CSMFO Magazine August 2016

CSMFO CALIFORNIA SOCIETY OF MUNICIPAL FINANCE OFFICERS

M A G A Z I N E

AUGUST 2016 #6

1 CSMFO MAGAZINE AUGUST 2016

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CALIFORNIA SOCIETY OF MUNICIPAL FINANCE OFFICERS

M A G A Z I N E AUGUST 2016 #6

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CSMFO MAGAZINE AUGUST 2016

The California Society of Municipal Finance Officers is the statewide organization serving all California municipal finance professionals. We promote excellence in financial management through innovation, continuing education and the professional development of our members. CSMFO members are deeply involved in the key issues facing local agencies. We value honesty and integrity, and adhere to the highest standards of ethical conduct.

Thank you to all the authors in this issue for sharing with us their time and expertise. If you have an idea for a future article, please contact Melissa Dixon at the CSMFO office at melissa.dixon@staff.csmfo.org.

Disclaimer: The views and opinions expressed in these articles are those of the authors and do not necessarily reflect the official policy or position of CSMFO. For more information on CSMFO or this Magazine, please contact the CSMFO office at 916.231.2137 or visit the website at www.csmfo.org.

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CONTENTS AUGUST 2016

6 President’s Message

22 Time for Negotiations – Are you Ready to Play a Larger

8 Executive Director’s Message

Role?

10 Negotiations With a Bit of Money: You’d Think It Would Be Easier

12 Can You Cost it? Calculating the Cost of Labor Contracts

24 You Can Run, But Ya Can’t Hide… From Prefunding 31 Diary of a Host Committee Chair 33 Careers: Job Opportunities

14 Trends in Public Sector Labor Negotiations 17 Rendezvous of municipal finance professionals in Germany

18 Flores v. City of San Gabriel: The Way Forward 21 What does a Finance Director need to know about benefit plans that provide cash in-lieu of benefits?

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Wearing Many Different Hats – Labor Management H

PRESIDENT’S LETTER JOHN ADAMS

JOHN ADAMS FACTS

John’s first job was in a bowling alley.

ope you are enjoying your summer, and if you are fortunate, you have been able to take some time off (or plan to). This month, the CSMFO Magazine will have a few feature articles revolving around things finance officers should know about trends in labor management. As I write the president’s message for August, I am excited to read this month’s articles. One of my favorite writers, Amy Brown, will let us know what is being negotiated at the bargaining table related to retiree benefits. If you don’t know, Amy Brown works for DiMare, Brown, Hicks, and Kessler, but many know her as Editor and Publisher of the Public Retirement Journal and the PERS Public Agency Coalition Alert. These two monthly publications cover public pension and health care Gabriel case, with a focus for agencies issues, local government employee on assessing MOU provisions and relations, and provide industry expert negotiating compliance with the new perspectives. If your agency does not FLSA ruling. The ruling certainly made currently subscribe, I would highly my agency review its current payroll recommend it. practices and to evaluate compliance We also have articles from with FLSA. For smaller agencies, two of the top law firms in if you have not, I would the state on labor and consult with your labor employment law for attorney and discuss a the public sector, Liebert Cassidy “In Thousand Oaks, the City review.

We also have a Whitmore and Council recognizes that the couple articles from Meyers Nave.

City and its services are only two practitioners that Liebert Cassidy as good as the employees focus on interestWhitmore will give that are providing the based bargaining us some insights and why Finance on how to “Cost” service.” needs to be at the negotiations, while table. David Cain, who Edward Kreisberg, is the Finance Director from Meyers Nave, will in Fountain Valley, wrote give us some pointers on an article on trends in labor how to negotiate in the current negotiations, really highlighting that economic environment. Personally, as both sides have a strong interest in a finance officer, I think it is tougher to negotiate in an improving economy than working together and negotiating a it was during the great recession. During fair and affordable labor agreement.

Whether it is SEIU or a management the great recession, no question it was group, the one thing I have learned difficult to propose reductions in force by sitting at many tables is that and/or take-aways, but explaining the relationships matter. If you are an financial challenges of the agency was easier and both labor and management employee or management, having good labor relations and working together for understood them. As revenues improve, your agency is the ultimate goal. it’s prudent to be cautious and aware of the potential next recession while in For the article “Time for Negotiations negotiations. It is critical that costing – Are you Ready to Play a Larger labor agreements anticipate the current Role?” Gary Rogers, Human Resources and future costs for your agency.

Director in Thousand Oaks, highlights The other article from Liebert Cassidy Whitmore is on the Flores v. San

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the importance of Finance being at the table. For both the agencies I have worked for, Finance is part of the City’s negotiating team, but this may not always be the case in all agencies (even though it should be). As a finance officer, we should express to our agency the importance for Finance to be at the table. We then should take an active role in shaping the negotiation strategy and be a key contributor in communications between management and labor. Luckily for me, I work with the best HR Director and Labor Relations Attorney in the public sector, and we have a great team that supports us.

As we know, costs associated with salary and benefits are generally the largest expenditure for a public agency. I am sure I don’t need to remind you that we are in the business of providing Public Services, services that our community expects and deserves. Normally, those services are not provided by City Council or Management, but the employees of the agency. In Thousand Oaks, the City Council recognizes that the City and its services are only as good as the employees that are providing the service. Understanding that, they strive to maintain strong labor relations that are mutually beneficial for the City and its employees by recognizing the importance of providing competitive compensation that attracts and retains great employees. As a finance officer, it is your responsibility to assist in communicating a similar message to your agency in a clear and transparent manner. Being involved in labor relations is critical and I hope you are ready for the challenge.

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At First Site…Or second. Or fourth. Or sixth Or… A

EXECUTIVE DIRECTOR’S LETTER MELISSA DIXON

MELISSA DIXON FACTS

Melissa’s first job was in a toy store.

CSMFO MAGAZINE AUGUST 2016

s we suggested in our survey to the membership last month, finding a site for the 2019 Annual Conference has been difficult, to say the least. Thank you to those of you who responded to the survey; the results were very helpful to the Board in making the final decision about where to hold our upcoming conferences (more on that in a minute). There were also a lot of comments to the survey (thank you for that too! We love comments), some of which indicated that we could do a better job of sharing with the membership about how site selection works. So, here goes.

Because of the nature of CSMFO’s program schedule, we need a venue with not one but two really large ballrooms. And by really large, I mean roughly 15,000-20,000 square feet for the general session and 20,000-25,000 square feet for the exhibit hall. The CSMFO Annual Conference is too large for the majority of “convention-focused” hotels and too small for most convention centers. Most venues (and certainly most suggested in the comments) don’t fit our criteria. This, more than anything else, prohibits us from even look at a lot of desirable locations in Northern California (like Napa or Tahoe). The Site Selection Committee discussed possibly changing the format of the general sessions to not include food (providing lunch elsewhere, reducing the fee and letting lunch be on your own, etc.); a general session room set theater style (just rows and rows of chairs, no tables) will fit a lot more people than one with tables set for lunch. This would allow us to still fit in Monterey, but the Committee wasn’t fond of this idea.

weekend. Sacramento had availability, but for a conference starting on Tuesday; the Committee felt we’d lose attendance due to council meeting schedules.

