Record Bond Sale OK’d; Discipline Vowed

Christopher Peak PhotosNew Haven went ahead Thursday night with a $160 million restructuring of the city’s debt, after three key players — alders who had to vote to approve it — won a commitment from the Harp administration to develop strict spending controls aimed at avoiding fiscal ruin.

The $160 million refinancing of the city’s debt and $58 million in new borrowing were both approved in a unanimous vote by the city’s Bond Sale Commission at a 40-minute meeting Thursday evening at City Hall.

It was the largest bond sale and debt restructuring in New Haven’s history, in effect paying off debts by borrowing more money.

The three alders on the five-member commission —  Board President Tyisha Walker-Myers, Majority Leader Richard Furlow and Third Officer Aaron Greenberg — all signed on, after a seven-hour negotiation earlier that day with the commission’s other two members, Mayor Toni Harp and Controller Daryl Jones.

During those negotiations, the alders got a promise that the city would put some of the up-front savings from the refinancing into addressing long-term fiscal challenges, rather than just into general operating expenses, as underlying debts continue to mount.

According to the resolution that was passed, the up-front savings will go toward preparing for “unanticipated shortfalls,” like a loss of state aid and medical self-insurance overruns; paying off the estimated $11.5 million shortfall from the fiscal year that ended on June 30; and depositing $4.5 million into the city’s two cash-strapped pensions, split evenly between the City Employees Retirement Fund and the Police & Firemen’s Pension Fund.

“We are faced with difficult times both in our City and State,” the alders stated in a written statement explaining their vote. “As we are confronting a series of hard choices, we will continue to look at other options to drive down costs and keep the burden of undue tax increases from our residents. As the budgetary authority of the City, the Board of Alders remains steadfastly committed to using legislative actions to facilitate that outcome by taking all the necessary and appropriate steps to do so.”

In the short term, New Haven’s budget won’t be under the same squeeze. Over the next seven years, the city will get a $108 million reprieve from debt payments. But over the long run, it will have to pay nearly twice that amount back. Over the following nine years, the city will owe $198 million.

How “10.3M” = $84M

In total, the city ends up paying $84 million more due to the refinancing, as the 4.82 percent interest rate adds up over the years.

The underwriters, however, didn’t use that number in their briefing. Instead, they referred to a loss of $10.3 million in “present value.” That much-lower figure discounts for inflation and assumes investment returns over the years.

Asked after the meeting about the discrepancy between the $83 million “gross dis-savings” and the $10 million “present value dis-savings,” Controller Jones and Budget Director Michael Gormany said they didn’t know. They called up the underwriter to ask him to explain the concepts over the phone.

The bond’s underwriter, Carlos Desmaras of Loop Capital Markets, which took a $1.45 million commission out of the sale, claimed that the arrangement will help space out the city’s debt more evenly.  Each year until 2034, the city will now pay a lump sum of about $50 million for all its debts.

Desmaras compared it to his own home mortgage, where payments of a similar size are made each year. They’ll be smaller, too, once he refinances his mortgage.

“I could take out a 15-year mortgage or a 30-year mortgage. I’m choosing to go with the 30-year mortgage. Why? Because my payments are going to be much lower. If I get in a position where I lose my job or I’m facing health challenges, I’m making a much lower payment,” Desmaras said. “The analogy is if the state makes a cut or there’s some additional overtime that’s not budgeted. I’m in a position where the mortgage I have today is much, much lower.

“Actually, frankly, it is a conservative approach,” he continued. “When people say, ‘Hey, it’s a scoop and toss,’ I think that really overstates it.”

But municipalities aren’t the same as homeowners. They might refinance once or twice in their lifetimes, but city governments borrow money against their tax base every year paying for much-needed infrastructure, technology and repairs.

“It’s helpful for the city to have a level debt service for the next 15 years, but it’s important to recognize we may have future debt-service boding,” pointed out Mohit Agrawal, chair of the Financial Review and Audit Commission (FRAC), the city’s independent budget watchdog. “We normally borrow around $50 million each year. It’s only level right now, and it won’t be once we start adding.”

Agrawal added that the argument that the city’s trying to level out its debt isn’t entirely true either. He pointed out that this year the city will pay a little over $35 million, before the rate jumps back up to $55 million next year.

Unless the city stops all capital projects, any new borrowing will mean New Haven faces an uphill climb, with bigger and bigger debt payments due each year, rather than the downhill slope that it’s always had, paying off bills as they come due.

The approach to paying off debts by borrowing money through the kind of refunding approved Thursday night is known by financial analysts as “scoop and toss.” (Read a story about that here.) It results in escalating payments in later years; the practice led Hartford to the brink of bankruptcy and a state bailout, its mayor, Luke Bronin, recently said at a conference on municipal finance. He called the strategy “short-sighted” and “irresponsible.”

Market Responds

While analysts (including credit rating agencies) worried about the outcomes of New Haven’s refunding plan, the markets stepped Thursday night in the form of buyers for the bonds.

After shopping the refinancing proposal around Wall Street, including in 11 different conference calls, the city was able to negotiate several changes to its original plan, including a provision that allows it to pay off their debts early and to receive more up-front cash to pay current bills.

Amon the highlights of the final version of the deal:

• The city’s go-to insurer, Build America Mutual, had said in recent years that it already had too much of New Haven’s debt to insure more. So the city was prepared to proceed with this bond sale without insurance. But the company reconsidered and decided to insure the debt restructuring along with Assured Guaranty. The city has to pay extra for the insurance, but the security lowers the interest rates.

• The bonds didn’t sell for their face value. The $58 million in new money bonds sold on the market for $63 million, meaning the city can pocket a $5.8 million bonus known as a “premium,” which the alders required be reinvested to pay down interest.

• The interest rates the city got for the refinancing bond were slightly lower than expected. At 4.82 percent, that’s still high, surpassing what some homeowners pay for a mortgage, a much riskier investment. “Usually cities are halfway between the U.S. Federal Reserve and home mortgage,” Agrawal said.

•The city can get out of the debt early. Through a “call feature,” New Haven can pay off the bonds ahead of time, perhaps through another refinancing like this. The city is taking a gamble here that it will be on better financial footing in a few years. Because bond holders want their interest payments to keep coming over the bond’s entire term, they raise interest rates if there’s a call feature. The city will benefit from closing out early only if it can find the cash and if interest rates go lower than they are now. Otherwise, it wouldn’t make sense to refinance at a higher interest rate.

