Thursday, May 20, 2010

Burning Cash in Harrisburg

NY Times has new story on the festering fiscal miasma in Harrisburg (little h) and the ever growing talk of bankruptcy for the municpality.  For those who like to point out that municipal bankruptcy can't happen I'll point out again that Westfall Township in Pike County did indeed just recently go through Chapter 9 municipal bankruptcy.  So there is no "can't".  Also talk of the options there to sell or lease parking garages.  Who is thinking of doing that?  Aren't those bids supposed to come in soon which will set off a minor national news cycle for us, it will be one of the bigger public infrastructure monetizations this year.  Just think the sales pitch to potential investors......  gotta be a better investment than the stock market.  That and with interest rates dropping ever lower, the financial cost of a deal like this is getting cheaper and cheaper to the firms that are likely to engage.  It just has to be a highly leveraged investment.  Whether any of those cheaper interest rates are capitialized into the price the city gets I doubt, though you would think it would be the case. 

So in a particular sense, the miasma in the stock market and other problems pushing interest rates down could be helping out this potential deal.  Not all good news of course... with stock market being whacked, anyone know how the city's pension fund has been faring of late?  Of course you don't. 

I keep meaning to look this up... but following up on the story today of a proposed hike in parking ticket costs..  How do parking tickets work in Chicago and their privatized meters?  Who is the ticketing authority?  How are appeals handled?  Who gets the fines?  or what happens when a local DJ or someone reduces a ticketed fine?


Anonymous BrianTH said...

If it is truly competitive bidding, cheaper interest rates should in fact be leading to higher bids. So if they are not--anyone up for an antitrust investigation into bid-rigging?

Friday, May 21, 2010 7:28:00 AM  
Blogger C. Briem said...

That is what I thought I was saying... obviously not very clearly.

But it is quite true. At these rates a well securitized load, with income virtually guaranteed by statute, ought to be financed at rates characterized as free money almost. Should be reflected in high bids.

Friday, May 21, 2010 7:31:00 AM  
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Tuesday, September 29, 2015 5:31:00 AM  

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