Claimed "Orange County, CA bankruptcy" is in the making
by Walter Burien -

It appears that another claimed "Orange County, CA bankruptcy" is in the making for Jefferson County Alabama.

Gee, I guess it is time to review a few of Alabama's CAFRs especially Jefferson County.

You can download the State of Alabama and County of Jefferson, and City of Birmingham CAFRs (Comprehensive Annual Financial Report) for review here:

You may want to share this information with your contacts and friends in Alabama.

As a big eye opener for you on the national level in respect to "scope" and "size" of fund management for many local governments from just one fund management group out of many, take a look at:

Additionally copied below is an article from GASB which lists the financial players from Jefferson County, Alabama and the foundation blocks of investment strategy of the county from 2000 that set the stage for today in 2008.

This information is provided  FYI

Truly yours,

Walter J. Burien, Jr.
P. O. Box 2112
Saint Johns, AZ 85936

Tel: 928-445-3532


Pension funds pay a salary and benefits at retirement. Any local government can be restructured to meet their annual budget needs "Without" taxes. TRF (Tax Retirement Funds) paying for every City, County, State’s annual budgetary needs! This now makes the people the true owners with government being the true service provider. Government has already shown that a TRF works by example through the management of their own combined multi-trillion dollar pension funds! CAFR1 says: Make it law and make it so!
To automatically subscribe to CAFR1 posts, CLICK HERE

Government Finance Officers Association of Alabama
Volume I Summer 2000 Edition #2

Annual GFOAA Site Visit!

The annual GFOAA site visit to the Jefferson County Economic and Industrial Development Authority facility on May 5, 2000 was attended by 15 members. Deborah McGill, director of the authority, provided an informative and interesting overview of the organization and the economic impact on Jefferson County. The JCEIDA is presently leasing industrial development sites at the Jefferson Metropolitan Park in McCalla, Alabama. This is a new industrial park with approximately 510 acres remaining to be leased.

The discussion of the establishment of the facility, including funding sources, and an overview of the financial operations of the facility was insightful and Ms. McGill’s presentation was very interesting.

Board of Directors Meeting

The GFOAA Board of Directors meeting was held May 5th at the Bright Star Restaurant in Bessemer. There were 25 members in attendance.

Business conducted included approval of the Minutes of March 1, 2000. The Treasurer’s report was approved as was the motion to hire Wilson, Price, Barranco, Blankenship & Billingsley to do a financial review of the fiscal year end and file Form 990-EZ. The 2000-2001 budget was also approved.

Reports Submitted

Membership Committee (Ronnie Burlison – Chair)
The current membership is 288 and a goal of 300 members was established for 2000-2001. Ronnie also reported the member application form is on the web site and is the preferred method for having individuals join GFOAA.

Governmental Relations (Gene Stabler – Chair)
Bills signed and passed during the Legislative session will be reviewed and members will be apprised of those laws pertinent to their agency/municipality.

Education (Judith Kamnikar – Chair)
Judith Kamnikar reported that December 12-13 were the tentative dates set for the Govenmental Accounting and Auditing Forum. The Committee will do a survey of members to determine their specific education needs to be address by GFOAA.

Certification Board (Rob Terry – Chair)
The CGFO charter has been updated. The charter and the certification brochure will be put on the web. The Certification Board will consider granting reciprocity to members that have earned the GFOA certification, Certified Public Finance Officer.

Public Information (Sherry Gurganus – Chair)
Sherry reported that she intends to publish a quarterly newsletter. The deadline for articles and other information for the summer issue is July 1, 2000.

Strategic Planning (Ed Kamnikar – Chair)
Ed Kamnikar briefly reviewed the GFOAA strategic plan to the board. After discussion, the motion to adopt the strategic plan was approved.

Other business discussed included the 2000 Annual Conference, the Summer Workshop, the 2000 GFOA National Conference, the 2001 Annual Conference and the Strategic Planning Goals.

To receive a copy of the Board of Directors Meeting Minutes for May 5, 2000, please contact:

Judith Kamnikar at (334) 244-3496 or

GFOA National Conference a Success!

The GFOA National Conference, June 11-14, 2000 held in Chicago, GFOA’s home, was the largest conference in the association’s 94-year history with more than 8,300 individuals attending.

GFOA greatly appreciates the support of it’s members and looks forward to the conference in Philadelphia, Pennsylvania, June 3-6, 2001.


