Tag Archives: bonds

Harrisburg prepares to file bankruptcy

After defaulting on its incinerator bonds
and

preparing to sell off pieces of itself,
Harrisburg, PA,
is preparing to file bankruptcy.

Laura Vecsey wrote in Pennlive 16 June 2011,

Harrisburg City Council looks to introduce resolution that would allow bankruptcy paperwork to be prepared:



Harrisburg City Council member Brad Koplinski is seeking to introduce a
resolution that will allow the council to prepare paper work that might
become necessary should a majority of the council decide to file for
Chapter 9 bankruptcy.

Koplinski said the urgency of being prepared escalated Thursday when
state Sen. Jeffrey Piccola introduced legislation that called for a
state takeover of Harrisburg should the distressed city fail to adopt
the Act 47 plan it was presented Monday.

It seems Harrisburg applied for Act 47, which is apparently a state
bankruptcy protection plan last October, but now:

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Incinerator forces Harrisburg to sell off parking lots

After defaulting on its incinerator bonds,
Harrisburg, PA, gets even more desperate and starts selling off pieces of itself.

William Alden wrote in huffpo 15 June 2011,

Harrisburg’s ‘Bad Deal’: City Forced To Pursue Parking System Lease Despite Fears:



The finances of Harrisburg, Pa., are so desperate that local officials are
considering a deal they fear will ultimately make the city more miserable.

A state-appointed panel, charged with crafting a financial recovery plan
for the city, announced this week that Harrisburg must pursue the sale of
public assets to help resolve its fiscal crisis. The nearly-bankrupt state
capital, weighed down by debt more than four times the size of its budget,
“is not in control of its own destiny,” the state team said in a report.

Three years ago, confronted with a similar budget shortfall, the city
considered leasing parking garages and meters in exchange for quick
infusion of cash, but that deal was never approved. Last month, the offer
resurfaced when New York-based developer LambdaStar expressed renewed
interest. Some city leaders harbor a growing fear that Harrisburg will
be forced into a deal that will bleed its coffers over the course of
decades, after it surrenders valuable assets to a profit-driven company
with the power to raise rates on a captive base of customers.

But those misgivings may not matter, as a budget crisis chokes Harrisburg
into submission.

“This is a situation where Wall Street will get paid, and the little
guys on Main Street, taxpayers, are going to get stuck holding the bag,”
Harrisburg City Council Member Brad Koplinski said.

Couldn’t happen here, right?
Our local governments would never

hastily approve bonds that could force raising taxes or default,
would they?
Oh, right: they already did.

-jsq

Harrisburg defaulted on incinerator bonds

Last year Harrisburg, PA defaulted on bonds it issued to build an incinerator,
according to Aaron Smith in CNNMoney,

Harrisburg, Pa., defaulting on its bonds:



The capital city Pennsylvania is broke and will be skipping this month’s
multi-million dollar bond payment.

On Sept. 15, Harrisburg, Pa., was scheduled to make a $3.29 million
payment on the bonds it issued to build a trash plant. But, the
cash-strapped city doesn’t have the dough.

“The city’s budget is in deficit,” said Chuck Ardo, spokesman for
Harrisburg Mayor Linda Thompson. “We’re looking for ways to trim the
budget just to keep services going.”

“Now the chickens have come home to roost,” the mayor said in a statement
released Wednesday.

You remember,

“Officials here decided seven years ago to borrow $125 million to rebuild and expand the city’s enormous trash incinerator….”



Well, that could never happen here,
could it?

-jsq

VLCIA land accounting



Chairman Jerry Jennett is asking for an accounting of the land
VLCIA has bought

using their $3 million a year in dedicated 1 mil property tax
and $15 million in bonds that Lowndes County guaranteed for them.
And it seems that much of it is in lots too small to be useful.

While the VLCIA board was approving minutes for their 17 May 2011
regular meeting, Chairman Jennett said this:

On the last page, where we’re talking about the industrial park acreage,
this is real good the way you’ve presented this,
it shows
Azalea West 17 acres
Lake Park 10,
Hahira 10,
[?] 165,
Miller 220,
West Side 155.

Let me ask you that in future you do one more thing.
That you tell me
how many 100 acre sites you have,
how many 50 acre sites you have,
and how many 25 acre sites you have,

[Col. Ricketts made some response.]

Then I’m going to assume that everything else is ones, fives, and tens.
And my point would be that we track those,
and that when someone comes with a project that and they need 200 acres,
we can’t do it.
But I think there might be room for at least one and maybe two 100s.
I think that’s important when we think about people….