Altogether, the city’s projected losses aren’t quite as high as indicated in the preliminary statement describing the bond, which predicted a $96 million loss over the whole refinancing.

Agrawal: Structural Mess Unchanged

Thomas Breen PhotoFRAC’s Agrawal said Thursday night that the city’s bond sale didn’t change his outlook on the city.

“My general sense is that the city’s financial situation is more severe year by year,” Agrawal said. “The interest rate is going up. It’s quite high for a municipality, and that’s real money that the city is going to have to pay off until 2034.”

He added that the city’s $31.2 million break in debt payments that the city needs this year reaffirms FRAC’s analysis that the city has a $30 million structural deficit that they need to realign in future years.

“This is the pattern we’ve been expecting and seeing for a few years,” he said. “We’re going to get through this year financially, but next year, the savings on the debt service are only worth $20 million, so we have to see if there is a plan to raise taxes in next year’s budget. If the state support is the same, the grand list doesn’t change basically, pension costs go up, medical costs go up, teacher salaries go up —  all those costs that are kind of built in —  if nothing were to change, the deficit will be slightly bigger than this year’s.”

Agrawal said he doesn’t know how the city would pay for those extra costs, but he said he looked forward to seeing alders’ proposal for developing a five-year financial plan.

Righting The Imbalance

Financial analysts say that deferring payments in a “scoop and toss” refinancing can remove the pressure to make needed tough cuts, papering over a city’s structural deficits (estimated at $30 million in New Haven).

The aldermanic leaders voting Thursday night to approve the bond sale said they understand the dire financial consequences facing the city. They said they won a commitment from the mayor to work together on a five-year strategy to tackle the challenge.

The alders said the city needed to refinance the bonds to “safeguard the City’s finances in order to continue to provide the critical services our residents depend on.” The refunding gives them “necessary budgetary flexibility while new projected revenues from economic growth are realized.”

In the meantime, they added, the alders will also be instituting strict financial controls that will be worked out among the full board.

“We have also insisted on long-term efforts to control expenditures for medical and retirement benefits, education cost overruns and overtime reductions especially in the Police and Fire Departments,” the statement read.

The sale also included a resolution guaranteeing that “a portion of the monies go towards addressing some of the structural deficiencies that credit agencies pointed out in downgrading the city’s rating last week — namely, increasing payments to the pension, medical and litigation settlement funds.”

“This is the first step in the five year plan that will be put together by the Administration, Board of Alder’s Leadership, Board of Alders Finance Committee Chairs and other stakeholders,” the statement read.

Furlow said that the alders would be meeting weekly with the city’s budget team. He said they’d be looking at bringing large-scale developments onto the tax rolls sooner, cracking down on overtime and looking for more revenue wherever they could find it.

Other alternatives, particularly a state bailout that some alders want to consider ,didn’t seem like reasonable option to Furlow. Because of its credit rating downgrades and high tax burden, New Haven is now eligible for financial assistance like state’s debt takeover that saved Hartford from bankruptcy. But in the process, the city would have to give up final say over its union contracts and annual budget. Or worse, Furlow said, if the city ended up in a higher tier like West Haven, every expense could be questioned and rejected.

Without other options, Furlow said the decision had not been easy for him to make.

“This is a tremendous amount of restructuring that we’re doing,” he said before the vote. “There’s been days and hours of work…, the telephone calls, sometimes answering the same questions in different ways to help us understand what’s going on. Those questions were necessary, over and over, to make sure that we understand what we’re doing. We’re not coming in here on a whim and just signing the city away.”

He added later, “We’re residents too. I’m not going anywhere. I owe it to this city to do the right thing. You absolutely better believe we’re going to get this under control. Everyone’s not going to be happy about it, but these are measures that we’re going to have to do, to get this paid off and come out of this whirlwind.”

An earlier version of this story follows:

3 Alders Decide City’s Fiscal Fate

Markeshia Ricks PhotosThe city’s largest-ever bond sale — a quest to borrow more money to retire mounting debt — is set to become official Thursday, unless three alders decide otherwise.

If the sale goes through, it will either lead the city to financial ruin, as some analysts warn. Or it will give New Haven a needed tool to close one deficit and tackle future ones, as City Hall claims.

The three alders — Board President Tyisha Walker-Myers, Majority Leader Richard Furlow and Third Officer Aaron Greenberg — sit on the city’s five-member Bond Sale Commission alongside Mayor Toni Harp and city Controller Daryl Jones.

At a meeting Thursday, the commission will hear how much interest banks want to participate in the $160 million bond sale. Almost certainly, the city will hear less advantageous terms than in previous bond sales, because of its declining financial condition.

After the cheapest proposal is selected, the sale will be put to a vote.

In the past, the commission’s nine-figure transactions have gone through unanimously, usually within less than 10 minutes. It’s not clear what will happen this time, amid fears of the implications the sale could have for New Haven’s fiscal future.

Walker-Myers, Furlow and Greenberg all did not return phone calls on Wednesday about how they plan to vote.

Thomas Breen PhotoOther alders who said they want to halt the sale —  at least, temporarily —  won’t have a chance to weigh in. That’s because the city’s hired bond lawyers note that the board signed away all its oversight, when members apparently failed to read the fine print hidden in every city budget for the last decade.

“This is not just kicking the can down the road. It’s a can that’s getting bigger and bigger down the road,” said Prospect Hill/Newhallville Alder Steve Winter. “We can’t keep doing this forever. There’s obvious limits to how much financial engineering can paper over deficits.”

The deal will provide cash to close an $11.5 million shortfall from the fiscal year that ended June 30. It will also take an estimated $27 million out of the budget, nearly closing an estimated $30 million structural deficit, for now.

Overall, the deal will take one-fifth of New Haven’s debt off the books for a couple of years, before Wall Street’s bond-buyers make the city pay back almost double what it saves up front over the next two decades.

For the first seven years, the city will get a $105 million break. But over the next decade, the city will have to scramble to make up $201 million. Overall, the city will lose about $96 million in the transaction.

The city faces less advantageous terms than in past sales because ratings agencies have downgraded its credit, insurers won’t touch the bonds and the federal government will levy a tax because the refinancing is being done so soon after the bonds were issued, multiple analysts said.

