Today is the Monday Muni Minutes – 1 Year Anniversary Edition – and What a Year it has been!

Key Highlights this Week!

• NABL Releases Paper on Policies and Procedures – Summary and link inside!
• Wayne County Rating Gets Much-Needed Boost – Off negative watch based on progress
• Download “A Taxing Dilemma” – Debbie’s nationally published Post Issuance Compliance article
• Solving the Compliance Puzzle – Line 8 this week is Standards!
• Special 1 Year Anniversary Offer on PIC Essentials:  The Audit-Proven Blueprint

So…here goes…today’s Monday Muni Minutes!

Enjoy and have a great week!  Deb

CURRENT EVENTS

NABL Releases Paper on Policies and Procedures for Issuers

NABL has prepared a 37 page paper on one of the key items driving your municipal post issuance compliance program – your policies and procedures as well as key points in recent SEC
enforcement actions.

Keep reading for links and a high level summary …

Last week, NABL released “Crafting Disclosure Policies,” a paper which emphasizes key components of developing effective policies and procedures for post issuance compliance.

As we have shared in the Muni Minutes over the last year, policies and procedures are the cornerstones for both setting up and managing your program – for ongoing financing reasons as well as to be as prepared as you can be in the event of an IRS or SEC audit.

Here are key highlights of “Crafting Disclosure Policies…”

1. Why – the background on issuer disclosure needs
2. What – the core elements of disclosure policies
   • Disclosures covered
   • Developing procedures
   • Documenting compliance
   • Training
3. How – Developing the approach for drafting your P&P
   • Determine your existing process
   • Decide what enhancements need to be made
   • There are two “over-the-shoulder walk-through” policy examples in our free training for new members – PIC Basics!
4. Sample Disclosure Policies – here is the NABL link
   • We also have several great examples in our Knowledge Library!
5.  Appendices
   • App A – Understanding Recent SEC Emphasis on Policies
     • Several examples are shown as well as why the SEC cares
   • App B – Annotated Form Policies and Procedures – a Sample Policy
   • App C – Table of References, including Orders cited

Since starting Issuer 2 Issuer, what makes for good policies and procedures has been one of the most common questions we are asked – this understandable NABL paper reiterates the best practices – the core elements, the thought process and the regulatory reason behind it.

In addition to the NABL Report, you are welcome to download my nationally published 2013 AFP article, “A Taxing Dilemma.” In it, I share how we, as issuers, can systematically do a better job of understanding and managing our compliance programs.  I think you will see strong similarities…

You can read the full NABL press release here.

[Editor’s Note:  Interestingly enough, in surveys we do prior to speaking engagements or educational conference sessions, we found that, on average, over 42% of issuers responding either do not have adopted policies in place, or their policies have not been updated in many years…]

 

OUT & ABOUT

Conferences:

There are about 30 conferences and regional events for the second half of 2015…
You can go to this Bond Buyer link to review what’s coming up and register! 

Resources:

IRS Interim Guidance on BABs and Other Direct-Pay Bonds
IRS 39-Page Memo TE/GE-04-0715-0019
See the full article in the August 3rd Edition of the Muni Minutes!

Replay: Webinar: MCDC – What Comes Next for Muni Underwriters
By: DIVER by Lumesis and hosted by the Bond Buyer
IT was AWESOME!  In case you missed it…
Here is the replay link and the slides.

Munivestor.com

Check out the “muni deal of the week”…try if for FREE and look at it from the bondholder’s perspective.

On-Demand Post Issuance Compliance Training for Issuers

“Compliance Basics” – a FREE, 3-part video Compliance Framework training, plus the Monday Muni Minutes.

Just Released – with a valuable and amazingly cost-effective “team learning” option!  

NEW In-Depth Training, PIC Essentials:  The Audit-Proven Blueprint – covering, The IDR – Form 4564, Project Accounting Boot Camp and our hot-button friend, PBU!

On-Demand Webinar

Resource:  On Demand Replay of Continuing Disclosure after MCDC

Slides:  Final Slide Deck for Continuing Disclosure after MCDC

Muni Market Minute Updates

(Quick news bits on topics we’ve covered in earlier MMM editions!)