Because we’ve been doing this so long, we have a good idea of which cities have venues that work for us, in both Northern and Southern California.

For North, that’s Sacramento, San Jose, Santa Clara, Oakland, San Francisco. San Jose, Santa Clara and San Francisco all have rates well beyond what the survey indicated was acceptable (for future reference, this is also why we’re not going to San Diego any time soon). Oakland and Santa Clara also provided dates that were off-pattern. CSMFO’s conference starts on Wednesday, ends on Friday. Those venues wanted us to book over the

After reviewing the survey results and much deliberation, the Committee recommended Palm Springs in early January for 2019 and Disneyland in late January for 2020. The Board approved those locations at its July 28 meeting.

All this left us with no viable options for Northern California for 2019, typically a North year. The Committee decided to think outside the box and asked for options for Southern California. We received two proposals, both for the first week in January: one from Palm Springs and one from Disneyland. (That first week of January was all they had available for the first three months of the year. Can you imagine?? Three years in advance and we still weren’t early enough!)

The Board requested we survey the membership to get an idea for how everyone felt about both Southern California three years in a row and early January. It turned out, you all prefer a January conference to a March conference, and the majority of those responding were unconcerned with going South three years in a row.

Phew! I’m glad that process is over.

It was grueling and rather unpleasant, not really having options. We’ll start searching for a Northern California venue for 2021 shortly after the Annual Conference next year…hopefully four years out will provide us more options!

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Negotiations With a Bit of Money: You’d Think It Would Be Easier Eddie Kreisberg, Principal, Meyers Nave

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ou’d think negotiations couldn’t get any harder than during the Great Recession. Your nightmares about falling revenues have just started to fade, with the details of layoff implementation replaced in your dreams by how to survive the Pokémon GO app. After all, the economy is on its way back, and the budget is looking, dare we say, o.k.

Time to sleep soundly knowing labor negotiations will be easy, right?

New Realities There are some reasonable arguments for larger wage increases. Revenues are improving and agencies have balanced budgets and perhaps even projected surpluses. Unions and employees understand that health and pension cost sharing is here to stay, and PEPRA should help contain pension costs further in the long run. And for some, the redevelopment agency challenges of the recent past have been addressed, new projects are coming on line, and hiring freezes have cautiously been lifted.

On the other hand, pension costs continue to rise, unfunded liabilities remain, and many agencies still project Not so fast. Sure, the bottom line has deficits down the road. Though improved, and wage increases will be revenues are returning, reserves are offered. But, boy, unions, our finances generally low, with a back-log of capital aren’t that much better! and infrastructure projects. Electeds Mr. Union Rep, I do believe you when now feel comfortable pursuing their you say that employees have been special projects, with a general desire to doing more with less, but we also have re-instate prior service levels. For some citizens clamoring about the pot holes in special districts, the climate simply isn’t the roads and that “Death Intersection” right to ask citizens to absorb further near the high school. Respectfully rate increases. And, PERB and litigation employees association president, no one liabilities from the Great Recession is saying your work is not valued, but linger, leaving unknown economic economists believe the next recession is obligations and often strained labor only a few years off, and our reserves relations. remain dangerously low. And yes Come to Negotiations Prepared Firefighters, your pay has fallen a bit Thus, your wage offer undoubtedly compared to other firefighters in the will be less than unions and employees area, but we did still have three hundred expect.

To be effective, you’ll need a applicants for our most recent opening. thoughtful and nuanced presentation, And, you know, the board/council is backed-up with facts and council/board pushing hard to restore services and support. It’s one thing to explain why adopt new programs. the agency can’t pay. It’s quite another Sound familiar? While the to explain why the agency is choosing negotiations of the recent past were not to pay (or at least not pay at a tough and even unpleasant at times, particular level). they also were fairly straight-forward.

So, be prepared. Know the status The message to unions was simple – we’ve got no money for wage increases. of your reserves and learn about applicable reserve policies and To be effective in bargaining now, industry standards … and come ready you’ll need to be more prepared, more nuanced, and more thoughtful than ever to explain. Share charts showing the millions of dollars of back-logged capital before. projects and the citizen concerns and liabilities if capital improvements are not made. The reality is that many of CSMFO MAGAZINE JULY 2016

the employees at the table have been clamoring for some of these very same repairs and new equipment.

Come with the number of frozen or unfilled positions, and show the impacts of decreased staff and furlough hours on service levels and overtime costs.

Indeed, a common union argument these last five years has been that employees should be paid more because the agency has refused to hire enough staff.

Increasing staffing may well be a “winwin” for both agency and union.

Though most were happy to see PEPRA become law, unions need to understand why PEPRA’s impact will not be seen for years, with unfunded liabilities and increasing pension costs continuing in the near term. Don’t just talk generally about the agencies’ health and pension costs. Bring the finance director and a benefits person and anyone else needed to help you explain the actual and projected costs of health and retiree health benefits.

Unions understand these costs are real, and relevant, and promoting a greater common understanding and being specific may help unions accept a lesser wage number.

Employees like to say how they’ve waited and now is the time for them to “get paid.” And to an extent, this may be true. But, evaluate whether and where recruitment and retention challenges actually exist, even at current pay and benefit levels. Other agencies after all have just come through the same recession. And for agencies with large and expanding benefits packages, an agencies’ total compensation offer may still be competitive even with just modest wage increases. Again, evaluate these issues in advance, and come prepared to justify why competing costs justify a given wage offer.

Further, legal challenges continue to influence negotiations. The Ninth Circuit just issued a decision in Flores

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v. City of San Gabriel that threatens higher overtime costs. The impacts of the Affordable Care Act remain unknown, with other legal questions related to treatment of cash in lieu and leave cash-out practices looming. Don’t learn of these developments from the union at the table. Work with legal and other advisors in advance to evaluate which of these legal developments apply to you, and are relevant to your wage and other proposals.

For special districts, the financial presentation should be even further developed. Often, unions will simply point to the district’s ability to increase rates and thus conclude the money is there for big wage increases. You will need to review the history of ratepayer increases, the economic challenges still faced by the district you serve, and the competitive position (if applicable) of your employees taking into account all benefits rather than simply wage.

Finally, spend some time evaluating what other proposals make sense to advance now. The answer for each

agency will be different, but don’t come with a list of “wants” just because you can, and it’s negotiations time.

Instead, be thoughtful about your proposals. Is now the time for big “merit” increases for management or for board/council members? Decide whether now, when large wage increases may be on the table, is the time to trade those wage increases for long-desired operational changes and improved management rights language.

Maybe it is, or perhaps now is exactly the wrong time for such proposals.

Similarly, really scrutinize whether now, rather than a year or two or three from now, is the time for that multi-million dollar construction project. It may well be, and labor negotiations obviously shouldn’t hold up projects essential to safety and serving the community. But, optics sometimes matters, and labor relations clearly do matter, so pushing a project out a bit to reward employees with a wage increase now may be the better approach for some.

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Conclusion Most of us believe union representatives are reasonable people who simply want the employees they represent to be treated fairly. This is typically an agency goal as well. After all, with happy unions and employees comes better labor relations, better recruitment and retention, and quality employees serving the citizens of your agency.

