LGC UPDATE

LGC UPDATE2014 NCLGIA – Summer Conference

Sara Shippee7/24/2014

2

AGENDA

• Announcements / Reminders

• Auditing and Reporting Tips

• Deposit and Investment Issues

• Deposits and Investment Statistics

3

ANNOUNCEMENTS / REMINDERS

• Introductions & Welcome • Becky Dzingeleski – joined me today

• Staff Changes:o Tashara Ware – Administrative staff left us on July 1st

o Steven Holmberg promoted - currently managing 2014 Audit Contract process including Approvals

o Alexis Credle is currently responsible for LGC-203 / INV 91 report processing and Audit Invoice Approvals

o In Debt Management – Mike Jankowski has taken the Assistant Director position vacated by Jim Baker

“All things are possible … but nothing is guaranteed.”

4


• Fiscal Management’s web pages are being re-organized to be more user friendly and easier to searcho Watch for that to be ready by early fall

• Audit Process continues to go well - changes on your side will be minimal for 2014:o Will still use commercial portalo Data input sheets continue to be available for download

from Treasurer’s websiteo Changes:

o You will have to pick a template for your unit type, e.g. city, county, school, charter, etc.

o Many questions clarified and New Questions addedo Detailed instructions for 2014 will come shortly

5


• Invoice processing for 2014 will be the same as last year – Alexis Credle is currently Approving

• Notice of approvals to units and auditors will be received via email

• Memo with updated 2014 instructions for processing audits is coming in August

• Illustrated statements for 2014 are posted to the web (City of Dogwood, Carolina County, Charter school, Board of Ed, & Housing Authority are currently available)

6

Best way to stay informed is through listserv:LGC_News

You may want multiple people on your staff registered in case you are out of the office.

Please give me or Becky a business card or send us an email if you wish to be registered.


7

• If you wish to go to the Debt market starting November 2014, audited financials are due to the LGC by OCTOBER 15th oPlease begin conversations with your auditor and the Debt

Management Section if you anticipate issuing debt in the November to December timeframe

o The opinion, financial statements, notes & supplemental schedules are required – Compliance audits can be delayed

Mark your calendar and notify Tim Romocki and your auditor if issuing debt in November or December of 2014, or January of 2015.


8

• GASB Standard No. 67-68• Data will come to you in a report from the State

Auditor with an opinion signed by the State Auditor• Mode of distribution yet to be determined – probably

from the web on the Treasurer’s web site• This is a reporting standard – no effect on day to day

operations

Effective for June 30, 2015 !!


9


• GASB Standard No. 67-68 – continued

o Law Enforcement Officers Separation AllowanceoNot affected unless in an irrevocable trust as

defined by GASBoGASB now defining this situation in new EDs

(already out – comments due August 15th)o Questions on 67/68 – call Sharon Edmundson or

Preeta Nayak – 919-807-2381o Memos and a webinar coming soon

10


• Secondary Market Disclosureo New memo – #2015-01: meeting all required

disclosureso If you are at the least concerned, please

speak with your bond counselo SEC has launched an amnesty program

about deficiencies in prior reportingo Webinar with details will be available in

August

11

ANNOUNCEMENTS – AFIR Reminder

• AFIR data is used for many purposes:o National statistics such as GNP by the Census o Used by State Legislature, State Agencies,

Legislative Research, and SOG for Water & Sewer Dashboard

o Used by League and County Commissioners Assoc.

o Used by your peers for comparative purposes

o Should be timely & accurate

12

AUDITING AND REPORTING TIPS

• Cost Allocations vs. Transfers – Memo #2014-07o Cost allocations should be treated as reimbursements to

reduce the cost of operations – it is not revenue, it is a contra account.

o Transfers are gifts of financial resources or equipment; they will be treated as revenue/OFS to the receiving fund.

o Legislature still looking at limiting transfers.• Treatment of PILOTs – Payments in Lieu of Taxes

o Payments to compensate the general government for public services rendered based on tax rate

o Should be classified as transfers – nonreciprocal interfund activity – in the enterprise operating statementso Please classify as “Transfer – Payment in lieu” in both funds

13


• Statutory limits on Transfers from Electric Funds for Eastern Municipal Power Agency – GS 159B-39o Effective July 1, 2014 – Permits the following:

oPayments in Lieu of taxes based on property taxes – presented as transfers in both funds

oReimbursements treated as reduction in expendituresoOther transfers will be capped at the greater of:

o Three percent (3%) of gross electric capital assets at the end of the preceding fiscal year

o Five percent (5%) of the gross annual revenues of the electric system for the preceding fiscal year

14


Tourism & Development Authorities (TDA)• LGC Staff currently reviewing Session Laws provided

by Legislative research that enable levying of Occupancy Tax.