By: Randy Wolfe
(205) 325-5675/Fax: (205) 325-5841

The title for the 94th GFOA Annual Conference was "e-Volving in a Cyber World." However, it wasn’t the Cyber World that was getting all the attention in Chicago, it was GASB 34. Every GASB 34 session was overflowing and every session had something for someone. I found the session "A Capital Idea: Meeting the Capital Asset Reporting Requirements of the New Financial Reporting Model" especially interesting. And, I found the presentation by Scott Schwarberg, Assistant Finance Director of the City of Kettering, Ohio ( especially useful. An audiotape, of which the remainder is a partial excerpt, is available from GFOA’s vendor (

A question many jurisdictions face is retroactive reporting infrastructure. Continually we receive ads and requests are made to present this or that service to help with the process. With financial reporting rather than accountability as the goal, the City of Kettering (60,000 pop.) took a rather direct approach. In Scott Schwarberg's own words: "First thing you need to determine is what I call an infrastructure strategy. How are you going to record your assets? Well at the City of Kettering, we chose what I affectionately like to call the Wooster method. And I'd liked to take credit for this but I can't because I got this method from Jim Pyers of Wooster, Ohio who has been recording infrastructure for many years. He's one of the handful of entities in the country who have been recording them for a long time. And under the Wooster method, as I call it, what we do is you do not record individual assets. What you do instead is record the dollars spent by category by year. For example, instead of placing a value on First Street and Main Street, which were both rebuilt in 1999, you place a value on 1999 streets, which is the total amount spent on all streets in 1999. So if you look at my fixed asset system all I have for streets is I have 20 assets on the books and that's it. I've got 1980 streets, 1981 streets, 1982 all the way up to 1999. That is all I have for the infrastructure on my books for streets is 20 assets. That’s all I have. So I don't have to worry about Main Street was done between 1st and 2nd street on one year and 3rd and 4th the next and then 10 years down you do them both together. I don't have to worry about that. I just have 20 assets for streets and that's it...... As you can tell, the record keeping under this method is very easy--- much easier that it would be to identify specific streets and you capture all costs under this method also because you're looking at the cost that you spend so it's all there. The categories of assets that we chose we based our categories that we chose on our capital improvement budget..... Our first category was streets, which included streets, bridges, sidewalks, and the drainage under the streets...... Our second category was signal systems this is our traffic systems...... Our third one that we used was drainage culverts..... And our fourth category and our last category was major park improvements that we've done. So now that I've got my categories, I have to review my past financial records. And what I have to do is get the dollar amounts - Well the dollar amounts by category were pulled from the general ledgers for all years back to 1980. I made up this nice spreadsheet for the auditors that basically had all the years up along the top - all of our account numbers along the side so it just totaled up. Pulled off the general ledgers, took the numbers, added them together."

Scott continues with an explanation of the composite method of depreciation used by the City of Kettering. Because the City of Kettering early implemented GASB 34, they have completed a GASB 34 audit. Scott relates "We were audited by KPMG LLP and here are some of the things they looked at. The first thing they did was tie back the general ledger numbers that I had on that spread sheet to the infrastructure numbers that I reported on my CAFR. Then KPMG went to our engineers and they said give us several streets or infrastructure projects that were built or resurfaced within the last 20 years. And then what the auditors did was verify that those projects were in the general ledger in the year that the engineers told them that they should be. Kind of like a sample test to make sure that we were picking up all the infrastructure. And then they tied those GL numbers to our infrastructure numbers. They then required verification of all donated streets and infrastructure...... And then last but not least they wanted the all encompassing statement from our engineers that said that the method of finance used should pick up all of the infrastructure value in the City of Kettering."

Scott goes on to relate on the time required for this project "So, other than that, the time we spent gathering all this information on assets; this method was very simple. I estimate that it only took about 80 hours worth of work to do it this way. So it just was not that big of a job to do it this way. If you've got your general ledgers and you do it by category it just wasn't that big of a job. Don't get me wrong, it was big but it wasn't that big."

There are many jurisdictions in Alabama smaller than both the City of Kettering and of Wooster, Ohio ( and, 22,000 pop.) that may want to examine the way jurisdictions retroactively reported infrastructure.

GASB 34 Links

The GASB has a number of interesting links. These begin with the GASB link itself ( The STATEMENT 34 button takes you to a page where you can order both Statement 34 and the Q & A Implementation Guide for Statement 34. Of special interest are the Statement 34 Resources for Governments and Citizens and Articles and Publications on Statement 34.

