Will attack on preschool funding come to haunt Plainfield?

As a former Abbott District, Plainfield schools are mandated and funded for full-day free preschool.

Plainfielders may well be concerned about how the funding of the mandated preschools for the group of schools formerly known as the Abbott Districts will play out, what impact that will have locally, and whether the City may have to pony up for a $7M bond the Mayor supported without Council approval.

The Star-Ledger sounded the alarm in a February 1 editorial (see here) after Senate Republican surface a plan to cut preschool funding by $300 million (see here) and shift the monies to suburban schools.

A few days ago, my February NJ Monthly arrived and, lo and behold, there was a long article on the successes of NJ's preschool programs -- viewed as a national model -- and the dark clouds on the horizon raised by funding issues (the article is viewable online here).

As the Ledger editorializes, it WOULD BE CRAZY to cut back a program whose success at eroding the differences between outcomes for poorer and better-off kids is measurable.

The funding cuts Republicans are looking at (Christie has foxily avoided comment) would mean reducing preschool in the former Abbott Districts (including Plainfield) to half-day programs.

The hardship on parents would be horrendous. The loss of the gains already seen would be inevitable.

But there is YET ONE MORE POTENTIAL OUTCOME FOR PLAINFIELD that is troubling.

The $7M UCIA bond funded the construction of a handsome new center for the BUF program.

Back in 2007, I discovered that Mayor Robinson-Briggs had written a letter to the Union County Improvement Authority (UCIA) in support of a $7 million bond to build an additional new center for BUF's preschool programs at West 6th Street and Grant Avenue (see here).

This was after discovering that the required legal notice for the bond was run by the UCIA, curiously, in the Westfield Leader (see here), rather than the more widely read Star-Ledger. Could it have had anything to do with the fact that it would be far less noticed in the Leader? And less likely to raise eyebrows?

Upon further questioning, I wondered aloud if the City might be left on the hook should BUF ever default on the bonds (see here). At their September 27, 2007 meeting, the Freeholders were told by the County Counsel that, in fact, Plainfield MIGHT BE ON THE HOOK FOR THE BOND, but that the County certainly wasn't.

I was later told that the Mayor's letter alone could not bind the City, since she had failed to secure the Council's endorsement of the project by a resolution of support.

If the funding is cut and the local Plainfield preschool centers (see list 2010 list here; evidently not updated by Board of Ed yet) are forced to cut back to half days, the question of BUF's viability comes to front and center.

The Plainfield BUF, whose finances have been shaky for years, and is now totally on its own and not part of the larger BUF network, would be faced with an unrelenting bond payment schedule, despite falling financial resources.

Would the City of Plainfield -- meaning you-know-who, dear taxpayers -- be obligated for the bonds on the basis of the Mayor's letter of support?

We may yet get to find out.

---

• NJ Monthly, Feb/2011:  "Pre-K at budget crossroads"
  
• Ledger --
• 1/29/11:  "Proposal would shift money to suburban schools by cutting preschool hours"
  
• 2/01/11:  "Editorial: Class warfare on urban preschools"
  
• Plainfield Today --
• 9/19/07:  "Mayor pledges support for $7M UCIA bond for BUF"
• 9/28/07:  "$7M BUF bond may leave city on the hook"
• 2/03/09:  "No light at end of tunnel?"
• Scribd, 9/2007:  "Legal notice for UCIA bond to expand BUF preschool"
  
• CountyWatchers:  "How UCIA bonds work"
• Board of Ed:  "2009-10 Early Childhood Providers" | "Early Childhood Program Info"
  

-- Dan Damon [follow]

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UCIA Solar Panel Plan: A gift horse to be looked over carefully

A gift horse that should be looked over carefully.

As Plainfield's City Council continues to look into the proposal to join with other Union County communities in the Union County Improvement Authority's solar panel scheme, it seems to me there are serious questions that need to be answered before the governing body can give its assent.

