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GFOA Newsletter
July 27, 2017
Environmental Impact Bond Project Wins 2017 Award for Excellence

This year’s winning entry in GFOA’s Awards for Excellence in Government Finance is DC Water’s “Managing Project Risk through Environmental Impact Bonds” initiative. These are the nation’s first environmental impact bonds, and they’ll fund the inaugural project in DC Water’s green infrastructure program, which is designed to help control the combined sewer overflow issues on major waterways in the DC area. The bonds will also help mitigate the risk that this initial project might not meet DC Water’s stormwater management requirements.

The bonds’ rate of return depends on the infrastructure’s meeting the requirements, and investors will only be paid if the standards are met. If not, investors will make a risk share payment back to DC Water.

GFOA’s Awards for Excellence in Government Finance recognize innovative programs contributions to the practice of government finance that exemplify outstanding financial management. The awards stress practical, documented work that offers leadership to the profession and promotes improved public finance. 

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Association News
Join One of GFOA’s Standing Committees

Applications to become a GFOA standing committee member are being accepted through July 28, 2017. 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 can 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.

  • Complete the application here.
  • If you are a current GFOA committee member, please complete the application for re-appointment here.

If you have any questions about the committee application, please contact Emily Brock.

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House Subcommittee Holds Hearing on Legislation Affecting State/Local Regulatory and Tax Authority

On July 25, 2017, the House Judiciary’s Subcommittee on Regulatory Reform, Commercial and Antitrust Law held a hearing on H.R. 2887, the “No Regulation Without Representation Act of 2017.” The bill, sponsored by James Sensenbrenner (R-Wis.), was introduced in the 114th Congress and reintroduced for the 115th in June. GFOA and other national organizations have opposed the bill as a broad preemption of state and local government regulatory and tax authority. (See GFOA’s comments for the record.) In particular, the physical presence requirement the bill seeks to implement would be detrimental to the decades-long effort to find a solution that would address the inability of state and local governments to enforce existing sales and use tax laws on remote sales transactions.

The subcommittee heard from four witnesses, only one from the state and local government community – South Dakota State Senator Deb Peters, whose testimony focused on the Tenth Amendment and how H.R. 2887 would hurt states’ rights and hinder their ability to protect the welfare of their citizens. Peters also expressed the frustration of stakeholders who have spent years trying to develop a remote sales tax solution (more broadly supported legislation like the Marketplace Fairness Act or the Remote Transactions Parity Act has yet to see any action by the subcommittee or the full Judiciary Committee). The Senator’s testimony and an archived video recording of the hearing are available online.

GFOA will continue to monitor the legislation for any developments. We urge GFOA members to reach out to their Representatives, especially if they are members of the subcommittee or full Judiciary Committee, and urge them to oppose this bill.

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House Committee Approves Bill to Classify Investment Grade Munis as High-Quality Liquid Assets 

On July 25, 2017, the House Financial Services Committee unanimously approved HR 1624, bipartisan legislation that would require federal regulators to classify all investment grade municipal securities as high-quality liquid assets (HQLA). This important legislation is necessary to amend the liquidity coverage ratio rule approved by federal regulators in 2014, which classifies foreign sovereign debt securities as HQLA while excluding investment-grade municipal securities in any of the acceptable investment categories for banks to meet new liquidity standards.

Not classifying municipal securities as HQLA would increase borrowing costs for state and local governments to finance public infrastructure projects, as banks would likely demand higher interest rates on yields on the purchase of municipal bonds during times of national economic stress, or even forgo the purchase of municipal securities. The resulting cost impacts for state and local governments would be significant, with bank holdings of municipal securities and loans having increased by 86% since 2009.

The next stop for HR 1624 is the House floor, but the date for its consideration has not been determined yet. GFOA is urging members to send letters to their congressional delegations urging support for this bill. GFOA has developed a draft letter and other resources on HQLA for you to use. Please reach out to your House members today and urge them to support HR 1624.

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Looking to Implement What You Learned at GFOA’s Annual Conference? Purchase the Session Audio Recordings

GFOA has audio recorded most of the sessions from the 111th Annual Conference, May 21–24, 2017, so you can refresh your knowledge of today’s most talked-about public finance topics or share the recordings with your staff. The audio recordings offer a unique learning opportunity regardless of whether you attended the Denver conference.

