Wednesday, September 26, 2012

Parkway East has no record of bond fees

Jackson Jambalaya attempted to learn how much the Parkway East Public Improvement District paid in professional services fees when it sold $27,770,000 in bonds in 2005. Parkway East attorney Bob Montgomery replied the district did not have any records showing how much was paid.

State law allows professional service fees up to 2% of the total amount of the bond sale. Such fees are lucrative and usually awarded to friends of the government issuing the bonds. There are no bid requirements for these services. JJ filed a public records request asking for the fees. JJ requested:

"The invoices or records of fees paid for professional services include these fees and professional services:

Issuer ,Issuer counsel, bond counsel, trustee, trustee counsel fee, rating agency fee, financial adviser fee, paying agent, other attorney's fees, underwriters fees, and underwriter's counsel fees
."

Keep in mind the public improvement district is a public body and is created by acts of the legislature and county. Mr. Montgomery replied on September 20:

"I do not have the fee information which you requested on September 11, 2012 letter in regard to Parkway East. However, I asked the original bond counsel, engineer, and trustee of the bond issue to search their records.

When and if I hear from them, I will make their information available to you
."

The fees are also not listed on the website of the Department of Finance and Administration. DFA issues an annual report that states the public sales of bonds in Mississippi and lists the professional service fees for each sale. Nice way for taxpayers to see what their governments are paying and to whom they are paying the nice fees associated with bond transactions. The 2005 report does not list Parkway East thus precluding anyone from learning how much the PID paid in transaction fees. However, the following 2005 issues provide a range of what the fees should be:

$21 million for Belk project: $207,649
$25,128,008 for Juniper Capital project: $337,070
$29,530,000 for Desoto County Convention Center: $439,209

2% of $27,770,000 is $555,400 is probably the maximum amount allowed by law. Nice change if you happen to be Butler Snow, Hancock Bank, and whoever else Parkway East chose to work on the sale if the fees were close to the limit.

Editorial Comment: That was the news, this is the opinion.  Such a rejection is nothing short of a poke in the eye of the taxpayers.  The taxpayers are forced to pay millions of dollars in bond payments for Parkway East and Parkway South yet Parkway East claims it has no records of paying what were likely hundreds of thousands of dollars in fees when they sold the bonds.  The same bonds the taxpayers are forced to cover thanks to the Madison County Board of Supervisors.   It strains credibility to expect Parkway East would not have on file these records or that is not able to obtain them. The Board should not make any more payments on behalf of these PIDs unless the taxpayers are given all details of these transactions.  However, do not expect such leadership from this board as its quite clear where their interests lie.

10 comments:

Shadowfax said...

It doesn't strain credibility; It strains the imagination. The brief, terse reply you got was a lie couched in an absurdity.

Anonymous said...


Quick to recognize a new mark when he sees one I noticed that Porter Bingham bent newcomer Cedric Gray over for a quick JPS bond refi buck where Malachi gets paid $1m while saving JPS only $2-$4m.

bill said...

It just gets curiouser and curiouser...

Anonymous said...

Remember those are two seperate PIDs, north and south. WJTV last night prtrayed it as one PID and one owner. Why are there so many different stories or is this just mud for a political year?

Anonymous said...

I remember when Bob Montgomery was attorney for Ridgeland and ridgeland bought the city hall complex on 51. They entered into agreement with DOT for proposed additional parking lot but contract stated no work would begin without DOT preapproval. Ridgeland put in the parking lot and DOT objected. Bobs statement in the CL was yes it was in the contract but he didnt read down that far. One of my favorites.

Anonymous said...

Bobs statement in the CL was yes it was in the contract but he didn't read down that far. One of my favorites.

Also known as the "Aw Shucks" explanation.

Anonymous said...

I'm calling bullshit. In just a regular real estate transaction funds are held in escrow and there is a full accounting of all disbursements. To say that there are no records held by a government body of any/all disbursements of funds is either a damn lie or Pickering has some serious problems to look into with the handling of ALL funds by district, not just the bond money.

And surely to God, Montgomery KNEW you would be posting his reply. Maybe he feels pretty certain that no harm will come to him by telling you to fly a kite, KF.

Anonymous said...

KF - check the original budget for the south parkway, then the final costs (nearly 3x budget) and try to trail where those additional monies went. Good luck with that.

Shadowfax said...

Montgomery is arrogant and untouchable, not unlike most lawyers. He doesn't give lying a second thought. Before he answered Kingfish's question, he smirked to himself......"Watch this".

Anonymous said...

I still don't understand how Montgomery could be the attorney for the PID and have his law partner be a landholder (McGraw) without a conflict arising.



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