By spending time evaluating how best to spend your available dollars, and truly demonstrating to your unions the need to spend some of those available dollars on competing needs, you are much more likely to walk away from negotiations with deals that won’t derail your economic recovery as well as greater mutual understanding with labor going forward. Good luck!

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Can You Cost it? Calculating the Cost of Labor Contracts Kristi Recchia, Labor Relations Director, Liebert Cassidy Whitmore

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hen it comes to labor negotiations, costing labor contracts is critical. Long gone are the days of generalized estimates related to labor costs. In today’s contract negotiations, labor groups are analyzing public agency resources and expenses to determine the ability of an agency to increase compensation and benefit costs during the meet and confer process. In addition to labor groups, elected officials are expecting greater transparency and more detailed information regarding costing. The impacts of Memorandum of Understanding (“MOU”) provisions on current and future costs (including unfunded liabilities for items such as leave cash outs) are part of the conversation in closed session.

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Providing accurate information enables better decision making for both shortterm and long-term financial impacts.

break down even further into categories such as pensionable, taxable, or those paid to a third party on behalf of an employee. Some direct costs can be What do we mean when we determined by position; others say “costing?” It means you are “bucket items” for which should be able to identify multi-year averages are the what each item in the best method to determine MOU costs on a fiscal costs. Examples of “bucket year basis and thereby “Clear costing data adds items” include overtime determine the total cost credibility to the meet and (e.g., stand-by, call-back, of the contract to your confer process.” and special detail), agency. tuition reimbursement, and Direct & Indirect costs that are not typically Costs – What are budgeted by position. An They?

MOU may provide that a member receives $2,000 in tuition Collective bargaining reimbursement but if less than 10% agreements contain both direct costs of the unit have ever used the tuition and indirect costs. It is important to reimbursement program in any given understand each of these concepts year, then the cost should be calculated and determine their value. Direct by averaging actual expenses over a costs are items that send cash out the few years (e.g. three-five years). Multidoor – compensation components and year averages are recommended to employer paid benefits are the two largest types of direct costs. Direct costs provide the most accurate picture of actual costs.

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Indirect costs are typically the value of contract provisions where cash isn’t necessarily leaving the organization but the provision has a value, for example, leaves of absence. For most employers, the value is a productivity cost and not an additional direct cost. However, in other cases where you have minimum staffing, sick leave may result in direct costs via the payment of overtime (to cover the work of the sick employee) or leave cash outs which result in dollars out the door.

Costing Methodology The process of costing is time consuming and can be tedious. Also, agencies often rely on what they previously budgeted to spend vs. what they are actually spending. It is recommended that you understand the difference and focus on what you are actually spending. In addition, it is important to establish your costing methodology and then communicate it to key stakeholders (i.e. City Manager, Finance Director, HR Director, Elected Officials, etc.). It is easier to start with the costing of the current MOU and reach consensus on the methodology long before you engage in developing proposals and seeking authority for the next MOU. Once a costing methodology has been established, cost consistently and communicate the rationale for the methods selected. A good example is the frequently asked question – what would a 1% salary increase cost?

Well, we need to be clear about the question – 1% of base pay or 1% of total comp? Are we including the value that 1% has on overtime costs? Have we factored in escalating provisions that we have previously agreed to pay like the employer rate for retirement benefits or the impacts of health insurance premiums that were already negotiated and exist in the MOU? If the base pay for a bargaining group totals $6,287,290 and the total cost for the group is $9,664,591 – then thinking through the 1% question in this way makes a big difference!

Who handles the costing? Is it the finance department, the budget office, Human Resources? Hopefully, it is a collaborative effort. If you are fortunate to have a finance system that can prepare costing information and create

costing scenarios – you are LUCKY! For most agencies, downloading data from payroll and finance systems into Excel spreadsheets to run costing calculations is more common. Have a conversation with your bargaining team leadership and chief negotiator early so you can determine the plan for costing.

years, etc. are issues elected officials want to understand and that you should understand as well.

Is Costing Really Helpful?

Absolutely! Understanding what each item costs sets the framework for identifying what each proposal in the negotiation process costs. Both agency and union proposals need to have a value identified in order to determine the feasibility of the proposal.

Additionally, when you have analyzed the cost, you will clearly see what the real impact of a proposal might be.

Calculating impacts that a proposal will have to the total cost is important. A proposal to increase base pay by 1% impacts the cost of any “roll-up” items. Roll up items are costs that are factored off of base pay including percentage based special pay, taxes, retirement costs, overtime impacts, etc.

Clear costing data adds credibility to the meet and confer process. You should be able to share costing information across the table and it can serve as an effective tool in explaining why items may not be able to be realized during negotiations. If you find yourself at impasse, and engaged in the fact-finding process, then your costing data will be essential during the factfinding hearing.

As public agencies begin to see improvements in the financial condition of their organization, costing will continue to be a critical component in labor negotiations. The long-term sustainability of the compensation structure and the ability to work within the structure require a solid and complete understanding of labor costs.

Effectively using costing to determine one-time costs, the best use of a dollar, structural costs that increase in future

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Trends in Public Sector Labor Negotiations David D. Cain, City of Fountain Valley Director of Finance/Treasurer & Adjunct Professor CSUN MPA Program

“Most negotiations are won or lost even before the talking begins, depending on the quality of preparation” - Roger Fisher and William Urv

W

hat were your thoughts as you walked into your first labor negotiation?

Or for those that have not had the opportunity to “meet and confer” what is your perception of the process? There are many books, studies and internet sites that discuss the broad field of labor negotiations and labor relations.

There are two areas that really define the negotiation process: strategy and costing. You will find elsewhere in this edition more information about costing.

I want to spend some time talking about “strategy” based on my experience at the table and in the university class room. Chester L. Karrass is quoted as saying “In business as in life, you don’t get what you deserve, you get what you negotiate.” Is labor negotiations about CSMFO MAGAZINE AUGUST 2016

the “substance” of any issue under consideration or is it the “relationships” and developing trust?

I remember very clearly my first labor negotiation meeting some twenty plus years ago. I was new to the public sector and had been given the task of getting an MOU agreement from one of the city’s public safety groups. I walked into the room with “our” labor attorney and the union rep walking in with “their” legal counsel and the dialog began, or so I thought. They laid out their position and we countered with our position, both extremes. We spend weeks and countless meetings getting to an agreement. Mind you, this was back in the day when we did not have any money. The feeling from both sides at the end was not really gratifying, although we had a signed agreement.

Under this process, sometimes one, or both sides, relents enough to carve out an MOU. Other times it can end in an impasse, which in today’s world means the long and expensive process of Fact Finding. People love to hear and read about the conflict as the story is told when the process goes bad.

Several weeks after the completion of our “successful” negotiations I was

talking with the lead union rep / police officer about our process and the fact that it took a lot of time and money to get to an agreement. We both agreed there had to be a better way in future negotiations. We both knew we wanted to set aside the “us versus them” approach. As we talked more we agreed that we would sit down together without lawyers or other representatives and have a dialog about where the City was financially and what we both wanted from a bigger picture approach.

We talked about and agreed about the need for our organization to reduce costs and increase service levels, with our limited funds and the long term viability of the agency could not be forgotten.