Finance systems face changes, October 1999, Government Computer News State & Local (

The recent AGA GASB 34 Satellite Teleconference in Montgomery highlighted the City of Orlando as an early implementer. Their web page and their FY 1999 CAFR are at

Neil Peirce, of the Washington Post Writers Group, writes of "Better Accounting for More Honest Politics ("

These links, though they are not inclusive, include links to many other GASB 34 related sites. Do you have a favorite GASB 34 site? If so, e-mail me at, and I will e-mail everyone who responds with a link with a list of all the links.


By: Judith Kamnikar
Office: 334-244-3496/Fax: 334-244-3792

Government Finance Officers Association of Alabama (GFOAA) was incorporated in 1985. During that fifteen years, the organization has become a leader in improving the knowledge and skills of all individuals concerned with governmental finance. This has been accomplished through the annual meetings which

(1) provide a forum for the discussion and analysis of those subjects of mutual concern to public finance officials, and

(2) promote the development of accounting, budgeting and financial reporting procedures that will improve the accountability of government to its citizens.

The Past

To encourage professional development, 1991 President Gene Stabler created a Certification Task Force to explore certification for government finance officers. Task force members Joy Hill, Ed Kamnikar, Judy Kamnikar (Chair), Gene Stabler, Linda Steele, Robert Terry, and Mike Wright studied the issue. Certifications held by members working in the government finance area were Certified Public Accountant, Certified Management Accountant, or Certified Internal Auditor. There was a need and interest in a certification program pertaining to government finance. The Texas GFOA had created a certification program, Certified Government Finance Officer (CGFO), that examined candidates using tests written by the National GFOA Government Finance Research Center (GFRC). The Task Force recommended GFOAA participate in this program. The recommendation was approved by the Board and a contract to license Alabama to use the national examinations became operative in 1992. Although the writing of the individual CGFO examinations has been transferred from GFRC to the University of North Texas Public Administration Center, the contractual arrangement for administration of CGFO examinations continues.

The Present

As of April 2000, eighty-three certificates have been issued to those individuals demonstrating a high level of competency in government financial management. Approximately 29% of GFOAA members have become certified. This high participation rate demonstrates the commitment of those individuals in the public finance arena to better serve their governments and citizens. To keep this certification active, the CGFO must complete forty hours of continuing education each year. Alabama GFOA provides a minimum of forty hours of continuing education through the Annual Conference, the Summer Workshop, and the Governmental Accounting and Auditing Forum. These programs serve not only CGFO's but all GFOA members and other non GFOA members working in the public finance arena.

The Future

Certification promotes professional excellence. It can keep an individual competent, competitive, and committed to public service. In this new century, it is even more important that the individual take responsibility for developing their talents to the highest level possible. GFOAA provides a mechanism for individuals to enhance their public finance careers through the certification program. Certification exams are offered semi-annually at the Annual Conference and Summer Workshop. If you are not certified and would like to have additional information, please contact GFOAA at

Successfully Marketing Your Bonds to Investors

By: Linda Goldblatt
Office: (205) 325-5041/fax: (205) 325-5841

Jefferson County was honored to be asked to make a presentation at the Government Finance Officers Association annual conference in Chicago. We were asked to speak on "Successfully Marketing Your Bonds to Investors" because of our Investor Relations Program. I have been asked to share with you some excerpts from the presentation, as follows:

Since Investor Relations symbolizes the importance of communication and cooperation, I felt it important to mention PACA (Purchasing Association of Central Alabama).

In April 1994 the County, as the host agency, was joined by 7 municipalities within the County to form the purchasing co-op known as PACA. As the co-op began to show results in saving tax dollars, the membership began a steady growth.

In December 1999, in response to numerous requests, the County Commission voted to make eligible for PACA membership those counties whose boundaries are contiguous to Jefferson County and as of May 2000, PACA’s membership stands at 54 and is a testimony to the power of cooperation.

Jefferson County is Alabama’s most populous county, with 15% of Alabama’s total population. Birmingham, the State’s largest city, and 34 other municipalities are located within the County’s 1,141 square miles.

According to the Municipal Issuers Registry, the Securities Data Company ranked Jefferson County nationally at #210 and 1st in the State for total principal amounts of municipal bonds issued from 1995 to 1998. Jefferson County issued a total of $1,052,695,000 in fiscal year 1999.

