Thursday, June 14, 2018

JPS Bond Issue: Golden Showers yet Again

The "Million Dollar Bonds" should be the nickname for the proposed issue of JPS bonds for $65 million since the proposed professional service fees will be $1.1 million.  Rankin County's bond fees for a $100 million sale was slightly over $300,000.  The notorious Siemens deal only had fees of $640,000 even though the bond issue was $90 million.  However, JPS bonds must be really special because everyone is getting paaaiiiiiid on this deal.  JJ obtained a schedule of the fees through a public records request.  Read them and weep.

Steve Edds of Lord Snow (Bond Counsel): $225,000
Government Consultants (Financial Advisor): $207,500
Mays Law Firm & Young Law Group (Underwriter's Counsel): $100,000
Disclosure Counsel (Unknown firm): $15,000
Trustee: $10,000
Trustee Counsel: $10,000
Spence Flatguard (State Bond Attorney): $1,000
Rating Agency: $55,000
Mississippi Development Bank: $70,000
Mississippi Development Bank Counsel: $30,000
Miscellaneous: $5,000
Siebert, Shanks, & Cisneros (Underwriter): $410,690
TOTAL: $1,139,190

Kingfish note: Compare these fees to similar bond issues.  Start with the 2017 Rankin County School Bond issue.  RCSD issued bonds for $100,750,000. 

Lord Snow (Bond Counsel): $46,925
Government Consultants (Financial Advisor): $51,791
Balch & Bingham (Issuer's Counsel): $20,000
Mississippi Development Bank: $70,000
Peoples Banks (Trustee): $1,500
Harrel & Rester (District Counsel): $32,128
S&P (Rating Agency): $59,800
Adams & Reese (Underwriter's Counsel): $28,600
Spence Flatguard (State Bond Attorney): $1,000
TOTAL: $312,994.

The Rankin County fees do not include the underwriting fees of Morgan Stanley. The district said its fee would be $950,000 for an issue of  $178 million.  JJ will estimate it to be around $533,707 (100/178 = 53%).  JJ is attempting to obtain the amount of the fee from the district.  However, Rankin County will still pay under one million dollars for professional service fees for a $100 million issue compared to $1.1 million for a $65 million bond issue.

The Kingfish doesn't buy into the disparate impact theory but one should ask why some of the same vendors are charging JPS much more money than Rankin County even though Rankin's issue was $35 million more than the JPS proposed issue. However, let's not stop with Rankin County.  Check out the 2008 JPS $114 million bond issue:

$114,000 General Obligation Bonds for JPS (2008)
Mississippi Development Bank (Issuer): $70,000
Dorian Turner (Bond Counsel): $243,813
Balch & Bingham (Issuer Counsel): $25,000
Trustmark (Trustee): $3,604
Baker Donelson (Co-underwriter counsel): $75,320
Community Capital (Financial Adviser): $65,800
Image master (POS, printing): $3,448
Moody's (Ratings): $22,230
Spence Flatguard (state bond attorney): $1,000
Jones Financial Services (Financial Adviser): $28,200
TOTAL FEES: $538,416



Remember the JPS bond refinance from a couple of years ago of those same bonds?  The fees more than doubled.

Jackson Public Schools General Obligation Bonds refinance: $118,070,000
Mississippi Development Bank (Issuer): $42,500
Balch & Bingham (Issuer Counsel): $30,000
Malachi Financial Products (Financial Adviser): $328,500
Trustmark (Trustee): $9,250
Chambers & Gaylor (Bond Counsel): $295,750
S&P (Ratings Agency): $63,000
Arbitrage Group (Verification): $6,000
Hunton & Williams (Special Tax Counsel, ATL): $197,500
Betty Mallet (Co-underwriter counsel): $112,500
Baker Donelson (Co-underwriter counsel): $142,140
Image Master (POS fees): $6,684
TOTAL FEES: $1,233,824


Don't forget the infamous Siemen's deal - a $90 million bond issue:


Malachi Financial Products (Financial Advisor): $182,000
Baker Donelson (Bond Co-counsel): $90,000
Anthony Simon (Bond Co-counsel): $90,000
Hunton & Williams (Disclosure Counsel): $70,000
Mississippi Development Bank: $70,000
Balch & Bingham (Developer's Counsel): $48,000
S&P (Ratings Agency fees): $39,100
Moody's (Ratings Agency fees): $34,000
Trustmark (Paying agent): $9,500
Imagemaster (printing): $3,500
Spence Flatguard (State bond attorney): $3,295
TOTAL FEES: $639, 395


Compare similar-sized bond issues over the last few years.