Recognizing those challenges, the city didn’t put the bonds on the open market, where it might not have gotten many bids. Instead, their underwriters are negotiating privately with banks, which will likely drive up interest rates even further.

“Scoop and Toss”

To avoid paying the bills, the city wants to use a controversial practice known as “scoop and toss.”

Essentially, the city “scoops” up a load of debt that it owes now and “tosses” it years away. The problem, for whomever has to handle it later, is that the debt is now far bigger in size.

Think of it like maxing out a credit card and taking out another one to pay it off, then waiting several years before you get around to dealing with the old expenses.

Those bills eventually came due in Hartford. After years of deceptively low debt payments in Hartford from a similar refunding, all the bills suddenly came due, Mayor Luke Bronin said recently, almost pushing the city into bankruptcy. Instead the state took over Hartford’s finances in return for a $550 million bailout.

“The city had done what I think were some irresponsible, short-sighted refundings that left us with a rapidly escalating debt service,” meaning the annual payments owed to bond-holders, Bronin said in an interview with New Haven-born journalist and analyst David Wessel. “To me, those … bond transactions were just unforgivable. That restructuring, I think, was totally unjustified because the consequences of it were so clear.”

 

Mayor Harp said in an interview that she can avoid catastrophe by stashing the up-front savings into the city’s depleted rainy-day fund, which will pay down everything she’s borrowing now and address a needed problem with government reserves.

Analysts say cities rarely find that kind of discipline with the up-front cash from refunding.

New Haven has already scooped and tossed twice, without putting any money away for the repayment plan.

In her first year in office, in 2014, Harp added $14.5 million more of debt for future years, after which her staff announced a balanced budget at a press conference.

Three years later, the administration pushed out another $31.6 million in a refunding. But this time, it still ended the fiscal year with a $11.5 million deficit. Leading to this latest proposed refunding.

Watching these refinancings, close observers of New Haven’s budget have been sounding the alarms for years. The rest of the city, including alders who aren’t clued in to the municipal bond market, didn’t know where to begin, how to even phrase the right questions about the premiums, interests rates and yields in an “advance refunding.”

The city’s independent budget watchdog, the Financial Review and Audit Commission (FRAC), warned of a budget balanced through “gimmicks,” with long-term debt paying for normal operating expenses.

Ratings agencies, meanwhile, downgraded the city’s credit. In its latest downgrade last week, Standard & Poor’s cited the latest planned bond refinancing as part of the reason. Its report said continually pushing back payment due dates put the city in a “very weak” position financially.

Mohit Agrawal, FRAC’s chair, said the refinancing would give the city cash to pay down last year’s deficit. But he said he didn’t know why the city had opted to do that through a bond at what will almost certainly be a higher interest rate.

“I understand the financial difficulties. I understand why we need to free up cash in the short run, but what I don’t see here is a long-term solution” he said. Because this bond will be taxed, “that’s a real problem. That’s real money we’ll be paying through higher interest rates. That’s a situation we should be worried about, if we let it go for so long, paying exorbitant interest rates to cover our bills.”

Agrawal said that, as an alternative that could both “meet the needs of the city and allow a longer discussion with more buy-in from the alders,” the city could pay down last year’s debt with a “tax anticipation notice.” Essentially, that’s an advance from a bank which gets paid back with property taxes mailed in over the coming months.

No Say

In the meantime, three alders are effectively calling the shots. The other 27 alders will be able to watch, but thanks to their own lawmaking, they won’t have an official say in what happens, despite provisions in state law that say they should.

According to state law, the alders are supposed to weigh in anytime the city takes on new debt. In fact, under new provision that took effect last year after the creation of the Municipality Accountability Review Board (MARB), the state considers bond refinancings to be so consequential that a two-thirds vote is required for any bond to pass.

But thanks to their own lawmaking, New Haven’s alders signed away their oversight — without even knowing it.

Every year, the alders attach an “appropriating ordinance” to the budget. For the most part, that amendment determines how much the city can bond and what the money can be spent on. The alders pore over this document, picking out line-items that they don’t think are worth it.

But the document also comes with some fine print.

For the last decade, the alders included a provision that allowed the mayor and controller to refinance bonds without a vote, as long as they determine the refinancing “to be in the best interests of the City” and that it’s done “to achieve net present value savings or to restructure debt service payments.”

That language first appeared in the years after the 2008 stock-market crash. At the time, everyone agreed the markets were fluctuating so erratically that waiting for official approval from the alders might mean missing a chance to score lower interest rates.

That boilerplate language has stuck around in every budget since, even though most alders didn’t know it was there. The city’s bond counsel says that’s all that’s needed to bypass the legislative branch and authorize the refinancing.

Markeshia Ricks Photo“I didn’t know that. That’s completely my bad,” Downtown Alder Abby Roth said of the provision.

“The Board of Alders are the ones responsible for passing the city budget in the end,” Roth said. “I think we totally should have a say in what they’re doing. This impacts our decisions now and in the future. I think it’s critical. We represent our constituents, and no one I’ve heard from is happy. Everyone wants a say in it.”

Roth said the administration should still have to explain the debt restructuring publicly, answering questions and listening to feedback.

“They should be working constructively with the full board, walking through exactly what will happen and what the consequences are,” she said. “To do this at the last minute, rush rush, is completely irresponsible.

“We’re facing a critical situation and we need to work together to try to resolve it. We should be very open with all the taxpayers of this city.”

Several alders said there needs to be more serious consideration of a bailout from MARB, the state agency that took on Hartford’s debt after “scoop and toss” caught up with the city. In exchange for similar financial assistance, the city would have to subject its union contracts and annual budget to MARB’s veto.

“I think it underscores the need to take really seriously the option of working with the state and the Municipality Accountability Review Board,” Alder Winter said. “It wouldn’t be a painless process, but I think the facts are clear that the city now qualifies … for the state to assist us both with our operating fund and even potentially assuming some of our debts, just like they assumed all of Hartford’s outstanding debt principal. There’s no question Hartford is on better financial footing, having worked with the state, and it behooves us to take that option seriously and take it up sooner rather than later.”

Hill Alder Dolores Colon said that the city had long paid off old debt with new debt, “borrowing from Peter to pay Paul.” Dating back to DeStefano’s administration, “This is the way we do business,” she said. But she argued that the sale should still go through, as one of the only ways to raise revenue.

