For years, many market participants treated “six months after year-end” (roughly 180 days) as a practical benchmark for audited financial reporting. In practice, that timeline has become difficult for many governments to meet consistently.

The consequences of delayed reporting are real:

• Credit and rating pressure. Rating agencies may place issuers on watch or otherwise flag them when current audited financial information is unavailable, even when the underlying reason is sector-wide capacity constraints rather than issuer-specific distress.
• Higher borrowing costs. When investors have less timely information, they often demand a higher risk premium, which can translate into higher yields and higher costs to taxpayers.
• Continuing disclosure complications. In the public markets, SEC Rule 15c2-12 continuing disclosure undertakings typically require annual financial information by a stated deadline and require notice if the filing is missed. Many undertakings also contemplate interim or unaudited information when audited statements are not yet available, but missed deadlines still create friction.
• Covenant and compliance tension. Many loan agreements were written assuming historical audit timelines. Delays can create technical covenant friction, forcing lenders and borrower to address issues administratively rather than economically.

The CPA pipeline problem

• Fewer firms compete for municipal audits. Some mid-sized firms have reduced or exited governmental work due to staffing constraints, risk, and the economics of the engagements.
• Capacity concentrates among fewer providers. As the pool shrinks, the remaining firms reach capacity. Scheduling becomes more rigid, and smaller or more complex engagements can be pushed later in the calendar.

Even when a government’s finance team is prepared, audits can run longer because the work itself has expanded. Over the last two decades, GASB standards have materially increased the scope of information that must be assembled, validated, and presented. Recent requirements involving leases (GASB 87), subscription-based information technology arrangements (GASB 96), and other post-employment benefits can require significant data gathering, system changes, and documentation work that adds weeks or months to both preparation and audit testing.

Because audit firms schedule fieldwork across many clients, delays can also cascade. If one engagement runs long, the next client’s fieldwork may be pushed back, creating a domino effect across a region or even a state.

Local government leaders emphasize that timely reporting is ultimately a function of organization capacity rather than simply meeting a deadline. As Diego Viramontes, CPA, City Manager of the City of McFarland, observed:

“The conversation around timely audits often focuses on deadlines, but the real challenge is building the organizational capacity to consistently meet them. By investing in our people and building a strong financial foundation, timely audits became the natural outcome of disciplined financial management—not simply an effort to meet a reporting deadline.”

The City of McFarland’s experience highlights a broader reality facing many similar local governments: while deadline extensions may ease compliance pressure, lasting improvement depends on building the staffing, expertise, and internal processes needed to support timely financial reporting. And that building takes time and attention while the deadlines continue to loom.

From a credit perspective, banks are less focused on whether an audit is late than on what fills the information gap while it is pending, such as budgets, management updates, operating results, and other interim information that helps demonstrate ongoing financial performance and transparency even if final audited statements are delayed.

• Transparency and communication. Capacity-driven delays are usually accompanied by clear explanations about audit scheduling and status. More concerning situations often involve vague responses, inconsistent narratives, or unexplained gaps.
• Evidence of internal readiness. Many governments can produce trial balances, budget-to-actual results, and interim financials even when the audited ACFR is delayed. An inability to produce any usable interim information may warrant closer attention.
• Consistency with external reality. Unreconciled cash, missing bank statements, unexplained variances, or persistent restatements can indicate problems beyond scheduling.
• Consistency across reporting channels. Credit analysis increasingly relies on multiple inputs: budgets, EMMA filings, bank reporting, and management discussions. Alignment across these sources is often more important than the timing of the audited statements themselves.
• Responsiveness under scrutiny. When questions arise, strong credits respond quickly and directly. Delayed or filtered responses can matter more than the delay itself.

Banks and local governments share a common interest: timely, reliable information that supports informed decision-making. When audited ACFRs are delayed for reasons outside the issuer's control, the answer is not to abandon reporting requirements. In the near term, stakeholders may need to modernize reporting expectations and add interim tools that preserve visibility. Over the longer term, however, sustainable improvement depends on expanding audit capacity, strengthening finance departments, and reducing the operational bottlenecks that contribute to delays in the first place.

Approaches increasingly used in municipal lending include:

1. Recalibrating audited ACFR deadlines
   
   Many publicly-issued debt disclosure frameworks in the municipal market (i.e., continuing disclosure requirements pursuant to SEC Rule 15c2-12) function on timelines longer than 180 days (which is also the suggested guideline provided by the GFOA). Therefore, in bank loan documentation, extending the required delivery date for audited ACFRs to 270 days after fiscal year-end (and in some cases 300 days) can better reflect current audit market realities while still maintaining a defined requirement.
   
   From a bank’s standpoint, extending deadlines is not about lowering standards; it is about aligning contractual obligations with operational reality and to better match existing continuing disclosure obligations so that technical defaults do not obscure actual credit conditions.
   
   Local governments should also consider opening a dialogue with the GFOA about extending the 180 days in its own guidelines to better align with the realities they are facing.
   
   
2. Allowing interim or unaudited financials when audits are delayed
   
   Where audited statements are not yet available, lenders may request interim financial information, budget-to-actual performance, or management updates to supplement ongoing monitoring until the audit is completed.
   
   
3. Keeping budgets on a short leash
   
   Budgets remain one of the most useful and timely tools for understanding a government’s planned operations. Requiring delivery of the adopted budget within a short window (for example, within 30 days after adoption) helps stakeholders assess direction and discipline between audits.
   
   
4. Strengthening “between-audit” notification
   
   If audited financials are delayed, stakeholders benefit from targeted notice obligations focused on truly material developments—such as material adverse events or material litigation—so that emerging risks are not hidden simply because the audit calendar slipped.
   
   Targeted event reporting is often more decision-useful than a delayed audit, as it provides real-time visibility into emerging risks.
   
   
5. Updating reporting covenants when opportunities arise
   
   When loans are amended or renewed, it is the perfect opportunity to revisit reporting covenants to ensure they reflect today’s audit environment and provide workable interim visibility.

• Incentives to expand governmental audit capacity, including state-level programs that encourage firms and professionals to remain in or enter the public sector audit space.
• Standardization and automation, including movement toward more machine-readable reporting that can reduce manual effort and accelerate parts of the audit process.
• More nuanced treatment of late filings, recognizing that a documented, capacity-driven delay should not carry the same stigma as a delay accompanied by silence, inconsistencies, or control failures.

Trevor leads Public Finance at EverBank and enjoys helping public agencies navigate their financing needs. When he’s off the clock, you’ll likely find him on a golf course, a mountain, a lake…or with his 5 lb Pomeranian in tow.

The Future of Local Revenue in the Digital Economy: Lessons from Santa Barbara's Streaming Services Utility Users Tax Case

By Keith DeMartini, Finance Director, City of Santa Barbara

Introduction

For more than a century, local governments have relied on utility users taxes (UUTs) as an important source of general-purpose revenue. Traditionally, these taxes applied to services such as telephone communications, electricity, gas, and cable television. However, as consumer behavior has evolved and technology has transformed the way residents access entertainment and information, many local tax structures have struggled to keep pace.

The City of Santa Barbara recently prevailed in litigation involving the applicability of its Utility Users Tax to digital streaming services. While the legal details of the case are unique to Santa Barbara's municipal code and circumstances, the broader implications extend far beyond one city. The outcome represents an important milestone in the ongoing effort of local governments to modernize revenue systems for the digital economy.

For Finance Directors, City Managers, and elected officials throughout California, this case highlights both the opportunities and challenges associated with adapting local tax structures to changing consumer behavior.

The Evolution of Entertainment Consumption

For decades, cable television services were commonly subject to local utility users taxes. Consumers paid for television programming through traditional cable providers, and cities collected tax revenue based on those transactions.

Over time, however, consumer preferences shifted dramatically. Streaming platforms increasingly replaced traditional cable subscriptions as the primary means by which residents accessed television programming, movies, sports, and other entertainment content.

As households "cut the cord," many cities experienced an unintended consequence. Revenue sources originally designed to apply to communications and video services began to erode, not because residents stopped consuming those services, but because the delivery method changed.

From a public finance perspective, this created an important policy question: Should similar services be treated differently solely because technology has evolved?

Overview of the Santa Barbara Case

Soon after I started with the City in October of 2020, the city was facing budgetary challenges during COVID.  As an economy that is heavily reliant on tourism, sales tax and transient occupancy tax revenue fell and were not enough to cover ongoing operating expenses.  Analyzing the applicability of our UUT ordinance on digital streaming services was a project worth exploring to identify ongoing revenues to fund our essential services.

The City of Santa Barbara adopted an approach that recognized the functional similarities between traditional video services and modern streaming platforms. The City determined that its Utility Users Tax ordinance applied to qualifying streaming services and sought to administer the tax accordingly.

We partnered with our tax audit and compliance firm to audit The Walt Disney Corporation (Disney) for their Disney+, Hulu and BAMTech (ESPN+) platforms.  I issued a formal tax determination of findings.  That interpretation was challenged by Disney.

The litigation focused on whether the City's existing tax ordinance authorized the application of the Utility Users Tax to digital streaming services and whether such taxation was consistent with applicable state and federal law.

An independent hearing officer, Santa Barbara County Superior Court, and California Court of Appeals ultimately ruled in favor of the City, affirming the City's authority to apply its Utility Users Tax to qualifying streaming services under its ordinance.  Disney appealed the decision to the California Supreme Court, but that court did not choose to hear the case, making the Court of Appeals decision final and binding.

While the case centered on Santa Barbara's local code provisions, the decision provides important guidance regarding how existing municipal tax frameworks may be interpreted in light of technological change.

Why This Matters for California Cities

Protecting Revenue Stability

Local governments face increasing pressure to maintain service levels while confronting rising costs, infrastructure needs, pension obligations, and economic uncertainty. General-purpose revenue sources are particularly valuable because they provide flexibility to fund essential services.

When residents shift from taxable legacy services to untaxed digital alternatives, cities can experience revenue erosion without any corresponding reduction in demand for municipal services. The Santa Barbara case underscores the importance of ensuring that local tax structures remain aligned with modern consumer behavior.

Promoting Tax Equity

The case also raises questions of fairness and neutrality. If two households receive substantially similar entertainment services, but one pays local tax because it subscribes to traditional cable while the other does not because it subscribes through a streaming platform, unequal treatment may result. From a tax policy perspective, neutrality is often desirable. Similar services should generally be treated similarly unless a clear policy rationale exists for different treatments.

Addressing the Digital Economy

Local governments across California are increasingly confronting tax issues associated with digital products, online transactions, and technology-enabled services. The broader lesson from the Santa Barbara case is that municipal finance professionals must continually evaluate whether revenue systems adopted decades ago remain effective in today's economy. The digital transformation of commerce is not slowing. Cities that proactively review their revenue structures will be better positioned to maintain fiscal sustainability.

Recommendations for Finance Directors

1. Review Existing Utility Users Tax Ordinances

Finance Directors should conduct a comprehensive review of their city's UUT provisions.

Key questions include:

• Does the ordinance contain technology-neutral language?
• Are definitions broad enough to encompass evolving service delivery methods?
• Have legal interpretations kept pace with technological change?
• Are there ambiguities that may require clarification?

