GFOA is always on the lookout for news items that will be useful for finance professionals, research that might help you do your job better, and legal and regulatory updates you need to know about. Check the GFOA news page for the updates and any relevant GFOA announcements, and see the GFOA Newsletter archive for back issues of our weekly electronic newsletter.
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.
What is the Award Program for Small Government Cash Basis Reports?
For practical reasons, many small governments prepare their financial statements using either the modified cash basis or state-mandated regulatory basis of accounting, rather than generally accepted accounting principles (GAAP). The Government Finance Officers Association's (GFOA) Cash Basis Award Program is designed to help such governments improve the quality of their annual financial reports.
On June 6, 2016, Patrick J. McCoy, GFOA President-Elect and director of finance for the New York City Metropolitan Finance Authority testified on behalf of GFOA at a hearing held by the Internal Revenue Service and the Department of the Treasury on their proposed rule on political subdivisions. The proposal would increase restrictions on the definition of “political subdivision” for the purpose of being able to issue tax-exempt bonds.
The Implications of the SEC Rule and MSRB Rule G-42 on Hiring and Using Municipal Advisors and Underwriters
The new G-42 rule from the Municipal Securities Rulemaking Board (MSRB) becomes effective June 23, 2016. Rule G-42, or Duties of Municipal Advisors, stems from the Dodd Frank Act and the SEC’s subsequent municipal advisor rule. This rule does not establish any responsibilities for issuers, but it does create numerous responsibilities for the municipal advisors that are hired by state and local governments.
The information contained in this document was developed to educate members about the SEC MCDC Initiative and should not be construed as legal advice.
Issuers that self-reported under the SEC’s Municipalities Continuing Disclosure Cooperation (MCDC) initiative can expect to receive settlement offers containing standard provisions to which they must consent in the near future. The SEC is requesting an extraordinarily short turn-around for the settlement—5 to 10 days—but has indicated that it will extend the settlement offer upon request.
Tuesday's general session featured Richard Florida, the urbanist perhaps best known for his concept of the “creative class,” which posits that metropolitan regions with high concentrations of technology workers, artists, musicians, and other creative groups exhibit a higher level of economic development. Florida explained that though the creative class makes up a relatively small portion of the total workforce, it creates a disproportionate amount of economic growth. For example, the creative class comprises about 30% of the workforce but produces about 75% of disposable income in the U.S.
The Government Finance Officers Association of the United States and Canada (GFOA) announced the winners of its 2016 Awards for Excellence in Government Finance. GFOA’s most prestigious awards recognize 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.
Marc Gonzales, Director, Department of Finance, Clackamas County, Oregon, became the new president of the Government Finance Officers Association of the United States and Canada (GFOA) at the association’s annual business meeting on May 24, 2016. During the past year, Gonzales served on the Executive Board as president-elect. He has been a member of the Executive Board since 2012. Gonzales accepted the gavel from 2015-2016 President Heather A. Johnston, City Manager, City of Burnsville, Minnesota.
Patrick J. McCoy, Director of Finance, Metropolitan Transportation Authority, New York, New York, was elected as president-elect of the Government Finance Officers Association of the United States and Canada (GFOA) on May 24, 2016. The election was held at the association’s annual business meeting in Toronto, Ontario, Canada.
Marc Gonzales, Director, Department of Finance, Clackamas County, Oregon, became president of the Government Finance Officers
Association of the United States and Canada (GFOA) on May 24, 2016. The gavel was passed at the association’s annual business meeting in Toronto, Ontario, Canada.
Marc Gonzales, director, Department of Finance, Clackamas County, Oregon, became GFOA’s new president at the association’s annual business meeting in Toronto, Ontario, Canada, May 24, 2016. Gonzales accepted the gavel from 2015−2016 President Heather A. Johnston, city manager, City of Burnsville, Minnesota. Also at the business meeting, the association’s members elected a new GFOA president-elect and five new members-at-large, who will each serve a three-year term beginning immediately.
At “Just Say No: Financial Products and Strategies to Avoid,” a Tuesday session at GFOA’s annual conference, the panelists discussed the pitfalls of newer, more “innovative” financial instruments that local governments have access to.
At the Tuesday GFOA conference session, “A CFO’s First 100 Days,” Yousef Awwad, chief financial officer of Portland Public Schools, and Marion M. Gee, finance director at the Metropolitan St. Louis Sewer District, discussed strategies for getting a successful start in a new financial leadership role.
Most people starting out as as financial leader have came from the ranks of financial management. Hence, the new leader needs to recognize the difference between leadership and management. Here are some of the key ways to become a leader:
Bruce Tulgan, who studies leadership and performance management in the workplace, addressed delegates during Monday’s opening general session. His research, based on 23 years of interviews with employers and employees, leads to a key finding: “The workforce is changing.”
For the second year in a row, GFOA hosted a luncheon for school districts to discuss GFOA’s best practices in budgeting for school districts. This year’s event featured four school districts – Portland Public Schools, Dayton City Public Schools, Upper Moreland Township School District, and Atlanta Public Schools – that have been on the journey toward optimizing the alignment between their limited resources and their student achievement goals.
Have you considered how you can use data to look at your city in a different way – to find out what it’s really worth? In his Monday conference presentation, “The Financial Impacts of Land Use Policy,” Joe Minicozzi, principle of Urban3, a consulting firm created by a real estate developer, discussed the importance of data modeling to determine your real potential for increasing tax revenues. His advice is, in short, “Do the math!”
At GFOA’s Tuesday afternoon “Next Generation Roundtable” discussion, people in the early stages of a career in public finance exchanged views on a variety of topics.
For example, when it came to how they got into public finance, there was a diverse range of experiences. For some participants, it was a public administration degree program, while others came from private-sector employers (and were, in fact, surprised to learn that public finance was a viable career path).
The general public has neither the time nor the technical expertise for using highly detailed financial information—they need guidance on how to extract information from your data. For example, terms that are commonplace for government finance officers are often completely foreign to most citizens. Therefore, the titles, labels, and other descriptors picked up from your financial system may need to be changed to more citizen-friendly terminology, according to "Helping Citizens Extract Information from Data," as session at GFOA's May 2016 annual conference in Toronto.
Central to understanding risk is a concept called the “flaw of averages”—the idea that a single average number obscures the variation in the data. In “A Financially Resilient Organization is a Risk-Aware Organization,” a session at today’s annual conference in Toronto, Process Omprovement Specialist with the City and County of Denver's Peak Performance Initiative Melissa Files and Executive Director of ProbabilityManagement.org Sam Savage discussed uncertainty in financial planning.
The “sharing economy” is a business model that allows providers and consumers to share resources and services, from housing to vehicles and more. Well-known examples include Uber and AirBnB. Cities like Austin, Texas, and San Francisco, California, are at the forefront of the challenge that sharing economy business poses to traditional municipal regulation and taxing regimes.
On Friday, September 20, GFOA filed comments to the IRS on Proposed Regulations that would redefine Political Subdivisions for the purposes of tax exempt bonds. The Proposed Regulations set forth a new, three-part federal test to define political subdivisions qualified to issue tax-exempt debt. Every entity would have to meet all three tests to be considered a political subdivision.
Over the past five years, the municipal securities market has witnessed a dramatic increase in the use of bank loans by municipal issuers as a tool to finance capital improvements as well as refund outstanding debt. Bank loans, which may be structured with fixed or variable interest rates and with defined maturities or flexible payment provisions, may offer a number of potential advantages over a public offering of municipal securities.