What I now realize is that we were talking about what is called “Interest Based Bargaining” versus the adversarial approach we had used the first time. This interest based process does not begin with demands and counter demands, but with a clear picture of each party’s true interests.

Interests include needs, desires, concerns, fears and hopes important to each side. They are the underlying reasons why people become involved CSMFO.ORG

requires buy in from both parties and the desire for both teams to help each other

in conflict. With a list of shared succeed. The following year we entered into a mutually beneficial two year agreement interest both parties can then begin to and emerged as stronger allies not adversaries. The investment was time and problem solve. Everyone can look for relationship building and we did reduce costs, no attorney fees! mutual gain. This process was also Positional Bargaining Interest Bargaining about building and maintaining trust.

Adversaries Joint problem-solvers The requirement Goal is victory Goal is wise decision for Interest Based Demand concessions Work together to determine who gets what negotiations to Dig into position Focus on interest, not positions work requires buy Mislead, use tricks Be open about interest, use fair principles in from both parties Insist on your position Insist on objective criteria; consider municipal and the desire for answers both teams to help Apply pressure Use reason; yield to principle, not pressure each other succeed.

The following year Look for win for you alone Look for win-win opportunities we entered into a mutually beneficial In my labor classes I have the students bargain an actual labor contract through role two year agreement and emerged as skillstoincluding reflective developed together by both sides yields playing teams. interpersonal As they begin ‘meet and confer’, many times I find them immediately stronger allies not adversaries. The listening, developing interest-based an agreement where each about party will taking the adversarial bargaining position even though we have talked other investment was time and relationship questions and where facilitation of willingly fulfillisit.the way I understand bargaining methods.

When I ask why they usually say “well this building and we did reduce costs, no solutions are second nature. Learn to the process actually happens”. Really! When asked why they did not use the Interest attorney fees! develop the ability to recognize that

based tools they usually state, “I didn’t think we could do that and besides we wanted to In my labor classes I have the students in any type of negotiation both sides win.” So it is true traditional bargaining polarizes each party where one side will win arethat under pressure and help negotiate bargain an actual labor contract through and one side will lose.

But in the end both side lose and it is impossible to build trust a solution that is mutually beneficial role playing teams. As they begin to that is ongoing.

Recently I had the opportunity with another employee group to to the whole organization.

A solution ‘meet and confer’, many times I find approach our negotiations from an interest based problem solving approach. Both them immediately taking the adversarial bargaining position even sides though openly we talked about the limited funds and how we could develop solutions that have talked about other bargaining were win-win for both sides. We created some options that allowed for a two year methods. When I ask whyagreement they usuallyand further building of trust through honest open communication. say “well this is the way I understand the process actually happens”. Really!

As finance professionals we are not always given the opportunity to become skillful When asked why they did not use the labor negotiators.

However, the tools of a good negotiator can be used in our day-toInterest based tools they usually state, lives. Learn to be a good communicator; be a person who has developed “I didn’t think we could doday thatfinance and strong interpersonal skills including reflective listening, developing interest-based besides we wanted to win.”

So it is true that traditional bargainingquestions polarizes and where facilitation of solutions are second nature. Learn to develop the each party where one side will win ability to and recognize that in any type of negotiation both sides are under pressure and one side will lose. But in help the end both negotiate a solution that is mutually beneficial to the whole organization. A solution side lose and it is impossible to build developed together by both sides yields an agreement where each party will willingly trust that is ongoing. Recently fulfill Iit.had the opportunity with another employee group to approach our negotiations from an interest based problem solving approach. Both sides openly talked about the limited funds and how we could develop solutions that were winwin for both sides. We created some options that allowed for a two year agreement and further building of trust through honest open communication.

As finance professionals we are not always given the opportunity to become skillful labor negotiators. However, the tools of a good negotiator can be used in our day-to-day finance lives.

Learn to be a good communicator; be a person who has developed strong

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2016 CSMFO Annual Weekend Training Seminar

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INSIDE LOOK

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Rendezvous of municipal finance professionals in Germany

uremberg, Germany, is the city of bratwurst and lebkuchen, great art, tremendous mechanical and industrial invention, and home to a half million Bavarians today. And Nuremberg was also the sight of a recent lunch and European rendezvous between former CSMFO President Thomas Fil and Tim Seufert, longtime supporter and commercial member of CSMFO! In middle Franconia and the heart of Bavaria, Nuremberg holds many fascinations. One of them is toys. The City was in many ways a significant birthplace of toys for Germany and the rest of the world. Wooden toys were designed and manufactured and shipped to many regions of the globe. As styles changed, and tariffs based on weight became high, many manufacturers switched to tin and other lightweight materials to avoid such costs and remain competitive. The Nuremberg International Toy Fair is still the largest fair of its kind. A visit to the Nuremberg Toy Museum, which was founded originally by the Bayer family, should be on any visitor’s list, regardless of age.

Industry has flourished in the City and nearby for hundreds of years. Stalwart firms such as Siemens and MAN established the area as the industrial heartland of Bavaria in the 19th century, and thus for Germany for years to come. The investment returns, jobs and taxes earned by these companies allowed architecture, art and culture to flourish.

Perhaps the most well-known artist from Nuremberg is Albrecht Dürer. He was one of the greatest artists of all time, and contributed so much to the fields of printing, graphic arts, painting, and even astronomy. He created the first prints of the heavens, and eventually the first map of the terrestrial globe in 1515. It is also believed that he had some communication with Copernicus, the revolutionary thinker on how the earth actually relates to the sun. Dürer’s paintings are studied today for their techniques, 500 years later. His large house was not destroyed in WW II and stands today as a museum and monument to the man and his accomplishments.

Nuremberg has contributed two important items to the world of gastronomy: Nürnberger Bratwurst (grilled sausage), a shorter and thinner bratwurst sausage, and Lebkuchen, a type of gingerbread eaten by many around the holidays. Thomas, Tim and their families enjoyed a few dozen of these bratwurst, potato salad, sauerkraut and beer over lunch, while they compared vacation notes, and discussed matters of local finance, too.

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Flores v. City of San Gabriel: The Way Forward Laura Kalty, Lisa S. Charbonneau, and Julianna Kresse

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he Ninth Circuit’s recent decision in Flores v. City of San Gabriel provides a new interpretation of how employers should calculate overtime under the Fair Labor Standards Act (FLSA) if the employer provides cash payments in lieu of health benefits to its employees.

There are generally two types of cashin-lieu plans implicated by Flores. One type of plan allows employees to opt out of an employer provided medical benefit plan and receive a cash payment instead. In the other type of plan, employers provide employees with a fixed allowance to pay for medical benefits and any unused portion of the allowance is paid to employees as cash.

The City treated the cash-in-lieu payments as benefits, not compensation, and excluded the payments in its calculation of the regular rate. The City’s police officers sued, alleging the cash-in-lieu payments were not benefits, but compensation and must be included in the regular rate calculation.

The police officers also alleged the City’s failure to include the cash-in-lieu payments was willful, entitling them to three years of back pay rather than two years. The officers also sought liquidated damages (i.e., “double damages,” the statutorily imposed remedy for an FLSA violation).