Many ordinances were drafted before streaming services even existed. Understanding how existing language applies in today's environment is an essential first step.

2. Coordinate Early with Legal Counsel

Any city considering taxation of digital streaming services should work closely with city attorneys and outside counsel as appropriate.

Legal analysis should include:

• Ordinance language
• Relevant California case law
• Federal telecommunications considerations
• Administrative and implementation issues
• Potential litigation risks

Careful legal review before implementation can help avoid costly disputes later.

3. Develop Strong Administrative Processes

Successful implementation requires more than legal authority.

Cities should ensure that:

• Service providers receive clear guidance
• Collection procedures are well documented
• Reporting requirements are consistent
• Audit provisions are clearly understood

A strong administrative framework improves compliance and reduces disputes.

4. Educate Stakeholders

Public communication is critical. Residents often perceive digital taxes as "new taxes" when, in many cases, cities are applying existing voter-approved tax structures to modern service delivery methods. Transparent communication regarding the purpose, legal basis, and fiscal impact of such taxes can improve public understanding and trust.

5. Evaluate Long-Term Revenue Sustainability

The streaming services issue is only one example of broader economic change. Finance leaders should regularly assess whether major revenue sources remain aligned with evolving economic activity. Revenue diversification and modernization should be ongoing components of every city's long-term financial strategy.

Why This Issue Was Important to Me

As Finance Director for the City of Santa Barbara, I viewed this case as more than a dispute over a single revenue source.

At its core, the issue involved maintaining the integrity of a voter-approved tax structure in the face of technological change. Residents were continuing to consume entertainment services, but the marketplace had evolved significantly since many utility users tax ordinances were originally adopted.

Our responsibility as public finance professionals is to ensure that local revenue systems remain fair, sustainable, and capable of supporting essential public services. Allowing revenue structures to become obsolete simply because technology changes can create long-term fiscal challenges for cities and ultimately shift burdens onto other taxpayers.

This case demonstrated the importance of thoughtful tax administration, strong legal analysis, and persistence. It also highlighted the increasingly important role finance professionals play in helping local governments navigate the intersection of technology, public policy, and municipal finance.

Conclusion

The Santa Barbara streaming services litigation represents an important development in the continuing evolution of local government finance. As consumer behavior shifts and technology transforms the economy, cities must adapt their revenue systems while remaining faithful to applicable legal frameworks and voter intent.

For Finance Directors throughout California, the case offers a valuable reminder that revenue sustainability requires ongoing attention, strategic thinking, and a willingness to address emerging challenges. The digital economy will continue to evolve, and local governments must evolve with it.

The lessons learned from Santa Barbara's experience can help cities across California evaluate their own revenue structures and ensure they remain prepared for the future.

Keith DeMartini was appointed Finance Director of the City of Santa Barbara in October 2020. In this role, he oversees the $692 Million operating and capital budget and all financial operations of the City, including the functions of budget management, treasury and cashiering, accounts receivable, investment management, debt management, utility billing, business tax administration, tax collection, accounting operations, financial reporting, audit, grant management, payroll, accounts payable, purchasing and risk management. Keith has over 20 years of public and private sector financial management experience. Most recently, he served as the Finance Director for the City of San Bruno from 2018 to 2020. Before that, he served in various financial, budget, IT and project management roles for the City and County of San Francisco. Keith has a B.S. in Business Administration/Financial Management from Cal Poly San Luis Obispo and a Master’s in Public Administration from San Francisco State University.

Legislative Update: AB 1383 and Proposed Changes to PEPRA

By: Jason Al-Imam, 2026 Professional Standards Chair

As part of CSMFO’s commitment to keeping members informed on issues affecting local government finance, we periodically share updates on significant legislative, regulatory, and policy developments. These updates are intended to provide objective information and analysis, promote member awareness and engagement, and support informed participation in the public policy process.

One measure currently drawing attention is California Assembly Bill 1383 (AB 1383), which proposes substantial changes to the Public Employees' Pension Reform Act of 2013 (PEPRA). If enacted, the bill is expected to increase pension costs and long-term pension liabilities for state and local government employers.

AB 1383 was originally titled "Public Employees' Retirement Benefits: Safety Members." While the bill still includes provisions affecting public safety retirement formulas, subsequent amendments expanded its scope to include broader changes to pensionable compensation limits and retirement benefits under PEPRA. The current title, "Public Employees' Retirement Benefits," reflects that broader reach.

Among its proposed changes, AB 1383 would expand retirement benefit options for safety members by establishing new retirement formulas and authorizing prospective benefit enhancements through collective bargaining. In addition, the bill would modify PEPRA pensionable compensation limits, a change that could affect both safety and miscellaneous employees who are subject to those limits and increase future pension costs for public employers.

For local governments, the primary concern is cost. Several provisions would reverse key PEPRA cost-containment measures, potentially increasing long-term pension liabilities and employer contribution requirements. Agencies may wish to evaluate impacts on staffing, service delivery, labor negotiations, and long-term financial planning, and communicate those impacts to State legislators as the bill moves through the legislative process.

The full text and status of AB 1383 are available at https://leginfo.legislature.ca.gov.

If you have questions regarding this topic, contact Jason Al-Imam, Chair of the Professional Standards Committee at jalimam@newportbeachca.gov.

Jason Al-Imam serves as the Administrative Services Director and City Treasurer for the City of Newport Beach, a full-service municipality in Orange County, California. He has more than twenty years of experience in municipal finance and accounting. Jason began his career in public accounting, auditing local governments throughout California, and later served as Finance Director for three other municipalities before joining Newport Beach. He recently served on the Board of Directors of the California Society of Municipal Finance Officers, and now currently serves as Chair of the Professional Standards Committee.

OMB Proposes Significant Changes to Federal Grant Rules

By: Jason Al-Imam, 2026 Professional Standards Chair

On May 29, 2026, the U.S. Office of Management and Budget (OMB) published a proposed rule that would substantially revise 2 CFR Part 200, commonly known as the Uniform Guidance, which governs the administration of federal grants and cooperative agreements. If adopted, the proposal would represent one of the most significant changes to federal grant management since the Uniform Guidance was first implemented in 2013.

OMB states that the revisions are intended to improve transparency, accountability, and oversight of federal financial assistance while reducing administrative burden for recipients. The proposal would also clarify that the requirements in 2 CFR are binding federal regulations. 

Several proposed changes could significantly affect state and local governments. Federal agencies would receive expanded authority to terminate discretionary awards that no longer align with federal priorities or the national interest. The proposal would also strengthen conflict-of-interest disclosure requirements, increase oversight of subrecipients, expand E-Verify requirements, and increase reporting obligations through SAM.gov. 

For local governments, the proposed rule underscores the importance of strong internal controls, grant documentation, subrecipient monitoring, and compliance oversight. In addition, certain costs that have historically been charged to federal awards may become subject to additional restrictions or require express prior approval from the awarding agency. As a result, local governments may need to fund some activities with local resources or obtain advance authorization as a condition of future grant agreements. Organizations that receive federal funding should review the proposed changes and evaluate how they may affect grant administration, procurement practices, allowable costs, and reporting requirements. 

Public comments are due by July 13, 2026. Stakeholders may submit comments through Regulations.gov by searching for Docket No. OMB-2026-0034-0001. The proposed rule and instructions for submitting comments are available in the Federal Register at: https://www.federalregister.gov/documents/2026/05/29/2026-10817/regulation-for-federal-financial-assistance. Final regulations could take effect as early as October 1, 2026, making it important for grant recipients to stay informed and prepare for potential changes. 

If you have questions regarding this topic, contact Jason Al-Imam, Chair of the Professional Standards Committee at jalimam@newportbeachca.gov.

Jason Al-Imam serves as the Administrative Services Director and City Treasurer for the City of Newport Beach, a full-service municipality in Orange County, California. He has more than twenty years of experience in municipal finance and accounting. Jason began his career in public accounting, auditing local governments throughout California, and later served as Finance Director for three other municipalities before joining Newport Beach. He recently served on the Board of Directors of the California Society of Municipal Finance Officers, and now currently serves as Chair of the Professional Standards Committee.

Chapter Meetings: Connecting, Learning, and Growing Together 

By: Michael O’Brien, Administrative Services Director 

Even though it feels like just yesterday that many of us were gathered in Palm Springs enjoying outstanding speakers and reconnecting with colleagues, we quickly returned to our agencies and the realities of budget season, strategic planning, and day-to-day operations.

During these busy times, it becomes even more important to step away from the office and connect with others who understand the challenges we face. That is where CSMFO chapter meetings provide tremendous value.

Chapter meetings offer more than just an opportunity to network—they create a space for meaningful learning and collaboration. Whether the topic is GASB updates, investment strategies, debt management, or leadership development, our speakers consistently provide relevant, practical insights that members can take back to their agencies.

At our most recent San Gabriel Valley Chapter meeting, we took a creative approach to learning. Benjamin Sehy and Paulina Woo from Meeder Investments transformed the classic game show format into an interactive “Jeopardy”-style competition focused on investment knowledge. The energy in the room was incredible, with participation from municipal members and vendor partners alike. Even more impressive was the strong turnout, especially given the timing between the conference season and budget preparation.

What continues to make our chapter successful is our intentional focus on delivering value to both our members and our vendor partners. Our goal is to provide high-quality educational content while also creating opportunities for our sponsors to showcase solutions that can help agencies operate more effectively.

Our vendor partners play a critical role in the success of our chapter. Their support allows us to host engaging events at unique venues, keep costs manageable for members, and enhance the overall experience through networking opportunities and sponsored activities. From raffle prizes to informal discussions, these interactions often lead to valuable connections and practical solutions.

Across the state, chapter leaders are working hard to create meaningful experiences that strengthen our profession. I have personally found it incredibly rewarding to serve both our members and our sponsors, helping to bridge the gap between challenges and solutions.

If you have not recently attended a chapter meeting, I encourage you to get involved. These gatherings are one of the most effective ways to stay connected, share ideas, and continue growing professionally. And if you are looking to make an even greater impact, consider volunteering—chapter leadership and participation are always in demand.

CSMFO’s strength has always been its people. By staying engaged at the chapter level, we continue to support one another and advance the important work we do in serving our communities. 

Chapter Meeting Engagement

Networking and Collaboration

Holiday Event with Sponsors

Top Golf Networking Event

Michael O’Brien serves as the Administrative Services Director for the City of San Dimas, a role in which he provides executive leadership over municipal operations with a focus on strategic financial management, organizational performance, and long-term sustainability. Since joining the City in April 2015, Michael has played a key role in strengthening the City’s financial position while advancing operational modernization and service delivery improvements. Prior to San Dimas, he served in municipal government roles with the Cities of Claremont, Seal Beach, and Hawthorne, building a broad foundation of public sector experience across finance, administration, and local government operations. Michael is a Certified Public Finance Officer (CPFO) through the Government Finance Officers Association (GFOA) and remains active in advancing best practices in municipal finance and governance.

Sacramento Valley Chapter Honors Joan Michaels-Aguilar 

By: Alberto Preciado, CSMFO Director

Determining labor costs is major project for many of us, especially during budget season or labor group negotiations. Close collaboration and clear communication with Human Resources staff is essential to getting it right.

