Related: Patrick to Hide Pit Costs in His Pants
"Pike agency finds way out of deal, and toll-hike foes take note" by Noah Bierman, Globe Staff | December 23, 2008
The Massachusetts Turnpike Authority has eliminated one of its most urgent financial problems, buying its way out of a complex financial deal yesterday in a move that lent ammunition to those who say a proposed toll increase can be delayed or reduced.
The authority's executive director, Alan LeBovidge, said that while the action to end a financial contract known as a swaption gets rid of a "cloud over our head," the authority is still counting on toll increases to plug its budget and fix its crumbling roads.
Which means we payed off some bank to quit hassling us every month.
"The whole premise of the toll hike was based on our operating deficit and our need for capital" improvement projects, said LeBovidge. "Ultimately, we're going to have to come up with the money, one way or another."
You know the drill, Mass resident....
1. Pull up to pump
2. Get out of car
3. Drop pants
4. Insert gas pump into ass
5. Pump gas
O.K, get set, ready, go!!!!
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The authority's swaption deals, in which the agency received upfront payments from banks beginning in 1999 in a swap for long-term agreements to trade interest payments with those institutions. The deals have caused a great deal of stress and debate at the Turnpike Authority, in part because their risk has been volatile and prospects for a significant lump-sum payment have grown substantially with the collapse of the global credit market.
Translation: the state sold equipment and assets to banks so the banks could lease it back to them at interest. How does that serve the public good?
"In the 1990s, the T and other transit agencies were encouraged by federal officials to sell their train equipment to banks and then lease it back. The arrangement brought the T $53 million in upfront payments. In return, the private banks realized a tax benefit"
NOT a GOOD IDEA at all!!! Thanks, Bill Clinton!
Related: Banks Bend U.S. Cities Over
Massachusetts' Fate Rests in Banks' Hands
The deal with the now-bankrupt Lehman Brothers was the most immediate threat. In 2002, Lehman paid the authority $35 million in cash. But in recent months, the Turnpike Authority was at risk of owing tens of millions if its credit rating continued to decline, because of a trigger in the agreement in which Lehman could have demanded immediate payment. The toll increase was initiated in part to prevent that from happening.
On Friday, LeBovidge struck a deal to pay $3.4 million to end the agreement. The authority calculated the amount of payment over the weekend and sent the money yesterday, he said. In the end, the authority actually made a profit on the much-maligned deal of more than $30 million, though most people continue to say it was a bad decision.
Yeah, we made a profit, is that what he said? What unmitigated liars government officials are. Since when did a bank or financial firm ever sell at a loss? If they do, they have taxpayers covering them! Sorry, but I don't belive the bser LeBovidge!
The authority still has two other deals, one with UBS that puts the agency at risk of owing $470 million under certain market conditions. LeBovidge said he is working on possible remedies for that deal. It remains a potential threat, but is not tied as closely to the authority's credit rating as was the Lehman agreement.
While SCHOOLS CLOSE, TEACHERS are LAYED OFF, HOSPITALS CUT BACK, and the roads go to shit! But we are PAYING OFF BANKS for DEALS that were STOO-PID to begin with!!
Board member Mary Z. Connaughton said that if the UBS deal is resolved soon, the authority will have the opportunity to delay the toll hike in hope that the Legislature will offer relief.
Translation: that "relief" is going to be a GAS TAX!
Fellow board member Judy Pagliuca said LeBovidge's deal on the Lehman contract averts what could have been a "catastrophic" situation. She said she still believes that a toll increase is necessary, in part to begin urgent work on construction issues that have been neglected. But she has asked turnpike managers to look into the possibility of staggering the hike over a few years to spare commuters its full brunt during tough economic times.
Several legislators have also argued that the full increase is not needed immediately.
"The question is, do they need $100 million?" said Senator Steven A. Baddour, a Methuen Democrat who cochairs the Joint Committee on Transportation. "I think this helps those of us who were making the argument that they don't need the maximum."Oh, they LIED and OVERSTATED the AMOUT they NEEDED -- just like the feds and their bailout?!! Pfffffttt!
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