In a nineteen page Order and Opinion, The Pennsylvania Department of Community and Economic Development has rejected all but one count of a citizen challenge to a $35 million bond refinancing plan proposed by Allentown.The claim that still survives, is focused on the useful lives of the projects being refunded. Under the The Local Government Unit Debt Act, a local government financing a new city hall or other project must be able to pay that debt while they are still being used. Their useful lives must outlast the time it takes to repay the bonds. The city's own bond ordinance indicates that the useful life of some projects, funded in 2003, is only between between five and twenty years. But rather than sustain the complaint, the DCED has given Allentown an opportunity to furnish any documentary evidence to show that the useful lives of these projects will outlast the debt repayment.
Mayor Pawlowski tells Morning Call reporter Paul Muschick that the necessary information has already been sent.
The fat lady may not be singing, but I hear her warming up.
it was my understanding that the remaining issue is the amount of the bond to be refinanced. although Pawlowski claims it is 22 million, he submitted and council approved for up to 35million. more troubling is pawlowski's characterization of the activists " small band of reactionaries bent on stopping allentown from moving forward." i know of no plans, safety issues, police hires or progress impeded by this action, on the contrary, interests rates have declined which will be an advantage to our grandchildren paying for this bond.
ReplyDeleteMM, The actual amount being fubnded is not really an issue. I have a link to the opinion and order, and wou can read it for yourself.
ReplyDeleteAs one of the "reactionaries" I have to comment. (Though it is a privilige to be a reactionary against continued credit card spending by Allentown.)
ReplyDeleteFirst, the City does have to provide detailed information about the amounts of the bonds to be refunded and the amount of $$ requested. We could only get this via the challenge. Now we have hard documents and we will track to make sure that the city does indeed refund the bonds, instead of generating operating revenue. There filing only stated that "a portion" of bonds would be refunded.
Also, stunningly, the DCED has ruled that the only reason given to Council and the public for the refunding is irrelevant. So politicians can tell leglislators and the public one thing, then tell Harrisburg something else? That's a great idea for open and accountable government.
And more incredibly, the DCED ruled that it doesn't matter if the ordinance complied with the specific legal requirements of the Local Government Unit Debt Act. They stated that since we are a Home Rule municipality we could choose to comply or not!!! (However, this statement will bite them in the butt later, we have some very interesting ideas now....)
And in direct contradiction to the Debt Act's purpose to prevent irresponsible fiscal actions, the DCED ruled it was perfectly okay to refinance lower interest rate debt instruments to higher interest rates and increase the overall debt burden. That is like an individual taking a lower rate mortgage and refinancing it at a higher rate. Only in government would that makes sense!
"...we have some very interesting ideas now ..."
ReplyDeleteHmm, lessee, would those ideas be MORE ways to waste the taxpayers' money fighting worthless lawsuits filed by a half-dozen people so out of touch with the voters that they have now lost every seat in city government? You keep going, Joe. As a matter of fact, some of us Dems in the suburbs would love it if your little bridge-club would take on Lehigh County, too. That way, we could probably gain control of the board of commissioners, the courts, and the two remaining Republican legislative seats, as well as the mayor's office, the city council, the controller's office ...
Whazzat now, Joe, Oh-for-Four in the courts, counting the EMS appeal, the police contract appeal, the refinancing appeal, and now this? Now exactly Matlock, are you? Seriously, just one win might have given you some credibility as true watchdogs, but you've been shot down more often than the Iraqi air force.
Hey, how about going national? You could single-handedly (six-handedly?) guarantee a Democratic White House and Congress. Be ambitious. Go for the gusto. Maybe Hillary will invite all of you the inauguration. After all, your little tribe won't take up that much room ...
dear anon 2:39, what exactly is the basis for your arrogance? which component of "moving forward" are you counting on to restore allentown? i'm not trying to be confrontational, but curious? i'm afraid mayor pawlowski made statements concerning recent tragedies which will cost the city 100 times more than anything joe hilliard does. i see the hilliard "camp" dealing with facts and figures, and i see you drinking platitudes like "moving forward"
ReplyDeleteAnon 2:39,
ReplyDeleteI've been where Hilliard is, and I respect what he's done. Even though he and I are miles apart politically, we need more (not less) citizens who challenge their government. It's what makes this country different.
His bond challenge has wasted no money, but has instead enabled A-town to take advantage of lower interest rates.
Incidentally, before you gloat too much, let me point out that if Hilliard appeals the DCED dismissal, the city will have a tough time floating those bonds. They will need an opinion from bond counsel and will probably have to insure them.
From reading the opinion, I don't think he should appeal. But don't make the mistake of assuming there are no issues.
Let's talk about costing the taxpayers money.
ReplyDeletePawlowski borrowed $10 million to show a phony $5 million surplus. Cost to taxpayers? $22 million in interest costs.
Pawlowski's refunding scheme had $21 million in math errors. If we cut costs by a mere $300,000 a year for 7 years we could ride out the debt spike. Pawlowski's plan? Refinance the debt at HIGHER interest rates which will cost $48 million over 29 years. Oh, but it gets better. Due to the paperwork that the challenge forced the City to produce, the actual interest cost will exceed $60 million - $2 million a year!!!
And Mayoral nominee Pawlowski urged councilmen Guridy and Hershman to drop the original police pension court challenge, then as Mayor he settled for a pittance. Cost to taxpayers? A $150 million dollar liability.
Keep it up Dems! We will end up like NYC - bankrupt - which allowed a Republican Mayor to win with only 10% of registration being R's.
Bernie, thanks for your kind words. I agree. What is needed is more citizen scrutiny of government by all.
And BTW. We won the EMS case which is why they had to rush to enact a second ordinance at the end of 2006. The County Court ruled that the ordinance we challenged was "unlawful". What does that mean?