The Sacramento Valley Chapter met on April 8th and members were treated to a presentation from TrueComp’s Ira Summer on best practices for collaboration between an agency’s HR and Finance teams. Attendees gained valuable information on how to better bridge the gap between two departments with different, but similar goals, for example, by establishing trust not only between departments, but also between the negotiating team and the bargaining units. Following the presentation, lunch was served along with a helping of spirited networking.

During the meeting, Chapter Vice-Chair Nou Vang presented the chapter’s 2026 Spotlight on Excellence Award to Joan Michaels-Aguilar of HdL. This is the chapter’s second time presenting this award, which recognizes individuals or teams for exceptional contributions in elevating public finance service across the Sacramento region in the categories of innovation, operational excellence, sustainability, ingenuity, and leadership.

Joan certainly exemplifies several of these qualities, but her nomination focused on her leadership contributions. In addition to her current work in service of HdL’s government clients, Joan brought over 40 years of service to government finance, serving in roles at the cities of Burbank, King City, Azusa, Covina, and Dixon. If that weren’t enough, Joan has been an active member of CSMFO since 1981, and has served as part the volunteer leadership, including as Northern California Board Member and CSMFO President in 2019!

One of the key points in Joan’s nomination was her deep commitment to education and mentorship. Therefore, it was particularly poignant that one of Joan’s mentees (Nou) presented her with the award. CSMFO prizes mentorship as a means to sustain excellence in public finance by strengthening the next generation of leaders through the wisdom and experience of our seasoned professionals.

The Sacramento Valley Chapter will hold its next meeting on July 8, 2026. 

Alberto Preciado is the Finance Director at the City of Davis.  He has spent over 18 years working in the field of municipal finance at different agencies including three cities and a special district.  Alberto is a member of the CSMFO Board of Directors.  He has served in various committees and at the chapter level since 2015, both as an at-large member, and as a Chair and Vice Chair.  In his free time, Alberto loves to travel and discover new food spots with his family, and hang out with his goldendoodle, Canelo.

Inland Empire Chapter Kicks Off 2026 With a Packed House and High Impact Insights

Ontario, CA — April 9, 2026

By: Tori Roberts, Inland Empire Vice Chair

The Inland Empire Chapter launched its 2026 program year with a full house, as more than 50 public sector finance professionals filled every seat at Dave & Buster’s in Ontario. The room carried the unmistakable energy of budget-season warriors taking a well-earned break to reconnect, learn, and recharge with their peers.

This meeting also marked an exciting leadership milestone for the chapter. Matt Schenk stepped into his new role as Chapter Chair, joined by Vice Chairs Tori Roberts and Heidi Schoeppe. The leadership team expanded further with Josh Calhoun, Finance Director for the City of Norco, and Evelyn Morentin-Barcena, Manager at RAMS, both of whom played instrumental roles in planning and executing the event. Their combined efforts created a kickoff meeting that set a strong tone for the year ahead.

Session Spotlight: Financing in an Inflationary Era
Presented by Holman Capital

The featured session, “Financing in an Inflationary Era: How Public Agencies Can Reduce Costs and Execute CIPs Through Capital Financing,” was led by Brent W. Kuhn, Holman Capital’s West Coast Public Finance Sector Manager. With more than 30 years of experience in municipal and public sector finance, including executive leadership roles as CFO across the law, healthcare, and sports industries, Brent brought a strong mix of technical depth and practical insight.

His career spans investment banking, municipal debt structuring, capital planning, and institutional investment management. He has advised public agencies across California, Idaho, Oregon, and Washington, and is widely recognized for developing financial solutions that align public needs with investor priorities. Brent holds an MBA from USC and a B.S. in Accounting from the University of Redlands. Outside of finance, he is an avid golfer and USGA member.

Brent delivered a clear, data-driven overview of the widening infrastructure investment gap, including the American Society of Civil Engineers’ $3.7 trillion national estimate, along with continued increases in the California Construction Cost Index. With state and federal funding becoming less predictable, he emphasized timing risk as one of the most significant exposures for agencies planning capital improvements.

His comparison of traditional bond financing and direct lending highlighted how direct lending can accelerate project timelines, help hedge against inflation, preserve reserves, reduce borrowing costs, and support phased or mid-sized projects without relying on volatile bond markets. The content was timely, relevant, and immediately applicable, exactly what Inland Empire members look for in a chapter meeting.

Engaged Members, Lively Questions

The audience engagement was one of the standout features of the afternoon. Members asked thoughtful, practical questions that reflected the real challenges facing agencies today. Common themes included:
• evaluating timing risk when construction costs outpace budget cycles 
• determining which projects are best suited for direct lending versus traditional bonds 
• maintaining flexibility when grant timelines shift or awards are delayed 
• understanding what financial metrics lenders prioritize 
• structuring financing for multi-phase CIP projects 
• communicating financing strategies to councils, boards, and the public 

Because the agenda included ample time for Q&A, attendees were able to explore these topics in depth. The discussion was lively, collaborative, and continued into lunch, a clear sign that the session resonated.

Networking + BBQ + Churros = A Perfect IE Chapter Combo

After the session, attendees enjoyed a classic barbecue lunch featuring smoked meats, hearty sides, and warm churros with dipping sauces that quickly became a crowd favorite. The relaxed atmosphere created the perfect space for networking, reconnecting with colleagues, and welcoming new faces to the Inland Empire Chapter community.

Final Takeaway

If you missed this meeting, you missed a powerful start to the 2026 program year, with actionable insights, lively discussion, and the kind of professional community that makes CSMFO special. The Inland Empire Chapter has much more ahead, and the next one is worth being in the room for.

Commercial Members and CSMFO

A Mutualism 

By: Tim Seufert, CSMFO Board Member

In biology, a Mutualism can be defined as an interaction whereby two (or more) species benefit more from their interacting than if they had remained apart. This concept is relevant for the net gain seen within the CSMFO community, between the Government and Commercial members. Each ‘species’ plays a role, and each receives an overall net benefit.
Commercial Members play a valuable and significant role in supporting California communities, providing a variety of services and significant expertise. To thrive, for example, local agencies need auditors, software providers, and fiscal consultants, just to name a few. And those Commercial entities need clients to thrive. Thus, we see this obvious Mutualism. The evolution of this provides more benefits over time - nearly 70 years now for CSMFO!

My CSMFO ‘History’

I have seen Mutualism play out time after time in my 25 years of interacting with the CSMFO community, including my most recent role as the first elected Commercial Board member. Many years ago, I was invited by past CSMFO President John De Russy to play a role on the conference host committee. This was a first, and unheard of at that time: It caused a lot of angst and discussion, but ultimately some convergence. Fast forward a few years, and after serving again on the Host Committee, I was able to add value as a member of the Professional Standards Committee. Today, we see many energetic Commercial members playing important roles, including those on a wide variety of committees and chapters. Dedicated professionals, like Neil Murthy, Wing-See Fox, Heidi Schoeppe and many more, share their expertise and energy for the betterment of the entire CSMFO community.
When I first joined the Board, I moved that we create a Commercial Member Code of Ethics, which the Board adopted in mid-2024. The goal of this Code was to essentially fill in a gap (the then-existing code stated that it only applied to Government members!), ensure universal respect for all members, and stipulate clear goals, ethics, and rules of the road for Commercial participants.

During my lengthy career serving local agencies, I have enjoyed working with and seeing our communities thrive. CSMFO plays a foundational role in doing just that - helping California cities, counties and special districts step it up for the benefit of 40 million Californians.

Tim Seufert has been a local government consultant and CSMFO contributor for a quarter century. During this time, he has also been a presenter and author on local government finance issues for the California League of Cities, the California Special Districts Association, and other forums given his years of experience in local government. 

Celebrating the Inaugural Government Finance Professionals Week Across California

By: Erika Gomez, Chief Finance Officer, Three Valleys Municipal Water District

Government finance professionals are rarely in the spotlight, but their work shapes every public service an agency delivers. This March, agencies across California took a step to change that by celebrating the inaugural Government Finance Professionals Week (GFPW).

From formal proclamations to team events and internal recognition, organizations across the state marked the week in ways that reflected both their culture and their commitment to strong financial stewardship.

Elevating the Role of Government Finance

Government Finance Professionals Week is ultimately about visibility. It highlights the role finance professionals play in supporting transparency, accountability, and long-term financial sustainability.

The City of Moreno Valley reinforced this message through formal recognition, with its City Council issuing an official proclamation honoring the week. In a message to staff, the City’s Chief Financial Officer noted that the recognition “highlights the essential role that government finance professionals play in promoting transparency, accountability, and sound fiscal management in our communities.”

Public acknowledgment like this does more than recognize staff. It reinforces the connection between financial management and community trust.

Recognition at the Organizational Level

Many agencies used the week to recognize their teams internally and emphasize the evolving role of finance within their organizations.

At the City of Atwater, Finance Director Anna Nicholas highlighted the importance of finance professionals as strategic partners:

“Government finance professionals are central to operations and organizational sustainability in government agencies. Government finance professionals should be included at the decision-making tables in all agencies and can contribute to positive impacts in their communities. When government finance professionals elevate their skills and expertise, the entire agency is elevated and benefits with improved outcomes.”

This reflects a broader shift in the profession. Finance is no longer limited to reporting and compliance. It is increasingly embedded in decision making and long-term planning.

Creative and Engaging Celebrations

Agencies also found practical and creative ways to engage staff and build awareness.

At the Ross Valley Sanitary District, the celebration included a hosted lunch for finance staff, a bulletin board highlighting the team’s work, and a “Price is Right, RVSD Edition” game during an all-hands meeting. These types of efforts help demystify finance functions and make them more visible across the organization, while also strengthening team culture.

On the other side of the San Francisco Bay, the City of Campbell’s Finance team shared perhaps the most unique celebration experience. The team participated in a group workout at a F45 Training Studio. The 45 minute, high intensity session mixed interval training, circuit work, and functional exercises in a team setting. It was a fun way to build camaraderie, challenge the team in a different environment, and bring some energy to the week. After all, the Finance team that trains together stays together!

Regional Leadership and Structured Recognition

Eastern Municipal Water District demonstrated a comprehensive approach to Government Finance Professionals Week by combining a structured internal recognition plan with regional collaboration.

Internally, EMWD developed a multi-day recognition schedule that included social media outreach, team gatherings, and staff appreciation activities. The week featured coffee and pastries hosted by finance management, appreciation gifts from the Chief Financial Officer, a team luncheon, and an ice cream social to close out the week.

Beyond its own organization, EMWD also played a leadership role by convening regional finance professionals to share ideas and coordinate approaches. Through outreach and follow up communication, agencies across the region were able to exchange plans, gather input, and identify common recognition strategies such as social media campaigns, public meeting acknowledgments, and team events.

This combination of internal engagement and external collaboration reflects how Government Finance Professionals Week can serve not only as a celebration, but also as a platform for strengthening connections across agencies.

Building Momentum for the Future

The inaugural year of Government Finance Professionals Week showed that there is no single way to participate. Agencies tailored their approach based on their size, structure, and culture, but the goal was consistent: recognize the value of the profession.