2017 issues and fees
Desoto County Highway Construction Project ($43.8 million): $317,652

2016 issues and fees
Harrison County Utility Authority Revenue Refunding ($103.185 million): $572,740
MGCCC Facilities Construction & Refinancing ($73,620 million): $359,821

2015 issues and fees
 Marshall County highway refunding project ($39.565 million): $303,582
 Municipal Energy Agency Power Supply Refunding project ($87.22 million): $873,494
DeSoto County Hwy Refunding Project ($24.155 million): $185,486

2014 issues and fees
Biloxi Stadium Project ($21 million): $245,500
DeSoto County Hwy Construction Project ($82.9 million): $469,343
Gulfport School District General Obligation bonds ($41.2 million): $458,278
City of Gulfport General Obligation ($30 million): $188,937

2013 issues and fees
Harrison County Hwy Refunding Project ($64 million): $274,858
Hattiesburg Water & Sewer refunding ($28 million): $548,000
JPS Refunding (Two issues, fees combined. $36 million):  $415,808
Jackson Convention Center Refunding ($65 million): $381,118
Jackson Water & Sewer bonds ($90 million): $646,895

Madison County Hwy Refunding Project ($88.865 million): $380,690


This is what happens when a School Board is stuffed with nothing but Ph.D.'s and fancy titles.  People who are smart yet don't even know how to ask the right questions.  These fees are nothing short of highway robbery and show why JPS and Jackson are imploding.

JJ has warned for years that bond deals are where the real corruption takes place in Mississippi.  Reporters and politicians are clueless about bonds while the corrupt use them to reward their friends in ways few understand.
 
Don't expect any mention to be made of these fees at the city council, school board, or in the news media.  This is what happens when the School Board President is "not focused mostly on saving money." 


49 comments:

Anonymous said...

But its for the children so don't worry about the money !

Anonymous said...

Lord Snow giveth. And Lord Snow taketh away. Blessed be the name of Lord Snow.

Anonymous said...

Should add in the $500k for the election. Based on the official statement for the rankin county school district deal, the underwriter was paid $596,078.43.

Anonymous said...

Elections have consequences. If the citizens of Jackson keep electing clowns they get the government they voted for.

Anonymous said...

More reasons as to why JPS needs to be dismantled, taken over, and re-tooled. Bond fees are negotiable, and anyone with half a financial brain would know that, and DO it.

Anonymous said...

My goodness. BS and GC, Inc., again fleecing the residents of Jackson Mississippi. At least Jackson got away from using stellar advisors like Malachi Financial and BD. Boy, they have really been beacons of integrity and keeping business above board in the past years.

Anonymous said...

What do you call a boatload of lawyers and lobbyist at the bottom of the Gulf of Mexico? A good start.

Anonymous said...

Build the wall now!

Antard said...

Govenor, why are you letting this happen. Surely this can not be your legacy in not letting the state take over JPS. This is what you get from the task force.
Jackson is in a deep state of lost.

Anonymous said...

All of these JPS clowns should be raked over the coals. Clearly corruption at its finest they're all clueless morons.

Kingfish said...

You think Pheel is going to tell his padnah over at Lord Snowho used to work for him that is firm can't rip us off?

Anonymous said...

I posted to an earlier related story. FOLLOW THE MONEY.

The residents of Jackson should change their name to BOHICAs.

No doubt some of the recipients of this "golden shower" will share the wealth. Golden shower, indeed.

https://www.urbandictionary.com/define.php?term=golden%20showers

Anonymous said...

Shame on the Guv. He had a chance to right the ship and clean house but he was scared of being labeled a "racist". What a coward. This fiasco is of his doing.

Anonymous said...

Donner, this is what you call DEEP enterprise reporting and why JJ is #1.

Anonymous said...

This is your legacy Lumumba. You no different than all the other fools. All talk and nothing but talk.

PittPanther said...

JPS already told you They Are Not Focused on Saving Money!!! Why are you surprised at high bond fees?

Anonymous said...

Where's the SPLC suing to prevent JPS money from being squandered? They seemed really concerned over a dime leaving to go to a charter but aren't raising hell about this? Maybe they're just gun shy after their last farcial legal argument ended up lookingn like a Clintonian "depends what the definition of 'is' is." Crap, they won't read this; exceeds the Twitter charachter limit.

Anonymous said...

KF - You should look up the state bond commissions agenda for their meeting next week. Steve is getting himself a cush gig for the next three years.

Anonymous said...

Kingfish, thank you for exposing this mind-blowing misuse of money. Maybe you could dig a little deeper and publish the names of individuals on the receiving end of the golden showers.

Anonymous said...

Are all the Foundations kicking in $$$ to help JPS avoid the brink of state takeover happy with this sort of fiscal waste?

Anonymous said...

Still chuckling about the dilweed(s) from Pelahatchie.

JJ rocks and the digging behind this post shows why.

Anonymous said...

Still waiting on why this is so urgent that the deal can’t wait til the November election. Incompetence isn’t the answer. Something smells.

F mickns said...

Great research, presentation and reporting ' the Kingfish is truly the king on this one!

Anonymous said...

Where are the concerned parents now ? Some concerned parents sued the State to prevent Jackson from losing control of its schools. So now, as concerned parents, shouldn't they be suing to prevent this fleecing of JPS and wasting of JPS' money ?

Anonymous said...

Nobody makes more from state and local governments than Butler Snow. Nooooobody!

Anonymous said...

