More than 18 months into the pandemic, COVID-19 still reigns as the most pressing concern for California issuers.
During a panel discussion Tuesday at The Bond Buyer's California Public Finance virtual conference, every discussion involved the pandemic in some way.
Though federal stimulus money helped California issuers avoid some of the worst budgetary ramifications of COVID-19, the pandemic presented challenges and still presents them, including the increased need for bond disclosure as uncertainty remains about how people will live and work as pandemic fears start to abate.
“Like other government entities, we have faced shortfalls. Hotel revenues plummeted, but there were a number of bright spots,” said Los Angeles Controller Ron Galperin. “The property market has been hot, hot, hot, so revenues there have been strong. And also, cannabis revenues have been strong. That might have something to do with how much time people were spending at home.”
Los Angeles has general obligation bond issuances coming up at the end of the month, including one for affordable housing, Galperin said.
“We are also issuing $155 million in new MICLA related bonds and bonds for wastewater in early 2022,” he said. “We are really at a low in terms of our indebtedness vs. debt capacity. But we will be issuing more going forward for infrastructure improvements.”
The debt management team for the City and County of San Francisco has been working remotely since the beginning of the pandemic, said Anna Van Degna, director of the controller’s office of public finance for the City and County of San Francisco.
“There have been efficiencies. We have saved time, because we aren’t walking from one building to the next,” Van Degna said. “We are doing something I never realized we would be doing when I left the private sector and joined the city in 2018. When we return to City Hall next month, we will be doing it hybrid.”
At the San Diego County Water Authority, one-third of the staff is in the field replacing pipes and doing maintenance, but the remaining two-thirds who work on administrative tasks have been working from home, said Lisa Marie Harris, the water authority’s financial director and treasurer.
“Our plan was to return to work on October 18, but due to the Delta variant, the general manager decided to have us return to work in January, and then we will be hybrid, coming into work at least three days a week.”
In San Jose, Nikolai J. Sklaroff, deputy director of debt and treasury management for the city, said they reopened City Hall during the summer.
“Though City Hall was closed to the public, some of our employees were still working in the office,” Sklaroff said. “We do hope to bring more folks back to City Hall. Our city does have a mask mandate. We have implemented a vaccine mandate. Staff and the City Council are in person, but the public has the choice to attend meetings in person or remote.”
“Our staff members who were commuting one to two hours a day, have embraced remote work,” Sklaroff said. “I think it’s tougher for managers. For some workers, who have worked in the private sector and are used to working from a hotel lobby or in the airport, it has been less challenging.”
All of the issuers said that zoom meetings with their bonds teams have actually been better than when everyone was traveling around.
“I find doing investment banking and municipal advisor meetings in Zoom, where I can be taking notes on the deck and seeing your face on the screen really helpful,” Sklaroff said. “I imagine some of these tools will be used beyond the pandemic.”
The advantage of Zoom is the meetings have been with the head underwriter on the deal, rather than an alternate who is available to travel for their 10-minute part of the presentation, Sklaroff said.
And it has been easier for California issuers to not travel to New York when they have bond sales.
“I am open to meeting with people in person,” Harris said. “It’s been beneficial to meet the entire banking team. And it’s been easier to just jump on a Zoom call. I’m not sure when we will go to New York again to do a bond sale. It’s convenient to do it from home. I’m not sure when that will happen. There is just a lot of uncertainty.”
