CEO Roundtable:
Municipal Deposits
Douglas Petix- 2nd Vice President of GFOA of NJ
&
Michael Drulis, GFOA and NJCFE
Who Is the GFOA of NJ
Since 1937, the GFOA of NJ has been a
professional association of government
finance officers working together to
enhance and promote professional
management of government for public
benefit.
Who Is the GFOA of NJ
The GFOA of NJ’s membership includes
those working in state, county, and
municipal government, school districts,
the public employee retirement
systems, libraries, federal agencies,
investment banks, and accounting, law,
and consulting institutions.
Who is the NJCFE

The NJCFE is a statewide
organization comprised of about 150
representatives of government
agencies, schools, businesses, and
non-profit organizations whose main
goal is to improve the personal
financial literacy of New Jersey's
citizens by promoting the teaching of
personal finance to people of all
ages.
Who is the NJCFE
 The
NJCFE believes that all
citizens of New Jersey must
have the financial literacy
necessary to make informed
financial decisions.
City of New Brunswick
Notable Demographics about New
Brunswick

50,000 Citizens
 5.5 square miles
 620 Employees, 136 Police, 85 Fire
 $75 Million Budget
 $10 Million- Sewer Utility
 $10 Million- Water Utility
 Maintain approximately 30 bank accounts
CFO and Treasurer
Payroll
 Accounts Payable
 General Ledger
 Pension Reporting
 Cash Management
 Grant Reporting and Reimbursement
 Budget

Professional Culture of a
Municipal CFO

Higher Expectation of Fiduciary
Responsibility
– Protect community assets rather than
the assets of a limited group of owners
or shareholders
– Higher degree of regulation, reporting
and restriction from other governmental
agencies
Municipal Needs and Functions

Collections and Cash Flow
– 99% rate of collection through an accelerated
tax sale process

Revenue Cycle
– Tax Collection February 1st , May 1st , August
1st and November 1st
– State Aid – August/September Infusion
– July and August, tightest cash flow months
Municipal Needs and Functions

Surplus
– 2.5% of budget appropriations-healthy
– Levy Cap makes it nearly impossible

Lending
– Notes and Bonds through Bond Council
Municipal Needs and Functions

Employee Banking
– Direct Deposit
– No fee ATM banking or local bank
Municipal Needs and Functions

Home Rule
– Connection to local branch offices for
business and employee needs
– Encourage support of local business
Municipal Needs and Functions

Changing back accounts is difficult
– Millions of dollars are wired in and out
automatically annually
– Predictability through relationships is
important
– Banking is secondary to daily
operations – a change requires a
SIGNIFICANT incentive
Municipal Needs and Functions

Reasons to Consider Banking Changes
– All accounts must be interest bearing by
statute
– Higher yielding money market accounts or
shorter time periods on CD’s
– Little to no banking fees
– Banking changes come slow and through
relationships, one account at a time
Experience with Commercial
Banking
Consolidation
 Out of state/region decisions made
that do not fit the NJ municipal need
 No longer desiring cash deposits
 Professional interaction on banking
side degrading, mistakes increasing

Experience with Commercial
Banking
Long lines, Night Deposits
 Minimal Interest rates,
disproportionately high fees
 Currently, movement towards
Community Banks

Banking Needs
Money Market accounts with interest
and minimal to no fees
 Investment

– Safe and liquid
– Minimum period of time with incentives
rather than penalties

Payment of outside payroll
processing service
Future, BUT Not Today
Credit Card Processing
 Insurance

Questions?
Thank you for your interest, any
questions?