Say Aloha to those 'T' cars
AIG bonuses are in the news of course… PWSA bonds were at least briefly in the news as well… but there is this little issue of how the miasma at AIG is impacting public transit systems across the county. The version of the story on PBS’ Newshour is online here. The issue are some semi-complicated buyback schemes public transit systems entered with some large capital purchases in recent decades. Basically transit systems 'sold' high cost equipment to bank or bank-like institutions who 'leased' them same equipment back and the deal worked out to some financial advantage to the agencies it appeared at the time. Problem is that these deals were insured by AIG. As AIG's financial miasma has escalated it's credit rating has put the deals at risk and potentially triggering the need for large cash payments from the affected systems. In one case a Belgian Bank has already tried to foreclose upon the rolling stock of Washington DC's transit agency. That is the bizarre world we live in now.
What I noticed last fall was that the Port Authority of Allegheny County here is indeed on the list of affected transit systems, although I have seen no news coverage on the issue here. I can be naïve.. I have to believe that if this was an issue here it would have been reported on by now. The fact that there has not been any news coverage leads me to believe any issue here is de minimus..... but you never know these days.
I have not seen any recent updates on transit systems being hit my these deals, but there is news of similar deals hitting other utilities. And with AIG in the news all the time these days, is this story really dead and buried around here?
Even if it isn't a big enough deal to be worked up about... things like this and then the PWSA bond deal are out there and clearly not made known to the public for the most part. It really really makes you wonder what other similar issues are out there that nobody has poked at at all.
Speaking of the PWSA bond deal... if anyone thinks it is just a passing political spasm... take note of the new developments in Jefferson County, Alabama where their sewer system is being put into receivership because of similar variable rate bond-induced problems.