The Hall of Fame Roundtable (CPE Eligible)

We will sit down with the industry's top veterans and chat about their public finance career trajectory. Additionally, we will take stock of where the industry has been in the past year and what, in their view, lies ahead for munis.

Transcription:

Lois Scott (00:08):

Well, thanks everybody for attending this. What's going to be a great panel discussion. Joan Stern, who's one of the recipients has delayed. I think there's some activities in Philadelphia. If you've been reading the news today, that might be delaying her. We don't know exactly, but she's a little delayed. I want to also say thank you to the Bond Buyer for educating this community, for supporting us and connecting us The role that the Bond Buyer plays in our industry can never be understated, and thank you for their work in putting this together and all the people that might be in the hallways or that have responded to an email requesting help, et cetera. Thank you. Some of you may not know me. My name is Lois Scott. I was a 2023 Hall of Fame winner last year. I'll take autographs after this session, but I'm also very proud member of the Kroll Bond Rating Agency Board, the best rating agency out there with my colleagues from Kroll here at the tables too.

(01:01):

They're absolutely wonderful to work with profound and wonderful insights on municipal bond deals and I encourage everybody to get to know them. I'm also Chair of the Milken Advisory Council on Excellence in Equity in Public Finance, which is a collection of people from around the industry that has conferences and meets several times each year. So with that, that's my background, but I'd like to dive into the more important people here. And that is our 2024, some of our 2024 Hall of Fame winners. I'll begin with Ken Lind. Ken is Senior Council at Nixon Peabody, probably somebody that most people in this room have worked with over the years. For more than 45 years, he has played an instrumental role in shaping major infrastructure projects throughout the United States. These include the New York MTA, the New York City Municipal Water Finance Authority, the City of Los Angeles Wastewater System, Manhattan's West Side Developments, metropolitan Washington Airports Authority on its rail link through Northern Virginia to the Dulles Airport using tolls on the Dulles Toll Road and the financial restructuring of Puerto Rico just to name a few.

(02:06):

What I recently learned was that Ken was in-house counsel for 14 years, the city of New York and MTA, and spent eight of his years in private practice as a resident of Los Angeles. Joan, I'm so happy you're here because I'm just going to introduce you. Welcome to Joan Stern. Joan started her career in 1971 as the first paralegal hired by the law firm. We now know and love as Blank Rome. In 1972, she worked on that firm's first public finance engagement for the Commonwealth of Pennsylvania, and that was the Commonwealth's Disaster Relief Bonds that work inspired her to attend Temple Law School graduating CU Laude. No surprise. After law school, Joan joined Blank Rome as an associate becoming the second woman in Pennsylvania to ever practice public finance law. She was elected as a partner of Blank Roman 1983 and served in a series of leadership roles for the firm.

(02:57):

She joined Eckert Seamans Cherin & Mellott as a partner in 2014. She retired from that firm in September of last year. Remains very active in the civic and cultural life of this great city that we're calling home for a conference. In her incredible 50 year career, she has drafted significant debt and finance legislation and enacted in Pennsylvania, New Jersey and other states. She served as bond council to the commonwealth, the city of Philadelphia, the school district of Philadelphia, and it was my great privilege to work personally with Joan on bond deals in the state of Alaska almost 20 years ago. Dave Thompson is a CEO of Phoenix Advisors. He began advising local governments on debt issuance in the mid 1970s. His five decade career in public finance took him from government banker to municipal investment banker to municipal advisor. He created de Novo a municipal centric broker dealer, Cypress Securities.

(03:46):

Following three successful years, David sold that Cypress to Cherry Hill based Commerce Bank forming Commerce capital markets. He founded Phoenix Advisors in 2004, shocking 20 years ago as an independent municipal advisor and is now together with his partners privileged to have relationships with over 700 governments throughout New Jersey and Connecticut. So today's panel will explore the journeys, the challenges, and the legacies of these three people who collectively have over 150 years of municipal finance experience. Their stories will not only inspire us, but provide lessons on leadership, perseverance, and the impact of excellence in shaping our communities. So with that, I'm going to begin with a handful of questions. Each of you has achieved remarkable success in your careers, and I want to begin by having each of you picked one career milestone that you think is significant and defining in your career. And I'm going to begin with Ken.