This effort was also championed by the California Society of Municipal Finance Officers (CSMFO), whose Board formally approved the recognition of Government Finance Professionals Week in December 2025, designating the fourth week in March for this statewide observance. In addition to establishing the recognition, CSMFO developed and shared resources to help agencies participate, which generated more than 700 page views on the organization’s website. As part of its broader strategic initiatives, CSMFO is continuing to evaluate the success of the first year and explore new ways to support agencies in recognizing and elevating the government finance profession.

Taken together, these actions created a shared moment across jurisdictions. They connected agencies in a collective effort to elevate government finance and highlight its importance to effective public service.

Looking ahead, there is a clear opportunity to build on this momentum by expanding public engagement, encouraging broader recognition from elected officials, and continuing to position finance professionals as key contributors to organizational success.

The first Government Finance Professionals Week established a strong foundation. With continued participation from agencies and support from organizations like CSMFO, it can become an enduring and meaningful tradition.

City of Atwater finance team members recognized during a City Council meeting

City of Moreno Valley finance staff celebrating their Government Finance Professionals Week proclamation

City of Campbell finance staff sweating it out during a team workout!

Ross Valley Sanitary District’s Government Finance Professionals Week display celebrating staff and sharing fun and informative insights about the finance function.

Themed gifts provided by EMWD’s CFO, with staff member Todd Craghead noting the team was “feeling the love!” during Government Finance Professionals Week

Erika Gomez is the Chief Finance Officer of Three Valleys Municipal Water District. Prior to assuming her current role, she served as Finance Director for the City of San Jacinto and as General Accounting Manager for San Bernardino County. She is a Certified Public Accountant and holds an MBA from California State University, San Bernardino, where she also played on the women’s soccer team. In her spare time, Erika enjoys spending time with family and friends, attending sporting events, snowboarding, reading, and watching movies.

Updates from Cal Cities 2026 Revenue and Taxation Committee Meetings

City Manager Sales Tax Working Group Recommendation

By: Ernie Reyna, Assistant City Manager (ACM)

The League of California Cities convenes its policy committee meetings three to four times annually, providing an important forum for municipal leaders and stakeholders. In 2026, the first in-person meeting took place in Sacramento on January 22, followed by the second in-person meeting in Costa Mesa on March 26. These gatherings are critical for discussing and shaping policies that affect cities throughout California.

Among the seven committees, the Revenue and Taxation Committee stands out as particularly relevant to the California Society of Municipal Finance Officers (CSMFO). This committee is chaired by Joe Vinatieri, who serves as Mayor of the City of Whittier. Under Mayor Vinatieri’s leadership, the committee addresses key financial issues that affect city operations and fiscal health, ensuring that municipal concerns are represented and considered in policy decisions.

A significant agenda item for the Revenue and Taxation Committee involved reviewing and deciding on recommendations put forth by the City Manager’s Sales Tax Working Group, which was based on data from 2020/2021 when shopping behaviors were much different due to the pandemic. The focus was specifically on proposed modifications to the allocation of the Bradley-Burns portion of city sales tax revenues generated by e-commerce and relating to fulfillment centers. The heart of the matter was the question of how e-commerce sales tax revenue should be distributed among California cities with fulfillment centers such as those for Amazon and Best Buy and those without fulfillment centers.

Within the committee, members expressed differing viewpoints about the fairest method of allocating these funds. One position advocated for the 1% share of Bradley-Burns e-commerce revenues to be partially directed to the destination city, where goods are ultimately delivered and consumed. Proponents of this view argued that destination cities should benefit from the economic activity generated by their residents’ purchases.

In contrast, other committee members maintained that this portion of revenue should remain with the city where the fulfillment center is situated. Supporters of this approach emphasized that fulfillment center cities bear significantly high costs in maintaining the infrastructure necessary to support these large-scale operations, including roads, public safety services, and other municipal needs.

The discussion surrounding the allocation of Bradley-Burns sales tax revenues from e-commerce quickly escalated into a highly contentious issue among California cities. The stakes were exceptionally high, as millions of dollars were at risk for municipalities that depended on these funds to support their general fund operations. The debate created tension between cities, with the potential for significant financial losses if certain allocation methods were adopted. For some municipalities, the proposed changes threatened to reduce their general fund revenues by more than 25%, a prospect that underscored the critical nature of the committee's deliberations.

The urgency behind the discussion stemmed from the broader implications of failing to reach a consensus. If cities could not agree on an equitable approach to distributing e-commerce sales tax revenues, the State of California might make that decision for all cities. In such a scenario, the state could decide unilaterally how to allocate these funds, possibly redirecting e-commerce revenues to address state budgetary needs. This possibility heightened the importance of the committee's work, as municipal leaders sought to preserve local control and ensure fair treatment for all cities involved.

During the January 22 meeting, the Revenue & Taxation Committee voted with strong support to advance the item, developing a series of recommendations for the League’s Board to consider. The committee’s proposals aimed to address concerns regarding the allocation of Bradley-Burns sales tax revenues generated from e-commerce and to provide a framework for equitable distribution among California cities.

• Implement a 50/50 split of Bradley-Burns sales tax revenues generated from e-commerce transactions, ensuring both fulfillment center cities and destination cities share in the revenue.
• Establish a plus or minus 5 percent fluidity band, allowing for limited flexibility in the revenue allocation to accommodate fluctuations in e-commerce sales tax receipts.
• Apply the recommendations prospectively, excluding revenues from existing sales tax sharing agreements from any split to avoid disrupting current arrangements.
• Introduce a five-year phase-in period following implementation by the California Department of Tax and Fee Administration (CDTFA), allowing cities time to adjust to the new revenue allocation method.
• Create a plus or minus 20 percent volatility band so that any city gaining revenues in excess of 20 percent would contribute those excess funds to mitigate losses greater than 20 percent for cities adversely affected by the reallocation of Bradley-Burns revenues.
• Reallocate county pool use tax dollars from out-of-state e-commerce transactions, moving these funds from the county pools to destination cities to better reflect where goods are delivered and consumed.

Following the Revenue & Taxation Committee's advancement of its recommendations, the League of California Cities Board addressed the issue during its meeting in Berkeley on February 19–20, 2026. After thorough consideration, the Board voted by a wide margin of 55–2 to reject all but one of the committee’s recommendations. The Board expressed concerns that the proposals were too divisive and noted that a substantial number of cities relied heavily on this revenue source for their general fund operations.

Ultimately, the Board decided to direct League staff to pursue statutory changes focused specifically on reallocating county pool use tax dollars from out-of-state e-commerce transactions[BM1] , which came about from AB 147 in 2019 and was implemented based on the South Dakota vs. Wayfair case requiring out-of-state-retailers with over $500,000 in annual CA sales to collect and remit sales and use tax.  This change would shift these funds from the broader county pools directly to destination cities, thereby more accurately reflecting the locations where goods are delivered and consumed. The Board viewed this targeted action as a more balanced and less disruptive alternative than implementing a 50/50 split of Bradley-Burns sales tax revenues from e-commerce sales.

Staff members from the League of California Cities are set to collaborate closely with the California Department of Tax & Fee Administration (CDTFA). Their joint effort will focus on designing and developing an effective mechanism for reallocating county pool use tax dollars generated from out-of-state e-commerce transactions. This process involves shifting these funds from county pools directly to destination cities, ensuring that tax revenues more accurately reflect the locations where goods are delivered and consumed.

This initiative marks a critical step in responding to the Board's direction and aims to establish a fairer distribution model for e-commerce sales tax revenue across California cities. Updates regarding the progress of this collaborative effort will be provided as the mechanism is developed and implemented.

With 28 years of finance experience under his belt—and plenty of stories to tell—Ernie Reyna has been making numbers work for the City of Perris for more than six years. Currently serving as Assistant City Manager (ACM), Ernie previously wore the hat of Director of Finance, proving that whether it's crunching budgets or leading teams, he's always up for the challenge (and maybe a coffee break or two).

When it comes to leadership, Mr. Reyna has taken center stage! He was elected President of CSMFO, kicking off his term on January 1, 2024. Since joining CSMFO in 2011, Ernie has rolled up his sleeves on numerous committees and steadily climbed the Board of Directors ladder, ultimately landing in the top spot. Talk about making finance fun and keeping things moving forward!

Ernie's academic credentials stack up nicely—he snagged his Bachelor of Science in Business Administration from UC Riverside and is a proud California CPA. Not one to rest on his laurels, he also went back for his master’s in public administration at California Baptist University, graduating in April 2023. Who says you can't teach an old dog (or a finance guru) new tricks?

Away from the spreadsheets and boardrooms, Mr. Reyna loves to pack his bags and explore new places with his wife, Dolores, and their two adventurous sons, Adrian and Andrew. When the suitcases are stashed away, you’ll find him kicking back at home, surrounded by his family and a lively crew of pets—cats Cocoa and Grogu, plus their dog Biscuit, who keeps everyone on their toes. It’s safe to say, life at the Reyna household is never boring!

The SEC Said It First: Artificial Intelligence Is Coming to Municipal Bond Compliance

What California Finance Directors Need to Know Right Now

This article is intended for informational purposes only and does not constitute legal advice. Readers should consult qualified bond counsel or other legal advisors with respect to their specific compliance obligations.

The municipal securities market has operated largely the same way for over fifty years. Bonds are issued, projects are built, closing binders are now digitally assembled, and then filed away. Sometimes, the ongoing compliance obligations that attach to those bonds quietly fall through the cracks until the agency hires a consultant or the consultants show up for the next bond issue.

Artificial intelligence brings an opportunity for change.

In January 2026, Dave A. Sanchez, Director of the Office of Municipal Securities at the U.S. Securities and Exchange Commission, delivered closing remarks at the Joint Compliance Outreach Program (JCOP) for Municipal Market Participants that every Finance Director, City Manager, and special district administrator in California should hear: artificial intelligence and emerging technologies are coming to municipal bond compliance and issuance, and the SEC is watching how they are used. For Finance Directors, the legal obligations remain the same.

That combination of opportunity and caution is worth taking seriously. Here is what it means for your bond compliance program.

Director Sanchez's message was not a warning against AI. It was something more nuanced and ultimately more useful: a reminder that innovation does not change regulatory obligations, but it does change how those obligations can be met. His precise formulation bears quoting:
“Technology may change how we do business, but it does not change why we do business or the fundamental regulatory concerns that exist in this market.”

For Finance Directors managing ongoing bond compliance, that distinction matters enormously.

The obligations attached to your outstanding tax-exempt bonds are real, legal, and they run for the life of every bond your city or district has ever issued. That could be thirty years or more. Those obligations exist whether or not you have a system to manage them, whether or not the Finance Director who closed the bond still works for your organization, and whether or not anyone has looked at your EMMA filing history in four years.

AI changes the feasibility of managing them well for every small city, not just the large ones with enterprise software budgets and dedicated treasury staff.

The Obligations That Last Longer Than the Bond

When your city or special district closes a publicly offered tax-exempt bond, two separate sets of ongoing legal obligations attach to that transaction. They do not end when the project is complete. They do not pause during staff transitions. They run until the bonds are paid off and, in the case of IRS record retention, three years after that.

