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Registration Open for the 2013 Ehlers Wisconsin Public Finance Seminar
Who doesn't want to take a cruise in the middle of winter? Join us for the Ehlers Cruise: Sailing the Seas of Public Finance at our annual Wisconsin Public Finance Seminar February 14-15, 2013 at the Kalahari Resort in the Wisconsin Dells.
Highlights this year include sessions featuring perspectives from several respected private sector real estate professionals to discuss key components necessary for successful development/redevelopment initiatives, an overview of development guarantees that are appropriate for developer agreements in the current market, a preview of the financial outlook for Wisconsin in 2013, the impact of the Financial Reform Act to local governments, current trends in public finance that could impact your next bond issue, and a look ahead at the 2013 legislative session.
We look forward to seeing you February 14th and February 15th.
Click here to view the brochure and register for the Seminar.
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IRS Work Plan
by Gail Robertson, Senior Arbitrage Specialist
The Tax-Exempt Bond (TEB) office of the Internal Revenue Service (IRS) has announced work plan priorities for 2013. The plan identifies specific measures to be taken by IRS agents over the next year to determine whether issuers of tax-exempt bonds are complying with post-issuance responsibilities.
Click here to read more.
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Introducing Kristen and Maureen
Ehlers is pleased to announce the addition of two staff members to our Wisconsin Financial Advisory Team.
Kristen Polson and Maureen Schiel join the 15 public finance professionals already serving our Wisconsin clients from our Brookfield office.
Click here for some brief background information to help you get to know them.
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Ehlers
375 Bishops Way
Suite 225
Brookfield, WI 53005
Phone: 262-785-1520
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Greetings!
As we begin 2013, we have a number of newsworthy articles in this issue of The Advisor.
Refundings were a popular theme both in our bi-weekly market commentaries as well with many of our clients. We'll outline a sample of some of the savings that could apply to your community too.
We'll update you with recent Dodd-Frank events and how they will apply to you. Many clients find value in engaging Paying Agents for their debt payments, so we'll discuss those.
Two tax-related articles will touch on the 2013 IRS Work Plan and how federal budget balancing could increase municipal borrowing interest rates.
The annual Ehlers Wisconsin Public Finance Seminar is just a few weeks away on
February 14-15, 2013. Be sure to look at the brochure and register to attend.
Finally, we welcome two new Ehlers' employees to the Wisconsin team, and introduce Kristen and Maureen to you. You can meet them in person and the rest of the team at the Public Finance Seminar!
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The Refunding Rodeo
by Phil Cosson, Senior Financial Advisor
In our bi-weekly market commentaries over the past year, we regularly chronicled the decline in interest rates and the common refrain "interest rates reach record lows". Many communities have refunded existing debt issues for savings.
In the link below is a table that provides a sample of refundings completed from late September 2012 through mid-November 2012. Savings are shown as "present value savings". Present Value savings represents what the future stream of savings is worth today considering that savings realized in the future are worth less than near term savings.
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 In July of 2010, the President signed the Dodd- Frank Consumer Protection Act into law. Among many changes, the Act regulated Financial Advisors, like Ehlers, as Municipal Advisors.
While Municipal Advisors are regulated under temporary rules by the Securities and Exchange Commission (SEC) and Municipal Securities Rulemaking Board (MSRB), the final rules have not been established by the MSRB.
The MSRB is still waiting for the SEC to finalize the definition of a Municipal Advisor. This definition is the same proposed rule that would have made appointed public board members subject to the Municipal Advisor rules. The SEC took comments on this rule in March of 2011 but still has not made a final determination as to who is a municipal advisor. |
The Value of Paying Agent Services
by Dawn Gunderson , Financial Advisor
Principal and interest payments for registered issues of municipal securities are made to the Depository Trust Company (DTC) which receives issuer payments, and in turn, pays registered bond holders. Some issuers choose to make their debt payments directly to DTC, while others engage a "paying agent" for this purpose. Ehlers provides paying agent services through an affiliate company, Bond Trust Services Corporation.
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Federal Budget Balancing Could Increase Municipal Borrowing Interest Rate
by Steve Apfelbacher, Senior Financial Advisor
Currently governmental entities are able to issue debt with interest to investors being exempt from federal income taxes. This exemption results in debt interest rates that can be up to 2% lower than comparable taxable interest rates. Congress and the President continue the battle to find an approach to balance the federal budget.
Eliminating or capping the exemption of interest for tax exempt debt on individual federal 1040 tax forms are approaches that are being suggested. All of these approaches will result in higher borrowing costs for governmental entities. There are four good reasons not to change the treatment of interest earned on federal tax exemption for municipal bond interest.
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