Despite the proverbial advice to 'never look a gift horse in the mouth', Plainfielders have learned from hard experience when dealing with the UCIA to heed the proverb at their peril.

The only thing I can find online is the UCIA's glossy pitch brochure (see here, PDF). I am not surprised that trying to float a $45 million bond issue with such thin information would cause questions to be raised.

This is the extent of the UCIA's description of the project's inter-relationships.

Everyone agrees going green is good. No one wants to be seen to be dragging their feet, and solar panels are the currently hot topic.

However, those are exactly the conditions under which well-meaning but relatively uninformed decision-makers can be scammed.

Already, Cranford (see here) and Berkeley Heights (see here) have put the brakes on participation, seeking answers to several questions. The two towns have now been joined by Summit (see here), which also thinks the program bears more investigation.

Here are some questions I think need satisfactory answers if Plainfield is to sign on --

DEFAULT SCENARIO

Private companies are to receive the bond funds to purchase, install and operate the solar panels. Setting aside the question of how these companies are selected (this is, after all, Union County), it is important for towns to know if they will be on the hook IF THE PRIVATE OPERATORS DEFAULT ON THE BONDS. Who then would be left on the hook? The municipalities? How much of the long-term risk of the project should a municipality be willing to assume?

PRICING

The private entity is supposed to own the panel installation and sell the electricity generated to the municipality or other entity, at a markup that includes servicing the bond debt and a guaranteed profit to the private firm. As prices are alway in flux and the public utilities are also working on 'greening' their technologies, what guarantee do the municipalities get that prices they must pay for the power they are generating will ALWAYS BE LOWER THAN THOSE OF UTILITY COMPANIES SUCH AS PSE&G?

MAINTENANCE

Who is responsible for maintenance over the long haul -- and not only of the panels, but of the underlying building fabric which may suffer deterioration as a result of the panels' installation? This is a question that should be settled now, rather than after an incident arises.

PROFITS

Is there some structuring of the financial aspects that provides a process for the municipality to participate in the profits of the venture over the long haul? Are the bonds structured so that the debt is amortized in addition to the interest being paid or will there be some 'balloon' payment down the road? If the private firm's liability for the bond principal declines over time as it is amortized, will the price structure change?

TERM

At what point, if ever, would the asset revert to the municipality? At what point could the whole deal be renegotiated? Forever is a very long time, and great care should be taken before entering a 'forever' agreement.

As Katherine Barrett and Richard Greene point out in a column in this month's GOVERNING magazine (see here) -- local governments are prone, on the one hand, to accept overly optimistic assessments of a project's costs and timelines, and on the other hand, to be disadvantaged by having less sharp negotiating skills.

They point to a study by William Eggers, Partnering for Value (see here, with link to PDF file), which outlines issues for local governments in public-private partnerships and what local government officials can do to improve their game.

Maybe the Council should even consider appointing a citizens committee to look into the matter and make recommendations.

At any rate, let's hope Plainfield's City Council looks this nag over pretty closely before deciding to buy.

---

• UCIA:  "Renewable Energy in Union County" (PDF)
• Ledger --
• Cranford, 7/19/10:  "With questions lingering, Cranford holds off on UCIA initiative"
• Berkeley Heights, 7/29/10:  "Township says no thank's to county's solar program"
• Summit, 8/11/10:  "Summit council questions county solar panel proposal"
• Governing:  "Partnering Up: The devil is in the details"
• William Eggers:  "Partnering for Value" (PDF)
  

-- Dan Damon [follow]

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Robinson-Briggs wants $4.4M bond she originally spurned

 

Plainfield's City Council will take up a proposal by Mayor Sharon Robinson-Briggs to issue $4.4M in bonds which she once spurned.

The amount was originally approved by City Council in 2005 (as part of a larger $11M bond) for the Senior Center proposed by the administration of the late Mayor Al McWilliams.

