Two fixtures of New Canaan financial policy have teamed up to start a consulting firm for municipalities called Municipal Enterprise Solutions, based in Stamford.
Kathleen Corbet, a former member of the Board of Finance and the town's former interim chief financial officer, joined with Board of Finance member Neil Budnick and a third partner, John Pizzarelli, of Westchester, N.Y., to form the business. The trio began work in July, but formally announced the launch of the company Nov. 12.
The firm provides advice to municipalities and nonprofits on how to reduce costs, become more efficient, invest prudently, improve strategy and make tough financial decisions.
"We have seen municipalities really be challenged by the current economy," Budnick said. "I think it's very hard for municipalities to be staffed in every situation. We offer backup for municipalities, everything from financial to operational."
Corbet said that while many companies offer financial consulting for municipalities, few have it as their central focus, a niche that Municipal Enterprise Solutions hopes to fill.
"It's a topic that is not always focused on from a consulting perspective," she said. "The fact that we're uniquely focused in this area sets us apart."
Municipalities' need for professional financial advice has risen in recent years following the collapse of the housing market, the 2008-09 financial crisis, and fiscal obligations like pension and health-care payments that have built up over the years. Since 2010, seven municipalities have filed for bankruptcy or defaulted on their debt, including Stockton and San Bernardino in California, both cities of more than 200,000 residents; Harrisburg, Pa., the capital of the state; and Central Falls, R.I., with many more teetering on the edge of financial insolvency.
"There is a strong need for the services that we provide in this economic environment," Budnick said in the press release announcing the firm. "As a result of the lingering effects of the financial crisis, municipalities continue to struggle with declining property, income, sales tax and other sources of revenue. At the same time, unfunded mandates and stagnant economic conditions increase the need to effectively and efficiently manage the delivery of essential government services."
The firm will draw on the experience each of the partners has from working in the financial sector and in town.
Budnick is the former president and CFO of MBIA Insurance Co., which focuses on municipal bonds. He retired from the firm in 2007. He was recently appointed by Gov. Dannel P. Malloy as chairman of the state's Investment Advisory Council, which advises the state on investment policies.
Corbet is the former president of the credit ratings agency Standard and Poor's, which she left in 2007, and before that was the CEO of the fixed income division of the financial firm AllianceBernstein. In 2011, she ran unsuccessfully for the office of town treasurer in New Canaan. In 2012 she served as the town's interim CFO after the January departure of Gary Conrad and until the hiring of Dawn Norton. She also served previously on the town's Board of Finance.
She was listed in TIME Magazine's article "25 People to blame for the financial crisis," for her role as head of Standard and Poor's, about which she replied, "With a 30-year career in finance and investments, the TIME piece is an unfortunate and inaccurate portrayal of my three-year tenure at S&P."
The third partner, Pizzarelli, is the former CEO of CIFG Holding.
The trio decided to form the company after several conversations earlier in the year. Budnick and Corbet have known each other for years.
"I wanted to be able to contribute to the public sector by volunteering; that's when I joined the BOF," she said. "I'd always done work in the nonprofit sector as well. As I got more and more involved in New Canaan, I recognized there were a number of opportunities in the public sector that had been a focus of mine in the private sector: operational management, cost savings, etc."
Municipal Solutions is also associated with "distinguished advisers," who will provide specific expertise. Two of them are David Abbey, the former superintendent of New Canaan public schools, and Jim Lisher, who is working on a Tele-Health initiative with the town. The program uses modern technology to improve health wellness in seniors, hopefully resulting in them staying in their homes longer and living healthier lives.
Corbet and Budnick said the scope of the firm will be regional for now, but that they have received interest from municipalities in other parts of the country. Budnick said he hopes to take on national clients selectively and expects the firm to grow.
firstname.lastname@example.org; 203-972-4413; @Woods_NCNews