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GFOA Newsletter
June 8, 2017
Tax-Exempt Municipal Bonds: The Most Vital Tool for Building and Maintaining U.S. Infrastructure

GFOA President Pat McCoy, along with finance officers from across the United States, explained the importance of tax-exempt municipal bonds in building our communities at GFOA’s annual conference in Denver. A video of the press conference is available on GFOA’s website.

The municipal bond tax exemption has a long history of success, having been maintained through two world wars and the Great Depression, as well as the recent Great Recession, and it continues to finance the majority of our nation’s infrastructure needs for state and local governments of all. Tax-exempt municipal bonds have been used to finance more than $3 trillion in critical infrastructure including the construction of schools, hospitals, airports, affordable housing, water and sewer facilities, public power utilities, roads, and public transit.

In 2015 alone, nearly 12,000 tax-exempt bonds were issued to finance more than $362 billion in infrastructure investments. Through the tax-exemption, the federal government continues to provide critical support for the federal, state, and local partnership that develops and maintains essential infrastructure, which it cannot practically replicate by other means.

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Association News
Join GFOA’s Financial Sustainability Research Project

GFOA’s recent research into what it takes for a local government to be truly financially sustainable has uncovered six leadership strategies and eight organizational design principles that lead governments to ongoing financial health. We have also developed a self-assessment technique that will allow local governments to determine the extent to which they exhibit these leadership strategies and institutional design principles.

Now, GFOA is looking for local governments that would like to join with other forward-thinking local government leaders in pilot testing this self-assessment tool. If you’re interested in participating, please e-mail Shayne Kavanagh.

New to Government? New Position?

Get up to speed by signing up to participate in one or both of the following upcoming immersive training programs hosted in GFOA's Chicago office:

Registration form / Register online / Hotel information

We look forward to seeing you soon! For information on what to do while in Chicago, visit Choose Chicago. If you have any questions about GFOA’s training seminars, contact GFOA

Don’t Miss Your Chance to be Part of the 2018 Lineup

We’re seeking the best and the brightest to share the latest research, strategies, and ideas during GFOA’s 112th Annual Conference, May 6−9, 2018, at America’s Center Convention Complex in St. Louis, Missouri! Click here to submit a topic or speaker for the conference.

For information about St. Louis, visit Explore St. Louis. Registration for the conference will open in early November.

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Learn about GFOA's New Budget Award Programs

Consider sending in a submission for one of GFOA’s new budget award programs—for school districts, community colleges, and states, starting with budgets for the fiscal year beginning January 1, 2017. The new program for school districts and community colleges has an expanded focus that encompasses the entire budget process, rather than focusing exclusively on the presentation of the budget document. The new budget award program for state governments will continue to focus on the presentation of the budget document, but program criteria have been modified to reflect distinctive aspects of budgeting at the state level. The program for municipalities, counties, and special districts remains the same.

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Rainy Day Funds and State Credit Ratings

Well-designed rainy day fund policies and timely use can protect against downgrades, according to Pew Trusts. The foundation’s research has found that even in states with the agencies’ highest rating (triple-A), policymakers often are unsure about how best to manage their rainy day funds to earn or keep high credit ratings. As a result, some state officials are reluctant to tap reserves even during recessions for fear of a ratings downgrade. Pew recommends that state policymakers:

  1. Design rainy day funds with clear, objective goals that policymakers can refer to regardless of changes in governors, legislatures, and business cycles.
  2. Structure rainy day funds to be in line with the economy, so that deposits, withdrawals, and savings targets are informed by the state’s revenue volatility and the business cycle.
  3. Base the decision to tap rainy day funds on the state’s fiscal situation, withdrawing money as appropriate during budget crises but resuming deposits when economic and fiscal conditions improve.

For more information, see GFOA’s Fund Balance Guidelines for the General Fund best practice.

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A Formula to Help Prepare for Active Threats

Communities need a “life cycle” approach to preventing and recovering from violent incidents in public places, according to Governing. “Managing active-threat events is not just about response. Preparedness, mitigation, and recovery are equally important.”

While preparedness can take multiple forms—program and site assessments, emergency plans, training, exercises—a good process starts by simply asking the right questions, the article says. Is there an intruder-response plan or policy? Do you know what it is? If there isn't such a plan in place, why not? Understanding the gaps in an organization's preparedness plan is key to determining what actions should be taken, by whom, and when. Once these needs are identified, they should be documented and shared across all levels of an organization. Creating a culture of preparedness requires buy-in from the bottom up, and a collaborative planning process goes a long way in aligning views of multiple stakeholders.

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Following Up on a Difficult Conversation

After difficult work conversations, with a colleague, superior, or direct report, avoid the temptation to pretend it never happened and move on, according to Harvard Business Review. Follow-up is important; you just have to figure out how. “What specifically should you do and say to make things less awkward and to move forward, while also making sure that you’re actually making some progress on the points that were discussed? The article suggests three key steps you can use to rebuild a good working relationship while also making progress on the problem at hand:

  1. Acknowledge that the conversation happened. Otherwise, you’ll feel and your colleague will also be left to guess at how to handle the situation. Follow up, acknowledge the discomfort, and focus on the positive.
  2. Find ways to move the conversation forward. It demonstrates that you are resilient and solutions-oriented, and that you want to stay in the conversation. Send a follow-up e-mail to summarize the conversation and focus on the outcomes you both want.
  3. Focus on building the long-term relationship. Remember that every interaction is just one human being talking to another. If the only interaction you have with someone is a difficult conversation, they may start avoiding you, or only associate you with difficult meetings. 
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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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