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GFOA Newsletter
February 16, 2017
EMPLOYMENT ADS  |  TRAINING  |  BEST PRACTICES
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GFOA Executive Board Approves Five Best Practices 

The GFOA Executive Board approved three new best practices and updated two existing best practices at its January 2017 meeting. These documents provide recommendations to government finance officers in the areas of governmental debt management, treasury and investment management, and retirement administration and benefits administration.

Interested in learning more about these best practices from the committee members who developed them? GFOA has scheduled an Internet training seminar for April 20, 2017, at 2 to 4 p.m. (Eastern) to provide more information on the best practices and how all governments can implement the recommendations. Speakers will include members of the committees that developed the best practices. Click here for more information or to register.

Investment Program for Public Funds: This new best practice recommends the steps governments should take when establishing a public funds program, which is essential to effective financial management. This best practice sets the foundation for creating protocols and internal controls, constructing and managing the portfolio, navigating changing economic conditions, and communicating information to stakeholders.

Procurement of Financial Services: Part of ongoing due diligence includes regular competition for the procurement of services. This best practice recommends that governments review their financial services contracts every five years and use a competitive process for the procurement of financial services. It also provides evaluation criteria for responses.

Electronic Payments: This best practice recommends governments use electronic payments for all payments. Moving funds electronically is efficient, effective, and common within local government; however, many governments still rely on producing paper checks to distribute funds. This method is not only costly, but includes additional risk for fraud, requires additional handling and processing time, and is more difficult to track than using electronic payments.

Refunding Municipal Bonds: This revision clarifies the recommendation that issuers include guidelines in their debt management policies that address preservation of future refunding flexibility when issuing any debt, formal refunding objectives, and monitoring of refunding opportunities on outstanding debt. GFOA also recommends that when evaluating a refunding transaction, issuers should analyze their refunding objectives, the efficiency of any related escrow, and the unique aspects of executing the refunding transaction.

Defined Contribution Retirement Plan Design: This revised best practice updates the recommendations for a government providing a defined contribution plan as the primary retirement vehicle for employees. These include analysis to determine the cost of providing the benefit and determining whether employees are eligible for a federal insurance program that provides benefits to retired people (e.g., Social Security).

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Association News
New Online Tools Available for Issuers

When a government issues municipal bonds to finance public projects, timing is everything. Several of GFOA’s best practices provide issuers with recommendations about timing, including Debt Management Policy, Refunding Municipal Bonds, and Selecting and Managing the Method of Sale of Bonds. Governments need to consider many details such as other transactions expected to enter the market around the same time and major economic data reports that can influence financial markets.

When applying these and other best practices, governments may consider using tools to evaluate the timing of bond issuance. The Electronic Municipal Market Access (EMMA) website can be a source of information for state and local governments as they make the decision to borrow and plan their transaction by using two new tools recently added to the EMMA website.

  • EMMA’s New Issue Calendar enables issuers to see the breadth and depth of new bond issues scheduled to come to market in the weeks ahead. This modifiable tool allows users to filter by state, tax status, and whether the issue is bank qualified. It also provides final pricing information for bond issues, giving issuers the ability to identify, monitor, and compare yields and prices of similar issues that have recently sold.
  • EMMA’s Economic Calendar provides a look at the upcoming economic reports and events that may have an impact on the municipal bond market.

Both the economic calendar and the new issue calendar are available to issuers in the Tools and Resources area of the EMMA website. 

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Local Government Wireless Siting Authority Faces Potential Threats at the State and Federal Levels 

In recent weeks, several state legislatures have seen the introduction of legislation that seeks to limit the authority of local governments over wireless siting policies. Local governments generally have a substantial interest in managing public spaces because they must balance the considerations for public health, safety, and aesthetics with the need to facilitate the deployment of emerging technologies. Unfortunately, the legislation being pursued in various state houses would take away local authority over public rights of way as it relates to “small cell” wireless equipment. For example, a bill introduced in the Minnesota legislature would provide the wireless industry with unregulated access to public rights of way and restrict the ability of local governments to negotiate fees that help to support their maintenance and management. 

