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FOR IMMEDIATE RELEASE\:                     Contact:  tjjohnston@fulldisclosure.net

April 2, 2004                                                         310-822-4449

 

 

$BILLIONS IN CALIFORNIA NON-VOTER APPROVED BONDS?

Full Disclosure Network® TV ON THE INTERNET & CABLE 

 

Los Angeles-CA-California school districts are so financially dependent upon non-voter approved bonded indebtedness  "that if we shut down entirely Certificates of Participation (COP's) , we would not have functioning school districts in California." According to former California State Controller Kathleen Connell (1995-2003) who described the State Controller's function in the cash flow and public debt reporting process to Full Disclosure Network® host Leslie Dutton in a two-part program.

 

The program is set to air world-wide on the Internet on Saturday April 3, 2004 at www.fulldisclosure.net, 24 hours a day, seven days a week, free on demand as a public service.  The program will also be featured on 40 cable systems throughout California for the next six months.

 

Kathleen Connell described the COP financing process that is little known because COP bonds are not voter approved. But they have become commonplace among California municipalities and school districts.  One difference is the COP "has a lower priority if the city or state gets into trouble if they elect NOT to pay the Certificates of Participation whereas it will always pay for its (voter approved) general obligation bonds.  Also, Connell revealed that "a Certificate of Participation's only collateral is the dollars that are associated with the budget item and it does not have the security of the good faith and credit of the municipal body."

 

The former State Controller who is now an Investment Banker said the COP method of financing came into play after Proposition 13 in California that limited the tax on assessed valuation to

1% .and every bond had to have two-thirds vote of the people.  When using COP's, a governing body does not go to the people for a vote but rather determines to use debt financing, borrowing money, to build a school, a library, using that project as collateral to the bond holder and if they fail to make payments in a timely fashion , then the bond holder can own that building.

 

You can view the entire program on our website at www.fulldisclosure.net, (starting Saturday) via media streaming, in addition to our  40 cable systems throughout California during the next six months.  A channel guide with airtimes is available on the website.

 

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