I've said it before, and I'll repeat it: Hiring John Wright was one of the smartest things that the Standard-Examiner has done within recent memory. His clear reporting benefits not only the Std-Ex, but it's general readership public as well.Mr. Wright reports that Ogden City officials have decided to take out what amounts to a $30 million debt-consolidation loan, to be funded by the issuance of new bonds, and to be applied approximately as follows:
a) $10 million to repay the money borrowed from BDO in 2001 to purchase and demolish the downtown mall;
b) $12 million to retire the bonds that were issued at about the same time to build out the BDO infrastructure (and to offset the above $10 million cash that was "borrowed";) and,
c) $5 million to pay off the short-term bridge loan which was used to pay off Woodbury Corporation, under terms of Ogden City's settlement of the three Woodbury lawsuits.
Arithmetic-competent readers will of course observe that these figures don't actually add up to $30 million. My guess, however, is that the $3 million that's seems to be unaccounted for will be eaten up by accrued interest, lender fees and commissions, and that once the smoke clears on this transaction, there won't be much small change left over.
And while we're on the subject of "smartness," I believe this is a smart move on the city's part. Not only will it finally resolve the Woodbury lawsuit problem, but it will get the U.S. Army off the city's back, and eliminate what could have potentially become some very expensive and messy civil litigation. If the city can resolve four lawsuits in one fell swoop, while prevailing interest rates remain low, $30 million will buy a lot of piece of mind.
Not only that -- having removed the pesky U.S. Attorneys' Office from its list of persecutors and detractors, City officials will then be able, after September 2006, to "borrow back" the $10 million that it has just "repaid" to BDO, and walk from the transaction with a tidy little "slush fund," to be applied to some of the city's other pressing financial problems. It could even be argued, I think, that such a "transfer" could be characterized not as "borrowing" at all -- but as the settling of accounts between Ogden City and the RDA entity, BDO. That would all depend, of course, on how the new bonding repayment scheme is structured. That's the single detail that Mr. Wright's article didn't make quite clear.
I told you it was smart. Cute might even serve as a better description. By "avoiding a battle with the army," (nice turn of a phrase, John,) City officials will now be able to re-create the original BDO-Ogden City "loan," without having anybody to complain about it.
Am I missing something here, gentle readers? Have Ogden City officials just figured out another clever way to scrape up some additional cash here, in addition to resolving their festering legal problems?
Help me out with your comments, if you will.
