I thought Jim Folts was speaking tonight, but twice I've heard that John Voltz is speaking. Me head swimz.

This link is particularly telling: http://www.blounttn.net/jrf/gbackInvite2.pdf

And to think we've had office holders as recently as a few months ago claiming any one publicly asking questions about our finances, was taking "cheap shots".

Commissioner's Graham, Reeves, Murrell, Ballard, Walker, McCulley (and at times others) have all made attempts to discuss our debt structure, but were deterred at every attempt. Something as benign as a memo from the Mayor's office has stopped the full CC from discussing debt. Although the recipient of that memo seems to have found religion about what he didn't know about our debt structure since the Finance Directors departure.

The trajectory on Mr. Folts graphs are clear. Why those arrows all continue pointing upward is the real scare. If you like the upward trend, keep voting for who you have been. A baby born today at BMH will thank you for the $2,000 debt you've given them straight out of the womb.

If you don't like the trend, the problem and those who created it and/or ignored it for the sake politics, vote them out in favor of those who are both recognizing the problem and offering solutions.

If we as a county continue to grow by the addition of people and residences, we will continue to have to provide services, especially public schools. Schools are expensive to build and to run. Residential development costs the county money; property taxes do NOT pay for the costs of schools.

We need to address the causes of our debt beyond the issue of "waste." We can sell off a bunch of SUVs and deny workers raises and still not address the root causes of the story Mr. Folts and others are telling us about.

The school debt issue is going to get worse as long as we encourage residential development that costs the county money. The schools department cannot "cut" itself out of the whole it is in even if all it wants to do is offer regionally respectable but otherwise inadequate education for a steadily growing number of children.

If we as a county continue to grow by the addition of people and residences, we will continue to have to provide services, especially public schools. Schools are expensive to build and to run.

No denying that. But this brings us back to a cart and horse situation. Prospect is being built where it is for a reason. People who move to Maryville to work at jobs in Pellissippi Place. When that place gets built out, the Wildwood, Rockford and Porter areas will see growth.

But all that is the cart. The horse isn't here yet. Commissioner Lail and few others raised the question of necessity and funding before the schools ground breaking. Others pointed out the fact Eagleton Elm. is nowhere near capacity. But to no avail, as the spend first majority had made its decision.

When ever PP starts getting tenants, we could probably speculate it won't get filled all at once. There could have been a measure of caution before the school was built, first seeing how fast PP would be occupied. Once understood, plans could have been enacted. Instead, we will likely end up with a school like Eagleton.

We need to address the causes of our debt beyond the issue of "waste." We can sell off a bunch of SUVs and deny workers raises and still not address the root causes of the story Mr. Folts and others are telling us about.

If we need these schools, what is there to cut besides waste? But I get your point, there are larger issues. Hopefully PFM and our new Finance Director will bring them under some kind of controls.

I think the larger point about cutting waste is, people need to see that their government (funded by them) is recognizing spending as usual is unsustainable. We still can't get some of our elected officials to recognize there is even a problem.


And I'll not argue the importance of schools either. Not that it always hasn't been, but knowledge will be the dominant commodity of the 21st century. As long as we see communist countries, whose workers make pennies on the dollar compared to ours, extolled as our "free" trade partners - the widget business will suffer here. Coming up with the knowledge for the next widget is where the real opportunity is.

But what if instead of building a new school based on hope, we actually used that money to provide new text books, white boards, laptops, etc to ensure our future students actually have hope in an uncertain global economy?

The school debt issue is going to get worse as long as we encourage residential development that costs the county money.

Another thing that cost the county taxpayer money, is the way the city's are allowed to approve multifamily developments within the Urban Growth Boundary of the county, but then they do not anex the development into the city. This practice then puts the burden of schools for the children upon the county taxpayer as well as the improvement of the roarways that will be effected by the additional traffic.

You will notice that when the city approves any commercial development within the UGB area of the county they anex only the area of the commercial development to reep the commercial taxes, but at the same time they do not anex the surrounding residential area, which would make them responsible for additional schools.

"This practice then puts the burden of schools for the children upon the county taxpayer as well as the improvement of the roadways that will be effected by the additional traffic"

Is it true that the County is responsible for education? My understanding is if I live in the City, my children don't have to go to City schools, is this correct?

"... Pellissippi Place. When that place gets built out, the Wildwood, Rockford and Porter areas will see growth ..."

