ABFM 2012 Registration & Hotel Reservations Open!
Those who submitted proposals for this year's ABFM annual conference should receive notification from Conference Chair Scott Pattison very shortly. In the meantime, you can go ahead on registering and reserving hotel rooms for the conference, which will be held October 11th-13th at the Marriott East Side Hotel in New York City.
Attendees can now book rooms at our host hotel, the Marriott East Side, for $249/night. This rate is available from Wednesday, October 10th, to Saturday, October 14th.
Online registration is available now through the current ABFM website. However, be on the lookout for an improved registration page by the middle of July.
In the Field
Firing Yourself: City Comptroller proposes Professionalization
Donijo Robbins De Jonge, ABFM’s secretary and archivist, splits her professional duties between Professor with the School of Public, Nonprofit, and Health Administration at Grand Valley State University and City Comptroller with the City of Grand Rapids, Michigan.
The position of City Comptroller was created as an elected position in the 1916 charter revision and today the Office of the City Comptroller for Grand Rapids is responsible for accounts payable, accounting services, payroll, internal audit, and financial systems. Donijo has served as the City Comptroller for
past 20 months, first appointed in November 2010 and subsequently elected with 60% of the vote in November 2011. Having served in the position for nearly two years, Donijo says “The City is running a century old financial structure in the 21st century and the time has come for the City’s financial structure
to be modernized. The first step to accomplish this feat is to start at the top with the City Comptroller position.”
At the City Commission meeting on June 19, Donijo proposed an amendment to the City Charter
that would change position of City Comptroller from an elected position to an appointed position. Furthermore, Donijo proposed that the position be merged with the Chief Financial Officer (CFO) position to create one position with the responsibilities of accounting, budgeting, and finance. All the responsibilities currently given to the Comptroller in the charter would still remain; this move would
provide the City Comptroller with additional responsibilities – those assigned to the CFO such as budgeting, purchasing, and debt authority.
Donijo argues, “The world of finance (accounting and budgeting) demands professional standards, ethics, and processes and there is no place for politics in the management of taxpayer money. You do not want a politician controlling the money; you want a professional who is certified by the industry.” At the meeting, she recommended that the City Comptroller position be appointed by the City Manager and that
the appointment be confirmed by the City Commission. Realizing the need to professionalize the office, she will recommend also that the new appointed position require credentials (e.g. CPA certification, years of experience in municipal finance) – qualifications she doesn’t possess.
Donijo is doing this for two reasons. First, she told the City Commission in her initial interview that she would evaluate the position and the office and make recommendations about ways to transform the office and perhaps even the City. Second, and more importantly, she says this is about good government and sound financial practices. She acknowledges that she is writing herself out of a job, but says, “This change is necessary now more than ever; it is what’s best for City.”
The City Commission voted unanimously to approve the resolution that would allow the charter amendment language to be placed on the November 6, 2012 ballot. The resolution now awaits final approval by the Michigan Attorney General’s office. Donijo is confident that the AG’s office will approve the ballot language and the voters will approve the charter amendment in November.
PA Times reports there is a great demand for articles and blogs on federal, state, and local budgeting. Please contact Christine Jewett McCrehin at email@example.com
if you are interested in submitting an article or blogging on budgeting!
ABFM is also requesting that persons interested in forming a host committee for the 2014 Annual Conference submit proposals by July 30 to the Conference Selection Committee chaired by Charles Menifield firstname.lastname@example.org
. The 2014 conference will be located outside of Washington, DC.
Elections Open for Executive Committee/Officers
Vote Online - Polls Close July 30th!
The election for our 2013 officers is here and will be open until the end of July.
This year we have one candidate for Vice Chair (Robert Kravchuk) and five candidates for the executive committee (Benjamin Clark, John Gilmour, Kenneth Hunter, Arwiphawee Srithongrung, Wie Yusuf). You may vote for only three executive committee members.
To view candidate bios and to vote, click the link: https://www.surveymonkey.com/s/abfmelection
. Terms of office will begin January 1, 2013.
2014 Conference RFP Now Open
Deadline for proposals is July 30th!
ABFM requests that persons interested in forming a host committee for the 2014 Annual Conference submit proposals to the Conference Selection Committee. The 2014 conference will be located outside of Washington, DC.