“We are in extreme duress. Extreme situations call for extreme actions. No one wants to owe a lot of money, but no one also wants to pay an 11 percent increase in taxes,” she said. “Sometimes we have to do difficult things that are not attractive or completely problem-solving to give us breathing room to come up with better solutions.”

East Rock Alder Anna Festa also cited the recent tax hike, but as a reason not to further burden taxpayers under even bigger debts to come.

“This short-term fix of refinancing is irresponsible with long-term negative effects,” she said. “I understand the bills need to be paid and the budget needs to be balanced, but there is obviously a spending problem if we can’t balance the budget with what funding comes into the city.”

Whatever’s scooped and tossed would eventually fall on residents, she added, and “refinancing may not be an option for them.”

Click on the links below to read other stories about the city’s structural deficit and ideas for closing it.

Hey, Buddy, Can You Spare $30 Million?
City Ends Policy As It Begins To Pay Off
Mayor Open To Idea Of Fewer Top Cops
S&P Downgrades City Credit Rating
City Will Refinance Debt To Avoid Takeover
Fixing the Budget: Fire Choices
Like Hartford, New Haven “Scoops & Tosses”

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posted by: 1644 on August 2, 2018  10:11am

“to achieve net present value savings or to restructure debt service payments”
There’s no problem with achieving net present value savings, although I doubt the alders or Harp even understand PV.  The problem is with the restructuring alone, when, as in this case, the PV of the debt will increase.
Overall, I am reminded of the scene in The Big Short where Mark Baum tells the stripper that she won’t be able to refinance (her two mortgages each on five houses and a condo) before the teaser rates expire and her payments increase 200%. Besides, while in the long run we will all be dead anyway,  even by 2027/28 Harp will be gone, so why should she care? (My elderly dad had the same attitude toward the carpenter ants that were eating his house. Me: “Dad, you need an exterminator because these ants will cause your house to collapse.  Dad: “Not in my lifetime.”:)

posted by: heightster77 on August 2, 2018  10:11am

Last one out the door shut the lights. More rubber stamping. Does anyone think for themselves in this city? Reminds me of a bumper sticker I saw years ago. ‘“The government is against the mafia, because they don’t want the competition”

posted by: robn on August 2, 2018  10:33am

I don’t care what tranche potential bond buyers think they are in. They will be first in line for a buzzcut when the $#!# hits the fan.

posted by: newhavenishome on August 2, 2018  11:23am

What’s next? Are we going to rent furniture from Aaron’s for City Hall and all the schools?
This is so irresponsible and negligent on behalf of Harp, Controller and the BOA. They are destroying a beautiful city.
The only way out of this is MARB. Bite the bullet and do it!

posted by: Patricia Kane on August 2, 2018  11:24am

Early on Mayor Harp took steps to change the anachronistic exemption that Yale and other wealthy non-profits enjoy at the expense of the tax payers who subsidize them. Unfortunately the City of New Haven doesn’t have a million dollars to employ lobbyists and tout its cultural contributions to the City and its residents. In the end, those concerts and other events are not free, but quite costly.
  When 50% of your land is untaxable, disaster is inevitable, especially when the demand for social services is shifted from the suburbs to the City.
  “Give me your tired, your poor, your huddled masses yearning to be free…” should be on the seal of the City of New Haven.
  None of this is to ignore the impudent spending that bought votes at the expense of financial stability and sanity.
  It’s amazing that GOP candidates actually tout repealing the State Income Tax, rather than increasing the taxes on the wealthy, including corporations. Caving into this fiscal brain washing is the price of financial illiteracy.
  There is no “rising tide” and it only lifts yachts.
  The people behind FRAC appear to be knowledgeable and sane. I trust them over any government official when it come to financial decisions.
  the residents of New Haven didn’t create this disaster, but they definitely will bear the brunt of it.

posted by: NHPLEB on August 2, 2018  12:31pm

Well,  at least we’ll have 3 alders to blame,  but the real blame belongs to the feckless aldermen who allow a strong mayor to run over them at every turn.  It’s not just Harp.  NH has had a strong mayor v alder situation for decades.  But to have feckless alders and a feckless mayor at the same time will lead us to bankruptcy.  Shame on all the politicos of NH:  past and present.


@ P Kane—-  try to fit this is on the NH Seal:  ...and give me a multi-billion dollar elitist university that will suck the life out of NH one day soon.

posted by: Noteworthy on August 2, 2018  12:31pm

The smell of desperation is wafting over the city. These alders should vote against this bond refinancing. And oversight should be reinstituted. This reckless, secretive moves are not in our interests - and Harp isn’t delivering balanced budgets. That the plan is to negotiate in private vs public is yet another indice of desperate stupidity.

posted by: cellardoor on August 2, 2018  12:53pm

How do we go about changing the governance of this city so that is professionalized, that is how do we hire a city manager whose job description includes adherence to best fiscal practices? The charter of the city is up for revision soon. New Haven has slipped another notch in the 2018 WalletHub ratings of city management, mainly because of financial mismanagement and the state of the city’s economy. How do we start?  The only alders who have shown insight and courage about the looming debt crisis are not those sitting on the Bond Sale Commission.  The BOA is toothless because of a disinclination to read the fine print? We need to professionalize the management of the city.

posted by: Bill Saunders on August 2, 2018  1:55pm

They are not money managers, and do not have the ‘skill set’ to make an informed, independent decision.

We are doomed, fellow taxpayers.

posted by: 1644 on August 2, 2018  2:40pm

PK:  As as stated to Kevin previously, the amount of a town’s land that is tax-exempt doesn’t matter.  It’s what’s on the land, both the tax-exempt and the taxable land.  Voluntown is mostly state forest, but forest uses few services, so it really doesn’t matter.  Over 30% of Branford is tax-exempt “open space”, but again open space uses few services, so places little burden on the town, certainly less burden than if it were developed with four bedroom homes paying $7K/ year in taxes but housing 2-3 children who needed to be schooled at a cost of $17-$20K each.  Unlike Choate, Yale houses few faculty with young kids that need schooling.  Yale has its own police, its own fire Marshal, and does its own trash removal.  It pays for building inspections incident to building via the permit process.  It does use New Haven fire, EMS, and public works services, so the question is do its voluntary payments (and the state’s PILOT) cover the cost of those services?  I suspect the answer is yes, meaning Yale is not a burden to the city.  The city’s problem is that it hasn’t developed the land that can be taxed in ways that bring revenues in balance with service demands.  Time after time, the BoA,  egged on by residents,  pushes for land uses and development that reduces city property tax revenue.  Rather than looking to Yale or the state, New Haven needs to use what is does control to maximize tax revenue.

