If the $4 trillion municipal bond market is like a small town, where everyone knows everyone else, then Tim Schaefer is the West Coast Mayor.
Schaefer stepped down after more than seven-and-a-half years as California’s assistant treasurer for public finance two weeks ago — quietly, he said, because he didn’t want ‘his retirement to upset the director’ .
Longtime financial adviser John Chiang tapped Schaefer for the job after winning the 2014 election for Treasurer, and he continued under Treasurer Fiona Ma’s administration after winning the job in 2018. Chiang did not seek a second term, unsuccessfully running for governor instead.
Ma is seeking a second term as treasurer and appears to be heading for another landslide victory, this time over Republican Jack Guerrero.
Schaefer’s job won’t be the only change if Ma wins re-election on Nov. 8. She has three vacancies to fill, but said she would wait until after the election to announce any changes.
Schaefer, 75, said he simply decided it was time to retire.
“When John (Chiang) was elected, he asked me to promise that I would serve two terms,” Schaefer said. “Here I am at the end of two terms, which I originally committed to. Treasurer Ma has signaled that she wants to make some changes to her administration. Her deputy leader left at the end of August. I just felt that it was a good time.”
Both Ma and Schaefer have a reputation for being strong-willed.
At The Bond Buyer’s California Public Finance conference in September, a panelist made a joke about Schaefer yelling at the finance team during lengthy discussions about one of the state’s deals.
But no one questions Schaefer’s encyclopedic knowledge of bonds.
Chiang’s director of communications, Marc Lifsher, once called Schaefer a professor, adding that he learned a lot about complex bond transactions while working with Schaefer.
Schaefer said he hasn’t decided what he’ll do next, but he won’t disappear to play golf and sit on his patio in a rocking chair.
“I still have a lot of energy for someone my age,” Schaefer said.
He has been involved in some of the State Treasurer’s Office’s largest bond-related public policy programs.
This includes the California Green Bond Market Development Committee. In separate interviews, committee chairman David Wooley and committee member Raul Amezcua, a Ramirez and Co. banker, verified Schaefer’s contributions without being asked.
The committee plans to produce recommendations next year on both best practices for issuing green bonds and how to disclose pre- and post-sale information on the Municipal Securities Regulatory Council’s EMMA website. .
This committee was originally formed under Chiang to encourage more California issuers to label green bonds, but focused more on disclosure.
During Chiang’s tenure, the Treasurer’s Office organized two Green Bond Conferences and a report was published based on the findings of these conferences.
“We come back to these documents a lot,” Wooley said.
Schaefer helped create the Green Bond Workshops and the resulting report.
“I’m very proud of the contribution I’ve made with the green bonds,” Schaefer said.
One of Schaefer’s contributions to the Green Bond Committee has been to ensure that any recommendations that come out of the committee make it easier for smaller issuers who don’t have the same financial staff as larger issuers.
Ma said whoever is appointed to replace Schaefer will assume his position as the Treasurer’s Office representative on this committee. Schaefer said he could stay as a private citizen if Wooley asks.
One of Schaefer’s toughest projects was working on the Banking Marijuana Business Aid Project.
He now admits he didn’t agree with legalizing marijuana, but Chiang had convinced Schaefer that they were for the pleasure of the people, and it was the voters’ will that it be legalized. After this conversation, Schaefer agreed to lead the search for banking solutions for the marijuana industry to facilitate its conversion into a legal industry.
“I found solutions,” Schaefer said. “Unfortunately, none of this came to fruition.”
Schaefer is a registered Democrat who resides in Sacramento. He moved there with his wife, Katherine, who also works in finance, when he took a job as a tax policy adviser in the comptroller’s office in 2014, when Chiang was state comptroller. Before that, he had lived in Los Angeles for 27 years.
“I’m not going to retire and walk away,” Schaefer said. “I’m too stubborn to do that. I suspect I’ll get involved in other ways. But I’m still evaluating that. I haven’t officially reached the retirement date. It’s in end of the year. I burn up unused leave.”
A 10-part webcast series that will educate newly elected officials about working with bonds is among what Schaefer considers his greatest accomplishments. The webcasts will ensure newly elected officials understand the contents of this 300-page bond document in their council brief, he said.
He worked with the CDIAC on this project, the official launch of which is scheduled for June.
“There are a lot of things I’ve worked on that I look back on with a sense of accomplishment, but this is the one I’m most proud of.”
Prior to serving in government, Schaefer founded Orange County-based public finance advisory firm Magis Advisors after serving as president of a similar company in Southern California and served as regional vice president with a practice national financial advisor.
As a consultant, Schaefer said he was often called upon to help the state structure and sell complex cash loans, the largest of which exceeded $10 billion. He began his more than 50-year career as a municipal bond salesman, syndicate manager and secondary market trader. He led the national short-term municipal trading desk of Chemical Bank in New York and the public finance division of Bank of America.
He also served for more than twenty years on the Technical Assistance Committee of the California Debt and Investment Advisory Commission (chaired by the California Treasurer) and for three years as a private sector adviser to the Standing Committee on Government Debt of the Government Finance Officers Association.
He is co-author of the California Public Funds Investment Primer and is a frequent speaker in the area of public finance.
Working for the treasurer’s office “was a tough job,” Schaefer said, “but I was glad I got it.”
He added that he would let others determine how successful he was, but “I think I have some things I can be pretty proud of.”