• GASB Publishes Post-Implementation Review Report on Fair Value Standard.
• US State Credit Quality Declines on ‘Destabilizing’ Trump Orders.
• S&P: U.S. Local Government Credit Quality Could Wobble As Federal Policy Shifts
• $4T Municipal Bond Market Wakes Up to Climate Risk. (With Help from Trump.)
• City Council Eyes ‘Micro-TIF’ Program for Individual Residential Properties.
• LA Fire Victims Are Suing Utilities. What’s at Stake?
• And Finally, Another Firewater, Kemo Sabe? is brought to us this week by Protect the Gallatin River v. Gallatin County, Department of Planning and Community Development, in which the Supreme Court of Montana weighed in on a zoning dispute concerning the building of a “glamping” site on an island in the Gallatin River.  Ok. Fine.  This approach typically involves setting up a nice hotel room covered by a canvas tent.  Ok.  Fine.  Little different in this case.  The owners plan to set up 48 campsites consisting of Teepees and Conestoga Wagons.  What could possibly go wrong?!  The (horrible, horrible) jokes just write themselves.  What could they possibly be thinking?  I actually don’t want details.  I want my imagination to run wild.  As should yours.

Large retail electric customer sought judicial review of Public Utilities Commission’s (PUC) approval of electric utility’s method for recovering extraordinary natural gas costs incurred during severe winter storm through uniform volumetric charge on all customers over two years.

The District Court affirmed PUC’s decision. Customer appealed.

The Supreme Court held that PUC adopted “just and reasonable rate” by approving utility’s cost recovery method.

Public Utilities Commission (PUC) adopted “just and reasonable rate” by approving electric utility’s method for recovering extraordinary natural gas costs incurred during severe winter storm through uniform volumetric charge on all customers over two years; method accurately reflected cost of service because utility had purchased natural gas based on total forecasted customer need, not based on actual individual consumption during winter storm, method would allow utility to recover costs it had incurred in anticipation of winter storm in exactly same way that it recovered its normal fuel costs, customers’ ultimate billing would appropriately be based on their individual usage, and method would provide utility with reasonable rate of return.

Developer brought declaratory judgment action against county and village, seeking determination that it was not obligated to pay highway improvement fees under intergovernmental agreement between county and village as a condition of annexation, on basis that fees did not meet requirements set forth in Road Improvement Impact Fee Law.

The Circuit Court, Lake County granted county’s motion for summary judgment and denied developer’s cross-motion for summary judgment. Developer appealed. The Appellate Court affirmed. Developer petitioned for leave to appeal, which was granted.

The Supreme Court held that:

• Fees did not constitute “road improvement impact fees” that would be required to comply with Road Improvement Impact Fee Law;
• Essential nexus existed between intergovernmental agreement’s fee condition, which allegedly burdened developer’s rights under takings clause, and legitimate state interest of minimizing traffic congestion, supporting finding that condition did not violate the “unconstitutional conditions” doctrine; and
• Rough proportionality existed between alleged burden on developer’s rights under takings clause and the harm sought to be remedied, and thus condition did not violate the “unconstitutional conditions” doctrine.

Highway improvement fees imposed by village on developer as condition of annexation of parcels in development project, on basis of intergovernmental agreement between county and village under which county agreed to design and construct road improvements in exchange for a portion of the construction costs being reimbursed by fees collected from developers within the area upon the occurrence of a triggering factor, including annexation, did not constitute “road improvement impact fee” that would be required to comply with Road Improvement Impact Fee Law; fees were imposed pursuant to a voluntary annexation, and Municipal Code specifically allowed municipalities to enter into annexation agreements and to have such agreements provide for contributions of monies to municipality.

Essential nexus existed between condition of agreement between county and village requiring village to impose highway improvement fees on developer upon annexation of development parcels into village, which allegedly burdened developer’s rights under takings clause, and legitimate state interest of minimizing traffic congestion, supporting finding that condition did not violate the “unconstitutional conditions” doctrine; fees would provide for road improvements to ease that congestion.