Let's hope it gets built out with valid forward looking industries instead of 4 barrel carburetor manufacturing plants or asphalt tipples. Sometimes our Industrial Search committees, especialliy in East TN, can be bought out or convinced that the old ways are still valid.

"... to reep the commercial taxes, but at the same time they do not anex the surrounding residential area ..."

Is that why District 6 looks like swiss cheese?

Bryan Daniels of the Economic Development Board recently was quoted as saying the buildout of Pellissippi Place would be 50 years. It is in Alcoa so the residential part of it will mean kids for the Alcoa schools. And the plan is for a lot of people who work there to live there...that is a key part of "mew urban" design. The composition of the EDB will have to change entirely for it to allow the kind of places Haymarket fears.

School kids who live within the urban growth boundaries but outside the city limits go to county schools, so the cities can approve developments outside city limits but in UGBs that do not generate students for their schools.

"... the composition of the EDB will have to change entirely for it to allow the kind of places Haymarket fears ..."

Yellowdog, I am dense in a lot of ways; what do you mean again? The composition of the EDB if static will bring in old technology, or the opposite?

By the way, "the walking uphill both ways to school, cougar on your back, toting a rick of wood, and an apple for the teacher" was meant as a colloquial complement--wasn't meant otherwise--hope it was taken well.

Does anyone know if the Reeves-McCulley resolution passed or not? I'd like to see the names of the Hall Of Shame. Jim Folts was spot on again tonight--good crowd. None of the mean people showed up.

And the plan is for a lot of people who work there to live there...that is a key part of "mew urban" design.

People who can afford the higher property rates and taxes. Everyone else will be looking where it's cheaper and there is land to build. In the county.

Mr. Daniels said 50 years because he can. He's in the public sector, not the private sector. What's the upside of saying ten? Say fifty and if it happens in ten, he's a genius. If the final tenant goes in fifty years from now, it will be an awesome reason to gum some cake out at the home.

The current EDB will not sanction the old technology in PP.

I sent a letter voicing concerns over there not being an access to the proposed PPE on Wildwood Road listing the new approved developments that will add 200 new residences within a quarter mile of where the PPE crosses Wildwood Road to several elected officials and planners, etc. stating that people will use the closest, not the safest route to access the PPE which will put them on some of the most dangerous roads in the county (like Mt. Lebanon Road and Peppermint Road and a deadly section of Sam Houston Road). What I got for my trouble was a death threat left in my mail box with a bullet in the envelope.

"... what I got for my trouble was a death threat left in my mail box with a bullet in the envelope ..."

Are you serious? The Asphalt Crowd sounds pretty violent, and short fused. What's your take on the Alcoa Highway Bi-Pass Bi-Pass?

Watch the video at:
http://www.wate.com/Global/story.asp?S=12087913

Skip to 01:17; and sit down with your kids and grandkids with coloured crayons, drawing spirals and wavy lines--that just about sums it up.

A maddening tragedy will unfold if we AS A COUNTY allow these guys to move forward unabated on these 19th and 20th century so-called fixes to a 21st century problem.

"... what I got for my trouble was a death threat left in my mail box with a bullet in the envelope ..."

I know a fellow who got an envelope of white powder left in his mailbox after a similar, but more general complaint.

Believe it or not, at last night's Commission Workshop Agenda Meeting, Peggy Lambert asked the Finance Director to clarify because "there is a RUMOR in the community about a balloon payment coming due next year". Anyone doing their homework would KNOW it for a fact, not accuse the public of spreading rumors about our dire financial problem.

If I have my information correct, and you guys check this, the $90k the budget committee wanted to give out as raises is the same amount we will need in the first quarter for the Financial advisors to come in. from yesterday's article int he times, it looks like it is going to be a close vote on getting them approved.
In regards to this, the meeting on March 2nd was public, the commissioners could ahve attended. The Budget meeting was public, and the commissioners not ont he committe could have attended, but all I see in the story are complaints about how the commissioners aren't being spoon-fed the information. They were concerned it wasn't in their info packets. If they ahd gone to the meetings, they would have known firsthand what was going on.
I also noticed that the Pitt-Reeves proposition barely got out of committee, so it may have a hard time getting 2/3 vote. I did email the commissioners that have links up, but it seems several of them don't want public input, and don't want it privately either.
This is part of the problem we are seeing with national politics. it seems inferred that we are just too dumb to know what is in out best interest, so those in power will tell us what it is. BTW- Smokey Mountian Tea Party Patriots will be meeting at the Library at 6:30 tonight. Hope to see some of you there.