 Wayne County off Negative Watch as “Plan” Progresses

Over the last several months, we have discussed how Wayne County, MI (home county of Detroit) has been taking proactive steps to stave off a potential municipal bankruptcy – determined not to follow in Detroit’s footsteps…if at all possible.

Officials received welcome news from Fitch that their actions are working…

“The county recently entered into a consent agreement with the state under Act 436 that affords to the county’s executive and legislative branches many, but not all, of the emergency manager powers and which may improve expenditure flexibility.” the rating agency report states.

Entering into this consent agreement was listed as the primary reason for the rating change – although the County’s bonds still remain at a “B” rating.

However, there is still much work to be done.

Wayne County still has some significant challenges to overcome as cited in the report – including bolstering its sagging tax revenues, its pensions and forging a long-term plan of sustainability.

“The rating reflects the county’s substantial financial challenges which have resulted in persistent structural and accumulated deficits,” the report states. “Previous lack of significant revenue or expenditure flexibility has hampered efforts to address the imbalance.”

You can read the rest of the article here.  You can also see the actual rating report here.

[Editor’s Note: Wayne County Executive Warren C. Evans continues to do an outstanding job of moving the county in the right direction…and quicker than many of us expected it could be done.]

Back by Popular Demand….

Given the recent settlements by the SEC and focus on “what might be coming next” for issuers, let’s make sure we are all…

Solving the Compliance Puzzle!

I have to say that this is still one of my favorites – I fell in love with this graphic as it so clearly and brilliantly represents the puzzling complexity we are dealing with, as issuers, in meeting our compliance needs.

We also know that both the IRS and SEC are paying much closer attention to it these days – and that it is our obligation as issuers to understand (and have fully complied with) our respective bond covenants.

As part of this effort, each week for ten weeks, we will focus on providing tips, insights and resources for one new line of our compliance puzzle.

So, are you ready?

Today, we’ll tie in the eighth line of our puzzle – Standards.

Today, we’ll look at a couple new standards, why I believe they came about, as well as provide you some links to interesting agency resources for further information.   Sound good?  OK, let’s get started…

Why are Standards important to us – as issuers?

Standards (and for purposes of discussion today, regulatory standards), are benchmarks promulgated by a regulatory agency to enforce provisions of legislation.

Ah, there’s that dreaded “E” word again…

So…what’s the first thing that comes to mind when you think of the word “standards”?   For me, it’s this:  What impact, if any, does this [new standard] have on my job & processes?

We are all keenly aware of how the IRS, SEC, GAO and MSRB are steadily increasing bond compliance and enforcement efforts – many which have been highlighted in Current Events and Out & About above.

In researching these new standards to keep you informed, I try to wrap my brain around each agency’s focus points and how they contribute to our bond compliance program improvement efforts.

Here is a good example…tying in Dodd-Frank and MSRB

On October 24^, 2014, the SEC approved the MSRB’s new standard, Rule G-44, for Supervision and Compliance Requirements for Municipal Advisors.  This year we have been talking a lot about new standards for MAs/FAs – including testing and new layers of supervision.

As shared last week, The Dodd-Frank Wall Street Reform and Consumer Protection Act, mandated the MSRB enhance oversight in this area.

To begin, let’s connect how the impact of Dodd-Frank directly relates to our bonds:  Of the roughly $3.6 trillion in tax-exempt bonds which are currently outstanding, approximately 75% of those are held by retail investors (i.e. consumers) either as individual bonds or as part of their mutual fund holdings.

Here’s why that matters to us…

Remember the volatility in the market crash of 2007-2009?  Investors saw daily triple-digits swings (up and down) in the market.  We also had the auction rate securities liquidity freeze.  The phones rang off the hook.  Whether you were an investor, an officer managing your agency investments, the CFO or a public entity board member answering frustrated investor calls – there did not seem to be anywhere safe to go.

Everyone wanted to know – what’s next?

Many stood by, helplessly watching their liquidity, investment income, net worth (and, in some cases, their plans to retire) bounce all over the place…and they became angry. The most notable event was a crippling one day drops in the DJIA, with a nearly 780 point freefall on September 29, 2008.

