Too Large Spending Bill?
Dave Gogol, Baker & Danials Lobbist was quoted as saying, “It’s going to be extremely challenging for the state(Indiana) to figue out how to use this money, because there’s so much of it.” This was at Sweetwater Sound on Friday - at a seminar on, “how to get yours” for area “hand out and asking” people.
If this doesn’t describe this pork-laden federal boondoggle, I don’t know what does! No one who voted for this in the house or the senate, has any idea of what they approved, except maybe the three RINO’s, Senators Specter, Snowe and Collins, who we can bet were promised whatever they desired in exchange for their vote. What they were promised is starting to come out - it can’t be hidden. We can only hope that Maine Republicans remember, or probably, ARE still experiencing the results of this give-away the next time Snowe and Collins have to get re-elected! Specter is another case which we will just have to leave up to God to correct.
Populism in Fort Wayne
So the mayor wants to hold a referendum on the gambling issue eh? While I’m no fan of government controlling casinos I realize that cat has already been let out of the bag so why not let the people vote?
The elitists always bring up the “representative democracy” argument. The idea that we elect our leaders to make these decisions because the masses couldn’t possibly follow all the various issues and be able to make an informed decision. On some level this is true - like whether or not some company should be given a contract for concrete work.
But on major issues such as smoking, gambling, Harrison Square, etc, I think people understand the issue. It isn’t that complicated and you don’t need to be a part-time legislator to figure it out. So since we understand the issue why not just go ahead and let us vote? It’s not like our elected representatives have been doing a bang-up job as our surrogates.
Kudos to mayor Henry for attempting to force local government to finally represent the people…
National Delegate for Obama Supports Change In Local Democratic Leadership
While the status quo Democrats line up behind current chairman Mike Bynum (you know Gia Quinta, Win Moses, Tim Pape, Kevin Knuth) 3rd District National Delegate Sofia Rodriguez Mirwaldt has sent a letter of support for challenger Pat Moore.
I don’t think there’s any doubt who the better choice would be - just read the letter after the jump as many of the things about inclusion and kindness I’ve already touched on are reiterated. The choice is between that and the power brokers who think their little cabal has an inherent right to control the party.
Pat Moore for Chair
High Performance Government Network verses FW City OF
Just for fun dial the City of Fort Wayne phone number 427-1185. You will be suprised (or maybe, shocked) to find that an employee of HPGN for well over a year is still claiming to be an employee of the city. Question: JUST WHAT IS THE CONNECTION BETWEEN HPGN AND THE CITY ADMINISTRATION??? Are Fort Wayne taxpayers still seeing that it’s old employees are provided with leads on potential customers at the expense of our tax dollars (in addition to the $95,000 per year we are paying them? And, by the way, wasn’t HPGN to issue a report to our City Council on all the Millions of dollars that they “saved” Fort Wayne in 2008? I guess they are too busy answering messages left on the city-owned answering machine to do a report that was promised.
FWCS Failing First Fiscal Responsibility Test
Remember when we were told that FWCS was going to build taxpayer trust by focusing on fiscal responsibility for smaller projects? Well it looks like they are failing their first test:
When the project to renovate two gymnasiums at Wayne High School into classroom space for the New Tech program was first proposed, administrators said the cost would be about $1.5 million. The actual bid came in at $960,285 from Fort Wayne-based Shawnee Construction and Engineering Inc. as presented at Monday night’s board meeting.
The problem is that $1.99 million worth of bonds is being sold today to pay for the construction plus other costs of the bond. [...] Chief Financial Officer Kathy Friend said the bond amount couldn’t be changed because it may have affected the sale and the district might not have gotten the money.
Ok, that’s perfectly reasonable. The estimate was off; these things happen. So we’re actually just borrowing more than we need. It means we can pay down the bond faster right? (Insert laughter):
Superintendent Wendy Robinson said the additional money will go toward making technology and sound-system renovations at Wayne, which she stressed will be used by New Tech students as well.
[...]
“It’s really a win-win for us,” she said of the work, which is to be completed by Aug. 7.
So instead of paying back the money early the district has simply found another area to spend the money. And a sound system at that. Big surprise…
City Light Lease Fund Update & Analysis
I attended the annual meeting of the City Light Lease board which meets to oversee the city’s investment of the original light lease money. The trust fund’s management company (Dimeo, Schneider & Assoc) presented a brief update of the fund’s current balance and took questions from the board.
First I want to say that my analysis assumes the one page of data that was presented is accurate since the full annual report was not made available to the media or even to the board (unbelievable). Specifically it assumes that the starting balance shown in the figure linked above was only increased through dividends and capital gains and not through additional contributions. Ok, enough on the caveats.
UPDATE: According to the News-Sentinel the city has been putting $270k/year into the fund. I’ve adjusted the numbers below to account for this.
To date I believe this group has managed the fund relatively well. Fund managers are typically compared to the S&P 500 as a benchmark and the sad reality is that most fund managers don’t outperform the S&P 500. In other words they are essentially wasting their clients’ time and money since the client could do better without using a professional money manager. So how is our management doing?
Well the current fund balance is $25.6 million which is down from it’s peak in 2007 of $35.1 million. At first glance this might sound bad but in reality it’s actually not that bad. Since 1996 the fund’s annual rate of return has been 7.1% 5.4% while the S&P 500 over the same time period has been only 4.5%. This comes out to about $7 $1.9 million that the fund managers have added over and above the S&P 500 benchmark - not bad.
