Workiva and OpenGov Announce Partnership to Help State and Local Governments Modernize Budgeting and Financial Reporting

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OpenGov Budget Builder to be Paired with Wdesk

Ames, IA and Redwood City, CA – February 21, 2017Workiva (NYSE:WK), a leading provider of enterprise cloud solutions for improving productivity, accountability and insight into business data, and OpenGov, the leader in government performance solutions, jointly announced today a partnership to help state and local governments modernize their budgeting and financial reporting processes.

OpenGov Budget Builder™ and OpenGov Intelligence, which streamlines budgeting, analysis and public disclosures, will be paired with the Workiva platform Wdesk, which provides governments the ability to link their data in a single, trusted source and create integrated reports with control and accountability.

States, municipalities and other governmental entities are required to submit a wide variety of documents and reports to regulators, bond investors and the public. These documents include annual budgets, monthly performance reports and Comprehensive Annual Financial Reports (CAFR) that comply with the Governmental Accounting Standards Board’s requirements.

OpenGov will offer Wdesk as part of its complete cloud-based budgeting solution, enabling customers to easily publish budget books based on their preparation done in OpenGov Budget Builder. The joint offering will also help governments create CAFR reports, quarterly management reports and other related documents.

With Wdesk, administrators can control access at all levels so that each user can create, edit and review data and documents that relate directly to them. This secure access feature is especially useful for reviewing and approving budgets as well as for CAFR external audit reviews.

“We are excited to work with OpenGov to further expand Wdesk across state and local governments,” said Matt Rizai, Chairman and CEO of Workiva. “Our joint product offering will give governments a complete budget, performance management and financial reporting solution, which will save them time and money.”

“With the addition of Wdesk to the OpenGov Smart Government Platform, we are jointly offering a complete solution for analyzing and communicating complex public sector financial information to government employees, elected officials and the public. We are excited to immediately offer Wdesk to more than 1,400 OpenGov customers,” said Zac Bookman, OpenGov Co-Founder and CEO. “Our partnership further enables data-driven decision-making and improves transparency for the public.”


About Workiva

Workiva (NYSE:WK) created Wdesk, a collaborative work management platform for enterprises to collect, link, report and analyze business data with control and accountability. Thousands of organizations, including over 70 percent of the Fortune 500®, use Wdesk. The platform’s proprietary word processing, spreadsheet and presentation applications are integrated and built upon a data management engine, offering synchronized data, controlled collaboration, granular permissions and a full audit trail. Wdesk helps mitigate risk, improves productivity and gives users confidence to make decisions with real-time data. Workiva employs more than 1,200 people with offices in 16 cities. The company is headquartered in Ames, Iowa. For more information, visit

Claim not confirmed by FORTUNE or Time Inc. FORTUNE 500 is a registered trademark of Time Inc. and is used under license. FORTUNE and Time Inc. are not affiliated with, and do not endorse products or services of, Workiva Inc.

About OpenGov

OpenGov is the leader in government performance solutions: easy-to-use cloud software for better budgeting, improved reporting and operational intelligence, and comprehensive transparency and open data. OpenGov solutions give governments the right tools and relevant data for more informed decision-making and better outcomes for the public.

Over 1,400 public agencies in 48 states use OpenGov software. Founded in 2012, OpenGov customers include the State Treasurer of Ohio, the city of Minneapolis, MN; Maricopa County, AZ; and Washington, DC. OpenGov is backed by top investors Andreessen Horowitz, 8VC, and Thrive Capital and has headquarters in Redwood City, CA.


Press Contacts:
Kevin McCarthy
Workiva Inc.
(515) 663-4471

Brian Purchia
OpenGov, Inc.

OpenGov Hits the Road and Hosts California Regional Leadership Summit

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Last week, OpenGov hosted an event for local finance directors in Sacramento, CA ahead of the 2017 California State Municipal Finance Officers (CSMFO) Conference. The user-centric OpenGov California Regional Leadership Summit featured an energetic address by keynote William C. Statler. Statler’s remarks tackled the challenges and opportunities California’s municipal finance officers face today.

Statler, veteran former Finance and IT Director of San Luis Obispo, CA and former Finance Director of Simi Valley, CA, spoke the audience’s language from experience and with candor. Among his top 10 challenges facing finance officers, he included:

  • Finance officers’ unique roles as guardians of the General Fund’s fiscal health;
  • Communicating the government’s fiscal story meaningfully – internally and externally;
  • Aligning resources with strategic goals; and
  • Long-term sustainability planning.

No challenge comes without opportunity, however. First and foremost, Statler noted there is substantial opportunity in the availability of achieving practical, powerful solutions through innovative technology. Indeed, the summit also featured three customer use case presentations that illustrated concrete examples of how governments are successfully leveraging technology such as the OpenGov’s Smart Government Platform.

Specifically, Incline Village General Improvement District (IVGID), a quasi-public agency in Nevada, and the City of Hayward, CA, have each used the platform to empower their departments’ staff with the detail and historical data necessary to create customized reports and drive informed decision-making. IVGID’s Controller Lori Pommerenck and Hayward’s Acting Finance Director Dustin Claussen presented on behalf of their organizations.

The City of Sausalito, CA’s former Finance Director Charlie Francis used the OpenGov platform as a solution to open up the town’s financial data to a broader constituency. The improved transparency led to a more diverse, representative public engagement environment.

The exciting part is that this is just the beginning. In the coming year, the OpenGov team is planning to host more Leadership Summits across the country to connect municipal leaders, finance officers, and public officials. Attendees will have the opportunity to connect with peers, contribute and gain insights into best practices, and see new technology solutions in action. Additionally, users who are already members of the OpenGov network will be able to take part in closed user-group sessions, which offers the opportunity for users to engage with more specificity around their own experiences and goals. Members of OpenGov’s top-rated Customer Success and Government Finance Solutions teams will moderate the user groups.

We are actively considering locations for future Leadership Summits, so if you would like to request that we host an event in your region, please email us at

‘Checkbook’ Feature on Website Shows Payments to Those Vendors Doing Business with Town

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Bosworth: ‘The Town is an open book.’

