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April 2013 MiniNews

  • Willdan Financial Services
  • Harris.
  • Cutwater Asset Management
  • PFM Asset Management LLC
  • 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

The Role of the Governmental Accounting Standards Board (GASB) and Our Opportunity to Influence It

A recurring topic of conversation among municipal finance professionals is the role of GASB. The conversation usually involves someone saying: Why do “they keep doing this to us?” It is sometimes difficult for us to understand how changes in GASB standards are useful, or if they are changes for the sake of change.

CSMFO leadership has been having discussions about how to have some influence in the process that GASB undertakes as it makes new standards and now it appears that there is a place to voice our concerns.

The Financial Accounting Foundation (FAF, parent of GASB) has just issued for comment a proposal to modify GASB’s scope of authority and the internal procedures for making scope determinations. GFOA has been advocating this for years and believes that this proposal is a major step in the right direction.

FAF commissioned an independent academic study to explore the purposes of financial accounting and reporting and discussed how GASB can best serve its stakeholders.

The following passages are taken from FAF’s Request for Comment document:


The Trustees believe a principal study finding was that the GASB’s independence and rigorous due process it follows in establishing standards are highly valued and well-respected. The study also found that the notion of government accountability has multiple dimensions. Besides financial accountability, other types of accountability include political accountability, accountability for performance in dynamic/new situations, fairness, and responsiveness.

There is a lack of shared understanding about which aspects of accountability are suited for assessment through financial reporting. This lack of shared understanding has led stakeholders to adopt differing views about the scope of GASB’s activities and involvement in accountability reporting. Although some areas of governmental accountability may be beyond its scope, there is no bright line for demarcating the limits of the GASB’s scope of authority. Given the multiple dimensions of governmental accountability, it would be difficult to set bright lines for information within the GASB’s scope of authority.

The Trustees have been exploring the potential for better defining and distinguishing the nature of GASB’s authority in setting standards for financial accounting and reporting. There are areas of financial reporting generally considered by stakeholders to be clearly within GASB’s authority. In other areas of financial reporting there is less agreement and a wider range of views. Some of the areas where there is less agreement may fall into the overlapping categories of reporting information labeled by the study as “financial accountability reporting” and “expanded accountability reporting.”

The Trustees are considering whether process or procedural enhancements will help clarify the GASB’s scope of authority and better enable the GASB to serve stakeholders within the context of its mission. To that end, the Trustees have been discussing with the GASB its process for placing issues on its research and technical agendas, ultimately resulting in governmental accounting standards and guidance. The Trustees are seeking stakeholder input on proposed changes to the GASB’s agenda-setting process. They believe stakeholder views will provide valuable input on whether the proposed changes will help resolve the GASB’s scope of authority issues while maintaining GASB’s standard-setting independence.

The question being addressed is how GASB sets its agenda and whether the agenda setting process has the proper amount of transparency. I encourage you to express your opinion! The comment period ends on April 30, 2013.

See the links below for more information.

Information about the GASB Scope Project
http://www.accountingfoundation.org/cs/ContentServer?c=Page&pagename=Foundation%2FPage%2FFAFSectionPage&cid=1176162236146

Financial Accounting Foundation news release
Financial Accounting Foundation Seeks Stakeholder Input on Proposed Changes to GASB Agenda-Setting Process
http://www.accountingfoundation.org/cs/ContentServer?c=FAFContent_C&pagename=Foundation%2FFAFContent_C%2FFAFNewsPage&cid=1176160985294

Financial Accounting Foundation Board of Trustees
GASB’S SCOPE OF AUTHORITY: PROPOSED CHANGES TO AGENDA-SETTING PROCESS REQUEST FOR COMMENT

http://www.accountingfoundation.org/cs/ContentServer?c=Document_C&pagename=Foundation%2FDocument_C%2FFAFDocumentPage&cid=1176160985576

 


Executive Director’s Message

By: Melissa Dixon, CAE

Did you know members from any of your agency’s departments can attend CSMFO courses? It doesn’t have to be just your finance folks. In fact, we recently sent out a promotional mailer to every city* announcing the upcoming Introduction to Government Accounting courses and suggesting other department heads attend. These courses are really a perfect way for non-finance agency staff to gain a baseline understanding of local government finance. Please encourage your colleagues in all departments to take advantage of these opportunities!
Upcoming Courses:

May 1 in Camarillo
June 19 in Ceres

These are the more immediate courses, but please check back to our training page to find all of our upcoming educational opportunities!

