Highlights
- Cyber Insurance Price Hike Hits Local Governments Hard.
- Galloway Education, LLC v. Township of Galloway – After taxpayer – the named landlord of property leased to charter school – sought an exemption from property taxes as a not-for-profit entity, the Tax Court denied the exemption due to the fact that the Bondholder Representative was the de facto landlord of the property purchased via the bond issuance and exercised significant control over the property and the operations of the school.
- In re Financial Oversight and Management Board – Court of Appeals holds, as a matter of first impression, that Fifth Amendment precluded impairment or discharge of prepetition claims for just compensation in bankruptcy under Title III of the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA)
- Substantive land use case from the Michigan Supreme Court here.
- Summary of Texas Government Code Chapter 809: Baker McKenzie
- West Virginia Penalizes Banks Including JPMorgan, Goldman for Coal ‘Boycotts’
- And finally, Oh, The Irony – Midwest Hellhole Edition is brought to us this week by City of Gary v. Nicholson, in which the standard-issue xenophobes crawled out of their holes to object to a symbolic city ordinance welcoming immigrants. We were about to launch into our standard-issue outrage at this (very, very unisolated) incidence of intolerance until we took a closer look. Gary? Gary, Indiana? The Most Miserable City in America Gary? We’re gonna go ahead and second the motion that absolutely no one – immigrant or otherwise – should be welcomed to Gary. And finally, finally, we’ll be leaving you – purposefully shorn of context – with this glorious quote from this week’s Vess v. City of Dallas, “resident was seized when employee kicked him in the head.” Cheers.
- Ed. Note: We’ll be introducing a new password in the near future. This will affect only those accessing the website directly. You should not experience any affects upon clicking a link in the newsletter. We apologize for any inconvenience.
- Orrick: Lessons From Recent SEC Municipal Enforcement Actions
- US Cities Plan to Use Infrastructure Aid on Roads and Bridges.
- NASBO FY2023 Enacted Budget Summaries.
- Goodman v. UBS Financial Services, Inc. – After bondholder alleged that bank incorrectly reported the amount of amortized bond premiums on his 1099 Tax Form, causing him to significantly overpay his federal taxes, District Court holds that bondholder plausibly alleged claims of breach of contract and negligence.
- And finally, Your Mileage May Vary – Khe Sanh Edition is brought to us this week by Torres v. City of St. Louis, in which grandpa was awakened in his own home by the dulcet tones of a battering ram and a flash bang grenade. Followed immediately by a gunfight in which the SWAT team fired 93 rounds, hitting his grandson 23 times. The officers claimed that the grandson had fired at them with an AK-47, to which grandpa responded that, “he did not hear an AK-47 fire during the incident and would have noticed the sound because he had heard it ‘thousands’ of times during his military service in Vietnam.” Sweet Christmas. Our most vivid memories of gramps is scratchy sweaters, risque ditties, and the increasingly anachronistic butterscotch hard candy. PTSD a bit thin on the ground on the mean streets of Santa Barbara, CA.
- Municipal-Bond Issuers Fall Behind on Disclosures.
- S&P U.S. Public Finance Mid-Year Outlook: The Heat Is On
- Texas Fought Against ESG. Here’s What It Cost.
- Muni Bond Market Is Left Behind in Move to Electronic Trading.
- BLX/Orrick 2022 Post-Issuance Compliance Workshop – Hybrid Event (NEW!)
- The Health System’s New Imperative: Market Demands for Climate Risk and Emissions Management – BLX/Orrick Webinar
- And finally, Sorry, But Minnesota Has Dibs On That Whole Land Of A Thousand Thing is brought to us this week by Champine v. Department of Transportation, in which the Supreme Court of Michigan informed us that, “Mr. Champine sustained severe injuries, including fractures to his face, jaw, and orbital bones, loss of teeth, severe contusions to his face and right eye, and lacerations that were readily explained by the bloodied chunk of concrete recovered from his vehicle.” The court further noted that, “the precise location of the defect could not be determined with any more specificity because of the extremely poor condition of this stretch of highway, which plaintiff stated contained more than one thousand potholes.” Two suggestions here: 1) perhaps avoid I-696; and 2) consider adding “bloodied chunk of concrete” to your rotation of beloved insults/endearments.
- GASB Issues Enhanced Concepts for Notes to Financial Statements.
- GASB Requests Input on Proposal to Require Disclosures About Certain Governmental Risks.
- MSRB Notice 2022-03 – Amendments to Certain Fees for Dealers and Municipal Advisors and Proposing an Annual Rate Card Process: SIFMA Comment Letter
- Climate Change, Hurricanes, and Their Toll on Municipal Credit.
- High-Tech Weathermen Forecast Climate Risks for Bond Investors.
- U.S. Supreme Court Decision in Carson v. Makin Reconfirms Availability of Municipal Bond Financing for Religious Organizations: Orrick
- Single Family Mortgage Prepayment Recycling – A Rising Bond Rate Alternative: Kutak Rock
- And finally, Ah, Crap is brought to us this week by Wittman v. City of Billings, in which “calamity struck when a grease clog in the City’s sewer main caused 1,000 gallons of raw sewage to back up into the Wittmans’ basement, an event known in official vernacular as a Sanitary Sewer Overflow (SSO).” We consider it a virtual certainty that the Wittmans’ reflexively resorted to the official vernacular upon encountering this particular calamity. The opinion does reassure that the odds of a Billings resident experiencing a similar event is 0.04687%. This is, a) an oddly specific number, and b) doubtless a source of great consolation for the Wittmans. This does, however, present an opportunity for the Billings Chamber of Commerce to update its motto to: “Billings! Come for the mountain air, stay for the 0.04687% chance of a calamitous sewage backup!”
- Ed. Note: We will be off next week to honor our robust, thriving democracy. Double Dose O’ Drivel 7/12.
- GFOA Government Finance Review June Edition Now Available.
- 2022 Update for Investment Advisers: Important Annual Requirements, Recent Proposed Rulemaking, and Recent SEC Enforcement Initiatives: Sidley Austin
- Fitch: Inflation, Rate Rises, Stagflation Undermine Sector Outlooks
- Biden Strengthens Cyber Coordination Between Feds and State, Local Government.
- Alabama Taps Local Banks for Controversial Prison-Bond Muni Deal.
- Alabama’s Prison Bonds Hit Snag Amid Weak Demand, Litigation.
- And finally, And What Might Have Piqued Your Interest? is brought to us this week by, Ex parte City of Warrior, in which the Supreme Court of Alabama began its opinion as follows: “At around 10:00 p.m. on the night of September 7, 2016, Officer James Henderson, a police officer employed by Warrior, witnessed a vehicle being operated by Donald H. Wright II “run” through a red traffic light. As Wright’s vehicle passed, Officer Henderson also observed, through an open passenger window, something dangling from one of Wright’s arms. Officer Henderson decided to follow Wright.” That’s one hell of a Spidey Sense, Officer Henderson.
- The SEC’s Proposed New Climate-Related Disclosure Requirements for Public Companies: What Do They Mean for Municipal Issuers and Borrowers? – Orrick
- GASB Posts Paper on Intersection of ESG Matters with Governmental Accounting Standards.
- Explore GFOA’s Latest Research on Cyber Insurance.
- Brookings 11th Annual Municipal Finance Conference.
- Jefferson County Foundation, Inc. v. West Virginia Economic Development Authority – Supreme Court of West Virginia holds that sale-leaseback arrangement involving West Virginia Economic Development Authority (WVEDA) and insulation manufacturer to finance construction of manufacturing plant was not a de facto tax exemption, and thus the West Virginia Economic Development Authority Act, as source of WVEDA’s powers, did not need to be strictly construed in action seeking declaration WVEDA lacked statutory power for its actions and that the sale-leaseback violated state constitutional guarantee of equal and uniform taxation, where sale-leaseback was a series of transactions resulting in two, distinct interests of a fee interest and a leasehold, and WVEDA’s resolution to enter into sale-leaseback did not declare that the leasehold interest produced by sale-leaseback would be exempt from taxation.
- And finally, For God, For Country, For Yale Anticlimax Alert is brought to us this week by City of Fort Worth v. Pridgen, in which a mother, “called the police to report that her neighbor choked her seven-year-old son because he left trash in the neighbor’s yard.” The responding officer proceeded to tase and violently handcuff not only the mother, but also her two teenage daughters. The officer was subsequently charges with: 1) excessive force (Natch.); 2) unlawful arrest (Makes sense to us.); and 3) discourtesy (Excuse me? Surely you’re making that up. We are not making that up.). We sit here striving to envision a courteous tasing (Unlikely, but also hilarious.). Perhaps the choking was courteous?
- Fitch: ESG in Credit – Exposure to Social Impacts Report
- ‘Woke’ ESG Scores From Credit Raters Draw GOP Ire to Muni Market.
- Texas Republicans Roil Muni Market Again With Energy Law.
- Fitch: Operational Technology Cyberattacks Are a Credit Risk for Utilities
- Save The Date: NABL Arbitrage and Rebate Live Webinar!
- Ponsa-Rabell v. Santander Securities LLC – Court of Appeals holds that there was no evidence of a special relationship between brokerage firm and customers who purchased municipal bonds from the firm, as would impose duty on the firm, under securities law, to disclose to customers that, at time of sale, it was actively trying to rid itself of its inventory of municipal bonds because of its concern of risk exposure, given the direction of the market.
- And finally, Think Of The (Alcoholic) Children is brought to us this week by In re Revocation of an Alcoholic Beverage Permit for Riteway Liquor Store, in which the Court of Appeal affirmed the closure of a liquor store. Sure, “the liquor store was one of the most dangerous places in city, two people had been murdered outside of liquor store in recent years, numerous residents of community wanted permit revoked, frequent complaints were made of loitering, fights, and drug use on premises.” Ok, maybe a smidge problematic. But let’s consider the balance of harms, shall we? To paraphrase, what profiteth a man if he avoids the occasional stabbing, BUT LOSETH HIS OWN LIQUOR STORE? Pretty sure that’s how that goes…
- The SEC’s Proposed New Cybersecurity Disclosure Requirements for Public Companies: What Do They Mean for Municipal Issuers and Borrowers? – Orrick
- GFOA Updates Economic Indicator Dashboards.
- New Online Hub to Help Cities Apply for Federal Infrastructure Funding.
- ‘Woke Bond Rating’? The Muni Finance Fight Over ESG Scores.
- America’s Political Right Has a New Enemy No. 1: ESG Investors
- Ducking the Culture Wars Isn’t an Option for Companies Anymore. Fighting Back Is.
- In re Financial Oversight and Management Board for Puerto Rico – Court of Appeals holds that lack of specific legislation permitting the plan to modify Commonwealth’s pension obligations to public school teachers did not bar confirmation of plan. Ed. Note: This one is instructive in that the Court of Appeals laid out the omissions to the Plan of Adjustment that would have obviated this particular litigation.
- And finally, Mel Brooks, Driving Instructor is brought to us this week by Battaglia v. Lombardi, in which the Supreme Court of Rhode Island provided us with a comprehensive description of an exotic, heretofore unknown, vehicular maneuver, stating that, “plaintiff positioned his vehicle in the spot, shifted the vehicle into park, and shut the vehicle off.” It is our understanding that this is also known as, “parking.” Fortunately, it has a happy ending. As the plaintiff explained, “I lifted up the pallet to push it against the chain link fence, and my whole body just went right down this open manhole that I had no idea was there.” It is our understanding that this is also known as, “hilarity.”
- Ed. Note: We wish to inform you that this week’s newsletter is in fact, uh, intentionally lame in order to allow you to catch your breath after last week’s monster issue. And we’re sticking to that story.
- Fitch: Where ESG Matters for U.S. Public Finance
- S&P Hits U.S. States With Politicized Credit Scores: WSJ Opinion
- Why Wall Street Can’t Escape the Culture Wars.
- Land Value Capture and Municipal Financing for Sea Level Rise Adaptation Infrastructure and Health Outcomes; RFP
- And finally, Rated R, For The Brutal Dismemberment Of Narrative Logic is brought to this week by Robinson v. Village of Sauk Village, in which a police chase of a stolen vehicle driven by Mark Coffey came to an initial (foreshadowing!) stop in a gas station parking lot in the standard-issue, cinematic fashion. Boxed-in bad guy, five squad cars, guns drawn – “including an AR-15 assault rifle and a shotgun” and the associated screaming about hands and such. And what happens next? So glad you asked. Does he surrender? Go down in a hail of gunfire? (I know, I know, the suspense is killing me too.) So here’s the opening sentence of the next paragraph of the Supreme Court’s opinion: “A little over one minute after [officer] arrived in the parking lot, Coffey drove away.” He drove away. “Nice to see you fellas, gotta be going.” Spoiler Alert: Coffey’s later shot and killed, so it all works out in the end.
- MSRB Proposes to Extend SEC’s Regulation Best Interest to Bank Dealers.
- Special Districts Are Kingdoms of Unaccountable Power.
- DeSantis’s Rush to Battle Disney Puts $1 Billion of Muni Debt in Question.
- Snodgrass v. City of Wichita – In claim brought by residents following city’s refunding of bonds issued for infrastructure improvements, Court of Appeals holds that residents were not entitled to a refund based upon city’s savings resulting from the refunding. Ed. Note: Worth keeping an eye on, as it was anything but a slam-dunk. The claim was denied based upon: 1) statutes of limitations, which can vary based upon the causes of action that are successfully plead; and 2) an unjust-enrichment-like claim that failed based upon the $300 owing to the individual claimants, as opposed to the $60 million saved by the city, which could be remedied via a class action.
- In re Jack County Hospital District – Bankruptcy Court enters Findings of Fact, Conclusions of Law, and Order Confirming the Second Amended Plan of Adjustment in Chapter 9 proceeding brought by hospital district. Ed. Note: Although there were no contentious issues adjudicated in this case, the Opinion and attached Plan of Adjustment are a treasure trove of resources for similar scenarios.
- And finally, Adam & Eve’s Apple Farm is brought to us this week by State ex rel. Nudo Holdings, LLC v. Board of Review for City of Kenosha, in which developers attempted to construe a vacant development lot as an agricultural enterprise based upon the existence of a few conifers characterized as Christmas trees and a few walnut trees characterized as, uh, walnut trees. The land was intensively farmed, as explained by the developer when he testified that, “he and his wife walked the trails to harvest walnuts, which he gave to his mother, who distributed some to her clients and ‘made some stuff’ with the rest.” And made some stuff with the rest. The court disagreed, with the gloriously gnomic, “This is a piece of land that has some things growing on it.” A life-time subscription to BCB (a $o.47 value!) to the first of you to rename your estate, “A Piece Of Land With Some Things Growing On It.”
- State v. Arizona Board of Regents – Supreme Court of Arizona holds that Attorney General had authority to bring quo warranto action against Arizona Board of Regents (ABOR) alleging that portion of agreement between ABOR and operator of hotels to build and operate hotel and conference center on ABOR’s property that allowed operator to lease the hotel and conference center property from ABOR for 60 years, and to purchase property from ABOR at end of lease term for a nominal fee, was not for benefit of state, as required by statute governing ABOR’s authority, but rather for the benefit and use of operator, and that lease violated non-delegation doctrine, where claim was based on allegation that ABOR unlawfully exercised its franchise.
- In re Flint Water Cases – In case brought against bond underwriters in connection with the Flint water crisis, District Court dismisses plaintiffs’ claims for conspiracy and negligence, finding no relationship between underwriters and citizens sufficient to create a duty of care.
- And finally, Not In My Boneyard is brought to us this week by McLoughlin v. Planning and Zoning Commission of Town of Bethel, in which Mono-Crete – a producer of precast concrete burial vaults – proposed to augment its existing facilities with a crematory. (Just so we’re all on the same page here, a “creamery” is a faux old-timey place to purchase archaic dairy treats, while a crematory is, uh, something else entirely…) Should you ever wish to witness a hot time in the old Zoning & Planning Department, we highly recommend adding immolation to the agenda. Favorite comment: “he does not want his business near any emotion or psychological feelings ….” Favorite publication cited: Directional Heterogeneity of Environmental Disamenities: The Impact of Crematory Operations on Adjacent Residential Values. Perhaps Mono-Crete should consider the manufacture of coffee-themed urns? It is the most modestly-priced receptacle.
- Hybrid Work Poses Credit Risk to Cities Looking to Issue Debt.
- Fearful Muni Investors Increasingly Embrace Bond Insurance.
- St. Tammany Parish Hospital Service District No. 2 v. Zurich American Insurance Company – In action brought by hospital service district against insurer for coverage of Covid-related losses, District Court holds that district is a political subdivision that is not an arm of the state and therefore a citizen of the State of Louisiana; complete diversity existed and, accordingly, the Court concluded it has federal subject matter jurisdiction.
- Matter of Oklahoma Capitol Improvement Authority – Supreme Court of Oklahoma holds that approval of application by Oklahoma Capitol Improvement Authority (OCIA) to enter into federal loans, secured with Transportation Infrastructure Finance and Innovation Act (TIFIA) notes, for rural highway improvement projects was warranted, where legislature authorized proposed TIFIA loans as an essential governmental function, OCIA gave valid notice of its application, and OCIA’s application was uncontested.