North Hempstead, NY, Feb. 6, 2017– North Hempstead Town Supervisor Judi Bosworth and the Town Board announced today that the Town has recently added a feature from technology provider OpenGov to the website that will provide a comprehensive report of all payments made by the Town, by year and vendor. This additional feature, called OpenGov Open Checkbook™, will continue to strengthen North Hempstead’s commitment to openness and transparency in government.

The Town launched its modernized website in 2015, which included its first interactive aggregate financial and budget reports powered by OpenGov. With OpenGov, the public can easily analyze, share and compare detailed town budget data in a user-friendly format. The addition of the OpenGov Open Checkbook to the town’s website makes it even simpler for residents to see checkbook-level spending data, and to follow how each and every one of their tax dollars is spent by their local government. Checkbook data for the years of 2014, 2015 and 2016, up to January 6, 2017, will be available.

“Previously this kind of information was usually kept in a text-heavy document, but will now be easily available and searchable to anyone through the Town’s website,” said Supervisor Bosworth. “The Town of North Hempstead has an obligation to its residents to show them how their tax dollars are being spent, and now through OpenGov the Town is an open book.”

“North Hempstead is a great example of how a town that is committed to open the books to the public can do so efficiently and effectively when they apply the right technologies,” said OpenGov CEO and Co-Founder Zac Bookman. “OpenGov is committed to powering more effective and accountable government, and we will continue to develop software and services that deliver on that mission for towns like North Hempstead.”

Have you tuned into North Hempstead TV lately? View all of our great programming on Channels 18 or 63 on Cablevision or Channel 46 on Verizon, or visit or

About OpenGov

OpenGov is the leader in government performance solutions: easy-to-use cloud software for better budgeting, improved reporting and operational intelligence, and comprehensive transparency and open data. OpenGov solutions give governments the right tools and relevant data for more informed decision-making and better outcomes for the public.

Over 1,400 public agencies in 48 states use OpenGov software. Founded in 2012, OpenGov customers include the State Treasurer of Ohio, the city of Minneapolis, MN; Maricopa County, AZ; and Washington, DC. OpenGov is backed by top investors Andreessen Horowitz, 8VC, and Thrive Capital and has headquarters in Redwood City, CA.
Learn more at


Steuben County, NY Partners with OpenGov to Modernize Budgeting and Open Data

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County seeks to save time and open the books with new web-based software platform

REDWOOD CITY, Calif., Jan. 25, 2017– Steuben County, New York and OpenGov, the world’s first integrated cloud solution for public sector budgeting, reporting, and open data, announced today that they will begin to roll out the OpenGov Smart Government Platform™ for the county. The new cloud-based software will help Steuben County simplify its budget planning, improve its internal data management, and make important information easily accessible to its citizens and elected officials. The county aims to set a new standard for government transparency and efficiency in the State of New York, and plans to have its OpenGov platform fully up and running in early 2017.

The software platform deployment will include OpenGov Budget Builder™, a first-of-its-kind online product designed to streamline the budgeting process for governments. The web-based OpenGov Budget Builder enables cross-departmental collaboration, and will eliminate the need for Steuben officials to use numerous complicated Excel spreadsheets when they plan the county’s $177 million budget. Steuben County will join a growing number of leading governments nationwide that have begun using OpenGov Budget Builder since its release in Fall 2016. A number of those governments have reported cutting their clerical work in half by adopting OpenGov Budget Builder.

“Steuben County is committed to ensuring our citizens can easily access information about how their tax dollars are being spent,” said Jack Wheeler, Steuben County Manager. “OpenGov technologies make that possible, and at the same time increase our operational efficiency, saving time and money so we can collaborate and serve the public more effectively.”

In addition to the new budgeting solution, Steuben County will implement OpenGov Intelligence™, which gives department managers, executives, and elected officials access to vital financial and performance information that can improve strategic decision-making. In conjunction with OpenGov Intelligence, the county will also launch a new public transparency site built with OpenGov Transparency™, which opens data to the public, enabling greater understanding of how tax dollars are being spent.

“Both citizens and government officials deserve the open and efficient government operations that modern technology can deliver,” said OpenGov CEO and Co-Founder Zac Bookman. “It’s encouraging to see more cities and counties like Steuben move to modernize the way they handle finances and data. It establishes a new standard for informed governing.”

According to Wheeler, the OpenGov Smart Government Platform will provide a tremendous advantage as the county increasingly shares data with other agencies in New York and seeks to automatically visualize important data for the public, elected officials, and internal decision makers.

About OpenGov

OpenGov is the leader in government performance solutions: easy-to-use cloud software for better budgeting, improved reporting and operational intelligence, and comprehensive transparency and open data. OpenGov solutions give governments the right tools and relevant data for more informed decision-making and better outcomes for the public.

Over 1,400 public agencies in 48 states use OpenGov software. Founded in 2012, OpenGov customers include the State Treasurer of Ohio, the city of Minneapolis, MN; Maricopa County, AZ; and Washington, DC. OpenGov is backed by top investors Andreessen Horowitz, 8VC, and Thrive Capital and has headquarters in Redwood City, CA.
Learn more at


OpenGov Budget Builder Goes Live in Jackson County, Georgia

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Counties small and large in Texas, Maryland and Indiana choose OpenGov Budget Builder for a modern and open approach to public finance, company announces 20 other local governments have signed up for new platform  

REDWOOD CITY, Calif – OpenGov, the world’s first integrated cloud solution for public sector budgeting, reporting and open data, announced today that its new OpenGov Budget BuilderTM solution is fully implemented at the Water and Sewerage Authority of Jackson County, Georgia. OpenGov Budget Builder is a first-of-its-kind online product designed to streamline the budgeting process for governments of all sizes, and to replace the legacy of complicated and antiquated Excel spreadsheets. OpenGov also announced today that more than 20 other local governments including Harford County, Maryland; Long Beach, New York; and Culpeper, VA are actively rolling out OpenGov Budget Builder for their upcoming budget cycles.

Jackson County Water and Sewerage Authority joins the City of Burnet, Texas, and Greenwood, Indiana as an early adopter of Budget Builder. With populations that range from 6,000 to nearly 250,000 citizens, these agencies demonstrate that Budget Builder can help cities and counties of any size make the budgeting process easier, faster and more collaborative across different departments.

