Sweden looks to be the guinea pig when going to a cash-free economy according to the New York Times. Cash-Free
Watch for the following impacts:
1 Loss of privacy
2 Increased risk of hacking/loss of funds
3 Marginalizing old people who depend on cash
4 Banks and credit card companies profits increase due to fees
5 Increased debt because easy to use electronic pay systems
6 Increased tracking of individual's location and spending
7 Increased government revenue
Other countries like Australia promise to be cashless by 2022.
The citizens of these cashless economic societies better hope they do not have any significant or extended power outages as they will not be able to purchase the necessities of life!
Tuesday, December 29, 2015
Monday, December 28, 2015
1 Year GeorgetownWatch Blog Anniversary
It has been exactly 1 year since the first post in this blog. It is not known if this humble effort has any impact on shining light on the governance of the City of Georgetown, but, it does require that I am educated about the policies advocated and ordinances enacted.
The primary goal is to educate the people of Georgetown so that the size and intrusiveness of city government is minimized. A list of the City's impacts on the citizens will be summarized for the end of the year which can be used to see how we are doing.
The primary goal is to educate the people of Georgetown so that the size and intrusiveness of city government is minimized. A list of the City's impacts on the citizens will be summarized for the end of the year which can be used to see how we are doing.
SunEdison Continues to Struggle
SunEdison's market capitalization is only $1.68B while its debt is $11.7B, including the debt of TerraForm Power and TerraForm Global, its wholly owned subsidiaries. The financial crunch that the company finds itself in has forced the company to cancel or renegotiate acquisitions, stop paying selected vendors and cut jobs.
The financial turmoil has caused shakeups in senior management of the subsidiaries as funds were transferred from the subsidiaries to SunEdison against the wishes of ousted board members.
The company is negotiating a $650M credit line with Blackstone Group. Blackstone owns Vivant Solar which SunEdison is trying to purchase for $1.9B. The credit line will likely require SunEdison give up a large block of its equity in return for cash, which will make Blackstone a major shareholder. The credit line will also be used to pay back an existing second lien credit.
In a SEC filing the company admitted that it continues to incur significant debt to fund its activities and acquisitions and has substantial pending obligations. Investors Business Daily rates SunEdison stock at a near-bottom IBD Composite Rating of 6 out of a possible 99!
The City Council needs to closely follow SunEdison to assure there are no financial impacts on the City as a result of SunEdisons financial difficulties.
The financial turmoil has caused shakeups in senior management of the subsidiaries as funds were transferred from the subsidiaries to SunEdison against the wishes of ousted board members.
The company is negotiating a $650M credit line with Blackstone Group. Blackstone owns Vivant Solar which SunEdison is trying to purchase for $1.9B. The credit line will likely require SunEdison give up a large block of its equity in return for cash, which will make Blackstone a major shareholder. The credit line will also be used to pay back an existing second lien credit.
In a SEC filing the company admitted that it continues to incur significant debt to fund its activities and acquisitions and has substantial pending obligations. Investors Business Daily rates SunEdison stock at a near-bottom IBD Composite Rating of 6 out of a possible 99!
The City Council needs to closely follow SunEdison to assure there are no financial impacts on the City as a result of SunEdisons financial difficulties.
"The Texas Economy is Getting Smoked"
So says the headline in Business Insider.Link Headlines are always over the top attention grabbers and this one is no exception. The carnage in the Texas economy is still largely restricted to the energy sector and its suppliers which include metal fabrication companies.
However, prudent people should take this as an indication that the broader economy is also likely slowing. Sales tax revenue to Georgetown is up 2.5% from last year, but sales tax revenue for Texas as a whole is down 3.3%. Georgetown needs to be very cautious and conservative in spending.
However, prudent people should take this as an indication that the broader economy is also likely slowing. Sales tax revenue to Georgetown is up 2.5% from last year, but sales tax revenue for Texas as a whole is down 3.3%. Georgetown needs to be very cautious and conservative in spending.
Sunday, December 27, 2015
The War on Federal Reserve Notes (CASH)
In case you have missed it, the Federal Government is waging a war on CASH! This war has been on-going for some time, but, it seems to be intensifying of late.
As part of the "War on Drugs" banks have been required to file a report with the Justice Department anytime more than $10,000 cash is withdrawn or deposited. Auto dealers have to report cash purchases of cars and title companies have to report cash transactions greater than $10,000 for real estate. This effort has been an abject failure. Link
Due to recent events in Greece and other European countries, capital controls, in the form of restrictions on cash withdrawals from banks have been imposed in many European countries. In the U.S., banks have been told to scrutinize cash transactions greater than $5,000 and report if deemed suspicious.
There are four principal reasons why governments want to eliminate cash from the economy.
1. People would not be able to evade paying taxes if all transactions are electronic.
2. The Federal Reserve and banks would be able to impose negative interest rates on depositors (depositors pay interest to banks on their deposits), since the depositors could not withdraw their funds and hold cash.
3. The Government would be able to shut down all illegal activities that are currently conducted using cash.
4. A fourth advantage of the elimination of physical cash would be to more easily control people and potential dissidents through the freezing of their bank accounts.
The bottom line is that citizens lose privacy and freedom while the Government increases its control over the populace. An in-depth description of actions taken so far and the potential ramifications are detailed in a two part article by Dan Mitchell senior fellow at the Cato Institute. Link
As part of the "War on Drugs" banks have been required to file a report with the Justice Department anytime more than $10,000 cash is withdrawn or deposited. Auto dealers have to report cash purchases of cars and title companies have to report cash transactions greater than $10,000 for real estate. This effort has been an abject failure. Link
Due to recent events in Greece and other European countries, capital controls, in the form of restrictions on cash withdrawals from banks have been imposed in many European countries. In the U.S., banks have been told to scrutinize cash transactions greater than $5,000 and report if deemed suspicious.
There are four principal reasons why governments want to eliminate cash from the economy.
1. People would not be able to evade paying taxes if all transactions are electronic.
2. The Federal Reserve and banks would be able to impose negative interest rates on depositors (depositors pay interest to banks on their deposits), since the depositors could not withdraw their funds and hold cash.
3. The Government would be able to shut down all illegal activities that are currently conducted using cash.
4. A fourth advantage of the elimination of physical cash would be to more easily control people and potential dissidents through the freezing of their bank accounts.
The bottom line is that citizens lose privacy and freedom while the Government increases its control over the populace. An in-depth description of actions taken so far and the potential ramifications are detailed in a two part article by Dan Mitchell senior fellow at the Cato Institute. Link
Monday, December 21, 2015
Latest on Fight to Stop Airport Expansion
Here is the latest from Carl Norris who is leading the fight against expanding Georgetown's airport.
GET AROUSED! GET INVOLVED!
Last Thursday, 12/10/15, city staff advised the Georgetown Transportation Advisory Board (GTAB) a grant agreement between the city and Texas Department of Transportation Aviation Division (TxDOT AVN) for the approximate $10 Million, 25 components, 90% federal grant, 1514GRGTN, is currently planned for execution by the city in January 2016. This is the immense airport construction project, with an estimated cost of 60% of the entire past $17 million, 36 year history of executed federal funded expansion improvements for the airport, it includes the infamous Fuel Farm, and is to be the irreversible platform for unlimited expansion for future airport aviation operations (more air fleets, heavier, noisier aircraft, more landings and takeoffs on a 24 hour basis, 7 days a week). Given the immense growth of our city and the airport in its very heart, this grant would impact every citizen inside the city limits and territorial jurisdiction.
This immense project is being slipped by without public participation by unaccountable and remote state bureaucrats in Austin by use of a "categorical exclusion" from legitimate National Environmental Policy Act (NEPA) review. The "categorical exclusion" means that full construction of this grant along with all cumulative previous airport improvements would have no adverse impacts on our community. Legitimate NEPA review would include preparation of an Environmental Impact Statement (EIS) in which public hearings would be conducted where all adverse impacts to our lives, safety, environment (noise, neighborhood disruptions, children's school environment, religious services,etc.), and property values, mitigation to lessen or eliminate adverse impacts, and practicable alternatives to the proposed project would be examined and evaluated. Remember, FAA's own records for our airport show 29 air crashes, 9 deaths with 4 of those deaths in our neighborhood to date.
If you are concerned and aroused about these adverse impacts and believe in public participation before this agreement is executed you need to take a few minutes before the end of this month and write a letter and/or an email (or both) expressing why you demand the preparation of an EIS prior to execution of this grant agreement. You need to address your communication to Mr. Robert W. Jackson, Environmental Specialist, Texas Department of Transportation Aviation Division, 125 East 11th Street, Austin, Texas 78701-2483, Robert.W.Jackson@txdot.gov.
If you do not get aroused, actively involved, inform others, and this tragedy occurs, you will have to include yourself with others also disinterested and apathetic to blame. If you want more information on this issue, contact me. cnorris29@suddenlink.net
This immense project is being slipped by without public participation by unaccountable and remote state bureaucrats in Austin by use of a "categorical exclusion" from legitimate National Environmental Policy Act (NEPA) review. The "categorical exclusion" means that full construction of this grant along with all cumulative previous airport improvements would have no adverse impacts on our community. Legitimate NEPA review would include preparation of an Environmental Impact Statement (EIS) in which public hearings would be conducted where all adverse impacts to our lives, safety, environment (noise, neighborhood disruptions, children's school environment, religious services,etc.), and property values, mitigation to lessen or eliminate adverse impacts, and practicable alternatives to the proposed project would be examined and evaluated. Remember, FAA's own records for our airport show 29 air crashes, 9 deaths with 4 of those deaths in our neighborhood to date.
If you are concerned and aroused about these adverse impacts and believe in public participation before this agreement is executed you need to take a few minutes before the end of this month and write a letter and/or an email (or both) expressing why you demand the preparation of an EIS prior to execution of this grant agreement. You need to address your communication to Mr. Robert W. Jackson, Environmental Specialist, Texas Department of Transportation Aviation Division, 125 East 11th Street, Austin, Texas 78701-2483, Robert.W.Jackson@txdot.gov.
If you do not get aroused, actively involved, inform others, and this tragedy occurs, you will have to include yourself with others also disinterested and apathetic to blame. If you want more information on this issue, contact me. cnorris29@suddenlink.net
Do Georgetown Police Spy on the Citizens of Georgetown?
There is no indication that Georgetown police use surveillance equipment, but, has the question been asked? The Federal Government, which has sponsored the development of surveillance devices is very secretive about the deployment of such devices and how they work. The bit of publicly available information was disclosed through open records requests and lawsuits filed by journalists and researchers.
It is known that surveillance equipment has been deployed with local police departments. They have to sign non-disclosure agreements with the Federal Government and with the manufacturer. This makes it extremely difficult for local citizens to discover if their local police are using the equipment in their communities.
Jennifer Lynch, a senior staff attorney at the Electronic Frontier Foundation has said that the use of these tools is part of the militarization of the police in the U.S.: “We’ve seen a trend in the years since 9/11 to bring sophisticated surveillance technologies that were originally designed for military use — like Stingrays or drones or biometrics — back home to the United States.”Link
It is known that surveillance equipment has been deployed with local police departments. They have to sign non-disclosure agreements with the Federal Government and with the manufacturer. This makes it extremely difficult for local citizens to discover if their local police are using the equipment in their communities.
