Friday, August 3, 2018

JPS Bond Issue: Golden Showers Yet Again

 This post was originally published on June 14.  Consider it a PSA for Jackson voters.

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." 


8 comments:

Anonymous said...

Kingfish,
I would love to post this on the nextdoor Fondren site... however I received so much blowback and called every name in the book last week when I encouraged others to look into this before voting to support this bond. It's amazing to me these white liberals are all about this bond issue must pass now. There kids don't even go to JPS. It's amazing.

Anonymous said...

So if the bond issue fails, what happens to that list of exorbitant fees?
Lawyers working for free?

Anonymous said...

12:31 - The way it usually works on bond transactions is that the professionals don’t get paid unless the deal gets done.

Anonymous said...

It is well known that selling bonds is a rip off and a way to pay back friends BUT the JPS takes it to a new level of stealing.

JWagner said...

Baker Donelson has been out of control with their fees for some time. Just waiting for the glass house at the District to explode.

Kingfish said...

And no one in the media will cover bond fees on any deal, much less this one.

So much for the Business Journal as well. They are too busy stuffing their faces at local eateries and writing about the newest restaurant to come to town.

Anonymous said...

Golden showers are too salty.

Anonymous said...

Where does JWagner get his information re Baker Donelson fees?

2016 Hottest Reporter Poll

Suscribe to latest on JJ.

Recent Comments

Search Jackson Jambalaya

Subscribe to JJ's Youtube channel

Who is the hottest reporter?

Archives

Who is the Hottest Reporter in Jackson?

Trollfest '09

Trollfest '07 was such a success that Jackson Jambalaya will once again host Trollfest '09. Catch this great event which will leave NE Jackson & Fondren in flames. Othor Cain and his band, The Black Power Structure headline the night while Sonjay Poontang returns for an encore performance. Former Frank Melton bodyguard Marcus Wright makes his premier appearance at Trollfest singing "I'm a Sweet Transvestite" from "The Rocky Horror Picture Show." Kamikaze will sing his new hit, “How I sold out to da Man.” Robbie Bell again performs: “Mamas, don't let your babies grow up to be Bells” and “Any friend of Ed Peters is a friend of mine”. After the show, Ms. Bell will autograph copies of her mug shot photos. In a salute to “Dancing with the Stars”, Ms. Bell and Hinds County District Attorney Robert Smith will dance the Wango Tango.

Wrestling returns, except this time it will be a Battle Royal with Othor Cain, Ben Allen, Kim Wade, Haley Fisackerly, Alan Lange, and “Big Cat” Donna Ladd all in the ring at the same time. The Battle Royal will be in a steel cage, no time limit, no referee, and the losers must leave town. Marshand Crisler will be the honorary referee (as it gives him a title without actually having to do anything).


Meet KIM Waaaaaade at the Entergy Tent. For five pesos, Kim will sell you a chance to win a deed to a crack house on Ridgeway Street stuffed in the Howard Industries pinata. Don't worry if the pinata is beaten to shreds, as Mr. Wade has Jose, Emmanuel, and Carlos, all illegal immigrants, available as replacements for the it. Upon leaving the Entergy tent, fig leaves will be available in case Entergy literally takes everything you have as part of its Trollfest ticket price adjustment charge.

Donna Ladd of The Jackson Free Press will give several classes on learning how to write. Smearing, writing without factchecking, and reporting only one side of a story will be covered. A donation to pay their taxes will be accepted and she will be signing copies of their former federal tax liens. Ms. Ladd will give a dramatic reading of her two award-winning essays (They received The Jackson Free Press "Best Of" awards.) "Why everything is always about me" and "Why I cover murders better than anyone else in Jackson".

In the spirit of helping those who are less fortunate, Trollfest '09 adopts a cause for which a portion of the proceeds and donations will be donated: Keeping Frank Melton in his home. The “Keep Frank Melton From Being Homeless” booth will sell chances for five dollars to pin the tail on the jackass. John Reeves has graciously volunteered to be the jackass for this honorable excursion into saving Frank's ass. What's an ass between two friends after all? If Mr. Reeves is unable to um, perform, Speaker Billy McCoy has also volunteered as when the word “jackass” was mentioned he immediately ran as fast as he could to sign up.


In order to help clean up the legal profession, Adam Kilgore of the Mississippi Bar will be giving away free, round-trip plane tickets to the North Pole where they keep their bar complaint forms (which are NOT available online). If you don't want to go to the North Pole, you can enjoy Brant Brantley's (of the Mississippi Commission on Judicial Performance) free guided tours of the quicksand field over by High Street where all complaints against judges disappear. If for some reason you are unable to control yourself, never fear; Judge Houston Patton will operate his jail where no lawyers are needed or allowed as you just sit there for minutes... hours.... months...years until he decides he is tired of you sitting in his jail. Do not think Judge Patton is a bad judge however as he plans to serve free Mad Dog 20/20 to all inmates.

Trollfest '09 is a pet-friendly event as well. Feel free to bring your dog with you and do not worry if your pet gets hungry, as employees of the Jackson Zoo will be on hand to provide some of their animals as food when it gets to be feeding time for your little loved one.

Relax at the Fox News Tent. Since there are only three blonde reporters in Jackson (being blonde is a requirement for working at Fox News), Megan and Kathryn from WAPT and Wendy from WLBT will be on loan to Fox. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both and a torn-up Obama yard sign will entitle you to free drinks served by Megan, Wendy, and Kathryn. Get your tickets now. Since this is an event for trolls, no ID is required. Just bring the hate. Bring the family, Trollfest '09 is for EVERYONE!!!

This is definitely a Beaver production.


Note: Security provided by INS.

Trollfest '07

Jackson Jambalaya is the home of Trollfest '07. Catch this great event which promises to leave NE Jackson & Fondren in flames. Sonjay Poontang and his band headline the night with a special steel cage, no time limit "loser must leave town" bout between Alan Lange and "Big Cat"Donna Ladd following afterwards. Kamikaze will perform his new song F*** Bush, he's still a _____. Did I mention there was no referee? Dr. Heddy Matthias and Lori Gregory will face off in the undercard dueling with dangling participles and other um, devices. Robbie Bell will perform Her two latest songs: My Best Friends are in the Media and Mama's, Don't Let Your Babies Grow up to be George Bell. Sid Salter of The Clarion-Ledger will host "Pin the Tail on the Trial Lawyer", sponsored by State Farm.

There will be a hugging booth where in exchange for your young son, Frank Melton will give you a loooong hug. Trollfest will have a dunking booth where Muhammed the terrorist will curse you to Allah as you try to hit a target that will drop him into a vat of pig grease. However, in the true spirit of Separate But Equal, Don Imus and someone from NE Jackson will also sit in the dunking booth for an equal amount of time. Tom Head will give a reading for two hours on why he can't figure out who the hell he is. Cliff Cargill will give lessons with his .80 caliber desert eagle, using Frank Melton photos as targets. Tackleberry will be on hand for an autograph session. KIM Waaaaaade will be passing out free titles and deeds to crackhouses formerly owned by The Wood Street Players.

If you get tired come relax at the Fox News Tent. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both will entitle you to free drinks.Get your tickets now. Since this is an event for trolls, no ID is required, just bring the hate. Bring the family, Trollfest '07 is for EVERYONE!!!

This is definitely a Beaver production.

Note: Security provided by INS
.