posted by: quercifolia on August 2, 2018  2:48pm

These 3 alders won’t do the right thing today. I am sure Harp will have her way and leave us bag- holding taxpayers to clean up the mess. It’s a total sham. The mayor, her cronies and the controller should be prosecuted for violating the charter and public interests. So sad to say but our best choice is to pray for a MARB takeover. Otherwise, with Harp as the captain and the majority of the BoA as her deckhands; this ship is going down.

posted by: cellardoor on August 2, 2018  3:04pm

@Bill Saunders, is “we are doomed” a response to the question of rewriting the city charter to professionalize the management of the city? Or is it an argument in favor of doing just that, because our current representatives (Mayor and most of the BOA) do not have the financial know-how and political will to do what is necessary for the future health of the city?

posted by: Patricia Kane on August 2, 2018  3:35pm

@1644 The Report of the 1985 Tax Revision Commission disagrees and its conclusions are still relevant. New Haven subsidizes Yale, YNHH and Tweed.

posted by: Bill Saunders on August 2, 2018  3:53pm

Cellar Door,

I think it was pretty clear what I was talking about…. a bunch of incompetents stealing eggs from the chicken coop.  We Chickens, being the taxpayer, The Coop being our homes and livelihoods. 

The Doomed being ‘Us’ not ‘Them’.....

Also, it is tacit call for better local representation in the future…. the citizenry has a year to organize an opposition slate to this rubber-stamping, union-driven cluster-frick posing as a representative democracy.

posted by: FacChec on August 2, 2018  4:08pm

According to the Charter:

Sec. 2-386. Same—Aldermanic approval of certain actions.

The board of aldermen’s prior approval shall be required for a transfer of appropriation or other action if the effect of such action would result in one (1) or more of the following:
(3)
To change the board’s previously approved appropriation by at least fifteen thousand dollars ($15,000.00).

Sec. 2-389. Action to eliminate a projected deficit.
If the mayor projects a deficit and recommends its elimination in a monthly financial report submitted to the board of aldermen pursuant to section 62 of the city charter as amended from time to time, his/her recommendations shall be effected unless the following conditions occur:
(1)
Two-thirds (2/3) of the entire board of aldermen vote to consider such recommendations at the meeting at which such report is received; and
(2)
The board of aldermen approves other action to eliminate the full amount of such projected deficit at the next board meeting following the mayor’s monthly financial report submission.

Sec. 2-390. Bond sale committee.
There shall be a bond sale committee consisting of the mayor, the controller and the president, majority leader and minority leader of the board of aldermen The committee shall supervise and approve all issuances and sales of bonds, notes or other obligations of the city that the board of aldermen lawfully authorizes. Additionally, the committee shall approve interest rates, maturity schedules, and all other terms pertaining to the issuance and sale of city bonds, notes or other obligations, which are authorized by Conn. General Statutes section 7-370 as amended from time to time. The key phase in this charter statue is: “sales of bonds, notes or other obligations of the city that the board of aldermen lawfully authorizes”

So how is it that the full Board has signed away their right of review by the small print language at the bottom of the page?

posted by: Chris500 on August 2, 2018  4:16pm

Of course Yale is a burden on New Haven in many ways without paying anywhere near its fair share.  New Haven is an example of a community based on charity (often more valuable to Yale than New Haven), so that although New Haven gains some fine things (free trees, drain basins), it does not gain what is needed for an economically feasible community, with real living wage jobs in a variety of companies, not just “non-profit” hospitals and universities (which absolutely do not offer much in the way of jobs for New Haven residents). Possibly we need to redefine “non-profit” in terms of New Haven’s tax laws and consider taxing the Yale conglomerates at least at a 50% rate.  Then perhaps New Haven would have some money to make the city attractive to for-profit companies.

posted by: robn on August 2, 2018  4:22pm

1644,

I have no kids in schools which is the lions share of our budget. Yours is not an argument for the non-taxation of Yale.

Oh and if the crowd hasn’t heard my refrain, Yale will never pay taxes because the exemption follows long standing national legal precedent. The exemption is, however,  a creature of the state legislature which could be sued for violating Equal Protection and requiring us to bear an unreasonable tax burden.

posted by: 1644 on August 2, 2018  4:22pm

PK: Do you have a link to that report?  Even if true,  it still doesn’t change the fact the the city often acts in ways that reduce its property tax income.  As for Tweed,  I believe there is FAA money to lengthen the runway,  an act which would at least reduce losses,  but the BoA has not wanted to take that action.  So, while the New Haven may complain about losses at Tweed, New Haven is the cause of at least some of those losses.

posted by: Patricia Kane on August 2, 2018  6:36pm

@Jonathan Hopkins: you published a link to 1985 Tax Revision Commission Report a year or 2 ago. Do you remember it.
1644 has requested the link. It still remains relevant.

posted by: 1644 on August 2, 2018  7:47pm

Robn:  And as I have said before, the exemption is more than a creature of the state legislature.  The charter represents a contract between the colony/state and the Yale Corporation, and, under the US Consitution’s contract clause, cannot be changed without mutual consent. 
  What am saying is that, rather than whine about how Yale or the state isn’t paying some mythical “fair share”, New Haven should, like nearly every other town,  do what it can do to increase its tax revenue.

posted by: Sean O'Brien on August 2, 2018  7:56pm

@1644 You’re conflating issues in regard to Tweed.

Tweed’s finances are the twin sister of this financial problem facing the City.  That is, infrastructure and operations are paid for with borrowed money.  In June 2009, a report of the Blue Ribbon Budget Review Panel, delivered to the BOA and with a few aldermen on the committee, was damning on the issue of Tweed.  Some excerpts:

https://share.riseup.net/#IMn4Ebkkoi4qfUXwBZzELA

- “There is no direct financial upside to Tweed.”

Why?

“All profits generated by FAA-supported airports must be re-invested in the airports themselves, so the city can never realize a profit from the airport.”

and

“The town of East Haven receives all property tax revenue from the airport, since all Tweed-based planes are “tied down” or hangared in East Haven town limits.”


- “Tweed represents a significant potential financial liability for New Haven.”

