There was a fine piece of reporting in the Arkansas Democrat-Gazette today by Mark Minton. If ever a story merited the loaded headline word "boondoggle," this one was it.
Pulaski County floated a $43 million bond issue in 2002, nominally to help poor credit risks become home owners. Six did. The real beneficiaries were the bond daddies -- banks, lawyers, etc. -- who raked in $2.5 million in fees though money for loans went begging. The feds are now questioning whether this deal was legit. The county could yet be on the hook for some serious payback, insurance policy or no.
Great stuff. But there's much more to be reviewed about the Pulaski County Public Facilities Board, the agency without an office or filing cabinet, that will seemingly sign off on just about any bond deal presented by the proper bond lawyers. It doesn't seem to hurt to have a dose of religion rolled in, either.
The story mentioned in passing that bonds had been issued for a variety of projects, including a refinancing issue of $31 million for Pulaski Academy (pictured), as well as multi-family housing, college housing and an ecumenical retirement center. (PA, I'd guess, needs financing to help buy property from neighboring Fellowship Bible Church. Who knew the advantages of municipal bond financing could be used to swell church coffers?)
At the mention of Pulaski Academy, my eyebrows shot up, though no further mention was made of that particular deal in the article. After a pitched battle several years ago, the Arkansas Development Finance Authority declined to lend the state bonding authority -- with its taxpayer-subsidized lower interest rates -- to Pulaski Academy. A number of people opposed the state providing low-cost financing to a private school, particularly to a school that contributed to white flight from public schools in Little Rock and particularly while the state was a defendant in court for historic actions aiding segregation in Little Rock. But never mind segregation. Why, really, should municipal bonding authority and its substantial benefits be extended to a private school?
Note to County Facilities Board: Consider this an FOI request for notice of all future "meetings" so that the public will at least have a little notice the next time the board decides to pass its favors around.
I think we'll hear more about this expansive use of bonding authority, based on grumbling I heard this morning. And PA isn't the half of it.
Just a few weeks ago, the same facilities board approved a resolution to issue $2.5 million in bonds to aid a junior high construction project for the Arkansas Baptist School. Once again, government help for a school that drains white children out of the Little Rock School District. Once again, using bonding authority aimed to achieve public purposes to help a private institution. But this particular deal raises a new and troubling dimension -- a government subsidy to a religious institution.
County Judge Buddy Villines was quoted in the D-G as having objected to payment to a role for a religious group in working with potential home buyers in the housing boondoggle, though the group did get $50,000 to help put the program together. (Note: the preceding sentence has been corrected fein the original version which said incorrectly that Villines had stopped the $50,000 payment. He didn't. He stopped a subsequent additional role for the religious group.) He didn't like that church entangelement, but he offered not a peep about public bonds to help build a Baptist school?
Cheers to JP Wilandra Dean, who voted no, and Pat Dicker, who abstained, on the Baptist bonds.
The Pulaski Academy bond vote was approved 12-1, with JP Julie Blackwood voting no. The limited records available on-line don't say which of the two other JPs didn't vote.
JP Doug Reed sponsored both resolutions. Thanks to Stump for the reminder that Reed's private employer is, happy coincidence, none other than Pulaski Academy. He's a teacher there. No conflict in sponsoring a $31 million financing package for your employer, is there? My efforts to run him down by phone and e-mail have been unsuccessful. Maybe Battlin' Bob Powers wants to trot off to the prosecutor, Ethics Commission, court, newspaper, etc. on this convergence of private and public life.
Bigger question: Can Pulaski County government do anything right?
Asked and answered, as the lawyers say.
UPDATE: Here are minutes of the board meeting at which bond issues for Arkansas Baptist and then for Pulaski Academy were approved. You can see no time was devoted to any serious discussion of the public purpose of aiding private schools, or a religious institution. Board chairman Ro Arrington was determined, particularly, that PA get its money, no matter who might object.
UPDATE II: Arrington called. He repeated what is reflected in the minutes. He believed the schools qualified under the tax code for tax-free bond issues. "We need to be the vehicle for people to take advantage of what is their given right under tax code," he said. I didn't get very far with my argument that a larger public interest should be taken into account by stewards of such immense benefits.
UPDATE III: Here's an overview of Pulaski Academy's budget, its plans for the money and other details from the bond offering.