• 1) Bankruptcy an Option, Says Mayor’s Fiscal Task Force (San Diego)

“Friday, Nov. 20, 2009 | A private task force of prominent local business leaders formed by San Diego Mayor Jerry Sanders is recommending the city file for bankruptcy unless it undergoes a series of urgent and drastic fiscal reforms, according to a draft of the group’s report.”

……1A) S.D. Faces Record Deficit, Council Slow To Respond

“AUGUST: Just one thing. If they bankrupt, could they get rid of the pension fund? That’s all I want to know. Who can tell me that?

DONOHUE: They’re – they…

YOUNG: Well, there’s a case up in Vallejo, California where that is – they’re – that is the issue at hand and it hasn’t been decided yet. Everybody’s watching to see what happens.

DONOHUE: But the judge – You know, Judge Ryan, who handled the Orange County bankruptcy, very clearly stated that any contract, regardless of what’s state law, when you enter into federal bankruptcy, any contract is on the table, so he was very clearly stating that pension benefits and pension contracts and all that sort of stuff would be on the table.

PENNER: Well, you’ve really made a lot of city workers nervous, especially those who are either in retirement or approaching retirement.”

• 2) Bing to seek council’s OK to sell $250M bond (Detroit)

“Municipal bonds are typically issued to allow local governments to borrow money for large capital improvements to bridges, roads, power plants or sewer systems. In Detroit’s case, the money would be used to chip away at the city’s debt, which is forecast to grow to $480 million by the end of the next fiscal year and to $750 million in fiscal year 2011-12.

Selling deficit bonds is generally frowned upon by Wall Street ratings agencies, which will quickly drop credit ratings and make borrowing costs more expensive — but because Detroit already has junk bond status, there’s less impact, said Joe Harris, the city’s former auditor general.”

• 3) S.F. commercial properties seek tax relief

“Collectively, those office towers, hotels, shopping centers and apartment buildings have an assessed value of $21.25 billion - but their owners say they’re worth about half that amount. If those claims stand, that could wipe $115.78 million off the property taxes the city collects. Residential appeals could erase another $13.47 million in property tax revenue.”

(News from November 19 shows how bad the budget deficit already is in SF)

• 4) Auburn Union could face bankruptcy

“Bankruptcy, furlough days, and large class sizes could be the future of Auburn Union schools.

Starting in 2010, Auburn Union teachers will likely get a five-day vacation they don’t really want.

And for the next three years, officials said they are going to have to take even more drastic cuts to keep the school district from declaring bankruptcy.”

• 5) OFFICIALS: Morristown near bankruptcy, city council approves cuts

“A member of the fire department told Volunteer TV News on Tuesday that the city is near bankruptcy and cutes have already been made to both the fire and police departments. On Tuesday night, the city council voted to make operational budget cuts and reduce some employees work weeks by an hour and a half.”

• 6) GLENN COOK: Government and the ‘B’ word (Opinion..Las Vegas)

“The city’s woes are far more urgent. Tax revenues for the current fiscal year were expected to drop 2.5 percent, but instead they’ve fallen off 18 percent. Last week, City Manager Betsy Fretwell announced 19 layoffs and the elimination of 54 vacant positions. Las Vegas is quickly burning reserves to preserve the rest of its payroll, and is bracing for the possibility of a $40 million budget hole next fiscal year.”

“Elected and appointed officials will shrug their shoulders and claim their hands are tied by their contracts with bargaining units — they can’t eliminate pay raises, cut salaries or reduce benefits unless the unions agree.

But now they can — if they file for bankruptcy.

The city of Vallejo, Calif., did just that in 2008 under the very circumstances Las Vegas and Clark County currently face.”

• 7) Chamber proposes jobless fund solutions (Vermont)

“The state’s leading business organization has set its sights on the next legislative session ,with the solvency of the state’s unemployment trust fund at the top of its list.

The Vermont Chamber of Commerce is calling for a balanced solution to the unemployment trust fund, which is anticipated to run out of money by the end of the year.”

• Paterson: Layoffs loom if state’s deficit isn’t reduced (New York)

“ALBANY — Lawmakers enjoyed the day off Friday as Governor David Paterson warned of a pending disaster looming over the state: New York will run out of money in December when a huge chunk of the $3.2 billion deficit is due.”

