Municipal Finance & Fiscal Distress
Not All Cities Have A Pension Problem
By Richard A. Ciccarone, President & CEO of Merritt Research Services, LLC and Co-Owner of MUNINET, LLC The Top 21% of Cities With High Pension Funding Levels Deserve Attention and Usually Praise With so much well-deserved negative attention focused on cities...
Worried About Public Pensions? Counties Often Have Lower Burdens
Counties Often Underappreciated Despite Generally Improving Fund Balances and Lower Debt and Pension Liabilities By Richard A. Ciccarone County governments are generally a good place to start your search for governments with positive financial conditions as well as...
Paying for Yesterday’s Public Services with Tomorrow’s Funds – Risking City Fiscal Stress
Are Fixed Costs Squeezing Out State and Local Governments' Ability to Deliver Public Services? In the back of every analyst’s mind, whenever they assess public pension risk and the potential for fiscal stress, is the question of whether or not the annual cost to pay...
Aging Infrastructure Is a Problem, From Any Point of View
Accounting Approach Shows Aging Infrastructure Kicks Additional Costs to the Future Validating the Aging Infrastructure Problem from the Engineer’s Point of View There are few public-minded cities and governmental officials that are unaware of America’s recent habit...
Fiscal Contagion: When Distressed Municipalities Put States and Local Clusters at Risk
by Richard A. Ciccarone When a municipal government suffers severe fiscal problems, be it a city, county, school district, utility district, or any other special purpose government, those problems have a tendency to impact or be shared by other governments. Bond...
This May Be One “Discount” That’s not So Appealing
More on 2015 City Pension Funds: This is Part II in Richard Ciccarone's look at city pension funds in 2015 and the future landscape. Part I can be found here. Earlier this month, MuniNet reported that most city pension plan funding ratios took a positive bounce based...
The Myth That Bankruptcy Is the Only Option for Distressed States and Cities – Alternatives to Chapter 9
By James Spiotto Myth: State and local governments only recourse to financial distress is to file bankruptcy or to stop making debt payments to bondholders. Reality: States do not presently have a bankruptcy alternative and do not seem to desire one. State and local...
Municipal Bankruptcy and Default
Commentary: Just Wipe Out Public Debt! — Not a Solution for Puerto Rico or Anyone Else
- by James Spiotto With the end of the flurry of Congressional activity over impeachment, followed by a general yearning for the end to partisan conflicts, we now look to this year and what issues can be addressed before the national election. There remain lingering...
What Illinois Can Learn From the Supreme Court of Rhode Island and Even Puerto Rico About Public Pension Reform
By James E. Spiotto The U.S. Supreme Court and virtually all state courts have recognized what the Rhode Island Supreme Court recently reaffirmed: insurmountable, unaffordable government contractual obligations for public pensions must be capable of reasonable and...
Chapter 9 Municipal Bankruptcy Statistics: Use by Number, Type and Year
Historically, the use of Chapter 9 bankruptcy by a municipality is still rare, and a last resort. MuniNet Guide's update on historical and current municipal bankruptcy statistics We are providing an update on our 2015 piece on municipal bankruptcy statistics. One of...
Written Statement of James E. Spiotto to the U.S. Senate Judiciary Committee
By James Spiotto United States Senate Committee on the Judiciary Hearing on Puerto Rico’s Fiscal Problems: Examining the Source and Exploring the Solution Is Chapter 9 Bankruptcy the Ultimate Remedy for Financially Distressed Territories and Sovereigns Such as Puerto...
Congress’s Role in Saving Puerto Rico from Financial Meltdown and Imminent Bankruptcy
by James Spiotto On December 1, 2015, the United States Senate Committee on the Judiciary held a hearing on whether and how best to assist Puerto Rico and its related municipalities and public corporations now facing severe financial challenges and economic distress....
Use of Chapter 9 Bankruptcy (by Number, Type and Year)
Historically the use of Chapter 9 bankruptcy by a municipality has been rare and a last resort: Since 1954, virtually all of those municipalities that filed Chapter 9 were small or not major issuers of Bond Debt except for Bridgeport, CT in 1991, Orange County in...
Chapter 9 and Alternatives – Part Three: Competing Interests in Chapter 9 and Bondholders’ Rights
by James Spiotto Chapter 9 is generally viewed as the remedy of last resort for troubled municipalities. If permitted by its state law, a municipality typically does not seek Chapter 9 relief unless it is in extreme financial distress with no obvious solution. Among...
Chapter 9 and Alternatives – Part One: Lessons Learned: An Update on the Municipal Bankruptcy Experience
by James Spiotto The state legislatures, in considering how best to assist local governments facing financial challenges or economic distress, may find instructive how other states have addressed these problems and the alternatives and opportunities available in the...