The host committee’s duties for the proposal are as follows:
Identify the host committee members and their affiliations.
Select a city that is accessible by economical air transportation and offers sufficient amenities for the conference.
Select a hotel for the conference that can accommodate the conference meeting and room requirements.
Secure economical price quotations for the following items:
Guest Room Night Commitment: about 220 rooms distributed as below
Plenary session rooms (one session Thursday and one Friday for 150 people)
Meeting rooms (4 breakout rooms in continuous use from Thursday morning through Saturday afternoon)
Continental breakfast (Thursday, Friday and Saturday) and break food service (3 each on Thursday and Friday for 75 to 100 persons, and one on Saturday for 75 persons) if necessary.
Friday luncheon (120 persons)
Two receptions (hors d’oeurves for 120 persons and cash bar service). If the local hosts are able to sponsor one or more of these receptions, this is a favorable consideration.
Costs of LCD projectors support equipment. ABFM owns five LCD projectors for use by conference participants during presentations, but neither screens nor PCs to support these projectors. Conference proposals must include the cost (if any) to use hotel projector screens and/or PCs. If the hotel allows conference participants to use their own PCs, this should be noted. If this is the case, the host committee may provide such PCs if possible and practical as part of their proposal.
Provide information, including cost, on transportation options from the closest airport to the conference hotel. Be sure to state whether the hotel has shuttle service.
Prepare a total estimated hotel cost to the association (do not include guest room nights) for the use of hotel facilities and food service.
ABFM usually receives a number of free guest room nights depending on the number of paid guest nights booked. These are normally used for invited speakers, award winners, or other special guests. Provide information on this.
Briefly describe a plan to market the conference to potential attendees in the area who are not members of ABFM, and identify potential local sponsors (including governments, associations, and other universities)
Prepare a list of amenities that are available near the conference hotel (restaurants, attractions, shopping)
The Conference Site Selection Committee consists of Charles Menifield (chair), Scott Pattison, Bryan Sullivan, Thad Calabrese, and Jim Savage. Please submit a document detailing this information by July 30, 2012
to Charles Menifield at email@example.com
GASB approves significant changes to Pension Reporting
On June 25th, the Governmental Accounting Standards Board (GASB) approved two new standards dramatically changing the reporting of public employee pensions by state and local governments.
GASB Statement No. 67, Financial Reporting for Pension Plans, revises existing guidance for the financial reports of most pension plans. Statement No. 68, Accounting and Financial Reporting for Pensions, revises and establishes new financial reporting requirements for most governments that provide their employees with pension benefits.
“The new standards will improve the way state and local governments report their pension liabilities and expenses, resulting in a more faithful representation of the full impact of these obligations,” said GASB Chairman Robert H. Attmore. “Among other improvements, net pension liabilities will be reported on the balance sheet, providing citizens and other users of these financial reports with a clearer picture of the size and nature of the financial obligations to current and former employees for past services rendered.”
It is likely these changes will have broad-reaching effects on state and local administration of employee pension programs and will necessitate greater allowances for underfunded obligations and implementation of reforms to limit costs, including the transition of more plans away from "definited benefit" and toward "defined contribution."
GASB provided these summaries on the technical relevance of the two new statements:
Statement 67 (Plans)
This Statement replaces the requirements of Statement No. 25, Financial Reporting for Defined Benefit Pension Plans and Note Disclosures for Defined Contribution Plansand Statement 50 as they relate to pension plans that are administered through trusts or similar arrangements meeting certain criteria. The Statement builds upon the existing framework for financial reports of defined benefit pension plans, which includes a statement of fiduciary net position (the amount held in a trust for paying retirement benefits) and a statement of changes in fiduciary net position. Statement 67 enhances note disclosures and RSI for both defined benefit and defined contribution pension plans. Statement 67 also requires the presentation of new information about annual money-weighted rates of return in the notes to the financial statements and in 10-year RSI schedules.
Statement 68 (Employers)
Statement 68 replaces the requirements of Statement No. 27, Accounting for Pensions by State and Local Governmental Employers and Statement No. 50, Pension Disclosures, as they relate to governments that provide pensions through pension plans administered as trusts or similar arrangements that meet certain criteria. Statement 68 requires governments providing defined benefit pensions to recognize their long-term obligation for pension benefits as a liability for the first time, and to more comprehensively and comparably measure the annual costs of pension benefits. The Statement also enhances accountability and transparency through revised and new note disclosures and required supplementary information (RSI).