Rough proportionality existed between burden allegedly imposed on developer’s takings clause rights by condition of agreement between county and village, which required village to impose highway improvement fees on developer upon annexation of development parcels into village, and the harm of traffic congestion that county sought to remedy via the condition, and thus condition did not violate the “unconstitutional conditions” doctrine; parcels were zoned agricultural before annexation but were reclassified as single family residential after annexation, and fees paid by developer would go to county’s design and construction of road improvements, with county paying for half of such improvements.

Landowners brought action against city, its mayer, city redevelopment commission, and commission members, alleging eminent domain action against landowners’ property constituted abuse of process because the taking was for private, false ends.

The Superior Court granted defendants’ motion to dismiss for failure to state a claim. Landowners appealed.

The Court of Appeals held that:

• Trial court was not collaterally estopped from finding that risk of inconsistent orders on same issues from two different courts warranted dismissal of landowners’ action against defendants;
• Landowners could pursue their abuse of process claim separately from eminent domain action;
• Landowners stated abuse of process claim; and
• Issue of whether mayor and commission members were immune from prosecution under Indiana Tort Claims Act (ITCA) could not be resolved at motion to dismiss phase.

Landowners could pursue their claim against city, its mayor, city redevelopment commission, and commission members, alleging eminent domain action constituted abuse of process, separately from eminent domain action; compensation allowed under eminent domain action did not include all damages available from tort claim for abuse of process, as attorney fees were limited to $25,000 in eminent domain action but were not limited as such for abuse of process claim, and trial judge in eminent domain action acknowledged that landowners would not be prejudiced by pursuing their abuse of process claim in another forum when it denied landowners’ motion for leave to file abuse of process counterclaim on ground that counterclaim was not type of pleading allowed in eminent domain action.

Landowners stated abuse of process claim against city, its mayor, city redevelopment commission, and commission members, based on city’s eminent domain action, where landowners alleged that eminent domain action brought by city against landowners was substantively improper on the basis of fraud and bad faith, that proceeding was subterfuge to convey property for private use, that taking was for discriminatory private purposes, for private gain, and motivated by spite, and that taking was solely to take property for private development by political contributors.

Action was brought by nonprofit environmental advocacy organization against county and landowners, who sought to develop “glamping” resort on unzoned river island, challenging county’s issuance of conditional floodplain permit to landowners. Landowners also challenged county’s modification of permit to include additional restriction.

Parties filed competing motions for summary judgment. The District Court ultimately affirmed issuance of conditional permit as modified by the county commission.

The Supreme Court held that:

• Administrator did not act arbitrarily or capriciously in declining to re-open public comment period;
• Administrator’s preparation of staff report for county commission during administrative appeal did not constitute improper post hoc rationalization of his decision;
• Administrator’s presentation to county commission during administrative appeal did not constitute improper post hoc rationalization of his decision;
• Administrator’s preparation of county’s written findings of fact, conclusions of law, and order was appropriate and lawful; and
• Commission’s decision to affirm administrator’s issuance of conditional permit was not arbitrary or capricious.

Township brought condemnation actions against two separate condemnees, seeking to use eminent domain powers to take condemnees’ properties in order to carry out land-swap contract with developer, under which contract township would acquire land owned by developer to use as open space in exchange for land township already owned combined with condemned properties.

The Superior Court, Law Division, entered identical orders authorizing condemnation and appointing condemnation commissioners. Condemnees appealed, and their appeals were consolidated.

The Superior Court, Appellate Division held that:

• Condemnation of properties lacked public purpose required for valid exercise of eminent domain power under Eminent Domain Act;
• Prior action by homeowners association challenging validity of land-swap contract did not collaterally estop condemnees from challenging, under Act, township’s condemnation;
• Land-swap contract between township and developer was invalid as to two properties owned by condemnees; and
• Remand to township for evidentiary hearing to address condemnees’ challenge to condemnation of their properties was not warranted.

Township filed declaration of taking to acquire title to property.

The Court of Common Pleas overruled preliminary objections raised by property owners and intervenors, who were potential purchasers, arguing that purpose of taking was to preserve open space, and, therefore, beyond township’s authority. Property owners and intervenors appealed.

The Commonwealth Court held that:

• Substantial evidence supported Court of Common Pleas’ determination that taking was for a recreational purpose, and
• Declaration’s statement that one purpose was to preserve open space did not render the taking per se unlawful.

