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 [...]

California, Chapter 9, fiscal emergency, municipal bankruptcy, municipal bond default, state and local politics

Add Xenia Rural Water District’s to the short but growing list of over-leveraged municipal borrowers.  With $143 million in debt and about 9,000 customers, the unfolding socio-gram includes bondholders, bond insurers CIFG and Assured Guaranty, the US Department of Agriculture, Bank of America, and last, but not least, the ratepayers.  A $5.2 million note to [...]

bond insurance, fiscal emergency, municipal bond default, non-rated bonds, special district

We have two opposing camps in the muni-market at the moment: those who say it is the next systemic shoe to drop and the rating agencies that are systemically raising ratings.
Which is right?
We have moved from a market that has had heavy intermediation from the bond insurance companies to one where investors are on their [...]

ballot initiatives, bond insurance, community development district, direct democracy, liquidity, municipal bankruptcy, municipal bond default, ratings, state and local politics, states

Looks like the city is making its best effort to try to resolve budget imbalance.  Ohio is one of the states that has a strong oversight/receivership program and municipalities may not file bankruptcy without approval of the state.  Local governments there do rely on income taxes, which is tough in the current economy, especially in [...]

Chapter 9, fiscal stress, municipal bankruptcy, municipal bond default

Harrisburg, Pennsylvania can’t really afford to pay for the Resource Recovery bonds that it guaranteed.  Their recently adopted 2010 budget does not include debt service for this guarantee (see prior post with link).  It is accepted practice for rating agencies to rate municipally (or state) guaranteed debt off the credit of the guarantor.  Unlike bond [...]

Chapter 9, fiscal stress, municipal bankruptcy, municipal bond default, state and local politics

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 [...]

California, municipal bond default, special district

The check is not in the mail.  Prichard, Alabama, came out of Chapter 9 bankruptcy in 2002 and promised to make deposits into its public pension fund.  They didn’t and now they are simply out of money.  Retirees did not get their October 1 payment.    What’s next?  The retirees are suing.  The city is looking [...]

Chapter 9, municipal bond default, Prichard Alabama

Municipal bond defaults over the last two years occur in sectors that tie into the financial crisis: real estate.  Multi-family housing and land development projects that never took off are at the front line.  Special entities – usually a district of some kind, depending on the state – sell tax-exempt bonds to finance infrastructure for [...]

community development district, Florida, municipal bond default, municipal bonds, special district