The Court also assessed liquidated damages against the City. Typically, such an award can be averted if the employer can demonstrate it acted in good faith. Here, the City argued its payroll department had consulted human resources regarding whether to categorize its cash-in-lieu payments as a “benefit” instead of compensation.

The court found this was insufficient to establish a good faith defense.

Looking Back

It is important to note that if your agency provides cash-in-lieu payments, but has not included the cash-in-lieu in your regular rate calculation, this does The Ninth Circuit agreed with the not automatically mean your agency officers and found that cash-in-lieu violated the FLSA. Rather, it is not Under the FLSA, hours worked in payments were “compensation for work” unusual for agencies to compensate excess of the applicable FLSA overtime and, as such, must be included in the employees in amounts and at rates threshold (usually 40 hours in a sevenCity’s “regular rate” calculation used to greater than what the FLSA requires day work week) must be compensated compensate non-exempt employees for – for example, by paying “daily” at 1.5 times the “regular rate of pay.”

FLSA overtime. overtime or by counting certain leaves Generally, all forms of compensation The Court went further and determined as time worked for overtime purposes. earned or received in a work week that the City’s benefits plan was Nonetheless, it is important for agencies must be included in the regular not a bona fide plan. In to evaluate carefully the potential rate of pay, with certain addition to other factors, liability created by Flores under the exceptions for gifts, a plan is bona fide if an FLSA. “The most obvious reasonable expenses, “incidental” percentage Moving Forward way to cut off potential discretionary bonuses, of the total contributions and payments made to liability under Flores Many agencies are looking for ways is paid out in cash. a trustee to provide the to minimize liability going forward is for agencies to start The Court did not set a employees with benefits. and otherwise bring themselves into threshold to determine including cash-in-lieu Prior to Flores, many compliance with the FLSA. There when an amount is agencies did not consider benefits in their regular are a number of ways to do this and “incidental” versus when calculations.” cash-in-lieu as a type of certain options may implicate or trigger it is not. However, in the compensation that must be obligations under other laws such as the City’s case, approximately included in their calculation of Affordable Care Act, IRS Section 125, 42-47% of the total contributions the regular rate. and Public Employees’ Medical and were paid out in cash to its employees; Hospital Care Act. Before implementing The facts of the Flores case were as an amount the Court thought was not any option, we strongly recommend follows: the City of San Gabriel offered incidental. The consequence of having consulting with legal counsel to analyze its employees a “Flexible Benefits Plan.” a plan that is not bona fide means potential impacts and consequences for Under the plan, the City provided a that the employer must calculate the your agency. designated monetary amount to each regular rate using the entire amount it employee to purchase medical, vision, contributes to the employee’s benefits Employers should consider moving to and dental benefits. While the City plan, not just the cash amount provided a payroll system that regularly calculates required employees to purchase vision to the employee in lieu of benefits.

FLSA overtime liability separately from and dental benefits, employees did whatever overtime is owed under the not have to purchase medical benefits MOU. Under such a “dual calculation” In addition to finding that the City if they provided proof of alternate method, employers can compare the violated the FLSA by failing to include medical coverage. Employees who did amount an employee is paid under the cash-in-lieu benefits in the regular rate, not purchase medical benefits received MOU with the amount the employee is the Court also found that the City’s the unused portion of their designated required to be paid under the FLSA and violation was willful because it failed monetary amount as a cash payment. pay whichever amount is greater. Use Of the total amount the City contributed to take sufficient affirmative steps to of such a “dual calculation method” determine whether cash-in-lieu should be may be the best way for an employer to to the Flexible Benefits Plan, the City included in the regular rate. As a result, insulate itself from FLSA liability going paid between 42% and 47% of that amount directly to employees as cash in the Court awarded the officers three forward. Of course, effective use of a years of back pay instead of two. lieu of benefits each year. “dual calculation method” requires an

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accurate and FLSA-compliant regular rate calculation.

Finance and payroll departments play a critical role in ensuring that an agency is in compliance with the FLSA. If you The most obvious way to cut off have not audited your payroll practices potential liability under Flores is for for some time, we recommend using agencies to start including cash-in-lieu benefits in their regular rate calculations. Flores as an opportunity to make sure that your regular rate of pay formulas Currently, all agencies should have a and calculations are up to date and in method for determining the regular rate compliance with the law. in order to calculate FLSA overtime for non-exempt employees. To comply with For specific advice on how Flores and the Flores decision, an agency would the decision to offer cash-in-lieu of health need to develop a method to regularly benefits may impact your agency, please incorporate cash-in-lieu benefits into contact one of the attorneys at any of its regular rate calculation for FLSA our offices statewide. overtime.

Laura Kalty, Partner in the Los Angeles Another way to minimize liability may be to eliminate or reduce cash-in-lieu benefits payments to employees. If an agency does not provide cash-in-lieu, Flores does not apply. However, before an agency can implement this option, it must meet and confer with affected employee organizations.

office of Liebert Cassidy Whitmore, began as a litigator and has grown into an unparalleled labor relations expert for clients, providing cutting edge labor and employment counsel for public agencies. She can be reached at lkalty@lcwlegal.com.

What does a Finance Director need to know about benefit plans that provide cash in-lieu of benefits?

regardless of whether the employee received any cash in-lieu of benefit. The court did not define what was considered “incidental” cash, but identified that more than 42% of the plan benefits paid in cash in this particular case was not incidental.

By Dan Matusiewicz, Finance Director/ Treasurer, City of Newport Beach 1) In a recent ruling of the Ninth Circuit court of appeals, the court took a particularly aggressive stance in the Flores vs. San Gabriel case, deciding that cash in-lieu of benefits provided through a Section 125 plan ought to have been included in employees’ regular rate of pay for overtime computation purposes. This would be true for employees that opted out of the plan as well as employees that selected medical benefits but received a residual amount in cash.

2) The court further ruled the since the plan provided more than an “incidental” amount of cash instead of benefits, the plan was deemed non-bona fide and therefore 100% of the medical allowance provided to all employees needed to be included in their regular rate of pay

3) The court went further and determined that since the agency had not made a good faith effort to determine if the cash-in lieu of benefit was subject to FLSA, they awarded the agency’s employees three years retroactive pay, doubled the award as punitive damages and then added the plaintiff’s attorneys’ fees. This can be a substantial sum for any city.

4) If your agency has a Section 125 Cafeteria plan that provides cash inlieu of benefits it would therefore seem, your agency has likely incurred an FLSA overtime liability to your employees. This assumes your agency, like most every other agency, failed to include the cash provided in-lieu of benefits in employees’ regular rate of pay for overtime computation purposes.

It is important to note this case may be reheard “en banc,” meaning by the entire Ninth Circuit court of appeals rather than a select panel of judges. Further information on this case can be found on the Liebert Cassidy Whitmore, Meyers Nave and Best Best & Krieger websites.

Lisa S. Charbonneau, Attorney in the San Francisco office of Liebert Cassidy Whitmore, represents clients in litigation throughout the state and advises clients on a variety of labor and employment law matters. She can be reached at lcharbonneau@lcwlegal.com.

Juliana Kresse, Attorney in the San Francisco office of Liebert Cassidy Whitmore, has represented clients in California State and Federal courts and is well versed in all aspects of the litigation process. She can be reached at jkresse@lcwlegal.com.

