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12-04-2012, 07:27 AM
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Originally Posted by Thomas L View Post
Unfortunately the offering memorandum is not posted on Glendale's finance webpage. (...)
It will be interesting to see how their 12.12.12 GO and excise tax bond issue goes, especially whether they can issue at an A spread versus BBB or worse. I would not be surprised if the latter were to come to pass.
I'm not sure what's up with that issue. It's not part of the city's debt management plan, where they expected to issue about $10-20 million per year in bonds over the next 5-7 years, and none of the outstanding issues were up for refinancing.

Originally Posted by Thomas L View Post
I am also concerned about their pension and OPEB obligations. At the end of FY11 they were very significantly underfunded and I doubt there will be any significant funding anytime in the next five years. In five years however we will be well into the baby boom retirement, so those funds will begin to experience significant cash outflows. I think it's quite possible the city will have to choose whether it will walk on the hockey subsidy or its retirees.

Why I'm especially interested in this year's financial report is to see the obligation for post retirement medical benefits. These wee last valued in FY09 at just over $100 million, completely unfunded and off balance sheet (Glendale is no different than any other municipality in this regard... all municipalities were forced to value these obligations for the first time in 2009). I believe they have to revalue them again in FY12.
OPEB and pension funds have been getting a bad rap for messing up GM, NYC and San Diego's balance sheets but they are really textbook cases of poor financial planning and corporate (municipal) governance. They're showing up in Glendale too, how surprising.

Originally Posted by Thomas L View Post
Removal of muni's tax exempt status is one of the ways that has been proposed to raise revenue in the "fiscal cliff" discussions.
I haven't followed the debate but that sounds like a measure with a high political cost (investors & municipalities really won't like it) for a relatively small economic benefit.

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