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Author:  W. Bartley Hildreth.


Source: Volume 38, Number 04, Winter 2018 , pp.1-70(70)




Municipal Finance Journal

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Abstract: 

The Municipal Finance Journal is pleased to publish, for a second year, the edited transcripts from the annual California Debt and Investment Advisory Commission (CDIAC) Pre-Conference held before the California Public Finance Conference. These 2017 sessions are provided by Mark Campbell, executive director of the CDIAC in the State Treasurer’s Office, and I thank him for organizing the panels, permitting the use of their transcripts, and coordinating with the various presenters to turn their work into this printed version. Municipal securities offerings are generally bespoke transactions involving many different parties, each bringing unique skills and perspectives to the table. The first CDIAC panel focuses on the use and evaluation of expert work products, such as appraisals, projections, and market studies. Buy-side analyst Gilbert Southwell III, issuer officials Heidi Schrader and Jim Miller, and bond counsel Lisa Greer Quateman examine professional standards, regulatory aspects, and market expectations for the use of expert reports in municipal offerings. Buy-side analysts want a professional opinion by a qualified expert, not just a recitation of risk facts and trends. Issuers provide the specifications and look for independent experts who can clearly explain the report’s assumptions. Due diligence is required, as is attention to any legal obligation to make continuing or event disclosures.The second CDIAC panel explores the expectations of practice for consultants involved in municipal securities transactions. Susan Gaffney, executive director of the National Association of Municipal Advisors, guides this discussion among municipal advisor compliance officer Leo J. Karwejna, auditor Gary Caporicci, and attorney/consultant Robert Doty. Handshakes are no substitute for a detailed scope of services, including the disclosure of expertise, assumptions, methodology, and performance measurement. The panel also notes that issuers have responsibilities in seeking and using expert advice. The third panel clarifies who is and who is not a “municipal advisor” with regard to securities law and offers tips for working with these advisors. Attorney Robert Doty moderates this third CDIAC panel consisting of Securities and Exchange Commission attorney Mary Simpkins, Securities Industry and Financial Markets Association attorney Leslie Norwood, municipal advisor Nat Singer, and issuer official Lakshmi Kommi. An added benefit is that both Nat Singer and Lakshmi Kommi have experience from serving on the Municipal Securities Rulemaking Board, which regulates municipal advisors. The Municipal Finance Journal welcomes the opportunity to work with a wide variety of organizations—as this issue demonstrates with the CDIAC—to publish edited proceedings of conferences or workshops that address municipal securities offerings as well as the fiscal management and creditworthiness of issuers of such securities. We also look forward to submissions for normal peer review, such as the final article in this issue. In 2017, the U.S. Supreme Court addressed tax-exempt financing of sectarian institutions in Trinity Lutheran Church of Columbia, Inc. v. Comer. Bond lawyers Matthias M. Edrich, Lauren Ferrero, Ann C. Lebowitz, John Utley, and Paul Wisor, all members of the National Association of Bond Lawyers, provide a legal analysis of this important Supreme Court ruling. The authors examine the constitutional framework and related federal and state jurisprudence, including the 2017 decision and its implications. The purpose of their article is to assist bond counsel in making a meaningful determination regarding the validity of a bond transaction involving religious institutions.

Keywords: Using and Evaluating Expert Risk Assessments; Professional Standards for Municipal Advisors and Consultants; Tax-Exempt Financing of Sectarian Institutions

Affiliations:  1: Editor.

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