public sector in a different capacity.


Executive Director’s Message

By: Melissa Dixon, CAE

If you haven’t already, you’ll soon be receiving your membership renewal notices for 2014. I’m happy to report that CSMFO membership remains on an upswing (we’re sending out 33 more notices this year than last!). I hope you find value in CSMFO, and you continue to support your professional organization.

Want to make the most of your membership? Now is the time that President-Elect Pamela Arends-King will start thinking about her committee appointments for 2014. If you’re interested in volunteering for one of the standing committees (listed below), please contact me at melissa.dixon@staff.csmfo.org.

  • Administration
  • Career Development
  • Conference Site Selection
  • Membership Benefits
  • Professional Standards & Recognition
  • Program
  • Technology

Also, don’t forget there are 20 chapters throughout the state who would most likely love having additional help putting on meetings and other chapter functions. Don’t be afraid to volunteer—you’ll be surprised what a rich, rewarding experience it can be!


Election Announcement

2014/2015 Elections Now Open

Three positions are open for candidates: President-Elect, North Board Director and South Board Director positions. Polls are open on our website and close November 30th at 11:59pm. Results will be published in the December issue of CSMFO MiniNews. For candidate profiles and online voting, please go to the elections page of our website.

 


2014 Annual Conference Scholarship Program

The CSMFO 2014 Annual Conference Scholarship Program is now accepting applications! This year, there are changes to previous eligibility requirements. For the first time, the Board of Directors and Annual Host Committee will consider awarding scholarships to multiple persons from a single agency; this policy allows an agency that is experiencing hardship to network and fully participate in the conference. Fifteen (15) scholarships will be awarded in 2014. For more information about the program, or to apply, please go to the 2014 Annual Conference page of our website.

 


Playing the Next Round

2014 CSMFO Conference — Palm Springs — February 19-21, 2014

2014 Logo FinalThere will be many breakout sessions that include:

  • The finance professional preparing for the future
  • Succession planning: how does the retiring person prepare for their next stage and plan for knowledge transfer. What do you do if no knowledge transfer took place?
  • Professional growth: your supervisor wants to be the next finance director. What do they need to know, what skills do they need to gain?

What changes lay ahead for the finance professional and what do you need to be prepared for:

  • Pension reform – the next steps
  • State and federal impacts – economic development or ObamaCare?
  • Bankruptcy – who’s next, what are the impacts on your organization?
  • Regulatory reform – new laws, updated GASB statements and more
  • The new normal – the next generation is now

Plan to join us in Palm Springs for the best CSMFO Conference ever!


The California Conundrum:

Is Water a Public Resource, an Economic Good, or a Tax?

By Tim Seufert, Managing Director/NBS

Summary
Depending on the beholder’s viewpoint, water has been called a public resource, defined as an economic good, and categorized as a “tax,” subject to the rigors of California’s electorate under the rules of Proposition 218. In a local government setting, are water rates set artificially low for short-term political gains in today’s post tax revolt California?  Or are they determined by sound analysis on a foundation of “good” public policy choices, such as addressing environmental concerns, fiscal prudence, and fairness?

The positive news from the results of my recent study is that it appears water rates are generally set by good public policy decisions. In addition, over half of the respondents had a water conservation-based rate structure. Fiscally prudent policies ranked highest in the survey, followed by fairness and environmental concerns. However, rate tension and political pressures were also present, especially when a conservation rate structure is in use. In addition, there is a concern that conservation mandates have had the unintended consequences of decreasing the public’s sentiment for conservation, and its commensurate price tag, while undermining overall revenue stability for local water agencies.

Background and discussion
Are local water rates set artificially low for short-term political gains?  Or are they determined by sound technical analysis on a foundation of “good” public policy choices? This research study (a cross-sectional quantitative survey of local water agencies in California, augmented by qualitative interviews) sought to understand this timely question by performing background and literature research as well as directly surveying local public water suppliers in California. For the study, good public policy criteria were defined as addressing environmental concerns, fiscal concerns, and fairness.

Amidst these water policy discussions, the anti-tax movement must be considered. Proposition 13 was approved in 1978, and then Proposition 218 in 1996 which established further limitations on local governments’ abilities to raise revenues. The anti-tax revolt became a significant problem for local water agencies in the most recent decade, as the California Supreme Court concluded in 2006 in the Bighorn-Desert View Water Agency vs. Verjil case that water rates were subject to the initiative powers granted, perhaps unintentionally, by Proposition 218.

