It’s not often a press release from a government official includes quotes with exclamation points and all CAPS. Either Santa Clara County Executive Jeff Smith has an overly excited stenographer or he’s mad as hell with the city of San Jose and he’s not gonna take it anymore.
Smith’s beef with the city stems from a disagreement on where repayment from Redevelopment Agency debt should go, and what he calls “misleading and inaccurate statements” to Wall Street by San Jose officials “about the City’s inability to meet its obligations on redevelopment agency debt.”
The county press release says the city has been informing Wall Street that due to the county’s insistence on being paid sooner than later, it won’t be able to cover its bonded debt obligations and will go into default. As one city employee tells San Jose Inside, “This is going to turn into such a pissing match.” Here’s a thorough account of what’s going on, replete with a reference to the Bickersons. (And newspapers wonder why young people don’t subscribe.)
Without further ado, let’s go to the press release to hear about the city’s supposed default.
“These assertions are simply untrue!” said County Executive Jeffrey V. Smith. “The City will NOT default upon their redevelopment bonds unless they make an intentional effort to do so. Nothing that the Auditor-Controller has done, or will do, will cause the City to default!”
When the state basically killed RDAs, a new law called ABX1 26 required municipalities to report financial information on how it will pay off their debt. The county claims that the city of San Jose has purposely delayed providing that information.
We could listen to County Finance Director Vinod Sharma’s measured thoughts on the issue, but it’s much more entertaining to focus on Smith’s quotes in the press release.
“If the City would simply comply with the state law by producing accurate and timely financial data, the Auditor-Controller and the state could do their jobs and develop a revenue disbursement plan that assures a smooth transition,” Smith continued. “The ‘cry wolf’ approach that has apparently been adopted by the City staff is NOT an effective financial management tool, and shows an enormous disrespect to the RDA bondholders. The truth is that there will NOT be a default upon San Jose RDA bonded debt! Period!”
Well, I guess that’s that. No more to see here.