It’s good Chairman Jennett is having Col. Ricketts keep track of all this
land VLCIA has acquired.
He started on this project at Brad Lofton’s last board meeting,
when he asked Lofton about lot sizes.
I look forward to the results.

Incidentally, while that list Chairman Jennett read does add up

Continue reading →

How did Lowndes County approve a contract with VLCIA that could force raising taxes?

We’ve seen that
the inter-governmental contract between Lowndes County and the
Valdosta-Lowndes County Industrial Authority (VLCIA) could force
the county to raise taxes to pay for VLCIA’s debts.
How did the county pass such a thing?
Apparently in a rush, with little review.

Matt Flumerfelt wrote in the VDT 19 November 2008,

County approves bond issue:



LOWNDES COUNTY — The Lowndes County Commission heard a presentation
Tuesday evening from Glenn Thomson, Alston & Bird LLP regarding a bond
issue the County has entered into for the purpose of providing needed
funding for the Valdosta-Lowndes County Industrial Authority.



After the presentation, a vote was taken accepting the issue and Lowndes
County Commission Chairman Rod Casey,


County Attorney Walter Elliott and


County Clerk Paige Dukes adjourned to an adjoining chamber to complete
the signing of the documents that will enable the Industrial Authority
to negotiate for the acquisition of property pursuant to their mission
of attracting manufacturing and other businesses to Lowndes County.

Bond Counsel, Glenn Thomson, stated, “Mr. Chairman and Commission, I
would like to take this opportunity to thank you for your time and brag
on your staff and consultants. Your staff put this transaction together
very quickly. In fact, the underwriter’s counsel remarked that he had
never encountered county employees and staff that had worked so diligently
and that due to their preparedness and hard work, he was able to put his
information together in near record time. Their performance and that of
County Attorney, Walter Elliott, who worked tirelessly on this project
as well, is a tremendous credit to those responsible for managing the
business of the county.”

Why was it necessary to put together a guarantee for a $15 million
dollar bond issue in “near record time”?

Continue reading →

Industrial Authority debts could force Lowndes County to raise taxes

A mil here, a mil there; soon we’re into real money!


Can the Valdosta-Lowndes County Industrial Authority (VLCIA)
commit we the local taxpayers to a $150 million bond issue
for a private company like the

Macon-Bibb County Industrial Authority just did?
Maybe.

VLCIA has already issued $15 million in bonds for which apparently

the Lowndes County Commission has committed the county,
that is, we the taxpayers, to pay the debt service.
That comes out of VLCIA’s one mil of dedicated tax income.
But according to the

intergovernmental contract,
it’s actually not even just from VLCIA’s current millage:


Section 4.4 Security for Contract Payments and for Bonds.

(a) The obligation of the County to make the payments required pursuant
to Section 4.1(a) hereof shall be a general obligation of the County for
which its full faith and credit is pledged, and shall be payable from any
lafully available funds, subject to the Tax Funding Limit. In particular,
the County agrees to levy an annual tax on all taxable property located
within its boundaries, as now existent and as the same may be extended,
at such rate or rates, as limited by the Tax Funding Limit, as and when
it may be necessary to provide the County with sufficient revenues to
make all payments required to be made by the County under this Contract.

The current VLCIA millage is one mil, or about $3 million a year,
collected by the county in property taxes and handed over to VLCIA.

But VLCIA’s charter says (in
Section 5):

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Do you miss him yet? Brad Lofton in SC



He may be gone, but he’s still up to his old tricks, and he’s using us for a reference.

Adva Saldinger wrote in The Sun News 8 May 2011,

Lofton hits ground running in new post; CEO asking taxpayers for $1.6 million:

The new Myrtle Beach Regional Economic Development Corp. president and
chief executive is by many accounts aggressive and personable, and he
says, ready to take charge and bring much needed jobs to the area quickly.

Brad Lofton said he will bring 500 jobs in the first 18 months, and an
average of 500 jobs each year over the next five to 10 years.

And a pony!

Has anybody verified the jobs Lofton claimed he brought to Lowndes County?

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“Parameters on the types of industry” –VDT Editorial



And what about all that land?

In addition to a news story about

Brad Lofton moving on up to Myrtle Beach,
the Valdosta Daily Times also had an editorial yesterday (14 March),

Lofton’s leaving a void
in which they make some good points, including:

While the search is on for a new director, now is the time for the city,
county and industrial authority board to come together to make some
decisions about the organization and what the community leadership needs
and wants it to be.

Here are

a few modest suggestions along those lines, including considerations
such as water.

More from the VDT:

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