Local News in Brief : County to Use Bonds for New Computers
Los Angeles County supervisors on Thursday approved an unusual financing plan that will use up to $17.5 million in non-asset bonds, or unsecured loans, to help pay for a streamlined computer system to track lawbreakers.
The board, on a 3-1 vote, authorized the sale of up to $13.9 million in unsecured “certificates of participation” to acquire computer software for the Criminal Justice Information System. Another $3.6 million in revenue raised from the sale of the non-asset bonds will help pay for an automatic tracking system for civil cases.
In voting against the proposal, Supervisor Pete Schabarum claimed the financing plan was a “Mickey Mouse” venture that could endanger the county’s credit rating because the loans are not secured by any asset, as is usually called for in such transactions. The county will pay certificate purchasers a higher-than-usual interest rate, up to 8%.
Treasurer-Tax Collector Sandra Davis, however, insisted that any risk would be borne by buyers of the eight-year, unsecured loans and not by the county.