LGC UPDATE 2014 NCLGIA – Summer Conference - PowerPoint Presentation

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LGC UPDATE

2014 NCLGIA – Summer Conference

Sara Shippee

7/24/2014Slide2

AGENDAAnnouncements / Reminders

Auditing and Reporting TipsDeposit and Investment IssuesDeposits and Investment Statistics

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ANNOUNCEMENTS / REMINDERS

Introductions & Welcome

Becky Dzingeleski – joined me today Staff Changes:

Tashara Ware – Administrative staff left us on July 1st

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

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

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

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

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ANNOUNCEMENTS / REMINDERSFiscal Management’s web pages are being re-organized to be more user friendly and easier to search

Watch for that to be ready by early fallAudit Process continues to go well - changes on your side will be minimal for 2014:Will still use commercial portalData input sheets

continue to be available for download from Treasurer’s websiteChanges: You will have to pick a template for your unit type, e.g. city, county, school, charter, etc.Many questions clarified and New Questions added

Detailed instructions for 2014 will come shortly

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ANNOUNCEMENTS / REMINDERSInvoice processing for 2014 will be the same as last

year – Alexis Credle is currently ApprovingNotice of approvals to units and auditors will be received via emailMemo with updated 2014

instructions for processing audits is coming in AugustIllustrated statements for 2014 are posted to the web (City of Dogwood, Carolina County, Charter school, Board

of

Ed, & Housing Authority are currently

available)

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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.

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ANNOUNCEMENTS / REMINDERSSlide7

If you wish to go to the Debt market starting November 2014, audited financials are due to the LGC by

OCTOBER 15th

Please begin conversations with your auditor and the Debt Management Section if you anticipate issuing debt in the November to December timeframeThe 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.

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ANNOUNCEMENTS / REMINDERSSlide8

GASB Standard No. 67-68

Data will come to you in a report from the State Auditor with an opinion signed by the State AuditorMode 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 !!

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ANNOUNCEMENTS / REMINDERSSlide9

ANNOUNCEMENTS / REMINDERSGASB Standard No.

67-68 – continuedLaw Enforcement Officers Separation Allowance

Not affected unless in an irrevocable trust as defined by GASBGASB now defining this situation in new EDs (already out – comments due August 15

th

)

Questions on 67/68 – call Sharon Edmundson or Preeta Nayak –

919-807-2381

Memos and a webinar coming soon

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ANNOUNCEMENTS / REMINDERSSecondary Market DisclosureNew memo – #2015-01: meeting all

required disclosuresIf you are at the least concerned, please speak with your bond counselSEC has launched an amnesty program about deficiencies in prior reportingWebinar with details will be available in August

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ANNOUNCEMENTS – AFIR ReminderAFIR data is used for many purposes:

National statistics such as GNP by the Census Used by State Legislature, State Agencies, Legislative Research, and SOG for Water & Sewer DashboardUsed by League and County Commissioners Assoc. Used by your peers

for comparative purposesShould be timely & accurate

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AUDITING AND REPORTING TIPSCost Allocations vs. Transfers – Memo #2014-07

Cost allocations should be treated as reimbursements to reduce the cost of operations – it is not revenue, it is a contra account.Transfers are gifts of financial resources or equipment; they will be treated as revenue/OFS to the receiving fund.Legislature still looking at limiting transfers.

Treatment of PILOTs – Payments in Lieu of TaxesPayments to compensate the general government for public services rendered based on tax rateShould be classified as transfers – nonreciprocal interfund activity – in the enterprise operating statementsPlease classify as “Transfer – Payment in lieu” in both funds

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AUDITING AND REPORTING TIPS

Statutory limits on Transfers from Electric Funds for Eastern Municipal Power Agency – GS 159B-39Effective July 1, 2014 – Permits the following:Payments in Lieu of taxes based on property taxes – presented as transfers in both funds

Reimbursements treated as reduction in expendituresOther transfers will be capped at the greater of:Three percent (3%) of gross electric capital assets at the end of the preceding fiscal yearFive percent (5%) of the gross annual revenues of the electric system for the preceding fiscal year

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AUDITING AND REPORTING TIPSTourism & 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 evaluationVery 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”

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AUDITING AND REPORTING TIPSTourism & Development Authorities (TDA) continued

If this language does appear, requirements under §159 are to be followedSee Memo #2014-08 on our website - Operation of and Accounting for Discretely Presented Component Units, Including

TDAs detailing the requirements for TDAsTDA Research Results – Various findings:Unit not required to create TDAUnit has enabling Act but Board has chosen not to create TDA / levy Occupancy Taxes

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TDA Research results – various findingsUnits currently

levying Occupancy Tax TDA not reported as a separate legal entity (Public Authority / DCU) in the 2013 Audit reportTDA information not shown

properly in 2013 Audit report §159 not being followed Annual Budget, Audits, LGC-203, INV 91 reportsUnits currently reporting

with parent government

Must

now be

named in 2014 Audit contract

Need TDA

Chairperson

signatureIf separate financial statements are issued – separate Audit contract requiredSLGFD 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.

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DEPOSIT AND INVESTMENT ISSUESLGC-203 is a semiannual requirement (June 30 and December 31)

LGC-203 for June 30, 2014 – due to be filed by July 25, 2014Late letters will not go out until late AugustForm 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. Workbook has dropdown lists for unit name and bank name.

(If you cannot find your name or bank, please call Becky or Sara.) 17Slide18

DEPOSIT AND INVESTMENT ISSUES

INV-91 annual requirement for the June filing (§159-33)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.Most efficient and effective to send along with your LGC203 forms and documentationOr email separately to LGC0203@nctreasurer.com titled INV-91 in the subject line

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

N

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

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DEPOSIT AND INVESTMENT ISSUESContact information:

Becky Dzingeleski (919) 807-2396becky.dzingeleski@nctreasurer.comSara Shippee (919) 807-2356s

ara.shippee@nctreasurer.com19Slide20

DEPOSIT AND INVESTMENT ISSUESSEC Municipal Advisor Rules – Dodd/Frank BillPrimarily about issuing debt

Relates to investment of proceeds as wellNormal brokers cannot advise you if bond proceeds are included with certain exceptions:Issue RFP to 3 brokers specifying date range, security type, and time for quotes to be returnedUtilize an independent municipal advisor when you come to the market

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DEPOSIT AND INVESTMENT ISSUESSEC Municipal Advisor Rules – Dodd/Frank BillInvestment 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 invested

If no bond proceeds – business as usualIf bond proceeds comingled then brokers can only show you market information - an inventory with no advice

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DEPOSIT AND INVESTMENT ISSUESBe cautious with investments offered with rates of return that are significantly higher than what appears to be available in the markets

Safety, Liquidity, then YieldAvoid any investment you do not understandQuestions – call our office at 919-807-2381

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Local Government Cash & InvestmentsState and Local Government Finance DivisionCounty and Municipal Portfolio Statistics

June 30, 2013, 2012, & 2011Slide24

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

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Comparison of total County & Municipal Deposits & Investmentsat June 30, 2013 - 2012 - 2011

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

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

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Percent Change from 2012 to 2013

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Percent Change from 2011 to 2012

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Total County & Municipal Portfolio Mix - June 30, 2013

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Portfolio Mix - June 30, 2011

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68.9%

46.8%Slide32

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

www.NCTreasurer.com