Meanwhile, in a somewhat related matter, the Federal Communications Commission (FCC) is also considering a petition, filed in late 2016, that seeks to “streamline” wireless siting policies. In particular, the petition filed by Mobilitie LLC, if granted, would substantially affect the way local governments set the fees charged for the private use of the public rights of way. An adverse ruling by the FCC could result in the substantial loss of local government revenue and essentially grant one industry preferential treatment with respect to public rights of-way. In December 2016, GFOA joined other organizations representing local government in requesting an extension to file comments responding to the petition. The FCC granted an extension and comments are now due March 8, 2017.

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GFOA’s Annual Conference: Where the Public Sector Meets, Learns, and Networks

We’re excited for this year’s big event! Check out session listings posted here. You do not need to sign up for sessions in advance − once onsite, simply attend the sessions of your choice. Concurrent sessions will begin at 1:30 p.m. on Sunday, May 21, and will end at 12:10 p.m. on Wednesday, May 24. Earn more than 20 CPE credits with your participation.

Help us plan and sign up your guests! There is no registration fee for guests or children, but they must be registered to attend GFOA’s Welcome Reception and to be allowed in the Exhibit Hall. If you have not yet provided the names of guests and children who will be accompanying you to the conference, e-mail their names to badges@gfoa.org.

If you’re not yet registered, click here to sign up today! Questions? Contact GFOA.
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Learn the Essentials of Debt Issuance at GFOA’s Preconference Seminar

The municipal marketplace is rapidly evolving after a push from investors and the federal government over the last few years for stronger disclosure requirements. GFOA’s preconference seminar, Essentials of Debt Issuance, on Saturday, May 20, from 1 to 5 p.m. at the Colorado Convention Center, will provide an overview for issuers and other marketplace participants on how current debt issuance and management trends are affecting public-sector entities.

Presenters will guide participants through the responsibilities before, during, and after bonds are sold, common transaction stakeholders, rating agency expectations, as well as other functions of debt management. This seminar will feature practical examples, highlight recent regulatory changes, and encourage interactive discussion on each topic. Relevant best practices, advisories, and resources created by GFOA’s Committee on Governmental Debt Management will also be discussed.

Participants will gain a better understanding of the risks associated with issuing debt and how to navigate an increasingly complex marketplace. Click here for more details and to register.

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Gain School Budgeting Best Practices this March in Chicago, Illinois, or Ashland, Virginia

Don’t miss GFOA’s in-person seminar on School Budgeting Best Practices March 9-10, at GFOA’s offices in Chicago, Illinois, or March 14-15 at the Hanover County and Hanover County Public Schools Fleet Services Building in Ashland, Virginia. Participants will get hands-on, practical information about how to implement GFOA’s new best practices in school budgeting, including guidelines for developing a comprehensive budget process that fosters collaboration between academic and finance staff on creating strategic goals. The end goal is a focus on aligning scarce resources with optimal student achievement. Tools from GFOA’s Smarter School Spending website will also be highlighted; these examples will help participant understanding and offer lessons they can apply to their own budgets.

Space is limited. Earn 16 CPE credits with your participation. If you have any questions about the training, contact GFOARegister today!

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Don’t Miss GFOA Training in Portland this April

GFOA provides professional development training opportunities to thousands of state, provincial, and local-level government officials and other finance practitioners each year. Training courses are presented as basic, intermediate, advanced, update, or overview.

Come to The Benson in Portland, Oregon, April 3−7, for one or more of the following courses:

Save with early and group discounted rates.  If you have any questions about the training, contact GFOA.