Defined Benefit Pension Plans. The Statement requires governments that participate in defined benefit pension plans to report in their statement of net position a net pension liability. The net pension liability is the difference between the total pension liability (the present value of projected benefit payments to employees based on their past service) and the assets (mostly investments reported at fair value) set aside in a trust and restricted to paying benefits to current employees, retirees, and their beneficiaries.
The Statement calls for immediate recognition of more pension expense than is currently required. This includes immediate recognition of annual service cost and interest on the pension liability and immediate recognition of the effect on the net pension liability of changes in benefit terms. Other components of pension expense will be recognized over a closed period that is determined by the average remaining service period of the plan members (both current and former employees, including retirees). These other components include the effects on the net pension liability of (a) changes in economic and demographic assumptions used to project benefits and (b) differences between those assumptions and actual experience. Lastly, the effects on the net pension liability of differences between expected and actual investment returns will be recognized in pension expense over a closed five-year period.
Statement 68 requires cost-sharing employers to record a liability and expense equal to their proportionate share of the collective net pension liability and expense for the cost-sharing plan. The Statement also will improve the comparability and consistency of how governments calculate the pension liabilities and expense. These changes include:
Projections of Benefit Payments. Projections of benefit payments to employees will be based on the then-existing benefit terms and incorporate projected salary changes and projected service credits (if they are factors in the pension formula), as well as projected automatic postemployment benefit changes (those written into the benefit terms), including automatic cost-of-living-adjustments (COLAs). For the first time, projections also will include ad hoc postemployment benefit changes (those not written into the benefit terms), including ad hoc COLAs, if they are considered to be substantively automatic.
Discount Rate. The rate used to discount projected benefit payments to their present value will be based on a single rate that reflects (a) the long-term expected rate of return on plan investments as long as the plan net position is projected under specific conditions to be sufficient to pay pensions of current employees and retirees and the pension plan assets are expected to be invested using a strategy to achieve that return; and (b) a yield or index rate on tax-exempt 20-year, AA-or-higher rated municipal bonds to the extent that the conditions for use of the long-term expected rate of return are not met.
Attribution Method. Governments will use a single actuarial cost allocation method – “entry age,” with each period’s service cost determined as a level percentage of pay.
Note Disclosures and Required Supplementary Information. Statement 68 also requires employers to present more extensive note disclosures and RSI, including disclosing descriptive information about the types of benefits provided, how contributions to the pension plan are determined, and assumptions and methods used to calculate the pension liability. Single and agent employers will disclose additional information, such as the composition of the employees covered by the benefit terms and the sources of changes in the components of the net pension liability for the current year. A single or agent employer will also will present RSI schedules covering the past 10 years regarding:
Sources of changes in the components of the net pension liability
Ratios that assist in assessing the magnitude of the net pension liability
Comparisons of actual employer contributions to the pension plan with actuarially determined contribution requirements, if an employer has actuarially determined contributions.
Cost-sharing employers also will present the RSI schedule of net pension liability, information about contractually required contributions, and related ratios.
Defined Contribution Pensions. The existing standards for governments that provide defined contribution pensions are largely carried forward in the new Statement. These governments will recognize pension expenses equal to the amount of contributions or credits to employees’ accounts, absent forfeited amounts. A pension liability will be recognized for the difference between amounts recognized as expense and actual contributions made to a defined contribution pension plan.
Special Funding Situations. Certain governments are legally responsible for making contributions directly to a pension plan that is used to provide pensions to the employees of another government. For example, a state is legally required to contribute to a pension plan that covers local school districts’ teachers. In specific circumstances called special funding situations, the Statement requires governments that are nonemployer contributing entities to recognize in their own financial statements their proportionate share of the other governmental employers’ net pension liability and pension expense.
Effective Dates and Availability
The provisions in Statement 67 are effective for financial statements for periods beginning after June 15, 2013. The provisions in Statement 68 are effective for fiscal years beginning after June 15, 2014. Earlier application is encouraged for both Statements.
Statements 67 and 68 will be available for download at no cost from the GASB website
in early August. Bound copies of the Statements will be available for distribution soon thereafter. A plain-language description of the new requirements also will be available on the GASB website