Denver Direct: Wanna Buy Some Bonds?
Friday, September 26, 2008
I guess it’s time to revisit one of my continuing topics, The Alphabet Bonds (Better Denver) approved by the voters of the City of Denver in the last election. I’ve sought more information using the internal “contact us” email system but no answer after three weeks. I haven’t been able to find an email address for Bond Czar Don Hunt. Maybe you’d like to try.
When last we checked, the bonds had not been issued, and “30-day commercial paper” was being used to borrow millions to get the projects started. Reportedly, this was at a 2% rate, which I think must be monthly, resulting in a 24% yearly interest rate. At this rate, much more of the money will be consumed by interest (bankers) over and above the scheduled 60% that they were due to be paid by the end of the term, and my guess is that there will be shortfalls at the end of the projects. Oops, more taxes required down the road.
And speaking of taxes, I went to the City Assessor’s Office after paying my onerous property tax. I had a very interesting session with the assessor who actual set the outlandish assessment on my property. He agreed that I could possibly get a refund if I filed the necessary paper work after Jan 1, 2009. The board will review the past two years to see if any adjustments would be warranted. You can bet I’ll be down at the Webb building doing that first thing next year.
But as our conversation grew more general, I was interested to hear him say (not for attribution) that the City’s property tax revenues are nowhere near meeting expectations, and that they “are really hurting”. With Ritter announcing a State-wide freeze on hiring and new construction, will Hickenlooper be forced to do the same?
from [email protected];
The Chips Start to Fall in Colorado
As Congress and President George W. Bush continues to look for common ground in coming up with a massive, $700 billion economic bailout for faltering financial institutions, Colorado Governor Bill Ritter predicts difficult economic times ahead. He announced the state would not hire any new employees and would not begin any construction projects, according to The Denver Post. For example, plans to spend $30 million on a full-day kindergarten school have been set aside. Ritter said during a press conference at the state Capitol yesterday that Bush’s national address earlier this week, highlighting a dire economic situation, hit home. Ritter said cuts were prudent given the possibility that state revenues could “begin to dramatically decline.” The Legislature’s Joint Budget Committee has already warned that the state could face a $100 million shortfall this year. Institutions of higher education are immune from the freeze but must assess their own budgets in light of the governor’s concerns, according to the Rocky Mountain News.
Optimist Andrew Oh’Willkie recently stopped by to tuck another comment into an old post. “I will note that ten months later, and much, much deeper into the collapse of the financial system, Denver bonds are still rated AAA, and Denver’s real estate market is among the healthiest of any major city in the nation.” The fact is that the ratings agencies themselves are now under scrutiny for their part in the current fiasco.
I note that the Washington Park oracle is still clutching that AAA rating to his chest, proclaiming, as did Frank Zapa years ago, “It can’t happen here”. For more ruminations as to why this can happen and is happening here in Denver, see here and here.
Time is the revelator. (Listen to the last post).
at 11:52 AM
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