Blogging Bayport Alameda

June 3, 2013

Negative percent

Filed under: Alameda, School — Tags: , , — Lauren Do @ 6:03 am

Last Tuesday’s School Board meeting there was an agenda item with recommended budgets by school site, the short summary is that most schools sites have cuts.

I put into a spreadsheet the numbers from last year’s budget and compared it to this year’s budget.  The stuff in the light pink is for 2013 and the blue compares this year’s numbers to last years:

budget

I dropped into an Infogram the 2013 budget per student as well as the percentage of change in the 2012 number to the 2013 per pupil.  But for those that don’t want to click over I screen capped the screen that shows the percentage change between 2012 and 2013.

elementary high

 

There was some discussion about the projected population, mostly there was disagreement about the projected population of Wood Middle School for next year.   My next project will be to try to compare projected numbers for budgeting purposes and compare it with the actuals to see how accurate AUSD staff got it year by year.   I would imagine that after a few years, staff gets pretty good at predicting this sort of stuff, it would be interesting to show how close they actually get.

51 Comments

  1. Total District Funding $108,023,000

    8905 total students

    So Basically $12,130.00 + Per Student

    Your 2012 Total Budget to Schools is less than 50% of Total District Funding

    http://districts.teachade.com/l/1115/Alameda-City-Unified

    Comment by Interesting way to Look at Where The Money is Going — June 3, 2013 @ 7:31 am

  2. What is included in the budget for each school? Obviously not pension costs but does it include staff and teacher salaries? If so, it underscores what we already know–it’s pensions and administration that are killing us, not “greedy” teachers. Allowing employees to draw multiple pensions with no cap was a very costly move as is the way in which pensions are calculated. Same story with police, fire, and city staff.

    Comment by Denise Shelton — June 3, 2013 @ 9:42 am

  3. The school budgets do include benefits costs including payments made for pensions. In the case of teachers, they are part of CALSTRS (http://en.wikipedia.org/wiki/CalSTRS). The Legislature controls pension benefits levels and payments not local school districts. Teachers are not part of the Social Security system.

    Comment by Mike McMahon (@MikeMcMahonAUSD) — June 3, 2013 @ 10:04 am

  4. Salaries and Employee Benefits run 74 Million For the District

    Employee Benefits $14,165,000

    Salaries $60,468,000

    http://districts.teachade.com/l/1115/Alameda-City-Unified

    Comment by interesting way to Look at Where The Money is Going — June 3, 2013 @ 10:08 am

  5. Salaries and Benefits work out to 8381.00 Per Student

    Comment by interesting way to Look at Where The Money is Going — June 3, 2013 @ 10:12 am

  6. Fire and police have sucked away enough of the budget and are now holding our schools hostage. I guess we’ll be seeing something on the ballot soon to raise taxes, and the police and firefighter will start sucking that away too.

    Comment by jsanders128 — June 3, 2013 @ 3:51 pm

  7. JSanders Fire and Police come under City Budget. This is School Budget. They Negotiated best deal they could. Residents are just on wrong side of the deal.

    Comment by interesting way to Look at Where The Money is Going — June 3, 2013 @ 4:33 pm

  8. 7. Isn’t it funny how Alameda residents are always on the “wrong side of the deal”? When our city officials mismanage our money (which they seem to always do), they just ask for more and we say YES!

    Comment by jsanders128 — June 3, 2013 @ 5:33 pm

  9. #8 Yes, they do. No we won’t.

    Comment by A Neighbor — June 3, 2013 @ 6:16 pm

  10. http://imgur.com/a/Wvhqe

    Comment by jsanders128 — June 3, 2013 @ 7:31 pm

  11. 10
    I did not know this. Whoever decided that this type WWII vehicle is needed in Alameda should be fired.

    Comment by Jack Richard — June 3, 2013 @ 8:55 pm

  12. 12
    Unlikely in our fine city — they are more likely to be making >200k with pension for life.

