Closing Budget Gaps With Asset Sales ABA 2012 Spring Meeting and 7 - - PowerPoint PPT Presentation
Closing Budget Gaps With Asset Sales ABA 2012 Spring Meeting and 7 th Annual State & Local Procurement Symposium April 19-20, 2012 Washington, D.C. Harriet M. Welch, Partner The Issue to be Addressed State and Local Government Fiscal
Recurring revenue shortfalls due to Great
Recurring expenditure increases due to fixed
Inability to achieve balance in short term (1-5
Attempts to achieve balance causing reduction in
Solution requires current cash infusions
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Monetizing functioning assets unlocks asset value
Urban renewal/economic development/land bank
Proceeds of asset sale usually not restricted but
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Sale and leaseback; may require creation or use
True sale transaction (California model) Assignment of tax benefits to new owner, current
Use of EU-type senior “project bonds” (GO or
Lease facilities with up-front investor payment
Ground lease to retain public asset ownership and
Sale of easements for land use control
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Need to find state law authority to sell assets if
Referenda requirements and fair valuation of
Effect of asset sale “privatization” on credit
Effect on labor agreements and benefits if assets
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Tax-exempt status of interest on bonds which
Continued public management or privatization of
Proceeds of securitizing tax payment streams not
Risk of loss to the public if sold assets are the
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Statutes which authorize asset sales to generate
Statutes which authorize true sales; address
Statutes which set parameters for valuation of
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Statutes which address labor
Statutes which permit mortgaging public assets
Statutes which address treatment of mortgaged
Statutes which follow the 2007 ABA Model
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Establish legal alternatives to traditional municipal
Shift risk of loss to investors with
Include asset sales in P3 transaction to generate
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Amend IRC to provide new category for asset sale
Provide matching federal dollars/loan guarantees
Provide federal funding subsidies for rehabilitation
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Harriet Welch focuses her practice on public finance, project finance, securities and municipal bond issues. She has more than 20 years of public finance experience in California and more than 30 years of public finance experience overall. Harriet represents California bond issuers, investment bankers, letter of credit banks and borrowers on tax exempt financings. She has served as bond counsel for the County of Los Angeles on a variety of financings, the Redevelopment Agency of the City of Los Angeles, the State Public Works Board, the California Educational Facilities Authority, the California Health Facilities Financing Authority, California Municipal Finance Authority and the City of Los Angeles. Harriet’s practice has focused extensively in recent years on bond counsel engagements for colleges, universities, private schools and other nonprofit organizations. She has written articles, including “Everything You Wanted to Forget About Tax Exempt Financing,” for the Western Association of College and University Business Officers and other industry groups, and been a speaker at industry conferences. Since 1997, she has served as bond counsel on financings for more than 30 California colleges and universities. She has been active in developing tax exempt financing for religiously affiliated schools in California. Harriet has also served as disclosure counsel to the State Public Works Board and the City of San Diego. She has extensive experience on lease revenue financings and certificates of participation, limited obligation bonds and
connection with work-outs of these financings. During the past six years, Harriet has served and is serving in California as bond counsel on 66 financings; disclosure and underwriter’s counsel on 42 financings; borrower’s counsel on 27 financings; and issuer counsel
+1.213.689.5158 harriet.welch@ssd.com Practice Focus Public & Infrastructure Finance; Public Sector; Fiscal Stability Invitiative Education The Catholic University of America, J.D., Member, Catholic University Law Review, 1978 Loyola University New Orleans, B.A., 1975 Admissions California, 1988
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Harriet also has experience representing clients in financing matters for transactions in Bulgaria, Palestine and
contracts in international jurisdictions; debt structuring for the Higher Commission of Investment and Finance of the Palestinian National Authority; proposed refinancing of electric generating facilities for the municipality of Nablus; and the proposed construction of local municipal shopping centers in the cities of Nablus, Ramallah and Jenin. Harriet is a frequent speaker on tax exempt financings. She spoke at the 2010 California Public Finance Conference and the 2010 National Association of Bond Lawyers’ Bond Attorneys (NABL) Workshop on “Educational Facilities, Cultural Facilities and Other Non-Healthcare 501c-3 Financings.” She has been selected as a Southern California Super Lawyer in a survey of her peers distributed by Thomson Reuters each year since 2007. In 2007 Harriet was named a fellow of the American College of Bond Counsel. She is past president of the California Association of Bond Lawyers and a former board member of the Women Lawyers Association of Los
County Economic Development Corporation (LAEDC). She is also on the Development Committee of the Catholic Education Foundation.
Representative Experience
Bonds (University of La Verne), Series 2010.
Revenue Bonds (Mater Dei High School Project), Series 2010A, 2010B, 2010C and 2010D.
Anticipation Notes, Series A & B.
Waste Revenue Bonds (Republic Services, Inc. Project), Series 2010.
+1.213.689.5158 harriet.welch@ssd.com Practice Focus Public & Infrastructure Finance; Public Sector; Fiscal Stability Invitiative Education The Catholic University of America, J.D., Member, Catholic University Law Review, 1978 Loyola University New Orleans, B.A., 1975 Admissions California, 1988
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April 19-20, 2012 Washington, D.C.
Harriet M. Welch, Partner Squire Sanders (US) LLP 213.689.5158 harriet.welch@squiresanders.com
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