Don’t vote NO.

Vote HELL NO.

A yes vote = a vote for “full employment for out of town lawyers who don’t give two sh!ts about Jackson”

R. Kelly said...

Too many corrupt officials in our city. Keep exposing those who are enjoying these golden showers, they are sick!

Anonymous said...

12:21 you know the mayor doesn’t run the schools right? Naw you probably don’t.

Anonymous said...

You can't defend this Priester.

Anonymous said...

@2:37 BabyChok encouraged the special election. He needs it out of the way before he jacks up property taxes again in the upcoming FY18-19 city budget.

Good luck catching those falling knives.

Photo of Phil Eating Popcorn.. said...

Bryant has no balls and no backbone. He was scared to death of the local, statewide and federal black-lash that would have followed him through his final year had he done what he should have with JPS.

Besides, he's really really busy traveling and doing photo ops.

Kingfish said...

You think Will Bardwell and Jody Ownes care about saving money?

This just means more of their friends get money.

Anonymous said...

Since 95% of the tax payers in Jackson have absolutely no clue as to the workings of bond issues, its fertile ground for fat, fat, payoffs. Just keep quiet and take the money. The only real scrutiny given bond issues regards the so-called
purpose(s) for borrowing, never the costs associated with the deal. It's a thief's
paradise. The children, who might as well be cattle, make the ideal cover for this graft. And remember, no attorney, including the "radical" champion of the people, Antar, question attorney's fees.

Anonymous said...

NO WONDER OTHOR CAIN IS SAYING VOTE YES, HE IS APART OF THE 1.1 MILLION... HUSH HUSH MONEY..
NEGROS STEALING, DERRICK & BENNIE GOING BE OVER CONTRACTS..

Bishop Bullwinkle said...


When your asked if this is legit.


https://youtu.be/-K7fCQlUhj0

Anonymous said...

This is why you have elected officials spending millions to get a job that pays tens of thousands. The payoff is in deals like this. A "Conservative Republican" in MS is someone who doesn't want a dime to go to single mothers, Wick or Snap. But they sure as hell don't mind the money going to their friends and business partners.

Anonymous said...

I'm not surprised as the recently retired maintenance director acknowledged that JPS has a $350k annual service agreement with Siemens but he never knew what it was for. and he was the head of all school facilities.

Anonymous said...

5:22 - you've got your parties mixed up. The "Conservative Republicans" you slam are those in the lower priced deal; the "Liberal Democrats" are those in the Jackson Public School deal. Please, oh please, find me any republican, conservative or not, involved in the decision making process of the JPS mess.

Anonymous said...

Putrid, is the word that comes to mind. Not those being paid, but those facilitating it.

Anonymous said...

This probably won't get approved either, but in any case, who in the hell would buy JPS bonds anyway when there are all sorts of great timber investments being offered up? Oh, and PS - one more comment gets roundfiled and we pull our support of JJ.

R. Kelly said...

Damn! Thought this blog post was about somthin else!

Anonymous said...

"one more comment gets roundfiled and we pull our support of JJ. "

Now THAT'S a serious threat. I am sure your generous donations almost singlehandedly keep this site up and running.

Anonymous said...

This would not be happening if Phil had let the state take over. Schools would be closed, bad teachers and administrators non-renewed for next year, and budget taken over the second the ink was dried. Newsflash--the Gov will have a chance to redeem himself this fall cause JPS is not better together.

Anonymous said...

Now we know why Phil would not approve the state takeover. Phil made a deal for Butler Snow and Government Consultants.

Anonymous said...

You've got to be wrong, 10:39. Phil Bryant is certainly not 'forward thinking' enough to have figured out something like that.

The only reason Bryant kicked the JPS can down the road to his successor is because he didn't want to deal with the folks standing on the steps with signs declaring him a racist.

Pappy Odaniel said...

@9:15... PERS buys crap bonds like this.

Change the Flag and Fill the Potholes said...

Like many optimistic Jackson residents who voted for the 2008 bond issue, this time we "Won't Get Fooled Again." At the time public education seemed a worthy investment in the future of Jackson - even though many of us still went the private school route. However, instead of progress all we bought was The Cedric Gray Posse and his buyout. I hate it for the kids but statistics matter and money has not improved performance metrics in the the district. It's also telling that the State has been completely silent on this proposed bond issue - especially after threatening to takeover JPS. Tate, who won't even touch the gas tax so we can actually drive across bridges, apparently just looks the other way at this increase. Basically, Mississippi no longer has a capital - just the Capitol where legislators wag their fingers at the incompetent local leadership.

Anonymous said...

$100 million ten years ago. $65 million now. JPS must really be growing to need all these new buildings to be constructed...

Anonymous said...

It’s all one big self licking ice cream cone. And this comes at a time when the IMF is telling governments world wide to tighten up and brace for the future.

The financial crisis yet to come is going to be so much fun. The ever growing bond bubble, both corporate and government, will eventually “pop.” You think 2008 was bad? Y’all ain’t seen nothin’ yet.

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