In response to:
Orange County, California's gamble on derivatives ultimately led to its bankruptcy. Poway's desperate financing deal is far worse and should be prohibited. Governments, especially small municipalities, should limit themselves to traditional financing. Times may desperate in the Golden State, but this is nuts.
I live in SD (former Poway resident, even), and I know there is an arrogance from folks living in that city born from sending their kids to those schools.
I can imagine the school district played on the council's/resident's arrogance and got this gamble allowed.
Surprising, though, because Poway is pretty solidly red (or at least used to be when I lived there 15 years ago), and pretty affluent. Definitely upper-middle class... not generally the types that are duped by silly financial schemes. Wait, what?
Well, I guess these are the same folks who thought real estate increasing in value at 25%/qtr was going to last forever.