Substantial evidence supported trial court’s determination that township’s taking of property was for a recreational purpose, rather than to conserve open space or prevent development, and, thus, was within township’s authority, as part of judgment denying preliminary objections to declaration of taking; township supervisor sent email to property owners over a year before declaration was filed, expressing that township was interested in acquiring property and including it in township’s park and trail system, declaration was filed 14 years after property owners filed preliminary residential development plan, and grant applications regarding the land stated that acquisition would conserve open space but also that funding would allow expansion of trails, greenways, natural areas, and parks.

Township’s taking of property was not per se unlawful based on fact that one of the stated purposes, as expressed in declaration of taking, was to preserve open space, even though only counties had authority to condemn for such purpose, pursuant to Open Space Lands Act; evidence showed that property was adjacent to or within area of importance and significance for nature conservation and would provide parks and active and passive recreational opportunities for township residents, wording of declaration did not defeat the fundamental recreational purpose for which land was condemned, and land conservation was inevitable in any passive recreational use, which was a public purpose expressly authorized by Township Code.

• MMA revised down its outlook for states, state housing finance
• Cuts to federal funding, staffing poised to challenge states

The “rapid and chaotic activity” of the Trump administration is undermining the credit quality of US states, according to a new report from Municipal Market Analytics.

MMA has lowered its state-sector outlook to neutral from positive, citing a bevy of White House executive orders and policies that have broad implications for federal funding and staffing. States rely on assistance from Washington for numerous programs including supporting public education and healthcare.

The uncertainty created by real or threatened changes in federal funding raises the likelihood that states will tap their reserves and may cut or pause projects. That may reduce state aid to local governments, colleges or hospitals, the research firm said. States do have an “exceptional” levels of reserves, according to MMA.

“The destabilizing actions of the federal government are a challenge to state credit quality,” Matt Fabian and Lisa Washburn of MMA wrote in the report. “State governments receive about one-third of their funding from the federal government and rely on such to provide essential services to their constituents.”

MMA lowered its outlook for state housing finance agencies, also pointing to cuts to federal funding and staffing as increasing the risk of a negative action on the US government’s bond ratings. It also highlighted the looming threat that the administration could eliminate the muni market’s tax-exemption entirely, or in part.

“States are also incurring increased costs from these actions in terms of distraction from normal government activities, increased costs for advisors and consultants to evaluate alternatives, and litigation costs related to challenging the federal government’s actions,” the researchers said.

Bloomberg Markets

By Erin Hudson

February 25, 2025

Key Takeaways

• Sudden changes to or uncertainty about the direction of federal policy could lead to credit instability for some local governments.
• Weakening economic performance or the loss of municipal tax exemption through the renegotiation of the Tax Cuts and Jobs Act would negatively affect all local governments.
• The effects of other policy changes, such as those pertaining to immigration and tariffs, would likely be experienced more regionally or locally.
• State and local governments have experience absorbing short-term revenue disruptions or expenditure requirements, but significant federal policy changes could have lasting effects that require management teams to proactively address their operating budgets.

Continue reading.

[Free Registration Required.]

27 Feb, 2025

With funding from Washington uncertain, New Jersey, like other states, is budgeting cautiously.

Gov. Philip D. Murphy of New Jersey proposed a $58 billion budget on Tuesday that would keep spending roughly flat as the state braces for potentially drastic reductions in federal funding, including Medicaid.

State officials acknowledged that drafting the final budget of Mr. Murphy’s second term had proved challenging amid uncertainty in Washington, where Republicans are considering deep cuts in spending on health care for low-income people to help pay for $4.5 trillion in tax cuts.

New Jersey estimates it could lose as much as $5.2 billion in Medicaid matching funds that help provide health coverage to roughly 700,000 residents.

Continue reading.

The New York Times

By Tracey Tully

Feb. 25, 2025

The nation’s municipal bond market is waking up to the accelerating risks of climate change, a sign of potential economic instability for a $4 trillion market long seen as a safe investment for ordinary people.

S&P Global downgraded the credit rating of the Los Angeles Department of Water and Power last month as devastating wildfires spread across the city, writes Thomas Frank.

