January 22, 2015
Tonight the Jasper County BOC voted 5-Ø to approve the “tax pledge” resolution, agreeing to bail out the JDA (Joint Development/4 County Development Authority) and make their note payments to the Bank of Madison.
See copy of resolution here.
TWG has stated before there are troubling issues with this resolution.
One-it is only signed by Jasper County. Each county of the 4 counties sign individually and not jointly as they have on other JDA resolutions.
Two-there is no stated interest rate in this resolution. Despite asking through open records for the interest rate, we have received nothing. Tonight Andrea Gray said the interest rate was 5% for the first 36 months, then prime plus 1.5%.
Three-there is no stipulation if or when JDA can borrow more money or, if they do, a requirement that they must come to the 4 counties to have that new borrowing approved.
Here is the payment schedule given to the BOC tonight; however, as you can see, no interest rate is stated on this schedule. You will notice in year 2016 and 2017, the counties borrow the same amount of money they pay back to the Bank. The counties pay not only the $1.3M note, but also the line of credit, and starting in 2018 they also pay the $5.9M GEFA note the JDA incurred for Baxter. Total to be paid on the $1.3M loan to the bank is $1.9M. Yep! Us taxpayers are on the hook, folks, for some real money.
JDA has been an unaccountable entity that is now in financial trouble and the burden has been put on the taxpayers (who remember–are never going to be liable for anything!). Members of the JDA don’t like it that TWG accused them of being deceptive and doing things in secret—that will be addressed in the next blog; however, in the past their loans and other dealings have been kept well out of the public eye and out of the newspapers in the 4 counties.
Other concerns are the conflicts of interest
Wayne Tamplin is on the Board of Directors and owns stock in the Bank of Madison.
He is also the accountant for JDA and the auditor for Newton County. Did his loyalties lie with JDA and getting them the very best deal or with the Bank of Madison?
Morgan County Comm. Ainslie also seems to have a conflict—see below.
Last night (1/21/16) at the Newton County BOC meeting, there was a 30 minute discussion about this tax pledge. It was very interesting.
During their discussion some great points were brought out by Newton County commissioners and the issue was actually discussed. Andrea Gray, JDA attorney, presented the “loan restructuring.” Details discussed were the same as Jasper County’s resolution–$136,000 per year for 10 years, then almost a $700,000 balloon note.
Comm. Sims said he would not support this until “we get answers from JDA.” Comm. Shultz said she would “like to see a financial audit of JDA.” And later clarified this as an objective, outside audit. Comm. Sims again questioned the interest rate (which obviously they didn’t know either) and how it appeared the Bank of Madison would profit $600,000 on this note.
Comm. Douglas said, “We are giving a blank check to JDA.” Andrea Gray told the Newton County BOC that the Bank of Madison could foreclose on the 1100 acres. Comm. Douglas then said, “This isn’t BOC or taxpayer caused. Don’t tell taxpayers we must pay now or else. The Bank of Madison is not our concern.” And he is so right!
The Newton County BOC wanted to meet with the JDA and table resolution until 2/2/16, but Andrea Gray insisted. The final vote was 3-2 with Sims and Douglas voting no. The vote also included the understanding JDA would be required to get an outside audit. Ms. Gray made some comment about not anticipating this level of opposition. Hurrah for the Newton County BOC that at least asked questions and let Ms. Gray know they weren’t happy with the situation.
The Morgan County BOC also voted 5-Ø to approve this resolution on Tuesday 1/19/16.
There were other questions asked, and Comm. Warren made it part of the motion that the note should be shopped for the best interest rate. Comm. Ainslie was all for signing just as he has been for the sale of land at a loss.
TWG questions if Comm. Ainslie had a conflict of interest. We have been informed that his son works as a loan officer at the Bank of Madison. If this is true, Comm. Ainslie should have revealed the conflict and not voted.
Some questions for all Commissioners
- Why hasn’t JDA ever been required to have an independent audit?
- Why isn’t JDA required to report to the BOC at least quarterly?
- Why isn’t JDA required to provide the minutes of each of their meetings to the BOC? (We might be able to find out about billion dollar bond deals this way.)
- Why did each county BOC vote to pay the loan to the Bank of Madison when we have been told this wasn’t ever going to happen—that these authorities stand on their own and the taxpayers aren’t ever going to be liable?
Someone, we assume JDA folks, has sent out a “response to Mary Patrick allegations” trying to discredit the TWG and Mary Patrick on the BILLION dollars worth of bonds. That response will be addressed in the next blog to come out shortly.