- And finally, Peppermint? Chamomile? is brought to us this week by Cleveland v. Taft Union High School District, in which the opinion noted that, “Bryan was involved in a fight with several classmates during a physical education (P.E.) class. After the fight, Bryan told assistant principal Rona Angelo that he had been ‘T-bagged’ during the incident. Bryan’s mother met with Angelo to discuss the incident, but Angelo did not tell her that Bryan had reported being ‘T-bagged.'” We have absolutely no idea if the Honorable Donald R. Franson, Jr. has any idea what any of this means. Frankly, we find it absolutely hilarious either way, although the court’s spelling of the term leads one to believe that it might be utterly clueless. For the definitive explication of the concept, we refer you to that ancient oracle Urban Dictionary, which defines “teabagging” here. It is not suitable for work. It is not suitable for those with heart conditions. It is not suitable for anyone. Consider yourself warned.
- Hawkins Advisory: March 31, 2022 Sunset for Telephonic Tefra Relief
- University of Michigan Sells Record-Sized College 100-Year Bond.
- MSRB RFI on ESG Practices in the Municipal Securities Market: SIFMA Comment Letter
- Market Response to MSRB ESG Survey Shows Frustration.
- LIBOR Act Protects US Legacy Contracts; New SOFR Use Growing – Fitch
- And finally, I Hate To Be A Bother And I Apologize If This Is An Inconvenient Time is brought to us this week by Williams v. City of Tybee Island, in which a concerned citizen observed a group of teens in a desperate battle for their lives as they fought a rip tide pulling them out to sea. Leaping into action the citizen immediately called 911…. ‘Cept she didn’t. In fact, she “called the non-emergency line for the City.” Of course, you’re thinking, “Why not just call 911, lady?!!” Fair point, but we think the bigger question is, “HOW THE BLEEP DID SHE KNOW THE NON-EMERGENCY NUMBER?!!” Knowing it off the top of her head – in an emergency – would be baffling. More baffling is the scenario in which she thinks to herself, “Oh, hey. Teenagers drowning. Seems like an emergency. Suppose I could dial the three digits I’ve been conditioned from birth to turn to in this scenario. Or maybe I should pull up the city directory on my phone and pursue this through the proper channels before rushing to any hasty conclusions.” The Court of Appeals did provide us with this zinger, “It is well established under Georgia law that the danger of drowning in water is a palpable and manifest peril.” Indeed. At least they had the decency not to follow that up with, “Just ask those dead kids.”
- Firm Short Positions and Fails-to-Receive in Municipal Securities: 2022 Report on FINRA’s Examination and Risk Monitoring Program
- New and Familiar Compliance Challenges for FINRA Members in 2021 and What That Means for 2022: Katten Muchin Rosenman
- Headlines for Alternative Lenders on LIBOR Replacement: McGuireWoods
- Hawkins Advisory: New Private Activity Bond Provisions for Qualified Carbon Dioxide Capture Facilities
- S&P Through The ESG Lens 3.0: The Intersection Of ESG Credit Factors And U.S. Public Finance Credit Factors
- Muni Investors Seek Proof From Governments Selling ESG Debt.
- California Warns Investors of Labor Market and Supply Chain Issues.
- Preston Hollow Capital, L.L.C. v. Cottonwood Development Corporation – Court of Appeals holds that lender’s pre-existing title to its own money did not allow lender to bring takings claim, as opposed to breach of contract claim, against city based on city’s failure to return funds lent to city by lender pursuant to parties’ loan agreement.
- And finally, Setting The Bar Low is brought to us this week by Srouy v. San Diego Unified School District, in which some issues arose concerning service of process, as defendant’s “mother is a refugee from Cambodia who ‘speaks and reads limited English’ and, due to her experiences under the Pol Pot regime, is ‘cautious’ when speaking to ‘anyone in authority.’ [Turns out that your editor also speaks and reads limited English and is cautious when speaking to anyone in authority. Just seems prudent.] True, we’ve had some well-publicized issues with law enforcement as of late but, come on, Pol Pot? [Shocking that no one’s attempted to market Pol Pot Pie. Sorry, sorry.] But therein lies a public relations opportunity: “Your San Diego Police Department – Genocide-Free Since 2003!”
- Post-Issuance Tax Compliance and Continuing Disclosure Responsibilities for Issuers and Borrowers of Tax-Exempt Bonds (Second Edition) – Orrick
- Rising Rates Hit Munis.
- Launius v. Flores – Court of Appeals holds, as a matter of first impression, that challenges to bond elections are required to be considered to be accelerated under the appellate rules of procedure, and thus a notice of appeal is due within twenty days after the date the judgment or order was signed.
- And finally, At Least It Wasn’t A Penguin is brought to us this week by Cornella v. City of Lander, in which ingrate citizen discovered a bat in her house and called the Animal Control Division of the Lander Police department, which was able to remove the bat. [You ever tried this? Tres tranquilo.]. Citizen later sued the police department when the bat escaped before it could be tested for rabies. But spare a thought for the bat. Was it a dark, brooding, billionaire playboy bat? Could his escape have been motivated by the trauma sustained as a bat pup when his bat parents were gunned down before his eyes? Most importantly, do the members of the Animal Control Division realize that Taco Bell is currently paying $15/hour? One is so rarely sued over a botched Flamin’ Hot Cool Ranch Doritos Locos Tacos Extreme. [Actual menu item. Get yours today.]
- Tax-Exempt Lending to Governments and Nonprofits; Bank Loans and Direct Purchases of Municipal Securities: Orrick
- The Fed Is ‘Normalizing.’ Here’s What Public Financiers Need to Know.
- Kansas GOP Takes Up Gun Bill Targeting Banks’ Muni Business.
- New Jersey Turnpike’s Swaps Mean a Windfall, Sort of.
- S&P Global Ratings To Enhance Transparency In U.S. Public Finance Credit Analysis With ESG Credit Indicators.
- Most Investors Don’t Need to Worry About the Alternative Minimum Tax Hitting Their Muni Bond Holdings These Days. Here’s Why.
- And finally, Let’s Go With Ladybug Farm is brought to us this week by Township of Fraser v. Haney, in which the Supreme Court of Michigan was forced to conclude that plaintiff’s neighbor, “had a history of illegal animal operations on the property, including a deer farm that had been ordered closed by a circuit court and Russian boar production that had been banned by the Michigan Department of Natural Resources.” Both of which existed prior to the present kerfuffle concerning the hog facility currently being run on the property. As the court noted, “The presence of the hogs on the property constitutes the wrong, and that wrong, along with the attendant harms it causes, is being committed as long as the piggery operates.” Piggery? That’s a new to us (although we did learn the term “animal husbandry” the hard way). Then again, fisheries are a thing. In that vein, what would one call an operation dedicated to raising bugs?
- Even When it Comes to the Mundane Forms 8038, the One Constant is Change: Squire Patton Boggs
- Municipal Securities Regulation and Enforcement: The Year in Review and a Look Ahead – Ballard Spahr
- In the Muni-Bond Bazaar, Quotes Are Invitation to Negotiate.
- From Stanford to Oberlin, Schools Rush to Tap the ESG Bond Market.
- How Sea Level Rise Exposure Is Priced into Municipal Bonds.
- And finally, Can’t Imagine Where Good Ol’ Ken Was On January 6 is brought to us this week by State v. Grant, in which Kenneth Grant was convicted of disturbing the peace after spending several consecutive days screaming obscenities at two women painting a house across the street. Per a neighbor, “this ain’t nothing new. He’d always sit on the porch and holler racial slurs, all the time, towards me, towards the neighbors, even towards people walking down the street.” Mr. Grant later complained to the Supreme Court of Nebraska that his 10-day sentence had been an abuse of discretion because, “the county court ignored his request for only a fine or probation.” Perhaps if he’d just yelled the request a little louder…?
- Draft Companion Compliance Resources for Dealers and Municipal Advisors.
- SEC Taking a Closer Look at Issuer Disclosure.
- Treasury’s Letter to Arizona May Impact Muni Issuance Disclosures.
- MSRB Launches Emma Labs as the Regtech Innovation Sandbox for the Future Of Municipal Bond Market Transparency.
- Registration is Open for GFOA’s 116th Annual Conference!
- Preston Hollow Capital, L.L.C. v. Cottonwood Development Corporation – Court of Appeals holds that lender’s pre-existing title to its own money did not allow lender to bring takings claim, as opposed to breach of contract claim, against city based on city’s failure to return funds lent to city by lender pursuant to the parties’ loan agreement.
- And finally, At Least It Wasn’t Grand Theft Auto? is brought to us this week by Lozano v. City of Los Angeles, in which LAPD officers Mitchell and Lozano declined the invitation of their supervisor to join him in responding to a robbery in progress. The reason for their blatant dereliction of duty? So glad you asked. The officers were engaged in a game of Pokemon Go and “Snorlax just popped up at 46th and Leimert.” Glorious. Just glorious. Shortly thereafter, Mitchell informed Lozano that “a Togetic just popped up, noting it was on Crenshaw, just South of 50th.” “Petitioners admitted leaving their foot beat area in search of Snorlax, but they insisted they did so ‘both’ as part of an ‘extra patrol’ and to ‘chase this mythical creature.'” As this entry is our mythical creature, “We will diminish, and go into the West, and remain Galadriel.” Been fun, folks.
- IRS and Treasury Guidance On the Transition From Interbank Offered Rates to Other Reference Rates.
- IRS and Treasury Release Final Guidance on Libor Transition.
- Protect Your Muni Bond Portfolio From A Tornado’s Ravages.
- Cyber Vulnerabilities Could Impact Municipal Finance.
- And finally, Great Moments in Sputtering Similes is brought to us this week by Kerr v. Polis, in which the Tenth Circuit Court of Appeals began its opinion as follows, “After ten years of litigation, this case is stuck in neutral. Despite carving a well-worn path from the district court, to this court, to the Supreme Court, and back, we have yet to finally decide whether any of the Plaintiffs are entitled to have the merits of their claims considered.” Wait, wait, wait. Got off to a nice start with the vehicular metaphor. (Simile?) Continued nicely by carving that well-worn path. Then just, just, uh, nothing. Fortunately, we’re here to help. “Despite carving a well-worn path from the district court, to this court, to the Supreme Court, and back, this 1974 Ford Pinto was rear-ended by a 1972 AMC Gremlin. It has yet to be determined if the occupants will emerge relatively unscathed or will be immediately engulfed in flames.” See? Easy!
- SEC Outlines Key Considerations for LIBOR-Linked Muni Securities.
- SEC Staff Issues Key Considerations on LIBOR Transition: Latham & Watkins
- Hawkins Advisory: Infrastructure Investment and Jobs Act
- MSRB Requests Information on ESG Practices: Cadwalader
- SEC Charges Adviser with Section 204A Violation for Failing to Maintain MNPI Procedures: Paul Hastings Ed. Note: This one is applicable only to those of you advising financial institutions.
- Pre-Order the New Electronic GAAFR.
- Tos v. State – Court of Appeal holds that statute clarifying that corridor or usable segment thereof was “suitable and ready for high-speed train operation,” for purposes of funding plan required by Safe, Reliable High-Speed Train Bond Act, when bond proceeds were to be used for capital cost for project that would enable high-speed trains to operate immediately or after additional planned investments were made on corridor or useable segment thereof and passenger train service providers would benefit from project in near-term, was consistent with single object of Bond Act approved by voters, and thus did not violate state constitution’s debt limit provision; statute furthered construction of high-speed rail system by funding investments in improvement of existing train systems that would be shared with high-speed train system.
- And finally, Revenge of the Mailbox, Part Deux is brought to us this week by Snay v. Burr, in which yet another life was tragically cut short by a mailbox. As the Supreme Court of Ohio noted, “The facts of this case are undisputedly tragic.” (Are they, though? Undisputedly tragic, yet just a teensy bit hilarious? Imagine the eulogy…) Although this strikes us as a new and terrifying phenomenon, we are reminded that the Bhagavad Gita (suck it, Oppenheimer) contains the immortal warning, “Now I am become Mailbox, Destroyer of Worlds.”
- Junk to Drive 2022 Muni Supply to Record $500 Billion.
- Valuing Water Rights in Eminent Domain: Nossaman
- ESG Relevance Scores in Credit Ratings vs Sustainable Fitch ESG Ratings in Financial Institutions: Fitch Webinar
- California Scheming.
- State ex rel. Pike County Convention and Visitor’s Bureau v. Pike County Board of Commissioners – Supreme Court of Ohio holds that county board of commissioners, under statute authorizing tax on lodging, had discretion to redirect from county convention and visitor’s bureau to another entity the proceeds of county-imposed sales tax on hotel lodging.
- And finally, I Heart, Like, Law Stuff is brought to us by Sweet v. Town of Bargersville, in which the United States Court of Appeals stated that, “To top it all off, she bullied a fellow employee by accusing her of receiving her job as a favor from a Town council member.” To top it all off? Soaring judicial rhetoric, no? Are the clerks all 14 year-old girls these days? Feels like we’re on our way to emoji opinions. Well, penumbras of emojis.
- Ed. Note: A technological meltdown prevented us from distributing last week’s newsletter. Following the (literal) sacrifice of assorted farm animals, as well as the (literal) sacrifice of assorted IT folk, we’re back in biz. We apologize for the (literal) hassle.
- Hawkins Advisory: Revisions to IRS Form 8038-CP and Instructions for Issuers of Tax Credit Bonds
- IRS Moves to Mandatory E-Filing of Forms for Direct Payment Bonds.
- MSRB Proposes Extension of Remote Inspection Relief: Cadwalader
- GASB Changes Name of Report to “Annual Comprehensive Financial Report”
- As US Cities Build Green Infrastructure, Here’s One Way They’re Paying For It.
- Flooding Could Leave Billions of US Municipal Debt Under Water.
- Cyber Risk In A New Era: Are Third-Party Vendors Unwitting Cyber Trojan Horses For U.S. Public Finance?
- Fitch: Cryptocurrency Poses Risks, Opportunities for US Public Finance
- And finally, It’s A Goddamn Paddle! is brought to us this week by In re Wright & Boester Conditional Use Application, in which the Supreme Court of Vermont referred to a building (A Goddamn Boathouse!), “used to store canoes, kayaks, and related accoutrements.” Related accoutrements, you say? Rather than compile last week’s newsletter, we embarked on a comprehensive, historic review of the nautical canon, from Homer’s Odyssey to Trimmer’s How to Avoid Huge Ships. Our preliminary conclusion is that this is indeed a novel usage. Well, other than Farragut’s immortal, “Damn the accoutrements! Full speed ahead!”
- Banks Press Ahead with Term SOFR Preparation; Credit Sensitive Rates Under Scrutiny: McGuireWoods
- SEC Approves Changes to MSRB Customer Disclosure Rules.
- UBS’s Botched Muni Statements Cost Clients Millions, Suit Says.
- A Tax Loophole for Greenwich. [This DOES NOT constitute an endorsement of the WSJ’s editorial take on this issue.]
- Kane v. Option Care Enterprises, Inc. – In breach of contract & quantum meruit claim brought by attorney against client, appeals court holds that the agreement between the parties – in which attorney was to evaluate and negotiate tax credits and other federal, state, and local level incentives from state government officials – was unenforceable as a matter of public policy because it provided for contingency fee lobbying.
- And finally, Great Moments In Anticlimax (For God, For Country, For Yale) is brought to us this week by University of Kansas Hospital Authority v. Board of County Commissioners for Franklin County, in which a driver was spotted driving through town at a hight rate of speed, without headlights, and jacked up on meth. The police gave chase, at which point driver fled, exiting onto the highway at a high rate of speed into oncoming traffic. The cops called off the chase, but shortly thereafter responded to a call reporting a grass fire which they discovered had been ignited when the driver rolled his SUV. He was extricated from the burning vehicle and airlifted out for medical care. The court’s opinion contains two pages of bullet points itemizing the carnage, only to end with this final, damning fact: “The driver has no insurance available.” Surely not! Who could have guessed? He struck us (ha!) as such a responsible young man.
- NFMA Introduction to Municipal Bond Credit Analysis.
- ARPA Funds: Non-Entitlement Units – GFOA Webinar
- JPMorgan’s Texas Muni Work Becomes Latest Culture War Fallout.
- Report: Urban Wealth Funds Allow Cities to Commercially Capitalize on Their Assets for the Public’s Benefit.
- UIRC-GSA Holding, Inc. v. William Blair & Company, LLC. – In dispute between issuer and its investment banker/placement agent in which issuer claimed that bank provided new client with issuer’s copyrighted deal documents, District Court holds that the deal docs lacked the requisite originality and creativity to warrant copyright protection.
- In re Atrium of Racine, Inc. – In conflict between bondholders and prospective residents following receivership of senior housing facility, Court of Appeals holds that residents’ entrance fees and security deposits had priority over the interests of the bondholders, as the Prospectus and Project Contract explicitly stated that the fees and deposits were fully refundable and constituted “Permitted Liens.”
- And finally, Martyrs of Morgan Stanley is brought to us this week by UIRC-GSA Holding, Inc. v. William Blair & Company, LLC., in which Asset Management and Investment Services company asserted that it could not possibly have plagiarized copyrighted deal docs due to the fact that its “top executives spent about six months painstakingly writing and re-writing the critical sections of the [PPM],” and “did almost all of the work themselves.” That is certainly how this recovering Big Law lick-spittle remembers it. Endless nights tucked warmly abed while the top executives painstakingly wrote and rewrote the critical sections of the PPM.
- Extreme Weather and Municipal Credit: Understanding the Risks and Opportunities – NFMA Webinar
- GASB Fact Sheet on the Proposed Note Disclosure Concepts Statement.
