29 Apr Diversity and Inclusion Champion: David Erdman, Capital Finance Director, State of Wisconsin
In his nearly 30 years of working in public finance, David Erdman, Capital Finance Director for the State of Wisconsin, has served as a mentor any chance he can get. His goal: to train and pass information on to a younger generation.
“We need more people to get involved to see how public finance is structured and executed,” Erdman said. “We need more people in the public labor force to experience how a large state-level issuer like Wisconsin does bond transactions. And then we hope they apply this experience to other, more diverse, and unique transactions.”
In his role at the State of Wisconsin, Erdman is responsible for authorization, tax review, issuance, disclosure, delivery, and post-issuance compliance for general obligations and other credits issued by the State of Wisconsin. During his tenure, Erdman has been involved with the issuance and management of more than $50 billion obligations in the form of fixed-rate, variable-rate, and interest rate exchange agreements.
According to Erdman, historically, the State along with other issuers has been required to include a certain percentage of work for businesses that are minority-owned and disadvantaged veteran-owned. His department, along with other issuers, are happy to comply. But in light of recent diversity, equity, and inclusion initiatives, including Executive Order #59 from Gov. Tony Evers to encourage more efforts in this area, Erdman started looking for more opportunities to bring diverse attorneys and other professionals into the public finance fold.
“One way we have promoted diversity, equity, and inclusion at the State for many years was to include provisions in our bond counsel contracts that they subcontract work to smaller or disadvantaged enterprises,” Erdman said.
The State has worked with MWH Law Group LLP, a certified minority-owned law firm, several times through provisions with large firms including Quarles & Brady LLP and Foley & Lardner LLP. MWH served as the disclosure counsel for a recent Wisconsin Center District bond sale related to their major expansion project. This was a unique and challenging transaction and MWH Law Group LLP provided a key seat at the table, according to Erdman.
Erdman developed both mentor and mentee relationships with Women in Public Finance, a national organization, and quickly learned an additional way to move the needle on diversity. While law firms that are not owned by a minority, woman, or veteran will accept State provisions to subcontract to smaller or disadvantaged businesses, they too are making efforts to improve diversity within the professionals they employ at their firms. Erdman focused on ways to recognize, enhance, and promote these efforts as such efforts are truly the way to move the needle on diversity, equity, and inclusion.
When a $306 million refunding was priced in March, Erdman took action. He asked the people involved in the deal working group to consider this an opportunity to include or enhance the number of minorities, women, and disadvantaged veterans who participate in the transaction.
“In public finance you tend to see the same people over and over again. It is rewarding to work with different people; they gain a new skill set and I hope to pass an opinion along that might help them with the next steps they take in their career,” Erdman said. “Anytime someone asks a question based on their perspective of finance or policy, it makes you take a step back and rethink, reevaluate, so you don’t follow the same habit, potentially a bad habit, over and over again.”
According to The Bond Buyer, the Wisconsin refunding deal used a tax-exempt forward delivery structure on one series and a taxable structure on a second, with UBS running the books, Public Resources Advisory Group as advisor, Foley & Lardner LLP as bond counsel, and Ice Miller LLP as underwriters counsel. Additionally, MWH Law Group LLP served as special counsel to bond counsel. The team members were almost exclusively women and/or Black professionals.
Erdman is excited about the quality of public finance firms that have a presence in Wisconsin, especially when compared to other states. His focus on building the diverse, equitable, and inclusive professional skill set for public finance in Wisconsin and the nation will not stop here.
“This can’t be one and done – it worked out well with the team members this time, but we are hoping for continued intentionality with the next transaction and invite other issuers across the country to consider the same,” Erdman said. “This will be a discussion I have with all my working teams going forward. Getting new people and firms involved in transactions not only provides the base to positively impact diversity and inclusion initiatives, but also is critical for the future of the public finance field.”
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