“OpenGov has completely transformed our agency’s budget process,” said Judy Smith, the Finance Director for Jackson County Water and Sewerage Authority, which serves approximately 8,100 residents. “By seamlessly compiling data from previous years, ensuring collaboration across departments and letting us quickly share key information with stakeholders, Budget Builder has allowed us to focus our time and energy on serving our residents instead of agonizing over the budget.”

Prior to implementing Budget Builder, administrators in both Jackson County and the City of Burnet faced massive technology barriers when they tried to collaborate. Budget teams were forced to spend thousands of hours reconciling dozens of Excel spreadsheets, exchanging email-based proposals, and performing clerical work instead of evaluating proposals and planning proactively.

“Smart budgeting is critical to the efficiency and efficacy of local government,” said OpenGov CEO and Co-Founder Zac Bookman. “As more and more agencies, cities and counties across the country look to implement OpenGov’s Budget Builder and our other tools, it is clear that the public sector is enthusiastically embracing the power of technology. Our offerings provide governments of all sizes with real-time access to accurate financial data to increase transparency, enhance integrity, encourage cooperation and save valuable time and resources.”

“Harford County, Maryland was in search of a product to streamline what is currently a cumbersome and antiquated budget process. We were thrilled when OpenGov introduced their Budget Builder cloud solution,” said Harford County’s Chief of Budget Kim Spence. “We look forward to working with the OpenGov team to modernize our budget preparation process so that we can continue to serve our citizens in the most efficient and comprehensive way possible!”

Budget Builder – which integrates with OpenGov’s suite of other tools – helps these governments dramatically simplify the budgeting process. Agencies access a single online platform to prepare budgets, report on spending against budgets, analyze other performance metrics, and keep elected officials and citizens better informed about how tax dollars are being spent. Budget Builder empowers administrators in Burnet, Texas to plan out the city’s $28.5 million budget, monitor spending and track investments and debts.

“Budget season has always been an ordeal. I worked late every night for months, and came in on weekends,” said Burnet’s Budget Director Connie Maxwell. “OpenGov has changed our entire process, giving me time to focus on the big issues affecting Burnet. Gone are the days of digging around through spreadsheets and enduring lengthy proposal submission cycles.”

Maxwell adds that the tool has allowed her to cut the time spent on the budget’s clerical work in half.  

About OpenGov

OpenGov’s Smart Government Platform is the world’s first integrated cloud solution for public sector budgeting, reporting, and open data. Used by over 1,300 public agencies in the rapidly growing OpenGov Network™, OpenGov’s industry-leading technology streamlines the budget process, improves outcomes, and builds trust with the public. Founded in 2012 with headquarters in Silicon Valley, OpenGov works with leading governments of all sizes including the State Treasurer of Ohio, Minneapolis, MN; Maricopa County, AZ; and Washington, DC. OpenGov is backed by leading investors including Andreessen Horowitz, 8VC, and Thrive Capital.  Learn more at


Announcing the Best of OpenGov Award Recipients!

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It’s that time of year. Prepare for an avalanche of awards and trends as people across industries prepare for 2017. The Best of OpenGov Award, however, is unique. It recognizes local governments that have gone above and beyond to innovate and improve government operations. Better government operations produce better outcomes for citizens, which in turn builds public trust.

We are excited to announce the winners:

Internal Reporting

OpenGov for management reporting helps public agencies streamline their operations. From tracking departmental spending against the budget to monitoring 311 requests, governments use OpenGov to execute on key strategic goals. This year, our winners are:

First Place: Capitola, CA

Runner Up: Rosehill, KS

Transparency and Open Data

Citizens expect their governments to provide easy, intuitive access to financial and performance information. These governments have gone above and beyond in their OpenGov portals. From robust Saved Views to active promotion, these agencies show their dedication to open government. We’re proud to work with them:

First Place: Menlo Park City School District, CA

Runner Up: Capitola, CA

Click here to see Menlo Park City School District’s Transparency Portal and click here to see Capitola’s portal.

Unique Use Cases

Many governments go above and beyond with their OpenGov sites. We’re excited to announce the winners for unique OpenGov use cases:

First Place: St. Petersburg, FL

Use Case: Annual Debt Schedules Report- Finance uses the report throughout the year to download the most recent annual debt schedule to perform analysis when issuing new debt, review budget transfer appropriations needed, create ad hoc reports for City Council, and provide auditors with annual debt service schedules.

Runner Up: Edgewood, KY

Use Case: Stealth Speed Survey – This report is used by Police Officers, the City Administrator, elected officials, and citizens. When residents complain about speeding on a street, the city collects this data to determine if the complaint is valid and supported by actual data. Edgewood also uses this data internally to assign extra traffic controls to Police Officers.

How Capitola Improved Council-Administration Relations With OpenGov

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Mark Welch serves as finance director for the City of Capitola, CA.

The ballots have been tallied. The yard signs have gone. The town halls are over.

2016’s local government election is behind us, but finance officers will feel its effects in the months and years ahead. New and returning members alike will seek to enact policy agendas and fulfill campaign pledges. And because every policy involves a financial investment, finance officers will find themselves responsible for figuring out how to implement the new council’s policies.

Many will be reasonable. Invest in repairing roads. Pay first responders well. Clean the parks. But then there are the inevitable others. Every year, councils propose pledges that do not reflect financial reality:

Repeal a sales tax that funds bloated salaries!

Slash pension expenses!

Cut travel costs!

I do not believe candidates intentionally mislead citizens. These public servants have decided to step up for their communities and their representation is one of the hallmarks of a democratic society. However, like most citizens, council candidates and members may not have the most informed knowledge of local government operations and finance. Financial illiteracy breeds honest mistakes during the campaign. In turn, this breeds conflict with the administration when it comes time to craft and implement policy.

In the City of Capitola, California, we believe good relationships with our governing body lead to better policies and, ultimately, better services for citizens. I want to share how, during the recent election, we took preemptive steps to educate and engage with candidates. I then will explain how we improved relationships with the existing governing body – elevating the quality of public debate and building trust with staff and citizens – and why this will help us engage new elected officials.

Educating Candidates Before the Election

It was important to us to empower candidates to make feasible promises to their constituents. Therefore, we held an orientation for council candidates after the filing deadline passed. Candidates had lacked an easy tool to learn about and explain financial issues to voters, so they often conducted their own analyses.