Under SEC Rule 15c2-12, you committed in your Continuing Disclosure Certificate to file an annual report with EMMA by a specific date every year, and to file a notice within ten business days any time one of sixteen specified material events occurs. (The SEC's 2018 amendments to Rule 15c2-12, effective February 27, 2019, expanded the list from fourteen to sixteen categories, adding obligations relating to the incurrence of certain financial obligations and agreements to covenants that could limit an issuer's ability to meet its bond obligations. These two additions are among the least well-understood compliance requirements at the staff level.) The listed events include rating changes, including upgrades, which surprises many people, bond calls, defeasances, amendments to bond documents, adverse tax opinions, and bankruptcy proceedings, among others.

Go to emma.msrb.org right now and search your city or district. What you see is what your underwriter sees when you come to market for your next bond transaction. Late filings, missing filings, and failure-to-file notices are permanently part of your public record. They appear in every future official statement. They follow you.

Under federal tax law, your tax-exempt bonds carry ongoing IRS obligations relating to how proceeds are invested and spent, how the financed facilities are used, and what records must be maintained. Every five years from your closing date, installment payments of any arbitrage rebate owed to the IRS come due, and potentially a check. It is important to understand that the arbitrage calculation itself is an ongoing monitoring obligation and not a task to be addressed only at the five-year mark. Issuers who wait until the payment deadline to begin tracking yield compliance risk compounding interest and penalties on any rebate amounts owed. If your bond proceeds earned investment income above your bond yield, that excess belongs to the Treasury.

Private use is equally misunderstood. The facilities your city financed with tax-exempt bonds must be used for governmental purposes. As a general rule, tax-exempt governmental bonds lose their status if more than ten percent of the bond proceeds are used for private business use and more than ten percent of the debt service is secured by or paid from private business revenues. When a management company operates your community center, when a cell tower lease is placed on your bond-financed municipal building, when a naming rights agreement is signed for your stadium, each of those arrangements may count as private use. Above the applicable thresholds, private use can taint the bonds and trigger retroactive loss of tax-exempt status. This is not a theoretical risk. It is a real one, and it catches cities that are doing everything else right.

Where Cities Go Wrong

The post-issuance compliance failures I have seen in California municipal finance share a common thread: they are almost never the result of negligence or indifference. They are the result of a system that asks a lot of local government staff and provides very little support, especially for small cities and districts.

Bond counsel sends a closing letter with compliance instructions. The city files it. Staff turns over. The responsible person changes twice in five years. Nobody inherits the institutional knowledge. The closing binder ends up in a storage room or a retired server. The EMMA annual report is due in nine months and nobody has a calendar reminder. The first sign of a problem is an underwriter's call the week before a new bond transaction goes to market.

Over the past decade, the Securities and Exchange Commission has repeatedly emphasized that continuing disclosure obligations are enforceable federal securities law requirements. The Commission's Municipalities Continuing Disclosure Cooperation Initiative, announced in 2014, resulted in enforcement actions against dozens of issuers and underwriters that had inaccurately represented their prior disclosure compliance. More recent enforcement actions involving municipalities and school districts have focused on misleading financial disclosures and failures to disclose material fiscal risks. These cases reinforce a consistent message: municipal issuers must maintain accurate and timely disclosure for the life of their bonds.

Artificial intelligence has the potential to change how local agencies manage these long-term compliance obligations.

What AI Actually Makes Possible

For the first time, the technology exists to give every California city and special district, regardless of staff size or budget, the kind of compliance infrastructure that used to require a dedicated treasury team or an expensive enterprise software contract.

Modern document analysis systems can review bond documents and identify key compliance information, including filing deadlines, rebate calculation dates, and record retention requirements. Automated monitoring tools can track trustee statements and expenditure schedules and alert staff when spending patterns affect arbitrage exceptions. Compliance systems can also monitor disclosure deadlines and generate reminders well in advance of filing dates.

These technologies do not eliminate the need for professional judgment. Finance officers, municipal advisors, disclosure consultants, and bond counsel must continue to evaluate disclosure decisions and approve filings. Technology can, however, reduce the administrative burden associated with tracking obligations that extend decades beyond the original bond transaction. These are not hypothetical capabilities. They exist today.

Director Sanchez's remarks reflect the SEC's understanding of this distinction. Artificial intelligence may assist with drafting documents or monitoring compliance obligations, but the legal responsibility for accurate disclosure and tax compliance remains with the issuer and its professional advisors.

The Risks the SEC Identified

Director Sanchez did not limit his remarks to the promise of AI. He identified two specific risks that deserve the attention of every issuer and professional in this market.

Hallucination risk. Director Sanchez raised the concern that an AI agent tasked with drafting a preliminary official statement could pull data from multiple sources and in the process invent pending litigation or generate incorrect revenue or expense figures. In the context of a municipal securities disclosure document, that type of error is not merely a drafting mistake. It may constitute a materially false or misleading statement in violation of the federal antifraud provisions. If you are using or plan to use AI in drafting official statements or other investor-facing documents, you need a robust review process to ensure that AI-assisted disclosures are independently verified for accuracy.

Supervisory substitution risk. Drawing on the Financial Industry Regulatory Authority's 2026 Regulatory Oversight Report, Director Sanchez highlighted the danger of what regulators are calling supervisory substitution: as AI agents execute multi-step compliance workflows autonomously, pulling data, interpreting rules, and triggering filings, human oversight can be silently eroded. The risk is not merely that the AI makes a mistake. The risk is that supervisors lose meaningful visibility into why the system made a particular choice, making it difficult to reconstruct the decision and assign accountability. This concern directly informs the right design for any AI-assisted compliance program.

The Right Model for AI-Assisted Compliance

The SEC's caution points to the correct design for any AI-assisted compliance system: technology does the administrative labor, professionals do the judgment work.

If AI is drafting disclosure language, material event notices, annual report cover letters, or the compliance summary in an official statement, that language must be accurate and must be reviewed by a qualified professional before it is filed. AI does not eliminate professional responsibility. It redirects it. The municipal advisor who recommends an AI-assisted compliance system owes the same duty of care to their client as always. The bond counsel who reviews an AI-generated draft takes responsibility for it when they approve it. The Finance Director who files an AI-drafted material event notice after bond counsel or a disclosure consultant has reviewed and approved it is in a fundamentally different and far better position than the Finance Director who never files anything at all. Critically, Finance Directors themselves must also review AI-generated output before it is submitted or filed. Delegating review entirely to outside counsel does not absolve the issuer of responsibility for the accuracy of its own disclosures. The Finance Director is the person who signs the continuing disclosure certificate and the person whose name appears on filings. That accountability does not transfer to the technology or to any vendor that provides it.

The right model is not AI instead of professionals. It is AI doing the drafting work, professionals doing the judgment work. Staff handles the administrative compliance labor. Bond counsel reviews and approves. Cities get the same quality outcome at a fraction of the cost.

That is a good outcome for everyone, including, it seems, the SEC.

What You Should Do This Week

The following actions cost nothing and take less than an hour:

• Go to emma.msrb.org. Search your city or district. Look at your filing history for every outstanding bond issue. Are all annual reports there? Are any labeled late? Are any missing entirely? This is your starting point.
• Find your continuing disclosure certificates. These are in your closing binders. They tell you exactly what you committed to file and when. If you cannot find them, call your bond counsel.
• Know your arbitrage dates. When did each of your bond issues close? The five-year anniversaries of those dates are when installment payments are due. Do you know those dates? Does anyone on your current staff?
• Ask who is responsible. For every compliance obligation described in this article, someone at your organization should be the named responsible party. If the answer is unclear, or if the answer is a person who left two years ago, that is worth addressing now.
• Review what comes out. If your agency is using any AI tool to assist with bond compliance, annual report drafting, or material event notices, establish a written protocol requiring Finance Director review of all AI-generated output before submission. Do not assume that because a tool generated the language, or because bond counsel has reviewed it, your independent review is unnecessary. You are the issuer. The filing is yours. Read it before it goes out.
  

The Bigger Picture: An Opportunity for Local Governments

Local governments borrow from the public to build the infrastructure that makes communities work. The tax-exempt status of those bonds reflects a public subsidy and the federal government's recognition that these projects serve a genuine public interest.

The ongoing compliance obligations attached to those bonds are the terms of that arrangement. They protect investors. They protect the integrity of the tax-exempt market. And they protect Finance Directors and elected officials from personal exposure in an environment where the SEC has made clear that enforcement is not hypothetical.

For twenty years, managing these obligations well required resources that most small cities and special districts simply did not have. That has changed. The question now is whether California's local governments, all four hundred and eighty-two cities and more than three thousand special districts, will take advantage of tools that finally make compliance achievable at every budget level.

The SEC is watching. More importantly, your bondholders, your underwriters, and your governing board are counting on you to get this right.

The good news is that getting it right has never been more within reach.

About the Author

Anita Luck is a California-licensed attorney with over twenty years of experience representing cities, counties, water districts, and other special districts in municipal finance and public law. She serves as bond counsel on a broad range of financings, including general obligation, special tax, assessment, lease, certificates of participation, utility revenue, successor agency, and state and federal financings under SRF and WIFIA programs. She advises public agencies on post-issuance compliance, including ongoing continuing disclosure obligations under SEC Rule 15c2-12, as well as the imposition of taxes, fees, and charges under Propositions 218 and 26. Ms. Luck also represents clients on election law, the formation of financing entities such as enhanced infrastructure financing districts, joint powers authorities, and community facilities districts, and a wide range of public law matters. She leads the public finance group at Aleshire & Wynder, LLP and can be reached at aluck@awattorneys.com.

Point-Counterpoint: One-Year vs. Two-Year Municipal Budget Processes

A Balanced Discussion for California Society of Municipal Finance Officers

By Chu Thai, Finance Director, City of Union City

By Will Fuentes, Finance Director, City of Campbell

Introduction

Municipal budgeting is a cornerstone of effective city management, directly impacting fiscal responsibility, service delivery, and long-term planning. California cities face unique challenges, from rapidly changing economic conditions to shifting state mandates. As Finance Directors, we recognize the importance of selecting the right budget process. And often times, one size does not fit all.  This article presents a balanced discussion of the one-year and two-year budget processes, exploring their respective advantages and disadvantages and offering practical considerations for CSMFO members.

Point: The Case for a One-Year Budget Process

Chu Thai, City of Union City

A one‑year budget keeps a government honest, agile, and aligned with real and ever-changing conditions. In an environment where the economy and municipal revenues are so uncertain and cost increases for pension, healthcare, insurance, goods, and services are often beyond expectations; a shorter cycle protects accuracy. Forecasts made for twelve months are simply more reliable than those stretched across twenty‑four, and that reliability translates into better decisions, fewer surprises, and a clearer understanding of the city’s true financial position.  While we all attempt to make highly accurate long-range forecasts based on strong assumptions, the accuracy of any forecast declines significantly after the first year; often due to economic and geopolitical factors outside our control.  Or in the case of 2020, a global pandemic.

Annual budgeting also strengthens accountability. Departments must justify their spending every year, creating a consistent rhythm of review that prevents outdated priorities from lingering. Elected officials gain more frequent opportunities to adjust service levels, respond to community needs, and incorporate new policy direction. For residents, the annual cycle is easier to follow and aligns with audited financial statements, quarterly reports, and the cadence of most public engagement processes.

