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GFOA Newsletter
June 23, 2016

GFOA’s 2016 Awards for Excellence in Government Finance, Part 2

GFOA recently announced the winners of its 2016 Awards for Excellence in Government Finance: the California Public Employees’ Retirement System’s risk mitigation initiative, and the City of Baltimore’s OutcomeStat (featured in last week’s newsletter). The awards recognize contributions to the practice of government finance that exemplify outstanding financial management, stressing practical, documented work that offers leadership to the profession and promotes improved public finance. The Awards for Excellence were presented at the GFOA’s annual conference in Toronto, May 24, 2016.

CalPERS received the award for its “A Balanced Approach to Risk Mitigation” initiative. The concept was developed to help reduce the pension fund’s unfunded liability, providing greater predictability of contribution rates, along with lower volatility. The fund used an integrated asset liability management framework designed to reduce risk and volatility in the pension system by incrementally lowering the discount rate in years of good investment returns and adjusting the asset allocation to account for the new discount rate. 

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Association News
There’s Still Time
Register for July Training Sessions in Columbus

GFOA will host six training seminars in Columbus, Ohio, from July 18 to 22:

Group discount. Register with three or more colleagues for the same seminar and get a 10% discount on each registration fee. Registrations must be received and paid together. This discount cannot be applied to online training registrations.) Submit a training registration form or sign up using GFOA’s e-store.

A block of rooms has been reserved for GFOA attendees at The Renaissance Columbus Downtown Hotel. Click here for more information on special GFOA group rates.

For ideas on what to do while in Columbus, go to Experience Columbus.
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eBook Now Available
Avoid Common Mistakes in Interpreting Financial Statements

We are all familiar with the notion of optical illusions, such as a mirage in the desert or the wheels on a speeding car that appear to be turning backward. So too in local government financial statements, certain items are not always necessarily what they at first appear to be. Such “financial statement illusions” can easily lead to serious misinterpretation and bad decisions.

GFOA’s new publication, An Elected Official’s Guide: Interpreting Local Government Financial Statements — How to Avoid 25 Common Mistakes (available in both eBook and print form), aims to help minimize that risk by examining 25 specific and commonly encountered mistakes. The goal is not just to serve those who seek to improve their own knowledge of local government financial reporting, but also to assist financial reporting professionals who desire a practical approach for sharing their knowledge with others.

For information about quantity discounts, e-mail GFOA Publications.

Download the order form (mail, fax, or scan and e-mail to GFOA) or order online.
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GFOA eBooks Have Everything Printed Books Offer—and More

With an eBook, you can:

  • Use the quick, robust search engine to navigate easily, finding specific words or phrases. You can also search the eBook while reading the printed book to easily locate information.
  • Set bookmarks, take notes in the margins, and highlight key passages.
  • Customize the font size—especially useful when reviewing financial information or statistical charts.
  • Link to individual chapters, footnotes, and appendices.

GFOA Accepting 2016 Standing Committee Membership Applications

GFOA Accepting 2016 Standing Committee Membership Applications Primary tabs View(active tab) Edit Outline Revisions Clone content Wednesday, June 17, 2015 Applications to become a GFOA standing committee member are being accepted through July 22. Serving on a standing committee is an excellent opportunity for GFOA members to contribute their experience and knowledge to the entire membership.

GFOA's seven standing committees meet twice each year and develop best practices, advisories, and policy statements for the approval of the Executive Board and membership. GFOA associate members from the private sector may also apply to be advisors to one of the committees.

The GFOA’s seven standing committees are: Accounting, Auditing and Financial Reporting; Canadian Issues; Economic Development and Capital Planning; Governmental Budgeting and Fiscal Policy; Governmental Debt Management; Retirement and Benefits Administration; and Treasury and Investment Management. 

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Another Move in the Marketplace Fairness Chess Game

An Internet retailer has filed suit against the State of Alabama, claiming its new rule requiring that all retailers selling more than $250,000 in goods annually must collect sales tax – regardless of whether the retailer has a physical presence in the state – is unconstitutional. This is not the first lawsuit of its kind; a suit was filed earlier this spring challenging the State of South Dakota’s law, which is similar to the Alabama rule.

The Alabama lawsuit was filed in the Alabama Tax Tribunal, while the South Dakota lawsuit was filed in state court. Until either of these cases reaches the U.S. Supreme Court, the states will face an uphill battle. A ruling in favor of the states would require the administrative agencies or lower courts to nullify Quill v. North Dakota, a step that lower courts are often reluctant to take. But because all administrative agencies and lower courts are required to follow rulings of the U.S. Supreme Court, the strategy of the GFOA, along with the State and Local Legal Center, is clear: Encourage these states to pursue the case so that it may reach the U.S. Supreme Court.