Kenneth Lind (04:47):

So I was fortunate enough to start off my career working for the city of New York, a newly created department of the city law department back in 1978 during the financial crisis. And it was just the greatest hits of everything that could possibly go on in the municipal industry. And to me, one of the things that really struck me at that point was the leaders at that time, the mayor of the city, ed Koch, the controller, Harrison Golden and others, and the day-to-Day effort that they put in to really making sure that things were going right together with a lot of the people working for the city at that point in time, one of whom was Mark Page, who was a real leader in putting things together. So to me, just being young, really being an observer and someone who's just trying to pick up what I could at that point in time, it was really incredible to see great mentors and role models that were working on the other side. And my one observation was one of the things I would do is go around and get signature pages and we'd have to catch the mayor at cot at seven in the morning. That's when he started the day and I was wondering why anybody got up that early, but he always seemed to be available whenever something needed to be done to get those financings done.

Lois Scott (06:12):

Remember all those signature machines we used way back when? Probably not most of the people in the room probably don't remember them, but they were fascinating. Joan, how about you Milestone that defined that you thought was a defining moment in your journey?

Joan Stern (06:30):

This is exciting. It's like being able to go to your funeral but before you're dead and hear all your eulogies. But I really think that the disaster relief bonds, the general obligation bonds of 1973 really transformed my life and brought me into public finance. I was the first paralegal that blank room hired. We had the great storm and flood of 1972. You can read the Pennsylvania constitution and the great storm and flood is there. We had to use the emergency provisions of the state constitution to authorize the bond issue, to allow us to take proceeds of state bonds and use them to make grants that would ordinarily be for private purposes for farms, for businesses, for homes. Because this was a category five hurricane that swept down the Susquehanna Valley and put people in Wells farra in Northampton County into tents. Their homes and businesses and farms were all demolished. And if you drove on the turnpike from Philadelphia to Harrisburg, you saw people living in tent cities.

(08:23):

So to work on this project to amend the institution so that the voters could vote on a referendum on the amendment to raise the state's local share of emergency funding. This is before FEMA was created. So all disaster relief was administered through the Department of Housing and Urban Development. You needed a wet signature of the President of the United States on the disaster declaration to qualify for the aid. And the federal formula was very simple. You got three federal dollars for every state dollar you matched. So everyone had to have skin in the cane. And if you're the paralegal, you're the one who has to call the White House and call the office of John Orman at the beginning of Watergate to ask for an originally signed disaster declaration. And I was shocked when the office hung up on me. Fortunately, as you know in Pennsylvania we often have divided government. Our governor and our house were democratic, but our federal senators, we had one of each, a Democrat and a Republican. So I was able to ask Hughes Scott, our Republican senator to go to the White House to get it for me. But these are the details that make up the lore about one's career.

(10:20):

But we had a very interesting time. It was for the time, a huge bond issue. We had to authorize $100 million. We sold the bonds in tranches. It was before the Internal revenue code was reformed and got so complex that we needed a unending advice from our tax counsel. But it was a very transformative time and I realized it was a way to make a living, to practice this kind of law, public finance law. I wasn't deterred by the fact that there were no women, there were no women practicing law very often anywhere. The other woman who practiced public finance law in Pennsylvania, I think we were the only two in the east. I used to say that we could convene the entire women's spar in public finance by going to the ladies room together. But we had a very pioneering governor. He was the first governor to appoint a commission on women to determine exactly what the laws were and the norms and policies that excluded women from probate juries and wouldn't allow them to open charge accounts without having either their husband or their father signing for them.

(12:08):

You couldn't if you were a woman, you could not get credit on your own. And after the commission made its very substantial report, governor Shab, this was Milton Schb who had made a fortune computers at a time when it was a pioneering business to go into, supported the introduction of the Equal Rights Amendment to amend the Pennsylvania Constitution and to have the commonwealth ratify the amendment for the federal constitution. It was successful in Pennsylvania. So we have the equal Rights Amendment in the Pennsylvania Constitution, but it doesn't mean things changed that much. I think you've been hearing our first female mayor, mayor Parker, she's our hundredth mayor. Philadelphia is a very old city, but it took all this time for us to elect a woman there.

Lois Scott (13:28):

So Joan, you couldn't get a credit card, but you could call the White House to get a signature. It's an amazing dichotomy in that story.

Joan Stern (13:37):

Yes, yes. Well, I operated under the theory that I could ask for anything I needed to complete my share of the work. And if it meant calling the White House, I called the White House, I'm not responsible for how they behaved fortunately.

