February 17, 2011
The Public Finance Authority (PFA) supports the regulation of municipal financial advisors which was included in the Section 975 of the 2010 Dodd-Frank Act. However, the PFA opposes the proposed definition of municipal advisors to include appointed members to governing bodies. Instead, PFA insists that the SEC exclude all governing body members, including those that serve across jurisdictional boundaries, from the municipal advisor definition based upon the following:
1.Governing boards of a state, a local government or a joint powers authority governing board such as the PFA are comprised of appointed members. A governing board cannot serve as an advisor to itself. The Board members for PFA are appointed by the executive committees of the National Association of Counties, National League of Cities, Wisconsin Counties Association and League of Wisconsin Municipalities which consists of elected officials.
2. The governing board of the PFA are directly accountable for its performance to the citizens of each municipal entity in which bonds are issued. The PFA cannot approve any financing unless a public hearing and approval is completed by the local elected body.
3. Appointed members of governing bodies, especially an entity like PFA, are typically citizen or public agency volunteers who are interested in serving for the public good, and often have special expertise that is critical to the effective functioning of the governing body. Having the federal government impose requirements on appointed state and local governing board members could deter qualified citizens from participating on these boards.