The Public Purse offers you serious thinking about economic, financial and political trends at the U.S. state and local level with a focus on municipal credit risk
TAG | California
9
San Diego City’s Financial Crisis: The Past, Present and Future
1 Comment | Posted by Natalie Cohen in Budget and Finance, Taxpayer v. union, bankruptcy and default, cities, municipal bonds, pensions
The Grand Jury of San Diego issued a report of this title yesterday. Also, at yesterday’s GFOA (Government Finance Officers Association) business meeting, the group voted that the Government Accounting Standards Board should stay away from the topic of sustainability. The only conclusion one can draw from the Grand Jury report is: the city of [...]
29
California Cities and Bankruptcy
1 Comment | Posted by Natalie Cohen in bankruptcy and default, bond insurance, cities, municipal bonds
See this post on Reuters for discussion about Antioch, latest city in California to talk bankruptcy. There is a bill, sponsored by state senator Mendoza, AB155, that would require cities to go through the state (via the California Debt and Investment Advisory Commission, CDIAC). The bill was referred last week by the Senate appropriations committee [...]
15
Los Angeles, LADWP and Political Risk
0 Comments | Posted by Natalie Cohen in Budget and Finance, cities, municipal bonds
Tight financial margins are not kind to political squabbles. In the last few weeks the city of Los Angeles has been engaged in a squabble with the city council and its utility, the Los Angeles Department of Water and Power (LADWP). The city’s mayor wants the utility to implement green power, the utility asked for [...]
18
Municipal Bankruptcy
0 Comments | Posted by Natalie Cohen in bankruptcy and default, municipal bonds
Here’s a clip from the California League of Cities concerning AB 155. AB155 (and its parallel, SB88) briefly, would prevent California cities from filing bankruptcy without going through the state – California Debt Investment Advisory Commission (CDIAC). Numerous other states have adopted similar provisions, which puts the state in the middle of helping with a workout [...]
25
Direct Democracy and Ballot Initiatives
0 Comments | Posted by Natalie Cohen in Voter initiatives, migration, states
Midterm congressional elections will be lively this year. Conditions are ripe for tax and spending initiatives and numerous recall elections are also on the popular agenda. Budget deficits, rising taxation and runaway spending are factors leading to tax and spending limitations. Anger at the federal government sometimes gets played out at the state and local level [...]
14
From Mortgage Resets to Mortgage Recasts
0 Comments | Posted by Natalie Cohen in housing mess
A particularly toxic form of adjustable rate mortgage is going to hit the headlines in the spring and summer of 2010 with defaults, foreclosures and workout discussions extending into 2012. “Option ARMs” also known as “Pick-a-pay” allow the borrower to choose how much to pay each month and reports indicate 94% of all borrowers paid [...]
6
Migration and Municipal Bonds
2 Comments | Posted by Natalie Cohen in migration, municipal bonds, reports
The slowdown in migration in the U.S. has significant consequences for municipal finance. New population growth in a community has been the driving force in municipal infrastructure finance since the beginning – and the slowdown we have seen over the last two years will affect bond volume in previously high growth centers. Borrowing to meet [...]
18
California Mello-Roos Bond Defaults Likely to Increase
0 Comments | Posted by Natalie Cohen in bankruptcy and default
In a recent report about Mello-Roos Community Facility Districts (CFD’s) the California Debt and Investment Advisory Commission (CDIAC) stated:
Despite the potential impacts of evolving mortgage conditions, CFD’s have not reported higher default rates, at least through 2007-2008, but have reported a recent rise in the number of their draws on reserves.
(Mello-Roos bonds are post-proposition 13 [...]
9
California School District Bonds, not as safe as they used to be
1 Comment | Posted by thepublicpurse in municipal bonds
School districts are often considered the safest investments in the tax exempt markets. They receive from 20-90% of their funding from their state governments, most of the rest from property taxes. So what to worry? Well, state governments, whose revenues react most quickly to economic changes, are having trouble. (Excellent coverage of state troubles at [...]