Saturday, February 5, 2011

Debt Story Emerges in City's Financials Filed with EMMA

Despite market analysts' claims to the contrary, deciphering a municipality's true debt picture is in some ways tougher than explaining how derivatives crashed the global economy. It's the opaqueness. Towns use a variety of different vehicles to place a bond issue, underwriters, government entities. So it makes it difficult to search on the name of a municipality and come up with a single number.
     Not even rating agencies have a full picture. They only analyze the municipal bond issue they're asked to rate. Most of the financials are prepared and provided by the municipality itself. The rating agencies don't make those documents public. But the municipalities do have to file them with the Electronic Municipal Market Access (EMMA), which is run by the Municipal Securities Rulemaking Board (MSRB), at http://   
     Asbury Park's files are over 200 pages long. Here are some pages, which give a glimpse of some of the debt obligations of the City. We're not attempting to analyze this data, which like other municipalities is not the most recent. The time lag is one of the points under review as part of the new financial reform act. But there are probably other visitors to this site who can reach some conclusions from the excerpts here. For the full file, please visit the link above.

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