Why?

“If the airport is not maintained to FAA commercial aviation standards, the FAA
subsidy will decrease by approximately $900,000.”

and

“The city will be obliged to repay millions of dollars worth of FAA grants if the airport
ceases operation altogether.”


That last part is why we can’t just treat FAA funds as manna from heaven.

The airport is also (very likely) in violation of FAA rules in regard to runway 14-32, a crosswind runway formerly utilized by smaller planes and general aviation, because of its de facto closure.  The bill in this year’s legislative session proposed closing this runway, which would likely result in paying back funds to the feds.

We are told that the millions required to extend the runway, expand the airport, and maybe even move the terminal will be paid “90%” by the feds.  That money has conditions, just as the money being discussed in the above article does, even if the fallout comes years later.

See https://www.aopa.org/news-and-media/all-news/2018/april/18/aopa-working-to-save-new-haven-crosswind-runway

posted by: 1644 on August 2, 2018  8:15pm

Chris:  Yes, Yale is the cause of New Haven’s economic decline.  Absent Yale,  there would be a Googleplex on College Street fronting the Green, just as Bridgeport and Hartford are thriving centers of high-paying jobs and filled with wealthy residents.  No vacant land in those places!  If only Yale’s presence wasn’t repelling the well-heeled from settling in New Haven!

posted by: Jonathan Hopkins on August 2, 2018  8:51pm

Here is the link to the 1985 New Haven Revenue Commission Report:
https://newhavenurbanism.files.wordpress.com/2016/03/1985-tax-commission-report.pdf

posted by: robn on August 2, 2018  9:29pm

1644,

As I’ve written before, you fail to see the exclusivity of two distinct issues.
One is Yale’s tax exemption which I accept as legally unassailable.
Another is the State’s obligation to tax citizens equitably and without adverse impact (an obligation which they are not upholding ;  something I don’t accept.)

posted by: Bill Saunders on August 3, 2018  5:25am

If Vegas had odds on this outcome, it would have all gone to ‘the house’.....

posted by: quinnipiacave on August 3, 2018  6:13am

This is a discouraging turn of events, but there’s so much development going on of properties that will be taxable and expand the grand list that some of the doom and gloom and “the end is nigh” comments seem overblown. Oh wait, they’re NHI comments—of course they’re histrionic and overblown!

Also, would Mohit Agrawal please run for alder? I only hope he lives in my district so I can vote for him. Or, better yet, for mayor.

posted by: robn on August 3, 2018  7:05am

Walker Furlow and Greenberg
RESIGN!
these actions are disgraceful.

posted by: southwest on August 3, 2018  7:26am

Ok now since they voted on approval of this budget..How many people now get raises,how many new people will get hired and how many will get layed off..Answer not a single one because this bunch is clueless and only want monies in their pockets..We are we going to elect a bunch of politicians that actually no what they are doing?  Just because a person run for office doesn’t mean they are always qualified. That’s how we ends up with theses money sagas with the taxpayers picking up the tabs..If taxpayers got to budget their dollars so should city hall..It’s amazing how clueless they are when it comes to budgets issues and that’s why we are in theses predicament issues with no way out..

posted by: NHPLEB on August 3, 2018  7:40am

So,  if the alders approved the bond sale,  the mayor “promises”  to be fiscally responsible?!?!?  And the alders fell for that?!?!?  If NH knew how to be fiscally responsible,  we wouldn’t be in such a mess. This is like lending money to a drug addict who promises to stop after this one more time.

And every alder and the mayor will be re-elected in the next election.  Why are we even writing to complain?  Everyone knows they can do as they please.  No change will happen till the creditors refuse to lend any more.  Why have FRAC? No one listens to what the guys suggests.  no one of the commenters,  like myself,  know what to do. 
But do we really have to wait till the city collapses??
It is a dark day in New Haven.

posted by: Patricia Kane on August 3, 2018  7:45am

“For the last decade, the alders included a provision that allowed the mayor and controller to refinance bonds without a vote, as long as they determine the refinancing “to be in the best interests of the City” and that it’s done “to achieve net present value savings or to restructure debt service payments.”

Is it even legal for one branch of government to waive its responsibility under the the law?

posted by: robn on August 3, 2018  8:27am

QUINNIPIACAVE,

Histrionics? The mayor and BOA just incurred $84,000,000 of pure interest payments because they’re unwilling to cut spending. Remember the mayor?....the one with her own personal chauffeur?

posted by: BlueDogMom on August 3, 2018  8:33am

You can petition to recall the mayor and any other elected official according to the city charter. I have been posting this repeatedly and with direct links to see if anyone-anyone might wake up and say yes, and help start the petition.

posted by: THREEFIFTHS on August 3, 2018  8:49am

Cry all you want.How many of you will vote them Back In?

posted by: Statestreeter on August 3, 2018  10:43am

@facChec & Patricia Kane

Your reference to the charter language and your overall question posed I agree that it seems the actions taken by 3 Alders on behalf of a whole board are illegal. The Alders have no authority to vote away their powers instilled by charter.

Walker, Furlow and Greenberg sadly did what is predictable of those who are at the collar end of the leash. The Mayors “promise” to not spend the extra cash and put it into some type of reserve is a joke. It reminds me of the time that the Alders voted to remove Jason Bartlett’s outrageous $20,000 pay raise only to have Harp keep giving it to him. What did Walker and Co. do? Nothing!  It’s like when the Harp handed out massive pay increases and issued retroactive back pay checks to her appointees with out approval from the BOA, per the same budget ordinance that lets these 3 incompetents decide massive debt issues. What did Walker and Co. do? Nothing!  It’s like the police and fire department projected to be millions of dollars in the red within the first quarter of FY 17-18. What did Walker and Co. do? Nothing!  It’s like a City that is millions of dollars in deficit not even half way through the fiscal year. What does Walker and Co. do?  Goes on a taxpayer funded 5 figure junket to China! 

You see the problem is we have people in positions to protect us from poor decisions of the Mayor who don’t know and don’t care to know or know and don’t care.

For years these Alders have been told a much more educated public than themselves to stop doing X and start doing Y at public finance meeting or your going to have massive problems. Well they disregard is year after year and now their excuse is we have to do this incredibly stupid thing financially because we have massive problems.

