Denver Direct: Bennet’s Bad DPS Deal

Tuesday, February 15, 2011

Bennet’s Bad DPS Deal

From DenverDirect video

Remember when now-Senator Michael Bennet was Superintendent of Denver Public Schools? Remember the bank “deal” he created for DPS? If not, you’d better refresh your memory if you want to understand what is happening now. (Thank you to Christopher Scott and the Huffington Post for staying on top of this.)

To date, the 2008 PCOPs have cost Denver taxpayers at least $115 million in interest and fees. DPS entered into the debt in 2008 to finance the District’s unfunded liability associated with its pension using a tool called Pension Certificates of Participation, or PCOPs. PCOPs are used to allow government entities to issue debt without voter approval. Under the PCOPs agreement, DPS sold 14 schools, including East High School, to a leasing corporation and then agreed to lease back those schools to pay the debt over the course of 30 years.
DPS now faces having to pay back the $750 million debt on April 24th. To avoid this, DPS must restructure the 2008 transaction or find a new financier to hold the debt should the 2008 PCOPs fail at auction. According to Fiscal Strategies Group’s David Paul’s own analysis contained in his firm’s proposal …(entire article here).

Did you remember that East High, and 13 other schools got sold, and leased back? Somehow that part escaped me. Oh boy, chickens coming home to roost big time. Michael… Michael…where are you?