The plot was hatched at a Ramada Inn just outside the Syracuse airport in the fall of 1978.

A small band of New York local government finance officers gathered to wrestle with the idea of creating a group to push for higher standards of professionalism in their field, as well as a platform to express ideas and formulate policies.

Arthur Levitt, state comptroller and benign "godfather" of local government finance, was retiring, and local officials felt something should be done to fill the vacuum.

Now, 13 years later, the New York State Government Finance Officers Association boasts over 800 members from a mere handful, a loud and informed voice in Albany on legislative matters, a highly regarded program of seminars for government financial managers, a newsletter that numbers over 30 pages an issue from just two pages of copy printed in its heyday, and the group's first executive director, hired in May.

Today the group holds annual meetings in Albany, as well as three annual conferences for its downstate, upstate, and western districts. It also hosts a plethora of education seminars that feature state officials, lawmakers, academics, and finance experts from the private sector.

The seeds for the new group had actually been sown four months before the meeting at the motel. Four would-be founders of the group sat in a Houston hotel at a national GFOA conference and hotly debated how to raise professional standards for financial managers in the state.

The four were: David A. Shulman, now a partner with Bennett Kielson Storch & Kremer, an accounting firm in New Rochelle, and former commissioner of finance for Westchester County; Stanley Schoenfeld, a principal with KPMG Peat Marwick, an accounting firm, and his colleague at the time, Barry Attwood, now director of finance for the Southwest Water Authority of Florida; and David R. Elleman, now finishing his 25th year as comptroller of Onondaga County.

"The plot has given birth to a baby, and I think a very good baby," said Mr. Shulman. "New York State needed a voice, both locally for finance officers as a group, as well as for the state itself -- it needed a voice nationally.

"That is what we set out to do," he said, "and we accomplished our mission."

Mr. Schoenfeld said, "To start with, there was a feeling among some people that additional professionalization of the function of government was going to be good for everybody, and there was a need to do whatever it took to professionalize people.

"And that meant a high standard of training, and a cross-fertilization of information," he continued.

"I think we had ambitious plans at the time, which now seem to be pretty small plans. We were obviously on to something, because people came out of the woodwork," he said, adding that even "the national GFOA helped out."

As for the late Mr. Levitt's feelings about a local GFOA, Mr. Schoenfeld said: "He felt that we were not capable of this higher level of understanding. The state would run the show."

Mr. Levitt wanted the state to handle municipal finance matters for local officials and he did not want them making policy. He preferred that local government financial managers just "fill in the blanks," Mr. Schoenfeld said.

Mr. Levitt "was protecting ourselves from ourselves," Mr. Schoenfeld said. "He realized that there were a lot of Aunt Bessies and Uncle Joes who were part-timers in city and town governments -- part-time bookkeepers. And he just didn't think they should all of sudden start going off on their own."

Mr. Schoenfeld added that Mr. Levitt "was sort of like a godfather -- very well respected."

Aunt Bessie and Uncle Joe

The embryonic group did not want to change things overnight, Mr. Schoenfeld recalled. "We didn't want to push all the Uncle Joes and Aunt Bessies out the door, but we wanted Uncle Joe to have a full-time chief accountant, if Uncle Joe was the treasurer.

"We wanted a more business-type approach to government financial operations," Mr. Schoenfeld said. "We wanted to catch up to state-of-the-art accounting, reporting, and auditing."

A veteran of the motel meeting and another founding father, J. Dwight Hadley, now assistant deputy comptroller for New York State and then commissioner of finance for the city of White Plains, said he remembered "about 20 of us helped form the organization. The principal person was Dave Elleman. He is the one that was the instigator in terms of pulling together all the people from around the state.

"We started out very modestly, and now have more than 800 paid members and more than 3,000 on our mailing list, made up of finance officers from all levels of government and a lot of private-sector profesionals," he added.

In recent years, a major force for change in the state GFOA has been Charles K. Stein, director of finance for the Suffolk County Water Authority, who joined in 1985 and served as its president last year.

"Rather than sit there and wait for things to occur, I felt the association had a role to play in assisting the legislators in understanding the effects of their laws," he said.

"We are not coming there with a bent or political affilation: We are coming in with a basic message, that there's a professional approach to things," he continued, adding "that is why we speak out against the one-shot revenues the state wants to use."

One key to the group's development has been its ability to expand and cover remote areas of the state. The group created its third regional council -- the Western Council -- this year to accommodate its current and potential members from the eight countries of western New York.

Chris Rego, deputy comptroller for Erie County, head of the new council and an active proponent for the new regional recognition, said, "We wanted to offer the western counties local training seminars.

"The downstate council and the upstate council meetings were too far away," he said. "So last year, with the assistance of the state GFOA, we sponsored a conference at the Buffalo convention center.

Bud Larson, the state GFOA's current president and an official with New York City's Office of Management and Budget, said, "I think that we've had a very successful year, this last year under Chuck Stein."

He added that "we are making a big push forward as an education and informational organization. We are looking to expand the number of meetings and seminars."