• Local enabling Acts differ – case by case evaluation• Very often this language appears, but not always:

“When the Board adopts a resolution levying a room occupancy tax under this Part, it shall also adopt a resolution creating a county Tourism Development

Authority, which shall be a public authority under the Local Government Budget and Fiscal Control Act”

15


Tourism & Development Authorities (TDA) continued

• If this language does appear, requirements under §159 are to be followed

• See Memo #2014-08 on our website - Operation of and Accounting for Discretely Presented Component Units, Including TDAs detailing the requirements for TDAs

• TDA Research Results – Various findings:o Unit not required to create TDAo Unit has enabling Act but Board has chosen not to create

TDA / levy Occupancy Taxes

16

TDA Research results – various findingso Units currently levying Occupancy Tax

o TDA not reported as a separate legal entity (Public Authority / DCU) in the 2013 Audit reporto TDA information not shown properly in 2013 Audit report

o §159 not being followed o Annual Budget, Audits, LGC-203, INV 91 reports

o Units currently reporting with parent governmento Must now be named in 2014 Audit contract

o Need TDA Chairperson signatureo If separate financial statements are issued – separate Audit contract

required

SLGFD staff has sent emails to the primary governments involved and their auditors for confirmation and to request information regarding contracts / levying Occupancy Taxes / TDA creation. Follow-up for 2014 will continue.

17

DEPOSIT AND INVESTMENT ISSUES

• LGC-203 is a semiannual requirement (June 30 and December 31)

• LGC-203 for June 30, 2014 – due to be filed by July 25, 2014o Late letters will not go out until late August

• Form revised each cycle for Pooling Banks and New Units – do not use any excel workbook earlier than the rev. 06-13 version – we prefer use of the Rev. 6-14 (most current) version. o Workbook has dropdown lists for unit name and bank

name. (If you cannot find your name or bank, please call Becky or Sara.)

18


• INV-91 annual requirement for the June filing (§159-33)o INV-91 for June 30, 2014 – due to be submitted to each of your

depositories (Not NCCMT) with a copy filed with our office no later than AUGUST 24, 2014.o Most efficient and effective to send along with your LGC203

forms and documentationo Or email separately to [email protected] titled INV-91

in the subject line

o Allows DST staff to match local government deposit accounts to information provided by their depositories.

o Necessary to ensure that local government funds are sufficiently collateralized in the pool.

mailto:[email protected]

19


• Contact information:

o Becky Dzingeleski (919) 807-2396

[email protected]

o Sara Shippee (919) 807-2356

[email protected]




20


• SEC Municipal Advisor Rules – Dodd/Frank Billo Primarily about issuing debto Relates to investment of proceeds as wello Normal brokers cannot advise you if bond

proceeds are included with certain exceptions:oIssue RFP to 3 brokers specifying date range,

security type, and time for quotes to be returned

oUtilize an independent municipal advisor when you come to the market

21


• SEC Municipal Advisor Rules – Dodd/Frank Billo Investment of new debt issues will be handled

by your trustees or financial advisors but this rule may catch you with left over bond proceeds from older issues … you must certify to broker that no bond proceeds are included in your funds to be investedoIf no bond proceeds – business as usualoIf bond proceeds comingled then brokers can

only show you market information - an inventory with no advice

22


• Be cautious with investments offered with rates of return that are significantly higher than what appears to be available in the markets

• Safety, Liquidity, then Yield

• Avoid any investment you do not understand

• Questions – call our office at 919-807-2381

Local Government Cash & InvestmentsState and Local Government Finance Division

County and Municipal Portfolio StatisticsJune 30, 2013, 2012, & 2011

24

County & Municipal Combined portfolio’s at June 30, 2013

Deposits NCCMT GovernmentSecurities

GovernmentAgencies

CommercialPaper

Other $-

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

Billi

ons o

f Dol

lars

25

Comparison of total County & Municipal Deposits & Investments

at June 30, 2013 - 2012 - 2011


GovernmentAgencies

CommercialPaper

Other $-

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

$4.0

$4.5

$5.0

$5.5

Billi

ons o

f Dol

lars

26

Comparison of total County Deposits & Investments at June 30, 2013 – 2012 - 2011


GovernmentAgencies

CommercialPaper

Other $-

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

Billi

ons o

f Dol

lars

27

Comparison of total Municipal Deposits & Investments at June 30, 2013 - 2012 - 2011


GovernmentAgencies

CommercialPaper

Other $-

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

Billi

ons o

f Dol

lars

28

Percent Change from 2012 to 2013

-60.0%

-50.0%

-40.0%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

% C

hang

e

29

Percent Change from 2011 to 2012


GovernmentAgencies

CommercialPaper

Other

-100.0%

0.0%

100.0%

200.0%

300.0%

400.0%

500.0%

% C

hang

e

30

Total County & Municipal Portfolio Mix - June 30, 2013

Counties Municipalities

40.8% 34.8%

27.9%25.4%

20.1% 25.5%

11.2% 14.3%

Deposits NCCMTGov't Securities & Agencies Other

68.8%60.2%

31

Portfolio Mix - June 30, 2011

Counties Municipalities

42.9% 29.6%

26.0%

17.2%

17.5%36.4%

13.5% 16.8%

Deposits NCCMTGov't Securities & Agencies Other

68.9%46.8%

Thank you!Together , we can build and maintain a fiscally strong and prosperous North Carolina.

www.NCTreasurer.com

LGC UPDATE

Documents

Transcript of LGC UPDATE