- SEC Sues Muni Advisers in First Case Over Bank Fee Splitting.
- Intriguing FINRA Enforcement Action In the Bond Market: More to Come? – Arent Fox
- Firm Settles SEC Charges For Prioritizing “Flippers” In Municipal Offerings: Cadwalader
- BlackRock, Goldman Join Racial-Justice Push in Muni-Bond Market.
- S&P Green Transaction Evaluation: Washington Suburban Sanitary District Consolidated Public Improvement Bonds of 2021 (Second Series) (Green Bonds)
- Disclosure Update: GFOA Webinar
- SEC, MSRB, FINRA to Hold Compliance Outreach Program for Municipal Advisors.
- And finally, Take A Check? is brought to us this week by McClain v. Carrollton Police Department, in which the Court of Appeals noted in Footnote 1: “The entirety of McClain’s complaint reads as follows: “Malpractice Class Act of defamation & illegal procession Lawsuit. For the amount of $999,999,999,999,999,999, 999,999,999,999,999,999,999, 999,999,999,999,999,999, 999,999,999,999,999,999,999,999,999.” Gonna put a bit of a dent in the Carrolton Police Department’s budget. Yet another upside of the pro se plaintiff: no contingency paid out to those rat bastard lawyers.
- Amendments to Rule G-10 Notification Requirement for Dealers: SIFMA Comment Letter
- A Big Bond Market Headache, Courtesy of the SEC.
- Cryptocurrency: U.S. Public Finance Issuers Cautiously Consider Its Applications
- Record Number of Muni Issuers Bet on Pension Debt With Rates Low.
- Update on the Reconciliation Package: Municipal Bonding Priorities
- And finally, Mr. Kafka, Please Step Out Of The Vehicle is brought to us this week by Bailey v. City of Annapolis, in which Mr. Bailey finally threw up his (cuffed) hands and sued the City of Annapolis Police Department after he was – once again – pulled from his truck and arrested for a crime he did not commit. And how do we know that he did not commit the crimes in question? So glad you asked. The reason is that each of the crimes in question was in fact committed by the OTHER James Elmer Bailey who was also born on 10/15/62 and also lived in the same town. Mr. Bailey was sometimes able to convince the arresting officers that they had the wrong man but, at other times, the one foot difference in height, the 100 pound difference in weight, and the completely different skin color were chalked up to, you know, ordinary discrepancies in eyewitness recollections. While “Kafkaesque” is perhaps tossed around a bit lightly, you know the real thing when you see it.
- Ed. Note: We will be off next week. Double Dose O’ Drivel 8/21.
- Which Side Are You On? Municipal Broker/Dealer Takes Both Sides.
- Billion-Dollar Muni Deals a Rarity as Free Cash, Revenue Pile Up.
- NFMA Recommended Best Practices in Disclosure for Toll Road Bonds.
- As Wildfires Burn, ICE Shows How Sophisticated ESG Tools Have Become.
- ‘Solar Bond’ Demand Goes Through the Roof.
- Telephonic TEFRA Hearings are Now Available Through March 31, 2022: Squire Patton Boggs
- City of Marion v. London Witte Group, LLC – Supreme Court of Indiana holds that the adverse domination doctrine, which tolled the statute of limitations as long as the corporate plaintiff was controlled by alleged wrongdoers, applied to both private and municipal corporations.
- Indiana Municipal Power Agency v. United States – Court of Federal Claims holds that statute providing funding for tax refunds to pay issuers of Direct Payment Build America Bonds (BABs), under American Recovery and Reinvestment Act (ARRA), did not constitute “appropriation Act,” but rather authorized “direct spending,” and thus, issuers’ refunds of 35% of interest payable for their BABs were subject to sequestration, under Budget Control Act and American Taxpayer Relief Act, that permanently canceled budgetary resources, including direct spending, defined as budget authority provided by law other than appropriation Acts, since BABs were not statutorily listed as program exempted from sequestration.
- And finally, A Shameless Man With Nothing To Be Shameless About is brought to us this week by Walker v. Agpawa, in which a “[mayoral candidate] engaged in a scheme to defraud an insurance company while he was Markham Fire Department chief. He was sentenced to three years’ probation and ordered to perform 200 hours of community service.” (That penalty’s in line with those meted out to non-violent drug offenders, right? Right?) Dude won his mayoral race and took the issue of whether one who had been convicted of an “infamous crime” is eligible for public office all the way to the Supreme Court of Illinois. Turns out they are. Best of luck, City of Markham!
- Muni Underwriters Cut Fees in Takedown Race-to-Bottom.
- Another Climate Risk for Cities: Higher Borrowing Costs.
- Cities and States on the Frontline of Climate Change Aren’t Always Upfront about Risks. Does the Municipal Bond Market Care?
- Bond Insurance on Pace for Best Market Share Since 2008.
- The Dedication Doctrine vs. The Project Influence Rule – Which Valuation Methodology Applies? – Nossaman
- How to Explain Pension Obligation Bonds to Your Governing Board: Orrick On-Demand Webinar
- BDA’s Fixed Income Leadership Three-Part Webinar Series is NEXT WEEK.
- Rosenberg v. JPMorgan Chase & Co. – Supreme Judicial Court of Massachusetts holds that remarketing agents alleged misrepresentations that they would comply with their obligations to Commonwealth to determine applicable rate of interest on long-term, tax-exempt, variable rate bonds that financed long-term public projects and infrastructure that, in their judgment, was lowest rate that would permit sale of bonds bearing interest at applicable interest rate at par plus accrued interest as of applicable rate determination date, was in public domain, for purposes of “public disclosure” bar to qui tam action against agents under Massachusetts False Claims Act (MFCA).
- And finally, Great Moments in Tragicomic Topography is brought to us this week by Doe v. Town of Madison, in which a high-school English teacher was arrested, convicted, and sentenced. to two years for sexually explicit contact with three students. A female teacher. With the football team. Her extremely bewildered/mortified husband testified that she was, “a woman who was teetering on the precipice of being kind of unhealthy and making some bad decisions and being very unhealthy and making some bad decisions.” It had been our understanding that the teetering precipice metaphor is typically deployed in order to indicate some kinda binary good/evil scenario. We’ve consulted a Chex Mix of esteemed geographers, cartographers, and pornographers and the scientific consensus is that she hurled herself off the precipice, picked up speed, plummeted past Kind of Unhealthy Canyon, slammed into Very Unhealthy Gorge, and splattered her mangled corpse at the bottom of Some Bad Decisions Valley. GPS coordinate currently unavailable. We pray to god that you know it when you see it.
- Ed. Note: It’s happened yet again; the annual summer doldrums (See, Coleridge, Samuel Taylor) in which not much of anything seems to be happening. Going a month or so without providing you with substantive content used to stress us out, until we arrived at the Zen-like tranquility resulting from the awareness that we routinely – and gleefully – fail to provide you with any substantive content whatsoever for 12 months of the year.
- SIFMA State-by-State Capital Markets Database.
- Muni Buyers Grab Billions in Bonds They Won’t See forMonths.
- Treasury Guidance on Non-Entitlement Units is Now Available.
- Muni Feeding Frenzy Seen Lasting as New Sales Lag Investor Cash.
- S&P: Could The Western U.S. Drought Threaten Municipal Credit Stability?
- Important Ohio Supreme Court Decision Clarifies Proper Method to Value “Big Box Stores.”
- And finally, I’m Not Sure That I Agree With You 100% On Your Police Work, Lou is brought to us this week by Gonzalez by Gonzalez v. City of Jersey City, in which police officers were dispatched to a single-car accident on a Jersey City bridge. Upon arrival they encountered Hiram Gonzalez (a name we can make absolutely no sense of) standing by his wrecked truck and offered him a ride to a nearby gas station while he waited for assistance. Mr. Gonzalez declined, stating, “I am not riding with no Jersey City cops.” Such a charmer, Hiram. Hiram was subsequently struck and killed on the bridge. When the autopsy revealed a BAC of .226%, and eyebrow or two was raised. But, really, what did the cops have to go on other than the symptoms of intoxication resulting from a .226, (“The toxicologist concluded that Gonzalez would have been ‘markedly intoxicated’ when speaking with the police.”), a single-vehicle spinout at 3:24 on a Saturday morning, and the fact that, “Earlier in the evening, Gonzalez had posted pictures of alcoholic drinks on his social media, and an opened bottle of Hennessy was found in his truck after the accident.” I mean, who could have known? Oh, on the advice of counsel and effective immediately, the BCB offices will be relocating to Jersey City, New Jersey. No particular reason.
- More Muni Issuers Are Making Banks Compete to Win Bond Deals.
- MSRB Offers Remote Municipal Advisor Principal Exam.
- Fitch: USPF Exposed to the Same Factors Pressuring the US Sovereign
- S&P: Uncovering Local-level Risk Factors for Municipal Exposures
- Pimco Veterans Look to Shake Up ‘Old School’ Muni Loan Market.
- MSRB Research Paper on the Taxable Municipal Bond Market.
- GFOA 2021 GAAP Update.
- And finally, Bismarck, Otto van Bismarck, is brought to us this week by Smith v. Isakson, in which Eric Smith was found guilty of violating a Bismarck ordinance restricting the use of public grounds without a permit after a mall and fast-food restaurant repeatedly asked Mr. Smith to remove his flags, banners, and assorted merchandise promoting the campaign of a particular presidential candidate from the property. (Don’t ask us, could have been any number of presidential candidates.). The penalty for this particular infraction is $100. There exists no possibility for jail time. Nevertheless, in a move no one could have seen coming from an individual already deemed a vexatious litigant (Is there a better two-word combo in the English language? Moist Towelette?) by the Supreme Court of North Dakota, Mr. Smith sued the mall for $500k (pro se, natch) and managed to (once again) take his case to the state supreme court. Our deepest, deepest condolences to the DAs who will now be required to provide Mr. Smith with a jury trial. You ever deal with a pro se litigant? Think clown-car towing rabid monkeys barreling head-long into a tanker truck of human waste. And finally, finally, when even Chick-fil-A wants you off its property, please take this as a sign that it’s time for a long dark night of political soul-searching.
- S&P: USPF Enterprise Sectors Treatment Of Operating Leases Under FASB’s ASU 2016-02 (ASC 842)
- MSRB Proposes Amendments to Annual Customer Notification Requirements.
- A “Good” Tax-Advantaged Bond Bill Tells Issuers Whether They Can Refund – A Case Study: Squire Patton Boggs
- Transaction Costs During the Covid-19 Crisis: MSRB White Paper
- The Use Of A Crisis To Create Opportunity In The Muni Market.
- BDA Fixed Income Insights Digital Magazine – Summer 2021
- City and County of San Francisco v. All Persons Interested in Matter of Proposition G – Court of Appeal holds that, although the constitutional provision requiring two-thirds vote of qualified electors to approve special taxes, requires governmental entities to gain approval of supermajority of voters before imposing a special tax, it does not repeal or otherwise abridge by implication the people’s power to raise taxes by initiative, and to do so by majority vote.
- And finally, Is There, Like, A Test For Performance De-enhancing Drugs, Dude? is brought to us this week by State ex rel. Schmitt v. Bridgeport, in which no less an authority than the Supreme Court of Ohio was called in to untangle a workplace farce in which William Schmitt wandered into the offices of Bridgeport Village in order to drop off a citizen initiative petition. Mr. Schmitt walked into cheerful-bizarro-alternate-bureaucracy-land that he was uniquely unqualified to navigate. (e.g. “An unknown person directed Schmitt to the mayor’s office, and when he arrived at that office, he asked a woman at the desk if she was the ‘clerk.’ She responded affirmatively. Later in that conversation, she clarified that she was merely a ‘volunteer clerk.'” See, also, “The fiscal officer is Mary Lyle, not Carole Lyle. (The record does not disclose whether the two Lyles are related.)” Then again, Mr. Schmitt was there “to place an initiative on ballot to enact an ordinance limiting the penalty for the possession or cultivation of certain quantities of marijuana or hashish within the village to a fine of $0.” But if the fine is, like, zero dollars, is that really, like, a fine, man?
- SIFMA Raises Concerns On Proposed Solicitor Municipal Advisor Regulations: Cadwalader
- Using and Navigating the Amended Form G-32 in Emma Dataport.
- NAIC’s SAPWG Exposes Proposed Definition of “Bond” for Purposes of SSAPs 26R and 43R: Mayer Brown
- Infrastructure Deal Within Reach – Muni Provisions Remain a Priority
- MSRB to Hold Series of Virtual Regional Town Halls for Municipal Advisors.
- NASBO Spring 2021 Fiscal Survey of States.
- And finally, Great Moments in Self-Abnegation, is brought to us this week by Town of Palm Beach, in which Diogenes devotee and and midcentury modern architecture aficionado sued the City of Palm Beach after it denied his application to replace his beachfront mansion with a wooden barrel in which to reside. JK! He sued after the city denied his request to replace his 10k sq. ft. mansion with a modest 25k sq. ft. midcentury modern abode. According to the owner, “the midcentury modern design communicated that the new home was clean, fresh, independent, and modern—a reflection of his evolved philosophy of simplicity in lifestyle and living with an emphasis on fewer personal possessions.” As the court drily noted {in a rather delightful opinion), “His emphasis on fewer personal possessions included two stories and a basement containing a five-car garage, wine storage area, and steam room. The first floor would have an open-air entry, guest rooms, dining room, kitchen, family room, powder rooms, and living room. The open-air entry would lead to the pool, spa, and cabana. The second floor would have more guest rooms, an exercise room, and the master bedroom.” Alas, the obscenely wealthy – and certainly not the meek – look to be inheriting the earth. Given the clear and present warming trend, not to mention that Palm Beach will shortly be underwater – they’re welcome to it.
- MSRB Notice 2021-07 – Fair Dealing Solicitor Municipal Advisor Obligations and New Draft Rule G-46: SIFMA Comment Letter
- Firm Settles FINRA Charges for MSRB Reporting Violations Involving SHORT System: Cadwalader
- BDA’s Public Finance Leadership Roundtable: Event Recap
- Muni Market Worries Build America Bonds Redux Could Prove Costly.
- Katzen & Boyer v. Clearfield County Industrial Development Authority, et. al. – In claim that issuers of industrial development bonds structured scheme to deprive bondholders of contingent appreciation interest and contingent rental interest, District Court holds that M&T Bank, as paying agent, could be held liable for breach of fiduciary duty, whether that relationship was classified as trustee/beneficiary or principal/agent.
- And finally, Elementary, My Dear Jackbooted Government Thug is brought to us this week by Sales v. City of Tustin, in which the Court of Appeal opined on whether “officers had a reasonable suspicion that criminal activity was afoot.” Afoot? Seriously? However, given the current reputational issues faced by heavily-militarized police forces, perhaps a new look is in order. May we suggest tweeds, monocles, and jaunty deerstalker caps? We look forward to the sight of basset hound heads sticking out the back windows of canine units everywhere, giant ears flapping in the wind. Auf wiedersehen, shepherds.
- Illinois Supreme Court Holds Challenge To GO Bonds Is Barred By Laches, But Avoids Underlying Constitutional Issues. The case is here.
- MSRB Seeks Comment on Potential Changes to Rules on Notifications to Municipal Securities Customers.
- Treasury Issues Guidance for Non-Entitlement Units of Government.
- Do State and Local Governments Need to Worry About Inflation?
- Matter of Trusteeship under Indenture of Trust, dated as of September 1, 1996 – After Industrial Development Agency issued industrial development revenue bonds to finance the acquisition and renovation of a facility by developer, Court of Appeals holds that – notwithstanding the fact that developer defaulted on the loan payments and abandoned the facility – that developer was the party entitled to the net remaining balance of funds. Ed. Note: You’ll want to read through this entire case in order to ensure that your Trust Indentures address this scenario.
- And finally, When Unwarranted Enthusiasm Attacks is brought to us this week by Flores v. City of South Bend, in which “Erica Flores’s life came to an untimely end when Officer Justin Gorny of the South Bend, Indiana, police department careened through residential streets and a red light at speeds up to 98 mph to reach a routine traffic stop he was not invited to aid, crashed into Flores’s car, and killed her.” Given our years of (quite ineffectively) honing our case briefing skills, we hereby submit the following concise summary of the Court of Appeals ruling: “Super uncool, dude.”
- SIFMA Comments to Proposed Amendments to the Margin Rule Regarding When Issued and Other Extended Settlement Transactions.
- SIFMA Urges FINRA to Reconsider Extended Settlement Margin Proposal.
- MSRB Seeks Comment on Amendments to Dealer Notification Requirements.
- Emerging Environmental, Social, and Governance Trends in the Municipal Bond Market.
- Pandemic Population Change Across Metro America: Accelerated Migration, Less Immigration, Fewer Births and More Deaths. Ed. Note: Do we know if trade groups (e.g. NABL, NFMA) are working on model pandemic-related risk factor disclosures?
- Fiscal Justice Rating Firm Will Judge Cities’ Inequity Risks.
- And finally, Great Moments In Misbegotten Cost-Benefit Analyses is brought to us this week by Commonwealth v. Tinsley, in which two dumbasses (see Law Dictionary, Blacks) randomly broke into a rural Massachusetts home and proceeded to engage in an almost comically brutal, violent, and bloody brawl with the three inhabitants. The two assailants finally managed to escape, running away with $49 and, eventually, 30-year sentences. Their loss is, however, your gain as we can now offer the you the following practice tip: If you enter a dwelling via the garage, and arm yourself with items taken from a toolbox in that garage, you are not “armed at time of entry, as required for conviction of armed home invasion.” So you have that going for you, which is nice.
