Before Council Votes to Help Uplift Sell Bonds, More Questions, Answers and Concerns
Earlier today Rudy posted an explainer to the City Hall blog about those so-called "conduit bonds" Uplift Education hopes to sell with City Hall's backing. But long story short, per a Los Angeles Times piece last year, they "allow private entities to tap into low-cost municipal bond financing for projects that boost economic development" -- in this case, Uplift's planned expansion into Deep Ellum and Fort Worth. The council's been promised that the creation of this so-called Education Finance Corporation wouldn't be the obligation of the city, per tomorrow's agenda, and that "the issuance of the bonds does not impact the credit rating of the Sponsoring Entity," which would be the city in this case. But as The Times piece points out, "Although conduits account for roughly 20% of all municipal bonds, they have been responsible for about 70% of all defaults in the municipal bond market in recent years."
That's just one reason Alliance AFT, which reps local teachers, has Big Problems with the city's involvement in Uplift's expansion efforts. But there are myriad others, of course, all of which are outlined in a letter we received this afternoon; it's below, but of course. And now there are some at 3700 Ross wondering why the city didn't reach out to the Dallas Independent School District before it rushed through this item, which only debuted as a consent addendum item Friday -- a mere five days before council's scheduled to vote on the creation of the corporation. DISD higher-ups don't have anything against charters -- in fact, some of Uplight's board members are part of the district's Commit! initiative -- but a few do privately wonder if Mayor Mike, who ran on a platform to save DISD, isn't giving a helping hand to a competitor.
I've just been told the item's been pulled from the consent agenda -- no surprise, given several council members' what-the-hunh? responses at yesterday's Economic Development Committee meeting. The council was also just sent a memo containing four pages' worth of A's to the Q's asked yesterday, including the big one: "What happens when a conduit corporation ... defaults?" Well, as The Times explains, the investors lose; the feds too, since they're not getting the tax revenue from the sale of these particular bonds. The memo to council also. Fourteen speakers are lined up to address the council about this tomorrow. Popcorn's popping.
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