David E. Hartley plans to retire this week from the San Francisco-based investment banking firm of Stone & Youngberg, marking the end of a public finance career that spanned four decades and witnessed a virtual sea of change in municipal bonds.
"It just seemed time," said Hartley, 65, adding that, "I want to carry on with the rest of my life."
Hartley entered the municipal finance industry when he joined Stone & Youngberg in October 1952, after two years of working as an equity trader in Seattle.
His responsibilities over the years range from analyzing municipal bonds to structuring public financings.
Hartley also participated in various industry groups, culminating in his role as chairman of the Municipal Securities Rulemaking Board in 1990-91.
He held various posts at the Public Securities Association, was a founding member of the California Assessment Bond Underwriters Association, which is now merged with the California Public Securities Association, and served eight years as chairman of the Technical Advisory Committee to the California Debt Advisory Commission.
Hartley became a partner at Stone & Youngberg in 1960 and was managing partner from 1985 to 1991. He worked mostly part-time this year as he began preparing for retirement.
In an interview last week, Hartley noted that the municipal market has changed dramatically during his 40 years in the business.
"In the old days, it was more matter of fact," largely involving "more easily understandable" general obligation bonds, Hartley said. By contrast, today's market features "an enormous number of different products."
Hartley noted that investment bankers also face a rigorous process today in arranging many financings.
"Most every public project today is surrounded by controversy," he noted.
On reflection, however, Hartley said the most satisfying financings in his career were also some of the toughest to accomplish. He is especially fond of projects that provided clean water and adequate water supplies for agricultural and urban users, along with the wastewater facilities for disposal.
"Being part of having brought that about is one of the things I look favorably on," Hartley said, though he noted that such projects were "so controversial" for some citizens because they feared they would induce growth.
Looking to the future, Hartley said the municipal industry must continue attempts to maintain credibility with investors. This is even more important now, he said, because a less sophisticated pool of retail investors is participating in the market even as the products themselves become more sophisticated.
"You have the need to inform the investors to give them continued confidence in the market," Hartley said. "We also need to be involved in the continuing disclosure to the investor. That's the thing that needs to be better."
If Hartley had to recall problems regarding investment banking in general, he would single out a 1980s trend toward "a transaction orientation versus long-term relationships."
In some instances it seemed as though investors and issuers were "being used to the advantage of the banker, and that's not what this business is about," Hartley said. "What makes this thing work is the long range," he added, noting that this means working on relationships benefiting clients rather than taking a hit-and-run attitude toward transactions.
Regarding the problems currently dogging California, Hartley is confident that "long term, we'll resolve the issues."
But he expressed disappointment over how the state's political process has operated recently.
"There used to be a lot more statesmanship," Hartley said. "Now it's partisanship" that leads to gridlock.
In particular, Hartley believes "partisan politics have impacted public infrastructure needs that are basically nonpartisan," causing "a number of bills to go down in flames."
Overall, however, Hartley said "I really feel like it's been such a privilege" to participate in the industry and at Stone & Youngberg for so many years.
And he would encourage young people to enter the business.
"What this business does is build things" that help improve the quality of life, Hartley said. "When you leave it, you can look back and see things that will be around for a long time."
Hartley's wife, Shirley, retired from the state university system in February after working as a professor of sociology. Hartley said they plan to travel, spend time at their second home in Hawaii, and do community work.
"We've been so lucky, [and] we want to give some of that back," Hartley said.
The couple also will operate a small family foundation that helps facilitate adoptions and other services for children with foster home backgrounds and special needs.