Jennifer Lynch, a senior staff attorney at the Electronic Frontier Foundation has said that the use of these tools is part of the militarization of the police in the U.S.: “We’ve seen a trend in the years since 9/11 to bring sophisticated surveillance technologies that were originally designed for military use — like Stingrays or drones or biometrics — back home to the United States.”Link
The citizens of Georgetown need to let their council persons know that we do not want the Georgetown police to have the capability to listen to the phone conversations of the citizens.
Thursday, December 17, 2015
Confirmed! Omnibus Bill Funds HUD Takeover of Local Zoning
"GOP LEADERSHIP CAVES ON GOSAR AMENDMENT
More bad news about the Omnibus spending bill: the Gosar Amendment language has been stripped out. This language would have prevented the Obama administration from implementing its Affirmatively Furthering Fair Housing rule (AFFH), a radical plan to use the power of the national government to create communities of a certain kind, each having what the federal government deems an appropriate mix of economic, racial, and ethnic diversity.
Apparently, Mitch McConnell and Paul Ryan weren’t up to defending the freedom of Americans to decide, through their local governments, how they will live — just as they weren’t up to slapping down the Department of Education’s assault on freedom of speech and due process."Link
The Real Reason to Keep HUD/Low Income Housing Out of City Government
President Obama’s wildly overreaching and altogether transformative Affirmatively Furthering Fair Housing (AFFH) regulation is the real threat to the autonomy of our local city council. Has the Republican leadership in Congress included in the Omnibus funding bill the amendment defunding AFFH proposed by Representative Paul Gosar (R., Ariz,) and passed by the House this past spring. As the root justification for all progressive initiatives, this regulation is structured to redistribute wealth from the haves to the have-nots and they do that by taking control of the zoning process.
I guess we have to wait until the bill is passed before we find out what is included!
"Mr. Obama’s AFFH rule seeks to radically reinvent local zoning laws in the United States – reengineering America neighborhoods based on racial and ethnic quotas. Under the rule’s assessment tool, local governments are required to “identify neighborhoods or areas in the jurisdiction and region where racial/ ethnic groups are segregated.”
Specifically, Mr. Obama’s AFFH rule seeks to radically reinvent local zoning laws in the United States – reengineering America neighborhoods based on racial and ethnic quotas. Under the rule’s assessment tool, local governments are required to “identify neighborhoods or areas in the jurisdiction and region where racial/ ethnic groups are segregated.” Next the rule compels them to “identify significant determinants that influence or contribute to those issues, and set forth fair housing priorities and goals to address fair housing issues and determinants.”
Refusal to comply with these invasive, unfunded mandates would empower the U.S. Department of Housing and Urban Development (HUD) to withhold millions of dollars in community development block grants from the area – effectively turning this $3.5 billion annual program into a political redistricting tool."AFFH Regulation
"Mr. Obama’s AFFH rule seeks to radically reinvent local zoning laws in the United States – reengineering America neighborhoods based on racial and ethnic quotas. Under the rule’s assessment tool, local governments are required to “identify neighborhoods or areas in the jurisdiction and region where racial/ ethnic groups are segregated.”
Specifically, Mr. Obama’s AFFH rule seeks to radically reinvent local zoning laws in the United States – reengineering America neighborhoods based on racial and ethnic quotas. Under the rule’s assessment tool, local governments are required to “identify neighborhoods or areas in the jurisdiction and region where racial/ ethnic groups are segregated.” Next the rule compels them to “identify significant determinants that influence or contribute to those issues, and set forth fair housing priorities and goals to address fair housing issues and determinants.”
Refusal to comply with these invasive, unfunded mandates would empower the U.S. Department of Housing and Urban Development (HUD) to withhold millions of dollars in community development block grants from the area – effectively turning this $3.5 billion annual program into a political redistricting tool."AFFH Regulation
To preserve our autonomy, the City needs to decline any HUD block grants, because these grants all come with "strings" attached.
Tell your city council person to keep us out of the web of HUD rules and regulations by declining to apply for HUD block grants.
Tuesday, December 15, 2015
Unfunded and Unreported Obligations
Under past accounting standards cities have not been required to report it's unfunded liabilities. This hidden debt is a result of outdated accounting methods used by city government officials, allowing a vast amount of pension and retirees’ health care benefits to be excluded from the cities’ financial reporting. The new pension reporting rules now in effect correct this deficiency in city's financial reporting, however, there are no requirements to report future health payment obligations. This latter deficiency needs to be corrected also.
Georgetown currently self-insures for health care for employees and retirees. This is accomplished by budgeting, annually, an amount to cover expected average medical expenditures plus a catastrophic insurance policy to cover those extraordinary expenses incurred by a limited number of individuals. Future health care obligations are not currently accounted for in the city's annual financial statements. A method needs to be developed to provide insight into these unfunded obligations.
The new pension account standards require a new discount rate for calculating net pension liability. The discount rate can continue to be the expected long-term rate of return, 7% per TMRS, on plan investments where current assets plus future contributions are projected to cover all future benefit payments. This requirement will be met if the employer funds the actuarially determined contribution, provided it pays off the unfunded liability over a reasonable period. However, plans where current assets plus future contributions are projected not to cover all future benefit payments must use a municipal bond rate to discount the noncovered payments.
The municipal bond rate is a yield or index rate for 20-year, tax-exempt general obligation bonds with an average rating of AA/Aa or higher (currently between 3.2% and 3.8%). Including a municipal bond rate as part of the discount rate increases liabilities. In addition, changes in the municipal bond rate or assumed rate of return on plan investments between measurement dates introduce more volatility into calculating liabilities and expense.
This new blended discount rate between the 83% funded liability and the 17% unfunded liability for Georgetown will cause the net unfunded liability to increase. The exact amount will not be known until TMRS reports to the city sometime next year.
Georgetown currently self-insures for health care for employees and retirees. This is accomplished by budgeting, annually, an amount to cover expected average medical expenditures plus a catastrophic insurance policy to cover those extraordinary expenses incurred by a limited number of individuals. Future health care obligations are not currently accounted for in the city's annual financial statements. A method needs to be developed to provide insight into these unfunded obligations.
The new pension account standards require a new discount rate for calculating net pension liability. The discount rate can continue to be the expected long-term rate of return, 7% per TMRS, on plan investments where current assets plus future contributions are projected to cover all future benefit payments. This requirement will be met if the employer funds the actuarially determined contribution, provided it pays off the unfunded liability over a reasonable period. However, plans where current assets plus future contributions are projected not to cover all future benefit payments must use a municipal bond rate to discount the noncovered payments.
The municipal bond rate is a yield or index rate for 20-year, tax-exempt general obligation bonds with an average rating of AA/Aa or higher (currently between 3.2% and 3.8%). Including a municipal bond rate as part of the discount rate increases liabilities. In addition, changes in the municipal bond rate or assumed rate of return on plan investments between measurement dates introduce more volatility into calculating liabilities and expense.
This new blended discount rate between the 83% funded liability and the 17% unfunded liability for Georgetown will cause the net unfunded liability to increase. The exact amount will not be known until TMRS reports to the city sometime next year.
Monday, December 14, 2015
Reality is Appearing in the Texas Economy
While the City of Georgetown continues to spend the taxpayers money like there is no limit and no tomorrow, sales tax data is showing the Texas economy is slowing down. (Link) "But then came the October collections: they plunged 5.4% year-over year; and now November collections that fell 3.3%. Two months in a row of declines; four months of the last six, and the first declines since the Great Recession low of March 2010."
It should be expected that sales tax revenue for the city will also decline and at the same time, pension contributions are likely to increase due to increases in city staff, in compensation levels, and revised pension accounting rules.
In the meantime, the city budget for FY-16 has increased by 23%. Developers are continuing to build as if there is no slow-down coming in the economy. Sun City has recently started to expand with 2500 additional homes and Wolf Ranch has started building another 2500 homes along highway 29. Exuberance is the word for the day and dismiss and ignore any thoughts or signs of a slowing economy. When the builders realize there are not enough buyers for all the homes anticipated, the revenues paid to the city by the builders and developers will also decline.
The city should be looking for ways now to slow down their spending before it becomes a crisis.
It should be expected that sales tax revenue for the city will also decline and at the same time, pension contributions are likely to increase due to increases in city staff, in compensation levels, and revised pension accounting rules.
In the meantime, the city budget for FY-16 has increased by 23%. Developers are continuing to build as if there is no slow-down coming in the economy. Sun City has recently started to expand with 2500 additional homes and Wolf Ranch has started building another 2500 homes along highway 29. Exuberance is the word for the day and dismiss and ignore any thoughts or signs of a slowing economy. When the builders realize there are not enough buyers for all the homes anticipated, the revenues paid to the city by the builders and developers will also decline.
The city should be looking for ways now to slow down their spending before it becomes a crisis.
New Pension Accounting Rules Increase Unfunded Liabilities
New accounting rules for government pension funds are currently going into effect. The net effect is that realistic discount rates have to be employed when calculating the funded/unfunded values of the investments. Lower discount rates cause the unfunded liability to significantly increase with the associated requirement for increased annual funding by government organizations, like the City of Georgetown.
The new accounting rules require: "For all fiscal years ending after June 15, 2015, GASB 68 requires your city to record a net pension liability (NPL) or net pension asset (NPA); and being in TMRS requires that you include disclosures in your financial report as a participant in an agent, multiple-employer plan."(TMRS)
An example of the impact of the new accounting rules on the unfunded liability of a pension plan is what happened to the Kentucky Teachers Retirement System. "Kentucky Teachers Retirement System's (KTRS) unfunded liability jumped to $24.43 billion in the fiscal year ended June 30, 2015, using new accounting rules known as GASB 67, compared to $14.01 billion in the prior year, a meeting of board members was told on Wednesday.
Under the rules Kentucky had to use a discount rate of 4.88 percent to calculate the net present value of its liabilities, compared to the 7.5 percent it would have used normally, said Beau Barnes, an executive and general counsel for the fund."Link
Texas Municipal Retirement System(TMRS) currently uses a 7% discount rate and based on KTRS's experience, it is expected that the discount rate will be reduced for calculating the unfunded liabilities for Texas cities.
The city needs to be prepared to increase its pension contribution to be able to maintain the recommended 80% funded ratio. TMRS will not issue its Comprehensive Annual Financial Report(CAFR) until the middle of next year, so the next year's contribution amount will not be known until then.
The new accounting rules require: "For all fiscal years ending after June 15, 2015, GASB 68 requires your city to record a net pension liability (NPL) or net pension asset (NPA); and being in TMRS requires that you include disclosures in your financial report as a participant in an agent, multiple-employer plan."(TMRS)
An example of the impact of the new accounting rules on the unfunded liability of a pension plan is what happened to the Kentucky Teachers Retirement System. "Kentucky Teachers Retirement System's (KTRS) unfunded liability jumped to $24.43 billion in the fiscal year ended June 30, 2015, using new accounting rules known as GASB 67, compared to $14.01 billion in the prior year, a meeting of board members was told on Wednesday.