What should I do now?

1) You should consult with your legal counsel immediately to review the facts and circumstances of your plan, monitor the final outcome of this case and chart a legal course of action.

2) If you conclude your agency has some level of exposure, you should also consider booking a liability commensurate with your exposure or prepare a footnote disclosure discussing the contingent nature of the potential liability in you next CAFR. 3) Moving forward, you should include cash in-lieu of benefits in your agency’s computation of FLSA overtime.

4) If more than an incidental amount of cash is provided in lieu of pay, the entire health allowance should be incorporated in the FLSA rate of pay.

5) To reduce or eliminate future exposure to overtime rates of pay, you can cease providing the excess cash in lieu of pay altogether. However, it also appears permissible to roll unused cafeteria allowance to a Retiree Health Savings account. If the employee does not receive the unused cafeteria allowance in cash, no amount needs to be included in the employees’ regular rate of pay. Please check with your legal and plan counsel!

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Time for Negotiations – Are you Ready to Play a Larger Role?

Gary Rogers, City of Thousand Oaks, Deputy City Manager/Human Resources Director

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any executives in local government – yes, even Finance Directors - shy away from the prospect of actively participating in the labor relations process. Negotiations can be conflict ridden, emotional, highly politicized, and extremely time consuming.

The responsibility for conducting negotiations with represented employees usually lies with an agency’s human resources professionals. Intense labor negotiations are frankly the reason why I think some people early in their local government career pick anything but human resources. I encourage you however to consider the benefits of an effective negotiations process and the contribution you can make as a finance professional.

A positive labor negotiations experience can have significant impact on productivity, employee morale, public perception of your agency, and ultimately on service levels to the community. That is why it is so important to develop and implement an effective negotiations strategy and to take the time to prepare for the process.

To increase the probability of success, it is essential that finance professionals take an active leadership role in the process. The finance perspective must be integrated in the preparation for negotiations, the actual meet and confer sessions, and the communication of financial information. An effective finance professional will not only provide detailed and comprehensive financial information to support good decisions, but will also provide broader insight to issues related to agency operations. I have participated in more than 100 separate negotiations during my career, and in my experience when CSMFO MAGAZINE AUGUST 2016

finance staff play an active role in the negotiations process, the outcomes have been far more successful.

In the new era of fact-finding and transparency, accurate and thoroughly evaluated financial data is essential to success at the negotiating table.

Another John Adams, the second President of the United States (not the CSMFO President), once said, “Facts are stubborn things; and whatever may be your wishes, or inclinations, or the dictates of our passions, they cannot alter the state of facts and evidence.”

Good financial data will assist the negotiating team in their preparation for negotiations, provide irrefutable material to share with sometimes disbelieving labor units, and lead to more informed decision making by elected officials. The presentation of accurate financial data helps develop trust with bargaining teams, elected officials, agency employees and the public, and should actually speed up the negotiations process because more time is spent discussing alternatives and less time is spent arguing about the numbers. Accuracy is essential to establish credibility, and it promotes the development of a positive long-term relationship between bargaining units and agency staff.

The negotiations process has become more complex and sophisticated over the years.

This, in tandem with an environment where the local paper and the public are keenly interested in the outcome,

requires public agencies to be strategic and articulate in presenting financial information. Finance staff are uniquely qualified to present information about the most important deal points in a labor contract, including total package costing, total compensation analysis for adjustments to benchmark positions, and the implications of pension obligations, retiree health care and various union proposals. The agency’s negotiating team and elected officials need thorough and comprehensive costing information to establish reasonable and appropriate negotiating authority; and ultimately to fully understand the implications of contract approval before making a final decision.

Senior finance staff are well positioned to demonstrate organizational leadership in other ways during the negotiations process. You may think the role of finance is limited to financial analysis and data presentation; however, some of the most meaningful contributions can be to help frame and add context to negotiating topics.

Finance staff’s vantage point is unique because they are at the center of many organizational transactions and activities and may understand the full implications of negotiating proposals.

Longer tenured staff are also able to bring historical perspective into the negotiations, insuring that relevant information is known and past mistakes are not repeated.

For a variety of reasons, there is sometimes a rush to reach agreement at the negotiating table and the financial CSMFO.ORG

negotiations process? Do you want details are left for another day. This to demonstrate your leadership skills to approach can be very dangerous and the broader organization? In addition should be avoided. The long-term to providing sound financial analysis, financial well-being of your agency is I encourage you to expand your role dependent on making informed in the negotiations process by decisions. There is sometimes assisting in the preparation also a tendency to overfor bargaining sessions, simplify a proposal attending the closed so that it seems sessions with elected more reasonable officials, and actively “The presentation of and is therefore more likely to be accurate financial data helps participating in the actual negotiations. accepted. Having an engaged finance develop trust with bargaining Your insights will add value to the process teams...” representative and help project a at the table helps unified and more global insure that unintended management perspective consequences of to labor. Your willingness to proposal are called out seek new challenges will increase and fully evaluated prior to your individual capacity to succeed making a decision. and contribute to your agency’s success.

So, are you ready to contribute to your agency’s success in the labor

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You Can Run, But Ya Can’t Hide…

From Prefunding Amy Brown, Public Retirement Journal, Partner, DiMare Brown Hicks & Kessler, LLC

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re you sick and tired of hearing about the importance of prefunding public pensions and retiree health benefits? There’s been a lot of discussion about the benefits of prefunding, and the political impacts of prefunding, the “you should have started prefunding yesterday” commentary from people who think they are smarter than you. We see your eyes rolling and hear your “yeah, yeah, yeah’s”. But for good measure, we wanted to take this opportunity to dog pile on what you have barraged with one last time. In other words, if this is the last thing you read on the topic, consider yourself golden.

looking to implement a prefunding plan which also calls for the employees to kick in.

A relevant rub has been whether or not retiree health care is considered a vested benefit (follow us for a second, we will create the nexus), but the answer to that question never seems simple. Contracts can be “express” – where the terms of the agreement are clearly determined from the written words of the contract, or they can be “implied” – where some or all of the terms of the agreement may be based on the conduct of the parties and, in some cases, relevant written communications outside of the contract.

There have been a number of This new bit of information that significant court cases dealing with you may not have heard in the rights of California public the public sector world is in employees to vested retiree regards to the State and health benefits, most notably “More than 20 employers what it’s doing to move the series of federal and have already signed up for the prefunding of other California rulings involving the Section 115 trust offered post-employment benefits the dispute between the

by PARS, which they call the (OPEBs) along. You are retired employees of Orange Pension Rate Stabilization probably aware that County (REOC) and the Program (PRSP).”

Governor Brown, through County of Orange[1] that took his budget proposals, has over six years to resolve and allocated a large portion the intervening rulings involving of the State’s budget surplus the City of Redding[2]. Without going to paying down OPEB unfunded into all of the messy details of these cases liabilities. But he isn’t doing it alone. He is (something lawyers get paid by the minute asking (read: strong arming) state workers to do), we will non-lawyer-speak the bottom in several bargaining units whose contracts line. expire next year to kick in their fair share.