• 9) Golf courses suffer as recession deals a bogey

“Hundreds of courses have closed, and once-exclusive country clubs have slashed fees or let in the public. Often linked to housing tracts, the greens and fairways have slumped along with real estate.”

“From his backyard, Joseph Leggett used to look out over the green, manicured fairways of the Palm Desert Country Club golf course.

Lately, what he saw looked more like weedy vacant lots.”

• 10) Health plan premiums are again on the rise

“Insurers blame costs, aging population”

“”We’re doing everything we can to help control costs,” said Michael Giaquinto, senior vice president of general business at HealthNow New York, parent of BlueCross BlueShield of Western New York.

Buffalo-based HealthNow is forecasting an average rate increase of 10.2 percent across its entire commercial book of business for 2010, before plan changes by employer groups.

Univera, which is owned by Excellus BlueCross BlueShield of Rochester, is projecting an average increase of 6.9 percent, but that’s after groups change plan features to lower their costs.

Independent Health Association, which released rates several weeks ago, said then that its premiums would rise 10.5 percent, before plan changes.

Those increases are averages across the board, with hikes for particular groups exceeding 20 percent in a some cases. And the averages apply only to commercial plans, not Medicare or federal government employees, which are separate.

For Medicare, HealthNow’s plans are rising 8.5 percent in monthly premium, Independent Health’s are up an average of 34 percent, or $17.30. One popular Independent Health plan, Encompass 65 Extra, soared 58 percent or $32, to $87 a month.”

• 11) Reform on the cheap (Tulsa)

“But tax revenue hasn’t come in as expected, so state bureaucrats have been cutting the state’s allocation to schools every month. The budget’s still the budget, it just doesn’t mean anything, an empty promise made by the leadership of the state.

Last week we learned that the superintendent at one local school district has cut out his entire budget for janitorial services and is cleaning the district’s toilets himself.

In Tulsa — which expects to get shorted as much as $10 million this year — substitute teachers have been told not to bother showing up for work. Most administrators and support workers are getting unpaid furloughs and other more drastic steps may be necessary.”

• 12) Off-Balance-Sheet Exposures WFC, PNC: I Did It My Way (zerohedge)

“Reading through the Qs for this quarter, a picture starts to emerge of utter chaos when it comes to how banks are implementing — or not — the changes by the FASB as to how organizations account for off balance sheet (”OBS”) exposures. Let us take two examples: Wells Fargo and PNC Financial.

In the case of WFC, the bank has taken the position that NONE of its conforming residential exposures should be brought on balance sheet despite the FASB rule change. As we discussed in The Institutional Risk Analyst this week, “Why? Because the loans inside these securitization vehicles are insured by FHA, so goes the thinking of WFC and its auditor, thus the bank has no liability to these entities or the securities they have issued to investors. Pretty neat trick, eh?”

Thus WFC is basically saying that none of the bank’s $1.1 trillion in conforming OBS exposures need to be represented or reserved against. My problem with this is two-fold: First, the FHA and/or GSEs will return some portion of the securitized loans, so WFC should explicitly disclose this cost and reserve against it. Second, it seems to be pretty arrogant for WFC to take such an aggressive positions with respect to these OBS vehicles, even with a third party guarantee, especially given the intent of the FASB rule change. BTW, WFC has another $0.6 trillion in non-conforming exposures we have yet to hear about. That is next quarter presumably.”

• 13) Change public employee pensions (Opinion…New Hampshire)

“In 2011, employer contributions will have to be raised by 11 percent for state workers, 21 percent for municipal employees, 30 percent for teachers and 31 percent for firefighters. The latter three costs will be borne by property owners and renters.

The pension system, thanks to an 18 percent drop in investment earnings, is now just 58 percent funded. Its $5 billion in assets aren’t enough to pay the benefits due all current retirees, let alone future ones. Worse yet, the problem will continue unless more changes are made.”

• 14) 2001 pension deal will hit taxpayers in wallet (Pennsylvania)

“Pennsylvania taxpayers are about to get the bill for a 2001 deal hatched by former Gov. Tom Ridge and the General Assembly that granted state workers — including legislators — and public school employees a handsome pension increase.

