SDASBO 2016 FALL CONFERENCE- UPDATES AND COMPLIANCE

1. SDASBO 2016 FALL CONFERENCE-UPDATES AND COMPLIANCE Rod Fortin—Director of Local Gov’t Assistance Department of Legislative Audit 300 S. Sycamore Avenue, Suite 102 Sioux Falls, SD 57110-1323 ph. (605) 367-5810 rod.fortin@state.sd.us http://legislativeaudit.sd.gov/

2. OUTLINE • BUDGETS • GASB STATEMENTS • 2016 SESSION • UNIFORM RULES (check your email for handout)

3. Budgets • STATUTORY DATES • Proposed Budget—Regular Meeting in May • Published—Not later than July 15th/ with • Notice of Budget Hearing held before Aug 1st • Approve Budget before October 1st • By “resolution” adopt levies • Changes from proposed to final budget shall be published in minute within 30 days of adopting final budget

4. Budgets • Subsequent to final adoption of the budget, resolution required to amend budget. (SDCL 13-11-3.2) • How much fund balance as of June 30, 2016 is assigned to finance FY2017 Budget? • True structural balanced budget • Recurring revenues = recurring expenditures • One time revenues used for one time expenditures • Discussion of the use of surplus and reserve

5. Budgets • Is it time to consider amending the prescribed Budget format? • Change in fund balance/net position? • Funds with no appropriations?

6. GASB Statements • GASB 68 Pension for Employers calculation for year ending June 30, 2016 • Implemented in FY15 • Second year calculation

7. GASB Statements • GASB 77 Tax Abatement Disclosures (FY17) • Tax Abatement is defined as a reduction in tax revenues that results from an agreement between one or more governments and an individual or entity in which • One or more governments promise to forgo tax revenues to which they are otherwise entitled, and • The individual or entity promises to take a specific action after the agreement has been entered into that contributes to economic development or otherwise benefits the governments or the citizens of those governments.

8. GASB Statements • GASB 77 Tax Abatement Disclosures (FY17) • Disclosures required encompass tax abatement agreements resulting from both (a) agreements entered into by the reporting government and (b) agreements entered into by other governments and that reduce the reporting government’s tax revenues

9. 2016 Session • HB1032 – An Act to revise certain provisions regarding guaranteed energy savings contracts. • Makes changes to unworkable provisions in current law regarding governmental units’ use of guaranteed energy savings contracts. Essentially, the State or a political subdivision (governmental unit) would contract for an investment-grade energy audit which would return one or more proposed projects for the governmental unit to consider. If the governmental unit doesn’t select a project then it pays for the energy audit. If it does select a project then the cost of the audit may be paid for separately by the governmental unit or rolled into the cost of the energy savings project. If the energy savings project does not pay for itself with energy savings, the contractor must make up the shortfall in energy savings.

10. 2016 Session • HB1090 – An Act to require certain statements and audits concerning insurance pooling arrangements to be filed with the Department of Legislative Audit. • Adds a new section to joint powers chapter 1-24 requiring any pool arrangement as defined in 1-24-11 to have an annual audit of its financial statements conducted in accordance with GAGAS and a copy of the audit must be filed with Legislative Audit within twelve months of the pool’s fiscal year end. Legislative Audit will make the audit reports available on its website. The law also allows the auditor-general to examine all financial records related to funds provided by the state or its political subdivisions of any pool arrangement if deemed necessary and in the public interest by the auditor-general.

11. 2016 Session • HB1102 – An Act to allow for additional time to review certain competitive sealed bids. • Amends 5-18A-5 to allow up to 45 days between the bid opening and the award of the contract for supplies bids and the invitation to bidders for supplies must include the number of days the government will use. For services and public improvement bids, the requirement remains unchanged and the contract must be awarded within 30 days of the bid opening.

12. 2016 Session • HB1214 – An Act to regulate conflict of interest for authority, board, or commission members. • Sections 1 through 11 • Seek guidance from legal counsel

13. 2016 Session • SB6 – An Act to revise certain performance security requirements for public improvement contracts. • Repeals 5-21-1.2 which conflicted with another statute. Adds a new section to chapter 5-21 allowing a public corporation to waive the requirement for a performance security bond for emergency procurements authorized by 5-18A-9.

14. 2016 Session • SB53 – An Act to revise certain provisions concerning the bank franchise tax. • Section 28 changes the basis for allocating the local governments’ share of the taxes collected. Currently, taxes are distributed to the various local governments by the county based on the proportion of each government’s personal property taxes collected in 1972-1976. The new law will distribute the taxes based on each government’s proportion of real property taxes levied in the previous year as certified by the Department of Revenue. This will likely cause some shifting of revenues, but based on testimony it varies from county to county on which governments win or lose.

15. 2016 Session • SB73 – An Act to clarify certain provisions regarding open meetings. • Section 1 makes it clear that an official meeting is any meeting of a quorum of a public body at which official business is discussed or decided, or public policy is formulated whether in person or by means of teleconference. • Section 2 expands the definition of teleconference to include any electronic medium including the internet.

16. 2016 Session • SB90 – An Act to ensure that members of the public are able to access and record public meetings. • Adds a new section to chapter 1-25 making it clear that no state, political subdivision, or public body may prevent a person from recording, through audio or video technology, a public meeting that is open to the public as long as the recording is reasonable, obvious and not disruptive.

17. 2016 Session • SB118 – An Act exempt certain purchases from certain bidding requirements. • Amends 5-18A-22 and for political subdivisions exempts from bidding (chapters 5-18A, 5-18B, 5-18C, and 5-18D) any purchase of equipment involving the expenditure of less than fifty thousand dollars.

18. 2016 Session • HB1182 - An Act to increase the state sales tax, the state use tax, the excise tax on farm machinery, and amusement device tax for the purpose of increasing education funding and reducing property taxes, to provide for certain school district reporting and penalties, and to declare an emergency.

19. 2016 Session • SB131 – An Act to establish a target teacher salary and a target teacher ratio, to revise certain provisions regarding education funding, to create the School Finance Accountability Board, and to provide for certain school district reporting and penalties. • SB132 – An Act to revise certain provisions regarding education funding.

20. 2016 Session • SB133 – An Act to revise certain provisions regarding shared services provided by the state to school districts, the sharing of services of school district employees, the classroom innovation grant program, and educator mentoring and certification reciprocity. • CHECK YOUR EMAIL FOR POWER POINT HANDOUT ON “UNIFORM RULES”