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Teresa Rotschafer Teresa Rotschafer Finance DirectorFinance DirectorCity of Johnston City of Johnston 515-727-7783515-727-7783trotschafer@[email protected] 14, 2014July 14, 2014
Economic Issues State Law Outside Agencies Federal Law Budget Valuations Funds Debt Capital Projects
Global United States State Local
Global Economy Business in your community Foreign Markets Cost of doing your business Cost of Oil, Metals, Building Materials
US Economy Federal Laws and Mandates
How many of you know someone that is or has been in Iraq or Afghanistan?
Affordable Care Act IRS Rulings Fed Bank S.E.C. Grants and Endowments
State EconomyState EconomyState Laws and MandatesState Laws and Mandates
2013 Legislative Impact 2013 Legislative Impact Revenue SharingRevenue SharingGrants and EndowmentsGrants and Endowments
Local EconomyLocal EconomyEmploymentEmploymentAffluenceAffluenceCrimeCrimeEducationEducationOther Local GovernmentsOther Local Governments
National SecurityBoston Marathon School Shootings
Mother NatureFEMAFLOODING TORNADOESWIND EVENTS BLIZZARDS
Those taxing agencies within any given community-city, school, county, assessors, community college, extension, state which service the citizens of that community.
City School County Community College City/County Assessor Extension
State DNR DOT DOM State Auditor’s
Office
GASB-Government Accounting Standards Board CFC-City Finance Committee 411/IPERS Worker’s Compensation Homeland Security/National Guard EOC and Township Trustees Non Profit and Not for Profits
United Way or Community Chest Churches and Charitable Organizations
Council/Legislature Citizens Other staff Employees
Tell us something we REALLY need to know
BACK TO CHEMISTRY…. General Fund Special Revenue Fund Fund Transfers Permanent Funds Debt Service Funds Capital Projects Funds Enterprise Funds
Cash Basis Vs GAAP Chart of Accounts
Standardization Is Very Critical
Financial Reporting To Council, Citizens,
other governments and Bond Buyers
GASB 34, 44 and 45 Budget and Reports
ASSESSED VALUE-Value given to property by the City/County Assessor
TAXABLE VALUE-Value available for taxation by various taxing agencies. How is the taxable value determined?
Assessed value minus any rollback applied to that class of property. Residential, Commercial, Industrial, AgLand
Other influences: Multi family, condominium
What about those tax exempt properties? What role do they play in this?
Planning-A Business Plan Control Monitoring/Reporting Amending
Budget Certification The formal filing of an approved budget to the
Department of Revenue and Finance and the County Auditor’s office.
Public Hearing Notice A prescribed form which must be completed
and published (or posted) no less than 10 and no more than 20 days before the budget public hearing. Each city must conduct a public hearing before the budget or amendment can be approved.
Using the information on Slide 18, how would you fill in the form as required by the State of Iowa?
www.dom.state.ia.us/
http://www.dom.state.ia.us/
Taxes Any general or special tax levied against
persons, property or business for public purposes as provided by law, but shall not include any special assessments.
$8.10 levy limit The limit imposed by state statue for the
general fund levy. $8.10/$1,000 of TAXABLE value.
Other taxes Employee Benefits Emergency Insurance Hotel/Motel tax Local Option Tax
http://www.iowa.gov/tax
Per Capita A calculation based upon population.
Example, Road Use Tax allocation.
WARNING:All allocations are not equal…
User Fees or service charges Water and sewer rental charges which
generate enough revenue to run the activity. How does the Council determine what the
user fees should be? Rents and Royalties
Rents paid only by those using the service. Example, renting City hall or park rental fees.
Revenue Bonds Bonds supported by user fees, usually from a
proprietary activity such as water user fees or sewer rent.
General Fund Chief operating fund of the city – used to
account for & report all financial resources not accounted for or reported in another fund.
Capital Project Funds - Used to account for & report financial
resources restricted, committed or assigned for capital outlays, construction of capital facilities and other capital assets.
