Over at another blog, a poster named "Think Again" is permitted to pen a column pointing out problems with the utility sell. Here is part of what he writes:
The useful life of a sidewalk or street, under normal use, could stretch 10 years. The bonds being used to float this sale are 20 and 30 years in length.
Here is Council President Ryan Vaughn's response:
Inclusive of the PILOT repayment and the borrowing debt for purchase, the deal saves ratepayers 1.47 BILLION dollars over 30 years AND provides us with $450 million for infrastructure improvements immediately. These figures are realized by operating and other synergies Citizens conservatively estimates at $40 million a year.
First of all, only someone who can't articulate concrete facts resorts to using nebulous words like "synergy." More importantly though, did you see how Vaughn completely ignored the valid point "Think Again" made? There is no excuse for taking out a loan for 30 years to pay for improvements that last maybe 10 years. It is the height of fiscal irresponsibility. And Vaughn calls himself a "conservative?"
Only in some twisted bizarro world is Ryan Vaughn, who has supported every tax and fee increase and big spending program Mayor Greg Ballard has proposed, a "conservative." Mayor Ballard will go down in history as the biggest spender in Indianapolis history. Ryan Vaughn's legacy will be as a liberal Republican lapdog for a failed, liberal Republican Mayor.
11 comments:
The term "synergies" is the biggest bullshit term used in government and business today. Whenever they tell you there will be all kinds of savings because of "synergies", look out. The way the deal is structured currently it is nearly impossible for Citizens Energy to achieve any decent savings for the ratepayers, particularly when we're saddling them with another $263 million in debt on top of the one and a half billion in debt they are already assuming, plus the corrupt pay-to-play contracts held by Veolia and United Water. How much will Vaughn's firm be rewarded once this deal goes through because of his self-dealing on behalf of the firm's clients? You can bet it will reach into the millions. Vaughn represents the worst of the "Me, Myself and I" generation,. No wonder he was such good buddies with Carl Brizzi and Tim Durham.
I thought the worse term was "realized" as if this money just falls from the sky. Bart Lies! blog covered that quite well.
Has any cost savings in this town actually been realized? Did we save anything combining the police departments or the fire departments? We certainly did not save any money with the bond swaps as reported by IBJ this week.
Has does this deal save ratepayers money? Where are the details that show 1.5 billion in savings? Why does the council and the media continue to label this as a purchase rather than a transfer?
This is just more hyperbole by a local politician in an effort to convince us that this bad deal will be a good deal.
Jon,
Haven't you heard. There are SYNERGIES involved. You can't argue with a claim there are synergies.
Don't forget the rate increase in sewer bills to pay for the increase PILOT that was already passed. That is a done part of the whole deal.
The $260 million in cash that Citizens would 'pay' for the sewer utility, will also be financed through bonding and the ratepayers will pay for the $260 plus interest and fees on that bond.
So, in the end, the question is cumbersome, but goes something like: Is it fair or prudent to raise sewer rates for 30 years to pay for infrastructure improvements that will last 10 -15 years and cost the price of construction PLUS interest on bonds amounting to just about the same dollar amount (doubling the cost of the infrastructure improvements)? Or... should we pay twice as much for something lasting half as long???
Savings are not savings if they are spent on other things. That is just moving expenses around.
Good point on the savings, Jon. All of the consolidation in Marion Co. hasn't led to one dime of savings. In fact, the consolidation of the township fire departments hit the city-county budget because IFD firefighters are generally paid more than the township firefighters. Sheriff Anderson's budget keeps growing even though he no longer has law enforcement responsibilities. The backlog in property tax appeals is worse than ever after consolidation. They are more than two years behind.
http://hoosiersforfairtaxation.blogspot.com/2010/07/common-sense-solution-to-citys.html
Here's an idea for starters.
I plan to ask the councilors and Citizens and whomever else I can think of to forever more include itemized bills (for the sake of transparency) that indicated how much of each bill goes to the PILOT bond, any other PILOT funds not bonded, and Bonds issued by Citizens (designated permanently as 2010 Infrastructure bonds) and the amount attributed to the variable rate bond fiasco, etc.
Ryan told me by email that they polled people and 62% favor this deal.
I can't believe that 62% of any group of people who live here think it is a good idea to use the future of our city's energy and water as collateral to a bank.
I asked to see the polling questionaire. I will publish it when he gives it to me. Has anyone seen it or know how the question was positioned?
Love or loathe Ryan Vaughn, he has made himself quite accessible. I believe he really thinks this is the smartest path. I happen to disagree with him.
How is the water company borrowing money any different than you or I running up a big credit card debt? Is this a way to bypass the debt limit for the city or more revenue for bond attorneys?
I agree with you, Paul, and with all of these comments. HFFT, we cannot wait to see the way the poll was worded and distributed, that according to Vaughn displayed, what I will call, the ignorance of our fellow citizens.
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