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  1. LGC UPDATE 2014 NCLGIA – Summer Conference Sara Shippee 7/24/2014

  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: • 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.”

  4. ANNOUNCEMENTS / REMINDERS • Fiscal 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 fall • Audit Process continues to go well - changes on your side will be minimal for 2014: • Will still use commercial portal • Data input sheets continue to be available for download from Treasurer’s website • Changes: • 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

  5. ANNOUNCEMENTS / REMINDERS • 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. ANNOUNCEMENTS / REMINDERS 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. ANNOUNCEMENTS / REMINDERS • 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 timeframe • 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. ANNOUNCEMENTS / REMINDERS • 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. ANNOUNCEMENTS / REMINDERS • GASB Standard No. 67-68 – continued • Law Enforcement Officers Separation Allowance • Not affected unless in an irrevocable trust as defined by GASB • GASB now defining this situation in new EDs (already out – comments due August 15th) • Questions on 67/68 – call Sharon Edmundson or Preeta Nayak – 919-807-2381 • Memos and a webinar coming soon

  10. ANNOUNCEMENTS / REMINDERS • Secondary Market Disclosure • New memo – #2015-01: meeting all required disclosures • If you are at the least concerned, please speak with your bond counsel • SEC has launched an amnesty program about deficiencies in prior reporting • Webinar with details will be available in August

  11. ANNOUNCEMENTS – AFIR Reminder • AFIR 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 Dashboard • Used by League and County Commissioners Assoc. • Used by your peers for comparative purposes • Should be timely & accurate

  12. AUDITING AND REPORTING TIPS • Cost 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 Taxes • Payments to compensate the general government for public services rendered based on tax rate • Should be classified as transfers – nonreciprocal interfund activity – in the enterprise operating statements • Please classify as “Transfer – Payment in lieu” in both funds

  13. AUDITING AND REPORTING TIPS • Statutory limits on Transfers from Electric Funds for Eastern Municipal Power Agency – GS 159B-39 • Effective 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 expenditures • Other transfers will be capped at the greater of: • Three percent (3%) of gross electric capital assets at the end of the preceding fiscal year • Five percent (5%) of the gross annual revenues of the electric system for the preceding fiscal year

  14. AUDITING AND REPORTING TIPS 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. AUDITING AND REPORTING TIPS 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: • Unit not required to create TDA • Unit has enabling Act but Board has chosen not to create TDA / levy Occupancy Taxes

  16. TDA Research results – various findings • Units currently levying Occupancy Tax • TDA not reported as a separate legal entity (Public Authority / DCU) in the 2013 Audit report • TDA information not shown properly in 2013 Audit report • §159 not being followed • Annual Budget, Audits, LGC-203, INV 91 reports • Units currently reporting with parent government • Must now be named in 2014 Audit contract • Need TDA Chairperson signature • 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, 2014 • 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. • Workbook has dropdown lists for unit name and bank name. (If you cannot find your name or bank, please call Becky or Sara.)

  18. 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 documentation • Or email separately to titled INV-91 in the subject line • Allows DST staff to match local government deposit accounts to information provided by their depositories. • Necessary to ensure that local government funds are sufficiently collateralized in the pool.

  19. DEPOSIT AND INVESTMENT ISSUES • Contact information: • Becky Dzingeleski (919) 807-2396 • Sara Shippee (919) 807-2356

  20. DEPOSIT AND INVESTMENT ISSUES • SEC Municipal Advisor Rules – Dodd/Frank Bill • Primarily about issuing debt • Relates to investment of proceeds as well • Normal 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 returned • Utilize an independent municipal advisor when you come to the market

  21. DEPOSIT AND INVESTMENT ISSUES • SEC Municipal Advisor Rules – Dodd/Frank Bill • 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 invested • If no bond proceeds – business as usual • If bond proceeds comingled then brokers can only show you market information - an inventory with no advice

  22. DEPOSIT AND INVESTMENT ISSUES • 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

  23. Local Government Cash & Investments State and Local Government Finance Division County and Municipal Portfolio Statistics June 30, 2013, 2012, & 2011

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

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

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

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

  28. Percent Change from 2012 to 2013

  29. Percent Change from 2011 to 2012

  30. Total County & Municipal Portfolio Mix - June 30, 2013

  31. Portfolio Mix - June 30, 2011 68.9% 46.8%

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