The financial ratings company cited “the increasing frequency and severity” of wildfires as its reason for the downgrade. Then S&P announced last week that it would begin assessing the threat of wildfires on the creditworthiness of all bond sellers in California.

That’s a big deal.

Ratings firms have previously penalized major municipal bond issuers in areas struck by disasters based on property damage, the cost of rebuilding and the potential loss of tax revenue.

But this may be the first time the decision was tied to future climate risks. Experts say the municipal market has long ignored the potential for a disaster to wipe out a city’s property tax base and force a bond default.

“It is a tipping point in the marketplace,” Thomas Doe of Municipal Market Analytics told Tom.

The Trump factor

President Donald Trump’s efforts to gut the federal government may also be forcing the municipal bond market to wake up to the realities of climate change.

After natural disasters, the price of bonds tends to drop. Then the nation’s disaster response apparatus hits the scene, provides technical and financial support for rebuilding, and “everybody’s made whole, and the world goes on,” Doe said.

But Trump has threatened to dismantle the Federal Emergency Management Agency, which would put states solely in charge of disaster recovery.

Without federal disaster money as a backstop, investors might look more closely at climate risks — and state and local governments may be compelled to undertake their own climate adaptation with projects to reduce their exposure to disaster damage.

“In a backhanded way, [Trump’s] policies are going to end up generating a wave of adaptation investment,” Doe said.

POLITICO.COM

By ARIANNA SKIBELL 02/25/2025 06:00 PM EST

The bonds are considered a safe investment. The Los Angeles wildfires sparked concern that climate change is making them risky.

As wildfire tore through Los Angeles in January, a financial ratings company made a decision that could mark a crucial shift in how a trillion-dollar market assesses climate risk.

S&P Global Ratings downgraded the credit rating of the Los Angeles water and power utility, citing “the increasing frequency and severity” of wildfires and signaling a potential awakening of the nation’s $4 trillion dollar municipal bond market to climate risk.

Short-term trouble followed the Jan. 14 downgrade of the nation’s largest municipal utility. The bond values fell, default risk rose and some bondholders sold at a loss. If the utility issues new bonds soon, it will have to pay higher interest rates to compensate buyers for the heightened risk.

Continue reading.

politico.com

By Thomas Frank | 02/25/2025 06:19 AM EST

Stakeholders see tax policy changes as the most significant challenge, with healthcare, higher education and affordable housing among the most-challenged sectors.

NEW YORK, Feb. 25, 2025 /PRNewswire/ — The Bond Buyer, Arizent’s essential resource serving the municipal finance industry, publishes its latest research, 2025 Predictions: What to Expect in the Year Ahead, which provides a deep dive into the macroeconomic outlook for munis, the impact of policy and regulatory uncertainty, the state of technology adoption and more. Sponsored by Build America Mutual, the findings reveal industry leaders see tax policy changes as the most significant challenge in the coming year, with healthcare, higher education and affordable housing among the most-challenged sectors.

The report, based on a survey of municipal finance professionals, also highlights a growing consensus that municipal bond volume must expand significantly to address the country’s escalating infrastructure needs. However, questions remain on whether funding will keep up with demand.

Key takeaways from the report include:

• Market outlook: 62% of respondents expect a favorable municipal finance climate in 2025, though concerns about inflation and policy volatility temper enthusiasm.
• Legislative priorities: Preserving tax exemptions on municipal securities and restoring tax-exempt advance refundings rank as the industry’s top policy goals.
• Climate risk and disclosure: 67% of respondents believe climate and extreme weather events should be explicitly addressed in municipal credit disclosures.
• Technology’s growing role: Nearly all respondents (96%) expect electronic trading, AI and machine learning to become increasingly integrated into muni markets over the next decade.

“Technology is finally occupying significant space in the minds of these professionals,” says Janet King, VP of Research at Arizent. “The municipal bond industry has been notoriously slow to adopt new tech, even as advancements in data management, business intelligence and AI tools have transformed other industries. It feels like only a matter of time before innovation has a significant impact here. That expectation can be seen in the 62% of respondents who believe their organization’s tech spending will increase in 2025.”

