A (Fiscal) Year in Review: CSMFO Professional Standards Committee 2022-23 Update

The California Society of Municipal Finance Officers (CSMFO) is a premier organization dedicated to promoting excellence in financial management in the public sector. At the heart of CSMFO’s commitment to professionalism and accountability lies its Professional Standards Committee, which plays a pivotal role in ensuring that members adhere to the highest ethical and technical standards. As we reflect on the activities of the Professional Standards Committee for Fiscal Year (FY) 2022-23, it becomes evident that this committee continues to be a driving force behind the advancement of municipal finance practices.

Before delving into the committee’s activities, it’s important to highlight the significance of CSMFO’s commitment to excellence. The organization serves as a central hub for financial experts working in local governments across California. CSMFO aims to enhance the skills and knowledge of its members while also upholding the integrity and credibility of financial operations in the public sector.

Activities of the Professional Standards Committee in 2022-23

1. Review and Enhancement of Financial Standards
The committee undertook a comprehensive review of existing financial standards, guidelines, and best practices. Collaborating with industry experts, the committee worked to update and enhance these resources to reflect the evolving landscape of municipal finance. The result was a set of refined guidelines that serve as a benchmark for members’ financial operations, ensuring transparency and consistency. Of particular note, the committee considered, and in some cases published highlights and other communication of, the following:

• Governmental Accounting Standards Board (GASB) Statements 99, 100, and 101
• Senate Bill (SB) 1489, pertaining to the forward settlement of investments
• An Office of Management and Budget (OMB) federal register technical update notice, which provides an alternative to a single audit for eligible Coronavirus State and Local Fiscal Recovery Funds recipients
• Revised California Committee on Municipal Accounting (CCMA) Government Industry Alert on GASB 87 – Leases
• CSMFO advocacy of local government finances
• Assembly Bill (AB) 1951 (Grayson), which would create a local government revenue loss by temporarily expanding partial sales and use tax exemption for manufacturing, research, and development to a full exemption. This would include any local voter-approved transaction and use taxes.
• Trailer Bill SB 189 excludes additional local subventions. A majority of the redefined subventions affect county appropriations limits. As a result, counties and some cities may need to revise their local Gann limit calculations. Cal Cities is expected to work with state officials to provide technical assistance.
• Best practice regarding due diligence on government sponsored investment pools such as Local Agency Investment Fund (LAIF), California Asset Management Program (CAMP) and California Cooperative Liquid Assets Securities System (CLASS). The California Municipal Treasurer’s Association (CMTA) recommends that an investigation of any investment pool or money market mutual fund be performed prior to investing and on a continual basis.
• AB 602 and new impositions on development impact fee programs, notably germane to assessment districts
• California Debt and Investment Advisory Commission (CDIAC) and the state’s Treasurer’s Office efforts to put out videos on technical issues that appear to have value to government finance professionals and elected officials
• New government industry alerts issued on the CalCPA website
• Michael Coleman website integration into CSMFO site
• Taxpayer Protection and Government Accountability Act (November 2024 ballot initiative related to the Business Roundtable)
• Banking consideration with the collapse of Silicon Valley Bank

2. Member Support and Consultation
Throughout the year, the committee served as a valuable resource for members seeking guidance on intricate financial matters. Members could reach out to the committee for expert advice, clarifications on regulations, and best practices. This personalized support fostered a sense of community and collaboration among CSMFO members, strengthening the overall financial management landscape in California.

3. Thought Leadership and Research
To promote innovation and thought leadership, the Professional Standards Committee initiated a preliminary research projects, in collaboration with GFOA, focused on organizational development for local government finance departments. The committee is considering publishing potential GFOA research findings, recommendations, and tools, contributing to the advancement of best practices in organizational development. The project is in its infancy but the potential outcomes are exciting.

The activities of the Professional Standards Committee of CSMFO in FY 2022-23 underscore the organization’s unwavering dedication to maintaining the highest standards of professionalism, ethics, and technical expertise in municipal finance. Through education, guideline awareness enhancement, member support, and thought leadership, the committee continues to play a vital role in shaping the financial landscape of California’s local governments. As the committee paves the way for innovation and the promotion of best practices, CSMFO members are better equipped to navigate the complexities of public finance in an ever-changing world.