Lois Scott (14:01):

So Dave, tell me a little bit about a defining moment in your career, a milestone moment as you think about your long and productive career.

Dave Thompson (14:09):

You're Joan and Ken. It's clear that milestones are damn heavy. My career is mild pebbles. It's not heavy stones. It's been working with local governments, local school districts, building parks, build parks, buy parks, courthouses. Schools regularly drive around the state for one reason or another. Often with my wife, as I go through towns and villages in New Jersey, I always point out to her as we see the sign that says entering burg, that's one of our clients. We do work with 'em. So it's been that amalgamation, that building pebble by pebble into real infrastructure for local governments. And I put 'em all together and I say that's the milestone.

Lois Scott (15:21):

I love that analogy because one of my first bond deals I ever was involved with was the Illinois tollway. And when we financed the road and it got built, I drove on it and I thought, this is what public finance is. And I always use that analogy for our industry because we can touch it, we can see it. We're building communities. So love that analogy. Alright, I'm going to switch now to your views on the evolution of public finance because you've been in this industry for a while and I'm quite curious, what have you seen in public finance and the evolution of it over the decades and the major changes that had the most impact? We'll start with Davis.

Dave Thompson (15:59):

One of the things I think I've seen that's on one side it looks good on the other side, it's not good and that's spread compression on new issues. It's created a problem from the standpoint that you can't pay a salesman to call Mr and Mrs. Smith and sell 'em 50 bonds if you're only making $2 and 50 cents gross in spread. So what happens? The street converts yield to spread and as the bonds travel pillar to post in the secondary market, the yields go lower. Price is higher. I've got that straight. It took a while, but I've got that straight. And the issuers think number one, that they've got a great deal because they only paid X number of small dollars in an underwriting discount.

(17:10):

I had a call from an investigative reporter a few years ago who started the conversation by saying that we did a refinancing for a school district and we left $600,000 on the table in savings. I said, what are you talking about? They had tracked the secondary market for 30 days after the sale and simply added together all those price improvements and said that's money that the school district should have gotten. You explained to them that well, they got their money upfront by only paying $3 and 75 cents discount instead of 13 or $15, but they don't understand that. So it creates problems. And it's unfortunate that governments tend to look at how much am I paying and not what am I getting for it?

Lois Scott (18:19):

So let the records show and the Bond Buyer needs to print this as a headline right now, municipal advisor advocates 13 to $15 spreads on all bond transactions. Get that headline out there guys,

Dave Thompson (18:31):

Book out some fans there and the yields and the bonds will be prove.

Lois Scott (18:36):

That's right. Ken, your thoughts on the evolution in public finance that you think were important?

Kenneth Lind (18:42):

So to me, one of the big changes that's gone on since I first started out years ago is really the fact that speaking for the legal side, now there were a handful of firms that seemed to have a franchise throughout the entire industry. I worked for a firm Brown and Wood that did the state of North Carolina all its agencies in 50 of its 100 counties. Other firms, they had other franchises, other firms had other franchises. And the spot I sort of pinpoint is what turned that around I think in large part was the small issue IBS and some of the other exempt facility transactions, the things that were so affected by the tax bills of the early eighties culminating in the 1986 tax bill. And really I think what you've gotten is a lot more regional and local firms that have built up on the legal side.

(19:37):

And the same thing has also happened I think on the underwriting side in many respects and in a lot of these cases, those local and regional firms are really starting to become more of national firms right now and amassing the resources that they need to be major players. So my one observation for all this, and I think for the most part it's for the better on the legal side, especially now when you see a lot of financings that are land-based, your real property tax-based deals, especially out in California, you really need a lot of that local talent to really pinpoint how you put the deals together and make sure that those real estate interests are really secure to secure your bond deals. But I think really the more regionalization and localization of the practice seems to be a big change.

Lois Scott (20:29):

Joan, your thoughts. What have you seen in the field of public finance evolution had significant impact?

Joan Stern (20:36):

I think the main thing that I've seen is that technology changes, but human nature does not. So human beings are motivated by the same things all the time. Frequently in the world of public finance, it's greed. And when you look at the evolution of the technology, it enables more people to claim that they have something innovative. But it's usually the technology that speeds things up. It's not the thinking about what's best for the public good and the lawyers are there, especially the ones who traditionally represent the governments, to try to make sure that in the wake of all the changes in technology, the ability to model a refinancing by simply programming some software or buying some already program software and sort of commoditizing the work. But you still have to think about the basic goals of the culture and the society that you're representing. And I think that's why for me, one of the great tools that has helped me in my career is legislative drafting. It's a very law driven aspect of finance and we're constantly faced with financial crises by looking backwards. But we should be looking very carefully at what are we doing? Why are we doing it, and is it going to make things better for our clients?

