McNees is hosting a Municipal Roundtable to discuss the issues of disclosure in the secondary market. This discussion will include an overview of SEC Rule 15c2-12 and cover everything from the simple things issuers do wrong to ESG disclosure and disclosure by distressed issuers. Participants will also have the ability to ask questions in this
Billions of Dollars Will Soon Start Flowing to State and Local Governments under the American Rescue Plan Act of 2021. Here’s What to Expect.
On March 11, 2021, President Joe Biden signed into law the American Rescue Plan Act of 2021 (“ARPA”), which provides for almost two trillion dollars of new federal spending to combat the ongoing impact of the COVID-19 Pandemic. Of particular interest for Pennsylvania is the approximate $350 Billion of new funding appropriated to tribal governments, states, territories, and local governments, $14 Billion of which is estimated to be received by Pennsylvania and its municipalities. With the United States Department of the Treasury (“Treasury”) mandated to pay out a substantial portion of the funds within 60 days of the enactment of ARPA, Pennsylvania and its municipalities might see initial funding from ARPA as early as May.
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With Great Funding Comes Great Responsibility: Assisting Municipalities with American Rescue Plan Compliance
Pennsylvania counties and municipalities could see a windfall from the nearly $14 billion in aid that will be delivered to the commonwealth through the recently passed American Rescue Plan Act.
While it will be welcome financial relief, counties and local governments should be aware of the rules and regulations regarding how those funds should be spent.
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MSRB Releases 2020 Review of Municipal Bond Market
The Municipal Securities Rulemaking Board (MSRB), the regulatory body that oversees the municipal securities market in the United States, recently released its annual report on the status of the market. The report, which can be reviewed here, offers some fascinating insights into what was a tumultuous year for the market. Our highlights follow:
- Spring Market Dislocation: For about two weeks in March, the market simply stopped functioning. During this period, benchmark yields in 3-, 10- and 30-year bonds increased by 213, 193 and 182 basis points, respectively. However, the recovery was similarly swift, with yields substantially returning to their pre-pandemic levels by the end of March.
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Short-Term Borrowing for Local Governments, School Districts in COVID Uncertainty
Recent legislation passed by the Pennsylvania General Assembly offers a new short short-term borrowing option to local governments and school districts dealing with budget uncertainties related to the ongoing COVID-19 Pandemic. House Bill 2536 was signed into law by Governor Tom Wolf on November 23, 2020, as Act 114 of 2020. Among other things, Act 114 created a special, limited emergency tax and revenue anticipation note program for the 2021 calendar year. The new program will provide greater financial flexibility to local governments and school districts as they await the results of tax collections in the coming months.
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Budgeting for OPEB Liabilities with an OPEB Trust
Many Pennsylvania municipalities in recent years have struggled to rein in their Other Post Employment Benefits (OPEB) liabilities. OPEB benefits are retirement benefits a public employer has promised to provide its retired employees, other than pension payments. Benefits might include life insurance premiums, post-retirement healthcare, dental and vision benefits and other types of benefits.
OPEB benefits are typically funded using one of two methods: (i) the pay-as-you-go method, which is generally paid each year from the municipality’s general fund; or (2) or an OPEB trust. A trust is typically established through an initial and then subsequent transfers of funds. The trust funds are invested and the principal and interest are used to pay for the promised OPEB benefits.
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McNees Launches Apollo Communications
McNees Wallace & Nurick LLC has launched a new public relations agency to provide strategic communications services to its clients and the regional business community.
Apollo Communications is headquartered in Harrisburg and will serve clients across Pennsylvania, Ohio and Maryland. McNees has selected veteran public relations professional and former journalist Brett Marcy to serve as president of Apollo Communications.
The company is just the latest initiative by McNees to provide enhanced value to clients and the community, said McNees Chair Brian Jackson. In recent years, the firm has added full-service government affairs, grassroots advocacy and nonprofit consulting to its professional services portfolio.
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The Relationship of Bond Counsel and Solicitor in a Bond Issue
A municipality or school district that is issuing debt (referred to herein as an “issuer”) needs to employ legal counsel to assist it with the debt issuance process. There are several legal roles in a bond issuance, two of which involve representing the issuer. To begin with, the issuer already has its regular solicitor who serves as the issuer’s general counsel on a wide range of legal issues, such as labor matters, bidding and contracts, land development, and litigation. When an issuer decides to issue debt to finance or refinance a capital project, it should also retain a special counsel, known as bond counsel, to assist both the issuer and its solicitor with the debt issuance process. Bond counsel firms specialize in the legal aspects of debt issuance, including tax law, securities law, and state statutory law.
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COVID-19 Related Extension Proposed for Pennsylvania Municipal Financial Recovery Program
On May 26, 2020 Representative Rob Freeman (Democrat – Northampton County) introduced House Bill 2548 in the Pennsylvania General Assembly, to provide a temporary reprieve to municipalities enrolled in Pennsylvania’s Municipal Financial Recovery Program. Mr. Freeman is the minority chair of the House Local Government Committee, the committee to which the bill was referred for consideration.
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Tax Anticipation Notes: A Short-Term Cure for the Coronavirus Budget Deficit?
With the onslaught of negative economic news related to the ongoing coronavirus crisis, many municipalities are scrambling to determine the impact of the pandemic on, among other things, their finances. Many may be staring down unbudgeted expenses related to this public health emergency, while at the same time anticipating substantial deficits due to drop-offs in real estate and income tax collections.
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