Madison County made two bond payments in 2011 of $258,328 on May 11 for the Parkway South and $374,021 on October 24 for the Parkway East Public Improvement Districts. However, the Mississippi Code in 2011 and a 2007 Attorney General's opinion may have prohibited such payments.
The two districts encompass the Galleria Parkway that runs from Highway 463 to Gluckstadt Road East of I-55 in Madison County. Parkway East sold $27,770,000 in bonds in 2005 to finance development. Parkway South sold $10 million in bonds in 2004. Madison County entered into a contribution agreement with both districts. Parkway South contribution agreement, Parkway East contribution agreement. The Parkway East agreement states:
The contribution agreement provides that in the event the District fails, for any reason, to levy and/or collect (or have collected) a sufficient amount of Special Assessments from the owners of land within the district in order to satisfy any debt service payment, the county shall advance to the trustee the outstanding amount required to satisfy the deficient debt service payment. (P.21 of the Issuing statement.)
The contribution agreements cite Section 19-31-17 of the Mississippi Code in stating the bond payments will be legal:
(o)To cooperate with, contract, or enter into contribution agreements with, other governmental agencies, including the governing bodies of counties and/or municipalities, as may be necessary, convenient, incidental or proper in connection with any of the powers, duties or purposes authorized by this chapter.
However, the Mississippi Code prior to this year stated in Section 19-31-29:
Bonds issued under the provisions of this chapter shall be limited obligations of the district payable solely from the sources pledged for the payment thereof. All such bonds shall contain a statement on their face substantially to the effect that neither the full faith and credit of the state nor the full faith and credit of any governmental unit of the state are pledged to the payment of the principal of or the interest on such bonds. The issuance of bonds under the provisions of this chapter shall not directly, indirectly or contingently obligate the state or any governmental unit of the state to levy any taxes or to make any appropriation for their payment arising out of contracts authorized under this chapter.
The Mississippi Attorney General weighed in on this issue in a 2007 opinion for Stone County (2007 WL 1725164. Opinion for Thomas Matthews, Jr. Esq., Attorney for Stone County Board of Supervisors). The opinion first states the question:
You seek an official opinion as to whether the County can be held liable for the actions, debts or obligations of a public improvement district established by the County pursuant to Mississippi Code Annotated Section 19-31-1 et seq., (The Public Improvement District Act).
The AG then states such payments are banned by the law:
"However, we do note that Section 19-31-23 which authorizes public improvement districts to issue bonds, notes and other evidences of debt, provides in part:
(2) Except as may otherwise be provided by the district, all obligations issued by the district shall be negotiable instruments and payable solely from the levy of any special assessment by the district or from any other sources whatsoever that may be available to the district but shall not be secured by the full faith and credit of the state or the county or municipality that created the district. (Emphasis added by AG)
The opinion then quotes the entire text of Section 29 to support the opinion. Thus the law was clear before 2012. Madison County apparently could not make bond payments on behalf of the Parkway East and Parkway South PIDs. The total payments were $632,349 in 2011. Madison County made another payment of $838,397 for Parkway East in April 2012 and another one is scheduled later this year. However, the 2012 payments are apparently authorized by law as the legislature changed the law this year to allow counties to make such payments only if they entered into a contribution agreement with the PID.
Representative Jeff Smith authored HB #1261 this year as Chairman of the Ways and Means Committee. The bill passed both houses with heavy majorities and was signed by the Governor. The bill made a nice little change in the law by inserting in Section 19-31-29 the following language:
"Except as provided in a contribution agreement, the issuance of bonds under the provisions of this chapter shall not directly, indirectly or contingently obligate the state or any governmental unit of the state to levy any taxes or to make any appropriation for their payment arising out of contracts authorized under this chapter." Line 789 of bill
The statute now reflects the change:
"Bonds issued under the provisions of this chapter shall be limited obligations of the district payable solely from the sources pledged for the payment thereof. All such bonds shall contain a statement on their face substantially to the effect that neither the full faith and credit of the state nor the full faith and credit of any governmental unit of the state are pledged to the payment of the principal of or the interest on such bonds. Except as provided in a contribution agreement, the issuance of bonds under the provisions of this chapter shall not directly, indirectly or contingently obligate the state or any governmental unit of the state to levy any taxes or to make any appropriation for their payment arising out of contracts authorized under this chapter."
What is more interesting is the bill states the law will become effective immediately when it is signed by the Governor. The standard effective date for most bills is July 1 of the same calendar year as passage. It should also be noted the bill does not contain a retroactive provision.
Editorial comment: Now why did Mr. Smith get interested in this subject this year? Anyone think a certain um, lobbying/law firm in Ridgeland might have been interested in this topic?
25 comments:
Wow. This is big stuff. Who is on the hook for those 2 payments that were not legit?
I'm beginning to wonder what the FBI could find if it suddenly popped in one day and confiscated the hard drives on every supervisor's computer.
If they weren't legit, it was due to sheer ignorance rather than graft. How do you expect a stock boy and mop-up lead-man to know fiscal details and state statutes?
My guess is that Madison County's Parkway bond lawyer is Mr. Kennedy of Butler Snow. softereb 11
Butler Snow's web site doesn't show a lawyer named Kennedy.
Do you mean Keyes?
Incredible job, KF. Incredible.
Sorry...Mr. England is their main rainmaker @ Butler Snow if its not the Governor.
AG opinions are not binding or of any legal import. The statute was changed and it operates retroactively. Theres no gotcha here...just a bond project gone awry...along with literally hundreds of others across the country. Real losers are the investors....states...pension plans...etc. You really should take the bar..you would make a good lawyer.