    Comment by jsanders128 — June 3, 2013 @ 9:01 pm

  13. Seems like our corrupt city government is already doing their best to suppress the facts so that they can continue to manipulate and take advantage of Alameda citizens:
    http://www.action-alameda-news.com/2013/05/31/city-of-alameda-refuses-to-release-budget-spreadsheet/

    Comment by jsanders128 — June 3, 2013 @ 10:42 pm

  14. Hooray, now Jsanders is linking to the world wide web’s best source for misinformation! A match made in heaven. When John is calling you out for getting your facts wrong, you know you’ve got problems.

    Comment by Facts, we don't nee no stinking facts — June 4, 2013 @ 7:09 am

  15. The APD doesn’t need a tactical vehicle. Columbine, Sandy Hook, Boston Marathon, nor any other acts of terrorism could never happen in Mayberry!

    Comment by dc — June 4, 2013 @ 7:48 am

  16. 15. Would you care at all to back up your accusations with your own “facts”?

    16. So are you saying that police should be equipped like the military to deal with all possible threats? I believe you left out the biggest attack of all: 9/11, where jumbo jets were flown into buildings. By your logic, the Alameda Police Department should be equipped with anti-aircraft batteries and advanced radar systems. They might also need state of the art fighter jets. Why not? We’ve already got runways at Alameda Point ready.

    Comment by jsanders128 — June 4, 2013 @ 8:25 am

  17. 17. I’m quite sure the police department has a much better idea of what types of equipment they might need than you seem to.

    Comment by dc — June 4, 2013 @ 5:20 pm

  18. Jsanders, I don’t think I need to support myself. my comments aren’t removed from Patch, I don’t misrepresent total compensation and salary:
    https://laurendo.wordpress.com/2013/05/31/sloppy-drunk/#comment-109855

    I don’t claim public safety eats up 70% of the city budget:
    https://laurendo.wordpress.com/2013/05/31/sloppy-drunk/#comment-109831

    I don’t claim that firefighters earn $200K and fire department is 34% of budget:
    https://laurendo.wordpress.com/2013/05/28/cutting-crew-2/#comment-109718

    I don’t say families in need cause crime:
    https://laurendo.wordpress.com/2013/05/17/spring-time-for-housing/#comment-109435

    I don’t un-comprehend crime site statistics:
    https://laurendo.wordpress.com/2013/05/13/bring-it-on-home/#comment-109295

    I don’t cite no-fact action alameda and I don’t have no-fact John correct my comprehension of city/school budgets. perhaps you should go post in the action alameda no-fact zone.

    Comment by Facts? We don't need no stinkin' facts — June 4, 2013 @ 8:49 pm

  19. 19:
    Ok, so are you saying that firefighters dont earn 200k?

    Comment by jsanders128 — June 4, 2013 @ 9:27 pm

  20. 18.
    Are you sure?
    http://www.businessinsider.com/fbi-officers-rifle-mistake-2013-3

    Comment by jsanders128 — June 4, 2013 @ 9:35 pm

  21. Jsanders, just sayin’ that you have no idea what you’re saying when you say they do.

    All we are saying….is give facts a chance (sing it with me!)

    Comment by Facts? We don't need no stinkin' facts — June 5, 2013 @ 6:47 am

  22. 22.
    So I’ve provided a number of facts, backed by links to references from the city’s own webpage … and the best response you can come up with is a personal attack against me? Do you by any chance work for the firefighters union? True to your username, you seem extremely skilled at distorting and discounting facts without actually addressing the situation or providing a counterargument. You’re a perfect fit for our City Government!

    Comment by jsanders128 — June 5, 2013 @ 9:12 am

  23. You provided a link to firefighters earning $200K? right…

    love the classic jsanders attack on messenger without facts…pointing out you have no idea what you’re typing isn’t a personal attack, it is providing a fact that is supported by your lack of ability to provide actual facts.