Under the rules Kentucky had to use a discount rate of 4.88 percent to calculate the net present value of its liabilities, compared to the 7.5 percent it would have used normally, said Beau Barnes, an executive and general counsel for the fund."Link
Texas Municipal Retirement System(TMRS) currently uses a 7% discount rate and based on KTRS's experience, it is expected that the discount rate will be reduced for calculating the unfunded liabilities for Texas cities.
The city needs to be prepared to increase its pension contribution to be able to maintain the recommended 80% funded ratio. TMRS will not issue its Comprehensive Annual Financial Report(CAFR) until the middle of next year, so the next year's contribution amount will not be known until then.
Sunday, December 13, 2015
Council Declines to Fund Low Income Housing Study
The City Council admitted that there is a lack of low income housing available in Georgetown, but, they refused to fund a $195,000 study on how to provide more low income housing. The study was denied for a variety of reasons, including being too broad, insufficient information and premature.
The real question was not addressed at all! Is it the City's responsibility to provide, subsidize or support any segment of the housing industry? It would seem that the purpose of the city government is to provide public safety, build and maintain roads and bridges, provide water and waste services, protect personal and property rights and maybe, energy. All other activities are not necessarily the city's responsibility, especially housing. That should be provided through the free market. City intervention into the housing market seems to be "social engineering" and that is definitely not a city responsibility.
The bottom line is the City should stay out of the housing business, regardless of income level of the housing users.
The real question was not addressed at all! Is it the City's responsibility to provide, subsidize or support any segment of the housing industry? It would seem that the purpose of the city government is to provide public safety, build and maintain roads and bridges, provide water and waste services, protect personal and property rights and maybe, energy. All other activities are not necessarily the city's responsibility, especially housing. That should be provided through the free market. City intervention into the housing market seems to be "social engineering" and that is definitely not a city responsibility.
The bottom line is the City should stay out of the housing business, regardless of income level of the housing users.
Where Is the City Budget for 2015-2016?
The fiscal year is almost one-fourth complete and the city has not posted the budget for FY 2015-2016! Where is the budget? Contact the City Manager, the Mayor, or your Council Person and request that the budget be posted on the city website. It should be posted Here, but, there are no entries since July 2015 when the budget was proposed. There have been several changes to the budget since July and there is no integrated public record of those changes. The July 2015 documents are also incomplete, especially with respect to city demographics, debt and debt service.
How can the city operate through 1/4th of the year without a complete, published budget? Are they "winging it"? Not a good way to run a city.
How can the city operate through 1/4th of the year without a complete, published budget? Are they "winging it"? Not a good way to run a city.
Tuesday, December 8, 2015
Investor Lawsuit Filed Against SunEdison
"Rosen Law Firm, a global investor rights law firm, announces the filing of a class action lawsuit on behalf of purchasers of SunEdison, Inc. (SUNE) securities from June 16, 2015 through October 6, 2015, both dates inclusive (the “Class Period”). The lawsuit seeks to recover damages for SunEdison investors under the federal securities laws.Class Lawsuit
According to the lawsuit, throughout the Class Period, Defendants issued materially false and misleading statements to investors and/or failed to disclose that SunEdison did not have the financial resources to maintain its high growth and sustain its dividend. When the true details entered the market, the lawsuit claims that investors suffered damages."
Let the games begin!
Sunday, December 6, 2015
Watch the City's Pension Obligation
As is usual for government organizations, the bad news from Texas Municipal Retirement System (TMRS) was dumped to the internet for public consumption late last Friday. TMRS earned -3.57% on its investments last quarter, and has earned -1.71% year to date.
Remember that when TMRS calculates the City's pension liability, they assume the investments earn 7% annually. When the investments earn less, the City's liability increases. At 7% return, the City's pension liability is covered at 83.3%, whereas at 5.85% the coverage is only 60%. Thus it is easy to see the City's pension liability increases substantially when investment returns decrease.
This bears watching as the City may need to substantially increase its annual pension contributions due to lower than expected investment returns.
Remember that when TMRS calculates the City's pension liability, they assume the investments earn 7% annually. When the investments earn less, the City's liability increases. At 7% return, the City's pension liability is covered at 83.3%, whereas at 5.85% the coverage is only 60%. Thus it is easy to see the City's pension liability increases substantially when investment returns decrease.
This bears watching as the City may need to substantially increase its annual pension contributions due to lower than expected investment returns.
Battle Against Airport Capacity Expansion Continues
The Airport Concerned Citizens (ACC) continue their battle against the city of Georgetown and the Texas Department of Transportation to stop the capacity expansion of the airport. The airport has applied for a grant from TxDOT for a new refueling and storage capability that increases the fuel storage by 60%. The cost of such improvements are usually split with TxDOT, which gets the funds from the FAA, with TxDOT paying 90% and the city paying 10%. The following email shows the funding sources the city has used for past airport projects and questions the propriety of the whole funding process.
There is no question that the fuel farm project is geared to supporting expanding the airport capacity. The City Council has directed the airport manager to make the airport self-supporting. To generate more revenue, the airport must sell more fuel which means it must attract more aircraft to the airport. Thus the airport manager is following the Council's directive! Doubling the load bearing capability of the main runway also supports the objective of increasing airport revenue by attracting larger and heavier airplanes to the airport that also use more fuel.
ACC,
The December GTAB meeting is set for Thursday, December 10, 2015 , GMC Bldg, 300-1 Industrial Ave., in lieu of the usual 2nd Friday of each month. ACC will have a presentation.
Access to the agenda is available via georgetown.org – government- agendas city council, boards and commissions.
Your attention is directed to Item E, Airport Progress Report, Mr. Russ Volk, Airport Manager. The last item in his eight briefing papers is a response to Councilman John Hesser’s request at the September GTAB meeting for information on the sources of funds identified by the city for payment of the city’s share of federal grants for the airport. After 3 months staff has prepared a response for Mr. Hesser and others by listing sources of payment for five (5) grants. The first four are current executed and one still pending, 1514GRGTN (this is the proposed $10 Million, 25 component grant of which the Fuel Farm is one of the components.)
The listing shows the fiscal pocket being used for payment as (1) the Airport Fund for 1114GRGTN and 1214GRGTN, (2) Bond issuance for 1314GRGTN and 1514GRGTN, and (3) Cash from the general fund for 1414GRGTN. These sources raise questions. Were the payments for 1114GRGTN and 1214GRGTN identified in the most recent Airport Fund Audit? What bond issue or bond issues authorized airport grant payments? What ordinance or ordinances authorized these payments and authorized cash payment from the general fund for 1414GRGTN?
For your reference, these identified grants are as follows:
1114GRGTN - $1,248,644 GTU improvements in 2011 for operations expansion;
1214GRGTN - Approximate 13 acre land taking under threat of condemnation for RW 11/29 – no final status or cost available. Cost estimated in excess of $1 Million;
1314GRGTN- Garver Engineering Contract – Design of GRU 2014 and 2015 CIP’s- no final status or cost available- Cost estimated in excess of $600,000;
1414GRGTN – Airport Lighting Improvements (GTU 2014 CIP) – no final status or cost available – Cost estimated at about $1.4 Million;and
1514GRGTN – GTU 2015 CIP- remains pending for grant execution. Program is 25 component, $10 Million, and includes the Fuel Farm.
Your attention, interest and questions of your own are encouraged in the above. Please make plans to attend this meeting.
Carl
Monday, November 30, 2015
More on University Apartment Failure
The city council voted 4 to 3 to approve the rezoning and variances for the proposed apartments on University Ave. in Old Town. However, since more than 20 percent of the property owners within 200 feet of the proposed apartments objected in writing, a supermajority was required for approval. Since a supermajority of votes was not achieved, the motion to approve failed.
The council was asked to rezone the property from commercial to planned unit development because building height, setbacks and density exceeded limits in the city code.
The developer cannot bring the same project back to the council for a year according to the city planning director. The developer also indicated that he had a commercial project in mind that would meet the existing requirements and that he was going to proceed with the planning and analysis of that project.
One councilman expressed concern that the process was controlled by just two council persons. Since those council persons represent the districts affected, it seems right that those most affected have the greatest impact on land use in their area.
Another issue to be concerned about is the rezoning and granting of waivers by the city council. If the zoning and building codes are not appropriate for a given piece of property, then the zoning and codes should be changed for all the property in a given area. There should be extremely few accommodations granted by the city council and the variations from the building codes should be very small, like <1 foot on building heights and setbacks, and <2% on density.
It seems like the process worked as it was supposed to; those most impacted by the changes from the established zoning and codes had the largest voice in the matter.
The council was asked to rezone the property from commercial to planned unit development because building height, setbacks and density exceeded limits in the city code.
The developer cannot bring the same project back to the council for a year according to the city planning director. The developer also indicated that he had a commercial project in mind that would meet the existing requirements and that he was going to proceed with the planning and analysis of that project.
One councilman expressed concern that the process was controlled by just two council persons. Since those council persons represent the districts affected, it seems right that those most affected have the greatest impact on land use in their area.
Another issue to be concerned about is the rezoning and granting of waivers by the city council. If the zoning and building codes are not appropriate for a given piece of property, then the zoning and codes should be changed for all the property in a given area. There should be extremely few accommodations granted by the city council and the variations from the building codes should be very small, like <1 foot on building heights and setbacks, and <2% on density.
It seems like the process worked as it was supposed to; those most impacted by the changes from the established zoning and codes had the largest voice in the matter.
Saturday, November 28, 2015
How Green Energy Really Works
The vaporization of $29 billion of liabilities ($230 million of which was owed to the US Taxpayer) amid Abengoa's bankruptcy (Spain's 'Solyndra'), it worth reminding the world's greater fools just how "green" energy really works.Green Energy Boondoggle
"Businesses that cannot possibly survive without subsidies are ipso facto not economically viable. In spite of all the high-minded pronouncements about the “need to save the planet” and how this valiant effort can allegedly be “combined with economic growth”, their existence serves primarily one function: to distribute money looted from taxpayers and consumers to assorted cronies of the political class, who in turn provide the latter with kickbacks.That is all there is to it."
This Spanish company has declared bankruptcy and thus reneged on all it's commitments from debt repayment to generating plant construction and operation. What happens to Sun Edison's contract with Georgetown when the subsidies stop and interest rates increase? Notice how the American banks are involved in the debt financing of Abengoa and how the U.S. Government provided loans and grants which are now noncollectable.
Remember, this is a giant wealth transfer scheme to transfer wealth from taxpayers and ratepayers to crony capitalists, including those overseas. Georgetown's wind energy provider, EDF Renewables parent company is headquartered in France.
Wednesday, November 25, 2015
Proposed Apartment Complex on University Avenue Near Southwestern University Failed
The proposed apartment complex on University Avenue near Southwestern University failed to gain city council approval for the zoning changes and code variances requested. More analysis forth-coming later.
What We Should Not Be Thankful For
We should not be thankful for the tyranny of the modern American police state this Thanksgiving. We the citizens need to "push back" every time our liberty and freedom is reduced by our government.
Our government is controlled by the rich and powerful for their benefit. The rich get richer and the poor become poorer.(Rutherford Institute)
Americans are being jailed for profit (civil asset forfeiture). Everyday behaviors become targets of regulation and prohibition, and have resulted in Americans getting arrested and fined for making and selling unpasteurized goat cheese, cultivating certain types of orchids, feeding a whale, feeding deer and holding Bible studies in their homes.