The Myth That States Required a Bankruptcy Option – Debt Resolution Mechanism’s for States
By James Spiotto Myth: States need the ability to go bankrupt and have no standing debt resolution mechanisms. Reality: Since the late 1800’s, no state has defaulted on its general obligation bonds with the exception of Arkansas in 1933 which was refinanced. State...
What Are the Causes of Municipal Defaults and Bankruptcy?
by James Spiotto A. Traditionally causes of municipal bond defaults in the U.S.A. have been more linked to inability to pay rather than unwillingness to pay or political risks: Economic depression. Non-essential services. Feasibility of projects and municipal...
Understanding Municipal Bankruptcy and Who Can Use Chapter 9?
By James Spiotto What is Chapter 9? Exclusive chapter of the Bankruptcy Code that provides a method for municipalities to adjust debt. Not a tool for elimination of municipal debt but adjustment of debt to what is sustainable and affordable. It is voluntary, a...
Lessons Learned from the Detroit Bankruptcy
by James Spiotto In July of 2013, Detroit was the first city that was the largest city in the state to seek protection under Chapter 9 of the Bankruptcy Code for municipal debt adjustment. Previously, Chapter 9 had been a remedy used rarely by any city, town, village...
Detroit’s Bankruptcy Repudiation of COPs Defies History
Detroit’s repudiation of its COPs in bankruptcy is not supported by the history of government finance in the U.S. Repudiation of debt by states or local governments is not new, dating back as far as the early 1800’s. The lessons learned from that repudiation should not be forgotten.
Puerto Rico’s “Willingness to Pay” Issue
Muni investors were sitting on pins and needles Tuesday morning and it was not all about the outcome of the USA-Belgium World Cup match. Weighing on their minds was the question of whether or not, in the wake of last week’s events, PREPA would be making payment for the July 1st coupon on its debt. A non-payment, of course, would constitute the largest muni default to date, eclipsing the Detroit case. It would also send a clear message that PREPA intends to seek imminent relief under the new “bankruptcy law†for public corporations.
A Historic Muni Bankruptcy Comes To a Close … For Now
Market Outlook The bond market was looking for bad news this week and found it in the minutes of the FOMC, released on Wednesday. Apparently, tapering has remained on the table, which really shouldn’t surprise anyone. However, the Committee did leave the door open for...
All Eyes on Detroit: What Happens to Unfunded Pension Liabilities When a Municipality Files for Bankruptcy?
While Detroit’s recent Chapter 9 municipal bankruptcy filing has certainly posed a variety of challenges for the City’s citizens and creditors, it may also serve a greater social benefit. Participants in the Detroit bankruptcy are presently considering the legal and...
Demystifying the High Yield Municipal Bond Market
“For most investors, the mere mention of high yield recalls the high-risk, speculative “junk bonds” of the Michael Milken era and its well-documented excesses. In the municipal arena, high yield also means higher risk, but the term encompasses a much broader class of...
Municipal Bankruptcy Remains “Last Resort” Despite Troubled Economy
Municipalities must prove insolvency in order to file for Chapter 9 protection
Vallejo Bankruptcy Filing Garners Attention in Municipal Finance Circles
As the courts consider Vallejo’s request for Chapter 9 protection, will other municipalities follow suit?
Municipal Bonds, Credit Quality and Disclosure
Fiscal Year 2017 Municipal Bond Audit Times Are Still Too Slow
Municipal Bond Audit Times Show Slight Improvement Since 2015 But Most Still Late to the Table -- The County, State and City Sectors are the Least Timely By Richard A. Ciccarone Municipal bond analysts and investors are accustomed to waiting a lot longer for...
Re-Assessing the Credit Quality of America’s Cities in 2017 – Part One: Examining Financial Health Against a Backdrop of High Ratings
Are Credit Ratings Reflecting True Risk? More than two years ago, MuniNet published a five-part series on Assessing the Credit Quality of America's Cities, intended to examine and create a framework to analyze the financial health of cities. With this first...
State and Local Government 2015 Audit Times Take a Step Backward
Municipal Government Audit Times Likely Affected by GASB Pension Rules A longstanding complaint among municipal bond analysts and investors is that municipal bond credit disclosures are slow to be reported, and not as timely as they are for other securities in the...
Assessing the Credit Quality of America’s Cities – Part Five: The Bottom Line
Due to its lack of accounting for infrastructure assets and all long-term debt and liabilities, including pensions, general fund analysis has limited utility when analyzing municipal financial health. By Richard A. Ciccarone By incorporating the...
Assessing the Credit Quality of America’s Cities – Part Four: FY 2014 Financial Condition
The most basic sign that a government is living within its means is that it balances its books at the end of the year. Traditionally, most city officials, experts, and observers of state and local government focus primarily on the general fund, usually a government's...