    Comment by Facts? We don't need no stinkin' facts — June 5, 2013 @ 1:21 pm

  24. 24
    “You provided a link to firefighters earning $200K? right…”

    $$$$

    Click to access calendar_year_2011_earnings_for_pra_reqt_0.pdf

    $$$$

    Comment by jsanders128 — June 5, 2013 @ 2:27 pm

  25. Jsanders

    Why Don’t they want to release the Spreadsheet for all the City Employees for 2012?

    Didn’t we pay these monies?

    Don’t they have a Fuduciary responsibility as Our Employees to Provide to the Residents a Full Accounting?

    What is there to Hide?

    Were not talking about Lunch money. These are Millions of Dollars of the residents money.

    A fiduciary duty[2] is the highest standard of care at either equity or law. A fiduciary (abbreviation fid) is expected to be extremely loyal to the person to whom he owes the duty (the “principal”): he must not put his personal interests before the duty, and must not profit from his position as a fiduciary, unless the principal consents.

    A fiduciary is someone who has undertaken to act for and on behalf of another in a particular matter in circumstances which give rise to a relationship of trust and confidence.

    Comment by What is there to Hide? — June 5, 2013 @ 3:00 pm

  26. In a fiduciary relationship, one person, in a position of vulnerability, justifiably vests confidence, good faith, reliance and trust in another whose aid, advice or protection is sought in some matter. In such a relation good conscience requires the fiduciary to act at all times for the sole benefit and interest of the one who trusts.

    Comment by What is there to Hide? — June 5, 2013 @ 3:02 pm

  27. We pay these People Hundreds of thousands of Dollars a year and they can’t give someone a simple Excel Spreadsheet in the same format as before. Why does this not pass the smell test.

    I’m a Bond Holder of Muni Bonds and city governments may only be accountable to their citizens, but they also have fiduciary duties to those who invest in their bonds.

    Bernie Madoff working at City Hall Now?

    Comment by What is there to Hide? — June 5, 2013 @ 3:11 pm

  28. Which cusips do you own?

    Comment by dave — June 5, 2013 @ 5:17 pm

  29. Dave I own

    PMX PIMCO MUN INCOME FD II COM

    I dont want the Muni Bonds to join the ranks of these POS Listed Below that had accounting issues and are Totally worth less No matter WTF the City Manager wants to Hide and play games.

    LEHKQ LEHMAN BROS HLDGS CAP TR III PFD SECS SER K 6 375%

    P37307108 ENRON CAPITAL LLC 8.00$ WITH GUAR MONTHLY INCOME PFD SHS ISIN#TC0001373946

    Comment by What is there to Hide? — June 5, 2013 @ 6:12 pm

  30. Ask him what he owns What is there to Hide.

    Comment by Jack Richard — June 5, 2013 @ 6:47 pm

  31. I looked at the PMX’s holdings as of 3/31 on Bloomberg, no Alameda bonds in the list. None in the 12/31/12 proxy either. Doesn’t look like you’re a bondholder, just a four-flusher.

    And in any case, a person who is jealous of a teacher’s salary is almost certainly not in a tax bracket that would call for owning munis. That person is also not required to own an asset class of which he has such deep concerns, however unfounded. Sell & buy something that eases your mind and fits your needs better.

    And unfounded those concerns are. The city DOES have long term fiscal woes, very deep ones. However, the city’s GO debt load, ie its bonds, is easily manageable for the next generation at least. With total GO debt of approx 22MM and annual debt service less than 3MM, and unrestricted property tax revenue of approx 30MM, the City of Alameda’s bonds are MONEY GOOD.* The city also has a serious long term structural deficit issue, caused primarily, as we all know and do not need to hear from you again (EVER) public safety contracts. These two circumstances exist parallel to one another for reasons far beyond your ken. Note that even Vallejo’s GO debt ended up money good.

