The red state-blue state battle on a variety of political issues that has cast a cloud over muniland became a topic of discussion during an issuers panel at the California Public Finance conference Tuesday.
"I have bitten my tongue until now at this conference, where there has been a lot of talk about ESG," said panelist Nikolai Sklaroff, capital finance director of the San Francisco Public Utilities Commission. "I think we need to reframe how we discuss ESG and green bonds. We are discussing that a lot with the GFOA debt committee."
Sklaroff, who said he was speaking for himself not the SFPUC in this case, is a member of the GFOA debt committee, where he said "ESG has been a real focus.".
California is a blue state, but whether you do or don't "proactively address climate change," he said, you still have to disclose ESG factors in your bond disclosure."
SFPUC has been very innovative, the first to use climate certification on bonds and the first, and only, issuer to list on the London stock exchange, he said.
"How fun to be able to speak to a cool California audience as one of the largest issuers of green bonds and to poke fun at the treasurers — the people who refuse to acknowledge that burning fossil fuels is not a good idea," he continued.
He said Blackrock and JP Morgan should give PUC a call, as should licensed muni underwriters who were banned in Texas or Virginia.
Citing statistics from a professor who
Sklaroff didn't just aim his volley at red states either, hitting California and its major cities for the practice of banning travel to states that have public policies with which they disagree.
"I currently can't travel to 28 states as a public official," said Sklaroff, a veteran muni banker prior to his recent move to SFPUC. "The capital markets are not kind to those who don't know the rules they play by. Most often the bans in the capital markets end up hurting the person weaponizing."
Another panelist, Derek Hansel, chief financial officer, for the Metropolitan Transportation Commission, said, "For us, it's less an issue of red state-blue state, and more an issue of Congress often doesn't do the things they should," referencing discussions from earlier panels about Build America Bonds.
"People keep telling me it's going to get realized," Hansel said.
Hansel's transportation agency, which works with 27 separate transit agencies all of whom are dependent on federal money, is more concerned about "uncertainty at the federal level."
"It just shows that public policy is broken in many places," said Marla Bleavins, deputy executive director of the Port of Los Angeles.
Look at the way, the country responded to COVID-19 — "hyper politicism," Bleavins said. "It was a public health crisis. I don't think it's good for the country when the politics overtake good public policy."