Staffing realities further reinforce the value of a one‑year cycle. Turnover, promotions, and shifting responsibilities are constant in municipal organizations. This has been especially true in Union City and other agencies I’ve served as it relates to public safety staff.  Regular assignment rotations and natural attrition often mean that new staff are involved in each successive budget preparation process.  Over a two‑year period, it’s entirely possible for an analyst or manager to miss the budget process altogether. With an annual budget, staff member cycles through the process regularly, building competence, confidence, and continuity. This rhythm ensures that institutional knowledge is refreshed rather than lost and that new employees gain hands‑on experience instead of waiting years for their first full budget.

Counterpoint: The Case for a Two-Year Budget Process

Will Fuentes, City of Campbell

A two-year budget process provides stability and efficiency for municipal operations. By planning for a longer horizon, cities can better align strategic objectives with financial resources, supporting multi-year projects and initiatives. This approach also reduces the administrative burden on staff, allowing more time for analysis, implementation, and performance measurement. And by allowing a “break” in year two of the budget cycle, staff can focus their efforts on other projects and priorities that would normally be put on the back burner such as an ERP implementation, an audit RFP, and process and policy improvements.  Or the second year of the budget process could be dedicated to CIP preparation only, while the first year was dedicated to operating budget preparation.  I have seen from a far this alternating budget and CIP approach work well for cities such as the City of Sunnyvale. Additionally, a two-year budget can foster stronger relationships with departments, as expectations are set further in advance.

Nevertheless, as Chu alludes to, the two-year process may reduce flexibility, making it harder to adjust to unforeseen circumstances. Economic downturns or legislative changes during the second year can create misalignment between planned and actual revenues or expenditures. We have all seen the State change the playing field for cities on multiple occasions year after year with new mandates, new legislation, and changes in local funding.  While mid-cycle adjustments are possible and often done before the start of year two, they may not fully address rapid changes. Despite these limitations though, the two-year budget encourages forward thinking and can enhance organizational stability since there is more certainty as to what budgetary allocations will likely be in year two. In addition, adjustments to a budget can always be made at any time by a City Council and mid-cycle adjustments do provide a sufficient level of surety that key revenues and expenditures will be reviewed at least annually.  However, in contrast to a one-year budget process, Finance staff, departments, the Executive Team, and the City Council do not have to go through the complete and often times all-consuming nature of a full budget process in year two; again allowing them to focus their time and energy on other projects and priorities which may be placed on the back burner due to lack of bandwidth.   

Comparative Analysis: Key Differences and Practical Considerations

The primary distinction between the one-year and two-year budget processes lies in their balance of flexibility and stability. One-year budgets provide cities with the ability to quickly adapt, but may increase administrative workload and limit long-term planning. Two-year budgets streamline operations and support strategic initiatives, but can reduce responsiveness to changing conditions.

For California cities, choosing the right process depends on local priorities, fiscal volatility, staff capacity, and community expectations. Cities with rapidly changing revenues or expenditures may benefit from the one-year approach. Those with stable financial environments and a focus on long-term projects may find the two-year process more effective. It is critical for Finance Directors and city leaders to assess their unique needs, engage stakeholders, and remain open to revisiting their budget approach as circumstances evolve.

Conclusion and Recommendations

Chu Thai: For cities facing frequent change, the one-year budget process is an essential tool for maintaining fiscal discipline and public accountability. While resource-intensive, it improves staff understanding of the process and ensures that city leaders remain closely attuned to current financial conditions and community needs.

Will Fuentes: The two-year budget process is ideal for cities seeking greater efficiency, time for other projects and priorities, and long-term strategic alignment. Although it requires careful monitoring and potential mid-cycle adjustments, it offers a stable framework for achieving multi-year goals.

Ultimately, there is no one-size-fits-all solution. CSMFO members should consider their city’s unique context and remain flexible, adopting the approach that best supports effective financial management and public service.

Chu Thai

Will Fuentes, Finance Director for City of Campbell: Will is the CSMFO President-Elect for 2026; transitioning into the role of CSMFO President for 2027.  Prior to that, Will served as Vice-Chair and then Chair of the Peninsula (SF) Chapter, Chair and then Senior Advisor to the Communications Committee, a Director on the CSMFO Board, and Vice-Chair of the Career Development Committee. Prior to working for the City of Campbell (Finance Director) and over a 28-year career in the public sector, Will has served in roles at the City of Milpitas (Finance Director), City of Hayward (Deputy Finance Director), City of San Leandro (Assistant Finance Director), and the City of Union City (Revenue and Budget Manager). In his free time, Will loves to hike, run, workout at F45, go dancing, spend as much time as possible with his family and friends, and cheer on the University of Notre Dame and the Buffalo Bills, as a former mid-westerner and New Yorker.

Elevate your Learning with GFOA’s Certified Public Finance Officer Program

Through the generosity of the Government Finance Officers Association (GFOA) and CSMFO, CSMFO is offering four scholarships for GFOA’s Certified Public Finance Officer (CPFO) Certification program (each scholarship valued at $1200).

The scholarship is available to active CSMFO and national GFOA members who are not currently enrolled in the CPFO program. The scholarship will cover the $1,200 fee for two years of participation in the CPFO program. It includes ten exam attempts, e-learning course credits, and access to a CPFO Exam Prep product with over twenty recorded seminars. A CPFO scholarship recipient who does not finish the program within two years will need to pay $600 per year until they pass all of the exams. A candidate is allowed a maximum of five years to complete the program. Any ongoing costs of the program are to be borne by the recipient. CSMFO and GFOA are not responsible for continued costs to participate.

The CPFO Program for GFOA members is a broad educational program designed to verify knowledge in government finance disciplines. To earn the CPFO designation, candidates must pass a series of seven examinations covering the major public finance disciplines. A candidate has five years in which to complete the program.

Examination Areas:

• Accounting and Financial Reporting
• Treasury and Investment Management
• Debt Management
• Planning and Budgeting
• Compensation and Benefits
• Procurement
• Risk Assessment

Once earned, the CPFO designation is maintained by paying an annual membership fee and participating in fifteen hours of continuing professional education and three GFOA Engagement Credits each year. More information about the CPFO Program can be found at Certified Public Finance Officer (CPFO) (gfoa.org).

Testimonial

CSMFO would like to congratulate recent recipients of the CPFO designation. This is an incredible journey to enhance and extend your technical knowledge.

“The CPFO program is much more than a certification. It provides invaluable skills such as specialized financial knowledge, problem-solving, time management, adaptability, and networking opportunities with other professionals in the field. The resources and insights gained through the program have been instrumental in both my career and personal development.

For those looking to elevate their expertise in public finance, I strongly encourage you to consider pursuing the CPFO certification. Not only will it strengthen your technical and leadership abilities, but it will also open doors to greater opportunities to make a meaningful impact in the communities we serve."

- Jennifer Ustation, San Gorgonio Pass Water Agency

Scholarship Process

To be considered for the scholarship, the applicant must be able to satisfy all of the requirements listed below: 

1. CSMFO Member 
2. GFOA Member 
3. Local Government Experience – minimum of 2 years
4. Submit Resume 
5. Completion of Personal Statement of Interest Deadline to submit your application is April 6, 2026. 

Award of scholarship is based on one’s ability to meet the requirements. All confirmed applicants will then be entered into a random drawing for final selection.

To be considered for the scholarship, applicants must be an active member of both CSMFO and GFOA with two years local government experience and submit an application at the following link: CPFO Scholarship Application

For the four recipients of the scholarship, CSMFO would gain value from your experience if you would share your experience with the CPFO program through a co-written article for CSMFO News.

Should you have any questions on the program, please direct your questions to Margaret Moggia at margaret.moggia@staff.csmfo.org.

After a successful 28-year career, Margaret retired as the Executive Manager of Finance for West Basin Municipal Water District. An opportunity to support the Town of Discovery Bay CSD as their Finance Manager provides her the opportunity to help guide them through transformative. Margaret began her professional career at Coopers & Lybrand focusing primarily on governments and nonprofits. Margaret earned her B.A in Economics from U.C. Santa Barbara. She maintains her license as a certified public accountant (CPA).

Margaret was appointed by the California Society of Municipal Finance Officers (CSMFO) Board to serve as Executive Director where she has overall strategic and operational responsibility for CSMFO programs and execution of its mission. Margaret served as the 2018 President for CSMFO and also served in a variety of volunteer capacities. Margaret has also been active with CMTA and GFOA. In June 2022, Margaret joined California Class, a joint powers agency, as a Board of Trustee to serve a four-year term for this local government investment pool. In April 2024, Margaret joined the NIGP Certification Commission as a public stakeholder member. 

A New Spin on Debt Financing in Sac Valley

By: Alberto Preciado, CSMFO Board Member

Warning: Puns Ahead

Though Valentine’s Day was still a month away, love was in the air at the Sacramento Valley Chapter meeting at the Cosumnes Services District’s Board Chambers on January 14^th! Of course, I’m talking about the love of debt financing. Attendees were treated to an informative and entertaining presentation on the similarities between the art of dating and issuing debt as a local government agency, “ministered” by the “union” of Rick Brandis and Nicki Tallman of Oppenheimer & Co., and Dmitry Semenov of Ridgeline Municipal Strategies LLC.

This “engaging” twist on the subject captivated the membership, and by the end of the ceremony—um, seminar—members came away with a new understanding of the options available for agencies looking to finance their projects, such as bond issuance, private placements, or state programs like the iBank. While issuing debt can feel like navigating a relationship, agencies must carefully evaluate which financing option provides the best marriage for their project needs.

Following the presentation, the speakers led a Q&A session with attendees, providing practical examples and answering clarifying questions about potential uses of the various debt options. After the Q&A came the “reception,” and though there was no dancing, there was great food and a spirited networking opportunity enjoyed by all. A special thank you to PFM Asset Management for generously sponsoring this chapter meeting, making this a no-cost event for CSMFO members.

Chapter Leadership Addition

Wrapping up the event, Chapter Chair Dave O’Toole of the Sacramento Metropolitan Fire District announced that Nou Vang of the Cosumnes Services District had volunteered to assume the role of Vice Chair. I guess you could say that she caught the bouquet (okay, sorry, that may be going too far)! Congratulations and thank you, Nou!

CSMFO Chapter Meetings: A Match Made in Heaven

CSMFO’s chapter meetings offer valuable opportunities for professional growth and connection within the public finance community. Members can participate in training sessions covering a broad spectrum of topics, ensuring they stay current with industry trends and best practices. These meetings also provide a forum to interact with neighboring colleagues, foster collaboration, and exchange innovative ideas.

For those interested in the next level of participation, chapter meetings are an excellent starting point for becoming more involved in CSMFO leadership. To explore upcoming events and find chapter meetings in your area, visit the events page at csmfo.org.

Alberto Preciado is the Finance Director at the City of Davis.  He has spent over 18 years working in the field of municipal finance at different agencies including three cities and a special district.  Alberto is a member of the CSMFO Board of Directors.  He has served in various committees and at the chapter level since 2015, both as an at-large member, and as a Chair and Vice Chair.  In his free time, Alberto loves to travel and discover new food spots with his family, and hang out with his goldendoodle, Canelo.

Chapter Roundup – East Bay Chapter

By: Drew Corbett, CSMFO Past President

CSMFO members throughout the East Bay area of the greater Bay Area region convened for a chapter meeting at the Cherryland Community Center in Hayward on January 15th.  The meeting featured a networking lunch and an educational program and was well attended by our governmental and commercial members, with nearly 50 registrants.