Each purchaser will receive an audio recording of the Monday, May 22, keynote presentation by Jim Collins, and a recording of the Tuesday, May 23, keynote panel discussion, “Government and the Economics of Health Care.”  

Click here to access the order form. Order online.* CPE credits are not awarded for listening to the recordings.

To purchase a track using GFOA’s e-store, log into your e-store account, go to the “Books” tab and then to the category “2017 Conference Sessions — Online Content” to add the tracks to your cart. Once purchased, you will receive a receipt from estore@gfoa.org and instructions about how to access the recordings from publications@gfoa.org. If you submit your order via mail, fax, or e-mail, you will receive a receipt via mail and instructions about how to access the recordings from publications@gfoa.org.

Plan to attend! GFOA’s 112th Annual Conference will take place May 6−9, 2018, at America’s Center Convention Complex in St. Louis, Missouri. Registration will open on November 6. Suggest a topic or speaker for the conference by completing the form here.

News Links
Program Diverts Non-Emergency Residents from ER, Sees Substantial Cost Savings

Like many governments, the city of Memphis, Tennessee, has been spending a lot of money on people who use the city’s 911 service for basic healthcare. The costs for ambulance, emergency room visit, and staff to handle call volumes are difficult to sustain, and in April 2017 the city engaged in an experiment to take some pressure off the emergency dispatch system, Route Fifty reported. The program, called Rapid Assessment Decision and Redirection (RADAR), sends healthcare providers to residents who are very unlikely to need emergency care, instead of transporting them to a hospital. When weekday calls are redirected to RADAR, a city paramedic and a doctor from the city’s partner, Resurrection Health, take a car (rather than an ambulance) to evaluate the caller. Of approximately 400 runs since April, 58% of emergency callers were diverted by RADAR away from the ER, and 66% of callers did not require an ambulance, creating substantial cost savings for the city. 

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Why You Shouldn't Cancel Your One-on-One Meetings

While it’s tempting to slash meetings from your schedule wherever possible, you really do need to meet one-on-one with everyone on your team regularly, according to Fast Company (via the Harvard Business Review). The reasons:

  • It’s ultimately more efficient to make sure everyone really knows what they should be doing, instead of wasting time and resources going in the wrong direction because they were fuzzy on the details.
  • Your employees will still need to talk to you, leading to an “open door” policy that means your office turns into a call center and you can’t focus on your work.
  • Employees who aren’t getting briefed at regular meetings will flood your in-box with questions, many of which need attention right away.
  • One-on-one meetings are valuable opportunities for creative collaboration.
Read More.
Montgomery County Uses Open Data Map to Solicit Public Opinions on Bikeways

Montgomery County, Maryland, created the Bikeway React Map – an open data map that allows people to indicate areas where certain projects, such as separated bike lanes, could be useful, 21st Century State & Local reported. The hundreds of comments generated contribute to the county’s larger Bicycle Master Plan, which aims to improve the bicycle network with features such as cycling lanes and bike storage facilities at transit stations. Most of the comments support recommendations the department has already made, while approximately 10% flag new issues. The online platform creates an easier way for residents to communicate their concerns, without having to attend public meetings.

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State and Local Pension Plan Funding Ratios Decreased in FY 2016

Pension plan funding has decreased in the past year, falling from 74% in 2015 to 72% in 2016, according to a new issue brief from the Center for State and Local Government Excellence. Pension plans paid 92.4% of their required contributions in FY2016, continuing the steady increase in percentage paid since the financial crisis. With pension liabilities growing, however, plans need to set and pay a more sufficient annual required contribution, in addition to achieving their assumed returns.

Key findings include: 

  • In 2016, the funded ratio of state and local pensions declined under both old and new accounting rules.
  • This decline reflected steady growth in liabilities and slow growth in assets due to poor stock performance.
  • The recent revival of the stock market is helping plan assets recover, with funded ratios expected to improve in 2017. 
  • Funded ratios are projected to remain essentially flat in future years.
  • To reduce their unfunded liabilities, some plans need to change their approach to setting their annual employer contribution. 
Read More.
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Editor: Marcy Boggs  |  Executive Director/CEO: Chris Morrill 

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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