People have mentioned the state MARB. Expert eyes on the budget, the authority to make the Mayor justify her budget and possibly millions in extra cash for our City doesn’t sound bad to me unless you have something to hide!!!

posted by: Noteworthy on August 3, 2018  10:47am

And the Screwing Continues Notes:

1. The outcome of this bond sale was never in doubt. These same alders couldn’t find any budget cuts, ignored taxpayer testimony about how to get savings and imposed a $30 million tax hike.

2. It is laughable that any of the people, including the mayor or her finance team - who couldn’t even explain some of the financial terminology and concepts - will somehow begin to rule this city with “strict financial controls.”

3. WTF are they waiting for? The past structural imbalances, the past deficits weren’t wake up calls? Somehow our city leadership is just now waking up? Had an epiphany? They didn’t see the years of budget deficits in the fire and police departments? Never saw a deficit in the school budget?

4. These people remind me of drug addicts who will somehow on their own, be able to end their addiction and become productive members of society. It’s not going to happen. If you have exhibited zero appetite for fiscal restraint, have been unable and unwilling to control spending, borrowing and financial management - somehow the mayor and the rest of them will suddenly start to be more adult, more mature? It is highly unlikely.

5. With all due respect to this scheme - it is reckless and dangerous. There is zero evidence Harp or anybody involved, given this last budget, given the secret double dipping pay raises, given Harp’s idea of adding a personal PR person, and keeping her chauffeur - will do anything they claim they will. It’s just a bunch of words that mean nothing and are designed to get through the crisis and damn the consequences.

6. If they had any integrity - they would resign. Absent that, they need to be fired, voted out and dumped. Let the process begin.

posted by: FacChec on August 3, 2018  11:26am

“The three alders(stooges) on the five-member commission —  Board President Tyisha Walker-Myers, Majority Leader Richard Furlow and Third Officer Aaron Greenberg — all signed on.

Isn’t it ironic that the same three leaders have been approving debt service increases, Bond refinancing sales; capital budget increases approvals of Appropriation # 5 which allows $50M in borrowing for the last three years, without a controller’s report, approved approp. #1 and the tax levy to pay for #1 @ $547M this year.
The Irony is that these same three trick bags now swear “, they will also be instituting strict financial controls that will be worked out among the full board.”

“We have also insisted on long-term efforts to control expenditures for medical and retirement benefits, education cost overruns and overtime reductions especially in the Police and Fire Departments,” the statement read.

They swear to the public to perform that which they have unanimously disavowed, ignored, kicked down the road, voted for every spending and debt plan put forth by the administration here-to-fore, including their predecessors.
In addition to free loading tax exemption builders anywhere from 7 to 30 years. Increasing New Haven’s overall debt over $1.5B.

They have just ensured the young adults will not stay in New Haven

posted by: Kevin McCarthy on August 3, 2018  2:08pm

Cellardoor, moving to a manager/Council form of government where the manager has the powers of a strong mayor would require a change in state law. Possible, but not likely.

Robn, can you cite a CT or federal 2nd Circuit case that supports your Equal Protection Clause argument?

1644, I agree that the city “should do what it can do to increase its tax revenue.” But half of the city’s grand list is tax-exempt as a result of state law. The city’s capacity to do as you suggest is limited. And the city is specifically barred by state law from extending the runway at Tweed (CGS § 15-120j).  On an entirely different note, I enjoyed your comment about the Googleplex.

posted by: robn on August 3, 2018  3:24pm

KM,

A lack of exact precedent does not mean a lack of an argument. But since you asked…

Allegheny Pittsburgh Coal v Webster County 1989
Its a pretty simple decision in that Equal Protection is violated when the state does not provide equality in tax treatment of similarly situated property.

You might rebuttle that Armour v Indy 2012 reversed this. However, both the majority and the minority opinions in that case reaffirmed the validity of the prior decision.

posted by: concerned_neighbor on August 3, 2018  5:20pm

Robn/Kevin - the key issue on an equal protection argument is the question of who is similarly situated. The comparators have to be essentially identical in all material respects. So long as there is a rational basis for the difference (read that as nonfrivilous) between the alleged comparators, any equal protection claim will fail. EP cases are exceedingly hard to prove because the rational basis standard sets a very low bar for the government to show a difference in treatment.

New Haven’s problem is not a tax problem, it is a spending problem. If NHV lived within its means, it could function just fine. Regrettably, decades of mismanagement, highlighted by this absurd bond sale, have saddled NHV with significant structural barriers to living within its means. For regular people, like me, I can’t spend more than I make because my income is limited and I may or many not get a raise next year. No one will lend me money just to live unless they think I can increase my future income to pay them back and pay for my increased living expenses. I have to live within my means. NHV can’t pay its own bills (living expenses) and pay for the mismanagement in the past which have multi year (decades or longer) payment schedules. Something has to give. There are three options that will solve the problem: increase tax, spend less, and/or someone repudiate the long term obligations which hang on around the neck of the city like a boat anchor. Because those long term obligations are contractual or statutory in nature, only bankruptcy, state legislative action or negotiation with the stakeholders can change those long term obligations. NHV’s current fiscal situation is no so dire that the stakeholders will negotiate to avoid the potentially worse outcomes under bankruptcy or state legislative action. So that leaves tax more and/or spend less. We can’t afford any more taxes. The City needs to spend less - lots less.

posted by: Patricia Kane on August 3, 2018  6:07pm

@concernedneighbor, kevin and robn:

Exhibit #1: the 1985 Tax Revision Commission Report. It has to be read more than once.
I would like to know how many cities or towns are similarly deprived of half of their taxable lands?
The law changes all the time.
Nothing is immutable.

posted by: cellardoor on August 3, 2018  8:15pm

@KevinMcCarthy, my understanding is that having a mayor does not preclude having a city manager who understands and adheres to best practices in city management. My observations at a recent meeting of the BOA Finance Committee with city executives, and of this mayor, regarding the budget have persuaded me that no one in this city’s government has an adequate grasp of the fiscal issues, or of the way out of this hole we keep digging deeper.  In some cities, a professional city manager reports to elected representatives who lay out the city’s goals, and the city manager is accountable if there is no progress toward those goals. But the city manager should not be a creature of patronage.

posted by: Honest in New Haven on August 3, 2018  9:09pm

I really hope these Alderpersons had someone outside of City Hall explain the ramifications of this bond sale to them.  I’m terrified at the thought of how many of these Alderpersons do not understand financial reports and just vote along so they don’t look dumb or uniformed.

posted by: 1644 on August 4, 2018  1:16am

JH: Thanks for the link.
PK:  The report asserts that Yale is subsidized, but provides no data to support that conclusion.  The relevant questions is, do the costs of municipal services provided to Yale by New Haven exceed the payments made by Yale and the State on behalf of Yale to the city?  The report is completed devoid of data.  Instead, it simply assert that (a) Yale is rich, (b) New Haveners are poor, (c) therefore, Yale should give New Haven money.I know many people moral systems postulate that the rich should give to the poor, but it does not logically fool that the poor are subsidizing the rich.  This would be particularly true when, as in Yale’s case, the riches come from outside of New Haven. I honestly don’t know if New Haven is subsidizing Yale, and no one can know unless one knows the cost of services New haven provides Yale.

posted by: JCFremont on August 4, 2018  4:19am

Maybe if New Haven elected a mayor who would fight for the city up in Hartford and come home with the full amount of the PILOT funds and not just crumbs and a few bones. If you want to tax Yale, give us a hard number of how much you think all that property is worth and how you came up with it and demand it. You all hate Yale and think it brings down New Haven tell me what you see in its place. Yale is not General Motors its not Olin Manufacturing. SNET’s monopoly is not coming back. so unless they announce that each dorm room will have full maid service and each student will have a personal secretary and valet the university can supply only so much employment. Since manufacturing has left many of Connecticut cities, state and municipal employment tried to fill the void but as we see, it has become “unsustainable.” New Haven’s business climate is toxic start up companies may come in to tap into the university and hospital but I don’t see too many Fortune 500 headquarters or Carrier Manufacturing Plants in our future. The business climate in New Haven is toxic, even an LL Bean is met with protests. Oh my this may bring in suburbanites, they might even be attending the tennis tournament!. Have the groups formed yet to fight any possible commercial expansion to the Harbor? I know many would like to limit kites at Tweed, should the harbor be limited to kayak’s and canoe’s?

posted by: LookOut on August 4, 2018  7:56am

please bring on the MARB.  If the downsides are the inability to privately sign union contract and having spending questions by an outsider, that sounds like a huge win.  How can we make this happen?

Its clear that the jokers who run this city have no path to financial stability…and please stop with blaming Yale.  Without Yale, we would have just reached this point much faster (due to a weaker grand list)

posted by: FacChec on August 4, 2018  5:23pm

This is the same Tri-feta crew who vote against a $250M bond request for many of the same items as now appears in this $160M approval. What happen to this funding idea/ proposal?  “According to a June 2016 valuation, CERF had unfunded liabilities of around $306 million and P&F unfunded liabilities of around $398 million.”

The power of the pen.. vodoo math. Just excuse it and call it… I had an Epiphany.

https://www.newhavenindependent.org/index.php/archives/entry/250m_for_pension_fund/”

posted by: TackyJacky on August 4, 2018  8:43pm

“Alders won a commitment from the Harp administration to develop strict spending controls aimed at avoiding fiscal ruin.”  HAAAA HAAAAA Ha Ha Ha Ha Wooo Hoo Hoo Hoo Heee Heee Jajajaja HAAAAAAA HAAAAA HAAAAA. OMG your killin me AHAAAAA HAAAAA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA   HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA   HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HAaaaa HAaaaa HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA

posted by: 1644 on August 5, 2018  2:04pm

PK:  I have read the 1985 report.  Much has changed since 1985, but even for that time the report does not quantify any subsidy Yale and Yale-New Haven, St Ray’s, and other tax-exempt received at that time.  Channeling the old man from scene 24, , answer me these questions three:
(1) What is the cost of services provided by New Haven to Yale’s tax-exempt properties?
(2) How much do Yale and the State pay New Haven in lieu of taxes?
(3) What is the difference between 1 and 2?
DeStefano clearly believed that (2) was greater than (1), and encouraged Yale to expand its tax-exempt footprint, often in favor of private development. (E.g, the Yale Health Plan/American Laundry site).  In 1975, and perhaps 1985,  Yale and the state made no payments in lieu of taxes, so it was pretty obvious that the cost of services was greater than the reimbursements provided.  Given the large PILOTs New Haven receives, it is far from obvious today.

posted by: Patricia Kane on August 5, 2018  5:23pm

@1644. No inventory of Yale property exists, that I know of, so quantifying the loss is blocked.
  Rick Wolff is an economist who no doubt had numbers or he couldn’t have reached the conclusion he did.
  I urge you to invite him to New Haven and question him in public. Maybe you can challenge him to a duel;  I mean a debate.

posted by: 1644 on August 6, 2018  12:46am

PK:  Yale’s property is on the Grand List, it’s just tax exempt.  The 1985 commission did compare the Grand List values to the value in Yale’s report.  Again, it really doesn’t matter what the value is.  What matters is the cost of services rendered and PILOTs for those properties.

posted by: JCFremont on August 6, 2018  8:46am

@1644 Face it. What the Tax Yale crowd wants is to tax the exempt property, AND receive the amount Yale pays currently. Oh and of course any City events that is having trouble balancing the books will expect Yale to be the lead sponser. Actually they don’t care about the property values, they would rather go after their Holy Grail, at its full value, The Endowment.

posted by: Itsbecky on August 6, 2018  1:33pm

It’s pretty sad that our controller could not explain the concept of present value, it indicates a serious lack of sophistication.

posted by: NHPLEB on August 7, 2018  7:15am

A politician makes a “vow”—— does anyone believe that?
We’d be better off having the GREEN GOATS FARM goats serve on the BOA and BOFinance and BOE.  At least the goats know their job requirements and do it diligently…...

posted by: 1644 on August 7, 2018  9:15am

Becky: Yes, PV is pretty basic, implicitly covered in high school math with compound interest.  Looking at Jones’s Linked-in profile, his finance education is pretty thin.  For undergrad, he majored in psychology which was somehow pre-med.  He obviously didn’t go to medical school (trouble in organic chemistry?), but did go to NYU for professional school.  I was thinking, well, Stern has a great reputation, but he didn’t go to Stern.  So, instead of an MBA, he got a Masters of Public Administration from Wagner.  It has a concentration in finance, but, looking at the syllabi,  the program seems nowhere near as rigorous at B school, with a lot of “how to get money “(taxes, cooked books) and less on how to manage it.