On May 7, 2019, the City of Baltimore discovered that its integral systems were the subject of a ransomware attack, breaching the City’s phone systems, emails, documents and critical operational databases, affecting roughly 10,000 City computers. The City notified the F.B.I. and took offline as many other systems as possible to prevent the spread of the cyberattack, but not before the malicious software locked and encrypted many of the City’s systems. The hackers responsible for the attack demanded thirteen bitcoins (approximately $100,000), as ransom, to release the City’s inaccessible databases and operational tools. In a move intended to disincentive future attacks, Baltimore rejected hackers’ demands and did not pay the ransom. Continue Reading Ransomware Attacks Targeting Cities and Municipalities
The Internal Revenue Service recently released Notice 2019-39, clarifying the scope of permitted current refundings of bonds issued under special governmental bond programs. Issuers may rely on this Notice to issue tax-exempt bonds to currently refund any bonds that are issued pursuant to such targeted programs, subject to some limitations. Continue Reading IRS Blesses Current Refundings of Targeted Government Bond Programs (With Limits)
Pennsylvania Governor Tom Wolf recently signed into law Act 4 of 2019 (HB 264), which amends section 12 of the Municipality Authorities Act, 53 Pa.C.S. 5612, to establish minimum standards for an Authority’s financial and operating procedures. Act 4 received unanimous support in both the House and the Senate.
Act 4 makes a number of noteworthy changes to Section 12 of the Authorities Act. A brief summary of those changes follows:
- Mandates the use of generally accepted accounting principles in the establishment of billing and collection procedures;
- Prohibits the acceptance of payments in the name of an individual on behalf of the Authority;
- Requires that an Authority’s annual financial report be submitted on a form prepared by the Department of Community and Economic Development, as well as the Authority’s incorporating municipality and any other municipality has has residents served by the Authority;
- Extends the deadline to file the annual financial report to 180 days from the end of the fiscal year, from the previous 90 days; and
- Requires that the Authority’s annual report and audit be discussed at a public meeting and formally accepted by a vote of the Authority board.
Act 4 establishes minimum standards; nothing prevents an Authority from approving more stringent standards in its financial procedures.
Most of Act 4’s changes go into effect immediately; the changes to the annual reporting procedures go into effect 180 days after passage.
A group of elected officials in the Pennsylvania House of Representatives and Senate have reintroduced a series of bills making significant changes to the process by which municipalities in Pennsylvania incur debt. The introduction of these bills has become a biennial occurrence; since the 2013-2014 legislative session, similar bills have been introduced, calling for such changes. None of the prior proposals have been enacted into law.
The bills that have been introduced in the 2019-2020 legislative session primarily consist of two packages – one in the House and one in the Senate. The package of reform proposals in the House can be found at House Bills 882-884. The package of reform proposals in the Senate can be found at Senate Bills 204-210. One proposal was introduced as House Bill 320, and is a standalone measure addressing interest rate swaps. We’ve included in this post links to each bill, so that you can monitor the status of the bills. Continue Reading Slate of Municipal Debt Reform Proposals Reintroduced in PA House, Senate
On February 19, 2019, a bill was introduced in the Pennsylvania Senate proposing to amend the Pennsylvania Breach of Personal Information Notification Act (the “Act”) to add new breach notification requirements for state agencies and political subdivisions of the Commonwealth. Continue Reading Senate Bill Proposes New Data Breach Notification Requirements for Pennsylvania State Agencies, Municipalities, and School Districts
Last legislative session, the Pennsylvania House of Representatives introduced H.B. 2664, which sought to add a new subsection to the Workers’ Compensation Act addressing post-traumatic stress disorders in certain first responders. That Bill never made it out of committee, but that’s not the end of the story. Continue Reading Proposed Changes to the Pennsylvania Workers’ Compensation Act for First Responders
The MSRB is finalizing some user-friendly enhancements to the Electronic Municipal Market Access (EMMA) website, the website designated by the US Securities and Exchange Commission as the official source for municipal securities data and disclosure documents. The enhancements follow new continuing disclosure rules that will increase the volume of information required to be disclosed on EMMA. The MSRB expects that the enhancements will make it easier for issuers and obligated persons to submit information, and for the public to access it. The enhancements should roll out for public use this summer. Continue Reading EMMA Gets a Makeover: Enhancements Coming in Summer 2019
Anticipating a vacancy in your manager position? Does your current or new manager need some training on a complex issue? Are you facing a difficult and time-consuming project that your current staff does not have capacity to complete? We can help.
We work with a number of municipalities, and one constant refrain we hear from supervisors, staff and solicitors is that there is a shortage of qualified managers out there. Several factors contribute to this situation. Let’s face facts, there are a number of baby boomers considering retirement. In many cases, there is no one on the “bench” in the township ready to step up to replace these folks. There are few opportunities to obtain the training necessary to become a well-rounded effective manager. Many municipal government staffs are just too small. Continue Reading Need Help with Your Municipal Manager Position?
Last week amendments to the SEC continuing disclosure rules for municipal bonds went into effect. Under the new rules, municipalities that are planning a public offering of municipal bonds must update their continuing disclosure agreements to include covenants to disclose each of the following:
- Incurrence of a financial obligation of the obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the obligated person, any of which affect security holders, if material.
- Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the obligated person, any of which reflect financial difficulties.
If you aren’t up to speed yet on the new rules, don’t panic – we’ve been following the issues relating to the implementation of the new rules closely since their announcement in August 2018. For more information, please see our prior commentary, available here and here.
We will continue to monitor industry response to the new rules and will be providing additional updates throughout the year as issuers, underwriters and their professionals adjust to them. Stay tuned!
On February 12, 2019, Representative Tina Davis introduced a bill proposing to establish a new regulatory commission with oversight over municipal water and wastewater authorities. H.B. 494 would establish a Municipal Water and Wastewater Authority Oversight Commission (“Authority Commission”). Representative Davis previously sponsored H.B. 798, which would have amended the Public Utility Code to subject municipal water and wastewater authorities to regulation by the Pennsylvania Public Utility Commission (“PUC”). Introduced in 2017, H.B. 798 failed to move out of the Consumer Affairs Committee. Continue Reading New House Proposal Would Subject Municipal Water, Wastewater Authorities to Additional Oversight