The California Environment
A variety of water rate structures are in use today by public water agencies in California for a host of economic, public policy, and practical reasons. These structures range from flat (or fixed) rates to metered rates to conservation-based tiered or block rates. More recently, water-budget rates (or customer-specific allocation based rates) have become technically feasible in California, and elsewhere. A water budget rate is “an increasing block rate structure in which the block definition is different for each customer based on an efficient level of water use by that customer.In the recent past, water budget rates linked with an increasing block rate structure have been implemented successfully in more than 20 utilities.2 However, detractors of water-budget rates have concerns about equity with such a rate scheme, and the motivational structures they can foster (to build a larger home, for example).

In general, calculating and implementing water rates has become more complicated and technically challenging within the California environment. In addition, Propositions 13 and 218 have added a level of politics and complexity. “Over the course of 34 years, California’s law of local utility fees has been transformed. An earlier era of legislative discretion and deferential judicial review meant disputes over rates were more often resolved by political means than lawsuits.”3 Clearly, the environment of policy decision making on water rate structures has changed.

Moreover, the relationship with the public at large has changed significantly, requiring a whole new paradigm of public education and engagement.

Study Results
Over half of the survey respondents had some type of conservation-oriented rate structure (inclining block or water-budget rates) in place. This would generally be expected given the conservation-minded goals and policies in use in California.

The-California-Conundrum---Water-Rate-Structures

Notably, it appears from the quantitative data that water rates are generally set by good public policies, most notably those policies classified as fiscally prudent. These top public policy motivations, as distinguished by level of importance (marked on a Likert scale as important, very important, or extremely important), were in the following ranked order:

  1.  Revenue stability
  2.  Repair and maintenance
  3.  Basic costs are covered
  4.  Fairness/equity in rates
  5.  Managing a finite supply
  6.  Ease of implementation
  7.  Conservation goals
  8.  Political pressure/Proposition 218

Goal numbers 1 through 4 above had importance scores in the 80-90 range, 5 and 6 in the 60-70 range, and 7 and 8 in the 50-60 range. Economic development and Intergenerational concerns (9 and 10 in the list) were mostly categorized as neutral.

Conclusions
What this study means for local water districts is a continued and increased need for rate-making diligence, including the development perhaps of an entirely new form of rate structure or even a new paradigm of ways for charging for water. In addition, water providers should enhance the transparency in rate setting and enliven the public dialog on the needs for water conservation and relevant rate structures in order to sustain the effort to manage the aging water infrastructure assets for the long-term benefit of Californians.


1 Mayer, Peter W. (2008) Water Budgets and Rate Structures: Innovative Management Tools. American Water Works Association Research Foundation: Denver, Colorado.
2 ibid
3 Colantuono, Michael G, Esq. (2012, May) A History of Rate-Setting Under California Law: Proposition 13 through Proposition 26. Presented at the Association of California Water Agencies, Monterey, California.

 


CSMFO MiniNews Committee Member Feature

-Carrie-Corder-croppedName: Carrie Corder

Agency: Cucamonga Valley Water District

Committee Chair of: Vice Chair, Career Development Committee

Q: How long have you been in the municipal finance profession?  This may sound geeky, but I knew I wanted to be an accountant after I took my first class in high school. After college I worked for a regional CPA firm and had the opportunity to audit school district clients. I then moved on to a City and now a Special District and enjoy serving the community in which I live. 

Q: How long have you been a CSMFO member? Served on a CSMFO committee? I have been a CSMFO member for 15 years. I served as the Inland Empire Chapter Chair for two years, the Administration Committee for two years, and now currently on the Career Development Committee.

Q: What committee are you a part of now? Why did you become involved with CSMFO’s committee(s)?  Serving as Chapter Chair and on the two committees has been a great experience and has allowed me to meet a lot of great people with the same interest of improving our profession. The Career Development Committee is especially important to me because we can all improve our knowledge and performance and help others who are newer to the profession. For the past three years I have been teaching Governmental Accounting at a local community college in order to show students that you can have a meaningful career in municipal finance.

Q: How did you come to be involved in the leadership of CSMFO? In 2009 I volunteered to be the chapter chair after the encouragement of a Committee Chair, Brent Mason. Brent gave me the run-down and I quickly learned that finding speakers was not as hard as I thought it would be. This was an incredible opportunity and I am very thankful for the experience. I encourage anyone who wants to be involved and serve others – CSMFO is a great way to share your time and energy.

Q: What are your goals for the committee for the coming year, and how do they relate to the overall organization’s goals? The Career Development Committee has many exciting goals all with the purpose of growing our member’s technical and leadership skills. In addition to the current line-up of offerings, we are looking for new training opportunities, both in-person & via webinar that will be of interest to our members. The activities of the Career Development Committee are central to CSMFO’s mission of “promoting excellence in financial management through innovation, continuing education and the professional development of our members.”