Lois Scott (23:16):

I'm going to follow up on that. Economic crises, financial crises. Over the course of 50 years, we've seen a lot of ups and downs. I want you each to pick one and talk about how that crisis actually shaped our industry. And you're working with issuers. Joan, I'll have you go first.

Joan Stern (23:32):

Okay.

(23:38):

I think we should think about the savings and loan crisis. One of the elements of the reforms of the tax code that we faced in the early 1980s, bond registration. I can remember when we had certificated bonds and one of the jobs of the paraprofessional in a law firm would be to go to read the bonds, proofread the bonds at the bond printer, then go to the signature company in New York and watch the bonds being authenticated. I still remember the clouds of paper dust in the signature company's rooms, but all of these things contributed to a renewed interest in treating the bonds of securities. So we have significant changes in disclosure as a result of these crises. The New York City crisis in 1975 prompted the Tower amendment, and I must say that coming as new people to the world of public finance, we always thought the bonds were securities. But a prospectus could be four pages long before 1975 and the disclosures that came with New York's fiscal crisis and in the financial rescue world, the development of different structures to rescue municipalities and counties in their financial crises required state intervention, federal intervention. I do remember the front page of, I can't remember which newspaper it was, but it said the president to New York dropped it, but that's not what happened. And New York came back and flourished.

Lois Scott (26:22):

Great. Ken, why don't you talk about an economic crisis or a financial crisis and how it shaped you and our industry.

Kenneth Lind (26:29):

So what I'll do is maybe put a couple of common lessons learned for a couple of them that affected the MTA, the first of which was September 11th. The MTA was caught in a couple of different ways, one of which was obviously having facilities destroyed under the World Trade Center itself, which had to be rebuilt. And the other part of that was the MTA was in the midst of a $14 billion debt restructuring. And so just over the course of time, among the different things that we seem to be helpful tools, and I know we'll get into this a little later, where finding immediate procurement relief is finding a way where you really have to redo facilities in a hurry to really get those RFPs into the market as quickly as you can to rebuild those facilities. Another thing that was very helpful, specifically in the debt restructuring part of it was the ability of the federal government to give advanced refunding authorization was in shape.

(27:35):

But to give a second advance refunding, and I know that was only for a few New York City issuers for MTA, the city of New York and maybe one or two others. But the impact of that second advance refunding on the MTA debt restructuring, which was looking to do tenders at that point, my recollection is it was give or take a half a billion dollars in difference in what they were otherwise able to put to rebuilding some of the facilities that had been destroyed as well as advanced some of the other facilities that were going on. And then the other one with some other things, Superstorm Sandy with procurement relief and also the pandemic itself, and I think this was a common lesson, Jonah, you were speaking about also is how important it is to get that state assistance and also the federal assistance for the MTA liquidity was the important thing right at the beginning.

(28:34):

And so there were a number of tools. We immediately went to the legislature and get an authorization for 10 billion in deficit bonds. About $3 billion of that was the New York Reserve Funds facility, the Municipal Liquidity Fund, which was extremely helpful. There was the authorization for relief from the pandemic that the MTA did a grant for to be able to borrow that money in anticipation of the grant. So I think through all of these things, there are a number of tools that the state and the federal government being good funding partners Canon did offer and a lot of lessons learned for going forward in those situations.

Lois Scott (29:19):

Well, you almost forget the impact on public finance of these massive earthquakes that we had in our industry and how everything happened. Dave, your thoughts?

Dave Thompson (29:29):

I will come back quickly to the credit crisis of 2008, liquidity crisis. But first, how many people here have been to the signature company when it existed? Certainly not a majority. Joan mentioned authenticating bonds. Penta, thank you, Thomas Jefferson signed, made 20 signatures at the same time, considered Lincoln signatures, seals, poor clerks, putting the seals on the bonds,

(30:06):

And then the guys in baggy pants coming in from the dealers who wanted to take the bonds away, count them and count them and count them and then point out to one of the people at the signature company. This doesn't have a signature. Oh, I think he's out by the elevator, be right back. He'd go in the back room, a master forger, bring the bond back, signed. I think the other thing they would do when the seal was missing, they had silver dollars. They put the silver dollar down, run it over top and bingo, there's a seal.

