by William Skink
Maybe I should look at this news as comforting in an old normal kind of way.
While Christians are gearing up for the rapture, and Americans are stocking up on essentials ahead of the election, Missoula County is issuing a LIMITED obligation bond for the fairground work.
It’s important to understand the reason why Missoula County is going with a LIMITED obligation bond instead of a GENERAL obligation bond, and that’s because the latter would require voter approval, and they damn well know how that would go. From the link (my emphasis):
Various user groups ranging from 4-H to ice sports at Glacier Ice Rink were expected to ask the county to place a general obligation bond on the November ballot to fund the next round of facility improvements.
A general obligation bond requires voter approval while a limited obligation bond can be approved by the county.
The general obligation bond, which is still a possible ask in future years, would fund an expanded ice arena, a livestock and equestrian center, a rodeo arena and additional green space.
In July, commissioners said the general obligation bond was ill-timed with the economic challenges brought by the COVID-19 pandemic and wouldn’t be approved if the groups presented it to voters this November.
This excerpt is at the end of the article, and comes after the County’s chief financial officer, Andrew Czorny, had this to say about what a great debt-bet the County is because of their excellent stewardship of money:
“The county is a good steward of taxpayers’ money and we have a good bond rating,” Czorny said. “These agencies know we’re going to do right by their loan, we’re going to spend it appropriately and pay it back. It takes decades to cultivate that type of reputation.”
Now, I might not have a fancy title by my name, so maybe I’m way off here, but aren’t loans made to entities that have collateral to put up, like courthouses and armored SWAT vehicles? And if the County doesn’t “do right by their loan” then whatever agency holds the debt gets to liquidate the assets, right?
Since I’m no financial expert, I consulted the mighty Google about what happens when municipalities default on bonds, and wouldn’t you know, as long as they aren’t GENERAL OBLIGATION bonds, a default wouldn’t necessarily impact a municipality’s rating. From the link:
Defaults on local government bonds have been more frequent than credit rating agencies have reported, according to a paper by Lang (Kate) Yang of The George Washington University and Yulianti Abbas of the University of Indonesia prepared for the 2019 Municipal Finance Conference at Brookings. But because these defaults usually occur on bonds issued to fund specific projects, as opposed to general obligation bonds, the defaults do not tend to raise the borrowing costs of the defaulting local governments.
Ah, financial shenanigans are afoot. Of course.
I wonder what would happen if NO BOND and NO ADDITIONAL DEBT was taken on for the non-essential plaza? Luckily we don’t have to answer that hypothetical, because the plaza is almost done, but, sadly, the ribbon cutting was cut because COVID!
Fairgrounds directory Emily Brock said the construction of a new plaza is moving forward and should be finished this fall.
“We are almost done with this project,” she said. “It’s really looking good. We got all the planting in earlier this week. Normally we’d plan a big ribbon cutting, but with COVID, we’re not going to do that.”
Yes, while the changes in your life are things like lost jobs, businesses and housing, the BIG LOSS Emily Brock is grappling with is a BIG RIBBON CUTTING.