The line between public and private property has been done away with. Call it what you will—taxes, penalties, fees, fines, regulations, tariffs, tickets, permits, surcharges, tolls, asset forfeitures, foreclosures, etc.—but the only word that truly describes the constant bilking of the American taxpayer by the government and its corporate partners is theft. What Americans don’t seem to comprehend is that if the government can arbitrarily take away your property, without your having much say about it, you have no true rights and no real property. The Bureau of Land Management is trying to take 90,000 acres of land away from Texans along the Red River.(Texas Public Policy Foundation files suit)
A fourth branch of government has been created—the NSA, CIA, FBI, DHS, etc.—came into being without any electoral mandate or constitutional referendum, and yet it possesses superpowers, above and beyond those of any other government agency save the military. It is all knowing, all seeing and all powerful.
"When a majority of citizens disagrees with economic elites and/or with organised interests, they generally lose. Moreover, because of the strong status quo bias built into the US political system, even when fairly large majorities of Americans favour policy change, they generally do not get it."(Princeton Study)
Our government is controlled by the rich and powerful for their benefit. The rich get richer and the poor become poorer.(Rutherford Institute)
Americans are being jailed for profit (civil asset forfeiture). Everyday behaviors become targets of regulation and prohibition, and have resulted in Americans getting arrested and fined for making and selling unpasteurized goat cheese, cultivating certain types of orchids, feeding a whale, feeding deer and holding Bible studies in their homes.
The line between public and private property has been done away with. Call it what you will—taxes, penalties, fees, fines, regulations, tariffs, tickets, permits, surcharges, tolls, asset forfeitures, foreclosures, etc.—but the only word that truly describes the constant bilking of the American taxpayer by the government and its corporate partners is theft. What Americans don’t seem to comprehend is that if the government can arbitrarily take away your property, without your having much say about it, you have no true rights and no real property. The Bureau of Land Management is trying to take 90,000 acres of land away from Texans along the Red River.(Texas Public Policy Foundation files suit)
A fourth branch of government has been created—the NSA, CIA, FBI, DHS, etc.—came into being without any electoral mandate or constitutional referendum, and yet it possesses superpowers, above and beyond those of any other government agency save the military. It is all knowing, all seeing and all powerful.
The schools, modeled after quasi-prisons churn out compliant citizens that expect the government to protect them from all discomfort and provide for all their needs and wants. The schools have closed campuses with armed guards, metal detectors, surveillance cameras, drug-sniffing dogs, tasers, cyber-surveillance, random searches, senseless arrests, jail time, the list goes on.
Our courts are not doing their job of strictly interpreting the laws and protecting the citizens. They are writing and re-writing legislation that is favorable to the government and special interest groups. Consider the Obamacare, Gay Marriage, etc.
Even though most of the intrusions into our freedoms and liberties are at the Federal level, we see the same kinds of intrusions in Georgetown. For example, the deer feeding ordinance, enacting "international" building ordinances and the control and licensing of private ambulances services.
Constant vigilance must be maintained and our elected officials must be held accountable for representing our interests and protecting our liberties and freedom.
Monday, November 23, 2015
Do We Need Zoning Rules?
The Planning and Zoning Commission narrowly approved a zone change for a proposed apartment complex on University Avenue near Southwestern University. Conditions restricting the number of units to 25, restricting building height to 30 feet and maintaining 61 parking spaces were imposed with the approval. The issues goes to the City Council tomorrow for consideration where they can either approve the Planning and Zoning Commission recommendation; approve the original proposal of 33 apartments, 36 feet high; do nothing; or approve their own conditions on the development.
The real question is: WHY IS THIS CONTROVERSY HAPPENING AT ALL? Doesn't the city have a set of zoning and building standards that a property owner/developer is supposed to adhere to? If the city can grant waivers to the rules, why have the rules in the first place? Wasn't there a time in the past where present and prior council members campaigned on the promise that the people of Georgetown should have a "well-defined and stable" set of rules to provide certainty so that they could plan their lives and businesses without worrying about the city changing requirements on a whim. What happened to that idea?
A cynic might think that the rules are for the "little people". They keep the average property owner from using or developing his/her property in a manner that is "best" for them. It is only for the powerful and well-connected that waivers are granted. Hey, that sounds like crony capitalism!
The real question is: WHY IS THIS CONTROVERSY HAPPENING AT ALL? Doesn't the city have a set of zoning and building standards that a property owner/developer is supposed to adhere to? If the city can grant waivers to the rules, why have the rules in the first place? Wasn't there a time in the past where present and prior council members campaigned on the promise that the people of Georgetown should have a "well-defined and stable" set of rules to provide certainty so that they could plan their lives and businesses without worrying about the city changing requirements on a whim. What happened to that idea?
A cynic might think that the rules are for the "little people". They keep the average property owner from using or developing his/her property in a manner that is "best" for them. It is only for the powerful and well-connected that waivers are granted. Hey, that sounds like crony capitalism!
Sunday, November 22, 2015
Civil Asset Forfeiture
In 2014, the federal government confiscated some $4.5 billion from Americans through civil asset forfeiture, according to a recent report from the Institute for Justice.(http://ij.org/report/policing-for-profit/)
As part of its report, the Institute issued state-level grades based on a variety of criteria, like the share of forfeited funds that police get to keep and protections for innocent owners. Most states and the federal government earned a D-. Two states, Massachusetts and North Dakota, earned an F for the incredibly low standard of proof required to forfeit goods there
This activity has been growing in recent years and there is compelling evidence that cities and police departments use these laws to beef up their budgets.(Washington Post analysis) Texas is rated a D+ and confiscated $26.6 Million in 2014 from its citizens.
Williamson County confiscated $98,344 in 2014 and Georgetown took in $58,024. It is unknown if crimes were committed and people were charged and convicted before the funds were appropriated to the city's and county's use. They should be asked how many forfeitures there were, the amount of money realized from each forfeiture and whether individuals were charged and convicted for each forfeiture.
Using civil asset forfeiture laws is inherently unfair unless a criminal conviction has been obtained. We need to encourage our state legislators to modify the enabling legislation to stop civil asset forfeiture in Texas until after a criminal conviction.
As part of its report, the Institute issued state-level grades based on a variety of criteria, like the share of forfeited funds that police get to keep and protections for innocent owners. Most states and the federal government earned a D-. Two states, Massachusetts and North Dakota, earned an F for the incredibly low standard of proof required to forfeit goods there
This activity has been growing in recent years and there is compelling evidence that cities and police departments use these laws to beef up their budgets.(Washington Post analysis) Texas is rated a D+ and confiscated $26.6 Million in 2014 from its citizens.
Williamson County confiscated $98,344 in 2014 and Georgetown took in $58,024. It is unknown if crimes were committed and people were charged and convicted before the funds were appropriated to the city's and county's use. They should be asked how many forfeitures there were, the amount of money realized from each forfeiture and whether individuals were charged and convicted for each forfeiture.
Using civil asset forfeiture laws is inherently unfair unless a criminal conviction has been obtained. We need to encourage our state legislators to modify the enabling legislation to stop civil asset forfeiture in Texas until after a criminal conviction.
Friday, November 20, 2015
More on SunEdison
Barons reports the following on SunEdison: Link
"JPMorgan lowered its rating on imploding solar developer SunEdison (SUNE) to Neutral on Friday, but pointed out the double-digit yields at its two publicly-traded “yieldco” subsidiaries and said both were unlikely to default on their commitments.
Analyst Paul Coster kept TerraForm Power (TERP), at an overweight rating. He kept SUNE’s other yieldco, TerraForm Global (GLBL), at Neutral, but had some positive comments.
Coster’s diverging outlooks were reflected in share prices on Friday. SUNE fell another 4 cents to close at $2.82 while TERP climbed 81 cents, or nearly 10%, to close at $9.20 and GLBL climbed 51 cents, or 11%, to $5.27.
Coster headlined his note on SUNE, “Ending the Agony: Downgrading to Neutral; Price Target to $5.50.” He suggested the company can avoid bankruptcy, but didn’t sound too confident, writing:
We think the stock is somewhat undervalued, the firm’s development and operational assets are high quality, but the situation is complicated, fluid and risky, so we move to the sidelines, deeply disappointed that we did not do so ahead of the “death-spiral.”
But as for TERP, he sums up:
We believe TERP is largely protected from cross-default risk at SUNE, and that the recent sell-off is over-done. We reduce our DCF [distributable cash flow]-based price target to $19.00 based on a revised DPS [dividend per share] growth-outlook and balance sheet commitments, but we remain Overweight and think the current yield of 17% is attractive.
Of GLBL, he writes in a similar fashion:
We believe GLBL is largely protected from cross-default risk at SUNE, and that the recent sell-off may be over-done. We reduce our DCF-based price target to $7.50 based on a revised DPS growth-outlook and balance sheet commitments, but we remain Neutral and think the current yield of 23% looks attractive."
"JPMorgan lowered its rating on imploding solar developer SunEdison (SUNE) to Neutral on Friday, but pointed out the double-digit yields at its two publicly-traded “yieldco” subsidiaries and said both were unlikely to default on their commitments.
Analyst Paul Coster kept TerraForm Power (TERP), at an overweight rating. He kept SUNE’s other yieldco, TerraForm Global (GLBL), at Neutral, but had some positive comments.
Coster’s diverging outlooks were reflected in share prices on Friday. SUNE fell another 4 cents to close at $2.82 while TERP climbed 81 cents, or nearly 10%, to close at $9.20 and GLBL climbed 51 cents, or 11%, to $5.27.
Coster headlined his note on SUNE, “Ending the Agony: Downgrading to Neutral; Price Target to $5.50.” He suggested the company can avoid bankruptcy, but didn’t sound too confident, writing:
We think the stock is somewhat undervalued, the firm’s development and operational assets are high quality, but the situation is complicated, fluid and risky, so we move to the sidelines, deeply disappointed that we did not do so ahead of the “death-spiral.”
But as for TERP, he sums up:
We believe TERP is largely protected from cross-default risk at SUNE, and that the recent sell-off is over-done. We reduce our DCF [distributable cash flow]-based price target to $19.00 based on a revised DPS [dividend per share] growth-outlook and balance sheet commitments, but we remain Overweight and think the current yield of 17% is attractive.
Of GLBL, he writes in a similar fashion:
We believe GLBL is largely protected from cross-default risk at SUNE, and that the recent sell-off may be over-done. We reduce our DCF-based price target to $7.50 based on a revised DPS growth-outlook and balance sheet commitments, but we remain Neutral and think the current yield of 23% looks attractive."
Any company that is yielding 17% or 23% is extremely risky in today's environment when 10 year treasury yields are approximately 2.26%.
Thursday, November 19, 2015
SunEdison Closes Below $3 A Share
Sun Edison continues to experience financial problems. With a low stock price, Sun Edison is limited in using it's stock as collateral to borrow more money. Loans to existing lenders require putting up more collateral as the stock price continues to sink. They are also burning cash to build new generating plants that they have committed to, such as Georgetown's. When will they run out of money to complete the builds? Will they be able to operate the plants, which they will have to do as they will not be able to sell them to their subsidiaries as they don't have the money and cannot raise money by selling their stock, because their stock price is also depressed? So many questions that will be answered over time by the market.