- Earth Day: Municipal Bond Climate Change Disclosure Update
- Biden Spending Plan Seen Jolting Muni Green-Bond Sales to Record.
- Barclays’s Derailed Prison Bond Deal Shows Growing Might of ESG.
- San Diegans for Open Government v. Public Facilities Financing Authority of City of San Diego – Court of Appeal holds that “lease revenue bonds” – in which a) City would lease land underlying proposed improvements to the City Public Facilities Financing Authority, which b) would then lease the land and improvements back to the City in exchange for annual payments and, c) the Financing Authority would issue bonds to fund construction of the improvements secured by the City’s annual lease payments to the Financing Authority – did not violate newly amended City charter provisions requiring voter approval of traditional “revenue bonds.”
- And finally, Oh! So That’s What That’s For! is brought to us this week by Robinson v. Village of Sauk Village, in which a pedestrian was struck by a stolen car being pursued by police officers. The Appellate Court helpfully pointed out that an officer, “activated the flashing lights on his patrol car in an effort to cause the vehicle to stop.” [Yeah, we added that emphasis. What you gonna do about it, tough guy?] The stolen car did not in fact stop. It was finally cornered in, of all places, a church parking lot. Upon being surrounded by three patrol cars and multiple officers pointing guns and screaming, the Court helpfully pointed out that “no reasonable person in his position would have felt free to leave.” Good to know.
- IRS Tax Exempt & Government Entities – Compliance Program and Priorities
- .New IRS Priorities Include Student Loan Bonds, Form 8038-G.
- Cash-Flooded Muni Market Beats Treasuries by Most Since 2009.
- Interesting eminent domain case from Massachusetts here.
- Case concerning distribution of TIF proceeds from Idaho here.
- FINRA Requests Comment on Proposed Amendments to the Margin Rule Regarding When Issued and Other Extended Settlement Transactions.
- Biden’s Script for the American Jobs Plan and a Leading Role Goes to Infrastructure – What Does that Mean For Transportation? Squire Patton Boggs (and Friends) Will Tell You THURSDAY!
- And finally, Tempest In That Spinny Little Kiddie Amusement Park Ride is brought to us this week by Carollo v. Platinum Advisors, LLC, in which litigation ensued from comments made by city commissioner at a public discussion conducted by the city commission regarding the economic benefits of a proposed petroleum refinery. Well that certainly sounds like the type of project that would elicit strong emotions, both pro and con. Wait, it wasn’t a refinery? A wastewater treatment plant? A coal-fired electric facility? Nope. A ferris wheel. A frickin’ ferris wheel. When jokes concerning circular arguments, revolutionary litigation, etc. are too corny even for us, you’re looking at some serious punishment. Oh well, what goes around comes around.
- NFMA Releases White Paper on COVID Disclosure.
- SEC 2021 Examination Priorities – Focus on Municipal Securities and Municipal Advisors – Ballard Spahr
- GFOA New and Revised Best Practices and Advisories.
- NFMA Conference to Offer 17 Sessions.
- California Draws Wall Street Bond Pitches for Clean Car Goals.
- And finally, Honey, I’m Home! is brought to us this week by City of Los Angeles v. Superior Court of Los Angeles County, in which we learned that no less an authority than CalOSHA had deemed a Los Angeles police station, “unsanitary, unhygienic, unclean, rat-infested, flea-infested, and/or otherwise unfit to be occupied by humans, including City and LAPD employees.” (Other than that, we’re sure it’s a lovely workplace.) Still, it came as a bit of a shock to learn that a cop working at this particular station brought home a unique gift for the wife: Typhus! (Apparently the Plague was on backorder.) The court explained that this bacterial transmission was possible due to the fact that the couple is “married,” which the judge helpfully described as a state of “residing in the same house where they shared meals, bathrooms, and common living areas and had ongoing physical contact with one another.” That Judge Collins! Such a romantic.
- Are you Ready for the End of LIBOR? The Fed Issues Guidance on Assessing LIBOR Transition Progress – McGuireWoods
- Ridding Trust Indentures of Pesky Bearer Bond Language: Butler Snow
- MSRB Seeks Comment on Regulation of Solicitor Municipal Advisors.
- FINRA Seeks Comment on Margining of Extended Settlement Transactions.
- Moody’s Launches Comprehensive Suite of Climate Solutions.
- And finally, You Had Me At Episiotomy is brought to us this week by Delanoy v. Township of Ocean, in which the court noted in its opinion that, “In 2014, however, Delanoy became pregnant again with an expected (and, as it turned out, actual) due date of March 17, 2015.” Knowing absolutely nothing of conception and childbirth, your Editor was initially of the opinion that synchronous expected and actual due dates was, like, some kind of Christmas miracle or something. That is until some generous colleagues sat him down and explained the mechanisms available for facilitating delivery on a date certain. While highly enlightening, we must say that we could have done without the puppet show. No storks were harmed in the making of this horrifying tableau.
- Another Abuse Of The EMMA Municipal Reporting System.
- SEC Division of Examinations Announces 2021 Exam Priorities: DLA Piper
- FINRA Requests Comment on Rule 4210 – Follows BDA Member Recommendations.
- SIFMA Amicus Brief: Walters, et al. v. J.P. Morgan Chase & Co., et al.
- BofA Widens Lead in Muni Business With Almost 20% Market Share.
- NABL U Now Webinar on Information Reporting – CLE Opportunity
- And finally, Whoa Man, That’s Deep is brought to us this week by Hicks v. KMD Investment Solutions, LLC, which featured the following exchange: “Q: Did you have to be a trained engineer in order to see a flat spot? A: I don’t think so, no, sir. Wasn’t “It Doesn’t Take a Trained Engineer to See a Flat Spot,” like, a Bob Dylan song or something?
- Fitch Ratings Updates State Revolving Fund and Muni Finance Pool Program Criteria.
- GASB Requests Input on Proposal to Improve Guidance on Compensated Absences, Amend Certain Disclosures.
- Disclosure Rules Led to Drop in Bond Trading Markups.
- California Court Rules Against Church in Special Property Tax Case.
- In re Financial Oversight and Management Board for Puerto Rico – Court of Appeals holds – on motion for relief from automatic stay that was triggered by commencement of Title III case under PROMESA – that district court did not abuse its discretion in denying motion and in not allowing companies that had insured bonds issued by certain Commonwealth entities to bring suit in another forum challenging the Commonwealth’s decision to suspend payment on the bonds.
- And finally, Great Moments In Inexplicable Capitalization is brought to us this week by AlBritton v. Commonwealth, in which DeVinche Javon AlBritton claimed that he was injured falling down negligently maintained stairs. The Supreme Court of Virginia began its analysis with the oddly assertive, yet defensive, comment that, “The doctrine of sovereign immunity remains alive and well in Virginia.” Who, precisely, had been laboring under the misapprehension that the doctrine of sovereign immunity had been taken out back and shot? However, the court redeemed itself with the immortal line that, “It seems odd to compare a convicted criminal sentenced to a prison to an invitee.” Indeed it does.
- MSRB Extends Date for Compliance with Primary Offering Disclosure Form: Cadwalader
- Office of Municipal Securities Staff Statement on LIBOR Transition in the Municipal Securities Market[1]
- SEC Office of Municipal Securities Issue Staff Statement on LIBOR Transition: Mayer Brown
- Forget Bitcoin or Tesla. Muni Bonds Are the King of Costly.
- Make Sure That Your Municipal Bonds Pay You For The Risk You Take.
- Registration Open for GFOA’s Virtual Conference.
- And finally, Great Moments In Nautical Euphemisms is brought to us this week by Hamen v. Hamlin County, in which SWAT teams were searching for a “fleeing felon” (clearly the ideal name for a penal track team). The SWAT teams believed that this particularly felon was no longer actively fleeing, but had instead holed up in a mobile home. Consequently, the officers approached the owners of the mobile home about opening up a few “communication portholes.” “We fully support open communication and our favorite movie is Titanic, so what’s not to like?” replied the homeowners. We now turn to the opinion, in which the Supreme Court of South Dakota informs us that, “to create the communication portholes for the trailer, an armored vehicle pulled away the front stairs and deck, which were not attached to the mobile home or secured in the ground, and pushed in the front door with a ram. The second armored vehicle opened three portholes on the opposite side of the mobile home by breaking through windows and a sliding patio door.” The record remains silent, but one can surmise that the homeowners likely communicated with law enforcement regarding their new portholes.
- FINRA Issues 2021 Report on its Examination and Risk Monitoring Program.
- IRS Provides Guidance on Electronic Signatures to Form 8038: Squire Patton Boggs
- Snowy Owls and Constituted Authorities: Squire Patton Boggs
- The ‘Quasi-Instrumentality’ Question: Chapter 9, Chapter 11, or Neither? – Arnold & Porter
- Everybody Wants Muni Paper.
- Fitch: Cyber Risk Poses Increased ESG Challenges to Municipal Govts
- Tax ballot initiative case for California practitioners here.
- And finally, I Don’t Know, At Your Earliest Convenience? is brought to us this week by Slavin v. American Medical Response of Massachusetts, Inc., in which mother and daughter were just a tad miffed when they called 911 and requested an ambulance. “The dispatcher sent a fire truck to the scene, and also called the city’s contracted ambulance service provider, which sent an ambulance.” A bad day got just a smidge worse when, “The fire truck, however, went to the wrong address, did not arrive at the correct address until approximately twenty minutes after the plaintiff’s 911 call.” The bad day got even worse worse when, “The ambulance did not arrive until approximately thirty minutes after the call from the 911 dispatcher.” And why had they requested an ambulance? So glad you asked. ‘Cuz mother and daughter had been STABBED BY AN UNKNOWN INTRUDER [Emphasis added]. Perhaps not the ideal scenario for a leisurely EMS response?
- SIFMA Issues New MSRB Rule G-17 Model Risk Disclosure Documents for Additional Products.
- Green Bond Disclosure: NFMA Call for Volunteers
- Court Plunges Into Puerto Rico Defaults That Put Bond Market on Edge.
- Muni-Bond Downgrades Top Upgrades for First Time Since 2014.
- Record Muni-Bond Sales Surge Fueled by Borrowing for Budget Gaps.
- Balbesi v. Lafayette-City Parish Consolidated Government – Court of Appeal holds that in-lieu-of-tax (ILOT) payments made by Lafayette Utilities System (LUS) to city-parish consolidated government were not de facto ad valorem taxes, even though the ILOT transfers were referred to in bond ordinances as payments-in-lieu-of tax, and/or because they were placed into the City General Fund along with other tax revenue.
- And finally, At What Point Did This Begin To Dawn On You? is brought to us this week by Mancini v. City of Tacoma, in which, “eight Tacoma police officers broke open the door of a Federal Way apartment with a battering ram. They had a search warrant, and they expected to find Matthew Logstrom, a young drug dealer living in a somewhat unkempt apartment. Instead, they awakened Kathleen Mancini: an older nurse living in a well-kept home, who had been sleeping after working the night shift. The police nevertheless handcuffed Mancini and took her, without shoes and wearing only a nightgown, outside while they searched.” Oops. For cinema’s greatest case of mistaken identity, see here. (Mostly Not Suitable For Work?) Obviously, you’re not a golfer.
- NFMA Advanced Webinar Series
- NABL Tax Sessions at The Institute: Virtual 2021
- NABL Releases an Update to the Crafting Disclosure Polices Paper.Libor Doesn’t Have to Mean Libor.
- Study Examines How Clean Air Act Affects Municipal Bond Market.
- And finally, WHEEEEEE!!!! is brought to us this week by Menges v. Department of Transportation, in which the court sets the scene with the positively Hemingwayesque, “It was daylight, the weather was clear, the pavement was dry, and conditions were normal.” That is, until a semi-truck “took the Avenida Pico exit at 55-60 miles per hour,” “continued down the quarter-mile long off-ramp,” “swerved to the left, straddled a curb, and then sideswiped a vehicle stopped at the bottom of the off-ramp waiting to turn,” “then crashed through a light standard, traveled into the intersection, and broadsided a car.” Fortunately the driver was a graduate of the BCB School of Implausible Deniability and “denied any recollection of the accident or the moments leading up to it.” We’ve never been more proud.
- SEC Proposes Amendments to Reg ATS for Government Securities ATSs.
- The Biggest Names in Municipals Reflect on an Unprecedented Year.
- 3-D Accounting: Developments in Debt Disclosures and Derivative Instrument.
- Farmers Bank & Trust v. Homestead Community Development – Court of Appeals holds that bank, which contracted with city for a loan guaranty on behalf of community development group, was bound at its peril to check city’s budget and accounts to verify that city had appropriated necessary funds to pay the guaranty, and thus city’s failure to allocate such funds precluded city from having to pay the guaranty pursuant to the Cash-Basis Law and the Budget Law.
- Davis v. Fresno Unified School District – Court of Appeal holds that taxpayer’s action against school district and contractor, which challenged contracts for construction of a middle school, was a reverse validation action to determine validity of district’s decision combined with a taxpayer’s action to restrain or prevent an illegal expenditure of public money, and was rendered moot after contracts were fully performed.
- And finally, Great Moments In Judicial Underreach is brought to us. this week by AEP Texas Central Company v. Arredondo, in which no less an authority than the Supreme Court of Texas gifted us with the following timeless legal insight, “Removal of a stub pole involves pulling it out of the ground and returning it back to the yard, and filling the hole up with dirt.” And filling the hole up with dirt. Next week we’ll fill you in on the California Supreme Courts lightbulb changing directive. Stay tuned.
- Ed. Note: We have absolutely no idea why we agreed to publish today, given that this is a time for faith, family, solemn reflection, and mayonnaise-procurement. We refer, of course, to National Sandwich Day. And now, a moment of silence for BCB’s patron saint, John Montagu, 4th Earl of Sandwich.
- Goldman, Citi, BofA, Others to Face Muni Bond Price-Fixing Suit.
- Fitch Ratings: ESG in Public Finance 2020 White Paper
- Treasury Publishes Updated FAQs – Coronavirus Relief Fund Payments for State, Local, and Tribal Governments – Ballard Spahr
- Coronavirus Relief Fund: The Prime Recipient Perspective – GFOA
- BDA and Greenwich Associates Partner on Research Report – Fixed Income in an Unprecedented Year
- Introducing the Fitch Analytical Comparative Tool (FACT) D-Trend for U.S. State Demographic and Economic Analysis (Description and User Guide)
- Real Estate Recovery, LLC v. Branson Hills Facility Infrastructure Community Improvement District – Court of Appeals holds, as a matter of apparent first impression, that – in light of the controlling provisions of the CID Act and the Jones-Munger Act – assessments levied or imposed by a community improvement district against property after a post–third-offering tax sale survive, such as to impose a continuing lien on the property.
- And finally, I Believe You’re Thinking of Sea Captains is brought to us this week by Bauer v. County of Erie, in which driver was rear-ended in a snowstorm. Rear-endin’ dude got out to check on things and offered driver a lift. Driver declined, stating his intention to stay with his car. Cut to three days later, when driver is found frozen solid in said car. We’re aware of captains bravely going down with their ships, but had no idea this practice also applied to cars. Maybe the guy’s first clue should have been the absence of a string quartet playing “Nearer My God to Thee” on his hood.
- GASB Hosting Series of CPE Webinars on the Preliminary Views, Revenue and Expense Recognition.
- How to Account for Capital Assets: GFOA Webinar
- Fitch Ratings Updates Coronavirus Scenarios for U.S. State and Local Tax-Supported Issuers.
- Taxing Disclosures: Municipal Securities Issuers and COVID-19
- A Technology Solution For Muni Bond Disclosure.
- Citigroup Sees Election as Bullish for Munis No Matter Who Wins.
- And finally, I’d Feel Much More Comfortable If You Just Went Ahead and Robbed The Place is brought to us this week by Rawson v. Recovery Innovations, Inc., in which a Mr. Kenneth Rawson (as you do) “made comments about automatic weapons and mass murder to a bank teller.” “When Rawson re-entered the same bank the next day, the bank employees called the sheriffs.” After Mr. Rawson was disarmed and involuntarily committed, he denied having any problem other than “the bank and police misunderstanding.” Oh, that little misunderstanding. While committed, Mr. Rawson was, “argumentative and denied having a mental illness, denied needing antipsychotic medications, and denied having suicidal or homicidal ideations,” which sounds to us very much like the typical BCB employee performance review.
- SEC Charges Charter School Operator and its Former President With Fraudulent Municipal Bond Offering.
- NABL: The Bond Lawyer – Summer 2020
- Fundamentals of Local Government Budgeting: GFOA Webinar
- Dechert LLP v. Pennsylvania Department of Community and Economic Development – Commonwealth Court holds, as a matter of first impression, that the movement from an expired zone into an active zone is not grounds for deeming a business unqualified for the tax benefits under the KOZ Act, assuming the business qualifies under the KOZ Act and meets the express relocation requirements.
- Board of Education of Richland School District No. 88a v. City of Crest Hill – Appellate Court holds that Tax Increment Allocation Redevelopment Act for redevelopment of blighted property did not allow city to jump a 234.9 foot portion of natural gas right-of-way, located in unincorporated excluded area of approved tax increment financing (TIF) district, to establish required contiguity between two parcels, and, thus, financing district was not contiguous.
