San Francisco Supervisor Questions City’s Debt, Hearing Called
SAN FRANCISCO (KCBS) — Questions were raised amongst the San Francisco Board of Supervisors this week about the extent of the city’s debt. A hearing will be held to find out exactly how much that debt is impacting the city’s ability to operate.
Supervisor Mark Farrell raised the issue of a somewhat convoluted type of financing called Certificates of Participation (COP’s).
“I have to say it shocked me that we had over $1.3 billion in non-voter approved debt on our books,” stated Farrell.
Certificates of participation are popular just because they allow government to build capital improvement projects without much, or any oversight.
There are instances where the certificates are being used at Laguna Honda Hospital, at jails, and at the courthouse across the street from City Hall.
Supervisor Farrell is especially concerned about COP’s that aren’t about brick and mortar.
“We use these debt instruments to fund what should be routine maintenance operations, such as filing our potholes, paving our streets, things that should be pay as you go here in San Francisco,” Farrell said.
According to Supervisor Farrell, certificates of participation mask the true cost of government and like unfunded pension and health care costs eat up money that should be going to fund city services. He’s now called for a hearing on the City’s entire debt structure and said in this economy, COP’s are bad public policy and are fraught with potential for abuse.
(© 2011 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)