These ‘self-explorations’ of financial data displayed in PDFs and often spreadsheets often didn’t end well. Because our financials were not presented clearly, candidates accidentally made incorrect claims about budgets, revenues, and finances. Newly elected members would come in with an incomplete or incorrect ideas, and propose policies they would not support if they understood financial realities.

Our elected officials – and citizens – deserved better. That’s why we decided to hold a candidate orientation. However, if we had relied solely on our financial system to prepare the necessary reports, time constraints would have prevented us from giving candidates the insights they needed.

It would have taken almost two full workdays to build the reports that explain issues candidates tend to care about, such as overtime across the entire organization. I would have been forced to download multiple reports from our financial system, combine them, calculate the right subtotals, determine the correct classifications, and prepare the necessary charts and graphs. And this is for every question a candidate might conceivably ask.

Fortunately, Capitola had purchased and implemented OpenGov, a cloud-based reporting and transparency tool. To generate the overtime report we needed in OpenGov, we simply filtered data by expense type, checked the overtime box, and selected all departments. OpenGov automatically generated charts as we went along. Instead of having to drill vertically into our Chart of Accounts, we could mix and match elements across departments and funds. It took just 15 minutes to build the all of the reports we needed.

Candidates loved having this information available both during the orientation and for their own use afterwards. Because OpenGov is interactive, we could answer any follow-up questions in real-time. Candidates also reported back that they were able to learn a lot more on their own – leading to more informed campaign platforms and councilmembers.

Engaging Existing Councilmembers

When the new council is sworn in, OpenGov will help us engage every member. We’ve had great success with the existing council.

Before OpenGov, although we generally enjoyed good relationships with our council, there were moments when trust broke down. For example, councilmembers would sometimes not trust the reports staff gave them. And because it often took over a day to generate a report, councilmembers could not receive immediate answers to follow-up questions if we hadn’t already pulled the report – reducing the information available to a debate and eroding trust between the administration and the council.

Since we implemented OpenGov, I’ve noticed a concrete improvement in our relationship with the city council. Because of OpenGov’s intuitive interface and visualizations, councilmembers use OpenGov to validate the numbers we give them, answer questions on issues such historical and projected future pension contributions, and inform their policy discussions. And they even use the tool to highlight successes to citizens.

Based on this success, I think the new governing body will benefit greatly from OpenGov just as its members did during the election.

Moving Toward Better Policy

During my time in government, I’ve seen dedicated councilmembers and staff unite to make the community a better place to live and work. A functional council-administration relationship – grounded in trust and mutual respect – can really move the needle on critical policy issues.

But, as we’ve seen, building and maintaining these relationships isn’t easy. It requires engagement both during and after the election. This engagement will always depend primarily on people, but OpenGov’s software is proving to be an indispensable ally. With OpenGov, our relationship with elected officials will benefit both sides – and Capitola’s citizens.

This article was originally published in the November 2016 CSMFO Magazine.

Mark Welch serves as finance director for the City of Capitola, CA. Before joining Capitola, Mark was Santa Clara’s Principal Financial Analyst and Assistant to the City Manager for the City of Sierra Vista. Mark holds an MPA from the University of Oregon and a BA from the University of California, Santa Barbara.

OpenGov’s New Open Data Solution Is Up And Running in Denton, Texas

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At the Code for America Summit, OpenGov announces Dallas-Fort Worth suburb as first customer to implement company’s new OpenGov Open Data tool

OAKLAND, Calif – At the 2016 Code for America Summit, OpenGov, the world’s first complete cloud solution for public sector budgeting, reporting and open data, announced Denton, Texas as the first city in the country to fully implement the OpenGov Open Data solution. Integrated with OpenGov’s other offerings, OpenGov Open Data is allowing Denton to increase public trust, facilitate civic action, and embrace the future of the smart government.

“It’s vital to our community and to the growth of Denton that anyone can easily access government information to enable civic developers and lay-users alike to gain value from public data,” said Justin Mercier, data system architect for the City of Denton. “The new open data platform works seamlessly, whether you want to run a hackathon or run a business, the data is easily usable and allows us to get vital city information quickly and efficiently.”

In addition to Denton, a Dallas-Fort Worth suburb with a population just over 100,000, several other cities and states across the country are looking to OpenGov Open Data to bring greater collaboration, transparency and innovation to governance. The tool is designed to work for governments of all sizes, and these additional governments – both big and small – will be implementing the solution in the coming months.

“Open access to government information is critical to the health of our states, cities and towns,” said OpenGov CEO and Co-Founder Zac Bookman. “Data is a foundation on which to build stronger and more sustainable governments. Leveraging OpenGov’s many tools, including Open Data, Denton and other cities can better understand trends, coordinate budgets, empower their citizens, and present a holistic view of the state of the city.”

Denton had previously released its data in PDFs and other formats that were hard to read and repurpose. As a result, the city’s tech community could not build applications; residents could not easily access a central location to search for data; and potential businesses could not quickly assess Denton’s economic condition The Open Data tool builds trust and shows elected officials and citizens how government agencies are performing in real-time. Open Data can also empower journalists with instant access to the data they need to tell accurate stories.

Working with OpenGov’s open data experts, Denton has uploaded numerous datasets that span a wide array of metrics to its data portal. Today, the city empowers residents and businesses with 71 machine-readable datasets, that range from the city’s demographic indicators to its upcoming building projects.

OpenGov Open Data is powered by CKAN, the industry open source standard for open data used by the federal government, the European Union, and hundreds of other agencies around the world. Earlier this year, OpenGov acquired Ontodia, the leading provider of open data and performance management solutions using CKAN, which allows governments of all sizes including cities like Denton to use OpenGov to connect budget and performance data with Census data, FBI crime data, and financial data from over 3,000 counties and 36,000 cities. In other words, it simplifies the ability to collaborate with other governments and agencies.

“Denton is leading the way in embracing the power of technology to improve our cities,” said Bookman. “We look forward to working with more cities across the country to make governments more transparent, accessible, and efficient through our toolkit of invaluable solutions.”