- And finally, Great Moments In The Mystifying Use (And Abuse) Of “Quotation Marks” is brought to us this week by Baltimore City Police Department v. Esteppe, in which the court informed us that, “In March 2012, Ms. Chelchowski threatened Mr. Esteppe to the effect that she had ‘cop friends’ and that he was ‘going down.’ Mr. Lewellen was one such ‘close’ friend, whom Ms. Chelchowski had known ‘for years.’ Later that day, Mr. Lewellen and several other officers ‘busted in’ through Mr. Esteppe’s front door and executed the search warrant.” Oh, a “close” friend you’ve known “for years?” We suddenly have the urge to take a “fork” and “stab” someone in “the eyeballs.”
- Ed. Note: Welcome to possibly the most useless issue of the newsletter to date, which is truly saying something. Some combination of plague and pestilence, standard-issue summer doldrums, and pre-election paralysis has resulted in a drastic dearth of muni market developments. Rather than consider the sorry landscape of weekly public finance publications, we invite you to enjoy the fact that your children are back in school, to congregate at your favorite bars and restaurants, and to mingle with the masses at sporting events, concerts and festivals. Oh. Wait. Never mind.
- Forget Pension Obligation Bonds. Two Cities Are – No Joke – Leasing Their Streets To Fund Pensions.
- Novogradac 2020 Credit and Bond Financing for Affordable Housing Virtual Conference.
- Platte County v. UMB Bank, N.A., Trustee of Transportation Refunding and Improvement Bonds (Zona Rosa Retail Project) Series, 2007 – After default of revenue bonds, Court of Appeals holds that County had absolutely no obligation to pay the revenue shortfall on the debt service, despite County’s agreement in the Financing Agreement to annually consider appropriating funds to do so; interesting discussion of the role of moral obligations as credit enhancements.
- And finally, With Fans Like These, Who Needs Drive-By Shootin is brought to us this week by Lona v. City of Fullerton Police Department, in which we learned that the Fullerton Tokers Town criminal street gang has adopted a truly unlikely mascot: the California State University Fullerton soccer team. We kid you not. In fact, the People v. Fullerton Tokers Town gang injunction, explicitly prohibits alleged gang members from wearing CSUF clothing and insignia. We imagine that the CSUF soccer squad is simultaneously, a) bewildered by the presence of this particular fan-base in the stands and 2) deeply heartened by the abject terror struck in the hearts of the hated UC Irvine (Go Anteaters!) contingent.
- NABL: Disclosure Industry Working Group Publishes Paper on Timely Disclosures
- The Lunacy Of Using City Streets To Collateralize New Municipal Bond Deals.
- Better Data Can Highlight Climate Exposure: S&P Focus On U.S. Public Finance
- Morning Zoo Radio and Cash Flow Relief for Issuers: Part 1 – Squire Patton Boggs
- Morning Zoo Radio and Cash Flow Relief for Issuers: Part 2 – Squire Patton Boggs
- Williams v. Bank of Ozarks as Trustee for Registered Owners of $4,400,000 Benton County Property Owners’ Improvement District No. 7 Special Assessment Bonds – Court of Appeals holds that failure of bank, as trustee for bondholders, to collect special-assessment taxes, after the special-assessment bonds issued by property owners’ improvement district to fund infrastructure improvements for residential subdivision had matured, did not constitute a material alteration that relieved guarantors from liability under guaranty agreements, under which guarantors had guaranteed payment of the principal and interest due on the bonds.
- And finally, Great Moments In Misplaced Lyricism is brought to us this week by Estate of Casillas v. City of Fresno, in which the court noted that, “the sands of municipal finances can shift swiftly in times such as these.” We checked with the GFOA and it agreed that it had neglected to incorporate the shifting sands of time into required financial reporting. Working group being formed. Volunteers needed.
- Ed. Note: The Nothing To See Here Folks, Please Move Along Dog Days have finally arrived, albeit a month late this year. Although there’s no telling if the resumption of meaningful activity will resume in September as per usual, we can assure you of one thing: you’ll be the last to know.
- LIBOR Summer Update: Regulatory Scrutiny Heats Up on Transition Preparedness – Sherman & Sterling
- SEC Publishes OCIE Risk Alert on LIBOR Transition Preparedness Examination Initiative: Dechert
- GFOA Disclosure Update.
- GFOA School District Roundtable on COVID-19 Financial and Related Impacts. and Fiscal First Aid for School Districts: GFOA Webinar.
- Interesting Supreme Court of Michigan tax foreclosure case here.
- And finally, Great Unsolved Lexicographical Mysteries Of Our Time is brought to us this week by Borelli Estate of Giordano v. Renaldi, in which we were baffled by the following from the opinion. “At the time he was operating his vehicle on Route 67, Ramirez had activated a set of lights that were affixed to the undercarriage. The lights are commonly referred to as underglow lights, the use of which … are illegal in this state.” This is an original statement by the Supreme Court of Connecticut, not a quote. WHY THE ELLIPSIS? Perhaps even better, and from the same opinion, comes this, “Renaldi sped up his vehicle in an attempt to lessen the distance between the two vehicles.” Oh, “to lessen the distance.” That explains it. Given that this was a police chase, we had naturally assumed that, “Renaldi sped up his vehicle” in an attempt to maximize the feel of the wind blowing through his hair.
- GASB Requests Input on Proposals to Improve Key Components of Government Financial Reports.
- GASB Adds Resources to Emergency Toolbox Addressing Issues Arising from COVID-19 Pandemic.
- NFMA Cybersecurity White Paper.
- NABL Submits Letter to IRS and Treasury.
- LIBOR Summer Update: Regulatory Scrutiny Heats Up on Transition Preparedness – Sherman & Sterling
- SEC Identifies LIBOR Preparedness as an Examination Priority – Sherman & Sterling
- NABL: SEC, MSRB, FINRA to Hold Virtual Program for Municipal Advisors
- GFOA 25th Annual Governmental GAAP Update: Webinar
- Weiss v. People ex rel. Department of Transportation – Supreme Court of California holds that Eminent Domain Law motion for requesting a ruling on evidentiary or other legal issue affecting determination of compensation would not be imported into inverse condemnation proceedings, disapproving Dina v. People ex rel. Dept. of Transportation.
- And finally, Capture the Tort Claim is brought to us this week by Erickson v. Canyons School District, in which high-school student Juel [sic] Erickson was attending an assembly in the high-school gym. “Before the assembly, a supervisor confiscated a home-made flag, fastened to a pole, from junior class officers and placed it on the east side of the gym. When a student retrieved the flagpole, the supervisor instructed another student to reconfiscate it. That student placed the confiscated flagpole underneath the bleachers, from where yet another student retrieved it. Student then climbed to the top of the bleachers and threw the flagpole into the crowd of students below, striking Erickson in the head and knocking her unconscious. No high school employee called an ambulance or provided Erickson with any medical care. Erickson thereafter ‘suffer[ed] from neck injuries and post-concussive symptoms.’” Among the many questions raised by this incident, one stands out: WHAT IN THE NAME OF ALL THAT IS HOLY WAS ON THAT FLAG?!
- Ed. Note: We will be off next week, returning 7/28.
- Franzen v. Downtown Development Authority of Atlanta – Supreme Court of Georgia validates bonds for major downtown redevelopment project in which bonds would be issued to developer and serviced solely by infrastructure fees collected by the city. Ed. Note II: This issuance was easily validated despite lengthy, detailed objections, due to the fact that Issuer’s Counsel carefully lined up the relevant interlocking/overlapping constitutional and statutory provisions required for this type of transaction. Thus, this ruling may serve as a useful guide to structuring similar deals.
- Howard Jarvis Taxpayers Association v. Bay Area Toll Authority – Court of Appeal holds that increase in region’s tolls to cross state-owned bridges, which was an increase approved by simple majority of voters at election called pursuant to bill passed by the state legislature, was a charge imposed for entrance to or use of state property, and thus it was not a “tax” as defined by state constitution’s provision on majorities required for tax increases.
- When More Banks Compete for Municipal Debt, States and Towns Win.
- And finally, Oh, Expedited You Say? In That Case… is brought to us this week by Saylor v. State, in which the court noted that “Saylor filed 16 separate tort claims.” This led Your Editor down memory lane to the time a girlfriend – clerking for a federal judge – brought home a filing from an inmate with the immortal title, “Expedited Motion to Kiss My Ass.” The source of the urgency remains unclear, but ya’ gotta respect the spirit.
- GASB Proposes Concepts for Recognition of Financial Statement Elements.
- GASB Requests Input on Revenue and Expense Recognition Proposals.
- GASB Releases Accounting and Financial Reporting Guidance Related to the CARES Act and Coronavirus Diseases.
- SEC Puts LIBOR Transition Testing in Focus: Latham & Watkins
- MSRB Modifies Rules to Align with Reg. BI: Cadwalader
- BDA Calls SEC’s Municipal Advisor Exemption “Dangerous.”
- Investors Want Details on Bonds that Pay for Police Misconduct.
- And finally, Should Probably Keep An Eye Out For That One (so, so sorry) is brought to us this week by Sawyers v. Norton, in which,, “[Inmate] was arrested for [as one does] having set fire to an art gallery under the belief that God had told him to ‘cleanse the business of witches with fire.'” In custody, “inmate repeated, strange, and self-harmful acts over the days leading up to the eye incident.” (Foreshadowing!) Jailers were “beseeched” (that turned Biblical quickly) by medical professionals to monitor inmate carefully. Thus, jailers had a little explaining to do following the “eye incident.” The incident? So glad you asked. Inmate PULLED HIS OWN EYEBALL OUT OF ITS SOCKET. “Inmate vividly remembers removing his own eye to prevent it from being ‘harvested by the witches,’ but he doesn’t recall anything else from earlier that day.” Art gallery should probably consider requiring some kind of waiver.
- Tax-Exempt Bond Tools for Governments Facing Cash Flow Challenges.
- Developing Public Finance Concerns in the COVID-19 Era.
- GASB Provides Guidance to Assist Stakeholders with Implementing Its Pronouncements.
- GASB Issues Guidance on Accounting for P3s.
NABL Webinar: Financings of Charter Schools
- School Facilities Implications for COVID‐19 Response: Orrick
- Bring Back Tax-Exempt Advance Refundings.
- And finally, Death With Indignity is brought to us this week by Bailey v. City of Leeds, in which the court listed the items removed from a graveyard by city employees thusly, “concrete or ceramic angels, statutes, or planters placed on a headstone or near a headstone or footstone; glass or transparent angels or crosses that illuminated and were hung from “sticks”; “shepherd’s hooks” on which were hung items such as birdhouses, baskets containing silk flowers, or wind chimes; and small vases, either freestanding or that had been placed on a headstone.” Not exactly Arlington National, eh? Cedar Grove Cemetery, where good taste goes to die.
- Disclosing COVID-19 Risks and Impacts in Connection with Municipal Securities.
- MSRB Publishes Summary of State and Local Disclosures to Its EMMA System about Impact of COVID-19.
- MSRB Provides Temporary Regulatory Relief to Market Participants Affected by COVID-19.
- NABL Sends Suggestions for COVID-19 Relief to Congress & Treasury.
- GFOA Fiscal First Aid Resource Center.
- When Can Bond Investors Lie to Banks?
- Municipal Bond Defaults Will Be A Wake-Up Call For Bond Insurers.
- Community QE – An April Game Plan for States and Cities.
- Federal Tax Law Considerations for Financings COVID-19 Costs on a Tax-Exempt Basis: What Issuers Need to Know – Orrick
- Preston Hollow Capital, LLC v. Bouldin – In Preston Hollow’s suit against bond guarantor, District Court holds that Preston Hollow must disclose the citizenship of each individual comprising Preston Hollow’s 66 members – including partnerships, LLCs, trusts, pension benefit plans, and retirement plans – in order to establish diversity jurisdiction.
- And finally, I’ll Give You Some Longevity To Infer is brought to us this week by Cochegrus v. Herriman City, Rosecrest Village Homeowners Association, Inc., in which the Supreme Court of Utah stated, “We conclude that under the circumstances here, the durable, nontransitory nature of the unsafe condition itself is evidence from which a factfinder could infer longevity.” Is it possible for a sentence to wear a little monocle and waistcoat while speaking in a haughty British accent? I think we can safely infer that it is.
- GFOA Debt Committee Releases Urgent Member Guidance for COVID-19 Debt Service and Disclosures.
- COVID-19 and Secondary Market Disclosure: Butler Snow
- Orrick: Waivers, Deferrals and Changes to Tax-Exempt Bonds During COVID-19
- COVID-19 and Municipal Securities Disclosure.
- GASB Issues Guidance for Transition from Interbank Offered Rates.
- Helping Public Entities Navigate the COVID-19 Financial Crisis: Squire Patton Boggs
- S&P: All U.S. Public Finance Sector Outlooks Are Now Negative
- Tax Anticipation Notes: An Option to Alleviate Municipal Cash Flow Shortages Due to the COVID-19 Outbreak – Day Pittney
- A Proposal for the Coronavirus Anticipation Note (CAN).
- And finally, This week’s episode of Honolulu’s Finest is brought to us by Hyun Ju Park v. City and County of Honolulu, which features these glorious sentences, “After consuming seven beers over the course of two hours, one of the officers, Anson Kimura, decided to inspect his personal revolver, which the department had authorized him to carry. He apparently did so to ensure that it was loaded.” The perforated bartender would now like to take this opportunity to ensure you that it was indeed loaded. She’s ok now, but was understandably aggrieved. Mahalo for nothing, officer.
- Ed. Note: Firms across the country have been posting state-specific summaries of Covid-19 rules and regs. As these are too voluminous for individual inclusion here, please visit this site and search for your jurisdiction.
- SEC Provides Additional Temporary Regulatory Relief and Assistance to Market Participants Affected by Covid-19.
- Fitch Ratings Updates Public Sector, Revenue-Supported Entities Rating Criteria
- NABL Asks IRS to Help with TEFRA, Debt Repurchase Problems: Squire Patton Boggs
- NABL Pushing for Municipal Bond Relief Measures in Response to COVID-19: McNeese
- Muni Market Gets Support from Fed as Part of Wide Effort to Curb Virus Fallout, Self-Regulator Warns to Review Compliance.
- Federal Reserve Considering Additional Support for State, Local Government Finance.
- Senate Stimulus Takes Steps to Add Liquidity to Municipal Market.
- The Fed Enters the Municipal Bond Market to Lend Cities a Hand, but Will It Be Enough?
- CARES Act: Municipalities – Miller Canfield
- Webinar: Rating Agencies Speak on COVID-19
- And finally, Swimming With Salmon is brought to us this week by County of Cedar v. Thelen, in which a rancher had the genius idea of expanding his pasture land by “erecting electric fence within ditch right-of-way along county road.” The rancher had “erected the same type of fence in the same location at least seven times” and had already been convicted of three misdemeanors by the time the Supreme Court of Nebraska was called into action. One might think that multiple criminal convictions would serve as a deterrent. One would be wrong, as rancher “has indicated that he will continue to disregard notices in the future because the fine is only $25.00, indicating cheap pasture rent.” But – having discovered this magic loophole – why stop there? Aquaculture in the county pool! Drop the kids off for daycare at the county jail! The possibilities are delightfully endless.
- Ed. Note: We’re all gonna die! Eventually. In the course of assembling this week’s newsletter, we came across a few Covid-related items that may not necessarily be pertinent to your practice, but that might be of value to clients or other members of the firm. These include: federal banking updates, force majeure, employment, and higher ed.
- The SEC’s Fixed Income Market Structure Advisory Committee Approves Two New Recommendations.
- Talking about The Thing: Squire Patton Boggs
- Fitch Webinar: Coronavirus Effects for U.S. States and Local Governments
- Muni Market Support for Federal Reserve Intervention Grows.
- BDA Urges Fed to Take Action to Assist Municipal Market.
- And finally, Location, Location, Location? is brought to us this week by Hochstein v. Cedar County Board of Adjustment, in which the Supreme Court of Nebraska weighed in on a neighborhood dispute. Neighbor A owns a “4,500 animal unit feedlot.” Neighbor B owns the 900 acre adjoining farm, on which it applied to build a home. Now one might expect this dispute to concern the mitigation of what must be the unthinkable stench emanating from the feedlot. Nope. Neighbor B was petitioning to build his home CLOSER to the stench. And at no point did the opinion bother to explain, a) WHY Neighbor B wanted to cozy up to the feedlot, or 2) WHY Neighbor A would begin to care. Goddamn you Nebraska Supreme Court! We’ll be circulating a petition.
- Ed. Note: Anything interesting going on where you are? Yeah, here neither.
- GASB Issues Proposal Addressing Certain Component Unit Criteria and Section 457 Deferred Compensation Plans.
- MSRB Addresses Supervisory Requirements in Light of Coronavirus: Cadwalader
- The Bond Lawyer – Winter 2020
- Treasury Inspector General for Tax Administration Report on Exempt Bond Promoter Oversight.
- Fitch Ratings: Coronavirus Effects for U.S. States and Locals Still Developing
- And finally, Time To Panic! is brought to us this week by Ogier v. City of Bellevue. No, this is not about the Wuhan Virus, but rather something much, much more terrifying. We are referring, of course, to missing manhole covers. In Ogier, plaintiff’s car got a bit scuffed up when she drove it into an open manhole cover. The Department of Public Works couldn’t account for the whereabouts of a 250 disc of cast iron and – rather cavalierly – testified that, “Occasionally manhole covers will vanish.” Wait! How do they vanish?! Where do they go?! What are they planning?! We need to drop all this virus nonsense and focus the entire might of the federal government on getting to the bottom of this. We’ll need someone to lead up the effort. Don’t know, uh, Pence?