Wednesday, November 18, 2015
Sun Edison is a Joke
Trading in Sun Edison stock was stopped today at about 2:32 p.m. for a short time, after high volatility triggered circuit breakers under Security and Exchange Commission rules. After the close of regular trading it slipped to $2.89 per share at 4:45 p.m. The stock price is now gyrating on twitter rumors. Not a sign of a healthy company!
It Will SUNE Be Over
According to an analysis published by Zerohedge, Sun Edison is in serious financial trouble. No word from the city as to whether or not they are preparing for Sun Edison's potential non-performance.
"Back in the summer, SUNE was a hedge fund darling and in the portfolio of virtually every aggressive asset manager: a true hedge fund hotel.
"Back in the summer, SUNE was a hedge fund darling and in the portfolio of virtually every aggressive asset manager: a true hedge fund hotel.
Since then it has plunged by 90% on both concerns about fundamentals and hedge fund liquidations and margin calls. Just yesterday, the stock plunged another 34% beginning the question which hedge fund is still long and is about to get another major margin call.
In any event, as @the_real_fly says, "it will SUNE be over" and perhaps catalyzing the ending is a brand new note by Axiom Capital Research titled "The Nightmare Before Christmas” – Credit Event Appears More Likely than Presaged, in which the analyst Gordon Johnson sees at least another 33% of downside before the stock finally stabilizes at something resembling a fair value of $2.00
Here are the highlights:
- Credit Risk Appears Worse-than-Forebode. After some pressure from a number of SUNE pundits following our downgrade of the shares last week (given SUNE’s shrs had already moderated -75% vs. +1% for the S&P 500 over the same timeframe), we decided to do another “scrub” of the company’s 10-Q published 11/9. Following this exercise, we are even more resolute in our subdued outlook, SELL rating, and yr-end C16 PT of $2/shr (34% downside). Why? Five reasons, namely:
- (1) when excl. cash committed for construction projects, SUNE has just ~$600mn in cash for general corporate purposes (which we now blv may not be enough to sustain SUNE through 2Q16) – Ex. 2,
- (2) SUNE’s decision to borrow $169mn in 1yr paper from Goldman Sachs (GS; NR) in 3Q15 at a 15.4% interest rate (incl. $9mn prepayment) to put up collateral, we blv, for the 8/11/15 $152mn margin call on its $410mn Deutsche Bank (DB; NC) loan (an addtl. $91mn of collateral was required from SUNE 10/15 [Ex. 3], and we surmise more since then with the fall in Terraform Power’s shrs [TERP; NC]), pointing to emergency cash needs as recently as 3Q15 – who borrows 1yr paper at 15.4%?, (Ex. 4), other than a distressed company,
- (3) Renova’s right to put 7mn of GLBL shares to SUNE at a price of $15/shr 3/31/16 (a $105mn liability) – Ex. 5,
- (4) SUNE’s potential obligation to buy ~16% of Renova for $250mn using its own shares (i.e., 83mn shrs), suggesting sig. dilution to equity holders in the offing – Ex. 6, &
- (5) TERP’s recent revelation that it put up ~27% (i.e., $388mn) of the capital necessary to fund the Invenergy Warehouse, implying SUNE’s aspirations for ~$6bn in Warehouse funds to “house” its ~3GW in projects being developed may require a ~$1.65bn cash infusion (Ex. 7). Barring unforeseen incremental cheap funding in the offing, we see a credit event as likely before 3Q16.
- Valuation. Our yr-end C16 PT remains $2/shr (34% downside). While more valuation detail is below, with acute stress on its core biz at present, & shortcomings selling huge amounts of projects into the secondary mrkt over a short period of time thus far, we blv SUNE will miss ~3.5GW developed in C16. Using ([1.42GW × $0.18 (op. prof.) - $150mn interest × 70% (tax)] ÷ 316mn shrs) = $0.23/shr in dev. co. EPS, & applying a 9x P/E multiple (assumes 15% DevCo GM into perpetuity; likely high given 9.6% 2Q DevCo GM), SUNE is worth $2."
Tuesday, November 17, 2015
University Craziness Just Down the Road
Palestinian students at UT-Austin disrupted an Israeli Studies professor by screaming and chanting anti-Israeli slogans. There is a climate of intimidation and threats against Israeli and pro-Israeli speakers on most of the University campuses around the country.
"Yesterday morning we posted about an incident at UT-Austin, in which protesters from the Palestine Solidarity Committee (PSC), led by law student Mohammed Nabulsi, disrupted an event hosted by Professor Ami Pedahzur of UT’s Institute for Israeli Studies. The invited guest speaker was Dr. Gil-Li Vardi from Stanford University."Link
Better wake up people, the evil is right here in our back yard.
"Yesterday morning we posted about an incident at UT-Austin, in which protesters from the Palestine Solidarity Committee (PSC), led by law student Mohammed Nabulsi, disrupted an event hosted by Professor Ami Pedahzur of UT’s Institute for Israeli Studies. The invited guest speaker was Dr. Gil-Li Vardi from Stanford University."Link
Better wake up people, the evil is right here in our back yard.
Problems at Texas Ethics Commission Affect All of US
Members of the Texas Ethics Commission have been outed as colluding with Democratic officials in blue states to find out the names of donors to conservative organizations.
"State regulators at the Texas Ethics Commission have been pursuing the names of donors to conservative groups, including a group called Empower Texans. State regulators in Texas claimed that Empower Texans had engaged in too much political speech in 2010 and 2011 by issuing vote alerts related to pending legislation."
"Texas participants on the nationwide list serve include John Moore, the director of the Texas Ethics Commission, and Ian Steusloff, the general counsel to the Texas Ethics Commission."
An in-depth disclosure of the collaboration of Texas Ethics Commission Director, John Moore, is available here: TEC after conservatives
It's time to contact your Governor, Lt Governor, and Texas Legislators to stop this attack on our rights and freedoms.
"State regulators at the Texas Ethics Commission have been pursuing the names of donors to conservative groups, including a group called Empower Texans. State regulators in Texas claimed that Empower Texans had engaged in too much political speech in 2010 and 2011 by issuing vote alerts related to pending legislation."
"Texas participants on the nationwide list serve include John Moore, the director of the Texas Ethics Commission, and Ian Steusloff, the general counsel to the Texas Ethics Commission."
An in-depth disclosure of the collaboration of Texas Ethics Commission Director, John Moore, is available here: TEC after conservatives
It's time to contact your Governor, Lt Governor, and Texas Legislators to stop this attack on our rights and freedoms.
Sun Edison Stock at $3.40 per Share Today
How much lower can SUNE stock go before the company implodes? How can a company that depends on borrowed money continue to operate when it's stock is valueless? Can this company meet its contractual obligation to build a solar electric plant and deliver electricity to Georgetown? How long before the company is delisted from the stock exchanges? So many questions!
Why is the City Fighting Reinstatement of Officer Hoskins-Brown?
The Williamson County Sun and the Austin American-Statesman newspapers (29 Oct. 2015) have covered this saga and reported that the evidence supporting the firing (twice) was not credible. A hearing examiner found that Officer Hoskins-Brown had indeed taken her boyfriend's prescription drug, for which she also had a valid prescription, but that the charges of ingesting mescaline and lying were not provable under the law. The police chief had placed Officer Hoskins-Brown on indefinite suspension, effectively fired, on June 13, 2013. The hearing examiner ordered Officer Hoskins-Brown reinstated after serving a 15 day suspension on November 1, 2013 with back pay and benefits.
The following day, the chief fired Hoskins-Brown for a second time on the grounds that she could no longer perform her duties because the county and district attorneys found her to be untruthful and refused to accept any cases she filed. Since the second firing was not for disciplinary reasons, the city said her firing was not subject to appeal. A trial court agreed with the city, but the Court of Appeals has ruled that the trial court does have jurisdiction and referred the case to the trial court for further proceedings. The Appeals Court ordered the city to pay the legal fees for the appeal.
Since the Appeals Court ruling, both the District and County Attorneys have publicly recanted their prior statements about Officer Hoskins-Browns credibility as a witness.
The city has now appealed the Court of Appeals ruling to the Texas Supreme Court. Why is the city doing this?
Are they trying to "save face" over a really bad decision?
How much money is this costing the city? Do they really have a Dallas based high-dollar law firm pursuing this effort? How much does the law firm charge? $500+ per hour?
Hoskins-Brown has offered publicly to settle with the city, but, the city has rejected those offers. WHY?
If the city loses, they have to pay all the litigation costs and pay Officer Hoskins-Brown damages, back pay and benefits.
If the city wins, what have they won? They have established no great legal principle. They are responsible for all the city's legal costs and they saved a few bucks for Officers Hoskins-Brown's back pay and benefits.
The city has already damaged its reputation as being fair and equitable to it's employees and has established itself as a litigious city, which is not good.
Taking employees to court is not a good example for Georgetown to set.
The following day, the chief fired Hoskins-Brown for a second time on the grounds that she could no longer perform her duties because the county and district attorneys found her to be untruthful and refused to accept any cases she filed. Since the second firing was not for disciplinary reasons, the city said her firing was not subject to appeal. A trial court agreed with the city, but the Court of Appeals has ruled that the trial court does have jurisdiction and referred the case to the trial court for further proceedings. The Appeals Court ordered the city to pay the legal fees for the appeal.
Since the Appeals Court ruling, both the District and County Attorneys have publicly recanted their prior statements about Officer Hoskins-Browns credibility as a witness.
The city has now appealed the Court of Appeals ruling to the Texas Supreme Court. Why is the city doing this?
Are they trying to "save face" over a really bad decision?
How much money is this costing the city? Do they really have a Dallas based high-dollar law firm pursuing this effort? How much does the law firm charge? $500+ per hour?
Hoskins-Brown has offered publicly to settle with the city, but, the city has rejected those offers. WHY?
If the city loses, they have to pay all the litigation costs and pay Officer Hoskins-Brown damages, back pay and benefits.
If the city wins, what have they won? They have established no great legal principle. They are responsible for all the city's legal costs and they saved a few bucks for Officers Hoskins-Brown's back pay and benefits.
The city has already damaged its reputation as being fair and equitable to it's employees and has established itself as a litigious city, which is not good.
Taking employees to court is not a good example for Georgetown to set.
Thursday, November 12, 2015
Is Sun Edison Imploding?
"Scott+Scott, Attorneys at Law, LLP (“Scott+Scott”), a national shareholder and consumer rights litigation firm, announces the commencement of an investigation into SunEdison, Inc. (SUNE) (“SunEdison”) related to potential violations of federal securities laws." Link
Sun Edison stock closed at $4.54/share today, down from $33.45 last summer. The market capitalization is only $1.4B and the debt is $11.7B. These are not numbers that inspire confidence.
So in addition to financial stress, Sun Edison is under investigation for potential violation of federal security laws. What are the implications for Georgetown's contract for delivery of solar generated electricity? Is the city watching this event and do they have contingency plans in the event Sun Edison cannot deliver the promised electricity? Inquiring minds want to know!