Where I’m concerned is their strategy for moving forward. These guys struck me as eternal optimists with no plan to hedge against the market continuing to tank. Their philosophy is a buy-and-hold one using the old “the market never goes down in the long run” ideology. While this strategy may be a reasonable one for individual investors looking 20-30 years down the line it is completely inappropriate for the city of Fort Wayne.
The reason is quite simple. Government is already “invested” in the long term economic success of our economy. When times are good there is more investment, more taxes, more jobs, etc. The problem comes when times get tough - that is what government needs to be prepared for. The city may very well need this money in the near future and especially if the economy continues to deteriorate. The board needs to ensure that the trust fund is properly hedged on the negative side considering this money may be needed.
I have no doubt that these managers could properly hedge the city if given that direction. Their past performance shows they are capable of adding value but they are not going to make that decision on their own. As they said during the meeting they are still going to pursue an investment strategy based on growth unless they are told otherwise. We don’t have to give up the growth investments completely but we should certainly hedge against massive market deterioration.
The old adage applies here - hope for the best but prepare for the worst…
Glenbrook Owner Closing in on Bankruptcy
The owners of Glenbrook Square, General Growth Properties, reported earnings yesterday and the news was not good ( via Calculated Risk):
We are considering all strategic alternatives and are continuing our discussions with our lenders. In addition, we have suspended our cash dividend, halted or slowed nearly all of our development and redevelopment projects, systematically engaged in certain cost reduction or efficiency programs, reduced our workforce by over 20% and sold certain non-mall assets. We currently have approximately $1.179 billion of past due debt and approximately $4.09 billion of debt that could be accelerated. However, our lenders have not yet exercised any of their remedy rights with respect to such debt. In addition, we have an additional $1.44 billion of consolidated mortgage debt and approximately $595 million of unsecured bonds scheduled to mature in the balance of 2009 that remains to be refinanced, repaid or extended. In the event that we are unable to extend or refinance our near and intermediate term loan maturities, we may be required to seek legal protection from our creditors.
Let me help with the translation:
We are completely screwed. But thankfully our creditors would be even more screwed than we are if they had to write down our debt (i.e. all the banks that are already insolvent would be in even worse shape). We are looking for financing from somebody at bargain basement prices (hint, hint Federal Reserve). Please save our ass by using some of the TALF for commercial real estate bailouts. If you don’t we will file for bankruptcy and all our creditors will go down with the ship. But this is not a ransom letter.
Something has to give soon. Either the government will give money to one of the major banks to merge with these guys or they will go bankrupt…
FW Redevelopment Authority/3-way liquor license application
This morning in room 350 of the City/County Office Building, our local Allen Co. Alcoholic Beverage Board was to have met. They did not have a quorum so they could not hold the planned public hearing on the subject license application which was to cover Parkview Field. As a remonstrator against such issuance, I was in attendance. Due to the lack of the quorum plus the fact that there was a remonstrator against, it was necessary to postpone the hearing until March 16.
In discussions with the hearing officer, it was discovered that the application listed an incorrect name for the officer of the Authority making the application. Per IC 7.1, the president and the secretary of the applicant corporation are to formally make the application under their names representing the entity. This would be J. Nelson Coats, president and Deanna Wilkerson, secretary who are two of the officers of the Authority.
My reason for opposing this application as requested is that I don’t see the reasoning behind using an entity like the Authority to own this permit. Since the Authority was established specifically to enable circumvention of the State of Indiana’s constitutional limitation on governmental debt, it just does’nt make sense. (Remember that the Authority was set up first to enable building the Grand Wayne Center with borrowed funds - and now is also being used to carry the debt incurred to construct the unneeded new baseball stadium and the unnecessary new parking garage.) Hardball Capital, as manager of the stadium will be earning the lion’s share of the profits on the sale of probably $3.50 beers plus the wine and liquor that will be sold in the bar in the stadium. SO WHY IS THE AUTHORITY APPLYING AND PAYING FOR THE NECESSARY PERMIT????
I plan to testify on March 16 and, if necessary, appeal to the State Commission about this matter.
Welfare Kings
I am so f’in irate after reading this story:
Citigroup Inc. is in talks with federal officials that could result in the U.S. government substantially expanding its ownership of the struggling bank, according to people familiar with the situation.
While the discussions could fall apart, the government could wind up holding as much as 40% of Citigroup’s common stock. Bank executives hope the stake will be closer to 25%, these people said.
I don’t know where to begin - Citibank wants to convert the government’s $45 Billion worth of preferred stock into 40% worth of common stock. Here’s the problem. Citi’s market cap is $10 Billion so we’d be converting $45 Billion worth of preferred shares into $4 Billion of common - a massive $41 BILLION LOSS FOR TAXPAYERS. These guys are unbelievable.
Citi and the Department of Treasury are simply looting the treasury and Team Obama is either complicit or too stupid to figure it out…
Parra Pushes for Change In Democratic Party Leadership
Wayne Township advisory board member Maria Parra has sent out a letter supporting Pat Moore for Allen County Democratic Party Chairwoman and asking others to vote for her in the upcoming party caucus.
I think Pat Moore would be an excellent choice. She is extremely involved with everything in the party and works diligently to get others involved as well. She is truly one of the nicest and most inclusive people I have ever met.
You can read Parra’s letter of support below:
