By TOM BOUTIN
I urge voters to once again turn down the full faith and credit long-term bond ballot measure for a new City Hall.
A project requesting the leveraging of all private real estate, residential and commercial, needs to have broad and deep support, but this downtown office building clearly does not have that.
Moreover, effectuating a lien immediately after residential property assessments increased so much this year, as commercial property assessments did last year, may be unscrupulous and is afflicted security for bonds.
Is it coincidental that City and Borough of Juneau leadership increased assessed values on private property when intending to sell bonds against property taxes – and without reducing the mill rate appropriately? Didn’t we vote this down less than a year ago?
Yes, and I think the best and most concise explanation was given when an AM radio interviewer this past summer asked the then-departing city manager that question. He emphatically answered, “so what?” Juneau leadership undeniably doesn’t care what we think.
That same city manager then sought and obtained money to better educate us this time around, indicating he believes we voted it down because we’re uninformed and/or stupid. One woman told me she voted no only because the ballot didn’t give her an option to vote hell no.
Wherever I go I hear additional voter concerns. Exempting debt payments from the mill rate cap detracts from already flagging Assembly credibility. A public debt issuer should first build a reputation for truthfulness and transparency.
Another concern is that voters are supposed to believe that this project is immune from the inflation that has increased the cost of seemingly all other Alaska public capital projects by 80% or more during the past three to six years. I worry that this city government would run out of bond proceeds when construction is only half complete.
Then, believing they have taxpayers over a barrel, the Assembly could say they need to sell completion bonds — possibly doubling the amount of debt. Insidiousness of that sort would be completely in character. Note that long-term interest rates have doubled, but the Assembly is silent about that. (One can hope that the election will bring veracity to the Assembly and raise the overall integrity.) There are many alternatives to borrowing against the full value of private property.
If, as the Assembly claims, eliminating space now rented by city government will meet bond payments then that should be the security for the debt rather than our property taxes — our homes and businesses. State and municipal debt in Alaska has been secured by lease payments, theater tickets, mineral production, fishing license fees, airport landing fees, electricity sales, student loan payments, energy production and governmental enterprise earnings.
However, as a Juneau voter I disagree with most debt right now because it allows profligate spending to continue while burdening a future generation with the invoice.
This Assembly makes frequent high-dollar bets and expenditures without asking what voters think. Only when they want to secure bonded indebtedness with our full faith and credit, using the assessed value of our property, do they ask for our opinion and commitment. When we disapprove they ask us again, spending our money to re-educate us.
Please vote no on this ballot measure and please vote very carefully on the Assembly races.
Tom Boutin is a Juneau resident who has served as chief of staff for the Alaska State Bond Committee, the Alaska State Pension Investment Board and the Alaska Retirement Management Board. He also was the CEO of the Alaska Industrial Development and Export Authority, a state-owned bank. In addition, he worked for many years in the forest products industry.
The liberal left can never spend enough.
Sounds a lot like the Anchorage assembly. We tried to peacefully protest, and they shut the public out. Guess trying to be reasonable has no effect. The communists have taken over. Public opinion has no effect. They will do as they please, at your expense. Don’t dare challenge them, you will be dismissed.
Yes they’re wrong to do this again. But it won’t stop them. They will hold as many votes as necessary to get what they want.
Or, like the JACC renovations and Whale park, they’ll just do it anyway.
Why should they listen? They know they won’t be voted out.
But Tom, it’s for the children…!
No! New city hall home for the assembly! Let’s deal with the homeless people first! They need housing before assembly that gets to go home!
The Breakwater is ready and waiting.
Except the residents of the area don’t deserve it.
Also the faux junta need to be kept as far away from children as possible.
Too bad you voted for them now cough up the money.
Seems like, Tom, a person with your credentials would have the ears of bond-market investors, the industry’s movers and shakers.
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Maybe a public word to bond-market movers and shakers might force city government leadership to explain what they’re doing, why completion bonds won’t be necessary, why this and future CBJ bonds shouldn’t be reduced to junk status.
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Maybe a word to the Municipal Securities Rulemaking Board would be helpful. The MSRB, overseen by the SEC, was created to protect and strengthen the municipal bond market. [Municipal Securities Rulemaking Board, 1300 I Street NW, Suite 1000, Washington, DC, 20005, (202-838-1500)]
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Could the dearly departed city manager’s “so what” actually have been a defensive reflex, an abrupt deflection from a potentially sensitive subject?