- GASB Issues Proposal to Enhance Concepts for Notes to Financial Statements.
- MSRB to Enhance Transparency of Timing of Issuer’s Annual Disclosures on the EMMA Website.
- MSRB Webinar: Continuing Disclosures and the EMMA® Website.
- A Bid to Shame Muni-Disclosure Derelicts Draws Industry’s Fire.
- MSRB Compliance Corner.
- Climate Change Is Coming to Your Hometown Bonds.
- Bondholder Committee On Behalf of Owners of Quad Cities Regional Economic Development Authority First Mortgage Revenue Bonds Series 2013A v. Sauk Valley Student Housing, LLC – District Court dismisses suit brought by Bondholder Committee against underwriters and trustee alleging fraudulent sale and improper management of student housing bonds, holding that the nature of the claims brought, as well as the relief sought, would require Plaintiff’s members to provide provide individualized evidence regarding their damages.
- And finally, Employee Of The Month is brought to us this week by Mark v. City of Hattiesburg, in which a court clerk was “terminated and reassigned [emphasis added] after being accused of hiding paperwork, shredding documents, accepting bribes in exchange for dismissing tickets, fines, and warrants, and engaging in inappropriate contact with judges.” Terminated? Sure. Reassigned? I’m going to need to remember that one for future use in my frequent out-of-office email replies. Has a much nicer ring to it than my usual, “remanded to custody.”
- Special Assessment Debt: S&P Criteria Implementation Summary
- New Form 8038-CP Just Released: Hawkins Advisory
- SEC Proposes Amendments to the Advertising and Solicitation Rules: Dechert
- Issuers Oppose Broad Interim Disclosure.
- GFOA Releases New Report on Cyber Security.
- Climate Risk Disclosure is Both a Challenge and Opportunity for Issuers.
- NFMA Annual Conference in New Orleans.
- Substantive Puerto Rico bankruptcy bondholder case here, for those of you into that kind of thing.
- And finally, Such A Modern Way To Die is brought to us this week by Hedayatzadeh v. City of Del Mar, in which, “On the night at issue, Javad and his friends walked around the guardrail at the end of 13th Street, down an unimproved dirt embankment, and crossed the train tracks. The group then walked northbound on the west side of the tracks to a spot where they sat and smoked marijuana.” So far, all in good fun. But then, “Javad noticed a freight train coming from the south and told his friends that he was going to use his phone to take a video ‘selfie’ of himself next to the train. As Javad was near the train tracks taking the selfie, he was struck by the train and killed.” Although his final one, you gotta admit that that’s one hell of an Instagram post.
- Fitch Ratings 2020 Outlook: U.S. Public Finance (Outlook Compendium Report)
- The Muni Bond Market’s Biggest Credit Risk: Climate Change.
- Final Opportunity Zone Regulations Provide Some Much-Needed Clarity.
- GASB 87: You Inventoried Your Leases, Now What? Practical Steps for Implementation and Lessons Learned.
- San Diegans for Open Government v. Public Facilities Financing Authority of the City of San Diego – Supreme Court of California holds – as nonparty to refinancing contract for remaining debt on bonds to finance construction of stadium – nonprofit taxpayer organization did not have private right of action under statute prohibiting public officials from having financial interests in public contracts, and thus, organization lacked standing to sue under the statute to avoid the contract on conflict-of-interest grounds; disapproving precedent. See also, CALmatters Commentary: California Supreme Court Helps Insider Dealing.
- Indian River County, Florida v. United States Department of Transportation – Court of Appeals holds that county’s interests were within the zone-of-interests protected by statute governing tax-exempt private activity bonds (PABs) to finance qualified highway or surface freight transfer facilities and, therefore, the county’s complaint raised claims that were cognizable under the Administrative Procedure Act, but also held that the Department Of Transportation permissibly and reasonably determined that the project qualified for tax-exempt PAB financing and that the Environmental Impact Statement for the project adhered to the requirements of NEPA.
- And finally, Great Moments in Flammable Euphemisms is brought to us this week by Massenburg v. City of Petersburg, in which some unpleasantness ensued when a neighborhood fire hydrant proved inoperable. It was our impression that that dude burned up real good, but the Supreme Court of Virginia was kind enough to inform us that that dude had, in fact, died from “thermal injuries.” Which took us back to day of the space shuttle Challenger unpleasantness, when we gazed up to the sky and thought that those dudes had blowed up real good, only to be informed by the president that those dudes had, in fact, “slipped the surly bonds of earth to touch the face of god.”
- Ed. Note: We will be off next week, returning 12/31 with a double dose of drivel to cap off the year.
- Broker-Dealers Participating in Primary Offerings of Municipal Securities: Prepare for Implementation of New Rules – Jones Day
- BDA Delivers Strong Message to SEC: Reject the Exemptive Order Outright.
- NFMA Responds to SR-MSRB-2019-13.
- Fitch Ratings: U.S. State and Local Governments to Hold Steady in 2020
- Wall Street’s Muni-Bond Bankers Brace for a Record Year in 2020.
- King County v. King County Water Districts Nos. 20, 45, 49, 90, 111, 119, 125 – Supreme Court of Washington holds that state statute, granting water-sewer districts the power to acquire necessary property rights to carry water along roads, and to lay sewer pipe along roads, did not permit water-sewer districts to use county’s rights-of-way without franchise.
- And finally, This Week In Delightful Understatement is brought to us this particular week by Alvarez-Mena v. Miami-Dade County, in which a couple “arrived at PreTech Academy in Miami, along with two of their children, to pick up their youngest child after his first day of preschool.” This Rockwellesque tableau somehow devolved into an altercation in which both parents ended up “arrested and charged with battery on a law enforcement officer, resisting an officer with violence, disruption of a school function, and breach of the peace.” Or, as the court described it, “A sequence of unfortunate events, the consequences of which were undoubtedly not envisioned by the Menas when they woke up that morning, resulted in their being involved in an altercation with Detectives Miguel Garcia and Evelyn Guas.” Indeed.
- GASB Proposes New Implementation Guidance to Assist Stakeholders with Application of its Pronouncements.
- SIFMA: Proposed Exemptive Order Related to Muni Advisors
- SIFMA Says SEC Is On ‘Wrong Path’ With Advisor Exemptive Order.
- MSRB Proposes Enhancements to EMMA Website
- Muni-Bond Ratings Are All Over the Place. Here’s Why.
- IRS Issues Private Letter Ruling Allowing Tax Equity Financing with a Regulated Utility Taxpayer.
- Fitch Exposure Draft for U.S. Affordable Housing Rating Criteria & Webinar
- “Small Claims Court” Lawsuits Could Cost Wall Street’s Credit Rating Agencies Billions.
- Herrick v. Jackson Hole Airport Board – Supreme Court of Wyoming holds that statute authorizing airport board to purchase “lands and other property” using revenue bonds allows purchase of both tangible and intangible property, which includes goodwill.
- And finally, Why Not In My Backyard? is brought to us this week by Town of Delaware v. Leifer, in which the town had to convince Mr. Leifer – at first gently, but then judicially – that he couldn’t hold a three-day music festival in his backyard. We’re just not seeing what part of, “off-site parking at a local school and rental of shuttle buses to transport attendees to the event site, a party tent for inclement weather, security at both the parking lot and event, $2,000,000 event insurance, 16 portable toilets, a 30–cubic–yard dumpster, EMTs on site and an ambulance on standby” is inconsistent with single-family residential zoning. Maybe we’re missing something.
- The Bond Is in the Mail: Muni Market’s New Way Around Trump Ban.
- A Missouri Bank is Using Tech to Secure Large Deposits from Public Entities.
- Regulatory Comments Stress Safe Harbors in Libor Transition.
- The Troubling Decline in City Revenue Growth.
- Matter of Trusteeship Created by Port Authority of City of St. Paul Relating to Issuance of Tax Exempt Senior Lien Parking Ramp Revenue Bonds (Fourth and Minnesota Parking Ramp Project) Series 2000-1 & 2000-7 – Court leaves unresolved the issue of whether Deed in Lieu of Foreclosure Agreement from Trustee of defaulted tax-exempt senior lien parking ramp revenue bonds and taxable subordinate lien parking ramp revenue bonds to Port Authority constituted a “sale” of the ramp and triggered certain rights and obligations owed to holders of taxable subordinated cash flow notes issued by the Port Authority. Time to tighten up the applicable docs.
- And finally, Oh, This El Camino is brought to us this week by McConnell v. Dudley, in which the Supreme Court of Ohio recounted the following, “A few minutes before 8:00 a.m. on September 18, 2013, Coitsville Township Police Officer Donald C. Dudley Jr. responded to a dispatch alert regarding a stolen vehicle, an El Camino. As Officer Dudley investigated, he located an El Camino that was being towed by a Buick sedan headed toward Youngstown. He pulled alongside the Buick and inquired about the El Camino, and the occupants replied that they owned it. Officer Dudley pulled behind the El Camino, and as he radioed for backup, the suspects unhooked the El Camino from the Buick and drove away in the Buick.” Apparently someone never read the classic,”Nonchalant Unhooking of El Caminos For Fun and Profit.”
- Trump Tax Cut Sets Off Boom in Once Sleepy Corner of Muni Market.
- When Summer Reading and Public Finance Tax Intersect – Tax-Exempt Bonds, Pop Culture, and the Town of Windthorst
- Electronic Disclosure, RIN 1210-AB90: SIFMA Comment Letter
- SEC Enforcement Annual Report: Retail Focus Raises Regulatory Risk for Investment Advisers
- NASBO State Expenditure Report.
- MSRB Investor Guide to ABLE Programs.
- And finally, Troy, Leningrad, Panama City Beach is brought to us this week by Classy Cycles, Inc. v. Panama City Beach, in which the court upheld a local ordinance prohibiting motorized scooter rentals. The court noted that, “The City is geographically small and crowded and is being besieged by inexperienced scooter drivers seeking amusement and driving in a dangerous manner.” Besieged? Motorized scooters? That’s what the Wehrmacht rode, right?
- FINRA Files for 4210 Effective Date Extension to March 2021.
- MSRB Proposes Changes to Content Outline for Muni Principal Exam.
- S&P Proposed Methodology For Rating U.S. Public Finance Rental Housing Bonds and S&P Request for Comment: Methodology For Rating U.S. Public Finance Rental Housing Bonds.
- S&P Credit Conditions: In The Mist Of Mixed Economic Signals, U.S. State And Local Credit Quality Remains Strong
- Are Taxable Advance Refundings Leaving Money On The Table?
- Fitch North American Project Finance: Lessons Learned
- Long v. Development Authority of Fulton County – Court of Appeals holds that hotel, office, and retail portions of project for which attorney general filed petition for validation of revenue bond authorized for issuance by county development authority were authorized under catchall provision of statute identifying projects that development authorities can finance.
- And finally, You Poor, Poor Bastard is brought to us this week by City of Alpharetta v. Hamby, in which Toby Hamby sued the city after he fell from atop an 18-foot retaining wall hidden in the woods, sustaining serious injuries. What was he doing in the woods, you ask? Dealing with a medical emergency. Would the court be good enough to gloss over or otherwise euphemize the medical issue in question. It would not. “Hamby was driving home when he experienced a sudden bout of colitis and soiled himself. He exited the highway at Mansell Road in Alpharetta looking for a place to clean up.” We’ve all seen our share of pharmaceutical ads, but nothing could possibly be more effective than, “If you or a loved one have experienced a catastrophic fall with your pants down while covered in fecal matter, you might want to ask your doctor about bunghola.”
- S&P Guidance | Criteria | Governments | U.S. Public Finance: Assessing U.S. Public Finance Pension And Other Postemployment Obligations For GO Debt, Local Government GO Ratings, And State Ratings.
- S&P Credit FAQ: How S&P Global Ratings Will Implement Pension And OPEB Guidance In U.S. Public Finance State And Local Government Credit Analysis
- Can Standardized Financial Data Help Government Save Money?
- New Private Delivery/Express Mail Address for Exempt Organizations Submissions (Forms 1023, 1024, 1024A, 1028, 8940 and Group Exemption Requests)
- Taxable Muni-Bond Sales Surge as Window Opens for Refinancings.
FASB and GASB to Cohost In Focus: Not-For-Profit and Governmental Accounting Webcast for Academics
- Advanced Tax Increment Finance Course.
- And finally, We Shall Not Abide This Insolence is brought to us this week by Stone v. Wright, in which a mother brought a claim against the deputy chief of police for false arrest, false imprisonment, and malicious prosecution. Ms. Stone was particularly incensed that she was accused of touching her child “in a rude, insolent or angry manner resulting in bodily injury.” Gotta say that we’re leaning in her direction here, as it has been our experience that the actions described above could best be characterized as “parenting.”
- Muni Bonds Face Climate Change. And Investors Are Ignoring the Risks.
- Local Muni Dealers Die Off as Wall Street Lands Most Deals.
- GASB Tackles Phaseout of Libor, Growth of P3s.
- Muni-Bond Investors Embrace Higher-Risk Issuers.
- CDFA to Host Free Webinar on 2018 CDFA Volume Cap Report.
- Advanced Tax Increment Finance Course.
- FINRA 2019 Advertising Regulation Conference.
- And finally, Unclear On The Concept, Kidnastics Edition, is brought to us this week by Jaquin v. Canastota Central School District, in which a kid enrolled in “Kidnastics” (thought we were making that up, didn’t you?) was instructed to jump from a gym mat. Per the court, “As the infant jumped, her feet did not lift off the mat, and she fell forward.” Wouldn’t technically be a “jump” then, would it? Acceptable descriptors for this incident include – but are hardly limited to – header, face-plant, and kersplat! Something tells us that Simone Biles ain’t too worried just yet.
- SEC Chairman Calls for Legal Bulletin on EMMA Disclosures: King & Spalding
- NFMA Seeks Comments on Draft Recommended Best Practices in Disclosure for Dedicated Tax Bonds.
- SEC Fixed Income Market Structure Advisory Committee (FIMSAC) Meeting.
- Cheatham I.R.A. v. Huntington National Bank – Supreme Court of Ohio holds, as a matter of first impression, that previously-accrued breach of contract claim did not automatically transfer to bondholder pursuant to statute upon purchase of bonds and that trust indenture did no automatically transfer breach of contract claim to bondholder upon purchaser of bonds.
- And finally, Lighten Up, Francis is brought to us this week by Preston Hollow Capital LLC v. Nuveen LLC, in which Judge Glasscock (we’re not making that up) opined as follows, “Law (and particularly its more flexible component, equity) is a creature of nuance and fine-but-significant gradations, and pithiness, like garlic, may both enhance the savor of a discourse, and at the same time mask its subtle flavors.” Never in the history of American jurisprudence has there been a man in more dire need of a wedgie. Then again, given that name, we’re rather certain that he’s no stranger to that particular briar patch.
- GASB Proposes Omnibus Statement Addressing Wide Range of Practice Issues.
- For All But the Lowest-Rated State and Local Governments, Buying Bond Insurance is a Bad Deal.
- The SOFR Primer, by SIFMA Insights.
- Multi-Asset Funds, Aggregating, Gentrification And Abuse: IRS Still Has A Lot On Its OZ Regs Plate.
- Carbon Capture Legislation – Potential for a New Type of Exempt Facility Bond: Squire Patton Boggs
- And finally, Perhaps We Won’t Be Relocating After All is brought to us this week by Beltran-Serrano v. City of Tacoma, in which we learned that a combination of two factors are likely to result in getting shot in the back: 1) “mental illness;” and b) “limited English proficiency.” As those are the defining features of the BCB workforce, we’ll be steering clear of Tacoma for now. The court’s opinion did include this gem, “As Officer Volk approached Beltran-Serrano, he laid down on his stomach and started digging in a hole. Officer Volk greeted Beltran-Serrano, but he looked up at her blankly and kept digging in the hole.” Eerily similar to the average BCB workplace communication.
- Ed. Note: It has come to our attention that we somehow managed to completely skip Issue 26 of the newsletter and, rather, went directly from Issue 25 – published on 6/25 – to Issue 27 – published on 7/2. Preliminary findings from our investigation into this incident are as follows: We’re idiots.
- Ed. Note II: We have officially (It’s official when we say it’s official!) entered the traditional summer financial market doldrums and, consequently, won’t have much to report in the coming weeks. We invite you to take this extra time to contemplate your poor choices w/r/t weekly subscription-based public finance products. Wait! No! More time with your families! More time with your families! Always screw that one up.
- Unanswered Questions from the April Regulatory Guidance on Opportunity Zones: Pepper Hamilton.
- How Federal Tax Reform Is Changing Government Borrowing.
- Bank Not Covered for Claims Over Alleged Bond Market Manipulation.
- And finally, A Firm Grasp of the Obvious is brought to us this week by Fiano v. Old Saybrook Fire Company No. 1, Inc., in which the Captain of the local fire department testified that, “Depending on the incident, it can be advantageous for firefighters to be at the firehouse so that they are available to respond immediately to any calls that come in.” You’re in good hands, Old Saybrook.
- GASB Proposes Guidance On Internal Revenue Code Section 457 Deferred Compensation Plans.
- SEC Approves Amendments Aimed At New Issue Transparency.
- BDA Submits Response to SEC Regarding Recent PFM Request for Interpretative Relief.
