How will the City of Walnut Creek pay for the proposed new library if they can't pass a bond? Maybe the plan is to be like Orinda and build it anyway with proceeds from the sale of "certificates of participation." If they can't pass a bond, any payment to the investors in certificates of participation must be at the expense of other more important needs in the budget and perhaps even of dedicated funds such as road repair money, which are not supposed to be used for other purposes.
First you get the money, then you build the project, not the other way around. Deficit financing is unconstitutional in California, unless the citizens give it 2/3 approval.
Watch out if you hear about "certificates of participation" or "lease-based financing" or any retainer of the law firm of Orrick, Herrington and Sutcliffe or US Bank. They did the job on Orinda. Certificates of participation don't require a vote, on the theory that the city can give up the "lease" at any time and therefore there is no commitment for any term longer than a year, so there is no requirement for a vote of the people who are going to have to pay the bill. It's sham financing based on a fake lease, with the intent to avoid a citizen vote.
Posted on Sun, 11/25/2007 - 00:15 — by TalBrody
Joined: Mar 2007
Posts: 1
How will the City of Walnut Creek pay for the proposed new library if they can't pass a bond? Maybe the plan is to be like Orinda and build it anyway with proceeds from the sale of "certificates of participation." If they can't pass a bond, any payment to the investors in certificates of participation must be at the expense of other more important needs in the budget and perhaps even of dedicated funds such as road repair money, which are not supposed to be used for other purposes.
First you get the money, then you build the project, not the other way around. Deficit financing is unconstitutional in California, unless the citizens give it 2/3 approval.
Watch out if you hear about "certificates of participation" or "lease-based financing" or any retainer of the law firm of Orrick, Herrington and Sutcliffe or US Bank. They did the job on Orinda. Certificates of participation don't require a vote, on the theory that the city can give up the "lease" at any time and therefore there is no commitment for any term longer than a year, so there is no requirement for a vote of the people who are going to have to pay the bill. It's sham financing based on a fake lease, with the intent to avoid a citizen vote.