The educational program was a panel discussion focused on the relationship between the City Manager and the Finance Director/Finance Department, with the objective being to provide finance professionals with insight on how City Managers evaluate issues from a finance perspective and the role the Finance Director/Department can play in supporting the City Manager in the execution of agency objectives.  Panelists included the City Managers from the cities of Union City (Joan Malloy) and Newark (David Benoun), along with their Finance Directors, Chu Thai and Krysten Lee, respectively.  The panel was moderated by Gloria del Rosario, who serves as Newark’s Deputy Finance Director, and I had the privilege of participating as well to provide some perspective as someone who has served as both a Finance Director and a City Manager.

A few of the topics of discussion included areas of natural alignment between City Managers and Finance Directors, as well as areas where their priorities may diverge; the City Managers’ perspective of what they need from the Finance Department to best support the operation; managing departmental issues and inter-departmental relationships; and navigating the political environment.  One of the major things that the City Managers emphasized throughout their remarks was how critical the Finance Department was to the operation and how much they relied on the Finance Director to keep them out of trouble!

The panel was also able to field some questions from the attendees, although the hour-long program moved very quickly and we were not able to address everyone who had something to ask.  As an indicator of how impactful this session was, I would estimate the panel could have lasted for another 30 minutes to cover all the questions.  East Bay Chapter Chair Chu Thai and Vice Chair Krysten Lee deserve a lot of credit for developing such a creative and innovative program for this chapter meeting, and I know the members of the East Bay Chapter are very much looking forward to what they come up with for the next chapter meeting.

Drew is the Principal of DKG Consultants, a firm he started in 2023 upon retirement after nearly 20 years in local government.  Drew started his municipal government career in Sunnyvale in 2005 as a budget analyst, and later became the budget manager/assistant finance director. In 2013, Drew was hired by the city of Menlo Park to be its finance director, and in 2015, Drew left Menlo Park to join the city of San Mateo as its finance director.  In 2016, Drew retained his title of finance director while adding the title of assistant city manager.  In his new capacity, Drew took on oversight of the information technology department and managed special projects on behalf of the city manager.

In late 2018, the San Mateo City Council appointed Drew as the city manager, where he served through June 2023.  In this role, Drew led the operations of a full-service city with over 600 full-time equivalent employees and over 105,000 residents.  During his time as city manager, Drew also served as the chief administrative officer of the San Mateo Consolidated Fire Department, a Joint Powers Authority that provides fire protection and prevention services to the cities of San Mateo, Belmont, and Foster City.

Drew earned his Master of Business Administration from the University of Wisconsin-Madison and has a bachelor’s degree in political science from the University of the South.  Prior to entering the public sector, Drew spent two years as an elementary school teacher in Compton, CA as part of the Teach For America program, and five years as a senior analyst/project manager with the Intel Corporation in Santa Clara, CA.

Drew has served on the Board of Directors for the California Society of Municipal Finance Directors and was the organization’s President in 2017.

CSMFO Mentorship and Cohort Programs Empower the Next Generation of Public Finance Leaders

By: Debbie Rosales, 2026 CSMFO Board Member & Channel Counties Chapter Chair

The California Society of Municipal Finance Officers (CSMFO) continues its commitment to professional excellence with its Mentorship and Cohort Programs—two impactful initiatives designed to support growth, leadership development, and long-term success in public finance.

Together, these programs create structured pathways for learning, connection, and career advancement, serving finance professionals at various stages of their careers while strengthening the public finance community statewide.

Mentorship Program: Experience Meets Aspiration

The CSMFO Mentorship Program pairs emerging and mid-career professionals with seasoned municipal finance leaders who bring years of practical experience and insight. Through one-on-one relationships, participants gain personalized guidance on career planning, technical skills, leadership development, and navigating the unique challenges of public sector finance.

For mentees, the program offers a trusted space to ask questions, build confidence, and gain perspective beyond day-to-day responsibilities. For mentors, it provides a meaningful opportunity to give back, share institutional knowledge, and help shape the future of the profession.

The result is a mutually beneficial relationship that fosters professional growth, strengthens leadership pipelines, and reinforces the collaborative spirit of CSMFO.

Cohort Program: Learning Together, Growing Together

CSMFO’s Cohort Program offers a structured, group-based learning experience focused on skill-building, peer collaboration, and shared problem-solving. Participants move through the program together, engaging in facilitated discussions, targeted training sessions, and collaborative activities centered on real-world public finance topics.

The cohort model encourages participants to learn from one another’s experiences, broaden their professional networks, and develop lasting connections with peers across agencies and regions. By progressing as a group, participants gain accountability, diverse perspectives, and a strong sense of community.

This program is especially valuable for professionals seeking a deeper understanding of public finance practices while building relationships that extend well beyond the program’s duration.

A Stronger Profession Through Connection

Both the Mentorship and Cohort Programs reflect CSMFO’s mission to promote excellence, integrity, and innovation in public finance. Whether through individualized guidance or collaborative learning, these programs equip participants with the knowledge, confidence, and connections needed to thrive in an evolving public sector environment.

By investing in people at every career stage, CSMFO is not only supporting individual success—but also strengthening the future of municipal finance across California.

Registration is now open for both programs. Don’t wait – sign up today!

Mentorship program - https://csmfo.org/page/mentorship

Cohort program - https://csmfo.org/page/cohorts

Debbie Rosales is the Finance Manager with Las Virgenes Municipal Water District.  She has over 20 years of professional government and non-profit experience in finance.  Debbie holds a Bachelor of Arts degree in Management from Webster University, a Master of Business Administration in Finance from the University of Redlands, and a Certificate in Accounting for Governmental and Nonprofit Organizations from UC Riverside.  Debbie has participated in CSMFO since 2014 and has volunteered in various roles including Chapter Chair of both the Inland Empire and Channel Counties Chapters, Membership Committee and Career Development Committee.  She currently serves on the CSMFO Board of Directors and chairs the Channel Counties Chapter.  Debbie is passionate about continuing education and staff development and membership engagement.  Debbie and her husband Mark are avid Disney fans who enjoy traveling, visiting family, and doting on their granddaughter.

Peninsula Chapter Rings in 2026 with a Great Turnout, Great Conversation, and Great Company

By: Derek Rampone, Peninsula Chapter Chair

The CSMFO Peninsula Chapter kicked off the new year in style with a lively New Year Luncheon on January 29, 2026, at Fleming’s Steakhouse in Palo Alto, bringing together thirty-eight (38) finance professionals from across the Peninsula to reconnect, share ideas, and start the year on a positive note.

Our featured speaker, Dr. Lynn Levis, Lead Facilitator for the Conscious Leadership Academy at the University of San Diego, an instructor in USD’s Leadership Coaching Certificate Program, and  Co-Founder of Moms Rising, delivered an engaging and practical presentation on building a sense of agency within organizations. Her talk focused on how individuals and teams can strengthen their ability to influence outcomes, navigate change, and lead effectively—an especially timely topic as local governments continue to face evolving fiscal and operational challenges. Attendees appreciated both the thoughtful insights and practical takeaways they could bring back to their own organizations.

While the luncheon service took a little longer than planned, the consensus was that the food was well worth the wait, and the extended time between courses simply provided more opportunity for networking and catching up with colleagues.

A special thank-you goes to our generous event sponsors, whose continued support makes Peninsula Chapter events like this possible. We greatly appreciate:

• Badawi & Associates
• Chandler Asset Management
• Fieldman, Rolapp & Associates
• PFM Asset Management

Their partnership helps ensure we can continue providing valuable professional development and networking opportunities throughout the year.

Thank you to everyone who joined us to kick off 2026. We look forward to seeing you at upcoming Peninsula Chapter events!

Derek Rampone is currently the Chair of the Peninsula Chapter of CSMFO and has over 26 years of accounting and finance experience, including extensive experience leading the finance and administrative services departments at the City of Mountain View (Finance and Administrative Services Director 2023-Present) and the City of Redwood City (Assistant Director of Administrative Services 2022-2023 / Financial Services Manager 2016-2022) as well auditing California municipalities while serving as Audit Manager, Senior Accountant, and Staff Accountant at Moss, Levy & Hartzheim, LLP (2000-2016).   Additionally, Derek obtained his Bachelor of Arts (B.A.) in Business Economics with an Emphasis in Accounting from the University of California, Santa Barbara. And in his free time, Derek loves to golf, workout, take his boat out on the lake, and spend as much time as possible with his family, friends, and dog.

2025 CSMFO Award Program Recipients

By: James Russell-Field, Fairfield-Suisun Sewer District &
CSMFO Recognition Committee

The CSMFO Recognition Committee oversees the Award Program for Excellence in Budgeting to recognize agencies with well-presented budget documents, best practices, processes, and procedures. The Recognition Committee also oversees the Innovation Award, which recognizes innovation in public sector finance in the areas of accounting, budgeting, treasury, debt administration, procurement, risk management, and technology.
With the rigorous reviews complete, the CSMFO Recognition Committee is pleased to announce the 2025 CSMFO Award Program recipients!

If you received an award for the 2025 season and need a copy of your award certificate, please see the instructions at the end of the article.

Innovation Award (2)

• City of Moreno Valley
• Dublin San Ramon Services District

Innovation Awards will be presented at the 2026 CSMFO Annual Conference in Palm Springs. Articles covering the Innovation Award winners will be included with the 2026 CSMFO Conference magazine!

Meritorious Operating Budget Award (7)

**First time award winner

Meritorious Capital Budget Award (1)

**First time award winner

Capital Budget Excellence Award (21)

**First time award winner

Operating Budget Excellence Award (117)

**First time award winner

A huge thank you to the whopping 136 volunteers that completed all the reviews! We will be recognizing the hardworking volunteers separately this spring.

Download Award Certificate and Feedback

If you are the recipient of an Award for the 2025 season, a notification was sent via Awards Force on February 5, 2026, that award certificates are available to download.

In case you did not see or receive that notification, to download your certificate navigate to [https://csmfo.awardsplatform.com/] where you submitted the entry, click on your entry, and then click on “Supporting Documents.” A copy of your certificate will be available there.

While you are downloading your certificate, please also make a copy of your reviewer feedback which you can access by clicking “View Feedback” after logging in. If you have any questions, please contact Margaret O’Brien (Margaret.O'Brien@cityofconcord.org).

• Snappy talking points perfect for dazzling elected officials
• Ready-to-use social media posts to showcase your finance squad
• An official appreciation message from your City Manager or General Manager (guaranteed to make at least one accountant blush)
• Proclamation and staff/board report templates, for those who love paperwork almost as much as they love a balanced budget

In short, everything you need to make this first celebration an absolute winner. Let’s make those spreadsheets sparkle!

Let’s face it, recognizing finance professionals is like finally awarding that “Best Supporting Calculator” Oscar; it’s not just well-deserved, it’s essential. By officially celebrating Government Finance Professionals Week, we’re not only shining a spotlight on those who keep the numbers straight but also boosting transparency and public trust (because who doesn’t love an honest spreadsheet?).