About OpenGov

OpenGov’s Smart Government Platform is the world’s first integrated cloud solution for public sector budgeting, reporting, and open data. Used by over 1,200 public agencies in the rapidly growing OpenGov Network™, OpenGov’s industry-leading technology streamlines the budget process, improves outcomes, and builds trust with the public. Founded in 2012 with headquarters in Silicon Valley, OpenGov works with leading governments of all sizes including the State Treasurer of Ohio, Minneapolis, MN; Maricopa County, AZ; and Washington, DC. OpenGov is backed by leading investors including Andreessen Horowitz, 8VC, and Thrive Capital.  Learn more at


Contact: Brian Purchia, 202-253-4330,

An OPEB Exit Strategy: How to Eliminate your Retiree Health Care Liability/Costs

By | Finance Officer's Desk | No Comments

Click here to see a list of all editions of the Finance Officer’s Desk column.

Health insurance for retirees and their dependents, life insurance, dental insurance, and long term disability or care coverage are representative benefits typically included in a city’s OPEB program. Even though employment has ended, cities have a contractual obligation to deliver the promised benefits to eligible former employees and/or their family members. This benefit is no longer needed to attract and retain qualified employees. More significant is that escalating OPEB costs can cause structural imbalance of your General Fund. Cities can maintain a skilled labor force without OPEB, It’s time to exit from providing this gratuitous benefit.

Prior to 2004, your annual budget included a line-item for retiree health care that was probably off your radar screen. The amount paled in comparison to health benefits for current employees. That is, until GASB 45 was issued in June 2004. GASB 45 is an accounting and financial reporting provision requiring government employers to measure and report the liabilities associated with other (than pension) post-employment benefits (or OPEB). Although GASB encouraged earlier implementation, GASB 45 became effective for periods beginning after December 15, 2006, for phase 1 governments (those with total annual revenues of $100 million or more); after December 15, 2007, for phase 2 governments (those with total annual revenues of $10 million or more but less than $100 million); and after December 15, 2008, for phase 3 governments (those with total annual revenues of less than $10 million).

Such was the case with the City of Sausalito. The following graph depicts the growth of OPEB (Other [than Pensions] Post-Employment Benefits) in the City of Sausalito since FYE 2002. As the graph depicts, by the time GASB 45 was implemented, Sausalito’s Pay-Go costs were growing at an annual rate of 5.5% – a rate faster than the 2% growth of General fund expenditures. Yet, the percentage of these costs to normalized operating expenditures never exceeded 1.6%. I.e., the relative cost to the City was immaterial to our structural balance.

Many cities (including Sausalito) reviewed the required OPEB actuarial studies and decided to continue funding OPEB on a Pay-Go basis, rather than pre-funding OPEB liabilities (click here for a discussion of pre-funding).

Then came the Great Recession. The stock market crash of September 2008 wiped out more than 20% of the equity market. Those cities that elected not to pre-fund and remained on a Pay-Go basis breathed a sigh of relief that they didn’t invest into a Section 115 trust.

Declining city revenue during the recession focused scrutiny on reducing major operating costs to continue balancing budgets. There was no appetite for reallocating money from providing essential services to contributing an OPEB ARC (Annual Required Contribution) into an OPEB Trust Fund. There was also an aversion to equity market risks.

Fast forward to today’s headlines and the news focus on mountains of OPEB debt and unsustainable health care costs. Almost every story references prefunding OPEB irrevocable trust funds as the only viable solution. Bond rating agencies will even put a cap on a score from having an OPEB burden that is considered very high and management’s lack of a credible plan to address the situation.

Now before we begin to fault cities that decide to stay on a Pay-Go basis, let’s examine the pros and cons of prefunding. There are three major positions that are supported by prefunding advocates:

  1. Prefunding costs less
  2. Prefunding promotes intergenerational equity
  3. Prefunding prevents crowding out

Today’s blog examines these three positions and concludes with a surprise recommendation for OPEB reform.

Costs Less

Is Prefunding a lower cost for the City than Pay-Go in a sense that a given OPEB benefit can be provided with a lower contribution rate under funding?

Proponents of prefunding assert: “Although pre-funding requires higher contributions in the short term, it is actually the cheaper option in the long term.” Graphs such as the one lifted from the above linked report, are presented that juxtapose retiree health care costs with prefunding alternatives, giving supporting visualizations that are actually somewhat misleading. Despite parenthetical warnings such as “(if assumptions are met and absent catastrophic investment losses)” the ability to relieve OPEB cost pressure is offset by relying on the stock market to pay for a substantial portion of the benefit! I.e., the Pay-Go approach is in nominal dollars, but the prefunding alternative is betting heavily that sustained growth in equity markets will pay for the difference!

Source: United States Common Sense


It’s not due and payable at a moment’s notice. Nor does it represent a legal debt obligation. It’s not like a car loan – you pay it off and it’s gone forever. It is an actuarial calculation built on assumptions that may or may not happen.

There isn’t a credible actuary who would assert that an 80% funded OPEB plan is better off that a 50% funded OPEB plan. The real deciding factor is can the entity sustainably afford to pay for its’ retiree health care obligations.

For many years, public pensions have relied on over 60% of their revenues from investments in Wall Street. And look at how underfunded they are! Under the red -herring of “Costs less”, governments were driven to invest more heavily in stock equities, increasing fiscal volatility. Let’s not make the same mistake with OPEB.

Cities that decided to remain on the Pay-Go system minimized their exposure to increasingly volatile financial markets and saved their cities substantial amounts of money from recent stock market downturns or investment returns less than the assumed discount rate. On the other hand, the impact of GASB 45, and the upcoming GASB 74 & 75 results in higher unfunded actuarially accrued liabilities (UAAL) because discount rates are lowered.

Takeaways –

  • There is no true cost difference between the two approaches, only different investment scenarios.
  • If you are going to set up a trust fund, do not invest in stock market equities expecting unreasonable investment returns! Rather target asset allocation in your trust fund closer to risk-free investment returns, such as US Treasury bonds.

Intergenerational equity

Is full-funding more fair from the standpoint of intergenerational redistribution than Pay-Go?

While it’s true that today’s taxpayers are essentially paying for health care for services that were rendered to the public decades ago, this has always been the case for cities and their retirees. Yes, this arrangement violates a cardinal principle of public finance—namely, that each generation of taxpayers should be responsible for funding the services that it enjoys. However, it was the tacit societal contract that each generation of taxpayers pays for the preceding generation retirees’ health care costs, on the understanding that the next generation of taxpayers will pay for the current workforce’s retirees’ health care costs. This can be advantageous to successive generations if population growth and health care costs are increasing at a steady state, and exceeding real interest rates. This was the case until recently. Increasingly longer life expectancies, escalating health care costs, and low fertility rates are not growing proportionately as was the case historically, and it has only begun to become unfair to successive generations.

