California launches the best new source of muniland data

May 17, 2013

Last December I wrote about a project sponsored by California Treasurer Bill Lockyer that is now up and running:

In the past year, three California cities have filed for bankruptcy. This casts a pall on the bonds of other California cities, because investors wonder if they also contain buried fiscal issues. In an effort to create more transparency, a new open source ratings project was recently launched:

Responding to market concerns about municipal credit quality, the California State Treasurer’s Office has commissioned a San Jose State University economist and a government-bond research group, Public Sector Credit Solutions, to develop a default probability model for city bonds.

The “default probability model” (which is what most credit rating agencies use as a model) was created by former Moody’s executive Marc Joffe of Public Sector Credit Solutions.

The project is a great leap forward for presenting public data. Nothing else like it exists in muniland. Here what it contains:

This website provides financial data and credit scores for most cities in California with population over 25,000 – roughly 260 cities in all. The financial data comes from Comprehensive Annual Financial Reports or Audited Financials that each city is required to file. We have also collected data from pension plan actuarial reports. For each city, we provide links to the documents we used as well as links to each city’s bond offering documents stored on the Municipal Securities Rulemaking Board’s EMMA system. Finally, we provide (hopefully) relevant news headlines for each city gathered from Google News and Yahoo News.

There is discussion on Twitter over whether the platform is the best method for rating municipal securities. That is a worthwhile discussion. But of much greater consequence is the ability to see the bones of municipal finances without having to dig through hundreds of pages of documents. I encourage every other state treasurer to follow Lockyer’s lead and have the same thing built for their cities and towns. Congrats to Marc Joffe of Public Sector Credit Solutions. Open up muniland!

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