PRACTICES

Specialized Governmental Services

Municipal Management Services

Is your Municipality facing a retirement or vacancy in a municipal management position?

McNees is ready to assist your Municipality in it’s time of need by offering interim municipal management services and training.

With the number of retirements and vacancies escalating, the demand for experienced management professionals has made the search process more difficult. Consequently, the time required to complete transitions and management duties are growing longer, making an interim appointment necessary.

Gain peace of mind knowing your municipal operations are in experienced hands and will continue to function as normal. McNees’ Specialist Penny Pollick has over a decade of experience in municipal government and can bring continuity, leadership and support to your remaining staff.

McNees offers flexibility with contract lengths based off of your needs. Compensation will be determined on a case by case basis varying by location, scope of work and position needs. Since the interim position will be employed by McNees, tax, insurance and other benefits will not be an issue to the municipality.

How We Help

Overall Assessment

  • Complete an overall assessment of the Municipality to determine strengths, weaknesses and areas of need in both operations and staff.
  • Guide and train staff accordingly

Daily Operations

  • Aid in efficiency and completeness of all daily operations

Accounting Procedures  

  • Audits, Banking, Bookkeeping, Budgets, Registrations, Tax and Tax Assessments

Governmental Entities

  • DCCD, DCED, DCNR, DEP, EPA, etc.

Elected & Appointed Officials

  • Terms of service, notification and appointment letters, compensation, etc.

FEMA and PEMA

  • Assist client in all aspects of a Natural Disaster (Flood, Snow, Hazard Mitigation, etc.)

General

  • Agendas, Minutes, Ordinances, Resolutions, Document Retention, Open Records, Zoning, Organization, etc.

Grants

  • Applications and Administration

Human Resources

  • Employee files, Hire packets, Personnel Policies, Back-ground checks, etc.

Pension Plan

  • Monthly, Quarterly, Annual Reports and Submissions, MMO, etc.

Reports

  • Assist in all mandated reporting requirements to the various government entities

Continuing Disclosure Compliance

Are you in compliance with the Securities and Exchange Commission (SEC) Rule 15c2-12?

Are you timely filing the MANDATORY requirements with the Electronic Municipal Market Access (EMMA) system?

Are all your filings in accordance with your Continuing Disclosure Agreement?

A Continuing Disclosure Agreement was executed in connection with the preparation for the closing of your bond issue and is enforceable against the signing party by the holders of the Bonds.

Two aspects of Rule 15c2-12 to consider:

  1. The Rule prohibits an Underwriter from purchasing or selling Bonds without first determining the Issuer’s five-year filing history on EMMA
  1. The Issuer has agreed to provide ongoing disclosure of certain information including:

– Annual financial information (often more than just audited financial statements.)
– Material event notices.

Issuers are subject to anti-fraud provisions of federal securities laws.

Thorough, extensive research of compliance history with continuing disclosure undertakings is an absolute necessity. We call this a “Deep Dive”:

  1. Not just an administrative checklist that some filing is made.
  2. You must ensure the substance of each filing satisfies the Issuer’s continuing disclosure obligations.

Examples of non-compliance with continuing disclosure obligations:

  1. Failure to report material events.
  2. Failure to file annual information.
  3. Late filings of material events or annual information.
  4. If information is submitted elsewhere on EMMA, the failure to file cross-reference filings is deemed by the SEC to be material non-compliance.
  5. Similarly, timely making of filings in the wrong location constitutes non-compliance.
  6. Failure to link annual information to the CUSIP of each outstanding security constitutes non-compliance.
  7. Failure to include all required content in the annual financial information constitutes non-compliance.

Consequences of failure to make required disclosures:

  1. The Continuing Disclosure Agreement is an enforceable agreement, and the Issuer may be compelled, either by the Underwriter, by any holder of its Bonds, and sometimes by other persons, to make the required disclosures.
  2. Failure to comply with the continuing disclosure obligations must be disclosed in future official statements.
  3. Failure to comply with continuing disclosure obligations may prohibit the Issuer from accessing the market for future financings as the Underwriter may determine that it cannot reasonably rely upon the Issuer to comply in the future.
  4. The SEC may assess penalties against an Issuer; charge an Issuer with violation of a cease and desist order; or charge an Issuer with making false statements.

Identifying potential reasons for non-compliance:

  1. Issuers have worked to identify the major cause of non-compliance. Overall, it seems that a lack of knowledge and education is the primary culprit.
  2. A small municipality or school district that goes to market infrequently is not likely to have a system in place to remind key personnel of disclosure requirements.
  3. Staff turnover is also likely; the finance manager or treasurer that issues the bonds may not be there five years down the road, therefore, the continuing disclosure requirements get overlooked.

Conclusion:

Successful continuing disclosure compliance requires a concerted effort by many different parties, primarily the management of the Issuer. One thing is certain; the SEC continues to increase its focus on the municipal market. It’s imperative that Issuers comply with the terms of its Continuing Disclosure Agreement. Now more than ever, it is critical for Issuers to ensure that effective internal controls pertaining to continuing disclosure compliance are in place and operational.

How McNees Helps

The Public Finance & Government Services Group of McNees Wallace & Nurick LLC is able to assist issuers and obligated person clients in complying with their continuing disclosure requirements under SEC Rule 15c2-12.

Penny Pollick, our Continuing Disclosure Specialist together with our public finance professionals, can offer such continuing disclosure-related services as creating and maintaining compliance templates for operating and financial data, undertaking continuing disclosure filings for issuer and obligated parties and creating model policies and procedures. Additionally, we will monitor continuing disclosure trends, review and provide advice on current continuing disclosure obligations and provide continuing disclosure training as requested and required.

We will also provide continuing disclosure compliance review services for underwriters and financial advisors to determine whether remedial action and disclosure of past filing failures is necessary prior to the publication of preliminary offering documents.

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