- BDA Submits Letter in Support of Recent FIMSAC Proposal.
- Governmental Accounting Standards Board Proposes Updated P3 Guidelines: Ballard Spahr
- Supreme Court Removes Obstacle For Plaintiffs Asserting Takings Claim In Federal Court: Day Pitney
- Knick v. Township of Scott, Pennsylvania – Supreme Court of the United States holds that a property owner has an actionable Fifth Amendment takings claim when the government takes his property without paying for it, and therefore may bring his claim in federal court under § 1983 at that time.
- And finally, Post-Apocalypse Dystopian City of Brunswick, Department of Public Works is brought to us this week by City of Brunswick v. Smith, in which the court ruled that there was, “no evidence to demonstrate that the pothole was created, concealed, or maintained willfully or wantonly.” Quoi? Say again. Our day was brightened immeasurably via imagining scenarios in which a pothole could/would be willfully and wantonly created, concealed, and maintained. Enjoy!
- GASB Issues Implementation Guide on Fiduciary Activities.
- In Major Blow To Its Opponents, SEC Pay-to-Play Rule Survives D.C. Circuit Challenge.
- MSRB Podcast: Municipal Advisor Considerations in Preparing for Examination
- Nonprofit Colleges, Universities Must Promptly Report ‘Triggering’ Events: McGuireWoods
- Atlanta Environmental Impact Bond Breaks into Public Market.
- SIFMA’s LIBOR Transition Briefing, July 15 in NYC
- New York Republican State Committee v. Securities and Exchange Commission – Court of Appeals upholds SEC pay-to-play rule governing political contributions of FINRA members who solicited government officials for investment advisory services contracts.
- And finally, Sure, It’s Not My Favorite Vehicle Either, But Still is brought to us this week by Reiber v. County of Gage, Nebraska, in which a dude was arrested for “making ‘punching-type motions’ toward occupants of a minivan.” The transcript of the initial interview with the arrestee produced this priceless exchange: “How do you spell your last name, Chad? Figure it out, you’re an investigator, investigate.” Touche. A question regarding a prior arrest was met with this succinct reply, “Terroristic threats, stabbed myself nine fucking times in the fucking chest … yeah, shit happens.” Indeed it does, Chad. Indeed it does.
- GASB Proposes Guidance on Public-Private and Public-Public Partnership Arrangements.
- BDA Submits Comment Letter on TRACE Pilot/Corporate Bond Block Trade Dissemination.
- States, Cities Forgo Projects to Keep Glittering Balance Sheets.
- S&P: As U.S. State Debt Levels Moderate, Transportation Funding Takes Center Stage.
- Opportunity Zones: Second Round of Proposed Regulations Are Helpful for Agribusiness and Forestry, but Refinements Are Needed to Support Revitalization of OZs in Farm and Timber Country
- And finally, Practical Practice Tip of the Week is brought to us this particular week by Webb v. Town of Saint Joseph, in which a small-town mayor was absolved of various shenanigans due to the fact that his misbehavior was the result of “poor decisions and bureaucratic dysfunction,” rather than “municipal policy established by an authorized policymaker.” “Honey, sleeping with your sister was a poor decision, not an established policy, so we’re all good, right?” So easy!
- IRS Notice 2019-39: Corrected!
- Fitch U.S. College and University Rating Criteria Finalization.
- Fitch Ratings Updates Availability-Based Project Rating Criteria.
- CDFA to Host Webinar on Opportunity Zones and Affordable Housing with HUD, USDA.
- Development Authority of Cobb County v. State – Supreme Court of Georgia holds that statute defining projects that development authorities could fund permitted county development authority to issue bonds for the construction of a facility that would be leased to a grocery store, despite argument that grocery store, which would replace a nearby store, was not essential to the development of trade, commerce, industry, and employment opportunities.
- And finally, Unclear on the Concept is brought to us this week by Garza v. Harrison, in which an apartment complex hired a resident to work as a “Courtesy Patrol Officer.” Ah, that’s nice in a wholesome “Help you with your groceries, ma’am?” kinda way. That is until the officer pumped five rounds through the windshield of a visitor’s vehicle. What’s the exact opposite of “courteous?” “Discourteous.” Right. That somehow doesn’t quite seem to capture the nature of the encounter. “So rude of me to obliterate your chest cavity. Wherever are my manners?”
- IRS Notice 2019-39: Perpetuating the Gift of Targeted Bond Programs, but Creating Confusion about the Tax-Exempt Current Refunding of Build America Bonds.
- GASB Proposes Guidance on Cloud Computing and Similar Subscription-Based IT Arrangements.
- MSRB Seeks Comment on Rule G-23 on Activities of Financial Advisors.
- ARRC Releases Recommended Fallback Language for Floating Rate Notes and Syndicated Loans. [‘Bout as wonky as it gets.]
- Hawkins Advisory: New Current Refunding Guidelines for Bonds Issued Pursuant to Special Authorizations.
- And finally, Why Don’t They Let the Grandkids Visit No More? is brought to us this week by Estate of Guyaux v. Township of North Fayette, in which the court ordered the Sheriff’s Office to remove all firearms from a dilapidated dwelling. Walk in and grab a few guns, right? So, so wrong. The department “worked for three days, from 7:00 a.m. or 8:00 a.m. to 11:00 p.m. each day. The removal operation required approximately 10 officers, some of whom worked overtime.” “After the firearms were recovered they were inspected and unloaded. The weapons were found to be in poor condition with corroded metal, and most were loaded with live ammunition. The deputies responsible for removing the ammunition spent considerable time doing so.” Indeed. “From there, the weapons were logged, photographed, tagged, and placed in a pile for transport. In total, 586 weapons, including a grenade launcher, were found and tagged.” Golly, wish we could analogize to a country. You know, one with crumbling infrastructure and stockpiles of loaded weapons. Nope. Sorry. Got nothing.
- GASB Establishes New Guidance to Assist Stakeholders With the Implementation and Application of Various Pronouncements.
- NFMA Letter on the Current State of Disclosure in the Municipal Market.
- Bond Buyer: Middle-Market Dealers Report Steep Regulatory Costs
- Collection of Data Elements Provided in Electronic Format to the EMMA Dataport System in Connection With Primary Offerings: SIFMA Comment Letter
- Issuers Welcome Fallback Language for Libor-Based Floating Rate Notes.
- IRS Allows Multifamily Housing Bonds to Finance Projects with Group Preferences.
- Update on Qualified Opportunity Zones: Second Set of Guidance Issued: Ballard Spahr
- Additional Takeaways From the Latest Qualified Opportunity Fund Regulations: Day Pitney
- New OZ Regs Post to Federal Register; Commenting Period is Now Open.
- BOKF, NA v. Estes – Court of Appeals holds that neither federally-chartered bank nor its corporate trust department which served as indenture trustee for certain conduit municipal bonds was a “municipal securities dealer,” within the meaning of the Securities Exchange Act, and thus, was not subject to compelled arbitration before FINRA, as neither bank, nor its trust department traded in securities on its own account.
- And finally, Who’s a Supportive Boy? Who? Who? is brought to us this week by Wilkison v. City of Arapahoe, in which the Supreme Court of Nebraska ruled that allowing owner to retain emotional support dog in his house was a reasonable accommodation under FHA, despite city’s dangerous dog ordinance. The catch? They also ruled that it wasn’t a necessary accommodation. Why not? So glad you asked. Dude had another other dogs and the court found that “comparable therapeutic benefit to owner with regard to his disability, and there was no evidence that the pit bull provided more support than owner’s other dog.” If only Chewy had possessed the foresight to document his superior emotional support skills. Bad dog, Chewy.
- New Guidance Would Streamline Underwriter Disclosures.
- Short on Financial Knowledge, Some School Districts Get Bad Deals on Bonds.
- S&P General Obligation Medians For Counties: Update As Of April 3, 2019
- S&P General Obligation Medians For Municipalities: Update As Of April 3, 2019
- IRS Publishes Second Round of Proposed OZ Guidance.
- IRS Releases Second Set of Proposed Regulations Regarding Qualified Opportunity Funds: Day Pitney
- Opportunity Zone Rules Leave Out Data Reporting, Penalty Details.
- Cottage Industry in Opportunity Zone Data Forms to Fill Vacuum.
- And finally, Great Moments in Maternal Instincts is brought to us this week by Tarrant Regional Water District v. Johnson, in which a five-months-pregnant woman encountered a damned waterway. “In the middle of the dam is a ten-foot-wide kayak chute, through which the river swiftly flows.” Did this impediment give Ms. Johnson pause? It did not. Predictably, she “lost her footing on the dam, slipped into the river, and drowned.” Ms. Johnson’s estate argued that “the kayak chute was slippery and that the current running through it was deceptively dangerous and difficult to see.” Indeed.
- Latest Opportunity Zones Guidelines Offer More Clarity For Business Investments.
- Treasury Releases Second Tranche of Proposed Regulations for Opportunity Zones.
- Treasury Offers New Guidance on Opportunity Zones.
- Investors Underpricing Impact of Climate-Related Risks, Says BlackRock.
- Climate Change: The Next Great Risk to Munis Is Already Here
- Muni Market Awaits Fallback Language for Libor Phaseout.
- Halifax Hospital Medical Center v. State – In bond validation hearing, Supreme Court of Florida holds that enabling act creating special tax district only authorized district to operate within the geographic boundaries established for the district and not outside the district and Interlocal Act, authorizing entry into contracts for performance of service functions of public agencies, was not an independent source of authority for special tax district to establish and operate a hospital outside geographical boundary of district.
- In re Financial Oversight and Management Board for Puerto Rico – Court of Appeals holds that provision of Chapter 9 governing postpetition effect of security interests merely exempts consensual prepetition liens on special revenues that bankrupt municipality acquires postpetition from bankruptcy statute governing postpetition effect of security interests in general.
- And finally, Jaws of Life – King Jame’s Version is brought to us this week by City of Effingham v. Diss Truck & Repair, LLC, in which city sought “compensation for extrication services performed by city’s fire department.” Those “extrication services?” Merely pulling a big rig off the poor mechanic upon whom it had fallen. We weren’t there, but are sure that the conversation went much like this, “Good gentlemen of the City of Effingham Fire Department, I find myself in a spot of bother, may I kindly request your finest extrication services?”
- Treasury Official Answers Questions on Opportunity Zones Regulations.
- Revenue Procedure Clarifies that Veterans Housing is Eligible for Bond Financing.
- This Libor Successor Is Growing Up, But Still Hasn’t Come of Age.
- How the Supreme Court Just Raised the Stakes in Muni Disclosure.
- Fitch Ratings Finalizes U.S. Public Power Rating Criteria.
- In re Financial Oversight and Management Board for Puerto Rico – Court of Appeals holds that provision of Chapter 9 exempting “application of pledged special revenues” from automatic stay enables bankrupt municipalities to apply those revenues to the relevant debt, but does not address actions to enforce liens on special revenues.
- And finally, Red Rover, Red Rover is brought to us this week by Jimenez v. Multnomah County, in which responsible dog owners were baffled by the citation they received for violating county code provisions making it unlawful for a person to permit a dog to engage in certain dangerous behavior. The behavior in question? So glad you asked. Merely “running loose, injuring another dog, killing another dog, knocking a child down and aggressively biting that child.” Jeez. What’s the big deal? We do enjoy the fact that the court pointed out that Chucky “aggressively” bit the kid, as it had been our supposition that Chucky took a quick break from his doggy crime spree to deliver a playful nip. RIP, Chucky. RIP.
- 20 Issues to Track in the Second Tranche of OZ Guidance.
- S&P: When U.S. Public Finance Ratings Change, ESG Factors Are Often The Reason
- A Cautionary Tale for the New Muni Bond Era.
- New Standards to Drive U.S. Sustainability-Linked Lending.
- Ruling on Puerto Rico Revenue Bonds May be ‘Game Changer’ on Mainland.
- Novogradac 2019 Opportunity Zones Spring Conference.
- And finally, Unclear and Inarticulate Standards is brought to us this week by, State ex rel. Federle v. Warren County Board of Elections, in which the local Assessor rezoned land from agricultural to residential, increasing the valuation from $17k to $866k. Cut to unamused landowners. The Assessor’s stated rationale? “Just a bad feeling that I got.” We kid you not. We also get this gem, “Nonetheless, after doing some ‘soul searching,’ the Assessor concluded that he did not believe that this is ag use land.” The Assessor also insists that, “You dot your T’s, you cross your things.” Noted. The Supreme Court of Wisconsin was unimpressed. But we did find it quite odd that the court repeatedly noted that the landowner’s trees were, “individually staked out and planted in clean rows.” Little practice tip for those of you planting orchards in Wisconsin.
- Babies, Bathwater, etc. – The IRS Should Keep the Helpful Non-Reissuance Rules from the Reissuance Notices
- Recap of Feb 14 IRS Public Hearing on Opportunity Zones.
- CDFA Federal Financing Webinar Series: Opportunity Zones
- S&P Pension Brief: Are Asset Transfers A Gimmick Or A Sound Fiscal Strategy?
- Fitch Introduces ESG Relevance Scores.
- Philadelphia Sues Seven Banks Over ‘Collusion’ in Muni Deals.
- 5 Steps to Maintain or Improve Your Municipal Bond Rating.
- Deutsche Bank Lost $1.6 Billion on a Bond Bet.
- ACA Financial Guaranty Corporation v. City of Buena Vista, Virginia – Court of Appeals holds that city which had leased municipal golf course from public recreational facilities authority, which, in turn, was to have used city’s rent payments to repay the bonds it had issued to refinance its construction loan, did not have an enforceable obligation to make rent payments to authority; neither city, nor authority, breached the implied covenant of good faith and fair dealing by using “subject to appropriation” language in their various financing agreements.
- And finally, Them’s Fightin’ Words! is brought to us this week by Fontenot v. Town of Mamou, in which the court ruled that a town was “a precarious possessor of a sewerage lift station.” This is will henceforth be our all-purpose insult and will doubtless result in the fighting of many duels.
- FINRA 529 Plan Share Class Initiative Encourages Firms to Self-Report Violations.
- `Question Everything’: Puerto Rico Hits $3.8 Trillion Market
- P3 and Your Tax Dollars: Federal Government Makes Next Foray into Public Private Partnerships.
- U.S. Army Corps of Engineers Seeks to Establish P3 Pilot Program – Webinar (Tomorrow! 2/13)
- P3 Connect: Denver, CO
- Snodgrass v. City of Wichita, Kansas – After landowners filed suit against city and law firm, alleging that the proceeds resulting from the refinancing of general and special obligation bonds benefitting their properties should be refunded to them by reassessing the special assessments levied against their property, the District Court granted plaintiff’s motion to remand the matter to state court, holding that the special assessments are taxes under the Tax Injunction Act and that plaintiffs have an adequate remedy in state court.
- And finally, Your Editor Sets The Bar Low (And Promptly Trips Over It) is brought to us this week by Ventura v. Town of East Haven and Rand Resources, LLC v. City of Carson, in which Your Editor encountered a couple of ghosts of law school past. We noticed that the opinion in Ventura was written by Justice Palmer of the Connecticut Supreme Court. After I gave the opening argument in a moot court trial presided over by Justice Palmer, he called me over to the bench and announced, “That was the funniest thing I have ever heard from the bench, but of course I would have had to declare a mistrial.” And the opinion in Rand was written by Your Editor’s friend and classmate Justice Cuellar (hey, Tino!) who’s currently occupying a seat on the California Supreme Court. So perhaps we fell a bit short of our potential, but we still have each other, right? Right? Fine, I’m gonna go get a beer with Brett.
- Securities and Exchange Commission Amends and Updates Rule 15c2-12: K&L Gates
- What Do the SEC’s New Continuing Disclosure Requirements Mean for Governmental Borrowers? – Miller Canfield
- Issuers Not Clear On Upcoming 15c2-12 Amendments
- Fitch Ratings Publishes Updated Criteria for US Variable-Rate Demand Obligations & Commercial Paper.
- GFOA Report: Infrastructure Funding in the New Budget Environment.
- Senators, House Members Request Clarity from Treasury on OZ Issues.
- Novogradac 2019 Opportunity Zones Spring Conference.
- And finally, Liar, Liar, Oh Crap, He’s Not Lying! is brought to us this week by Sikorjak v. City of New York, in which dude’s pants literally caught fire as he was using a cutting torch. One co-worker instructed him to “stop, drop, and roll” in lieu of the fire extinguisher for which they were frantically searching. Thanks, dude, super helpful. The plaintiff testified that he eventually put out the fire by covering his leg with clay. The record is silent at to whether he took advantage of the makeshift kiln to craft one of those lumpen ashtrays we used to fashion in Arts & Crafts at school back in the day to take home to the folks. Before, you know, it became clear that perhaps the local school district shouldn’t be sanctioning smoking.
- Skadden’s 2019 Insights: Political Law: What to Consider When Providing Investment Fund Services to US State and Local Government Entities.
- MSRB to Discuss SEC’s Concerns on Disclosure at Quarterly Meeting.
- Hawkins Advisory: Final TEFRA Hearing & Approval Regulations
- FINRA Bond Facts.
- Adviser: EPA Letter to IRS on Opportunity Zones Merits Attention
- Save the Date: Upcoming BDA Infrastructure Events
- Lake Ridge New Tech Schools v. Bank of New York Mellon, Trust Company, N.A. – After indenture trustee processed fraudulent pay affidavit, District Court holds that corporation which had entered into trust indenture agreement governing issuance and redemption of municipal bonds failed to adequately allege that exculpatory clause in agreement was contrary to public policy and failed to adequately allege duty of indenture trustee independent of agreement, and thus failed to state negligence and gross negligence claims.