For more insights and predictions — including expectations for bond volume and credit conditions, buy- and sell-side perspectives on resilient infrastructure and the outlook on policy and regulation — download the full report here: https://www.bondbuyer.com/research-report/charting-muni-finance-progress-through-uncertainty

Research Methodology

This research was conducted by The Bond Buyer (an Arizent brand) to gain insights from municipal bond sector stakeholders about issues expected to affect their business and the industry at large in 2025. A total of 103 qualified respondents at firms in the municipal bond community answered the survey.

About The Bond Buyer

Since 1891, The Bond Buyer has empowered issuers, investors and other municipal finance professionals to navigate the complexities of policy, regulation, market activity, infrastructure and more. Across its journalism, events, research and benchmarking, The Bond Buyer provides insight into the most relevant topics — from public-private partnerships to innovative deal structures. As the only independent resource serving the complete municipal finance community, The Bond Buyer’s authoritative content connects leaders online, in person and in print every day.

About Arizent

Arizent is a business information company that advances professional communities by providing insights and analysis and convening industry leaders. The company uses deep industry expertise and a data-driven platform to deliver its services, which include subscriptions, marketing services, live events and access to Leaders, an executive forum. Arizent also connects business communities through leading financial services brands like American Banker, The Bond Buyer, Financial Planning and National Mortgage News, as well as professional services brands like Accounting Today, Employee Benefit News and Digital Insurance.

About Build America Mutual

BAM Mutual is the only bond insurer that solely guarantees timely payment of interest and principal on U.S. municipal bonds, and has insured more than $150 billion of financing for essential public projects for more than 6,000 issuers. BAM is rated AA/Stable by S&P Global Ratings.

NEW YORK (S&P Global Ratings) Feb. 26, 2025—S&P Global Ratings projects that U.S. municipal sustainable bond issuance will follow the broader municipal market, according to a new report titled “U.S. Municipal Sustainable Bond Outlook 2025: Sustainable Bonds Expected To Trail Conventional Market,” published Feb. 26, 2025, on RatingsDirect.

Potential changes to tax-exemption status for municipal bonds could slow the market as a whole, as could changes in policy and sentiment.

“Green energy and transportation will continue to propel the market as certain states enact their mandates for renewable power supply and associated capital needs, supporting momentum in green bond financing,” said S&P Global Ratings credit analyst Kaiti Vartholomaios.

We expect large repeat issuers to continue to embrace sustainable bonds and drive the market.

This report does not constitute a rating action.

The report is available to RatingsDirect subscribers at www.capitaliq.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by sending an e-mail to [email protected]. Ratings information can also be found on S&P Global Ratings’ public website by using the Ratings search box at www.spglobal.com/ratings.

Read the MSRB paper.

The need to deploy public funds for clean energy is clear. But how could the government do it? The Federal Financing Bank could be the answer.

Since my time at the Treasury Department, I have been intrigued by the possibility of repurposing and reimagining various financing mechanisms that currently live at the department in service to the need to finance clean energy supply chains.

I wouldn’t characterize these mechanisms as ready to be deployed by any stretch, but I think they are worth uncovering and then understanding.

One such mechanism is the Federal Financing Bank (FFB), which was created by Congress in 1973. This so-called bank sits inside the Treasury Department and is administered by Treasury career staff—there are maybe four full time people at most running this bank. They have a management structure like any bank, but with a governance structure that consists of the undersecretary for domestic affairs, the assistant secretary for financial markets, and the deputy assistant secretary for public finance. It’s not a bank as we think of banks, but rather a financing vehicle that facilitates borrowing by the various federal agencies so as to limit the stress that federal borrowings might otherwise press on private financial markets.

The Federal Financing Bank borrows from the Treasury and uses these funds to make loans to federal agencies that are tasked by Congress to executing program. Because the FFB can borrow cheaply, it can pass this low-cost funding onto federal agencies that are implementing particular programs. In other words, the federal programs that the FFB are funding are getting funds from the Treasury rather than from private markets; and because this funding is cheaper, there are savings to taxpayers.

The portfolio of the FFB for fiscal year 2024 is currently sized at approximately $185 billion. The breakdown of the loans spans entities like the Rural Utilities Service, HUD’s Risk Share Program, and the DOE Loan Programs Office. The details of these loan facilities need examination, but the point is that there is an entity already stood up by Congress inside the Treasury that can potentially serve as an adjunct credit facilitator to clean energy supply chain federal projects. The funding is internal, and so the FFB mechanism has the potential to bring down the cost of financing these projects.

