Gaffney to Leave GFOA

WASHINGTON — Susan Gaffney, federal liaison director for the Government Finance Officers Association for the past 12 years, plans to leave her post at the end of next week and move to California to help with family matters.

She will continue to do some work in the near-term for GFOA, such as helping out with its winter meeting here in February and working on transitioning in whoever is named to replace her, sources said.

But several muni market participants, who heaped praise on Gaffney for the work she has done for GFOA and the muni market, said Wednesday that it will be impossible to find a replacement for her.

"She's irreplaceable,"  said Ben Watkins, Florida's bond finance director and a member of GFOA's committee on governmental debt management. "I don't know what we're going to do without her."

"It's a big loss for GFOA," echoed Tim Firestine, the chief administrative officer for Montgomery County, Md. who is slated to become GFOA's president next June.

"She has been an absolutely invaluable resource for state and local governments as their Washington eyes, ears and advocate," said Patrick Born, regional administrator of the Metropolitan Council in Minnesota and former head of the GFOA debt committee.

"Susan has done fantastic work for state and local governments and the bond community," said Bill Daly, director of governmental affairs for the National Association of Bond Lawyers. "She is irreplaceable and will be greatly missed."

Gaffney joined the GFOA on Nov. 20, 2000, having worked for a think tank specializing in trade and international issues. She knew nothing about municipal bonds at that time.

She became GFOA's Washington point person on a host of issues after the association shrunk what had been a sizeable office here that had had several experts on municipal bonds, pensions and other issues.

Over the years, she's mastered many legislative and regulatory issues affecting state and local governments and kept GFOA members up to date on them, all the while working with other muni groups to protect state and local interests and push forward with key initiatives, sources said.

Gaffney's departure comes as the market faces the greatest threat to tax exemption in years. President Obama, lawmakers and public policy groups have put forth proposals that would cap the value of tax exemption for wealthy investors, turn all new munis into tax credit bonds, or require all new munis to be taxable rather than tax-exempt. Muni bond advocates have said that the fight against these threats will have to be led by state and local governments. And Gaffney has been a leader among issuer groups.

"Susan has really been the heart, the spokesperson, for the issuer community in Washington," said Frank Hoadley, a former GFOA debt committee chair who is to retire at the end of this year as Wisconsin's capital finance director.

"She's extraordinary. She's really been a moving force for GFOA," said Watkins. "She's the one who coordinates and organizes our efforts and she's been the glue that binds all of the associations together, like the Public Finance Network."

The PFN is a coalition of muni market groups that join together to push various public finance initiatives before Congress and the administration.

"It takes so much time to really learn and appreciate the nuances of this business," said Watkins. "You really need to understand it in order to be credible on Capitol Hill and she does."

John Cross has worked with Gaffney on securities and tax issues for years as the recently appointed director of the Securities and Exchange Commission's Office of Municipal Securities and former associate legislative tax counsel in the Treasury Department's Office of Tax Policy.

"Susan Gaffney has been an exceptional leader and thoughtful advocate on public policy issues affecting state and local governments that are critical to our nation's public infrastructure," he said. "I have had the privilege of working closely with her for a long time and in many different roles, and she has made invaluable contributions to the municipal bond community in advocating for sound public policies on behalf of state and local governments. She has been a true leader in this area."

Lynnette Kelly, the Municipal Securities Rulemaking Board's executive director, said, "She's been a tenacious advocate for issuers and has been instrumental in helping to craft the issuer protection mandate for the MSRB.

The board was given a mandate to protect issuers, in addition to its core mission of protecting investors, by the Dodd-Frank law.

Gaffney also played a key role in organizing and working with the Muni Council, a collection of state and local government and other groups that wanted to improve disclosure in the muni market, Kelly said. The council was instrumental in setting up a Central Post Office, a one-stop place for issuers to file disclosure documents that eventually evolved into the EMMA system at the MSRB.

"She'll be missed by a lot of the other muni finance related organizations in Washington," said Hoadley. "She was a great one for putting all of the pieces together and getting various organizations to act together."

"She was always really the workhouse, but she let everyone else take the credit," said Kelly.

"She's one of the hardest working persons I've ever met," said Firestine. "You call her and she's in the office every night and she works on weekends. She's a true professional on this subject and she loves public finance."

Firestine says Gaffney played a major role in getting Congress to raise the small issuer limit for bank-qualified bonds to $30 million from $10 million in the American Recovery and Reinvestment Act.

"She constantly kept that issue in front of everybody and on the agenda," he said.

Firestine also said she is an expert on online sales taxes and has represented GFOA in the Streamlined Sales Tax Governing Board, Inc.'s efforts to develop uniform definitions and standards for collecting taxes from online sales. She has taught a class for him on these issues at the University of Maryland, he said.

Gaffney also was instrumental in setting up issuer meetings with both SEC Chairman Mary Schapiro and Commissioner Elisse Walter, who is to replace Schapiro next week as chairman, after they vowed to improve muni disclosure, Firestine said.  Gaffney wanted issuers to tell the SEC officials how they disclose information and what would be possible versus unworkable, he said.

"She's had an impact on everything in the market since she's been in her position," said Kelly.

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