To that end, the New York GFOA has become a more sophisticated, structured organization. Gone are the days of moving from borrowed office to borrowed office.

"Up until a month ago, we had been strictly a volunteer organization," Mr. Larson said. "We have had some minimal administrative support in our office in Albany.

"Nobody would be able to take a role and go forward with issues. It was a paper-processing office," he said. "Now there will be a person available on a regular basis that someone can contact with questions on local finance issues."

New Executive Director

The new executive director is Cathy Chazen Stone, formerly a senior project manager of the Nelson A. Rockefeller Institute of Government, a division of the State University of New York.

"It is very exciting," Ms. Stone said. "The people who compose the organization are very dedicated, interesting people" and the New York GFOA "is very important to them."

"My first job is to organize the very positive efforts of the membership toward education and passage of legislation," said said.

"We don't consider ourselves lobbyists," she said. "We consider ourselves educators. We do push legislation we are concerned about."

Mr. Hadley said, "We have tried very hard to be a professional organization versus being a lobbying organization." But, he added, "we have identified issues during the years that help our members; we have stepped forward to work with the Legislature."

The group's efforts in changing state laws affecting local finance have taken on momentum. "We have normally done that on a low-key basis, but have been successful during the years," Mr. Hadley said.

He noted that the group most recently worked very hard with two banking associations and the state comptroller to tackle a problem local governments face with the deposit, investment, and collateral issues.

The problem is that local governments need to have their deposits in banks collateralized. The banks, however, were not required to buy securities to collateralize the municipalities' deposits.

The new bill, which has a very good chance of passing this year, would widen the now conservative list of securities a bank can use as collateral and at the same time require the banks to have collateral in place for local government deposits.

"We walk a thin line," Mr. Hadley said. "We are not lobbyists. We are not doing all the things a lobbyist would do.

"We will work with the staff of the Legislature and work with the staff of the comptroller's office" on issues affecting local government financial management, he said.

To deal with proposed changes in the state's local public finance laws, Ms. Stone said the group recently organized a meeting of the New York State Association of Towns, the New York State Conference of Mayors and other Municipal Officials, the New York State Association of Counties, the New York State County Finance Officers, and the New York State Association of School Business Officials.

"We felt that in this legislative session, we really want to have a legislative mandate," she said. Many members of the New York GFOA are also members of these groups, she noted. "The GFOA and the other groups agreed to support eight proposals."

Among the eight proposals, the groups support amending the state constitution to allow for a more flexible serial bond maturity schedule. The amendment would allow scheduling of the first principal installment on bonds no later than two years after the date of issuance. The law states that repayment must begin after the first 18 months.

The GFOA endorses the permanent repeal of the 5% down payment provision that requires municipalities to put down 5% of the total cost of a bond-financed project before the bonds are sold.

The growth of the New York GFOA has been noticed by many observers of local government finance.

Colleen Woodell, an analyst with Fitch Investors Service and a veteran observer of finances in New York, said, "I think they have become a more cohesive group. There is a lot to be gained from working together.

"The leadership has been aggressive in the last couple of years," she said, "it is a sign of the times there has been so much pressure on the locals the last few years."

C. Todd Miles, a partner at the bond counsel firm of Hawkins, Delafield & Wood and one of the group's private members, said, "The organization has provided a comprehensive forum, bringing together municipal finance officers, bond lawyers, financial advisers, and investment bankers, and other consultants and providers of professional services at the local government level in order to share information about the latest developments in municipal finance."

With respect to legislation to modernize the local finance laws, Mr. Miles noted that "the organization has come to play an instrumental role in educating its membership about such initiatives and facilitating communication of the membership's views directly to the state Legislature and the governor."

The reform bill, which has languished in Albany for the last four years, may be passed with the fiscal 1992 budget or just afterwards, a number of state officials have said. The reforms have the potential for saving local governments millions of dollars in annual costs and fees.

A poll of the New York GFOA's membership was recently taken, Ms. Stone said. From the information culled from its members, a four-pronged strategic plan was developed for the group.

The first goal is to increase membership and encourage broader and more active participation from professionals in the public and private sectors.

She noted that annual dues are $100 for private members and $50 for government members. The group's annual budget is about $100,000, but "hopefully the budget will grow with seminars and new membership," she said.

The second goal is financial management. "We want to be a clearing house for information, a bridge to the academic community, and get members to publish articles on financial management," Ms. Stone said. "And we want to demonstrate leadership in developing and implementing financial planning, management, research, and policy-making."

A third goal would be formulating policy and legislation, she said. The state's GFOA would provide a forum "to promote our own policies at all levels of government, and communicate these with the appropriate authorities."

And finally, the group aims to continue its traditional services of education and technical support.

Commenting on the future role of New York's GFOA, Mr. Stein said, "I see the organization really taking off in this decade."

He continued, "There is a realization out there that the boom years are no longer around. We have to return to the basics of fiscal management. The role of the finance official is going to be extremely important and it will be up to these organizations to assist financial managers in carrying out their daily responsibilities."

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