GFOA Recognizes Beverly Hills For Excellence in Public Finance

The Government Finance Officers Association recently recognized nine outstanding contributions to public finance. The annual GFOA Awards for Excellence stress practical, documented work in categories ranging from accounting and budgeting to Treasury management.

Among the 2011 honorees was the City of Beverly Hills for its Alternative Retiree Medical Program (ARMP). Beverly Hills had provided relatively generous medical benefits to retirees, but also accrued significant unfunded liabilities. Through ARMP, the City bought out vested employees who volunteered for the program, and created a defined-contribution benefit for new employees.

ARMP allows eligible staff members to choose an alternative benefit in lieu of their current retiree medical benefits – an actuarially determined amount they can disburse to several tax-advantaged accounts or take as a cash lump sum.

The innovative strategy allowed Beverly Hills – working with De La Rosa & Co. from start to finish – to turn a rapidly escalating liability into a lower fixed cost. With 58% of employees accepting the exchange, the cumulative cost of unfunded liabilities over 40 years was reduced $260 million.

The GFOA considers eight criteria when evaluating a submission, including local value, technical significance, transferability, efficiency and originality. Other California entities taking home 2011 Awards for Excellence are the Los Angeles County Community Development Commission and the City of L.A. Office of the Treasurer.