In other news…where do you want to see the Annual Conference in 2015? The Site Selection Committee has been hard at work trying to determine the best possible location and venue. Recently we’ve looked at Sacramento, Monterey and Santa Clara, all of which have their own pros and cons. The committee will meet later this month to make a recommendation to the Board, but I wonder what you, the members at large, think about these options. We had a record-breaking turnout in Oakland, some say due to the easy commute for so many agencies within driving distance. Others think it was due to the ‘urban feel’ and suggest Sacramento might therefore be the best draw. Others still think Monterey is a harder to get to, but the “destination” conference might encourage folks to come early or stay later and combine work and play.

While there are a number of considerations that I can’t go into here (size of the available meeting space, location of the exhibitors, room rate of the hotel, cost of the meeting space) that the committee will be deliberating, if you care to take a moment and share your thoughts on these potential locales, I’d love to hear from you – melissa.dixon@staff.csmfo.org.

*Please don’t take offense if you’re with a county or special district; this is more of a pilot mailer.

 


Don’t Forget About Your Infrastructure

By: Eric Johnson, Revenue & Cost Specialists

A recent report by the California Statewide Needs Assessment Project, a coalition of local government groups, identified more than $82 billion in repairs and reconstruction needs on California’s local streets.

This, of course, is not news for those that follow such things. As local government starts to emerge from the crater that was the Great Recession, it is important to keep the needs of your local infrastructure in mind.

For most local agencies, the CIP budget was one of the first areas that was cut and then was left at that level, or cut even more, in following years. But that means you may have a ticking time bomb at ground level and underneath the ground waiting for the next big storm to expose it.

What can be done? The first step is to identify the scope of the problem in your agency. While the GASB asset reporting requirements were a step in the right direction when they first came out, they are inadequate in determining the real scope of the problem due to the use of historical numbers. What good is it to know how much it cost to put in a street 30 or 40 years ago? You need to identify what your funding needs for infrastructure are today and into the future, not 30 or 40 years ago.

You can get better information. One option is to compile a Master Facilities Plan, which identifies your current infrastructure, the condition of that infrastructure and most importantly, identifies the projects and costs to keep that infrastructure at a level that maximizes the life of the asset.

Another option is to identify how much infrastructure currently exists, and using current unit replacement costs (e.g. cost per square foot for street replacement) calculate the total cost of your infrastructure. Then divide that by the expected life of each asset to calculate the annual replacement cost. This is the current replacement depreciation number. Or put another way, this is the amount you should be spending, on average over time, on an annual basis to keep your infrastructure in its current condition. If you are spending less, your infrastructure is deteriorating. This option is less detailed and therefore less accurate than the first option, but it at least identifies what ballpark you are in with regards to funding needs.

This is crucial to do because for every year that you try to stretch out a piece of infrastructure, the more that it will cost to replace it when it finally breaks. It’s like with your car; if you properly maintain it then it will last longer. If not, you will find yourself buying a new car a lot earlier than you thought you would.

Once you have identified that number for your streets, street lights, traffic signals, sidewalks, curbs, gutters, storm drains, water and sewer systems and all of the other things that make your city function, then you can start to talk to the decision-makers about why these needs are so important.

Ultimately this is similar to the unfunded liabilities with retirement benefits. You don’t have to pay for the entire liability all at once, but funding to cover the entire liability should be identified.

Before long, tax revenues will start to inch up and there will be a hue and cry to restore staffing levels that were cut in the last few years. By identifying the scope of the infrastructure backlog in your agency now, you will be able to make sure that infrastructure’s voice is heard before any decisions about staffing levels are made.

Eric Johnson
Revenue & Cost Specialists
eric@revenuecost.com
714.992.9027

 


Successor Agency Cash Flow Tips

By: Alexa Smittle and Tara Howard, Rosenow Spevacek Group, Inc. (RSG)

PMany redevelopment successor agencies around the state are facing cash shortages for a multitude of reasons and are looking for solutions to help fill the gap. Successor agency income is limited to two, roughly equal, distributions from the county, that are swept away if not needed immediately in the following six-month period. Though solutions to this problem are limited within the confines of the Dissolution Act and the implementing actions of the State Department of Finance, some successor agencies have found success with the following approaches to these short-term cash flow issues:

1. The simplest solution for cash flow shortages may be a loan from your general fund to the successor agency. Careful consideration should be executed to ensure that funds are available and that the successor agency will receive sufficient revenue in the future to repay the loan. The loan should be documented well and must be approved by Oversight Board. These seem to work best in situations where one-time cash flow issues are present.

