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The mayor believes KPMG will make their financial findings, known as “audited statements” (in the real world) on Oct. 27, 2006, and that Macias Ginni & O’Connell will issue theirs on Nov 24, 2006 …
Then the mayor states these will be circulated to the various national rating services two days later and discussions will begin to reestablish the city bond ratings.
This of course makes a very big assumption, and that is that the audited reports reflect the city financially strong enough to issue bonds.
As a banker, it has been my experience that “audited statements” seldom show the organization being audited in stronger condition then that organization’s internal statements.
Audit statements are similar to the “lab tests” you take as part of your annual physical examination. The lab test can come back showing you in good condition, or they can raise concerns, some serious. To act as if our annual financial statements will reflect no serious condition that needs addressing before we go to the bond market seems a strange assumption.
Also as a banker I know, and what the Kroll report reminded us of is, “you can not borrow yourself out of debt.”
Our city leaders seem to feel once they can get their hand on that “unlimited credit card” all our problems will be behind us.
That simply is not true.