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Closing Budget Gaps With Asset Sales

The lingering Great Recession and slow recovery have diminished the growth of state and local government revenues while expenses continue their increase causing structural budget gaps. A new source of revenue is the sale or conversion of government assets into revenues. These revenues may be one-time proceeds of asset sales, leases and franchise fees, redevelopment of existing buildings, imposing new fees, rents, assessments on underutilized assets and various offsets to operating costs. Squire Sanders partner Kenneth W. Bond will cover the budget benefits and the legal and tax challenges in conducting asset sales and conversions. This OnDemand Webinar will also cover how state laws need reform to develop a comprehensive legal basis for accessing the equity in government assets. Squire Sanders partner Harriet M. Welch will discuss various techniques and financial structures available to effect asset sales. Squire Sanders partner Christopher Brigstocke will provide insight on the European-UK model of private-public sector partnerships where assets are sold to a special purpose entity and the financial risk of design, construction, operation and management of government assets and services is shifted to investors.


Runtime: 87 minutes
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Over 32 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Agenda

The Issue to Be Addressed - State and Local Government Fiscal Stress

  • Recurring Revenue Shortfalls Due to Great Recession
  • Recurring Expenditure Increases Due to Fixed Labor/Benefits Agreements
  • Attempts to Achieve Balance Causing Reduction in Core Public Services

The Budgetary Benefits From Asset Sales

  • Monetizing Assets Unlocks Asset Value to Close Budget Gaps
  • Urban Renewal/Economic Development Assets Sold May Enhance Revenues
  • Proceeds of Asset Sale Not Restricted but Must Be Applied to Alleviate Deficit

The Techniques to Effect Asset Sales

  • Sale and Leaseback; May Require Creation of Conduit on Behalf on Public Entity
  • True Sale Transaction (California Model)
  • Use of Senior and Subordinated Debt Paid From Revenue Flow
  • Lease Facilities With Up-Front Investor Payment (i.e., Parking Facilities); P3
  • Ground Lease to Retain Public Asset Ownership and Regulation
  • Sale of Easements, Franchises, Licenses, etc. for Land Use Control

Legal Issues Involved in Asset Sales

  • Need for Basic State Law Authority to Sell Assets If Not Surplus
  • Referenda Requirements and Fair Valuation of Assets
  • Effect on Labor Agreements and Benefits If Assets and Facilities Sold
  • Tax-Exempt Status of Interest on Bonds Which Financed Sold Assets
  • Continued Public Management or Privatization of Sold Assets

The Need for Revision of State Laws to Effect Asset Sales

  • Statutes Which Authorize Asset Sales to Generate Budget Revenues; Authorize Public Assets to Be Rented or Leased Rather Than Owned; Empower Conduits
  • Statutes Which Authorize True Sales; Address Asset "Ownership" Issue
  • Statutes Which Set Parameters for Valuation of Assets and Regulation of Public Assets Under Private Sector Ownership
  • Statutes Which Address Labor Agreements/Employee Benefits When Assets Held on Trust for Investors

UK-Type Public Private Partnership Infrastructure Financing

  • Establish Legal Alternatives With Equity Participation to Finance Infrastructure
  • Shift Risk of Loss to Investors With Senior/Subordinate
  • Include Asset Sales in P3 Transaction to Generate Budget Revenues

Federal Funding and Tax Incentives

  • Amend IRC to Provide New Category for Asset Sale Tax-Credit Bonds
  • Provide Matching Federal Dollars for Asset Sale (ABA Resolution 105, 2009)
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Over 32 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Credits

OnDemand Webinar

This course was last revised on September 21, 2011.

Call 1-866-352-9540 for further credit information.

This program does NOT qualify, nor meet the National Standard for NASBA accreditation.

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Why Lorman?

Over 32 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Faculty

Kenneth W. Bond

Kenneth W. Bond

Squire Patton Boggs LLP

  • Senior partner of Squire Patton Boggs LLP
  • One of the top 20 international law firms and one of the top 10 public finance law firms in the U.S.
  • Recognized expert in tax-supported and appropriation-backed infrastructure financing for states and local governments
  • Adjunct professor at Albany Law School
  • Published numerous articles on finance topics
  • LL.M. degree, The Johns Hopkins University; J.D. degree, University of California (Hastings) School of Law
No photo available

Christopher Brigstocke

Squire, Sanders & Dempsey

  • Partner with Squire, Sanders & Dempsey (U.S.) LLP in the London office
  • Practice covers all aspects of commercial property and he has particular expertise in relation to large scale urban regeneration projects
  • Has experience of renewable energy and infrastructure projects in particular on-shore and off-shore wind projects
  • Has a particular interest in sustainability issues impacting the property industry and has spoken at a number of property industry events on this topic
  • •LL.B. degree, with honors, Cardiff University; Plymouth College
No photo available

Harriet M. Welch

Squire Patton Boggs

  • Partner with Squire, Sanders & Dempsey (U.S.) LLP
  • Focuses her practice on public finance, project finance, securities and municipal bond issues
  • More than 20 years of public finance experience in California and more than 30 years of public finance experience overall
  • Written and spoken on topics related to her areas of expertise
  • Selected as a Southern California Super Lawyer in a survey of her peers distributed by Thomson Reuters each year since 2007
  • J.D. degree, The Catholic University of America; B.A. degree, Loyola University New Orleans
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Product ID: 387197
Published 2011
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