It is possible for public employees in As you recall, this isn’t a first. The California to obtain vested rights to their California Association of Highway retiree health benefits. And it really boils Patrolmen (CAHP) negotiated a modest down to the collective bargaining agreement salary increase and an employee and – did the parties negotiate and agree upon employer allocation to prefunding their retiree health care as a vested right? Did retiree health care obligations. And many ya’ll agree to health benefits in perpetuity? local agencies have followed suit.

A continual, guaranteed level of benefits?

But the issue that has caused the biggest In analyzing whether there is an express splash – in our minds anyway – is the or implied contract to provide vested negotiations at the local level. Many public retiree health benefits, the courts look at the agencies that offer retiree health care are employer’s legislative acts (i.e., resolutions, CSMFO MAGAZINE AUGUST 2016

ordinances, and approved MOUs). If the parties’ intent to confer a contractual right to retiree health benefits is not explicit, the party asserting the right (i.e., the retirees) has a heavy burden to overcome. As we have learned from our smarty lawyer friends, like Jeff Chang with Chang, Ruthenberg & Long, PC, a long-term practice of providing a retiree health benefit is not, by itself, enough to create a vested retiree health benefit.

Now here’s where the relevance comes in – if public employers are asking their employees to share the retiree health care burden by partnering up to prefund, don’t you think if there’s any ambiguity with regard to that benefit being a vested right, the employees would ask for clarification?

And by clarification, we mean an expressed right outlined in the new agreement? Or is it possible the courts could view that required employee contribution as further proof of an implied contract for retiree health benefits?

So say you have reached an agreement with your bargaining units to prefund and now it’s in the cards. What do you do now?

How do you prefund? With our maturing public pension plans, we know that we should expect greater fluctuations in required contributions from year to year. And since we know big fluctuations are coming, our actuaries are warning employers to plan for it in order to ease the burden when big contribution increases do arrive. But how exactly does one do that? It’s not like big portions of your annual budget are discretionary spending.

If you’ve been in the position of sitting on extra cash, you will have quickly learned that there’s little you can do with that money to “prepare” your agency for fluctuating contribution requirements. If you give that extra money to CalPERS, CalPERS will apply it toward your unfunded liabilities, and it will probably make only a small dent in CSMFO.ORG

your annual required contributions due to their amortization rules. While paying down unfunded liabilities is always worthwhile, it won’t help you manage future year-to-year changes in required contributions. You could stash some cash in a rainy day fund, but that has its drawbacks as well. The good news is: we’ve got an answer for you. Duh, dah, dah, duh…. The Section 115 trust!

There’s a new kid in town doesn’t yet have a catchy nickname, so we’ll refer to it by its official name - the Section 115 trust.

CalPERS recently put out a survey to all of its members about their thoughts on interests in a new pension savings account. Of the agencies that responded, 60 percent said they’d never heard of a prefunding trust for pensions. It’s so new that this comes as no surprise, yet this is an important tool that every agency should be evaluating.

Depending on your agency’s priorities, this might be a valuable tool for your budgeting strategies.

Historically, Section 115 trusts have primarily been used for prefunding OPEBs. All of the OPEB prefunding plans, including the one offered by CalPERS, are operated under IRC Section 115. Once employer assets are placed in the trust, the assets may only be used for the designated purpose of prefunding OPEBs. However, in a private letter ruling, the Internal Revenue Service said that Section 115 trusts could also be used for prefunding pension benefits, and that created a whole new tool for employers. Private financial service providers, namely PARS (Public Agency Retirement Services), were quick to create and offer this tool to public agencies starting in 2015. Their 115 trust can be used to prefund both OPEBs and pensions, although assets must be separately accounted for and used for their respective obligations only.

Aside from responsible budget planning, there’s another very good reason to consider a Section 115 trust for pensions. With GASB 68 pension reporting requirements just around the corner, agencies are beginning to understand the implications of those new rules. GASB 68 requires the liability for pension obligations to be included on an employer’s balance sheet (though calculated

differently than your pension valuation).

Those new liabilities cannot be offset with any assets over which the employer retains discretionary control. To offset that liability, an employer has only two choices: it can pay down its unfunded liabilities, or it can offset liabilities using an irrevocable Section 115 trust. The trust provides a mechanism and ability for employers to reduce their pension liabilities while also reserving those funds to assist in future years’ budgeting.

So, if at the end of the fiscal year you discover that your agency has a sur-plus, you have some ideas about how to spend that money, right? How about getting a council or board res¬olution to use a portion (for instance 50 percent) of one time money to reduce your unfunded liability?

Let’s use CalPERS as an example. A onetime contribution to CalPERS will reduce your unfunded liability and will also save you the 7.5 percent interest that you’re paying on that liability. We’re guessing most of your other debt doesn’t come close to 7.5 percent. There are definite reasons for just plunking the money down and chipping away at the big goal, but with this strategy, employers won’t see a big reduction to their annual payments since CalPERS will spread the contribution out over the remainder of the amortization period.

If instead you choose to establish a Section 115 trust, you are not necessarily paying down unfunded liabilities as far as your pension fund is concerned. Those funds will be reserved for a time down the road when CalPERS is asking for an annual contribution payment that would otherwise create heartburn. However, and we realize this may be confusing, the assets in a Section 115 trust for pensions can also be used to offset your unfunded pension liabilities at least as far as your financial statements are concerned. When weighing which option is right for you, you must consider your agency’s unique circumstances and long-term funding strategies.

The one and only John Bartel of Bartel & Associates aka resident actuarial expert (if you don’t know him, stalk him on Google.

He’s pretty good) has been talking about these “prefunding” accounts for at least a year now. He says an agency could use a

Section 115 trust for rate stabilization, which can be used to mitigate pension investment volatility more effectively than any tool out there. Also, if you’re still thinking a rainy day fund might be the way to go (in order to retain that discretionary control), consider that investments held in an irrevocable trust are significantly less restricted than your general fund investments. They are designed for the long term horizon and are likely to produce much higher investment returns – 3 to 7 percent annually – given the increased flexibility and range of investment choices.

There are some downsides to consider.

Access to these types of trusts can only be used for transferring proceeds to your retirement system directly or to reimburse the employer for your retirement system’s con¬tributions. In other words, assets cannot be used for any other purpose than paying your agency’s pension obligations.

More than 20 employers have already signed up for the Section 115 trust offered

by PARS, which they call the Pension Rate Stabilization Program (PRSP). Why should you consider a prefunding account for pensions? Here’s a quick summary of the trust’s benefits: • Assets in the trust will offset unfunded pension liabilities.

• Agencies control the risk tolerance of the portfolio.

• Assets held in trust allow for greater investment flexibility and risk diversification compared to an agency’s general fund investments.

• Assets can be used to stabilize rates – to offset unexpected contribution rate increases or be used as a rainy day fund when revenues are impaired based on economic or other conditions.

• There’s the potential of improving an agency’s bond rating.

• Employers have flexibility to access trust assets any time, as long as it’s used to pay employer pension obligations.

So, there are plenty of options out there for you to use. And if you’re not yet prefunding, get in a while it’s all the rage (it’s also a fiscally prudent thing to do).

For more information contact: Amy Brown, The Public Retirement Journal at abrown@lawpolicy.com or 916-341-0808.

