Skip to comments.Cities Hit as Funds From Bonds Pay Other Bills
Posted on 11/14/2011 3:50:28 PM PST by dynachrome
When the recession squeezed Miami's budget in recent years, officials reached into funds raised for road repairs and other projects to plug the shortfall.
Now, the city is paying a price. The moves triggered lawsuits and a federal investigation, in a brouhaha that holds ramifications for how municipalities nationwide maneuver around unprecedented money problems.
Cash Flow View Interactive ..Cities and states across the country are using money designated for specific purposessuch as fixing roads or sewersin order to fill financial holes elsewhere, according to public officials and records. The moves are exposing municipalities to controversy, as federal regulators and local auditors are more heavily scrutinizing their finances to protect bond buyers and taxpayers.
(Excerpt) Read more at online.wsj.com ...
What could go wrong?
This has to be highly illegal since the investors where investing in a specific use.
This has been brewing for awhile, and is finally coming to a head. The ‘stimulus’ $$ is gone, and they kept spending like it was 1999.
In the NYC area there is going to be a rude awakening. Had a buddy of mine sold his house for 240K. Some of his neighbors were angry at the low price. They thought it should be 270K. He tried to explain to them that his RE agent already did a marketing analysis of the area. He was shocked that larger homes with larger land were selling at 250K. How can he sell is smaller house/land at 270K. Many were shocked that 1/3 of the contracts fall apart because buyers cannot get a mortgage. If my friend had listed at 270K, and buyer puts down 20 percent, the mortgage company can assess the house at 250K. The buyer either comes up with more down payment to make the loan amount divided by the lower price assessment of the bank at 80 percent or tell the seller to lower the price to make the loans work.
Despite his explanation, some of the neighbors are angry. Many did not realize most of the Wall Street activity was possible due to TARP and stimulus which lasted two years. Feds are out of money. System will coast and crash. Home prices will fall like the rest of the country. They will get more angry when the delayed foreclosures resolve their paperwork problems start hitting the market. Wall Street in NYC will lay off up to 10,000 from Oct thru Mar 2012. This winter the bonuses are smaller.
How bad was the community at my friend, someone went into his fenced backyard and used a slingshot to break one of his windows. Could it be a kid mischief at a vacant house with a RE sale sign on it or a disgruntle neighbor???? He doesn’t want to speculate and can’t wait for the buyer to close on the property.
Is there no person in government in this country with any common sense and integrity? How could not understand that it is wrong to lie to people from whom you are borrowing money about what that money is to be used for?
You’re absolutely right. It’s time the taxpayers stop paying for politicians malfeasance, and for them to pay personally. Either they are held financially responsible or go to prison for a very long time, preferably both. Or we will end up like Greece.
Whichever goofball law firm is bond counsel on these deals should intervene right now.
Oddly, the article mentions Miami. Miami is the city that just spent nearly 500 million dollars on a baseball stadium. I cannot imagine why they are broke.
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