2. Some successor agencies have found success either creating bond reserves or receiving DOF approval to divide large principal payments over both ROPS periods. A long-term cash flow will help you be ready for semi-annual shortages that occur when principal payments are due or balloon payments appear.

3. Don’t miss the deadline to file a notice of insufficient funds with your county auditor-controller, which is May 1, for the ROPS 13-14A period. The county auditor-controller has the ability to take funds paid into the successor agencies RPTTF (e.g. DDR revenue, proceeds from asset disposition, residual revenue, etc.) and allocate them back to the successor agency to cover cash flow shortages. Timing is everything – this must be done before the funds are disbursed. Many counties are unsure how to react to these filings, so be sure to walk them through the process.

4. If you have property assets to dispose of, push forward on your Property Management Plan so it can be submitted to DOF immediately after your finding of completion. If approved, you can liquidate property and cover cash flow shortages with the proceeds.

Alexa Smittle, Senior Associate, and Tara Howard, Associate, are advisors to several dozen successor agencies in California and active contributors on the California Redevelopment Association technical committee and other professional organizations engaged in assisting communities finance and implement community development programs.

 


Resources for Budget Season Available from ILG

The Institute for Local Government offers a wealth of free resources to help local agencies engage their residents in the budgeting process.

There are many good reasons to include the public in discussion about local budgeting. Such involvement can:

  • Better inform residents about local agency budgets, including revenues, expenses and challenges.
  • Generate support for workable budget solutions in light of local priorities, needs and constraints.
  • Through transparent and inclusive processes, sustain and grow public trust and confidence in the budget decision-making process and decision-makers.

Resources include:

Want to stay up to date on the Institute’s public engagement offerings? Sign up for the Institute’s e-newsletter at http://www.ca-ilg.org/public-engagement-1.

Does your community have a budget-related public engagement story to share? Feel free to share with us at: http://www.ca-ilg.org/post/share-your-agencys-public-engagement-story

The Institute for Local Government values your feedback on resources and how we can best serve your needs. If you have questions, comments or suggestions, please contact Katelyn Downey at kdowney@ca-ilg.org

 


Save the City Business Tax Program!

The California Municipal Revenue and Tax Association ask for your city’s support for SB 211 (Price). This bill extends the life of the Franchise Tax Board’s City Business Tax program, which has significantly benefited participating cities over the years. By obtaining free FTB listings of local business-related tax filers, cities have identified thousands of unlicensed businesses in their jurisdictions and collected past due business license revenues. The 17 cities that have reported their results to CMRTA have collectively raised well over $60 million.

Unfortunately this program is scheduled to sunset at the end of 2013, so we need your support to keep it going. If you would like help save the City Business Tax program or learn more about it, please contact CMRTA President David McPherson at (510) 238-6650 or DMcPherson@oaklandnet.com. CMRTA will provide a template letter of support for SB 211 to be sent to key legislators.

 


CSMFO’s Accounting and Fiscal Policy Classes

CSMFO offers Introductory, Intermediate Governmental Accounting and Fiscal Policy Training classes throughout the year. Each class is taught separately by highly respected instructors. We are thankful to our instructors for their time and commitment. One of our long time instructor’s, Kathryn Beseau, for the Intermediate Governmental Course, retired and we want to thank her for her years of service to CSMFO. In February the Board approved a new contract with Susan Mayer who will assume the role of instructor. We are excited to have her on board to teach this important intermediate course, and will begin to schedule courses soon. We have also been busy scheduling courses for the upcoming years but we are still looking for host agencies. To date, we are excited to offer the following Accounting and Fiscal Policy Classes. Please look to see where you or your staff can benefit from these courses.