Takeaway – Remember there is a transition cost in the decision to shift from Pay-Go to prefunding. It double loads the current generation with paying for past AND current health care services.

Crowding out

Is the real problem created by rising retiree health care costs “crowding out” other government priorities?

Structural balance is the goal of preparing annual balanced budgets. (See GFOA’s best practice “Achieving a Structural Balanced Budget”) Simply put, you have a structurally balanced budget when recurring revenue growth meets or exceeds recurring expenditure growth. Whenever a major expense category increases faster than revenues, another expense must be reduced.

Takeaway – Fully funded trust funds are not the goal of OPEB reform. The ultimate goal of OPEB reform should be General Fund structural balance. This means making sure that revenue growth keeps pace with all expenditure growth.

What’s the Answer?

When health care costs inflate faster than all other expenditures, Pay-Go funding will consume larger percentages of government’s annual budget plans. But, so will prefunding because of the intergenerational equity transition cost discussed above! In other words, both approaches work against structural balance.

Here’s an approach to successfully manage structural balance. Phase in a comprehensive OPEB reform program!

1. Close OPEB benefits for all new entrants! – By terminating total medical benefits OPEB for all future employees your accrued actuarial liability and normal cost will be eliminated when all current and legacy retirees/annuitants are deceased.

2. Offer to transition current employees from defined benefit OPEB to defined contributions – Many employees will voluntarily elect to take cash now rather than wait for a future benefit, especially newer workers that are in occupations that have high mobility or turnover. Take advantage of this! Offer cash into a deferred health plan, or deferred compensation plan and have them waive any rights to future defined OPEB benefits. When current employees elect to shift from the defined benefit OPEB to a defined contribution plan, there are significant decreases in accrued actuarial liabilities and normal costs.

3. Set up an irrevocable OPEB trust fund – An irrevocable trust fund is the only vehicle where assets can be shifted into that offset the accrued actuarial liabilities (remember key takeaway from above – don’t bet your trust fund on stock market volatility!) In setting up the irrevocable trust fund, do not limit your permitted investments to cash and cash equivalents, but also include capital income producing assets to generate income for paying for retiree health care benefits.

4. Move income producing capital assets into the irrevocable OPEB trust fund – Typically governments only invest cash into their irrevocable trust funds. The impact on the statement of net assets is a corresponding reduction in unrestricted net assets. However, by moving capital assets into the irrevocable trust fund, the book value of the capital asset is offset by a corresponding reduction in restricted net assets! By moving assets into the irrevocable trust fund that have market values approximating the UAAL, you effectually eliminate the UAAL, and the ARC reverts to the Pay-Go amount. To preserve the integrity and purpose of the irrevocable trust fund, only move assets that are producing significant income such as cell towers, municipal buildings that are rented to the private sector or other government agencies, parking lots, etc. (Yes, this takes the income out of your General Fund – see next step)

5. Pay all retiree health care costs out of the irrevocable OPEB trust fund – by paying all retiree health care benefits out of the irrevocable trust fund, these expenses are also moved out of the General Fund offsetting the impact from previous step.

6. When there are no more PAY-Go annuitants, close the irrevocable OPEB trust fund and return all income producing assets back to the original fund of origin – Talk about leaving a legacy for your grandchildren! A revenue source that was previously dedicated to paying retiree health care costs becomes unencumbered when an actuary certifies there are no more annuitants subject to the benefits of the trust. These income-producing assets are now transferred back to the government’s balance sheet generating fresh cash flows of added revenues. They can be used to reduce or eliminate taxes, or increasing capital investment in infrastructure. Thus unleashing true grass-roots economic stimulus for your local government.


There are other subsets of OPEB reform mechanisms such as removing the implicit subsidy element of health care provision and making use of medical exchanges to lower retiree health care costs. Of course, it’s always smart to monitor the progress of political efforts to nationalize health insurance and make changes in Medicare (e.g. co-pay rules). Look for guidance from your state association of cities: the League of California Cities has a very comprehensive document outlining many OPEB reform ideas. Incorporate these into the above to focus on structural balance of your General Fund.Conclusion

But just don’t stop there! There is tremendous political and labor union pressure to continue with OPEB, a gratuitous benefit that reduces funding for essential public services. The real focus of this article is to convince you to close out your retiree health care program! Make meaningful OPEB reform your number 1 priority, not just marginal changes on the edges.

A new OPEB liability and cost-reduction option now available to California cities is participation in the League’s Health Benefits Marketplace (HBM) (click here for more information)

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Charlie Francis is a municipal finance expert. He has more than forty years of local government financial management experience in both the public and private sector, including twenty years of experience as a Chief Financial Officer. Most recently, he served as the Director of Administrative Services and Treasurer for the City of Sausalito where he earned the unofficial title of “OpenGov super user”.  He has also served as a finance manager for the Town of Colma, CA, and as CFO and acting City Manager for the Cities of Indian Wells, CA and Tracy, CA.

Questions or comments? Email Charlie at

The Anatomy of an Oil Boom and Bust

By | Finance Officer's Desk | No Comments

From pumping oil to paving roads

In 2010, Catarino “Cat” Castro had a great job working in the oilfields around Douglas, a city in Converse County, Wyoming. He started working for an energy company in 1999, and after several years, the company had promoted him up the ranks. Life was good for Cat Castro in Converse County. And he wasn’t alone. Converse County was a great place to live in 2010.

Although the financial crisis affected small towns to entire states across America, large portions of Wyoming remained mostly unscathed. Converse County in particular thrived on one of the state’s most diverse economies. While oil and gas development rose and fell throughout the years, our coal mines formed a rock of stability; the uranium mine’s managers were considering expansion, and the county’s fourth wind farm was about to come online.

In the second half of 2010, the Wyoming Oil & Gas Commission received 62 oil and gas permit requests for exploration in Converse County’s portion of the Powder River Basin. That number almost tripled by the first half of 2011, more than doubled again by the second half of 2013, and peaked in the first half of 2015 at 1,072 requests. By the end of 2014, 1,497 completed oil and gas wells fueled Converse County’s economy.

