The role played by the city council and past mayors in approving the swap is not pretty.

http://www.eastbayexpress.com/ebx/goldman-swaps-subsidized-private-corporations/Content?oid=3289626&cb=55657eef0b9b763922aec2c771a59768&sort=desc#readerComments

Not much has improved in the dysfunctional government of Oakland in at least a decade, as shown by the recent Council approval of another +200 of pension bonds.

But the media coverage of complex policy issues has vastly improved. So there’s hope things will change.

Len Raphael, Temescal

Cannot assume that is true. Very likely that the fees have been getting paid with the “tax overrides” that are only supposed to be used to fund the ancient cop/fire pension fund, PFRS, using the justification that the swap was originally done to hedge old PFRS pension obligation bonds.

If true, terminating this swap at best would free up more of the tax override money five years from now when the balloon payments on the new PFRS.

We need a full accounting of how the city has spent close to a billion dollars of property tax overrides over the past 25 years and yet we still owe 400 million to the PFRS pension fund.

The other day Scott Johnson, assistant city admin was quoted as saying Goldman Sachs had expressed strong interest in participating in the (now approved) $250 Million pension obligation bond offering.

GS the consummate deal maker is likely to offer to cut the swap exit fee in return for getting out of the interest rate swap in return for an equivalent discount on the cost of the bonds.

City officials have not released any info on expects costs of the bond issue, nor have they in prior POB issues. The muni bond market is notoriously opaque with the true cost of bonds hidden both from taxpayers and end bond investors.

If GS worked that deal it would make City officials look like hero’s and GS look contrite but the residents would take it in the shorts on the bond pricing.

At tonight’s city council meeting I described that scenario to an SEIU member.

He laughed and said that would be fine with the SEIU because they were less interested in saving the city 5 Million/year, then they were in showing they had clout and building their base of support.

Len Raphael, Temescal

Len Raphael, Temescal

Also ask what happens if the stock market drops instead of doing better than the bond interest rate we’ll be paying out?

Considering that has happened at least once or twice before and largely created this huge debt, why assume we’ll beat the stock market this time?

The Goldman Sachs deal is a rear guard battle at this point.

But the pension bond refi can still be stopped so that we make sure we all understand the risks involved.

Len Raphael, Temescal

The democrats in charge of Oakland make poor financial decisions, support a president who continues to make poor financial decisions while raking in money from Wall Street, and your ire is directed at the lending organization?

I’m not saying the Republicans would be better, but at least if they were in charge you would certainly include them in your rant rather than giving Kaplan and her ilk a pass on the mismanagement that got us into this mess.