More exploration has to be considered here—for example, what federal programs exist whose cost could be reduced by virtue of this mechanism? And what federal programs could be created that relate to clean supply chains that could use a financing facilitator? Is the mandate for the Federal Financial Bank broad enough to contemplate its use in other ways, while staying consistent with the Congressional intent that created it? What other financial plumbing mechanisms exist at the Treasury and even elsewhere—like the Department of Agriculture—that can be deployed to bring down the cost of creating clean supply channels? Does the Exchange Stabilization Fund have relevance to the financing of clean supply channels?

In working on this Carnegie taskforce, we’ve reminded each other of why the United States should strengthen clean energy supply chains, both at home and abroad, and explored the best measures for doing so. But we can’t forget the how: when the political will is there, policymakers will need to know how to best provide the finance to the clean energy projects that will secure U.S. prosperity and security in the future.

carnegieendowment.org

by Sarah Bloom Raskin

Published on February 26, 2025

Norwalk, CT, February 26, 2025—The Governmental Accounting Standards Board (GASB) today published a Post-Implementation Review (PIR) report on the Board’s fair value standard.

The report focuses on GASB Statement No. 72, Fair Value Measurement and Application.

The report, issued by GASB staff, concludes that Statement 72 met the three PIR objectives:

• The standards accomplish their stated purpose,
• Costs and benefits are in line with expectations, and
• The Board followed its standard-setting process.

Furthermore, the report concludes that Statement 72 resolved the underlying need for the Statement, which involved complicated valuation issues from a financial reporting perspective. The report also concludes that the Statement was operational and application of the Statement provides users of financial reports with decision-useful information, including fair value measurements that are highly relevant to the analysis of governmental financial information and fair value-related disclosures.

After the issuance of each GASB standard, the GASB provides educational support, responds to technical inquiries, and often issues questions and answers about the standard through implementation guidance. More complex standards—like Statement 72—are eligible to undergo more extensive PIR procedures culminating in a final report.

More information about the PIR process, including other projects for which the GASB is currently conducting PIR activities, is available by visiting the GASB PIR web portal.

The wildfires that incinerated entire neighborhoods in the Los Angeles area in January were among the most destructive in California state history, killing at least 29 people and causing billions of dollars in property damage.

That loss of life and property has led to a flurry of lawsuits against two utilities: Edison International Inc., an investor-owned electricity supplier with operations in Southern California, and the Los Angeles Department of Water and Power, the biggest municipal utility in the US. Some residents who lost homes, businesses and loved ones allege the utilities failed to take appropriate safety measures in an area highly vulnerable to wildfires.

Over the last decade, electrical utilities in the western US — from California to Oregon, Colorado, Texas and Hawaii — have become frequent targets of lawsuits that blame their equipment for devastating fires. The flood of litigation has put utilities in financial peril and created a backlog that forces many victims to wait years for payouts that may not fully cover their losses.

Continue reading.

Bloomberg Industries

By Peter Blumberg

March 1, 2025

The bill calls on utilities to meet wildfire protection standards. In return, they’d gain legal protection.

A bill that would establish minimum wildfire prevention standards for electric utilities in exchange for an annual certificate from the Oregon Public Utility Commission could give them immunity from being held accountable in lawsuits, lawyers say.

If passed, House Bill 3666 would give utilities a state-sanctioned defense against lawsuits when their equipment starts fires, leaving customers holding the bag for damages caused by multi-billion dollar companies that provide electricity to nearly 75 percent of Oregonians, lawyers and survivors warn.

Rep. Pam Marsh, D-Ashland, filed the bill Tuesday to create standards for wildfire prevention work undertaken by utilities. That would result in safer communities and help the utilities stay insured by avoiding costly lawsuits, she said.

Continue reading.

governing.com

Feb. 28, 2025 • Alex Baumhardt, Oregon Capital Chronicle

The Regents of the University of California is offering $1.2 billion of municipal bonds and plans to use proceeds from the sale to finance and refinance projects across its system.