Introduction to Government Accounting – Instructor Ahmed Badawi

City of Camarillo – May 1, 2013

City of Ceres – June 19, 2013

Power of Fiscal Policies / Long Term Financial Planning – Instructor Bill Statler

City of Agoura Hills – April 11, 2013

City of Riverside – May 9, 2013

Coachella Valley Water District – September 12, 2013

City of Lakeport – October 10, 2013

Interested in Hosting? Here are the requirements:

The accounting classes are appropriate for individuals that have some accounting background, but may be new to the government sector or for employees who have recently assumed responsibility for financial and accounting reporting. The classes are also appropriate for anyone interested in brushing up on basic government accounting skills. Once a basic understanding of accounting concepts is reached, these concepts can easily be applied to the unique requirements of the governmental area.

Host site requirements for the accounting classes include:

  • A minimum of 20 registrants
  • Seating for 60 participants with tables and chairs
  • One rectangular table up front for speaker
  • Table and chair in back for registration
  • ***Room open and available at 8:00 a.m. for set-up (*** 7:30 a.m. for Intermediate classes)
  • Parking alternatives for up to 60 participants, preferably free parking
  • A computer with a remote to advance PowerPoint slides
  • A port to allow for a USB flash drive
  • A screen and projector

The host site will need to provide lunch (with beverages) and light morning/afternoon refreshments for the attendees. The host site will be reimbursed actual costs up to $15 per attendee, including the instructor, by CSMFO.

The Fiscal Policy Training classes are offered as half-day or one-day sessions. Good times come and go, but your values shouldn’t – which is what fiscal policies are all about. Setting clearly articulated fiscal policies builds a strong foundation for protecting your agency’s long-term fiscal health. As recent economic events have shown, no agency is immune to economic downturns. But agencies with clear fiscal policies in place with a tradition of following them have a significant strategic edge over those that don’t. Policies make tough decisions easier by providing guidance both when times are good by preventing problems to begin with, as well as when the inevitable tough times do arrive.

Host site requirements for the fiscal policy training classes include:

  • A minimum of 10 registrants
  • Seating for 60 participants with tables and chairs
  • One rectangular table up front for speaker
  • Table and chair in back for registration
  • ***Room open and available at 7:30 a.m. for set-up (*** 12:30 p.m. for afternoon sessions)
  • Parking alternatives for up to 60 participants, preferably free parking
  • A computer with a remote to advance PowerPoint slides
  • A port to allow for a USB flash drive
  • A screen and projector
  • Location convenient to lunch options for attendees (preferred)

The host site will NOT need to provide lunch or refreshments for the attendees. Attendees are on their own for lunch.

For all classes, the host site gets two free attendees. Unless otherwise provided by the hosting agency, one of the attendees will be designated to registering participants, checking room set-up, assisting the presenter, assisting with food and assisting with set-up as needed.

CSMFO will handle the online registrations and fees for the classes.

CSMFO and the host site will be responsible for marketing and promoting the courses. The host site is strongly encouraged to market and promote the courses to local agencies and chapters to maximize attendance.

If you are interested and able to host any of the classes in 2013, or for more information please contact Margaret Moggia, Board Liaison to Career Development Committee, at margaretm@westbasin.org.

 


Coaching Corner

Elected officials and the public demand clear, effective budget communications. Don’t miss this opportunity to learn best practices — just in time for your budget presentations. Scott Catlett and Ken Brown earned rave reviews for this session at the CSMFO Annual Conference. Now, you and your staff can benefit from it.

“Best Practices in Communicating Your Budget Effectively” — webinar
10:00 – 11:30 a.m. PT, Wednesday, April 24, 2013
CSMFO Coaching Program
*** Advance registration required for this no-charge webinar: https://www1.gotomeeting.com/register/818942704

Panel topics:

  1. The problem with budget documents
  2. Suggested solutions
  3. The Riverside approach
  4. The Irvine approach
  5. Questions & Answers

Presenters:
* Scott Catlett, Asst. Finance Director, Riverside
* Ken Brown, Manager, Budget & Business Planning, Irvine

Audience: finance professionals

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.

1. Register in advance for the webinar:
There is no charge for participating in the webinars, but each requires advance registration.
*** Advance registration required for this no-charge webinar: https://www1.gotomeeting.com/register/818942704

2. Connect with the webinar and audio:
Use your logon information from the email confirmation you receive via email from GoToWebinar. We recommend the Use Telephone option dial-in number provided by GoToWebinar for sound quality. Depending upon your internet connection, VOIP option for audio (computer speakers) can have delays or sound quality issues.