Special Revenue Funds Funds that have special restrictions. For
example, Road Use Tax (RUT) or grants. Proprietary Funds
Enterprise fund accounts for a city’s acquisition, operation and maintenance of facilities and services which are all or mostly self supporting by user fees.
Debt Service Fund or funds used to account for funding and
payment of interest and principal of general obligation and special assessment debt of the City. (Sec 384.4)
Permanent Fund – Used to account for resources that are legally
restricted so that only the earnings, and not the principal, may be used to support a governmental operation.
Fund Transfers – Cities often make transfers between funds in
order to accurately portray their expenditures.
Treasurer Report Cash on Hand/In
Bank and Investments
Receivables (how much has been billed out but not received—good idea even on cash basis
Unappropriated Surplus
Budget Report By function:
Police, Fire, Library By Program:
Public Safety, Public Works
Balance Remaining
Cash Flow Timing of Revenues Timing for Expenditures Checks-ACHs-Wires Banking services
Investments Safety Liquidity Rate of Return
Fraud
What are idle Funds? Cash on hand (in checking or savings
account) not currently needed for expenses.
What is Cash Float? The balance in an account which has been
pledged (a check written) but not yet needed (the check has not been presented to a bank for payment.
What is Cash Flow? Cash flow is the activity of revenues and
expenditures though out any given period.
By Fund By Date By Type
Revenue Taxes vs fees vs
state shared Expenditures
By Program By Department By Cycle
By Bank Account Electronic Banking ACH-Automated Clearing
House used for debits and credits against another account.
Wires-same day debits or credits on another bank
Sweep Accounts-account which is cleaned out at 2:30 and returned the next day in order to earn one day’s interest
All of the Above
Liquidity The availability of funds from an account or
conversion of an investment to secure cash. What kind of money are you investing?
Co-mingled Funds: A mixture of fund balances used to create a larger balance without loosing identity of ownership.
Pro Rated Interest: The allocation interest earned on an investment or interest bearing account which is made up of various funds. This allocation is usually based upon ownership of balance.
Interest on Checking Negotiate banking services
Timing the length of your investment Banking Calendars Cash flow charts Discussions with Departments/Contractors
Gantt Chart: A chart to show a schedule for a project.
Other information-electronic banking and Treasurer of State Website
http://www.treasurer.state.ia.us Flexible CDs
0 0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0 0
264079.1
140954
-80225
327955.31
601978.91
465730.89481449
1401008.92
966776
848979.806
953184.7052
1023425.864
1134964.859
-200,000
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
93 94 95 96 97 98 99 00 01 02 03 04 05
Year
En
d B
ala
nce
Fiscal Year
General Fund Cash Balance
ACTUAL
TREND
Date Description Revenues Investments Expenses Balance1-Jul 213,028.00
July 19,449.00 (43,687.00) 188,790.00
Aug 19,074.00 1,000.00 (22,453.00) 186,411.00
Sept 21,083.00 (1,000.00) (47,453.00) 159,041.00
Oct 297,414.00 (22,453.00) 434,002.00
Nov 20,283.00 (22,453.00) 431,832.00
Dec 20,483.00 (35,416.00) 416,899.00
Jan 21,458.00 (22,403.00) 415,954.00
Feb 20,158.00 (23,403.00) 412,709.00
March 277,914.00 (22,403.00) 668,220.00
April 40,695.00 (23,403.00) 685,512.00
May 20,233.00 5,000.00 (22,403.00) 688,342.00
June 19,908.00 (55,617.00) 652,633.00
Totals 798,152.00 (363,547.00)
How to determine liquidity:Look at the lowest balance over the last two years+ Add the smallest amount of monthly revenue Subtract the highest monthly expense
Presto: $6,000-$1,200 + 300 = $5,100.
