Financing Plainfield: The Devil is in the details

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Put aside for a moment the appearance of incompetency in Mayor Robinson-Briggs' administration's NEAR DISASTER FOR THE CITY'S FINANCIAL RATING in not planning in a timely fashion for the rollover of millions in Bond Anticipatory Notes.

Put aside for a moment, also, the appearance of impropriety in City Administrator Carlton McGee's soliciting an old Jersey City contact to put together a quickie financial transaction.

Put aside for a moment, also, the deception that seems to have been involved in cutting a $25,000 check for her services BEFORE the resolution for same was even brought to Council.

Let's look at the upcoming Act II of this nascent telenovela (and there is an important difference between a telenovela and a soap opera):

1. These notes are REALLY SHORT-TERM: The maturity date is 3/20/2007 -- six months.
   
   
2. Does that mean Ms. Knight-Marshall gets ANOTHER BITE OF THE APPLE? At $25,000?
   
   
3. What will it be: Bonds or BANs? If Robinson-Briggs goes with BANs (Bond Anticipatory Notes) AGAIN, they'll be due for a rollover -- at another 6 months or a year -- with ANOTHER ADVISER'S FEE. If she goes for Bonds, there is the work of preparing a bond ordinance and -- gues what -- the opportunity for more FEES.
   
   
4. The Council breaks a sweat. Or if it doesn't, it should. The RATINGS LETTERS that accompanied the current BANs (both Moody's and Fitch's -- available for download from the City website) highlight IMPENDING DANGER SIGNALS.
   
   
5. Robinson-Briggs proposes balancing the FY2007 budget (now under discussion) with $2.9M of the city's $3.1M RAINY DAY RESERVES -- essentially LEAVING THE FUND BROKE. That would be frittering away -- IN HER FIRST YEAR -- the reserves that Mayor Al McWilliams went out of his way to build up over the course of eight years. And we've got THREE YEARS TO GO?
   
   
6. This will have TWO CONSEQUENCES: The rainy day fund will be gone AND that will NEGATIVELY AFFECT OUR FINANCIAL OUTLOOK for the next sale of bonds or notes. Can you say HIGHER INTEREST RATES, costing the taxpayers even more?

The Council needs to look at this situation very carefully. The Devil, as they say, is in the details.

-- Dan Damon

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