    You are right that the public safety contracts are a serious issue that must be confronted ASAP. There, I said it. Happy? Great. Now please either shut the fuck up, as you recently promised to, or learn a little about the things you so obsessively cut & paste. If you take the latter course, you might (MIGHT) be able to add something to the discussion, and might (and even bigger stretch) gain a measure of respect from others in the debate.

    *There are also revenue bonds backed by other sources of funds besides the GF, but they have no claim on the GF and therefore do not enter into this discussion. They’re money good too, by the way.

    Comment by dave — June 5, 2013 @ 7:12 pm

  32. Dave

    I have EFT’s Bond funds With California Munis in it and also have some Nuveen Municipal Trust . I just listed one because I thought you might have something constructive to say besides Shut To Fuck up.

    Of Course you never addressed any question I Asked.

    Why Don’t they want to release the Spreadsheet for all the City Employees for 2012?

    Didn’t we pay these monies?

    Don’t they have a Fuduciary responsibility as Our Employees to Provide to the Residents a Full Accounting?

    What is there to Hide?

    Were not talking about Lunch money. These are Millions of Dollars of the residents money.

    You must be part of the Lil Hollerin Weasels Group. LLC working out of City Hall.

    Just a Wild Ass F Guess.

    Comment by What is there to Hide? — June 5, 2013 @ 7:43 pm

  33. Jack

    What Dave owns is a raincoat to stop Ants from peeing on him.

    Dave’s Night job is the Lead Singer for the Four Flushers Humming Lil Russtofarian Hymms. Nights off he working on his Swallow Calls …Always the Environmentalist.

    Comment by What is there to Hide — June 5, 2013 @ 8:30 pm

  34. Jsanders, appreciate your support of my point, that you have no idea what your talking about. The alamedan even made it easy for you. There’s a column called “Total Gross Earnings” and it’s more or less ordered most earned to least. There are five people who earned more than $200K on that list, all on the first page. Which of them are from fire? You can even include fire department heads.

    If you actually read it, rather than intuit that it backs up your “facts” it looks like the highest paid fire employee earned $166K. that’s the top one in the whole department.

    With back up like that, it’s no wonder you link to action alameda, you use facts the same way! a word to the wise, those guys like to sue people over tiny little things (don’t worry, they never win), but they might come after you for plagiarism if you keep stealing their game.

    Comment by Facts? We don't need no stinkin' facts — June 5, 2013 @ 10:55 pm

  35. I’m Sure the Bond Writers are forming Long Lines for the City of Alameda

    Thanks Dave for pointing all this out in your Bond Research of City of Alameda

    Calif. City Sold Bonds Doomed To Fail, 9th Circ. Hears

    By Beth Winegarner 0 Comments

    Law360, San Francisco (May 13, 2013, 5:43 PM ET) — The city of Alameda, Calif., knew when it sold municipal bonds to fund a city-run telecom system that it wouldn’t be able to repay investors, a business trust told the Ninth Circuit on Monday, arguing Alameda is liable for the $20.5 million the trust chipped in.

    Nuveen Municipal Trust’s attorneys argued that a California federal court was wrong to find Alameda immune under California law and to require Nuveen to prove that the city’s actions caused the securities to lose value by the same methods required in high-volume-stock cases. Because Alameda raised funds for the telecom system through 18 trades over a series of months, it would be impossible for Nuveen to prove loss causation in the same way it would in a corporate stock-loss case, according to the trust’s brief.

    “Because this is a secured debt obligation, it’s sufficient to show that when Alameda issued the bonds, it knew they could not be repaid or refinanced,” argued Scott W. Wilkinson of Davis & Ceriani PC, an attorney for Nuveen.

    To refinance the bond debt, Alameda needed positive income by 2008, but instead projected negative income, Wilkinson argued.