Kenneth Lind (30:51):

One more thing on the signature company. Remember at that time they were mostly all bearer bonds, so as soon as they walked out the door, they could have been taken by anyone and cashed in. But the greatest thing about the signature company is you couldn't find it on Google Maps. It was the most secure place. It was on a third, I think the third or fourth floor of a nondescript building with an elevated that worked occasionally. And so the greatest security, which you couldn't find,

Dave Thompson (31:20):

I became a financial expert to some clients early back in the seventies because I knew how to get there. Career building, the other thing real quick, regionalization the bond business. I was there again in the seventies when New Jersey had no bond councils, New York, Philadelphia, and then fellow named Jack Kraft left me I guess it was, and came over to Jersey and said to the Jersey people, I can do this. And it was a good thing finally, I think. But there was, I'm sure some handwringing that went on among the major firms in New York and in Philadelphia. When business went away, it went to somebody else. But the credit crisis, the credit crisis, 2008, the liquidity crisis to me brought home the fact that I'm going to call them complicated. I was involved in low floaters early on in New York that had bank letters of credit behind them as I'm going to call it a placebo. Of course, they probably would've stepped up offshore eight securities. It was simply it'll never happen. There will always be a market until there wasn't. And did that screw up an awful lot of people's plans?

(33:05):

Port authority of New York, New Jersey, a billion maybe of auction rate securities that all of a sudden went to interest rates, I dunno, 15 where they hit, they hit 20% this greatest thing since sliced bread went stale very, very quickly. It really found people up and it brought home to me that why people got into these things because they were marketed by their public finance bankers because remarketing fees got so low on low floaters that when they did the auction rate, well now we're really doing something. We've got this Dutch auction that we're running, so now you can pay us 50 basis points again on the remarketing.

(33:59):

They were, I dunno, pushed. It's the old about the quick jokes are terrible to tell. It's priest a hippie and the richest man or the smartest man in the world on an airplane engine trouble. It's going to go down. The pilot says, I'm sorry, but there's only two parachutes in the back for you guys. The smartest man in the world quickly grabs, puts one on, jumps out. The priest says, I've lived a good life, says to the young hippie, you go ahead, you take that one, I'll meet my maker. Yipe says, no need father, the smartest man in the world just jumped out with my nap sack. So the smartest things, the complicated structures that are going to save all in when you're finished, 50 basis points, probably a stretch. Think hard about them, think real hard as an issuer. Do I need to do that? That's enough.

Lois Scott (35:14):

Okay, so I want to take us out of the past and use all of the experiences that you've had to look a little bit forward. What do you see as the big challenges facing the industry? What are the big opportunities, emerging trends or innovations that you think that the industry needs? I'll start with Ken.

Kenneth Lind (35:33):

So to me, I think one of the first things we've got to conquer is work from home and training issues that I think have come up to me at least I feel it's been a real loss, especially with younger associates that are coming in and others to not be available to sit down and discuss problems over the course of time. And I know everybody says it's an old thought and things like that, but I remember going on all day in two day meetings to specifically sit down and go page by page documents, especially for smaller issuers, the smaller community hospitals and others who aren't as well versed in what they're getting themselves into and just going over doing a page turn and really understanding all the provisions that are in the documents. And I think a lot of that has been lost. And I'm not saying we need to do away from work from home, but I think we've got to come to a better understanding of making people available to make sure that they're getting training at the level that they need to.

(36:54):

Another part of it is really just in the fact that when you take a look at folks who are out here, a large part of the industry really revolves around, especially as I was in the 1986 tax bill and there's a lot of that experience that's going to be lost or is being lost. I think we've got to find better ways, especially in the section 103 tax realm to really make sure that all of that knowledge base is available on a ready basis and whether that's through NA or other industry groups that grow up, I think just making the entire industry universe of good thoughts and regulations and good practices, best practices in the industry, more readily available to a whole new group of people who are growing into this at this point.

Lois Scott (37:49):

Wouldn't it be great if there was an industry coffee hour on Fridays or something where those of us who've been around the block a bit could just give thoughts to people who are struggling. Joan, your thoughts on the future? Big challenges, opportunities, trends.