After Robinson-Briggs took office in 2006, the project was dropped while the new mayor shopped for a developer. In 2007, Glen Fishman's Dornoch Plainfield LLC was selected to develop the Senior Center in a project that included market-rate luxury condos on the upper three floors.

Robinson-Briggs and her mentor, Assemblyman Jerry Green, took great pains to inform the public the project would be built at no expense to the taxpayers, and that the previously approved bond money would not be used.

In the event, the project was built, but costs to Plainfield's taxpayers -- not yet fully toted up -- include 13% of the building's maintenance costs.

The Robinson-Briggs administration also floated the idea of a tax abatement for buyers (in effect, an increased assessment for all other taxpayers) which was withdrawn after public outcry and has not been re-introduced.

Then there is the matter of the 'fitting out' expenses in excess of $250,000, the tab for which the Mayor wanted the taxpayers to pick up and about which the Council is still awaiting an accounting.

Seems the mayor has found a use for the 'found money' and is willing to saddle the taxpayers with the bond after all.

There's nothing like being flexible, is there?

---

-- Dan Damon [follow]

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Will these kill Robinson-Briggs' plan to buy YWCA?

Senator Lautenberg secured $460,000 for use at Tepper's site.

Will Plainfield Mayor Sharon Robinson-Briggs continue with her plan to have the city float $5.5 million in bonds to buy the YWCA (see my previous posts here and here)?

Besides the issues already raised, there seem to be two more that are true 'deal-killers'.

TEPPERS

In his FIRST Senate career, Sen. Frank Lautenberg secured two grants for Plainfield -- one for the Plainfield Public Library and one for the city's Tepper's redevelopment project. The Library used its grant expeditiously.

The city's $460,000 grant fell in the gap between the McWilliams and Robinson-Briggs administrations. As the deadline for using or returning the grant approached in 2007, I blogged about it (see here and here).

While there was talk by the new administration of using it elsewhere, when push came to shove and the deadline was literally upon them, the Robinson-Briggs administration awarded a no-bid contract for sheetrocking the 15,000+ square foot space.

Though there was talk of using the space for the proposed business district streetcam project, that has not come to fruition and here we sit, three years later, with nothing done to put the space to good use.

Why not the Tepper's basement, which we already own, and which has been 'improved' with nearly a half million taxpayer dollars already?

Maybe the Council should take a look into this before further consideration of the Robinson-Briggs proposal to buy the YWCA.

WHO SAYS $5.5 MILLION IS A FAIR PRICE?

Cranford is buying school and property for $1.9M. 

While Mayor Robinson-Briggs somehow came up with a dollar amount of $5.5 million, no one seems to know where it came from.

Real estate professionals are asking why the typical average-of-three professional appraisals method wasn't followed, especially considering the city's fragile financial position, and the YWCA's admitted drawbacks -- of which parking availability is a critical shortcoming.

Meanwhile, we learn that over in Cranford -- where properties fetch better prices than in Plainfield -- the Township Committee is about to bond for the purchase of the former Solomon Schechter Day School building and its 3.7 acre campus on Orange Avenue, for the princely sum of $1.9 million (see story here).

So, how do we know the YWCA price is a good one?

And why bond to buy when you already own?

---

• Plainfield Today --
• 6/14/2010:  "Mayor Robinson-Briggs displays edifice envy in desire to buy YWCA"
• 6/17/2010:  "Plainfield mayor's YWCA proposal raises hackles"
• 5/21/2007:  "Will city have to give $460K back to Feds?"
• 6/26/2007:  "Lautenberg grant deadline looms"
  
• Cranford Chronicle:  "Township to bond $1.9M to buy school and 3.7 acre campus"
  

-- Dan Damon [follow]

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Plainfield mayor's YWCA proposal raises hackles

1920s view of Plainfield's historic YWCA.