Sun Edison stock closed at $4.54/share today, down from $33.45 last summer. The market capitalization is only $1.4B and the debt is $11.7B. These are not numbers that inspire confidence.
So in addition to financial stress, Sun Edison is under investigation for potential violation of federal security laws. What are the implications for Georgetown's contract for delivery of solar generated electricity? Is the city watching this event and do they have contingency plans in the event Sun Edison cannot deliver the promised electricity? Inquiring minds want to know!
Tuesday, November 10, 2015
Sun Edison Showing Signs of Stress
Sun Edison, the company that the city has under contract to provide solar generated electricity over the next 25 years is experiencing financial stress. The stock price plunged 24% as investors found out that the company is bleeding cash at a higher rate than expected.
"Shares of SunEdison Inc slid 24 percent to a nearly two-and-a-half-year low on Tuesday after the U.S. solar company posted a wider-than-expected loss, raising fresh concerns about its ability to fund its operations, projects and acquisitions." Reuters
"Shares of SunEdison Inc slid 24 percent to a nearly two-and-a-half-year low on Tuesday after the U.S. solar company posted a wider-than-expected loss, raising fresh concerns about its ability to fund its operations, projects and acquisitions." Reuters
The company is terminating 15% of their workforce to try and stem the hemorrhaging of cash. They are pulling back from building additional generating plants in some countries and they are no longer selling assets to their captive "yieldcos", which have been a source of cash for the company.
The deteriorating financial condition brings into question the company's ability to fulfill its contract obligations to Georgetown. If the company is forced to declare itself bankrupt, then existing contracts are no longer enforceable.
Read the article at the link for more information about SunEdisons financial condition.
Thursday, November 5, 2015
Georgetown's Future Growth
The City Council is beginning to have discussions about the future growth of Georgetown and how and where they can impact that growth.
A quick look at census data shows that the growth in Georgetown has been taking place west of IH 35. For the years 2010 to 2013, the population west of IH 35 in zip codes 78628 and 78633 increased by about 6,000. In zip code 78626, east of IH 35, the population decreased about 550 over the same time period. As later population data becomes available, the relative growth between east and west of IH 35 are likely to continue.
Another analysis, presented at the last council meeting, shows that over the last 20 years, 17,545 housing starts have been recorded in the city. With the city divided into four quadrants, it was shown that 74% of those housing starts occurred in the northwest quadrant, with 4% in the northeast, 2% in the southwest and 20% in the southeast quadrant.
Looking at the city's 2030 growth map, it is clear that the growth is likely to continue to the northwest.
It can be observed on the map that the city cannot expand south into Round Rock. It cannot expand east because of Weir. It cannot expand north along IH 35 because of Jarrell and it cannot expand west because of Leander and Liberty Hill. Georgetown's Extra Territorial Jurisdiction also meets those other city's boundaries. The only option remaining is to continue expanding to the northwest along Williams Drive and Hwy 195.
It has been suggested that given the impediments of Georgetown Lake, the San Gabriel rivers and IH 35, for people to drive to shopping, medical, etc., it makes sense to encourage more commercial development in the northwest part of town as that is where the population growth is likely to occur. Currently most of the commercial property is located along IH 35 and Williams Drive. If more businesses and services are not located in the northwest quadrant, traffic congestion will increase and become intolerable. This will lead to more expensive road and bridge projects to allow people to drive to the business and shopping areas.
Thus, it seems that more business and shopping services should be encouraged to locate near the population growth areas.
Contact your city council person with your thoughts and concerns about future growth in Georgetown.
A quick look at census data shows that the growth in Georgetown has been taking place west of IH 35. For the years 2010 to 2013, the population west of IH 35 in zip codes 78628 and 78633 increased by about 6,000. In zip code 78626, east of IH 35, the population decreased about 550 over the same time period. As later population data becomes available, the relative growth between east and west of IH 35 are likely to continue.
Another analysis, presented at the last council meeting, shows that over the last 20 years, 17,545 housing starts have been recorded in the city. With the city divided into four quadrants, it was shown that 74% of those housing starts occurred in the northwest quadrant, with 4% in the northeast, 2% in the southwest and 20% in the southeast quadrant.
Looking at the city's 2030 growth map, it is clear that the growth is likely to continue to the northwest.
It has been suggested that given the impediments of Georgetown Lake, the San Gabriel rivers and IH 35, for people to drive to shopping, medical, etc., it makes sense to encourage more commercial development in the northwest part of town as that is where the population growth is likely to occur. Currently most of the commercial property is located along IH 35 and Williams Drive. If more businesses and services are not located in the northwest quadrant, traffic congestion will increase and become intolerable. This will lead to more expensive road and bridge projects to allow people to drive to the business and shopping areas.
Thus, it seems that more business and shopping services should be encouraged to locate near the population growth areas.
Contact your city council person with your thoughts and concerns about future growth in Georgetown.
Tuesday, November 3, 2015
Tax Increment Zones, Pro & Con
Lone Star Rail will be returning to Georgetown in the future requesting that the city create a Transportation Infrastructure Zone to dedicate tax revenues to Lone Star Rail. What are Tax Increment Zones?
Tax Increment Zones, Tax Increment Reinvestment Zones, Transportation Infrastruction Zones are all essentially the same. They are property zones created by local government to dedicate growth in tax revenue after a certain date to a specific economic development activity. The political leaders tell their citizens about all the wonderful characteristics of such a zone, but, they never mention the negative characteristics of such zone. We will try to identify all the relevant characteristics of these government created entities.
The politicians tell us, the taxpaying citizens, the following:
1. A TIZ stimulates economic development.
2. A TIZ is a partnership between the government and developers.
3. There is a separate Board to manage the TIZ.
4. The TIZ has an expiration date.
5. TIZ revenue does not come from existing tax base and thus does not cause the tax RATE to increase.
6. TIZ revenue is restricted to how and on what it is spent.
7. TIZ revenue can be capped, with excess going to general funds.
What the politicians do not tell us is the following:
1. Tax Increment Reinvestment Zones are an admission of failure. Every time Government creates a TIZ, it is a vote of no confidence in its own ability to properly collect and spend taxpayer dollars.
2. It is a confession that our city should be managed by unelected boards at secretive meetings who can issue debt without voter approval.
3. History has shown that TIZ funds are spent on activities and projects not specifically approved in the governing documents.
4. A TIZ provides our elected officials the opportunity to engage in crony capitalism by providing tax subsidies to favored developers.
5. A TIZ is a mechanism for the city to take a larger share of limited tax revenues from rival entities like school districts and the county.
6. A TIZ provides urban planners the opportunity to practice social engineering by promoting high-density, mixed-use developments that are anathema to most citizens. This is exactly what would happen along a Lone Star Rail line if a TIZ is created as requested.
7. A TIZ rarely, if ever, expires. They are routinely renewed, expanded and extended.
8. Each TIRZ represents a moment when our elected officials decided to hand over the purse strings to someone else, diverting dollars that could have been spent shoring up pension obligations, paying down debt, or enhancing public safety.
9. Economic development may be slowed if new businesses are not provided the same incentives as those provided in an existing TIZ.
A description of the three existing Tax Increment Reinvestment Zones in Georgetown may be found here. The existing TIRZs are Rivery Park, Downtown and Williams Drive. The governing Boards and members are identified in the afore-mentioned link.
When considering all the attributes of a TIZ, it seems extreme caution should be exercised before creating such an entity. Very strict controls and time limits should be imposed. It is believed that the city should have a bias against using such constructs and only use them in very limited cases.
Tax Increment Zones, Tax Increment Reinvestment Zones, Transportation Infrastruction Zones are all essentially the same. They are property zones created by local government to dedicate growth in tax revenue after a certain date to a specific economic development activity. The political leaders tell their citizens about all the wonderful characteristics of such a zone, but, they never mention the negative characteristics of such zone. We will try to identify all the relevant characteristics of these government created entities.
The politicians tell us, the taxpaying citizens, the following:
1. A TIZ stimulates economic development.
2. A TIZ is a partnership between the government and developers.
3. There is a separate Board to manage the TIZ.
4. The TIZ has an expiration date.
5. TIZ revenue does not come from existing tax base and thus does not cause the tax RATE to increase.
6. TIZ revenue is restricted to how and on what it is spent.
7. TIZ revenue can be capped, with excess going to general funds.
What the politicians do not tell us is the following:
1. Tax Increment Reinvestment Zones are an admission of failure. Every time Government creates a TIZ, it is a vote of no confidence in its own ability to properly collect and spend taxpayer dollars.
2. It is a confession that our city should be managed by unelected boards at secretive meetings who can issue debt without voter approval.
3. History has shown that TIZ funds are spent on activities and projects not specifically approved in the governing documents.
4. A TIZ provides our elected officials the opportunity to engage in crony capitalism by providing tax subsidies to favored developers.
5. A TIZ is a mechanism for the city to take a larger share of limited tax revenues from rival entities like school districts and the county.
6. A TIZ provides urban planners the opportunity to practice social engineering by promoting high-density, mixed-use developments that are anathema to most citizens. This is exactly what would happen along a Lone Star Rail line if a TIZ is created as requested.
7. A TIZ rarely, if ever, expires. They are routinely renewed, expanded and extended.
8. Each TIRZ represents a moment when our elected officials decided to hand over the purse strings to someone else, diverting dollars that could have been spent shoring up pension obligations, paying down debt, or enhancing public safety.
9. Economic development may be slowed if new businesses are not provided the same incentives as those provided in an existing TIZ.
A description of the three existing Tax Increment Reinvestment Zones in Georgetown may be found here. The existing TIRZs are Rivery Park, Downtown and Williams Drive. The governing Boards and members are identified in the afore-mentioned link.
When considering all the attributes of a TIZ, it seems extreme caution should be exercised before creating such an entity. Very strict controls and time limits should be imposed. It is believed that the city should have a bias against using such constructs and only use them in very limited cases.
Monday, November 2, 2015
What is Lone Star Rail Up To?
Lone Star Rail(LSRD) has been very quiet of late. No progress reports, press releases or public announcements. Their web site http://www.lonestarrail.com/ has very little current information or description of activities. Their Environmental Impact Study(EIS) is not slated for completion until September, 2017. In the meantime, no progress reports have been made public.
The Wilco Sun(Link) reported last week that the Federal Highway Administration and TxDOT has accepted Lone Star Rail"s "purpose and need" report, but there are no other reports of this acceptance, nor are there any links to the "purpose and need" report.
Evidently Lone Star Rail has been concentrating their effort to extract funds from local governments at the southern end of the proposed rail line. Bexar County approved $500,000 for Lone Star Rail in the budget they passed last week. "Lone Star Rail District Director Joe Black said he's also asked the City of San Antonio and VIA Metropolitan Transit for start-up funding. The rail agency will also ask for funding from Alamo Colleges, Black said."
The LSRD is asking that Schertz and New Braunfels enter into tax increment zone agreements by the end of September, in order to lock in a local funding commitment for future operating and maintenance costs. These tax increment zone(TIZ) agreements are mechanisms for transferring power away from the local communities and local elected officials. Once a TIZ is created, the additional taxes generated in the future by property within the TIZ goes to LSRD without limit. Not good for the local citizens to give up the power to control the taxes in their city.
