Sunday, February 24, 2008

Bonds, Luzerne County bonds

The Luzerne County Commissioners voted the other day to spend some left over bond money on things it wasn't originally borrowed for. I've been complaining about this sort of shell game as long as I have been blogging.

The bond money came from $32.5 million borrowed in November 2003 to fund Susquehanna River recreation improvements. The bond document did not earmark funding for particular projects, which means commissioners are free to spend the money as they see fit.

Tim (take your hat off) Grier has made the same objection and points out that that bonds are supposed to be used for long term capitol improvements not everyday operating expenses. County Budget/Finance Chief Sam Diaz, and noted debit card abuser, said there is no legal requirement to use the money on projects that will last as long as repayment. I think he is wrong on that point. Even if he isn't the county government shouldn't be borrowing money for one thing and spend it on another. A few years ago they borrowed $9 million to build a new juvi prison then gave a sweetheart lease to a Pittston facility that the state objected to and had to terminate the lease. Then last December they used that money as Christmas presents for all sorts of projects that had nothing to do with the reason for borrowing the money in the first place.

Diaz also detailed the shortfalls of the last piece of fiction that was passed off as the county budget.

In other business Thursday, Diaz released a report explaining how the county ended 2007 with a $13 million deficit.
The report blames the deficit on a $16.8 million revenue shortfall, predominantly due to the county’s failure to meet projections in the following areas: current-year tax collections, $5.3 million; prior-year tax collection, $4 million; sale of county-owned land, $4.5 million; securing of state probation grants, $637,700; and federal transportation grants, $503,000.

Now they want to use $2.5 million of the proposed new bond issue to buy some land from Louis DeNaples when they can't sell the land they were counting on the help balance this year's budget. WTF?

Grier has offered to drop his challenge to the latest $93.5 million Bond issue if the Commissioners would just explain in detail what the money will be spent on. To me that's a reasonable request but they won't do it. And even if they did spell out how the money will be spent the way the thing is worded lets them spend the money on other things. Am I just becoming an old cynical bastard that doesn't trust the government?

Wilkes-Barre attorney Pete Moses, who is handling the county’s bond borrowing legal matters, on Friday declined to say if the county will accept Grier’s offer. Moses said he finds it "curious" that Grier wants to settle at this stage and is surprised Grier went public with his interest in settling.

It should be noted that Peter Moses looks to make a pretty penny on the bond issue and is billing the county for his work on this challenge. He has the best of both worlds. It makes you wonder why the county would bring in a hired gun who has a financial interest in seeing the bond succeed when they have so many other solicitors on the payroll.

And Commissioner Greg Skrepenak said the debit card abuse is "not criminal." It may not be but if I used a company card to buy drinks at a strip club or a $800 dinner tab with a $300 booze bill or pay for my kids hotel bill I'm sure I would be on the business end of a bread line


Robes said...

gort didn't an employee of penn state pretty much do the same thing with his debit card? isn't he being bound over for criminal court?
kinda makes you go hmmmmm

Anonymous said...

Good luck on that debt issue. Maybe the county can sue Tim Grier for the extra interest the county will have to pay due to the deterioration of the municipal bond market.

After Vallejo, CA files for bankruptcy, I'd be surprised if Luzerne County receives any interest for a bond issue without a bigger sucker taking on the risk.