I wish I could tell you what Northampton County's Financial Adviser, Gary Pulcini, said during last night's Council meeting. He was there to review the swaption coming due on October 1. At this point, the County will have to pay Bank Of America $25.2 million. It's up from just $10.2 million at the end of 2009.
Pulcini spent the better part of an hour discussing LIBOR, variable rate demand bonds, the Debt Act, the fixed swap rate, refunding, etc. I have no idea what the hell he was talking about, and feel sorry for the reporters who have to try to explain it.
The one comment that made the most sense to me came from newly elected Bob Werner, who is disgusted by the 2004 sales pitch made by Concord Public Finance. "What can we do to make them accountable for what they have done to us?" he asked.
According to County Solicitor Karl Longenbach, not much.
Here are the only points I could understand from Pulcini's presentation:
1) There is no silver lining. The only question is which pill the County wishes to swallow.
2) The County will have to pay the swaption on October 1. Because of the way it as set up, you can't just refinance your way out of this mess.
3) Because the County reserved the money to pay this swaption off in its fund balance, its AA bond rating will probably remain intact.
4) The County can refund the debt service on its remaining bonds.