As national unemployment topped ten percent in late 2009, the county’s rate was under seven percent. And while hiring had slowed, the energy boom ensured the sector’s jobs still accounted for one of every six, and growing, of the county’s jobs. Those jobs — in the coal mine, the uranium mine, the railroads serving coal shipments, oil and gas fields, or the coal-fired power plant — were relatively high-paying, with annual wages averaging over $60,000. The standard of living was high; the cost of living, low.

A stable job market also meant a stable community with a growing population, rising numbers of children in classrooms, and – most important to the County’s government – a stable tax base. The County had just experienced its seventh consecutive year of rising revenues; although income was projected to be flat in 2010, projections for 2011 suggested a seven percent increase in property tax and sales tax revenue.

Property tax valuations surged, rising from $505 million in 2007 to a record $693 million in 2010. The tax revenues allowed the County to invest in infrastructure, roads, and employees. Although the County was in good financial condition, as the recession across the U.S. continued, economic worries began to surface.

In the Fiscal Year 2010 budget, the Commissioners noted, “County departments and outside agencies were cautioned during the budget work sessions that next year will likely see a significant decrease in valuation; therefore, the County will probably not be able to fund programs at the same level as this year.”

Those concerns never materialized. Instead, the county valuation jumped 18% to another record of $851 million in 2011, fueled in large part by the surging oil and gas play in the Powder River Basin.

The boom resounds throughout Converse County

Cat had moved to Williston, North Dakota, away from his family, to take advantage of the oil boom there. But in 2014, Cat saw the changes the energy boom was bringing to Douglas, with new building and new shops. Douglas wasn’t as busy as Williston, but there were lots of employment opportunities with oil companies. He decided to return to Douglas. Even though he would take a pay cut, it was worth it to be home every night and be with his family.

Cat wasn’t the only energy-sector employee to move to Converse County. Past 2010, employment in Converse County surged.

The impacts started with traffic. Trucks and crews began hauling rigs, materials, and workers along corridors in the northern half of the county. Highway 59, the main route north to Campbell County and Gillette, became the focus of safety concerns as the personal vehicles of those headed to the mines in Gillette sometimes collided with large trucks hauling oilfield materials. The results of these accidents were often deadly.

According to the Wyoming Department of Transportation, the Annual Average Daily traffic count on Highway 59 increased 43% from 1,720 vehicles per day to 2,458 between 2004 and late 2013. In a one-month stretch from October 25 to November 25, 2014, the Wyoming Highway Patrol reported 31 crashes between Douglas and Gillette, with one fatality and fourteen injuries. On December 7, 2014, the Casper Star-Tribune wrote that the Wyoming Highway Patrol added more troopers on Highway 59 to address “unsafe highway conditions.”

The traffic wasn’t just on highways and paved roads. When wellhead locations are overlaid onto the county transportation system map, it becomes clear that the majority of drilling activity was occurring in areas that were miles from any paved road. County roads that were lonely and rural prior to the oil and gas development became bustling truck routes, seemingly overnight. Bill Hall Road, in northern Converse County, saw an average of 5 trucks a day in 2011, 800 in 2013 and 1,300 trucks per day in 2014. County roads not designed for commercial use endured thousands of trucks daily; the County Road & Bridge department struggled to keep up.

Converse County’s Road & Bridge department expanded its workweek to include mandatory overtime. Their departmental overtime budget ballooned from $12,264 in 2011 to $31,696 in 2014. Like other departments and businesses in the County, Road & Bridge struggled to find and keep employees. If someone could operate heavy equipment, they were more than likely working for an energy company and making twice what we could offer.

Housing shortages became the next issue. The influx of workers drove vacancy rates in the county from almost 7% in late 2009 to 1.9% in the fall of 2013. Our school districts hired teachers to keep up with increasing enrollment, but couldn’t find them places to live. Hotels sold out every night; people filled every campground. Many employees commuted from Casper.

Elevated housing demand boosted housing prices. According to the Wyoming Cost of Living Index, apartment rent in Converse County increased 22% from the 4th Quarter of 2012 to the 4th Quarter of 2013. It wasn’t unusual to see advertisements for houses renting for $1,200 per month — double what a resident would have paid in 2008.

Rising housing costs were just part of the inflationary picture. The prices of fuel and groceries were also higher than in surrounding counties. As lines grew and patience shortened, local businesses struggled to meet demand and find workers. Suddenly, Converse County became one of the most expensive places to live in Wyoming.

Converse County responds to citizen complaints with financial transparency

Increasing prices brought our government more revenue. Countywide sales tax revenues doubled from $34 million in 2011 to $68 million in 2013, then rose to $89 million in 2014. Every week, the local newspaper ran stories touting the record production and county revenues.

In the November 2012 election, voters approved a sales tax increase to fund three projects totaling $31.7 million: a remodeled library branch in Glenrock, a new library building in Douglas, and a new branch of Eastern Wyoming College in Douglas. The tax was estimated to raise $500,000 a month for six years; instead, it averaged $1.1 million in revenue each month, paying off the projects in 31 months.

As the Treasurer’s Office began preparing to bill the 2014 property taxes for a record valuation that just topped $1 billion and the county began preparing a budget with record revenues and expenses, citizens grew frustrated.

Concerned about soaring living costs, upset with gridlocked traffic, and exasperated at the hassle that comes with living in a bustling boomtown, residents began asking questions. What was the County doing with all of the money? Would the County lower their taxes? How much were energy companies paying in taxes? When will roads be fixed?

Policymakers used to the boom and bust cycles of an energy economy were putting record numbers into reserves but struggling to explain that need to citizens who focused on the millions of dollars being pumped into the local economy. Although the County published a budget book with pages of figures that detailed revenues and expenses, citizens used to finding answers in seconds on Google were unlikely to scour a PDF budget book.

Interest in the energy boom spread beyond the county’s borders and even the region, as stories about the exploration in the Powder River Basin appeared on major newswires and newspapers across the country. The Treasurer’s Office began fielding several calls a week from reporters wanting more information about the revenues, the impacts, the long-term sustainability, and the changing landscape of the newly-industrialized rural areas of the county.