But getting back to the question "Why the need for a Investor Relations Program."
In the mid 1990’s, Steve Sayler, Jefferson County Finance Director, being aware that the investor needed and wanted more information, was frustrated by the historical relationship with underwriters. While understanding the underwriters desire to protect their customer (the County’s investors) from being harried by the issuers, he realized they still needed access to information we could provide. The rating companies were contacting us, as were the investor analysts, but rarely were we contacted by the Portfolio Managers.

In December 1996, in response to a suit filed for failing to comply with the Clean Water Act, the County negotiated a “Consent Decree” with the Federal Environmental Protection Agency. Around the same time, the MSRB issued new municipal disclosure guidelines, placing the burden of disclosure on the issuer. With these challenges in place, the need for an Investor Relations Program became obvious.

The Sewer indebtedness, which could reach $2.5 to $3 billion dollars in the near future, became the impetus for the program-- to explain the debt issue, how to repay, how the program was progressing and to convey “no surprises”.

When developing the policies and following GFOA guidelines for an Investor Relations Program there were many things we needed to identify:

  • What marketing material was needed – what relevant financial & operational information and special reports;
  • If we would, and how to conduct on-site vitists,
  • What would benefit our investors and promote communications—such as newsletters and information about upcoming debt issuance, capital and financial plans,
  • In the internet a cost-effective approach to communicate with existing and new audiences,
  • What is our internet strategy?
  • Do we outsource or internally maintain the web server?
  • Is document conversion done in-house?
  • How to increase awareness of County objectives,
  • The vehicle to promote information from annual and/or quarterly reports,
  • How to obtain and maintain a list of all major/ institutional bond holders,
  • Procedure for disclosure information to be disseminated on a routine and regular basis to all interested parties.

Lower financing cost was foreseen as a by-product of the program.

The County set up an internet web site in 1997 and placed Kiosks in various locations throughout the County to provide information and services to its citizens. We were one of the first governmental entities in the nation to offer automobile tag renewals via the internet.

The Investor Relations home page was set up within the County’s web site in late 1998 and early 1999 contained:

  • Economic and demographic information,
  • Significant financial policies,
  • Current newsletters and special announcements,

The fall of 1999 saw the addition of:

  • The CAFR (Comprehensive Annual Financial Report),
  • A monthly updated report of the Sewer Revenue Capital Improvements Warrants

The year 2000 has seen the addition of:

  • A Micro-budget Summary, including the mid-year review, and
  • An update on the Sewer Consent Decree and voluntary capital projects for the sewer system statistical information shows that over 50% more visits to the investor web site came from interested parties located outside of Jefferson County.

Total visits to site for the first quarter averaged 5 per day and is continuing to grow.

In preparation for a March 1999 issuance of almost $1 billion in Sewer Revenue Warrants the following action was taken:

  • In the summer of 1998 the County locked in the cost of bond insurance, thereby saving approximately $1.5 million.

In September 1998, we hosted an on-site visit and made a presentation to Moody’s Investors Service.

In February of 1999, the Underwriters, County Finance Director and Environmental Services met with about 30 institutional investors in a pre-marketing, grueling 3 day "road show" to New York, Boston and Chicago. Which, according to the underwriters, saved the County approximately $20 million.

The underwriters reported that at the time of issuance, they were able to lower the interest on the debt by $4 million. The lower rate was due to the great size of the debt and the pre-marketing efforts which resulted in a great demand for the warrants.

As the Investor Relations Program is newly created, in planning for the future, we are constantly re-defining:

  • where are we,
  • what are we doing, and
  • what can we do better to achieve the goals of the County Commission and our citizens.

The summer to fall of the year 2002 could see the next and possibly the last consent decree warrant issue of approximately $1 Billion dollars. We are looking at what pre-marketing steps will be taken?

We are evaluating additional information to be posted on the web site and/or additional communication vehicles including an "Economic and Financial Trend Analysis."

We are anticipating a re-designed web-site for easier access to information for PC users. The current site is tied to our kiosks, which offers multiple services and information. However, while being a great benefit to kiosk users with the necessary touch screen design, it is not as convenient for the PC users that are more familiar with hot keys and links.

The County has been selected, from nearly 50 local government entities, by the Federal EPA to participate in their second Environmental Management System Initiative. Benefits expected include:

  • improved overall environmental performance,
  • expanded pollution prevention opportunities, and
  • enhanced operational control and efficiency.