The Wilco Sun(Link) reported last week that the Federal Highway Administration and TxDOT has accepted Lone Star Rail"s "purpose and need" report, but there are no other reports of this acceptance, nor are there any links to the "purpose and need" report.
Evidently Lone Star Rail has been concentrating their effort to extract funds from local governments at the southern end of the proposed rail line. Bexar County approved $500,000 for Lone Star Rail in the budget they passed last week. "Lone Star Rail District Director Joe Black said he's also asked the City of San Antonio and VIA Metropolitan Transit for start-up funding. The rail agency will also ask for funding from Alamo Colleges, Black said."
The LSRD is asking that Schertz and New Braunfels enter into tax increment zone agreements by the end of September, in order to lock in a local funding commitment for future operating and maintenance costs. These tax increment zone(TIZ) agreements are mechanisms for transferring power away from the local communities and local elected officials. Once a TIZ is created, the additional taxes generated in the future by property within the TIZ goes to LSRD without limit. Not good for the local citizens to give up the power to control the taxes in their city.
Friday, October 30, 2015
More EMS Spending Coming
It has been reported that the City needs two more ambulances for the city within the next 18 months. Also, two new firehouses are required to be constructed over the next 18 months. Most likely one will be built in conjunction with ESD 8 on Williams Drive near Four T Ranch Road and the other one will likely be built in the Southeast quadrant of Georgetown. Details about specific locations will be provided as they become available.
So it appears the City Council is again ready to borrow more money to expand city services. This is in addition to the 23% increase in the city budget for FY 2016. Since the city never funds capital projects out of current revenue, expect more bonds to be issued increasing the long term debt burden.
Remember, the city could have prioritized the dispatch process to send only the Williamson County ambulance on medical calls instead of creating the city's own ambulance service. That would have reduced the number of times two vehicles (a fire engine and an ambulance) were dispatched to a single call, thus increasing the number of vehicles available to respond to multiple emergencies. This would allow for quick response to a fire incident that occurs within minutes of a 9-1-1 (medical) call.
So it appears the City Council is again ready to borrow more money to expand city services. This is in addition to the 23% increase in the city budget for FY 2016. Since the city never funds capital projects out of current revenue, expect more bonds to be issued increasing the long term debt burden.
Remember, the city could have prioritized the dispatch process to send only the Williamson County ambulance on medical calls instead of creating the city's own ambulance service. That would have reduced the number of times two vehicles (a fire engine and an ambulance) were dispatched to a single call, thus increasing the number of vehicles available to respond to multiple emergencies. This would allow for quick response to a fire incident that occurs within minutes of a 9-1-1 (medical) call.
The city council appears ready to spend more of your money!
Thursday, October 29, 2015
Does Georgetown PD Require Written Consent for Property Search?
Police often ask to search a person's property to determine if there is any illegal activity being conducted. It is every citizen's right under the US Constitution to deny permission unless there a properly executed search warrant signed by a judge. There are instances where the police think they have received oral permission and the property owner thinks they did not give permission. This can subsequently cause many problems for the property owner, the police, and a prosecutor if evidence of a crime is discovered.
A federal lawsuit has recently been filed in San Marcos alleging the police conducted an illegal search that was not authorized by the property owner. Link
There is a simple straight-forward solution that would prevent any misunderstanding about whether permission for a search was granted or not: Employ a written search consent form signed by the property owner in those instances where there is no official search warrant. The article in the Link provides a more extensive analysis.
This seems like a good idea and Georgetown's police chief should implement such a policy if he hasn't already.
A federal lawsuit has recently been filed in San Marcos alleging the police conducted an illegal search that was not authorized by the property owner. Link
There is a simple straight-forward solution that would prevent any misunderstanding about whether permission for a search was granted or not: Employ a written search consent form signed by the property owner in those instances where there is no official search warrant. The article in the Link provides a more extensive analysis.
This seems like a good idea and Georgetown's police chief should implement such a policy if he hasn't already.
Thursday, October 22, 2015
Another $160.6 Million in Debt for Georgetown Taxpayers? Thanks Georgetown ISD
Has anyone noticed that the voters of Georgetown are being asked to approve another $160,600,000 in debt to build and refurbish schools in Georgetown ISD?
We will have some insightful financial analysis in the coming days. In the meantime notice that according to The Sun paper, $8650 has been raised by a political action committee to convince the voters to approve the bond package at the November 3, 2015 election. Voters should also be aware that $5,000 of the $8650 was contributed by contractors, architects and engineers and that 3 of the 4 contributors are from outside of Georgetown! Follow the money folks if you want to know who benefits financially. Frankly, $5,000 for a piece of the $160,600,000 pie seems really cheap (sarcasm).
We will have some insightful financial analysis in the coming days. In the meantime notice that according to The Sun paper, $8650 has been raised by a political action committee to convince the voters to approve the bond package at the November 3, 2015 election. Voters should also be aware that $5,000 of the $8650 was contributed by contractors, architects and engineers and that 3 of the 4 contributors are from outside of Georgetown! Follow the money folks if you want to know who benefits financially. Frankly, $5,000 for a piece of the $160,600,000 pie seems really cheap (sarcasm).
Wednesday, October 21, 2015
Texas Has a Lot of Debt
Because the economy has been better than in most other states, it is easy to forget how much debt the state has accumulated. The Truth in Accounting organization has calculated the total debt and the debt per taxpayer for all fifty states. There are eleven states whose assets exceed liabilities and Texas is NOT one of those states. Texas ranks 27th out of 50 with a tax burden of -$8300 per taxpayer. A more complete analysis of Texas debt is shown in the chart following:
Keep in mind that these figures do not include county and city debt. Georgetown has and continues to accumulate bond debt, pension and healthcare obligations.
Georgetown, Williamson County, the school districts and the state need to reign in the spending to no more than population growth plus inflation! Tell your elected representatives of your concern and that you expect them to reduce the growth in spending and quit financing government with more debt!
Georgetown, Williamson County, the school districts and the state need to reign in the spending to no more than population growth plus inflation! Tell your elected representatives of your concern and that you expect them to reduce the growth in spending and quit financing government with more debt!
Monday, October 12, 2015
Austin Sues Over Unequal Appraisal System
Across Texas, homeowners are feeling the pressure of high property taxes, and our state’s broken commercial property tax system bears part of the blame. As noted in a previous post, Proposition 1, which is on the ballot in November gives some property tax relief, but, potentially much more relief could be provided to home-owners if commercial property was valued at market value.
The City of Austin recently contracted for an analysis comparing appraised values of commercial properties to actual sales prices over the years of 2012 through early 2015. They found the average undervaluation in the year of sale was:
- 48% in 2012
- 44% in 2013
- 53% in 2014
The average undervaluation for these three years was 47%.
They segregated commercial property into two categories; unimproved and under-improved land versus developed property. The greatest undervaluation was for the unimproved and under-improved land and the undervaluation for 2012 through 2014 was 92%.
The effect of this disparity in valuations of commercial property and residential property is to cause residential property to pay a larger share of the property taxes that are levied and collected by the taxing entities. If more money was collected from commercial property owners, then the money collected from residential property owners could be reduced.
The primary cause of the undervaluation seems to be the unavailability of sales price data to the Assessor on commercial properties. There is currently no Texas law requiring disclosure of sales prices. Thus, the obvious solution would be for the legislature to pass a law requiring sales price disclosure.
Austin has filed a law suit stemming from a petition the city filed in June with the Travis Central Appraisal District. It contends that the appraised values of billions of dollars in commercial and vacant land do not match market prices, a violation of the state Constitution's requirements that all property be taxed “in proportion to its value” and in an “equal and uniform” manner. State Comptroller Glenn Hegar is also listed as a defendant.
Perhaps the City of Georgetown should conduct a study to determine if the under-appraisal of commercial property is an issue in Georgetown. Let your city council person know you are concerned about this potential issue.
Here is a link to a report on the Austin law suit. http://www.texastribune.org/2015/08/24/austin-sues-texas-over-unequal-appraisal-system/
The City of Austin recently contracted for an analysis comparing appraised values of commercial properties to actual sales prices over the years of 2012 through early 2015. They found the average undervaluation in the year of sale was:
- 48% in 2012
- 44% in 2013
- 53% in 2014
The average undervaluation for these three years was 47%.
They segregated commercial property into two categories; unimproved and under-improved land versus developed property. The greatest undervaluation was for the unimproved and under-improved land and the undervaluation for 2012 through 2014 was 92%.
The effect of this disparity in valuations of commercial property and residential property is to cause residential property to pay a larger share of the property taxes that are levied and collected by the taxing entities. If more money was collected from commercial property owners, then the money collected from residential property owners could be reduced.
The primary cause of the undervaluation seems to be the unavailability of sales price data to the Assessor on commercial properties. There is currently no Texas law requiring disclosure of sales prices. Thus, the obvious solution would be for the legislature to pass a law requiring sales price disclosure.
Austin has filed a law suit stemming from a petition the city filed in June with the Travis Central Appraisal District. It contends that the appraised values of billions of dollars in commercial and vacant land do not match market prices, a violation of the state Constitution's requirements that all property be taxed “in proportion to its value” and in an “equal and uniform” manner. State Comptroller Glenn Hegar is also listed as a defendant.
Perhaps the City of Georgetown should conduct a study to determine if the under-appraisal of commercial property is an issue in Georgetown. Let your city council person know you are concerned about this potential issue.
Here is a link to a report on the Austin law suit. http://www.texastribune.org/2015/08/24/austin-sues-texas-over-unequal-appraisal-system/
Friday, October 9, 2015
Public Hearing on Airport Fuel Farm
The Georgetown Transportation Advisory Board and Governing Body held a Public Hearing for a new fuel farm at the airport on Friday, October 9. Approximately sixty citizens were in attendance. There were twenty nine speakers of which twenty eight were adamantly opposed to increasing the airport capacity and they viewed the movement and sixty percent capacity increase in the fuel farm as the "camel's nose under the tent" for additional increases in take-off and landings and ground engine tests. One speaker was neutral on the fuel farm. He was concerned about the wait line for aviation gasoline and the starting and stopping of the aircraft engines as the line moved forward to the filling station. He viewed this as a hazardous operation which the proposed plan does not address. 93 percent of the speakers lived in neighborhoods around the airport.
The Board chairman told the audience at the beginning that the Board would not ask any questions, comment on any testimony, or engage the citizens in any manner. Par for the course!
Several people commented on the lack of adequate communication to the people living around the airport about the Public Hearing. They indicated that multiple methods of notification should be used including mailings to all the affected residences. Several people complained about the time of day for the Hearing as it precluded working people the opportunity to provide input. Again, not very considerate of the citizens who pay taxes and form the backbone of the community.
Many issues were raised including the concern that property values will be adversely affected by an airport with increased operations. There was growing concern expressed about safety and increased noise and its effect on children in the home and the nearby schools. It was also pointed out by several speakers that the location of the airport near the center of Georgetown is unsuited for a growing community and an expanding airport. It was pointed out by at least two speakers that increased airport operations would have a negative effect on wildlife in the designated wildlife habitat areas.