Coaching Corner

“Forecasting Sales and Use Tax Revenues Successfully” – Webinar

2:00 – 3:30 p.m. PST, Wednesday, November 13, 2013 CSMFO Coaching Program

Learn how to forecast sales and use tax revenues successfully. CSMFO has identified this as one of the core skills for local government finance professionals.

Advance registration required for this no-charge webinar: https://www1.gotomeeting.com/register/594339769

Panel topics:

  1. How do sales and use tax revenues fluctuate?
  2. What are the common errors to avoid in forecasting these revenues?
  3. How can you follow a structured, deliberate approach to forecast accurately and address economic uncertainty?
  4. How do you adjust for payment aberrations, economic fluctuations, the “triple-flip,” and other accruals?

Presenter:

* Lloyd de Llamas, Executive Chairman of HdL Companies, previously City Manager for Monterey Park, Lawndale, and Woodlake.

We’ll be using webinar tools (including real-time questions and live polling) to make this a great opportunity for audience interaction.

Are you a member of CSMFO and want to earn CPE credit for participation in the webinar? Note the requirements at registration.

Post-Webinar Group Discussions

Many agencies are organizing groups to participate in the webinars (live or recorded) and discuss the topics among themselves after the webinars. Some are summarizing their discussions and distributing them to managers throughout their organizations.  Use the CSMFO Coaching Program as an effective way to enhance professional development in your agency. Here are some discussion starters for this session:

  •  What are the key drivers of our sales and use tax revenues?
  • What can we do to better track and project these sources?
  • How can we anticipate important adjustments for State administrative fees, County charges, and triple flip elements?

MORE RESOURCES: See the “Coaching Corner” at www.csmfo.org/coaching for valuable resources to boost your career. These include a Financial Management Skills Inventory, Resource Matrix, Coaches Gallery of 24 volunteer CSMFO Coaches willing to help you on a one-to-one basis, and an archive of digital recordings and materials from past webinars at www.csmfo.org/training/webinars.

For more information: contact CSMFO@donmaruska.com.

Don Maruska, Master Certified Coach
Director, CSMFO Coaching Program
www.csmfo.org/coaching
 


Welcome New CSMFO Members!

  • Susan Casey, Administrative Services Director, American Canyon
  • Ana Kwong, Accounting Supervisor, Rohnert Park
  • Stephan Christensen, Manager of Budget and Financial Analysis, City of Modesto
  • DeAnna Espinoza, Principal Accountant, City of Modesto
  • Yolanda Anaya, Government Relationship Manager, Bank of the West
  • Edward B. Lasak, CPA
  • Teresa Delfino, Administrative Services Manager, Pajaro Valley Water Management Agency
  • Robert Carroll, Sr. Management Analyst, City of Santa Ana
  • J.D. Mooney, Director of Business Development, Springbrook Software
  • Julie Interrante, Customer Service Supervisor, City of Tustin
  • Erica Pastor, Senior Manager, Mann, Urrutia, Nelson, CPAs
  • Justin Williams, Partner, Mann, Urrutia, Nelson, CPAs     Partner
  • JoAnne Speers, Executive Director, Institute for Local Government
  • Pearl Lieu, Assistant Finance Director, City of South Pasadena
  • Laura Doud, City Auditor, City of Long Beach

 


Chapter Meetings

Central Coast Chapter Meeting – November 14

Local Government Financing Alternatives to Support Energy Efficiency, Water Conservation and Renewable Energy Projects
– Laura Franke, Public Financial Management, Inc (PFM)

Montere Bay & CMTA Chapter Luncheon – November 14

Public and Internal Financial Reporting Made Easy & Alternate Employee Benefit Plans
– Marc Pimentel, CSMFO Monterey Bay Chapter Chair

Orange County & CMTA Division 9 MeetingNovember 18

“Be Prepared – Business Continuity”
– Kathryne Daniels, Bank of America Merrill Lynch

San Gabriel Valley Chapter Luncheon – 20 November

Potential Changes in CalPERS Rates and Other Actuarial Peals of Wisdom
– Mary Elizabeth Redding, Bartel & Associates

Inland Empire & CMTA Div 8 Meeting – 21 November

Year-End GASB Updates
– Terry Shea, Rogers, Anderson, Malody & Scott, LLP


Education Opportunities

2013 CSMFO Annual Weekend Training Seminar, Los Angeles, CA
– November 15, 9:00 a.m. – November 18, 12:00 p.m.

Intermediate Governmental Accounting, Lincoln, CA
– November 21, 8:00 a.m. – 5:00 p.m.

  • Susan Mayer

Intermediate Governmental Accounting, Gilroy, CA
December 12, 8:00 a.m. – 5:00 p.m.

  • Susan Mayer

Career Opportunities

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.