    “They knew it would fail. … We have testimony that Alameda could foresee the consequences.”

    http://www.law360.com/articles/441160/calif-city-sold-bonds-doomed-to-fail-9th-circ-hears

    Comment by What is there to Hide — June 5, 2013 @ 11:01 pm

  36. 35

    Here is what a 95K Salary looks like…….The other 100K is not important and No one should count……

    Total Salary 95,661

    Overtime 8,256

    Acting Pay 5,665

    Other 22,850

    Medical 23,161

    Retirement 41,058

    Total Compentation 196,651

    Comment by What is there to Hide — June 5, 2013 @ 11:06 pm

  37. Dave we will see who is Four Flushing. I’m not a wealthy individual but I’m not eating chili out of a Hubcap either.

    The Items I listed in # 30 are presently in my accounts along with a few others.

    For the sake of Charity I will offer up 10K to your favorite charity in Alameda for the Benefit of Youth if I can’t show Proof.

    If I can Show proof you Give 10K to Alameda Boy’s and Girls Club or Girls Inc.

    I will have brokers Email Lauren and Jack for Verification.

    PMX PIMCO MUN INCOME FD II COM

    LEHKQ LEHMAN BROS HLDGS CAP TR III PFD SECS SER K 6 375%

    P37307108 ENRON CAPITAL LLC 8.00$ WITH GUAR MONTHLY INCOME PFD SHS ISIN#TC0001373946

    Comment by four flush this — June 6, 2013 @ 1:24 am

  38. Don’t be fooled Alameda. Ultimately, the number that matters is the “grand total” compensation, as this is the number that taxpayers are on the hook for.

    Comment by jsanders128 — June 6, 2013 @ 4:47 am

  39. John:

    You really aren’t worth the keystrokes, and never have been, but a third cup of coffee this morning gives me the strength to post this.

    You made a dubious claim about owning City of Alameda bonds. When asked for proof, you could not show it. Your strange proffer of a bet that you own three random securities is puzzling, nowhere near germane, and just plain odd. A person could discuss the merits of the city’s debt without falsely claiming to be a creditor, or boldly challenging me to disprove your account statements, even with your insane inclusion of JR as your second in this increasingly bizarre duel.

    This is the most polite way to say, and it takes great restraint to tone this down: YOU DO NOT KNOW WHAT THE FUCK YOU ARE TALKING ABOUT.

    The city’s General Obligation debt is the only debt with a claim on the General Fund. This is the debt that counts in any discussion of the city’s credit-worthiness, which is solid and which would and has attracted any number of bond underwriters.

    The bond you cite in 36 is not and never was a liability of the General Fund. In fact, having read the OS more than once, I can tell you that document is replete with disclaimers stating just that, and makes it clear to any literate person that the ONLY claim that bond had was on the revenues and failing that, the proceeds from sale of the cable division, explicitly ringfenced from the electric company. I’ve read a blue million bond OS’s and prospectuses in my 20 years in the bond business and can scarcely recall a doc with such explicit disclosure of the risks of the deal. Perhaps the most explicit disclosure, though, was the 7% coupon, which if memory serves was 400 or more bps over GO debt at that time. There’s a reason the first suit failed an why the appeal will also. It’s a Hail Mary at best.

    The city is nowhere near defaulting on its bonds. The debt load is not large and is easily manageable, (as described above, and not refuted by you)and most importantly, has first claim on property tax revenue. They are, I repeat, money good. About the only thing that could make Alameda default in our lifetimes is The Hayward Fault (knock wood) but that is a separate discussion, and frankly one I’d rather have than this one.

    At the same time, the city has a structural deficit problem that is long overdue for a fix. Failure to fix that that does not endanger the GO creditors nearly as much as it does the citizenry and the public safety unions themselves. That gap is closed by budget cuts, not by failure to service debt. So far the budget cuts have hit public works and parks while sparing the PS unions, but should it persist the union workers themselves will take hits as police & fire jobs are eliminated. That is a bad situation we MUST avoid, but it does not mean default AT ALL. Consider Vallejo: the traffic lights don’t work, the police force has been gutted down to nothing, it’s a complete disaster, but the GO debtholders got paid in full. Period.