Date Revenues Investments Expenses BalanceFY13 652,633.00 July 19,349.00 (43,787.00) 628,195.00 Aug 18,974.00 (22,553.00) 624,616.00 Sept 20,783.00 (47,853.00) 597,546.00 Oct 297,014.00 (22,653.00) 871,907.00 Nov 19,783.00 (5,000.00) (22,453.00) 864,237.00 Dec 20,383.00 (34,516.00) 850,104.00 Jan 21,058.00 (22,033.00) 849,129.00 Feb 20,400.00 (23,840.00) 845,689.00 Mar 270,815.00 (22,809.00) 1,093,695.00 Apr 39,596.00 (23,888.00) 1,109,403.00 May 20,021.00 (122,950.00) 1,006,474.00 June 18,808.00 (168,754.00) 856,528.00
856,528.00 Totals 786,984.00 (578,089.00)
Using slides 36 and 38 determine the liquidity of this community.
Answer: Lowest balance Smallest amount of monthly revenue Highest monthly expense $159,041+$18,808-$168,754 = $9,095
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
Cash Flow 2012-2013
For the Month of ________
Location/ USBankWells Fargo IPAIT Total
TypeChecking @interest 153,028.00 153,028.00 Time Certificates of Deposit 10,000.00 10,000.00 T-Bills - Pooled Investments 50,000.00 50,000.00
Total 153,028.00 10,000.00 50,000.00 213,028.00
USBank72%
WellsFargo5%
IPAIT23%
Investments by Location
-20 40 60 80
100 120 140 160 180
Checking @interest Time Certificates of Deposit
T-Bills Pooled Investments
Valu
e in
1,0
00s
Type
Types of Investments as of _______
Historical information-Get the big picture before you look at the pieces
Discussions with Departments/Contractors
Discussions with Banker/Treasurer Engineers, Architects, Financial Advisors
Other forms of spreadsheets Software as simple as MS Money or
Quicken Complex packages
Trace your cash and investments Help you forecast cash needs
Patterns Know when you get what and when you’ll spend $$
Safety of Principal
Safety of Assets
Fraud Prevention
What kinds of fraud or theft are we looking for? The obvious? Someone walking out the door with
cash? Someone disconnecting the water meter
to water the lawn? Investing in “a sure thing”? “Investing in our own Community”
Buyer beware. Do your homework.
Are you loosing too many tools? What happened to all that copy paper,
city gas? Is someone using city equipment for
personal purposes? Are purchases done thru competitive
bidding? Or are you paying the price no matter what? How do you know if it is too high?
People are assets (Intellectual Assets) Employees are people too
Do you have safety training? Driver>>>Confined spaces>>>Ergonomics
Fire/Property Losses---Insurance? Flood Plan What will you do if a Pandemic hits your
community?
A salesman calls to confirm an order for soap. You didn’t order it. He says Bob ordered it but since he is on vacation, you have to accept it. You’re not sure. He agrees to give you a free CD player for accepting this before the end of the month-- he really needs to complete his sales for the month. Since Bob ordered the soap, anyway, what does it hurt?
Purchasing Policies When to purchase How much to purchase How to purchase
Capitalization Policies Projects Equipment/Buildings
POLICY-POLICY-POLICY Equipment Projects Buildings Infrastructure
POLICY-POLICY-POLICY General Obligation Revenue Bonds Leases-Operating vs Capital Tax Increment Financing (TIF) Registrars
Insurance Policies 28E Agreements Contracts-Performance Bonds
Worker’s Compensation Policies Safety Programs
Annual Debt Report – State Treasurer’s Office (on line)
Road Use Tax Report - Department of Transportation(on line)
Annual Financial Report –State Auditor’s Office (can get e-report from DOM)
T.I.F. Reports – DOM
It’s not a dirty word (there are 5 letters) Municipal Oversight Law
Helps your understanding Helps your credibility Good references
Iowa League of Cities Web Site Calendar of Events 2013 New Laws of Interest to Cities FAQ – Municipal Oversight Law
www.iowaleague.org
Lots of pieces Lots of questions Lots of responsibility Lots of help
Clip
City Attorney Bond Counsel Other city staff Local Bankers ISU Iowa League of Cities
Mentor Program Department of
Management
State Auditor’s Office State Treasurer’s
Office Department of
Natural Resources City Finance
Committee IMFOA and GFOA Each other-call,
network, share Me
TERESA ROTSCHAFER FINANCE DIRECTOR CITY OF JOHNSTON (515) 727-7783