The 90K WAS, yes WAS, to hire someone to review the past debt. What is missing in this debate is that the resolution last Nov was to hire someone to review the past debt yet now the county is hiring a financial planner but calling them a financial adviser.

Is the county going to get out of the swaps as suggested in this quote of Jenning's in yesterday's OP at the DT ?

“There is nothing to panic about. There is no crisis. There is not going to be a problem refinancing the $46 million and in terminating the (interest rate) swaps.”

Why then spend 90K to see what the county has done in the past if it has been determined that the swaps will be paid off???

After reading those RFQs the only company I would hire is Stephens Inc. Of the four presented only Stephens has clearly laid out one very important aspect of the whole bond mess.

Blount COUNTY only has 24K in 'bonds' and the balance of the 217 million we refer to as 'bonds' are actually loans from either the Blount or Sevier PBAs. The Blount County PBA has its own swap adviser and that is ECHO.

So why pay to review the status of past payments? Is there even anything the Commission can do to change the 'loans' from the PBA?

Remember that each and every bond resolution passed by the county commission's give complete authority to the mayor to work with the PBA to set loan terms.

Does anyone really think that THIS commission will tell the mayor what to do with those "loans" and that the mayor and the PBAs will comply?

These questions certainly need answered.

Mr. Jennings was specifically referring to the two interest rate swap agreements associated with the $50 million that the County Commission refinanced on a short-term basis back in 2009.

Also, the county is not just hiring a company to evaluate the debt but also to advise the county on an ongoing basis, if I understand correctly. The comptroller's office is going to be requiring counties that use derivatives to retain independent financial advisers.

Hay, yes I am serious, it is a matter of record at the Justice Center (Kathy W. Burch, 1009 Mt. Lebanon Rd. Maryville 37804) and the FBI. As far as "Alcoa Hwy Kills", I have been injured by other drivers twice on Alcoa Hwy. When they try to fix it I have been told that Steve West is one who starts jumping up and down as to how it will affect his business and gets the proposals stopped, so they came up with the plan they have now to appease them (the complainers) and it will help with part of the problem. It also helped when they lowered the speed limit several years ago. Do your research and see the proposals that have been made over the years and see who stopped them, so very little has been done to date for a very serious problem.

Also, the county is not just hiring a company to evaluate the debt but also to advise the county on an ongoing basis, if I understand correctly. The comptroller's office is going to be requiring counties that use derivatives to retain independent financial advisers.

If the county goes to fixed, why would there be a need for an ongoing arrangement?

For FUTURE swaps or forward purchase, the Comptroller's new guidelines require the county to have among other things..

A Debt Management Policy and Derivative Policy ( note the Commission voted down a Debt Management policy last May!)

A Financial Advisor and Bond Counsel

FUTURE swaps which are far unlikely to happen.

FUTURE swaps which are far unlikely to happen

That's un-constitutional, by Gawd! Private Companies should have a right to profit off of Municipal Debt! What's this world comin' to when Good Honest Hard Working Big Financial Corporations are vicously attacked like this? I suppose next they'll try and take Morgan Keegan out of the loop as our County's Debt Financial Advisor. We been doin' all kinds of business with them folks for years. They's like family. This sounds like a Communist Plot to take over our Private Corporate Owned & Runned Local Gov't--that's what it is, by Gawd! Dang Pinkos! Who blew the whistle, and done went and upset our well-oiled Apple Cart?

Assuming it would be feasible to go ahead and convert all the county's variable rate debt into fixed rate and terminate all the existing interest rate agreements, Blount County is still going to have to use an adviser each time that it deals with bonds.

The Tennessee Comptroller's Office is going to mandate that county's retain independent financial advisers. From a press release about the draft guidelines:

"(ComptrollerJustin) Wilson also expects the model debt policy to have provisions prohibiting an individual or company from representing more than one party in a local government bond transaction. For example, a local government’s financial advisor would be banned from also serving as the local government’s bond underwriter or bidding on the debt."

As for "ongoing arrangement," we'll have to wait and see the specifics of the contract, but Chairman Samples indicated that it would be an at-will arrangement for either party. Both he and Jennings have said that, after the initial $90,000 cost, PFM Group would require an ongoing retainer of $3,000 per quarter -- so, $12,000 per year.