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Jurisdictions Receive First-Time Certificate of Achievement for Excellence in Financial Reporting

Congratulations to the following entities that have received the Certificate of Achievement for Excellence in Financial Reporting for the first time: Merced Irrigation District, CA; Worth Park District, IL; Crest Hill, IL; Addison Fire Protection District #1, IL; Grayslake, IL; Damascus, OR; Community High School District 155, IL; Dinwiddie County, VA; Herriman, UT; Greenwood School District 50, SC; Western Tidewater Regional Jail, VA; Aldine Independent School District, TX; Allen Independent School District, TX; White Pine County, NV; Gallatin Airport Authority, MT; Marin Transit, CA; California Joint Powers Risk Management Authority, CA; Laguna Woods, CA; Jersey City Housing Authority, NJ; City of Fountain Valley, CA; Kings Park Central School District, NY; Bloomingdale Fire Protection District #1, IL; Biltmore Forest, NC; Burlington, MA; Fillmore, CA; Red Bluff, CA; Trumbull, CT; Washington County, TN; Castro Valley Sanitary District, CA; Happy Valley, OR; Rhode Island Health & Educational Building Corporation, RI; Camrosa Water District, CA; North Central Regional Transit District, NM; Pinal County Community College District (Central Arizona College), AZ; Independence, OR; Kimberly Heights Sanitary District, IL; and Monterey Peninsula Water Management District, CA.

It’s easy to participate. Submit the completed CAFR, along with an application. The normal submission deadline is six months following the government’s fiscal year end. Jurisdictions can request a one-month extension because for reasons including employee turnover, implementation of major pronouncements, or audit issues. Reports for the fiscal year ended December 31, 2015, must be submitted by June 30, 2016. If you need an extension, contact CAFRprogram@gfoa.org.

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News Links
Public Pension Funding Grows Slightly to 74% in 2015

The funding status of U.S. public worker pension plans remained nearly unchanged in 2015, rising to 74% in 2015 from 73% in 2014, according to a new study from the Center for Retirement Research at Boston College. Under the Governmental Accounting Standards Board's new accounting rules, with assets valued at market, the funding of pension plans declined slightly, reflecting the poor stock performance in 2015. Required contributions continued to climb in 2015, but plans also stepped up their payments from 86% to 91% of the required amount. If public pension plans meet their assumed expected returns over the next four years, plans should be 78% funded by 2020, the report found. 

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State Budgets Mostly Grow at Moderate Pace

Most state budgets continue to grow at a moderate pace after several years of slow recovery. For the first time, estimated state general fund spending and revenues in fiscal 2016 surpassed their fiscal 2008, pre-recession peak levels after adjusting for inflation. However, the progress has been uneven across states and long-term spending pressures remain in areas such as health care, education, pensions, and infrastructure. A majority of individual states (29) have yet to surpass their fiscal 2008 spending levels (adjusted for inflation), while revenue totals in 23 states remain below fiscal 2008 levels. Total general fund spending grew 5.5 percent in fiscal 2016, equal to the 38-year historical average, while the median growth rate was 3.8%. With revenue growth only expected to be 2.9% in fiscal 2017, governors recommended modest spending growth of 2.5%. Governors recommended a mix of tax increases and decreases for fiscal 2017, with 13 states having net increases and 15 states having net decreases. While some states have recently tapped reserves, 25 states increased their rainy day fund balances in fiscal 2016, and 27 states proposed increases in fiscal 2017.

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Can Batteries Make Solar Work for Local Government?

The small town of Minster, Ohio, uses batteries to deliver more solar power per customer than any other in the country, according to GovTech. Minster might offer a strategy for other small towns and counties that own their own utilities. “The village built a system of lithium-ion batteries with more storage capacity than the solar array’s peak capacity, and are using that system to sell services to the area’s power grid,” the article reported. Studies have pointed to revenue-generating potential in batteries, which can provide services that grid operators are willing to pay for. Batteries can also be used to regulate voltage, to help bring infrastructure back online after a blackout, or to avoid congestion along transmission lines. 

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Advisory Committee on Tax Exempt and Government Entities Presented Recommendations

On June 8, 2016, the Advisory Committee on Tax Exempt and Government Entities (ACT) presented its 15th report of recommendations to the IRS in a public meeting in Washington, DC. The report addressed five issues:

  • Employee plans—analysis and recommendations regarding changes to the determination letter program.
  • Exempt organizations—long-range planning for the future of the IRS and the exempt community.
  • Federal, state, and local governments—revised federal, state, and local government training and communicating with small local governments.
  • Indian tribal governments—survey of tribes regarding IRS effectiveness with current topics of concerns and recommendations.
  • Tax-exempt bonds—recommendations for continuous improvement and enhancing resources in the tax-exempt bond market.

ACT members provide observations about current or proposed IRS policies, programs, and procedures, and they suggest improvements. 

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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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