The university is selling $320.5 million of 2025 Series CB, and $887 million of 2025 Series CC general revenue bonds, according to documents posted Wednesday on MuniOS.

Retail orders can be placed on March 4, with institutional pricing scheduled for March 5. The offering is expected to close on March 19. Interest payments will be made on May 15 and Nov. 15, with the first payment due in the second half of this year.

The University of California system encompasses 10 campuses, six academic health centers, and three national laboratories. It has about 293,000 full-time equivalent undergraduate and graduate students.

The bonds will be secured by the university’s general revenue, bond proceeds and money from other funds and accounts. Sources of revenue include student tuition and fees, and net sales and service revenue from educational and auxiliary enterprise activities, according to the preliminary official statement.

Moody’s rated the securities Aa2, and S&P Global Ratings and Fitch Ratings have them rated at AA.

RBC Capital Markets and Siebert Williams Shank are lead managers on the deal.

Provided by Dow Jones Feb 27, 2025 4:30pm

By Stephen Nakrosis

Write to Stephen Nakrosis at [email protected]

Drew O’Neil discusses fixed income market conditions and offers insight for bond investors.

The overall size of the municipal bond market is over $4 trillion. While this a very large market, an investor’s personal situation combined with the nuances of the municipal bond market can sometimes make it feel much smaller. Investor preferences such as coupon, maturity, call structure, and issuing state can shrink the available investment options considerably. There can be a benefit for investors living in states with high income taxes to purchase municipal issues from their own state, which in most situations avoids state, in addition to federal, taxes. Still, there are many situations where an investor might be better served looking for opportunities nationwide rather than isolating themselves to their home state.

Continue reading.

advisorperspectives.com

by Drew O’Neil of Raymond James, 2/27/25

• The Golden Age of Public Finance is now over.
• A temporary upswing in municipal bond credit quality began in 2021 boosted by Federal fiscal policy. Four years later, municipal credit is now returning to normal levels.
• A more positive macro-economic backdrop exists to begin 2025 compared to last year.

Continue reading.

by HilltopSecurities

February 25, 2025

Qualifying projects would be in areas of town under ‘blighted and substandard’ designation

After decades of approving tax-increment financing assistance for a variety of larger projects, the Hastings City Council now appears ready to extend TIF to everyday taxpayers making material improvements to their own residential properties.

Gathered Monday for their second regular February meeting at the Hastings Municipal Airport Terminal, Mayor Jay Beckby and council members directed staff members to draft a proposed resolution making “micro-TIF” financing available to qualifying property owners in redevelopment areas across the city.

According to the parameters suggested by staff, the micro-TIF assistance would be available to owners of residential property only, at least in the beginning.

Continue reading.

Andy Raun [email protected]

Feb 24, 2025 Updated Feb 25, 2025

Florida has no income tax, and now Governor Ron DeSantis is pushing a plan to eliminate the state’s property levies as well.

On Thursday, DeSantis again raised the idea of abolishing property taxes or rolling them back significantly, saying that Florida residents need relief — a message he has repeated in recent weeks.

“Property tax says that you never really own your property, because you have to pay rent to the government,” DeSantis said at a press conference, criticizing local governments for swelling their coffers with revenue from the state’s booming real estate market.

Continue reading.

Bloomberg Politics

By Anna J Kaiser

February 27, 2025

• Aldermen last week delayed vote on bonds for infrastructure
• Critics question why payments for principal delayed until 2045

Chicago’s City Council on Wednesday approved Mayor Brandon Johnson’s controversial proposal to sell $830 million in bonds for infrastructure costs despite concerns about the debt’s delayed repayment schedule and who would get to use the proceeds.

The ordinance passed 26 to 23.

The finance committee had approved the proposal earlier this month but last week aldermen delayed the full City Council vote given criticism of a plan to start principal payments on the debt in about two decades.

The bond is the first the city is seeking to issue after S&P Global Ratings downgraded its credit one notch to BBB last month. S&P said the cut was due to a “sizable structural budgetary imbalance” that will make aligning costs and revenue “more challenging” in the coming years.

“There’s nothing wrong with them needing to borrow the money for their capital plans,” Lisa Washburn, a managing director at Municipal Market Analytics, said in an interview before the vote. “The issue is that the debt structure is aggressive and expensive, and pushes the costs well into future.”