As a by-product, we could anticipate possible lower financing costs.

Employee Benefits

By: Travis A. Hulsey
(205) 325-5738/Fax: (205) 325-5841

Two of the biggest concerns for employers at the present time are continued worker shortages and medical cost inflation pressures.


The cost of health insurance is rising at rates not seen for at least a decade according to a recent survey. The cost of employer-sponsored health insurance premiums increased about 2% per year between 1994 and 1997. But the costs began escalating in 1998 and are expected to grow by an estimated 9% to 12% this year.

Factors contributing to the increasing medical costs are: general price inflation, an aging population, new medical technology, overuse and misuse of medical services, oversupply of hospital beds, and high administrative costs. Also, the cost cutting strategies employed by managed care plans were one-time-only strategies that have now run their course as physicians and medical administrators have become more effective at fighting managed care’s payment reductions. Additionally, many health insurance firms that competed aggressively for market shares in years past and lost money are now attempting to recover lost profits.

A report by Weiss Ratings, Inc. found that 50% of the country’s health maintenance organizations lost money last year. As premiums rise, the number of uninsured individuals—44 million nationwide and growing by one million per year—will continue to escalate. The uninsured usually receive health care in the nation’s hospital emergency rooms, which is the most expensive place to deliver primary care. Those unreimbursed costs are then passed along to the insured in the form of higher premiums.

Most employers can expect sharply higher health insurance premiums this year driven largely by surging pharmaceutical costs. Prescription drug costs are currently rising at a rate of 20 percent per year most of which is for new drugs coming on the market. Employers who pick up the lion’s share of the nation’s health insurance tab are taking aim at the marketing and pricing policies of pharmaceutical manufacturers, whom they accuse of peddling overly costly solutions to common ailments. Pharmaceutical companies counter that the high prices for newer drugs are justified because they are more effective and actually lower expenses in other parts of the health care system.

Irregardless of cause, the effect is that employers can expect medical premiums to outdistance inflation by two to three times over the next few years.

Employee Benefit Statements

A vibrant economy has produced low unemployment and a spike in wages as employers compete for scarce workers. The public sector has witnessed difficulty in retaining experienced employees and attracting top quality candidates due to the inability to compete with large firms in the private sector. However, governmental entities tend to provide very competitive fringe benefit packages for their employees which is often overlooked. All too often employees make regrettable career decisions based strictly upon their hourly rate of pay without considering their total compensation package. Also, all too often employers fail to properly communicate the value of fringe benefits to their employees.

Governmental entities are service providers for its citizenry and employees are its most valuable resource. In order to attract and retain qualified employees we need to convey the “total compensation” including fringe benefits to our employees. One of the most effective tools to convey the total compensation to employees is utilization of an Employee Benefit Statement. These statements should be prepared for each employee on a calendar or fiscal year end basis. Common fringe benefits which we need to convey the monetary value of include: vacation pay, holiday pay, sick pay, military leave, jury pay, uniforms, retirement contributions, social security contributions, health insurance contributions, life insurance calculations, Section 125 plan tax savings, and deferred compensation tax savings. I was surprised to find that in my particular organization the total fringe benefits accounted for almost 30% of total compensation. This type of information definitely needs to be communicated to the employees on a regular basis in order that they may make informed decisions regarding their career choices.

GFOAA New Members!

Ro Arrington Sandra B. Johnson
Perry Barron Renita Lanier
Toni Bellini Earl S. Lavender
Avito P. DeAndrade Carol Magee
Bill Dickerson Kevin W. Moore
Peter Dranka Angela Palmer
Mara Dyar Edwina Penney
Shonae Eddins Michele Porter
William C. Farris Carolyn Rhodes
Diana Gilbert Rhonda Sipper
Debra Hangen Sylvia Stacey
Frances Jackson Patricia Tabereaur
DaShana L. Jelks Mary Thaggard
Michael Johnson Gwenda H. Veras
Michael K. Johnson  

GFOAA Administrative Services

Please notify Office Automation Specialist to change your address, or other pertinent information, at the following address:

Office Automation Specialist
Mrs. Janet Mularz, Owner
8860 Chantilly Way
Montgomery, AL 36116
Phone: 334-409-9136

Editor: Sherry R. Gurganus
The Balance Sheet
Suite 810 – Courthouse
716 Richard Arrington Jr.
Boulevard, North
Birmingham, AL 35203