The Parkway, currently managed by Sacramento County, has been running behind about $1 million a year in basic maintenance funds, and this bond fiasco has cost the County an additional $500,000 a month.
This type of management is part of the reason we have called for a nonprofit organization, contracting with a yet to be formed Joint Powers Authority composed of all of the Parkway adjacent government stakeholders, to assume daily management (and supplemental fund raising) for the Parkway.
It is a management model used successfully by Central Park in New York and our own Sacramento Zoo.
The County’s response to Parkway funding woes has been to push for increasing taxes on Parkway adjacent property owners for additional Parkway funding.
More local agencies caught in bond turmoil
Failed auctions raise the cost of borrowing for SMUD, Placer and El Dorado services.
By John Hill - jhill@sacbee.com
Published 12:00 am PST Monday, March 3, 2008
State and local governments are facing a sudden spike in borrowing costs in a little-known bond market, the latest fallout from the subprime mortgage meltdown.
"It could disrupt local services," California Treasurer Bill Lockyer said of the auction-rate bond mess. "It could make government more expensive. That's a real thing to be concerned about."
Public agencies, from the city of Roseville to the Sacramento Municipal Utility District, say they are working to restructure their debt to avoid budget strains, and point out that the same bond markets have saved them money in recent years.
But there is no doubt that they are scrambling to fix a financial problem that began when some of the companies that insure tax-exempt government bonds were shaken by their losses in mortgage-based securities.
The end result is sticker shock for state and local governments, which got into the obscure bond markets because, for years, they offered unusually low borrowing costs.
Sacramento County, for example, saw the interest rate on a pension obligation bond climb last month to 8.5 percent from 6.5 percent, boosting its monthly interest payment by more than $500,000.
