The Morning Report
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OK, I’m back from webmonkeying. Making things work on a website can be both gratifying and extremely frustrating at the same time. Thanks for sticking with me.
One thing: recently I wrote a column talking about the state of things financial at the city of Chula Vista. I described pension obligation bonds the city issued in 1994 and that the city was facing a “balloon payment” to pay them off by 2011.
Here are the facts:
- The city of Chula Vista borrowed $16.79 million in 1994 and used the money to invest in its pension system (as I’ve said countless times, my wife would never let me borrow money in order to invest it, but, that’s just their deal.)
- Chula Vista began paying off the debt by paying $1.5 million annually.
- By 2011, that annual payment will be $2.8 million after gradual increases. So, it’s not a balloon. It’s more of a gradual bloat. I will admit that describing it as a balloon payment was wrong. I apologize.
- To borrow $16.79 million in 1994 and invest in its pension system, the city of Chula Vista will end up spending a total of $34.65 million.
At least they have a nicely funded pension system now, right? Right?