There had to be a better way to tell the story of the boom and to show citizens how the County was using hard-earned tax dollars to repair roads, upgrade schools, and encourage inclusive economic growth. We wanted a way to demonstrate both how the oil boom impacted public finances and that we were putting their money to good use.

In October 2014, we announced a partnership with OpenGov – a management reporting and transparency company based out of Silicon Valley. For the first time, interested citizens could see the visual, interactive story of how the oil boom affected County’s finances, including what revenue came into the County and where it went. They could see that although revenues doubled, so did the costs of maintaining roads, retaining employees, housing additional prisoners, and combating higher crime.

Journalists from anywhere in the state, or the world, now had instant access to the numbers they needed to investigate, track and spread the message of what an energy boom means to a small county. The County Treasurer began referring inquiries about the county’s finances to the OpenGov site instead of providing data verbally or emailing documents.

Editors from one of the largest newspapers in Wyoming, the Casper Star-Tribune, attended a county commissioners meeting to thank the county for the OpenGov site, expressing their hope that other government entities would follow suit and usher in a new era of transparency and accountability.

The OpenGov platform helped tell the story of the boom and how we were dealing with the revenues and expenses so that County Commissioners and residents could work through the issues together and explore what benefits would come from living in the hottest energy town in the state.

From boom to bust

Then our boom fell apart.

In June of 2014, fourteen oil rigs operated in Converse County and the price of crude oil was over $105 per barrel. By November, only three rigs were drilling oil wells in the county – and the price of oil fell below $45.

By March 2016, the rigs and workers were gone.

In the winter of 2015, the dramatic dip in oil prices caused the company Cat was working for to suspend all drilling. Cat was laid off. “It was stressful,” Cat says, feeling the immediate pressure of not being able to find work and watching the nest egg he worked so hard to build during the boom being depleted. He tried to find a job in the Douglas area but found it “impossible.”

The County’s unemployment rate doubled from 3.2% to 6.3%. And not only was the promising oil boom over; the coal mines that formed the county’s economic bedrock were also about to come under fire.

On August 3. 2015, as the price of oil crashed, President Obama released his Clean Power Plan that specifically targeted coal-fired power plants and set new emissions standards.

As the power industry redoubled efforts to transition from coal to cheaper, more environmentally-friendly natural gas, demand for coal plummeted. In 2014, Converse County’s mines produced over 33 million tons of coal. The Energy Information Administration estimates that coal production in 2015 was 10% lower than 2014 – and the lowest since 1986. Powder River Basin production in 2016 is already down approximately 28%.

The bust sets in

In March 2016, Wyoming’s (and America’s) two largest coal mines announced layoffs. Arch Coal cut 15% of its workforce, or 230 people, and Peabody Energy cut 235 people at North Antelope Rochelle mine. In April, Alpha Natural Resources followed suit and laid off workers from their Belle Ayr and Eagle Butte mines. By the end of April, the largest coal producer in the United States and operator of the coal mine north of Douglas, Peabody Energy, filed for bankruptcy.

Cuts in coal production and shipping cascaded to the railroads. Union Pacific announced that in the fourth quarter of 2015, they shipped 22% less coal than in the same quarter of 2014, and were putting 1,200 locomotives in storage nationwide. U.P. also shed 4,100 jobs nationwide, some of those in Converse County.

The economic damage was immediate. Sales tax collections that had peaked at over $10 million per month in February 2015 plummeted to $1.9 million in April 2016.

In July 2016, the Wyoming Department of Workforce Services announced that Converse County had one of the largest jumps in unemployment statewide between June 2015 and 2016, from 3.9% to 6.8%.

The County’s assessed valuation dropped over $300 million, from $1.8 billion to $1.5 billion; and the Fiscal Year 2017 budget process became all about guessing when we would hit bottom and how to deal with a General Fund that would receive 20% less revenue.

Citizens asked questions – and transparency answers them

Citizens now asked how the County would sustain services, how far revenue would fall, and how the commissioners planned to prioritize expenses and projects.

To answer these questions, we turned again to OpenGov.

First, after a letter to the editor in the local newspaper asked where the county spent all the money from the boom and why more wasn’t put into reserves, we promoted the Checkbook Report that showed every check the County issued throughout the year, so that citizens could see for themselves where the money went. We saved views that showed the county spent over $400,000 to purchase and transport gravel for county roads and another $350,000 to a machinery company for equipment and repairs.

Next, when news stories about the oil and coal company bankruptcies created concerns about whether property taxes would get paid and whether the bust would create a deluge of delinquent tax accounts, we created a report comparing delinquent tax amounts for 2015 against prior years. The report provided visual reassurance that delinquent property taxes for tax year 2015 were similar to prior years, lessening the worries about budget shortfalls in the current fiscal year.

The OpenGov platform was also vital in explaining how and why sales tax collections could drop so far, so fast – from a high of $96 million in countywide collections in Fiscal Year 2015 to $26 million in Fiscal Year 2016. We published a report to the OpenGov portal showing sales tax collections by industry sector, so the public could see that the Mining sector dropped from $46 million to $12 million and how the loss of population and jobs affected Retail sales, which fell from $14 million to $6 million.

The platform became a method for the public to see the anatomy of the boom and the bust: a visual telling of the rise and fall of the Powder River Basin oil and gas play and the crash of the coal market.

Moving forward

Cat is now looking for work back in North Dakota. Even though he’s not looking forward to being away from his family again, he knows he’s got to go where the work is. His future in the oilfield seems uncertain. Like most, he’s hoping for a resurgence in oil prices, but knows the energy sector could become even more depressed, depending on the whims of the market.

Cat’s story is not unique.

Some businesses have closed; others are for sale. Some families moved out of the community to find work elsewhere, while others seek employment opportunities in different labor sectors, or hope oil prices will recover and things will pick up soon.

Long-time residents just shrug and accept the ups and downs as just part of the boom-bust cycle common to places that rely on the energy industry to drive the economy.

The County, like many residents, will rely on the reserves they built during the boom to ride out the current energy down-cycle and wait for better days.

As a bumper sticker on the back of an old truck parked downtown says, “Please, Lord, just give us one more oil boom. We promise this time we won’t waste it.”


Joel Schell is Converse County’s Treasurer. Kim Hiser is Converse County’s Deputy Treasurer.