The result? Happier teams, stronger staff retention, and workplace morale that’s as high as your best budget surplus. Plus, let’s be real: this recognition is long overdue. If anyone deserves applause (and maybe a parade with Excel spreadsheets for streamers), it’s our finance squad.

So, without further ado, let’s make 2026 the year finance professionals finally get the spotlight! Here’s to being celebrated like the true rockstars of spreadsheets, the headliners of hard budgets, and the unsung heroes who know how to party, responsibly, of course, with balanced ledgers and maybe a conga line of calculators!

Commercial Corner: Roundtable Roundup and So Much More!

By: Wing-See Fox, Commercial Partner Committee Chair 

As a long-time CSMFO commercial member and current Chair of the Commercial Partner Committee, I have witnessed a strengthening and expansion of the relationship between commercial partners and CSMFO over the years.  Commercial members are active in CSMFO leadership, serving on Committees and holding a Board seat.  Sponsorship at the Annual Conference remains at sold-out levels year after year.  Still, I believe there is room to improve the benefits of commercial membership, and one of the near-term goals of the Commercial Partner Committee is to restructure CSMFO commercial membership to enhance benefits for its commercial members while continuing to further the mission of CSMFO. 

As a first step, we gathered input from commercial partners by sending out a survey in May.  Then we held a Commercial Roundtable in September and conducted interviews with a variety of commercial partners in October.  We asked what benefits they valued the most and whether they would be interested in firm-level membership rather than individual membership.

Feedback from commercial members was clear that meaningful networking opportunities with current and potential clients and education/knowledge sharing are most highly valued.  Advertising, discount pricing for events, and leadership opportunities are also valued, but to a lesser extent.  A significant number of respondents were not clear what specific benefits were offered to commercial members but felt that it was important to maintain their membership to demonstrate support for CSMFO, since they consider CSMFO to be the premier public finance association.

Additionally, the majority of those we surveyed and spoke to are interested in firm-level membership, covering multiple employees, and support tiered pricing levels.  During the interviews, we also tested the idea of tiered annual sponsorship options that include year-round commercial membership benefits as well as sponsorship of the CSMFO Annual Conference.  In general, we found that commercial partners are open to different formats for commercial membership as long as they can understand and articulate the benefits and why they are worth the cost.

Over the next few months, Margaret Moggia, Executive Director of CSMFO, and the Commercial Partner Committee will work together to flesh out the benefits and pricing for firm-level commercial membership and annual sponsorship options for discussion with the Board of Directors.  Our ultimate goal is to present a proposed membership structure for Board approval that can be implemented for the 2027 membership year and Annual Conference.

If you are interested in contributing to this effort, please reach out to Margaret at margaret.moggia@staff.csmfo.org, myself at wfox@ufi.us, or any CSMFO Board member!

Wing-See Fox is the Managing Director of the Public Finance Group at Urban Futures, Inc. (UFI). Wing-See has over a decade of experience in the fields of municipal advising, public finance, and municipal securities. She has worked on over $3 billion in municipal debt offerings for cities and special districts in California. Prior to joining UFI, Wing-See was a Vice President at Raymond James Public Finance, and her investment banking experience also includes work in the Municipal Securities Group at UBS Investment Bank in New York. Wing-See received an MBA from Columbia Business School, a Master of Social Work degree from Columbia University School of Social Work, and a Bachelor of Arts degree in Psychology from Stanford University. She is an active member of the California Society of Municipal Finance Officers (CSMFO) and the Northern California Chapters of Women in Public Finance (WIP) and Asian Americans in Public Finance (AAPF). 

President’s Message - State Conference Fall Tour: Building Bridges Across the West 

By: Jennifer Wakeman, CSMFO President 

West Coast Alliance (WCA)

CSMFO is proud to be part of the WCA alongside four other state association partners: Alaska Government Finance Officers Association (AGFOA), Colorado Government Finance Officers Association (CGFOA), Oregon Government Finance Officers Association (OGFOA), and Washington Finance Officers Association (WFOA). This partnership gives our members access to member benefits and rates to these partner organizations’ conferences, virtual education offerings, and other resources. It also opens doors to expanded networking and career opportunities.

For the association volunteer leaders, the benefits go even deeper – connecting with peers who share the responsibility of guiding our statewide associations. These relationships have been invaluable, and I have gained so much knowledge and perspective from the other association presidents with whom I have worked this year. Beyond participating in bi-monthly meetings to share updates on programming and planning the WCA reception at the GFOA Annual Conference, Presidents attend each other’s annual conferences.

The WCA member conferences are currently scheduled with two in the first quarter of the calendar year (CSMFO and OGFOA), and the remaining three occurring in the last four months of the year. These visits aren’t just educational – they are a chance to see how other associations organize their leadership, plan events, and engage their members. And, if you are a super municipal finance nerd, learning the nuances of each state’s municipal finance systems and the different relationships with state leadership is fascinating!

Stop 1: WFOA in Bellevue – Where Finance Meets Fun

Dates: September 23–26

The WFOA team rolled out the red carpet at the 70th Annual WFOA Conference in Bellevue, WA! From the start, they included me in a variety of events, including a Grease-themed Thursday night get-together and a volunteer appreciation dinner that doubled as a murder mystery party—what a fun twist!

The conference offered many great sessions which I was able to attend and found were very similar to CSFMO’s schedule. Something new to me was their wellness program: a series of activities that occurred throughout the week, culminating in a prize drawing at the end of the conference for those who completed them all. Another WFOA tradition that was new to me was “Fraud Friday,” where education is combined with a friendly trivia competition. Past winners proudly sported their “Fraud Friday” shirts, adding a playful vibe to a serious topic. Programming is provided by the State Auditor’s team on their fraud prevention program and the support that they offer municipalities (Preventing Fraud | Office of the Washington State Auditor). It was really inspiring to see the benefits of a strong state-local relationship.

 Beautiful Bellevue weather

 Mickie Cooper, WFOA President
 Bonnie Overfield, Washington Public Treasurers Association
 Brian Kennedy, OGFOA Past President
 Charlotte Osborne, GFOA of British Columbia Secretary-Treasurer
 Jennifer Wakeman, CSMFO President

Stop 2: CGFOA in Loveland – Love Boat Vibes in the Rockies

Dates: November 18–21

While the Colorado weather was crisp and cool coming off the mountains, the CGFOA camaraderie was warm and abundant at their 2025 Annual Conference in Loveland. I had a great time getting to know the outgoing president, Bryan Archer, and the incoming president, Tim Kleeman.

CGFOA’s conference had an ideal setup with the conference to one side of the hotel lobby and the hotel rooms to the other. No complicated signage, no shuttles – just easy access! We know how much these things matter! The conference sessions covered great topics, but unfortunately some of the ones I was most interested in conflicted with city or CSMFO meetings that I needed to attend. This, however, allowed me to delve into the conference app, Eventscribe, which we have never used at CSMFO (we use Guidebook). It offered many of the same features but functioned a bit differently, so it was fun to explore as I found the presentations I had missed and was able to email the slides to myself.

The Thursday night event was a lively Love Boat-themed party (a nod to the Loveland location), complete with costumes. Captain Stubing stole the show!

 Jennifer Wakeman, CSMFO President
 Bryan Archer, Outgoing CGFOA President, and his wife, Alicia
 Mickie Cooper, WFOA President

 Mickie Cooper, WFOA President
 Jennifer Wakeman, CSMFO President
 Tim Kleeman, Incoming CGFOA President

 Chilly, but beautiful Loveland!

Both of these WCA partners provided great conference experiences, full of valuable content and welcoming peers who were eager to learn about similarities and differences with California. I feel so fortunate to represent CSMFO at these events and build these networks. If you’re looking for fresh learning opportunities, check out the training offered by our partner associations—you won’t regret it! 

Artificial Intelligence in Municipal Finance 

By: Erika Gomez - Chief Finance Officer, Three Valleys Municipal Water District 

Artificial intelligence (AI) has become a steady presence in modern life, appearing in headlines and daily conversations more frequently than ever. According to the Pew Research Center, 95% of U.S. adults say they have heard at least something about AI, and the share who say they’ve heard a lot has nearly doubled since 2022.

According to the IPSOS AI Monitor 2025, 67% of people believe they have a good understanding of AI, but about one-third may not. Before diving deeper, it’s worth clarifying what AI actually is, because while many people equate it with ChatGPT, AI goes far beyond any single tool.

At its core, AI is a field of computer science focused on creating systems that perform tasks that typically require human intelligence, such as recognizing patterns, learning from data, making decisions, or understanding language.
Public attitudes toward AI are mixed. The IPSOS AI Monitor 2025 notes that 55% of people believe AI products and services offer more benefits than drawbacks, yet 50% also say they feel nervous about them. People are optimistic about AI’s potential, but still uncertain about its risks.

Despite the hesitation, AI may be more familiar than many realize. In fact, most people use AI tools every day without thinking about it. Local governments are also embracing AI to enhance efficiency and improve service delivery. Here are a few ways:

• Invoice OCR: Optical Character Recognition (OCR) automatically extracts information from invoices and verifies accuracy. This includes information such as vendor names, dates, invoice numbers and totals.
• Chatbots and Virtual Assistants: Government agencies are increasingly deploying chatbots to answer routine questions, provide program guidance, offer 24/7 support, reduce staff workload, and improve accuracy and consistency. These tools handle high volumes of inquiries simultaneously, resulting in improved service and reduced operational costs.
• AI-Enhanced Applicant Screening: AI tools can parse resumes, filter candidates, and rank top applicants based on required skills or experience. This reduces manual review time and can also help minimize bias by applying consistent criteria.
• Generative AI Tools Like ChatGPT: ChatGPT represents a class of AI capable of creating text, images, code, and more from user prompts. It is now widely used for drafting content, summarizing information, and accelerating brainstorming.

While AI can simplify many aspects of work, responsible use is essential. Below are key best practices for employees and organizations:

• Use AI as an Assistant: Let AI support (but never replace) human judgment and review all AI-generated content for accuracy and alignment with your organization’s goals.
• Protect Confidential Information: Do not enter private, sensitive, or regulated data into AI tools unless using an approved secure platform and avoid inputting customer information or documents covered by privacy laws.
• Promote Critical Thinking: Treat AI outputs as a starting point, not a final answer. Ask whether the response makes sense and aligns with known facts.
• Keep Guidelines Updated: AI evolves quickly, and policies should evolve with it. Regularly review rules around data security, usage, and department-specific applications.
• Invest in Training: Provide staff with clear guidance on how to prompt, evaluate results, and use AI safely. Proper training reduces risk and increases productivity.

I hope this article inspires you to explore how your organization can benefit from the possibilities that AI has to offer. And before you turn the metaphorical page, I’ll leave you with this little nugget of wisdom to keep in mind as you move forward: “A computer can never be held accountable; therefore, a computer must never make a management decision.” – IBM Training Manual, 1979

Erika Gomez is the Chief Financial Officer of the Three Valleys Municipal Water District. City of San Jacinto’s Finance Director. Prior to assuming her current role, she served as Finance Director for the City of San Jacinto and General Accounting Manager of San Bernardino County. She is a Certified Public Accountant and has an MBA from California State University, San Bernardino, where she also played for their women’s soccer team. In her spare time, Erika enjoys spending time with family and friends, attending sporting events, snowboarding, reading, and watching movies.