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Sensitive how?
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At MunicipalBonds.com we find “Be Aware of Fraud in the Muni Bond Market” by Justin Kuepper, February 2019, which includes four types of fraud:
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“Accounting Fraud: Investors may be provided with a false sense of financial health to secure positive ratings and make bonds more palatable. For instance, Ramapo, NY, officials lied about revenue sources for a baseball stadium bond issue and propped up the fund’s balance with money from other town funds and fake receivables.
Siphoning of Bond Proceeds: The proceeds of the bond may be redirected towards other purposes. For example, Harvey, IL, officials diverted $1.7 million of proceeds for a Holiday Inn hotel to fund the city’s payroll and other operational costs that were completely unrelated.
Missing or Misleading Statements: Government officials may make misleading public statements (aside from disclosures) to prop up bond ratings. For example, Harrisburg, PA, officials made misleading statements in the city’s budget report, financial statements, and State of the City address.
Insufficient or Ineffective Internal Controls: Governments and their advisors may have undisclosed conflicts of interest or other ineffective internal controls. For example, Barcelona Strategies LLC defrauded a South Texas school district in connection with multiple bond offerings, which negatively impacted both the school district and bondholders.”
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(https://www.municipalbonds.com/risk-management/be-aware-of-frauds-in-municipal-bond-market/)
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Responding, “so what?” seems like a tell, natural if something along these lines is in the planning stage, or happening, and is deemed to be none of the interviewer’s business.
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So, Tom, city officials being weird even for them, four ways they can hit the megabucks jackpot, a possible tell that they’re doing it, your jeremiad calling their baby ugly, now is the time for some really pointed questions, right?
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First question: where do you find someone with motivation and muscle to ask the rest of the questions in a way that answering with “so what?” is not an option?
Morrigan,
What you have written here would turn into an excellent letter to submit to the Juneau Empire, KINY Radio, and the Juneau Community Collective Facebook page. Please do that! The election is coming right up. Ballots will be mailed this week (as Juneau no longer believes in voting on election day for some reason).
Thanks.
Tom Boutin
Yes, Juneau and Anchorage assemblies are almost a mirror image of one another. THEY ARE ALL NE’ER-DO-WELLS– as in lying to the voters for normal course of business.
A ne’er-do-well is someone who is no good, a good-for-nothing, an irresponsible, lazy, worthless human being. Ne’er-do-well is hyphenated.
Intriguing point…
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Wonder if the mirror effect might have evolved from Anchorage election staff and machinery being contracted to count Juneau votes…
We have a very good chance to make some much needed changes on the assembly right now with some excellent candidates running in the upcoming election.
JoAnn Wallace, Joe Geldhof, & Nano Brooks
Please get out and vote and encourage others to do the same.
There are many alternatives to borrowing against the full value of private property. Tell us what that is Tom! Something tangible? Or more delusion of some sort?
Ed: The obvious alternative to borrowing against the full value of private property is to not build a new city hall.
Easy. Don’t do it at all.
Thanks Ed,
I think that the savings being claimed by the Assembly to come from the new city office is the first, best place to look for debt service payments. That is what I tried to convey here. If desired, the credit backstop of the Alaska Municipal Bond Bank, as was used to backstop ticket receipts for the Anchorage Performing Arts Center renovations would very likely be available. Given the incredible increase in assessed values in commercial and residential properties in Juneau, and the shaky spending decisions made by the Assembly I think the savings claimed would be better than the full faith and credit. There are many alternatives to the full faith and credit however. I think most voters will once again prefer no new building no matter the financing device chosen.
Tom
And then they will do it anyway.
The Juneau Borough bureaucracy manages and controls elections. Every time the voters say “NO” to a new city hall the bureaucracy can easily arrange a re-vote. They can repeat this process over and over and over. However, once they achieve a yes vote, by even a small margin, it is much more difficult for opponents to get a revote by initiative petition. The bureaucracy has significant advantages over the voters (their bosses). Encourage your friends to vote NO on the new City Hall… if for no other reason than to show our servants who the bosses truly are.
It seems the selling of the present city hall may have been done to push the new city hall so the assembly will still have someplace to meet when they are moved out by the new owners of the building. Where will they go?
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