Register today! Registration form / Hotel details
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News Links
Diminishing State Aid Leaves Local Governments Looking for Coping Strategies

Many states are providing local governments with less financial aid than they did before the Great Recession, and given sluggish state revenue growth, the trend isn’t likely to end soon, according to Governing. More states are expecting revenue numbers to come in below projections than in any year since 2010, a recent survey by the National Association of State Budget Officers found. “Local governments and school districts in 16 states incurred inflation-adjusted cuts exceeding 10%. Going back further, real intergovernmental revenues from states have grown nearly three times slower than localities’ own-source general revenues since fiscal year 2000,” the article reported. The situation leaves local governments to develop new strategies to cope, and most municipalities have needed to make substantial cuts in their budgets; for example, “387 Ohio municipalities asked voters to approve new tax levies or replace existing ones, many for the first time in decades.”

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Retiree Benefit Funding Picture Better than the Headlines Indicate

The state and local governments with the largest cost burdens face enormous challenges and unpleasant solutions, but the general situation isn’t nearly as dire as the worst headlines indicate. The picture for U.S. cities’ overall combined costs – pensions, other post-employment benefits such as health insurance, and payments on all government bonds – is a mix of a handful of deeply troubled jurisdictions and many where the costs appear manageable, according to a recent study by The Center for Retirement Research at Boston College. The eight major cities with the highest total cost burdens range from the predictable – Chicago and Detroit – to surprises such as Wichita, Kansas, and Portland, Oregon. The combined costs for counties are also mostly manageable, although California, with its system of large county governments, has six of the seven U.S. counties with the most burdensome long-term costs. The other is Cook County, surrounding Chicago. Costs also appear manageable for most states. Those with the highest combined costs are Illinois, New Jersey, Connecticut, Hawaii, Kentucky, Massachusetts, Rhode Island, and Delaware. The study notes that states with high pension burdens also tend to have high costs for retiree health benefits.

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Innovative Leaders Have Five Skills in Common

Analysis identifying competencies show that the most innovative leaders, According to Harvard Business Review:

  • Manage risk. “Innovative leaders scored 25% higher than their non-innovative counterparts on managing risk. Innovative leaders are bold when it comes to experimenting with new approaches.” Suggestions for improvement in this area include identifying, documenting, and planning for risks as part of developing strategic alternatives.
  • Demonstrate curiosity. Innovative leaders “actively take the initiative to learn new information, which demonstrates engagement and loyalty to company goals.” One way to improve in this area is to evaluate your current knowledge and skills and how they will help achieve long-term goals, and identify what other skills or knowledge would move you in this direction.
  • Lead courageously. Innovative leaders “turn tough circumstances into prime opportunities to demonstrate their decisive capabilities and take responsibility for difficult decision making…When facing a tough decision, consider the alternatives, identify and confront risks, and prepare to deal with other people’s reactions.”
  • Seize opportunities. Innovative leaders “anticipate potential obstacles before taking action, but avoid over-analysis.” To become more adept at seizing opportunities, “examine setbacks and problems related to creating new opportunities and competitive strategies within your own company. Learn to see advantages in changing situations and new developments.”
  • Maintain a strategic business perspective. Innovative leaders “thoroughly understand the business, the marketplace, and the customer base and are adept at identifying strategic opportunities or threats for the business.” One way to help develop this perspective is to “perform a knowledge-based SWOT (strengths, weaknesses, opportunities, and threats) analysis, comparing your organization’s knowledge to that of its competitors and to the knowledge required to execute your organization’s own strategy.”
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Editor: Marcy Boggs  |  Executive Director/CEO: Jeffrey Esser

The GFOA Newsletter (ISSN 1051-6964) is published weekly by
the Government Finance Officers Association of the United States and Canada.
Correspondence regarding editorial and/or business matters should be sent to
GFOA, 203 N. LaSalle St., Suite 2700, Chicago, IL 60601-1210. Phone - 312/977-9700 FAX - 312/977-4806.

 


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