    You are correct that the city has a significant fiscal problem but you do not understand what/why/how it is. Your passion for fiscal rectitude is commendable but is overshadowed by the manure spreader that you have working 3 shifts.

    This will be my last post on the subject. This being America, you’re free to call me any name you like, as you generally do when out-argued. You’re also free, don’t forget, to educate yourself on the subject so as to post thoughtfully about it.

    Comment by dave — June 6, 2013 @ 6:54 am

  40. Wow, nice post dave. Appears jsanders and “john” have similar tactics of making up facts, throwing around links of info that don’t support them and then spinning desperately not to look like a fool.

    jsanders, I have to give you credit. here i thought you were sincere, when instead i realize you are doing performance art. bravo! your brilliant reworking of the wizard of oz’s exclamation “pay no attention to the man behind the curtain” when he was discovered to be a blathering blow hard. Your masterful turn of phrase “don’t be fooled Alameda” harkens perfectly to that moment, exposing a frightened character who has been caught to saying something untrue and desperately trying to get back to a time when they could realistically pretend that they had facts to back their statements up. Like the Great Oz, your character quickly tries to point to other things to lead people to believe they aren’t seeing what they see. In your characters case, a person with absolutely no ability to communicate facts in an honest and meaningful way. The desperation that you capture in two short sentences is awe inspiring. Cormac McCarthy couldn’t be so concise and yet convey so much despair.

    “Don’t look at the facts I present” your character screams,”I didn’t mean them. I didn’t mean to say that firefighters earn over $200,000 a year! what I really meant was that when you take their earnings and add other things to them, there is a higher cost and that number, while it still doesn’t average $200,000 a year for firefighters, is still closer to what I wanted you to believe, despite having no proof, because it was in fact not accurate.”

    Bravo sir, bravo! I can only look forward to your next rendition. don’t let us down.

    Comment by Facts? We don't need no stinkin' facts — June 6, 2013 @ 8:31 am

  41. Dave here is Exactly what I said.

    If your not bright enough to comprehend I can’t Help you.

    “We pay these People Hundreds of thousands of Dollars a year and they can’t give someone a simple Excel Spreadsheet in the same format as before. Why does this not pass the smell test.

    I’m a Bond Holder of Muni Bonds and city governments may only be accountable to their citizens, but they also have fiduciary duties to those who invest in their bonds.

    Bernie Madoff working at City Hall Now?”

    “Dave I own

    PMX PIMCO MUN INCOME FD II COM

    I dont want the Muni Bonds to join the ranks of these POS Listed Below that had accounting issues and are Totally worth less No matter WTF the City Manager wants to Hide and play games.

    LEHKQ LEHMAN BROS HLDGS CAP TR III PFD SECS SER K 6 375%

    P37307108 ENRON CAPITAL LLC 8.00$ WITH GUAR MONTHLY INCOME PFD SHS ISIN#TC0001373946

    I didn’t say Alameda Bonds Specifically though they might be in some accounts.

    Pimco is a Huge Player in the California Muni Bond Game. I have also held some Nuveen which are major players also.

    I can See the City has been in Lawsuits with Nuveen Regarding the City of Alameda Bonds.

    So to make the stretch that they might be in Portfolio is NOT out of Line.

    You Like to Twist the Truth and Miss Quote and Claim everyone is a Idiot for asking for A Simple Accounting of where the Money is Going in Regards to Employee Compensation.

    Nice frkning Smoke Screen ……. Your a great Left Guard for something indefensible.

    Comment by Have another Cup — June 6, 2013 @ 9:08 am

  42. 41

    Your kicking a Dead Horse…We know your getting screwed by City for only paying you Double your salary in other Perks……Were Slave Drivers in Alameda.