- And finally, Great Moments in Pedagogy – Eugenics Division is brought to us this week by Brewington v. City of Philadelphia, in which the kindly physical education teachers at Walter G. Smith Elementary School sent nine-year-olds crashing head-first into an unpadded concrete wall during a relay race, resulting in some serious head trauma. At first glance, tragic. But on second thought… Might it make sense to select the uh, (in)appropriate children, and speed up the inevitable via concrete wall? ‘Cuz singling out the mentally/physically enfeebled for special treatment has always worked out well, right? Right? Hey, where’s everyone going?
- IRS Releases Final TEFRA Regulations: Orrick
- IRS Releases Proposed Regulations Consolidating Guidance on Reissuance of Tax-Exempt Bonds: Mintz, Levin
- Judge Rules on Constitutionality of Tax Credit Bonds.
- Public Charter Schools: Borrowing With Tax-Exempt Bonds (Third Edition) – Orrick
- MSRB Releases Education Resource for New SEC Rule 15c2-12.
- S&P U.S. Local Government 2019 Sector Outlook: Showers For Some, Downpours For Others
- S&P U.S. State Sector 2019 Outlook: Caution – Slower Speeds Ahead
- S&P U.S. Public Finance Sector Outlook Webcasts Scheduled. Please note that this link provides the topic and date for each of the eight scheduled webcasts. Additional details for each webcast, as well as registration information, is available by scrolling down to the “Events” section of the newsletter and/or website.
- Municipal Bonds: Great Expectations For 2019
- And finally, Just Not Your Day is brought to us this week by Nair v. City of New York, in which dude “experienced a tire blow-out, spun out of control, struck the center median, and came to rest facing eastbound in the left lane.” He was almost immediately struck by a second vehicle. After police and tow truck arrived, the tow truck was struck by yet another vehicle, propelling it into the dude. We now propose adding Just Not Your Day to the existing “stuff just happens” family of Act of God and Force Majeure. Welcome. And we’re not quite sure why the “(collectively, “Mother”)” reference that popped up in Brewington v. City of Philadelphia cracks us up so much. Just does.
- U.S. Cities Look to Shed Ratings While Taking On More Debt.
- MSRB Finalizes Compliance Resource on Application of Content Standards to Advertisements by Municipal Advisors under Rule G-40.
- Muni Market Looks to Taiwan Where Insurers Welcome New Options.
- Ex parte City of El Paso – Court of Appeals holds that city’s authority to expend bond proceeds on the construction of a “multipurpose performing arts and entertainment facility” included the building of a facility that could accommodate sports; district court judgment failed to comply with EDJA provisions specifying scope of injunctive relief.
- Jayhawk Racing Properties, LLC v. City of Topeka – Court of Appeals holds that agreement for city’s purchase of a reversionary interest in a multi-purpose motorsports facility financed by issuance of sales tax and revenue (STAR) bonds was proprietary and, thus, enforceable against city, even after new members were elected to the city council.
- And finally, The Wheels On The Bus Go Pound and Pound is brought to us this week by Theisz v. Massachusetts Bay Transportation Authority, a baffling case in which, “On March 3, 2015, at approximately 10:45 p.m., Smith was operating an MBTA bus in Lynn. At a bus stop, Theisz asked Smith for directions. Smith got off the bus and attacked Theisz, causing serious and permanent injuries.” Raising the obvious question, WHAT ON GOD’S GREEN EARTH WERE THE REQUESTED DIRECTIONS? Likely not the nearest Dunkin’ Donuts. Your editor has had a glorious time speculating but, as a family publication, can not share his preferred conjectures. So conjecture away! Happy New Year!
- Fitch Ratings: Driverless Cars Leave Parking Assets at Risk
- S&P Credit FAQ: Criteria Considerations For Mass Transit Agency Ratings
- Fighting Fires With “Forest Resilience” Bonds.
- When a Local Government is ‘Unwilling’ to Cover Debt Costs.
- Renewable Energy: Leveraging the Opportunity Zones Tax Incentive to Improve Returns on Renewables, Storage Plus, and Standalone Storage.
- After the Retail Apocalypse, Prepare for the Property Tax Meltdown.
- S&P U.S. Public Finance State & Local Government Credit Forum, New York
- And finally, Practice Tip of the Week – Tax Division is brought to us this week by Thompson v. Molde, in which delinquent taxpayer’s arguments included the following clever, clever gambits (among many, many others): “All bills are obligations of the United States as per U.S.C. TITLE 18 > PART I > CHAPTER I > Sec. 1. > Sec. 8. -Obligation or other security of the United States defined”; “It is true that a woman cannot sue or be sued under the common law unless under the doctrine of ‘Coverage’ or ‘Coverature’”; “Cancelled stamps are legal tender for all debts, public and private as well as all other obligations of the United States”; and “The NDCC is null and void. It is Roman Civil Law. It is also a combination of Socialism, such as Marxism, Communism, and National Socialism, (Nazism).” The Supreme Court of North Dakota remained unpersuaded. Please feel free to mock the benighted Thompsons. We’re quite sure they aren’t heavily armed.
- MSRB Draft Interpretive Guidance on Pennying and Draft Amendments to Existing Guidance on Best Execution.
- Fitch U.S. College and University Rating Criteria Revision.
- Why the Extra Safety You Get Through Bond Insurance Is Worth the Modest Yield Reduction.
- Muni-Bond Defaults Show Risk Clustered in Midwest, Southeast.
- And finally, BCB’s Department of Hope-Based Forestry this week proudly brings you Trustees of Dartmouth College v. Town of Hanover, in which a town board member testified that, “What we also have to recognize is that there is some shading probably already caused by the existing trees, which are already quite tall and will continue to grow, I hope, in some respects for many years to come.” We hope, in some respects, that Mr. Carter will eventually be introduced to the concept of photosynthesis. And those of you with offspring occupying adjoining bedrooms, please inform said siblings that they are authorized – via Dartmouth – to refer to each other as “abutters.” Once again, you’re welcome.
- Disclosure Obligations of Issuers of Municipal Securities: Orrick
- New Best Practices at GFOA.
- S&P U.S. Public Finance Criteria: Priority-Lien Tax Revenue Debt
- S&P U.S. Public Finance Criteria Guidance: Priority-Lien Tax Revenue Debt
- Fitch Updates U.S. Public Finance Charter School Rating Criteria.
- Update on Qualified Opportunity Zones: First Set of Guidance Issued: Ballard Spahr Note associated 11/1 webinar.
- NABL: IRS Office of Chief Counsel Issues Memo Regarding the Use of Tax-Exempt Bonds to Advance Refund Taxable Bonds.
- Municipalities Can’t Tax Internet Providers, Except When They Can.
- NFMA Advanced Seminar on P3s and Infrastructure.
- S&P 2018 U.S. Public Finance Credit Forum, San Francisco
- And finally, We’re Not Seeing the Problem, is brought to us this week by Wyoming Guardianship Corporation v. Wyoming State Hospital, in which an involuntarily committed hospital patient “who had been diagnosed with schizophrenia, post-traumatic stress disorder, dementia, and borderline intellectual functioning” “was found abandoned, anxious, trembling, breathing rapidly, and reeking of urine.” “Investigators noticed food on the floor in several areas of the hall and observed that the dining room area floor was very dirty with food and possibly human feces.” There is clearly only one place where this woman belongs. Please welcome BCB’s newest editorial assistant, Ms. Linda Golek. Been a seamless transition so far.
- Hawkins Advisory: Rule 15c2-12 Compliance Alert
- Disclosure Requirements for Tax-Exempt Bonds – Significant Changes Made by the SEC Under its Recently Amended Disclosure Rules.
- S&P Updated Advance Notice Of Proposed Criteria Change For Priority-Lien Tax Revenue Debt Published. [Note Table of Affected Issuers.]
- S&P Through The ESG Lens: How Environmental, Social, And Governance Factors Are Incorporated Into U.S. Public Finance Ratings
- States Have Reason to Share Trump’s Concern With Rates.
- Trump Tax Law Saved These Bonds, But IRS Sees Issuance Dwindling.
- FINRA Board Approves Revisions to 4210 Amendments.
- State Fiscal Rankings: The Mercatus Center at George Mason University
- And finally, That’s THE Dog, To You is brought to us this week by Ex parte Gilland, in which the Supreme Court of Alabama referred to a particularly vicious canine as, “a German Shepherd dog (hereinafter ‘the Dog’).” Just plain cracked us up. Not sure why. The court recited an (almost) comically horrific series of atrocities committed by The Dog over a two year period, culminating in a savage attack that killed plaintiff’s dog and inflicted gruesome injuries on the poor woman. And so what’s the point of being the state with the 6th highest per capita gun ownership in the country if no one could be bothered to shoot the damn thing? Sun’s Out, Guns Out! Jasper, Alabama.
- GASB Wants Uniformity in Reporting Conduit Debt.
- SEC Charges Broker-Dealer/Investment Adviser with Deficient Cybersecurity Procedures.
- Task Force on Climate-Related Financial Disclosures: 2018 Status Report
- As Fund Managers Await Regulations, Key Questions Surface With Qualified Opportunity Funds.
- Compliance Workshop on MSRB Rules G-21 and G-40: Advertising by Dealers and Municipal Advisors.
- Lake Ridge New Tech Schools v. Bank of New York Mellon, Trust Company, N.A. – District Court denies High School’s motion to remand to state court, holding that Indenture Trustee’s employee could not be held personally liable because his alleged negligence in facilitating a fraudulent payment from the Trust Account consisted solely of actions taken within the scope of his authority in negligently carrying out a contractual obligation of the Trustee as his employer; Court finds that employee had been fraudulently joined for the sole purpose of defeating diversity jurisdiction
- And finally, in a change of pace, Say It Taint So is brought to us this week by your Editor’s local rag, The Sheet. In reporting on a cross-country track meet, we were informed that our Huskies had beaten Desert Christian, the “perineal favorite.” (emphasis added) In the event that the word being sought was in fact, “perennial,” this will surely go down in the anals of colossal spellcheck oversights.
- Increased Transparency to Continuing Disclosure Requirements.
- SEC Announces Muni Conference, as Regulators Face Backlash.
- BDA Submits Comment Letter: MSRB Draft Amendments to Primary Offering Rules
- GASB Issues Proposals Designed to Improve Government Financial Reports and Establish Recognition Concepts.
- Libor Replacement Carries Risk for States and Cities, Group Says.
- Requesting Interpretive Guidance from the MSRB
- MSRB Proposes Professional Qualification Requirements for Municipal Advisor Principals.
- MSRB FAQs Regarding Permissible and Impermissible Uses of Municipal Advisory Client Lists and Case Studies by Municipal Advisors.
- Conflict of Interest Issues are Pivotal for Municipal Advisors.
- The “Privatization” of Municipal Debt.
- S&P U.S. Municipal Retail Electric And Gas Utilities: Methodology And Assumptions
- S&P RFC Process Summary: U.S. Municipal Retail Electric And Gas Utilities: Methodologies And Assumptions
- S&P Advance Notice Of Proposed Criteria Change: Priority-Lien Tax Revenue Debt
- In Need of More Research – The Congressional Research Service’s Error-Filled Report on Private Activity Bonds (and, Specifically, Qualified 501(c)(3) Bonds)
- NCPPP Integrated Water and Stormwater Management Symposium.
- And finally, BCB’s Department of Demographics this week brings you City of Westworth Village v. City of White Settlement. White Settlement? Surely there must be a charming, innocent explanation, no? Uh, no. Means exactly what it says. Surely someone has suggested that the City might want to look into updating its name? Indeed they have. Per Wikipedia, “On October 14, 2005, city leaders announced a plan to have local voters decide on a possible name change for the town from White Settlement to West Settlement. In the November 8 election, the name change was overwhelmingly rejected by a vote of 2,388 to 219.” Res ipsa loquitur speaks for itself yet again.
- GASB Clarifies Guidance on Majority Equity Interests.
- Rising Rates on Wall Street Loans Push States to End Swap Deals.
- Tax Increment Finance: Innovation & Trends
- MSRB Request for Comment on Draft Interpretive Guidance on Pennying and Draft Amendments to Existing Guidance on Best Execution.
- Why MSRB is Concerned About `Pennying’
- Disaster Recovery Bond Financing: Considerations for Congress
- How Munis Could Play a Role in Disaster Legislation.
- Smart Beta ETFs Take on the $3.8 Trillion Municipal Bond Market.
- What ‘Adult Entertainment,’ Puerto Rico And Chapter 9 Bankruptcy Have In Common.
- And finally, Just a Minor Discrepancy (Can’t We All Get Along?) is brought to us this week by PBBM-Rose Hill, Limited v. Commissioner of Internal Revenue, in which landowner was shocked to find itself facing a gross valuation misstatement penalty by the IRS in what appeared to be a minor valuation squabble. After all, what’s be big deal here? The IRS determined that the landowner could deduct $100k for a conservation easement, while the landowner claimed a deduction of $151,600. Certainly, reasonable minds could…. Oh, we need more zeros, you say? Ok. How many? Two? Hang on, gotta move a couple commas… So we’re talking $15,160,000? As in millions? Oh, that is more.
- Ed. Note: Just a (not particularly friendly) reminder that all of the items contained in the newsletters are archived on bondcasebriefs.com, which serves as a fully-searchable database. We are fully aware that we routinely publish items that may not be immediately relevant to your current practice. The idea is that we’ll be here for you in event that you need to get up to speed on recent developments (e.g. micro-bonds, opportunity zones, and that blockchain nonsense all the kids are talking about these days.)
- Task Force on Climate-Related Financial Disclosures Releases Three Key Documents that Serve as Building Blocks to Describe and Support Implementation of the Task Force’s Recommendations.
- The California Heat Assessment Tool.
- Ed. Note II: The two bullet points above represent sources of both macro and micro information regarding climate-related risk factor disclosures. We’ll work to keep you apprised of additional such sources as they become available.
- S&P: SEC Disclosure Rule Changes Will Improve Transparency, But Municipal Bank Loan Structures Can Still Carry Hidden Risks.
- Houston Eyes Designer Bonds to Pay for $15 Billion Ike Dike.
- And finally, When “Insult to Injury” Just Won’t Cut It is brought to you this week by, Lopez v. City of Grand Junction, in which the Lopez family was just a tad aggrieved when the city ruptured a gas line, resulting in an explosion inside their home. Oh, but it gets so, much worse. The gas entered the home via, yes, their sewer line. We now invite you to lean back, close your eyes, and luxuriate in the many delightful ways to describe the combination of exploding hydrocarbons and fecal matter. You’re welcome.
- Seven Things to Know About the SEC’s Amendments to Rule 15c2-12: McGuireWoods
- SEC Approves Narrower 15c2-12 Disclosure Amendments.
- Sneaky But Legal Use Of General Obligation Bonds.
- S&P: For Many Muni Issuers, Technology Brings Financial Benefits, But Also Increasing Credit Risks
- How Rising Interest Rates and Widening Credit Spreads Will Drive Greater Use of Bond Insurance.
- Trump Trade War Prompts State Warnings to Bond Investors.
- Davis v. Detroit Public Schools Community District – Court of Appeals holds that opponents of public financing for construction of sports arena lacked standing to seek declaratory and mandamus relief to require school board to place on next city election ballot question asking city voters to approve or disapprove of tax increment finance entities’ use of property tax revenue intended for school operating purposes to finance sports arena.
- And finally, Ah, So That’s What Happened To My Pants is brought to us this week by Norfolk Southern Railway Company v. Johnson, in which a man was reported as “possibly intoxicated, maybe on something” and was “stripping his clothes off and walking up towards the stockyards.” As your Editor, I would like to take this opportunity to express my deepest regrets regarding my unacceptable conduct on the night of…. Wait. What? Some guy named Chris Matano? Not me, eh? Hmm… Suppose that particular apology has, over the years, simply become a bit of a reflex.
- S&P: Blockchain is Coming to Muniland, and the Changes Could Be Significant.
- Chapter 11 or Chapter 9: Investors Beware.
- For Muni Bond Sales, Brand Matters.
- LA County Uses P3 Lease Revenue Bonds for 21-Story, $295 million Office Tower.
- S&P U.S. State Ratings And Outlooks: Current List
- Landmark Towers Association, Inc. by EWG-GV, LLC v. UMB Bank, N.A. – Court of Appeals holds that special district’s levy was a “special assessment,” despite argument that it was imposed on real property according to a uniform mill rate, and thus imposing it on condominium in the district violated the due-process rights of condominium’s homeowners association, where the levy funded purely local improvements directly and specially benefiting only a planned development in the district.
- Trafalgar Woods Homeowners Association, Inc. v. City of Cape Coral – District Court of Appeal holds that credits against special assessments for irrigation water pursuant to planned development ordinance extended to homeowners association and property owners of individual lots as successors in interest to project developer, rather than only to developer.
- And finally, Is Our Children Learning? is brought to us this week by Freedom From Religion Foundation, Inc. v. Chino Valley Unified School District Board of Education, in which school board member Andrew Cruz articulated the board’s position on beginning meetings with a prayer thusly, “I think there are very few districts of that powerfulness of having a board such as ourselves having a goal.” Let us all now bow our heads and offer up a prayer for the poor children of the Chino Valley Unified School District. Amen.
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