CHICAGO — The Michigan Municipal Advisory Council is looking for the seventh director in its 80-year history as current director Mike Alandt aims to retire by the end of the year.
One of only five municipal advisory councils in the country, the Michigan MAC has been a player in the state’s public finance market since 1931.
The council is designated by the Securities and Exchange Commission as the state information depository for Michigan. It is supported by its members — there are currently 43 — and has data on nearly every note and bond sale in the state over the past several decades. It also maintains data on all outstanding state and locally issued bond issues and debt records of 2,800 political subdivisions.
Located in downtown Detroit, the MAC began as a way to keep track of defaults as issuers struggled during the Great Depression. Ninety years and another major market collapse later, Alandt sees the council playing an increasingly valuable role as a clearinghouse for data on municipalities’ fiscal information and outstanding debt.
“Since the big financial crisis, the rating services are not relied upon as much as they used to be, and everybody thinks you need to go back to basics and do your own analysis,” Alandt said in an interview Tuesday. “This has given us a shot in the arm. It’s our premiere cornerstone — we’re the only place where you can easily obtain the overlapping debt of any municipality in the state of Michigan.”
Michigan governments face fiscal stress due to falling property tax revenue and state aid. Some market participants, including state and university economists, have said one of the chief problems with assessing default threats is finding accurate information on the amount and type of debt issued, and what revenue sources back it.
“There is a big need for the ability to get information from a third-party source,” Alandt said. “This database that we have can be useful not only to the broker-dealers, but to all users of municipal debt. The municipality itself can take a look at not only what their debt is but how they stand in comparison to their peers.”
New laws could support the council’s role as a databank of municipal fiscal information. Gov. Rick Snyder successfully pushed a new law that requires local governments to file annual financial reports in order to qualify for some of their state aid. Michigan’s new emergency manager law, which significantly broadens the state’s powers to intervene in and control local finances, could also make the council’s data more valuable.
Alandt, 65, joined the MAC as director in early 2001. He replaced 34-year veteran director Louis “Bud” Schimmel, who became emergency financial manager for the town of Hamtramck after he left.
Before joining the council, Alandt was director of Banc One Capital Market’s short-term municipal desk in Chicago and worked as a trader for National Bank of Detroit before it merged with First National Bank.
The council’s board is in the midst of interviewing candidates and hopes to hire a new director by early fall. “As an organization, the MAC provides an awful lot of services to the community, and I would hope that the next person is able to take it to the next level,” Alandt said.
There are also municipal advisory councils in Texas, Ohio, North Carolina, and South Carolina.