Two employee retirement systems that oversee state pension funds estimate that the total necessary to cover unfunded pension liabilities could be as high as $5.9 billion in 2012. That would require $536 from every single state resident, including children.

It would be a 600 percent increase from what the state and local school districts are paying now: about $842 million, according to the retirement systems.”

• 15) First Coast will see its share of aging Baby Boomers (Florida)

“The demographic shift also will squeeze the Florida Retirement System, the $110 billion fund that pays for the retirements of government workers, teachers, police officers and firefighters. Benefits promised to retirees will outpace contributions to the system in coming years, creating an unfunded liability, a preliminary assessment released this month showed.

The state retirement system already has taken a hit during the recession, with the plan about 88 percent funded. That’s the first time there’s been a shortfall since 1997.

The pension problem exists nationally, from private sector giants like General Motors to the federal government. When Social Security began in 1936, there were 20 workers for every retiree. That nationwide number is now at four workers per retiree and is expected to drop to three as Baby Boomers retire.

“You look at what happens to the Big Three automobile companies, that was one of the things that literally made them financially untenable,” said state House speaker-designate Dean Cannon, R-Winter Park. “It could happen in city, county and state governments as well.”"

• 16) County board scrambling to fix budget (Monroe)

“In fact, although there is a $23 million pool of money in the retiree health-care fund, that account still carries more than a $60 million unfunded liability. And that liability will continue to grow because, for the past two years, the county board has not put anything toward the unfunded portion.

“We are only collecting enough to pay current year bills,” said Michael Bosanac of the county finance department. “There is nothing left over to transfer to the trust fund.”"

• 17) West Virginia governor to approve pension rescue, new bonds

“West Virginia Governor Joe Manchin expects to sign bills giving the state’s large cities pension-funding relief and approving the sale of $225 million in stimulus bonds, a spokesman said on Friday.”

“One West Virginia city, Huntington, has warned that $125 million in unfunded pension-plan liabilities might force it into insolvency.”

• 18) Proposed Redding ballot measure an effort to stave off escalating pension costs

“The city sets aside $2.1 million each year to cover retiree health insurance. But the annual insurance liability is estimated at $6 million under current accounting standards.”

• 19) Revamping Public Pensions: System isn’t sustainable (Opinion..Stanislaus County)

“As recently as 2007, StanCERA leaders were boasting that their retirement fund was almost fully funded — in line to meet 96.6 percent of its long-term obligations. By late 2008, it had dropped to 85 percent, and a new forecast shows it will drop to 60 percent funding by 2013.”

• 20) Oregon board juggles ways to lessen retirement costs

“Board members of Oregon’s Public Employees Retirement System said Friday they are disinclined to change the system’s rules to alleviate the impact of skyrocketing employer contribution costs in 2011.

Oregon’s $50 billion public employee pension fund lost $17 billion last year. Though financial markets have recovered some this year, PERS still has only 75 cents in assets for every dollar in liabilities, and needs to reset the rates it charges employers to start digging out of that actuarial hole.

Under current rate setting rules, Oregon’s public employers face a $1.5 billion increase in their pension costs next biennium — a 170 percent increase in overall system costs that could rip a hole in the budget of every state agency, municipality and school budget that participates in the system.”

• 21) unemployment insurance funds running out of money

A) Minnesota’s unemployment insurance fund remains in a deficit

B) Mass. Unemployment Fund Running Out Of Money

C) Georgia unemployment fund is tapped out

D) High unemployment depletes fund (Florida)

E) Gov. Phil Bredesen says another tax hike to shore up Tennessee’s unemployment trust fund appears unavoidable.

F) Montana

• 22) GRAND RAPIDS OPINION

“How much wage reduction or how many furlough days would be required to stanch a 26 percent budget deficit? And what do you have left after you do so? To solve the deficit with pay cuts alone would require every employee taking a 41 percent cut. That’s not pain; that’s genocide.”

…….Move over for San Francisco, San Diego, New York, Detroit, Las Vegas, California, Florida and all of the others as they race against the U.S. government and hurry towards their destination.

- saxplayer00o1