Joan Stern (38:05):

Well, I do agree with Ken that there's no substitute for FaceTime and you need to know your clients, whether you're a banker or a lawyer, a financial advisor, whatever your sphere of activity is, you have to know your colleagues and you have to know the clients and understand the culture and the history that caused the legal and regulatory environment in that region or that state to evolve. And there is no substitute for being able to walk down the hall and put your head in the door of an office and say to a colleague, what do you think about this? What do you think about that? Also, it's important again to slow things down. Nobody is doing anything that's better than what we had before remote work and you are closer to your clients, you are closer to the objectives that you're trying to achieve. If you're engaged with colleagues, collective work produces a better product then working on your own. So I think that's really critical and I think understanding the history of what you're working on is important as well. That may be because I was trained as a historian before I became a lawyer, and I think that knowing the history of what you're working on is a critical Component.

Lois Scott (40:26):

Just add a comment on that work from home piece. There's a McKinsey study that came out that said that the work from home is actually more desired by the more senior people than the junior people. The junior people want to come in for the mentoring and talking and it's those of us at the other end of our careers that are not showing up in the same ways we once did because of the convenience of working from home. So it was an interesting counterintuitive study on that. So all of those people in the room who are seniors, very senior crowd, make sure you show up for the junior staff too, Dave.

Dave Thompson (41:01):

I think that's pretty true. A number of us more experienced people found that we can get things done and still mow the lawn and it's probably a little bit dangerous because it's jerking back to one of your comments. Our job, everybody's job who knows a little more than the person next to them. It's important that they pass that knowledge along and answer the questions, the good questions. There are dumb questions by the way. There are, but good questions absolutely deserve good answers. Explanations not just yes, no, that's the right thing. That's not the right thing. Why in depth? And it doesn't happen if it's with an email or God help us a text because it's not going to text. You'll get me exercise on those. That's I think

Lois Scott (42:29):

The bankers in the room would agree,

Dave Thompson (42:31):

Right? Yeah. Well, it's our turn by the way. You'll see that sort of segues into regulatory, the regulatory environment. Wouldn't it be nice if the SEC provided guidance as opposed to guidance through enforcement? If they tell you you did something wrong after you've done something wrong. It's nice to know where that bright line is and there is no bright line. It depends on the particular examiner or whatever and there's got to be something done differently. The regulators have to know more about our business if they have to their people more so they can keep them as opposed to them being trained there and then coming to us, then they have to do it. But you can't have examiners who don't know the difference between a basis point of insurance premium and a basis point of yield. It makes no sense at all.

Lois Scott (43:51):

That could be a very long panel discussion.

Dave Thompson (43:52):

Yeah, that's true. We don't want to get that's a rabbit hole.

Lois Scott (43:55):

I think we all have some thoughts on that topic. I'm going to just ask for really quickly, a trend that I'm seeing that saddens me a little bit is the commoditization of our industry. Public finance is the most bespoke part of the finance world. You can do a 13.25 year bond with a double flip, swap, twist and et cetera. And I think that some of that's changing. Do you have any comments on that?

Dave Thompson (44:20):

I've always been a vanilla person, so the needs of my clients are to build infrastructure and be able to pay for it and put their head on the pillow and say, we've taken care of business. Joan Kennedy. That doesn't mean everything is that way, but it's generally speaking, what are your thoughts?

Kenneth Lind (44:48):

I think there are a number of markets out there for which there are a lot of very useful financial tools to be put to work. The P three area has really come in now where you have private entities that in many cases are better understanding at least over the less advanced municipal issuers out there in terms of their use of swaps and derivatives. We just ended up doing a financing for one of the terminals at A JFK and they agreed to go forward with bank loans before getting back into the municipal market. And they very effectively used swaps in order to temper interest rates and got a nice, we're very well advantaged by doing that. So I think that there are different types of transactions and different entities that are able to understand the risks involved to put them to good work. I think one of the things we found out over the course of time is that may be doing a 30 year swap on all of your bonds isn't the best way of doing it, but tailoring them maybe for 10 year call periods or other things, there are strategies that can be used very effectively in a lot of different situations.

(46:22):

But I think the main part is really those who are the obligors on them, fully understand what they're getting themselves in there and they have the resources to finance their way out if need be.

Dave Thompson (46:35):

And most, I'm going to say most don't understand.