Assessing the Credit Quality of America’s Cities – Part Three: Long-Term Liabilities beyond Pensions
By Richard A. Ciccarone City Financial Challenges Beyond Pensions When Assessing the Credit Quality of America's Cities, pensions aren't the only big long term liability facing America's cities. Add to the list bonded indebtedness, other post-employment benefits...
Assessing the Credit Quality of America’s Cities – Part Two: The Achilles Heel to the Fiscal Condition of Cities – Public Pensions
In the second part of our series on city credit quality, the spotlight shifts to the Achilles heel for many cities: public pensions. by Richard A. Ciccarone Governmental credit quality is a byproduct of both the underlying economy and the cumulative...
Assessing the Credit Quality of America’s Cities – Part One: Focus on Bond Ratings
How close to the fiscal distress edge are America's cities? This article, the first in a series, Assessing the Credit Quality of America's Cities, examines the financial health of cities against a backdrop of high ratings issued by the three major credit rating...
Does Municipal Bond Credit Quality Impact Annual Audit Times?
Increased attention on local government fiscal stress and Chapter 9 bankruptcy filings has heightened concerns over municipal bond credit quality in wider circles than ever before. But while the Securities and Exchange Commission (SEC) requires certain issuers of...
Most Municipal Audits Still Slow, Despite Push for Timely Transparency
In the corporate bond market, the Securities and Exchange Commission (SEC) requires that annual audit reports be submitted within 60 to 90 days of the close of the fiscal year. While the Municipal Securities Rulemaking Board (MSRB) has said that it would like to have...
Study Examines Municipal Audit Turnaround Time
How long does it take for municipal entities to produce annual audit reports?
Debate Over Restructuring Muni Ratings System Continues
While proponents of a radical change in the municipal ratings system would like to see imminent change, others caution against acting in haste.
How the Muni Bond Experts Use the Internet
We recently polled members of the MuniNet Guide & Review Editorial Advisory Board - a group comprised of professionals who work in local government and municipal research - to see how they use the Internet to get the information they need to do their jobs....
Muninet Guide – General Topics
U.S. State Crime Rates – Comparing Types of Crimes Across the States
Report - U.S. State Crime Rates by Type for All 50 States, D.C., and Puerto Rico This report gives researchers and citizens an opportunity to look at U.S. state crime rates, what crimes are being committed and in what frequency, for all 50 states plus Puerto Rico and...
Who Watches the Watchdogs? Be Your Own Media Bias and ‘Fake’ News Analyst
The Best Armor Against Media Bias, Fake News, and Other Disinformation is Your Own Education and Ability to Identify It MuniNet takes a look at why bias matters, the difference between bias, spin, and truly 'fake' news, and provides you with tools to...
Are Public Libraries Still Relevant in American Communities?
by Mardee Handler Founded in 1833, the Peterborough Town Library in Peterborough, New Hampshire is the oldest tax-revenue supported library in the nation. If you visit its website, you’ll be greeted by an offer to follow the library on Facebook, attend a workshop to...
Do Sports Teams and Venues Have a Significant Impact on Local Economies?
by Mardee Handler The economic benefit of major league sports teams, international mega-events and sport venues has become a particularly contentious public finance issue over the past few decades, according to Robert Baade, Ph.D., Professor of Economics and Business...
The Tug-of-War between Cities and Suburbs
by Mardee Handler, managing editor From the nation’s most densely population urban centers to outer-ring suburbs, the U.S. population continues to shift, while the concepts of urban sprawl and smart growth remain hot topics in municipal circles. Well into the second...
Five Handy Online Calculators for Municipal Research
by Mardee Handler, managing editor We’ve come a long way from the abacus. The online world is not flat, which continues to increase the power of the Internet. Certainly, we can access vast amounts of information online. We can also, in a growing number of examples,...
Reflections from the Editor: Guiding the Municipal-Minded through the Internet Evolution
This year, MuniNet Guide celebrates its 15th anniversary. In March of 1997, after a year of research and development, the first issue of MuniNet Guide & Review was published as a 12-page hard-copy newsletter. At the time, the Internet was in its infancy, and...
SPECIAL! Select Cities Lead the Pack in Providing Investor Relations Content
Trailblazing cities recognized for excellence in providing online information for municipal investors
MuniNet Guide Top Picks – January 2010
A sampling of editor’s picks for outstanding municipal-related websites of the month
Scenes Contribute to the Growth and Decline of Communities
The combination of scenes, attitudes and values has a strong influence on where people choose to live.
Striving for Online Excellence – Part 3: Content
This third installment in MuniNet Guide’s “Striving for Online Excellence” three-part series examines quality content – perhaps the most important element of a municipal web site.