Facebook PRJ: https://www.facebook. com/publicretirement Twitter PRJ: https://twitter.com/Cali_PRJ

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For more information, contact the following representatives from our California public finance team: Mark Adler Managing Director 301 297-6010 mark.j.adler@pjc.com

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INSIDE LOOK

Diary of a Host Committee Chair Drew Corbett, CSMFO President-Elect As President-Elect and Host Committee Chair Drew Corbett works on preparations for the 2017 Annual Conference in Sacramento, he thought it would be fun to give the membership a glimpse into the process of putting the conference together.

Each month, Drew will provide a running commentary on some of the work that goes into conference preparations.

will accommodate a group of our size.

We’re close, however, to fully knowing what we have to work with, and once we do, we’ll start to fine tune what I know is going to be a great Thursday night event.

July 20, 2016: Held our monthly host committee meeting in Sacramento at the Hyatt. The committee has been June 16-29, 2016: Lots of emails great so far in terms of finding a way exchanged with Melissa, Janet, Teri to carve our time in their schedules DREW CORBETT and Marisa over the past few weeks as to attend these meetings, including we work on some of the follow-up items as many as possible making it to from the June Host Committee meeting. of the key areas of the discussion was Sacramento to meet in person. It’s been Overall things are running along pretty around the hotel options. While the host really efficient to have most everyone smoothly, but we have hit a few bumps hotel will be the Hyatt, our room block together in one room, and today was no in the road that we need to make sure is not big enough to accommodate all of exception. With that said, the day was we work through in a timely manner in the expected attendees. As such, we’ve not without incident. July 20th was the order to stay on track. Logistics for the been working to secure room nights day that Southwest Airlines had a major Thursday night event, the location of the in other nearby hotels as well. When computer glitch that caused massive President’s Dinner, timing of when we we open up conference registration, system-wide delays and cancelations. can open registration, and the number which we are planning to do on Well, we had three people on Southwest of conference hotels are all areas that October 3rd, all of the conferenceflights from Orange County. David Cain are presenting some challenges right related hotel options will be available had an early flight and got out before now. Nothing we can’t work through, for selection. This will allow for our the delays began. Grace Leung and but I’m definitely getting a greater and membership to see what’s available Marisa Anticevich were not so lucky, greater appreciation for what SMA hotel-wise and select what works best as their flight was delayed for so long and M&AMS do to pull this conference for them. For those of you wanting to that it got to the point where it made together. Because the list of items to stay at the Hyatt, I would recommend no sense for them to even come to address continued to grow, the five of us securing your approvals for the 2017 Sacramento for the meeting. And while decided a conference call was in conference soon so that you can David was lucky to get there before order, which we scheduled for register for the conference and the delays began, he was not so lucky June 30th. book your hotel shortly after later in the day, as he was not able to registration opens, as we One great piece get home and had to spend the night in expect the Hyatt to be a of news to report Sacramento. popular location. from David Cain, Despite the problems getting all of who is heading up We spent the our members to Sacramento, we had the subcommittee to remainder of the meeting a great meeting and made a lot of secure the Wednesday predominantly focused progress on a number of fronts. The keynote speaker: David on some of the logistical bulk of the meeting focused on the let me know on June questions that need to be Thursday night event, which is turning 29th that we are all set answered about the Thursday out to be way more difficult to plan with our Wednesday keynote night event. When you are than I had anticipated. The committee speaker, Connie Podesta. Connie working with hotels, convention centers has come up with some great plans so came as a recommendation from one and outside vendors, there are a lot of far, but each time we think we have of our longtime members, and the details to be worked out, as well as a the general plan set, we run into some committee was really impressed with number of guidelines and parameters kind of logistical issue. For instance, if her. We’re thrilled to have her join us we must follow. This often means we want to use the exhibit hall for the in Sacramento and look forward to her adjusting our plans to fit within what the event, we have to make sure the event keynote! hotel and convention center will allow. set up can be done in time given the That’s been one of the challenges so June 30, 2016: Conference call fact that our exhibitors will be needing far, as some of the ideas the committee with Melissa, Janet, Teri and Marisa to to break down their booths and pack up has really liked have had elements that discuss a number of key issues prior to just aren’t feasible for the locations that our next full committee meeting. One

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that same afternoon; we also need to work around access to the loading dock.

As such, timing will be tight! We’re working through the issues and are making good progress, and I am really looking forward to a great Thursday night event.

July 21, 2016: Our vendor relations subcommittee hosted a conference call with some of our conference exhibitors. This was something that current President John Adams started last year in preparation for the 2016 conference in Anaheim and is a great opportunity to follow up with our exhibitors on their conference experience. The call was very productive and we got some good feedback and ideas for things we can do to make the conference experience even better for our exhibitors and sponsors. I greatly appreciate everyone who took the time to join the conversation.

And finally, my last bit of news for this edition of my running diary is very exciting. In addition to securing Connie Podesta for our Wednesday keynote, I am extremely pleased to announce that Chris Thornberg will be our Thursday keynote. Chris was a huge hit at last year’s pre-conference session, so I am thrilled to have him at our Thursday lunch session in Sacramento.

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CAREERS JOB OPPORTUNITIES Senior Accountant, City of Tustin Salary Range: $6040-$7744/month Application Deadline: 9.2.16 Director of Budget & Finance, Ralph Andersen & Associates Salary Range: $168,941 - $213,395/year Application Deadline: 16-Sep-16 Accountant, Contra Costa County Employees’ Retirement Assoc Salary Range: $5,261 - $6,395 monthly Application Deadline: 26-Aug-16 Accounting Supervisor, Contra Costa County Employees’ Retirement Assoc Salary Range: $6,715 - $8,162 monthly Application Deadline: 26-Aug-16 Associate Management Analyst, City of Berkeley Salary Range: $6,939 - $8,239/month Application Deadline: September 6, Infrastructure Financing Program Supervisor, City of Modesto Salary Range: $6,548 - $7,958/month Application Deadline: Mon. 08/29/16 Administrative Analyst, Big Bear Lake Salary Range: $62,483 - $75,962 Application Deadline: Open until filled Accountant, City of Thousand Oaks Salary Range: $5,576-$8,365/month Application Deadline: 2-Sep-16 Administrative Services Director, Town of Windsor, CA Salary Range: $123,910 - $154,740/year Application Deadline: September 8, 2016 Administrative Services Director, Ralph Andersen & Associates Salary Range: $102,840 - $131,244 Application Deadline: 26-Aug-16 Accountant/Payroll, Aliso Viejo Salary Range: Range $55,579 - $77,811 Annually Application Deadline: September 16, 2016 by 4.00 p.m.

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WHAT DO CALIFORNIA’S

LEADING CITIES, COUNTIES & SPECIAL DISTRICTS HAVE IN COMMON?

Type Atypical ASSURANCE | TAX | ADVISORY OUTSOURCING | STAFFING

SOLUTIONS FOR STATE & LOCAL GOVERNMENT

Performance Reviews & Operations Improvement Risk Management Solutions IT Planning & Implementation Cybersecurity Staffing Uniform Guidance Implemention Solutions GASB 68 Support Services CSMFO MAGAZINE JULY 2016

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