Kenneth Lind (46:40):

I think that's right and

Joan Stern (46:43):

I think that's right, Jim.

Dave Thompson (46:44):

There's something wrong there, isn't it?

Joan Stern (46:46):

It's really important for people to understand, especially the people in government, that it's the government that will end up paying for it. They can pay now, they can pay later, they can make their decision about the structure, but they have to understand that the private partner is at best a partner at war. It's someone who is saying to the government partner, you won't have to do anything. And at the end of the deal, there'll be a bill to pay and it's the government that will have to pay it. They have to understand the risks and rewards of p threes. And there's a difference between having to make a profit and having to be a taxpayer and a government becoming a bank.

Dave Thompson (48:03):

A lot of smaller issuers, I don't mean tiny, I'm talking about 25, 30, $50 million school deals, things like that enter into a swap and they have a swap advisor, oh, I'm covered, I've got an advisor. What's the role of the swap advisor to give you an opinion that it's priced fairly when you do it, they don't care whether you should do it or shouldn't do it or do you really understand what you're doing. They're not an advisor in that sense. And that's scary because the client thinks really believes they have an advisor. They wouldn't happy to do that if it wasn't good for me.

Lois Scott (48:52):

I'm going to end our panel with one final question for each of you and that is what advice do you have for new professionals coming into this industry? And if you look back, anything you wish you had done differently, Dave,

Dave Thompson (49:09):

That's easy. Ask questions and buttonhole the more senior, more experienced people within your firm, engage them in conversations about transactions, about theoretical transactions. Sit down, go to lunch with 'em. Have we do a thing called lunch and learn where things are kicked around while we're eating pizza? Be you need as a young person to have that, I'm going to call it a mentorship, but the sharing of information and if you are in a place where you don't have that, where the people with the knowledge are too busy, check back with me later another time. Maybe you're in the wrong firm.

Kenneth Lind (50:10):

So I very much agree with everything that you've said in getting a well, especially when you're starting out getting a very diverse background from as many different attorneys in your shop. Not everybody works on the same types of deals. Not everybody has the same viewpoint on particular ways of putting them together. But the other thing I would advise them to do is very carefully consider going in-house in the government and working in the finance area there. I spent 14 years, two years with the city of New York and then 11 and a half years at the MTA. And that's when you really have a chance to sit down and work with other great professionals on how things get done outside of the financing realm. You go through the treasury department capital programs, you're going through your procurement department and you're also seeing the political aspects of how these transactions get together. Consider going in-house for some period of time and really getting your skills together and then either go back or start in private practice.

Joan Stern (51:18):

I would say everything that Dave recommended, everything that Ken recommended and remember that the answer to the question never asked is always no. So ask if you can go to the council meeting or the hearing or the drafting session because you'll learn a lot just by watching and listening. And don't be afraid to ask why are we doing this frequently? Governments like all old institutions, and I'm used to working with one of the oldest institutions in the country, the commonwealth of Pennsylvania is really old. So governments practice and crus station people don't know Y the government that they're working for did X. So when they get a new thing to a new wrong to right, they passed a law that says we really mean it. And in addition to having to do all these things now, the government below us has to do A, B, and C. So you are making things unwieldy. You're making people feel that they'll never see this project come to fruition. And it shouldn't be that things get to a crisis before you can do anything thing. So that's what I would counsel all these younger people to do.

Dave Thompson (53:23):

We don't subscribe to the mushroom theory of training. We all know what that is, right?

Lois Scott (53:31):

Yes.

Dave Thompson (53:31):

So if you're doing that, you're doing it wrong. People aren't going to grow into the kind of bankers, lawyers, advisors that you want to have in your organization. They're going to learn to do things by rote that there's one way to get it done. Hurry. And that's not what you want. You want somebody that's going to think about what might be, what else could I do? Is there another way to do it? What happens if what happens with a 10 basis points swing on that refunding well, how are you going to find out, run the damn numbers at 10 basis points better or worse? And let's see what it does to it. Don't just come back one set of numbers. It's that kind of, I call it intellectual curiosity that you got to develop in your people.

Lois Scott (54:20):

Thank you. I want to say thanks to each and every one of you, not just for being on the panel today, but literally for 50 years of service to our communities, for being the professionals that you are, that we all look up to and respect and admire. And for you caring enough to actually be here to continue that journey with us. We all stand on your shoulders and I say thank you. Thank you,

Dave Thompson (54:45):

Thank you.