Chaos begets correction – the pendulum effect.

Dramatic events like this, whether one time or part of a more systemic challenge, rippled across the entire investment market.   They directly affected legislation and drove these new standards and regulations which now impact our bonds…and our workflows.

We have already painfully seen – first-hand – the IRS, SEC and MSRB’s enhanced enforcement efforts with the MCDC Initiative, as well as how they plan to share data resources to enhance their compliance enforcement efforts.

Their increased use of technology, analytics, questionnaires and inter-agency sharing of their databases will be instrumental in achieving these goals.  As such, we need to be diligent in cross-checking our submissions – and, for some, just doing them in the first place.

In closing, here’s several informative agency and client compliance advisory resource links for you:

General Accounting Office (GAO)

Municipal Securities – Options for Improving Continuing Disclosure (CD)

Link on right of this page provide both 1 page summary and full report options for the CD report.

Generally Accepted Government Auditing Standards – Overview of the Yellow Book

For municipalities who are audited under these standards.

Municipal Securities Rulemaking Board (MSRB)

MSRB Education Center Main Page

Videos and other multimedia: understanding the market, investing, issuing and monitoring investments.

MSRB – Issuers and Continuing Disclosure

More multimedia specifically on disclosing information on our bonds!

Other Advisory Resources

Vermont Municipal Bond Bank – a State Approach to PIC

Securities Litigation Matters: Recent MCDC Examples by Mintz Levin

I hope you found this segment helpful!  Stay tuned – next week, we’ll dive into another really hot topic area – its line 9 of the puzzle –Policies.

Remember, take small bites.  For more information or other “Standards” resources, check out our Knowledge Library. You can also ask a question in the comments section or reach out to us privately via e-mail and we’ll do our best to help.

We really do look forward to your feedback – and to provide the best content possible.

Based on recent requests, I will be working with a couple of “finance team experts” who will provide guest articles on selected topics in muni finance, including the new rules for MAs, trainings and the investor view.  Are there other topics of interest?

Just shoot me an e-mail or drop us a line in the comments below and let us know, OK?

Have a GREAT week!

In closing, we are so excited that PIC Essentials: the Audit-Proven Blueprint is now available!  A special welcome to members who joined us. We look forward to your comments, questions and chatting with you in the Private Facebook Group – Club PIC!

NOTE:  You can still join the learning group here: PIC Essentials: the Audit-Proven Blueprint.

Plus, as we believe so strongly in the team approach to success, we are offering a tremendous “team discount,” where you and four additional compliance members within your agency or company can join the series right along with you…for only $70 more!

SURPRISE BONUS!!  Our 1st Anniversary Celebration Special Offer:  in celebration of Issuer 2 Issuer’s Muni Minutes One Year Anniversary, we are going to re-open up the special offer we ran earlier this summer – you can get all four hours of dedicated compliance training PIC Essentials for roughly 50% off the normal training price!  You can also still get the team package for $70 more, if you want!

Simply use this link to get your super-savings on PIC Essentials:  The Audit-Proven Blueprint .  However, this special offer will only be good this week – so please sign up and we’ll see you on the inside!

We hope you found this week’s edition of the Monday Muni Minutes valuable and informative.

Chat soon!

As always, your comments are welcome…scroll down and let us know what you think about any of the articles!

To your compliance success,

Debbie

 

 

The greatest compliment you can pay us is to share this newsletter with your issuer friends….

P.S. Enjoy reading the Monday Muni Minutes each week?  Invite your issuer friends to join us on Issuer 2 Issuer and so they can get their free online training, PIC Basics!  They will also get the Monday Muni Minutes delivered directly to their inbox as well as receive a special “new member” discount offer on the PIC Essentials training!

P.P.S. PIC Essentials: the Audit-Proven Blueprint is now available! You can sign up for the informative, on-demand webinar series by clicking above!  Read about the “Team Discount” above! Also check out our 1st Anniversary Special Offer above! It’s truly a great deal.

P.P.S. Want a one-click way to get faster information?  If you are on LinkedIn, you can get access to breaking muni news articles as well as interesting compliance tips and resources, posted by us during the week.  Join our private LinkedIn Group Page, and follow us on our Company Page.