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Author:  W. Bartley  Hildreth.


Source: Volume 35, Number 04, Winter 2015 , pp.1-100(100)




Municipal Finance Journal

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Abstract: 

We are pleased to continue our relationship with the National Federation of Municipal Analysts by publishing edited presentations from their 2014 annual conference in Lake Buena Vista, Florida. Interestingly, the host city, Lake Buena Vista, is part of a special taxing district, the Reedy Creek Improvement District, created in 1967 by the State of Florida to entice Walt Disney to create what is now known as Walt Disney World. In essence, the district functions as a county government. Property taxes are levied by the district’s board of supervisors, elected by landowners, to pay for the cost of basic municipal services. These taxes, levied by Disney on Disney property, serve as the basis for general obligation bonds. In addition, revenue bonds are issued backed by utility sales to Disney or its lessees. Accordingly, the district as debt issuer is one of the most unique and appropriate settings in which to conduct a conference of the leading municipal analysts in the country. Public pension systems are the subject of often heated debates in our political environment, even leading to recall elections and presidential ambitions. Professionals often disagree, even among accounting experts and scholars from several disciplines looking into the numbers. “Staying Alive in a Sea of Numbers” is the NFMA panel that does just what the title implies. Guiding us through the numbers are Dean Michael Mead, from the Governmental Accounting Standards Board, Marcia Van Wagner, at Moody’s Investors Service, and Donald J. Boyd, from the Rockefeller Institute of Government. Each panelist helps us unravel the complexity of the accounting, credit rating, and fi scal risks associated with pension systems. A panel on “The Great Infrastructure Crisis” examines ways to fund the large funding gap. Susan Kendall, a broker, moderates the panel. Alexander Heil, chief economist at a major issuer, outlines the country’s physical deficiencies in the context of economic, social, and environmental challenges. Duane Callender, from the U.S. Department of Transportation, reviews the innovative financing opportunities available to leverage local funding. Brian Wheeler, as an issuer official, shows how the consolidation of smaller utilities into one authority can take advantage of scale economies and promote regional partnerships. Broker Tom Green offers interesting and innovative suggestions to deal with the changes underway in funding fundamentals. Bankruptcy remains a hot topic in the municipal market given the Detroit case. Credit analyst Gregory Lipitz moderates a panel that helps cut through the thicket of noise on the topic that has been described as a “once-in-a-generation event.” Policy analyst Steven Fehr reviews the results from a national study on state oversight of local governments, from tight control to hands-off behavior. State oversight manager Thomas Neff delves into how New Jersey handles local fiscal challenges. Attorney William Kannel walks carefully through the nuances of Chapter 9 municipal bankruptcy in light of recent developments. As if today’s problems were not enough to concern municipal analysts, the last panel goes fast forward by asking what the municipal investing landscape might look like in 2040. Nicole Byrd, municipal research head at Nationwide Insurance, moderates the panel. Steven Ricchiuto, a macroeconomist for a Japanese institution, lays out the demographic, labor, and economic changes both here and abroad. Wealth manager John Dillon notes that investors face additional factors, such as tax reform and credit risks. Broker Sohail Bengali frames the landscape from both the demand for infrastructure and the supply of funds, leading to the “just-in-time replacement” buzz phrase used by many public works directors. We are proud to present these four panel sessions from the 2014 NFMA annual conference. Each offers the rich details that we have come to expect from municipal analysts speaking from their different positions. At the end of each session are questions and answers that cut even deeper into the topics. The Municipal Finance Journal is open to considering other professional gatherings for similar treatment of their proceedings. Our goal is to provide scholars and professionals in municipal securities and state and local financing with the most compelling research and market commentary that deserves wide distribution and standard journal treatment.

Keywords: Pension liability, pension funding, Infrastructure finance, federal vs. local funding, Municipal bankruptcy, Chapter 9, Municipals outlook 2040, excess supply

Affiliations:  1: Georgia State University.

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