3. Ask questions:
You may submit questions anonymously via email to CSMFO@DonMaruska.com in advance or via the webinar during the panel discussion. As moderator for the session, Don Maruska will pose the questions.

4. Presenters’ presentation materials:
We post these with the agenda at “Live Audio & Archives” tab of www.csmfo.org/training/csmfo-webinars-and-hot-topic-calls. The PPT will be available about 2 hours before the webinar.

After a webinar occurs, a digital recording along with the PowerPoint materials and results of the polling questions will be available within 24 hours at the “Live Audio & Archives” tab of www.csmfo.org/training/csmfo-webinars-and-hot-topic-calls.

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.

a. What challenges do we have with communicating our budget information?
b. Which tools and approaches from this webinar might we apply for our agency?
c. What actions can we take now to enhance communication of this year’s budget?

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.

Enjoy the resources and support to thrive as a local government finance professional.
Don Maruska, Master Certified Coach
Director, CSMFO Coaching Program
See “Coaching Corner” at www.csmfo.org/coaching

 


Welcome New CSMFO Members!

  • John Augustyn, Deputy Finance Director, Thousand Oaks
  • Melissa Bellitire, Associate Financial Analyst, Albert A. Webb Associates
  • Robin Borre, Management Analyst II, Rancho Cordova
  • Rob Braulik, Town Manager, Town of Ross
  • Mary Case, Partner, Moss Adams LLP
  • Jack Castro, Finance Director, City of Parlier
  • Nila Cordova, Director of Fiscal Services, San Joaquin Regional Rail Commission
  • Ryan Cunha, Mayer Hoffman McCann P.C.
  • Debora Dickerson-Sims, Administrative Supervisor II, San Bernardino County
  • Connie Gee, Accountant II, Santa Ana
  • Juston Glass, Financial Analyst, Santa Clara
  • Melissa Hurtado, Revenue Operations Manager, Thousand Oaks
  • Erik Kapeller, VP/Relationship Manager, BBVA Compass
  • Irene Lui, Controller-Treasurer, San Jose
  • Jane McDermott, Accountant, Murrieta
  • Gita Mehirdel, Senior Accountant/Manager, Redwood City
  • Jerry Merritt, Controller, Monterey Peninsula Airport District
  • Bob Quaid, Interim Finance Director, Central Basin Municipal Water District
  • Yin Tai, Financial System Analyst, City of Millbrae
  • Jill Taura, Finance Director/City Treasurer, Glendora
  • John Williams, Institutional Investment Officer, Wells Fargo Securities
  • Mary Williams, Financial manager, Long Beach

 


Education Opportunities

Tax Allocation Bonds for Successor Agencies” Webinar
April 9, 11:30 a.m. – 1:00 p.m.

  • Jim Cervantes, Sussan Corson, Mark Northcross, Kurt Yeager

Power of Fiscal Policies (Morning)
April 11, 8:30 a.m. – 12:00 p.m.

  • Bill Statler

Power of Fiscal Policies / Long Term Financial Planning (All Day)
April 11, 8:30 a.m. – 4:30 p.m.

  • Bill Statler

Power of Fiscal Policies (Afternoon)
April 11, 1:00 – 4:30 p.m.

  • Bill Statler

Introduction to Government Accounting
May 1, 9:00 a.m. – 4:30 p.m.

  • Ahmed Badawi – Badawi & Associates

Power of Fiscal Policies (Morning)
May 9, 8:30 a.m. – 12:00 p.m.

  • Bill Statler

Power of Fiscal Policies / Long Term Financial Planning (All Day)
May 9, 8:30 a.m. – 4:30 p.m.

  • Bill Statler

Power of Fiscal Policies (Afternoon)
May 9, 1:00 – 4:30 p.m.

  • Bill Statler

 


Chapter Meetings

Sacramento-Valley Chapter Meeting
April 17
The topic of discussion will be the Elimination of Redevelopment including “war stories”, lessons learned and experiences.

 
Central LA & South Bay Chapter
April 25
Fraud Awareness and Prevention Tips

  • Ernie Cooper, Cooper Forensics & Investigation Group

AB 340 Pension Reform, Healthcare Reform/ “Pay or Play” Rules

  • Marcus Wu, Hanson Bridgett

Channel Counties Chapter Meeting
May 30
Guest Speaker: Michael Coleman from the City of Camarillo Public Library
 


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.