    Here is what a 95K Salary looks like…….The other 100K is not important and No one should count……

    Unless of course you Have to Pay……… So you don’t like to count it.

    Total Salary 95,661

    Overtime 8,256

    Acting Pay 5,665

    Other 22,850

    Medical 23,161

    Retirement 41,058

    Total Compentation 196,651

    Comment by Have another Cup — June 6, 2013 @ 9:25 am

  43. 40
    “…even with your insane inclusion of JR as your second…” Insane is right. Only bond I have (besides my wife) is with my tortoise.

    Comment by Jack Richard — June 6, 2013 @ 9:43 am

  44. Dude, your a masochistic poster…yet another link that shows that the “facts” that come out of your head are useless and untrustworthy…appreciate the reminder

    Comment by Facts? We don't need no stinkin' facts — June 16, 2013 @ 11:10 pm

  45. In recent days the city has won the appeal of the completely frivolous telecom lawsuit by Nuveen and also had its credit rating upgraded. For those keeping score at home, John is still o-fer.

    Comment by dave — October 1, 2013 @ 11:51 am

  46. I couldn’t find where this was Frivolous Lawsuit. In Fact Judge Ruled reasonable cause or good faith in filing or maintaining the lawsuit.

    How much did Lawsuit Cost us as City Dave -0 To Defend.

    I know not as much as the 10 Million Lost by the Bond buyers of Alameda Bonds.

    In June 2008, Alameda Power determined that refinancing the Notes was not a viable option in light of the overall economic downturn and decided to sell the telecom system. Comcast bought the telecom system in November 2008 for approximately $15 million, and the City paid all net proceedsfrom the sale to the Noteholders. Nuveen received $10,105,110 toward the principal of the Notes it held, a shortfall of approximately $10 million.

    III. DEFENSE COSTS
    The City cross-appeals the denial of its motion for defense costs. Under California law, “applicable defendants may recover defense costs . . . if the trial court finds the plaintiffs lacked either reasonable cause or good faith in
    filing or maintaining the lawsuit.”

    Affirming the district court’s denial of the City’s motion for defense costs, the panel held that although the City was entitled to summary judgment, the bond purchasers had reasonable cause to bring suit, and the evidence sufficed to
    establish their good faith.

    Click to access 11-17391.pdf

    Comment by Interesting Case — October 1, 2013 @ 4:08 pm

  47. Dave Thanks For the Heads up on Bonds.

    Detroit defaults on more than $600 million of ‘unsecured’ GO bonds

    Reuters
    5:18 p.m. CDT, October 1, 2013

    (Reuters) – Detroit on Tuesday defaulted on more than $600 million of general obligation bonds deemed unsecured by the city’s emergency manager, a city spokesman said.

    The move marked the second bond default by cash-strapped Detroit after Kevyn Orr, the former corporate bankruptcy attorney who has been running the city since March, announced on June 14 a moratorium on unsecured debt payments.

    Comment by Interesting times — October 1, 2013 @ 4:19 pm

  48. So what do we learn from all this. Issue bond, don’t pay them back (default), prevail in a Lawsuit and end up with a higher Bond Rating to start this process over again.
    So AUSD needs to ‘borrow’ money to fix the pools. City will loan the money but AUSD does not want the loan to appear on its books as it will affect a proposed Bond issue.

    I just wonder what kind of ethics we are projecting to accomplish our goals.

    Comment by frank — October 1, 2013 @ 4:41 pm

  49. Frank, the telecom bond was NOT tied to the city’s general credit in ANY way, nor to the electric company’s. Its only security was the assets of the telecom division, or proceeds from its sale. The prospectus was extremely & repeatedly clear about this. For all the errors of the telecom debacle, ring-fencing the bond issue was a good move. For these and other reasons, the example of that bond issue is a real exception, and isn’t much of a guide or template for future borrowing.

    Comment by dave — October 1, 2013 @ 5:35 pm


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