Losers are the taxpayers is what you are trying to say. Republicans are the culprits. Bad government happens in the suburbs too.
This legislation was not retroactive!!!! Hang on and stay tuned!!! Fur is GONNA fly!!!
What does Bill Billingsley think--He tried to tell everybody last supervisor election the mess the county was in--would love to hear from Bill--
Did anyone read the clarion ledger this morning about the law on raising taxes?? Also there was an editorial-- Leadership Poor in the Metro area--Rankin County,City of Jackson, JPS and Madison county were all lumped together as being less than above board--Madison County was singled out as being the WORST of the offenders--Thank you Gerald Steen for bringing US all together--You have done a MOST UNUSUAL job--We will not forget you in Madison County--
This is not as clear as the bold print leads you to believe. The argument can be made that the bonds are not backed by the county - it's just a limited 2-year contribution. Also, the bond doesn't require the levy of taxes to make the payment.
Sure, opposing arguments can be made as well, but this is stuff for the Supreme Court.
Now, who's going to sue to get the ball rolling -- Mayor Mary would be a good start.
There's no place like a county for interesting politics, and Madison's just keep getting more interesting. Frankly, after supporting D.I. Smith in 2011 I'm willing to give Gerald the benefit of the doubt on the solid waste millage increase. County residents, and I'm one whose solid waste millage is going up, need to pay a reasonable rate for their trash pickup, and the millage increase does that in a heavy handed way. I would rather set up a system to bill the county residents for their trash pickup just like they do in the cities, since there are many county landowners who don't occupy the land and don't need trash pickup, but I understand the need for that service to be paid for by the people who use it.
The PID payments are wrong but they're also unavoidable. To 5:15's point that the investors are the real losers, I'd have to say not in this case. Payments are being made by the taxpayers and the investors aren't losing anything. I think the landowners - the people, not their shell corporations - the county and the bond holders need to come up with a way where haircuts can be taken all around and the county end up with ownership of the land. Workouts on failed projects are done every day, and it's not right for the developers to walk away and the investors be made whole while the taxpayers foot the bill for everyone. There may be a great development waiting for us down the road, but it's a long road and the taxpayers shouldn't be the only ones buying the gas.
I still believe there is fat to be cut from the budget. I'd start by dropping the appeal on the landfill decision. John Bell voted with Karl and Paul to funnel some money to Eric Hamer, a generous campaign contributor to all three, to pursue an appeal that we don't need and aren't likely to win. I'm sure a close analysis of the budget would reveal other places where cuts can occur. I like the county employees and value their work as much as anyone, but there are plenty of people on the private side who haven't had any raises in awhile. In fact, I imagine some of the people who have been out of work for awhile would be happy to take a county job with no salary increase. Salary money has been saved by not filling vacancies, not by laying people off, and that can continue. I'd also take another look at how Rudy Warnock is being paid. The percentage deal that he has with the county has resulted in him being overpaid as the county engineer, sometimes paying him hundreds of thousands of dollars for handing the project engineering off to someone else. However, he continues to get the support of most of the board - he also was a big donor to some of them during the last election - so I don't look for them to try and save any money by taking away his ability to increase his pay simply by increasing the price of the project he's working on.
Taxpayer money is just as dear when times are good as it is when we're going through a rough patch, and we shouldn't be spending a penny more than necessary to get the job done in any situation. Bill Billingsley
Where does it say anywhere Bill that there must be a uniform charge for solid waste between city and county, city and city, county and county?
The services are not equal but somehow you've decided to throw in the towel and ignore the apples-to-oranges service levels.
The whole notion of subsidization is a ruse. If it wasn't then the county could lower millage rates paid by city residents to achieve the equalization.
We water our yards more often in Madison, which means we pay through the nose for sewage. The eggheads who decide the charges assume we're flushing the commodes six hundred times a day up here.
Contribution = appropriation and the law bans appropriations for these purposes.
I'm not suggesting that there should be a uniform charge, 10:31. I simply said that county residents should pay a reasonable rate for their trash pickup. The services aren't equal - the county picks up once a week and the city of Madison twice (I don't know about the other cities). As best I can recall from the public hearing, the county administrator reported that the county residents pay around $12 a year for their service and the city residents pay around $168.
Not sure about the legal stuff, KF. I'm only commenting on the apparent disparity between county and city residents. BB
$1 per month for garbage pickup? That can't be.
None of Bill's figures agree with my monthly bills.
Breaking News--Just wait the Supes DID break the law by paying pid payments--And it sounds like it could be a "personal" problem for them--Where do you fall on this issue kingfish--People are taking bets who's right--
Shadowfax, I think the numbers they gave out during the public hearing are averages. I shouldn't have posted them without doing some more homework, but someone asked for my opinion and I gave it. Sorry...BB
As usual I appear to be wrong in thinking I made a mistake with my earlier post. My city water bill has a $14 a month charge for trash pickup. Times 12 months = $168. The county isn't as easy to figure because it's different for each resident based on the assessed value of the property. Shadowfax, your trash pickup bill should be $14 a month if you live in Madison. Don't know for the other municipalities, and there's no trash pickup on your county water bill, provided you're billed by Bear Creek like I am. Does that help? BB
Since Madison county is the worst offender of the tax law under the leadership of John Bell (gaveling people and denying them their right to speak) and Gerald Steen playing monopoly with our money--I guess since the city of Jackson was in the Clarion Ledger editorial It must mean that Mrs. Stokes provides better leadership for her city than our bafoons do--
Post a Comment