While some Chicago officials defended the structure of the bonds, Washburn said that such back-loaded debt payment schedules aren’t typical in the public finance industry. Plus, the structure as laid out by the administration could make future budgets more challenging, she added.

The City Council narrowly passed a budget for 2025 that closed a nearly $1 billion deficit but questions still remain about how the city will account for $175 million it needs for its underfunded municipal employee pension that it expected to receive from the Chicago Public Schools. The school district has been contributing toward the municipal employee pension for the last few years because its non-teacher employees participate in that plan.

Given deficits for both the school district and the city, that payment has become a source of conflict between the mayor and CPS Chief Executive Officer Pedro Martinez.

Bloomberg Markets

By Shruti Singh

February 26, 2025

• Hackers got access to town’s email and impersonated official
• Thieves gave bank wiring instruction for 2024 bond closing

Three months after cyber bandits hacked White Lake Township, Michigan, stealing about $30 million during the closing of a municipal-bond offering, the Detroit suburb is returning to the market.

The community of 32,000 plans to sell $29 million of bonds after the cyberattack forced it to cancel a debt issue to finance the construction of a civic center.

On the day of the initial sale’s closing in November, criminals impersonated a township official after gaining access to the municipality’s email, according to an offering document for the upcoming sale. The hackers then directed Robert W. Baird & Co., the investment bank that bought the bonds, to wire the purchase price to an account they set up.

Continue reading.

Bloomberg Markets

By Martin Z Braun

February 27, 2025

• Congressman Yakym supports reviving muni advance refundings
• But private-activity muni bonds likely to get a look, he says

A Republican member of the House Ways and Means Committee said he’s working to keep the federal tax exemption for municipal bonds intact as the chamber reconciles its budget framework with the Senate.

“We have to protect the tax exemption for our municipal bondholders full stop,” Congressman Rudy Yakym, a Republican from Indiana, who also heads the House Municipal Finance Caucus, said in a telephone interview on Thursday. “The thing that we have to protect most is the municipal-bond status for cities and towns across the country.”

Last month, a menu of spending cuts that circulated among House Republicans listed ending the tax-exempt status on municipal bonds as one of the options to extend certain tax cuts when they expire. That prompted municipal issuers and bankers to lobby lawmakers to keep the exemption that underpins the $500 billion-a-year debt market.

While many in the industry are worried about the pullback of the exemption, it hasn’t been a discussion point on the Ways and Means Committee, which has jurisdiction over the federal tax code, Yakym said.

“It is being hotly debated but the hot debate is taking place — from my observation, my vantage point — outside the halls of Congress as opposed to inside,” Yakym said. “As we look at the menu of options that are available to us, my goal in the committee is to ensure that municipal tax-bond exemption removal is not on that menu for discussion.”

Yakym, who previously served on the Indiana Finance Authority, a conduit for municipal issuers to sell bonds, said he’s seen firsthand the positive impact of the muni tax-exemption. It provides municipal borrowers, particularly the smallest towns, access to low-cost capital that they may not have otherwise to fix roads or sewer systems, he said.

Roughly $11 billion in municipal bonds are currently outstanding in Yakym’s district, which includes South Bend. Without tax exemption, the cost of that debt could be at least $150 million higher a year, he said, based on estimates.

A niche within the broader municipal industry called “private activity bonds” may be subject to some scrutiny in terms of cost and impact, he said. Such debt can be issued by public agencies on behalf of colleges, hospitals, airports, affordable housing developers, and other entities.

Along with Representative David Kustoff, a Republican from Tennessee, Yakym is also advocating to revive a debt-refinancing tactic that allows state and local government borrowers to sell tax-exempt muni bonds for so-called advance refundings. This provision was eliminated as part of the 2017 tax cuts.

The congressmen are now seeking co-sponsors for legislation introduced earlier this month, with the hopes of including the measure in budget reconciliation.

“We want to provide the opportunity for these municipalities to do advance refunding and to be able to refinance their debt successfully as interest rates continue to fall,” Yakym said.

Bloomberg Politics

By Shruti Singh

February 27, 2025