Municipal Debt Research
From The Debt Collective
LINKS TO EXPLORE:
- The audit says there’s little evidence that the poor condition of streets and pipes around the city is attributable to the floodwaters.
- It does not allege any misspending by the city.
- It adds that “the city’s failure to maintain streets adequately after Katrina is the most likely cause of street damage that exists today.” City officials have spent an average of about $2 million a year maintaining the city's streets during the last decade, the audit says, when they should have been spending about 16 times that much.
- FEMA money is the major source of funds city officials plan to tap as they begin to tackle a $9 billion backlog of street and sewer repairs.
- “We’ll never get another shot like this in our lifetime to rebuild our infrastructure,” said Zach Butterworth, the city’s lobbyist in Washington. (The city's lobbyist? What?)
- “You’re trying to stop violent crime, and so you don’t have officers to issue traffic citations,” Jones added. “Traffic citations are way down. They’re half of what they used to be; therefore, our funding mechanism is no longer there.”
- “Traffic Court is still a money-making operation, even in the worst of times,” Jones said. “And this is the worst of times.”
- “Historically, Traffic Court has generated $12 million a year.
- LINK TO Independent Audit of Traffic Courts (2013 financials)
- Students who can't afford uniforms in New Orleans all-charter-system are routinely barred from attending school. And their parents can end up in jail.
- More than a decade after Hurricane Katrina, poverty in the city is worse than ever, even as rents have doubled during the past decade.
- Other schools refuse to let students attend class if they’re “out of compliance.” One parent I helped worked at Walmart and lived paycheck to paycheck, struggling even to pay her rent. Her son was on free lunch, and the shoes that the school required cost $400 because he was a kid who happened to have size 15 feet. They kept him on in-school suspension for more than a month because that’s how long it took his mother to come up with the money to pay for the right shoes.
- Recently I advocated for a parent whose son and daughter attended a school that required different uniforms for boys and girls. The parent bought both of her kids the boys uniform—dark pants and a white shirt—because it was the cheapest option. The school said that that was unacceptable; the little girl needed to wear either a plaid skirt, which was $35, or a plaid jumper, which was $45. When the mom said she couldn’t afford that, administrators told her that her daughter couldn’t come to school until she had the right uniform. The administrator I met with on the mom’s behalf was convinced that the mother was “gaming the system.”
- A student can’t attend school because he or she lacks the right uniform, but once children miss a certain number of a days, the state gets involved. Parents can be summoned to Truancy Court and fined. If a summons arrives and the parent has moved—something that’s very common in a city with high poverty and a severe shortage of affordable housing —a warrant is issued for their arrest. I’ve even seen parents held in contempt of court and sentenced to jail time because their children are missing school as a result of uniform violations.
- "The Baupost Group, a Boston-based hedge fund managed by billionaire Seth Klarman, owns nearly $1 billion of Puerto Rican debt, purchased under a shell company subsidiary and hidden from public scrutiny. Baupost acquired the debt through an on-paper Delaware-based corporation named Decagon Holdings LLC, whose beneficial owner had been unknown until now."
- "For more than a year, Puerto Rico has clashed with investors who hold slivers of its $73 billion debt, and who have pushed the United States territory to pay up."
- "If Mr. Trump meant the federal government would work to help Puerto Rico have the debt forgiven, that could result in major losses for investors large and small. Still, it is far from clear whether the president or the federal government has the power to do that. And despite the reference to Goldman Sachs, Puerto Rico’s debt is held by a diverse universe of investors, including big hedge funds and middle-class Puerto Ricans who thought it would make a safe retirement nest egg."
- "Most of Puerto Rico’s debt is in the form of municipal bonds, a type of debt governed primarily by state laws — or territorial laws, in Puerto Rico’s case — not by the federal government. Branches of the federal government, like the Internal Revenue Service, can step in under certain circumstances, but not simply to “wipe out” the debt."
- As a territory, Puerto Rico was not eligible to take shelter in bankruptcy court, and without court protection its creditors began filing lawsuits seeking to enforce their claims.
- Among other things, it used money from its workers’ pension system to pay for operations, leaving a $50 billion hole.
- Congress enacted a special law, called Promesa, in June 2016 that put Puerto Rico’s finances under a federal oversight board and halted the creditors’ lawsuits. The new law also gave Puerto Rico certain bankruptcy-like powers, like the power to reduce debt unilaterally under the supervision of a federal judge.
- "Even before the storm, the power authority had been operating under a federal court order for Clean Air Act violations and was reported to have cheated its ratepayers for many years. About $9 billion of Puerto Rico’s total debt was issued by the power authority."
Sonoma County, CA
- PG&E and other large utilities in California have a long history of being found responsible for major wildfires because of inadequate maintenance of their power lines.
- In April, the state Public Utilities Commission fined PG&E $8.3 million for failing to maintain a power line that sparked the Butte Fire in Amador County in September 2015. That fire burned for 22 days, killing two people, destroying 549 homes and charring 70,868 acres.
- CalFire announced last year that it will seek to force PG&E to pay $90 million in firefighting costs. More than 1,000 lawsuits and claims are still pending against the utility.
- State Sen. Jerry Hill, D-Redwood City, said he sees similarities in PG&E’s problems with maintaining its power lines to the utility’s failures to properly maintain its natural gas lines that led to the 2010 San Bruno explosion that killed eight people and destroyed 38 homes. PG&E was fined $1.6 billion by the PUC, and a federal jury last year convicted the company on five charges of violating federal pipeline safety regulations and one charge of obstructing an official National Transportation Safety Board probe into the blast.
Privitization of Water Infrastructure
Private Equity Investment in Water
- NGP Global Adaptation Partners
- Gary Taylor, a partner with AgriCura, a fund focused on U.S. corn, soybean, cotton, rice and wheat farming, said water was fundamental to smart agricultural land investments.
- "We have done extensive work to understand the aquifer system along the Mississippi river and do believe over the term of our fund that water will become increasingly important," Taylor, a former executive at Cargill, said.
- Water is vital not only for food and domestic well-being. It is “fundamental to economic growth”, points out Usha Rao-Monari, head of Global Water Development Partners, an investment outfit backed by Blackstone, a private-equity giant.
Water and Energy Use
- Farmers selling water allocations to Oil&Gas for Fracking, instead of farming with it
- "Power generation is a thirsty business. Overall about 41% of America’s withdrawals go towards cooling power stations."