Finally, almost all speakers spoke against a Finding of No Significant Impact. They all wanted a full Environmental Impact Study for the fuel farm and the other planned capital improvement projects before any other actions are taken.
As a final insult to the participants, they were informed as they were leaving the Hearing that they would have to submit written copies of their testimony for the testimony to be included in the official records of the Public Hearing. Many participants spoke extemporaneously without the aid of notes or prepared testimony. This places an additional and unnecessary burden on those citizens as the Hearing was recorded and that recording could easily be incorporated into the official record.
Does the City Listen to Its Citizens?
Just returned from the Georgetown Transportation Advisory Board and
the Governing Body which held a Public Hearing for a new fuel farm at the
airport. Is the City leadership out
of touch with its citizens? Whenever
citizens attend City Council meetings or any of the City established advisory
boards meetings, there is usually an opportunity for citizens to speak on any
items that are on the agenda.
Unfortunately, there is never any real-time feedback to the citizens who
have taken the time to attend the meeting and to constructively provide input
to the Council or Board. This lack of
dialog leaves the citizens feeling extremely frustrated and suspicious that
there are “hidden agendas” and non-public deals being negotiated and
implemented to benefit specific individuals, companies or industries. Only an open and transparent dialog between
those who govern and the citizens can inspire trust between the citizens and
their government.
The Council makes many excuses for not engaging in public dialog
with Georgetown’s citizens ranging from, “it just a few of the same old people”
to it is “the same old issues”. There
are “smart” people in the community with ideas on how the Council and Boards
can constructively engage with the citizens in a public, on-the-record
meeting. Let us hear the ideas and give
them to your City Council representatives.
Monday, October 5, 2015
SunEdison, Georgetown's Solar Electric Provider, Called Hedge Fund Hotel
The list of hedge funds long SunEdison Inc (NYSE:SUNE) reads off like the who’s who of the hedge fund industry. In first place is David Einhorn‘s Greenlight Capital, which owned 24.8 million shares of the solar company at the end of June. SunEdison is Einhorn’s second largest equity position after Apple. In second place is Dan Loeb’s Third Point, which held 12.4 million shares at the end of the second quarter, making the solar company Loeb’s sixth largest equity position. In third place is Larry Robbins’s Glenview Capital, which owned 11.4 million shares. Overall, 93 out of over 730 elite funds owned a stunning $5.68 billion worth of the company’s stock (representing 69.10% of the float) at the end of June, up from $4.44 billion a quarter earlier.
It is likely that Einhorn is quite unhappy with the value of his investment as the stock price has declined from $33.45 in July to about $9.00 per share today. That is a 73 percent decline in three months! Many retail stock analysts are recommending that investors sell the stock due to the uncertainty about the future.
SunEdison spins off their solar generating plants to a seperate company called a "yieldco" by signing long-term contracts with users like Georgetown. This "yieldco" is supposed to provide consistent dividends to shareholders. SunEdison's "yieldco" is called TerraForm Power, Inc and it had to borrow the money to purchase the power plants from SunEdison. Of course SunEdison had to backstop the loans since TerraForm initially had no assets or insufficient assets to back the loans.
SunEdison spins off their solar generating plants to a seperate company called a "yieldco" by signing long-term contracts with users like Georgetown. This "yieldco" is supposed to provide consistent dividends to shareholders. SunEdison's "yieldco" is called TerraForm Power, Inc and it had to borrow the money to purchase the power plants from SunEdison. Of course SunEdison had to backstop the loans since TerraForm initially had no assets or insufficient assets to back the loans.
A CreditSights report concludes it is possible SunEdison to be dragged down by TerraForm and the added burden of posting cash collateral for the margin loan that was backed by stock. More reporting can be found here. SunEdison also plans on terminating 15 percent of their employees as they strive to survive as a going concern.
Here are more excerpts from the link about SunEdison:
"Amid a surge in debt and increasingly negative operating cash-flow, the plunge in stock (asset) price may have triggered a cross-collateral margin call of around $315 million. Furthermore,mass layoffs are on the cards as the CEO attempts to "optimize" the business".
"the more we find the more negative we get on the sponsor company of TerraForm Power".
The citizens/rate-payers of Georgetown are entitled to know the risk to them through the City if SunEdison fails to perform up to the terms of the contract. However, the City refuses to release the contract to its citizens and has been unwilling to identify the risks to the City as well as any mitigation strategies.
Monday, September 28, 2015
Another Controversy Brewing re Southwest Bypass?
Georgetown and Williamson County are jointly planning on constructing a bypass around the southwest side of Georgetown. The County has the lead on this phase and awarded a $1.75M contract last fall to HDR, a Nebraska engineering firm, for planning and design. A conceptual map from last fall follows:
This map indicates the Southwest Bypass would meet the Outer-loop at I-35 to start forming a "beltway" around Georgetown.
The current route shown below comes from the Capital Area Planning Organization (CAMPO) 2040 Transportation Plan and does not show the bypass meeting the Outer-loop at I-35 to form a beltway.
Evidently sufficient design work has been accomplished to show that there will be a sharp turn to the Northeast near I-35 that will necessitate the slowing of southbound bypass traffic from 70 mph to 60 mph. The long-range plan is for this road to be four-lane freeway.
The sharp turn high-lighted in the red rectangular box is known as the Ox-Bow interchange due to its shape. A rational highway design engineer would eliminate the Ox-Bow and design a smooth transition to I-35. It is unknown precisely why this design is currently the baseline.
Stay tuned to see if wiser heads impose a change in the baseline.
This is reminiscent of the debacle at the intersection of State Highway 195 and Ronald Reagan Blvd. The transition between the two roads, both Northbound and Southbound are confusing and require one to twist themselves into a pretzel to navigate through the transition. There are obvious safety issues also. Already, an ambulance from a nearby town had difficulty negotiating the transition from Ronald Reagan to 195 southbound.
Hopefully good highway engineering design will prevail.
This map indicates the Southwest Bypass would meet the Outer-loop at I-35 to start forming a "beltway" around Georgetown.
The current route shown below comes from the Capital Area Planning Organization (CAMPO) 2040 Transportation Plan and does not show the bypass meeting the Outer-loop at I-35 to form a beltway.
Evidently sufficient design work has been accomplished to show that there will be a sharp turn to the Northeast near I-35 that will necessitate the slowing of southbound bypass traffic from 70 mph to 60 mph. The long-range plan is for this road to be four-lane freeway.
The sharp turn high-lighted in the red rectangular box is known as the Ox-Bow interchange due to its shape. A rational highway design engineer would eliminate the Ox-Bow and design a smooth transition to I-35. It is unknown precisely why this design is currently the baseline.
Stay tuned to see if wiser heads impose a change in the baseline.
This is reminiscent of the debacle at the intersection of State Highway 195 and Ronald Reagan Blvd. The transition between the two roads, both Northbound and Southbound are confusing and require one to twist themselves into a pretzel to navigate through the transition. There are obvious safety issues also. Already, an ambulance from a nearby town had difficulty negotiating the transition from Ronald Reagan to 195 southbound.
Hopefully good highway engineering design will prevail.
WOW! Look at Our Solar Electric Provider!
Can this company remain in business? Its stock price has fallen from $33.45 to $7.40 this morning! It has been burning cash like at a wiener roast! It spent approximately $3,500,000,000 more than it earned in 2014. Most of these funds came from borrowing and stock sales. That is not a sustainable business model.
Friday, September 25, 2015
Ballot Proposition 1
The Texas legislature voted in the last session to provide property tax relief to ALL Texas residence owners, subject to voter approval in the November 3, 2015 election.
The tax relief is to be effected by increasing the residence homestead exemption from $15,000 to $25,000. The increased exemption will also be applied to frozen tax values, so if you are already 65, or disabled, and your taxes have been frozen, you also will realize a decrease in your taxes, as your tax bill will be recalculated using the new homestead exemption ($25,000 vs $15,000), and the reduction then applied to your frozen tax amount.
The proposition also prohibits cities or counties that have adopted the frozen taxes for the elderly and disabled from reducing or repealing the exemption. This means Georgetown will have to apply the $25,000 homestead exemption to those in the city that currently have their taxes frozen which will result in a reduction in taxes!
Of course all the city council has to do is raise the tax rate to recover those lost city revenues. But watch out for obtuse methods to be proposed to increase your taxes through all kinds of new fees.
The proposition will also permanently ban a tax on the sale of real estate (transfer tax) in Texas. This closes off another revenue source for our politicians to exploit as they have done in 36 other states!
The tax relief is to be effected by increasing the residence homestead exemption from $15,000 to $25,000. The increased exemption will also be applied to frozen tax values, so if you are already 65, or disabled, and your taxes have been frozen, you also will realize a decrease in your taxes, as your tax bill will be recalculated using the new homestead exemption ($25,000 vs $15,000), and the reduction then applied to your frozen tax amount.
The proposition also prohibits cities or counties that have adopted the frozen taxes for the elderly and disabled from reducing or repealing the exemption. This means Georgetown will have to apply the $25,000 homestead exemption to those in the city that currently have their taxes frozen which will result in a reduction in taxes!
Of course all the city council has to do is raise the tax rate to recover those lost city revenues. But watch out for obtuse methods to be proposed to increase your taxes through all kinds of new fees.
The proposition will also permanently ban a tax on the sale of real estate (transfer tax) in Texas. This closes off another revenue source for our politicians to exploit as they have done in 36 other states!
Proposed Texas Constitutional Ammendents
November 3, 2015 Constitutional Amendment Election Ballot Language
Please visit the Texas Legislature Online home page to obtain further information.
Proposition 1 – SJR 1
“The constitutional amendment increasing the amount of the residence homestead exemption from ad valorem taxation for public school purposes from $15,000 to $25,000, providing for a reduction of the limitation on the total amount of ad valorem taxes that may be imposed for those purposes on the homestead of an elderly or disabled person to reflect the increased exemption amount, authorizing the legislature to prohibit a political subdivision that has adopted an optional residence homestead exemption from ad valorem taxation from reducing the amount of or repealing the exemption, and prohibiting the enactment of a law that imposes a transfer tax on a transaction that conveys fee simple title to real property.”
Proposition 2 – HJR 75
“The constitutional amendment authorizing the legislature to provide for an exemption from ad valorem taxation of all or part of the market value of the residence homestead of the surviving spouse of a 100 percent or totally disabled veteran who died before the law authorizing a residence homestead exemption for such a veteran took effect.”
Proposition 3 – SJR 52
“The constitutional amendment repealing the requirement that state officers elected by voters statewide reside in the state capital.”
Proposition 4 – HJR 73
“The constitutional amendment authorizing the legislature to permit professional sports team charitable foundations to conduct charitable raffles.”
Proposition 5 – SJR 17
“The constitutional amendment to authorize counties with a population of 7,500 or less to perform private road construction and maintenance.”
Proposition 6 – SJR 22
“The constitutional amendment recognizing the right of the people to hunt, fish, and harvest wildlife subject to laws that promote wildlife conservation.”
Proposition 7 – SJR 5
“The constitutional amendment dedicating certain sales and use tax revenue and motor vehicle sales, use, and rental tax revenue to the state highway fund to provide funding for nontolled roads and the reduction of certain transportation-related debt.”
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