I'll try to run down the numbers on the cost of Morgan Keegan's advisory services on some of the bond issues to compare with the PFM costs for a story next week.

Best,

Joel

The only thing I care about swapping is guns. Let's put the guns back in the bars and bedrooms and parks.

FYI, the draft guidelines that the Comptroller's Office is considering include the following specifications. See "e."

"'Financial Advisor' means an individual or entity that provides advisory services with experience in the area of debt transactions for issuers of municipal debt.

A Financial Advisor is required for the following debt
transactions:

a. whose final maturity is greater than 25 years from the date of issuance;

b. that cause the ratio of variable-rate debt to increase beyond level set in Section ;

c. that are not at least level debt amortization;

d. that use any type of credit enhancement;

e. involving an underwriter; or

f. involving the use of a derivative."

Assuming it would be feasible to go ahead and convert all the county's variable rate debt into fixed rate and terminate all the existing interest rate agreements, Blount County is still going to have to use an adviser each time that it deals with bonds.

If the bonds are fixed, what advice is needed?

At any rate, thanks for working on this Joel. Although multi-week/day exposé maybe needed to help people understand. If the choir doesn't get it, I'm not sure how the congregation is supposed to.

FYI - the case for Stephens Inc. by poster "stephens": http://www.blounttalk.com/b2evolution/blogs/index.php/2010/02/09/blount-s-financial-adviser-has-problem?blog=2#c12896

LOL I ain't against having an adviser. But ya know, lots O' counties go out for bids on bonds without paying for an adviser. Look at the RFQ and you will see the advisin' fees for when that happens.

If you wanna negotiate the price ya need the adviser.
If you are going out to bid then you don't.

Ya might want to review the tape from Tuesday night because Samples constantly says BIDS and Jennings says NEGOTIATE.

and then there is that little bit O'code ( vs guidelines!) that no one talks about.

Notwithstanding the foregoing provisions of this subsection, a financial advisory relationship shall not be deemed to exist when, in the course of acting as an underwriter, a municipal securities dealer renders advice to an issuer, including advice with respect to the structure, timing, terms and other similar matters concerning a new issue of municipal securities.

Joel, I am not quoting any DRAFT Guidelines. I am quoting the current Guidelines that became effective 11-1-09

Under those new guidelines the Comptroller states as a transition to the new guidelines that-

TRANSITION:
Governmental Entities having received Letters of Compliance pursuant to the 2000 Guidelines (and as amended in 2002)(“2002 Guidelines”) and entered into an Interest Rate Agreement or Forward Purchase Agreement prior to November 1, 2009, will be governed by the 2002 Guidelines with respect to those Agreements

You are quoting the draft model debt policy.

http://www.comptroller1.state.tn.us/repository/NR/NR12-16-09.pdf

New guidelines are coming down the pike that will require independent financial advisers. Have a nice day.

FYI, given the diverging interpretations of when an adviser will be required, I've contacted the Comptroller's Office to clarify the matter. Will include whatever I found out in my next story.

Best,

Joel

"... believe it or not, at last night's Commission Workshop Agenda Meeting, Peggy Lambert asked the Finance Director to clarify because "there is a RUMOR in the community about a balloon payment coming due next year". Anyone doing their homework would KNOW it for a fact, not accuse the public of spreading rumors about our dire financial problem ..."

LK, I missed the meeting, for I was at Folts' presentation. At what point MM:SS in the video does PL ask the question?

Based on Jennings' response, mayhaps the question was prompted to give a crafted reply.

"Will include whatever I found out in my next story."

Joel,
Do you get a bonus for getting people to read the printed Times? We all know it won't be in the online version, at least in it's entirety.

Joel gets paid because people buy the print edition instead of hoping that the DT will just give it all away free. They have to have s little income to give Joel a little money....

It would be nice, though, if the DT would let you read the whole paper online if you have already paid for a print subscription. Other newspapers and magazines have managed to figure out how to do that.

Joel-

Thanks for asking a few extra questions, and for trying to help us all understand this a little better.

Take care,
~Wendy

Blount County Commissioner
District 4, Seat C

"It would be nice, though, if the DT would let you read the whole paper online if you have already paid for a print subscription."

I would subscribe if this was the case.