Plainfield Mayor Sharon Robinson-Briggs, who seems to have outrun her headlights, has stirred up a hornet's nest with her surprise proposal to have the city float $5.5 million in bonds to buy the historic YWCA building on East Front Street.

First off is the embarrassment she caused the YWCA's leadership staff and board, who thought conversations with the Robinson-Briggs administration last week were private and preliminary (see Mark Spivey's story in the Courier here).

Besides bringing a half-baked proposal to the Council, Her Honor's proposed largesse has drawn attention to other cultural funding in the community toward which she has been quite stingy.

Supporters of the Queen City's premier cultural institution -- the Plainfield Public Library -- which is more heavily used in the current recession than ever, wonder how cutting the library's appropriation can be justified when compared with such a vacuous proposal as that for the YWCA building.

Others who find the Mayor's proposal questionable include supporters of the city's Drake House Museum. The Historical Society of Plainfield, which operates the museum on behalf of the city, has been given the cold shoulder by the Robinson-Briggs administration over a $55,000 match needed to satisfy the condition of one of the grants used for renovations of the Drake House.

Lastly, a commenter on my previous post (see here), points out that the Armory, at the corner of East 7th Street and Leland Avenue, is a far more accommodating building -- with more parking -- than the YWCA would be for a 'cultural center'.

Assemblyman Jerry Green was featured in a large story on the Armory by the Courier's Mark Spivey back in September, 2008 (see here), where he was trying to broker a deal on behalf of Mayor Robinson-Briggs and the city to acquire the Armory building.

I modestly suggested at the time that the Armory -- which the state has been trying to peddle unsuccessfully for years -- should be turned over to the City for the princely sum of $1 as a fair deal considering the renovations that would need to be done.

Assemblyman Green subsequently picked up the $1 mantra, but we have heard nothing more in the past year and a half.

Mayor Robinson-Briggs, who did not avail herself of the opportunity to speak to the Armory purchase at the time, may now have a chance to explain why a $5.5 million (just for openers) deal is better than a $1 deal.

---

• Courier: "Council tables proposal to purchase YWCA building"
• Plainfield Today --
• 6/15/2010: "Mayor withdraws bond ordinance to buy YWCA"
• 9/08/2008: "Plainfield buying Armory? A little background and a modest proposal"
• Courier: "Deal may be near for Plainfield to buy armory building"

-- Dan Damon [follow]

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UPDATE: Mayor Robinson-Briggs withdraws bond ordinance to buy YWCA

Original YWCA logo under oriel window of the Plainfield YWCA.

UPDATE: This post was originally written before Monday's City Council agenda session. The administration WITHDREW the proposed bond ordinance without comment.

Plainfield Mayor Sharon Robinson-Briggs has a surprise bond ordinance on tonight's Council agenda (Bond ordinance #1248), proposing that the City bond $5.5 million for the purchase of 'real property'.

Turns out the 'real property' in question is the historic YWCA building on East Front Street.

While it is not widely known that the YWCA is in very difficult financial straits, it certainly will be as a result of the mayor's initiative this evening.

The Robinson-Briggs administration is likely to face some sharp questions tonight concerning the proposal, some of which might include --

• Why, in an era of shrinking government and fiscal difficulties, would the city BUY a building?
  
  
• How was a value arrived at without having several independent appraisals done to arrive at a more or less 'professional' opinion?
  
  
• What would the building be used for?
  
  
• What would be the cost of engineering and feasibility studies for any proposed uses?
  
  
• What would be the cost of renovations?
  
  
• What would be the ongoing impact on the city budget of having another building to staff, heat, maintain and insure?

That's just for openers.

This is not Her Honor's first venture in edifice envy -- a few years ago, when the YMCA was in desperate shape, she wanted to buy it, too.

That talk has died down since Ravenell Williams has come on board.

Stay tuned.

---

-- Dan Damon [follow]

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Mayor Robinson-Briggs displays edifice envy in desire to buy YWCA

The Plainfield YWCA in the 1920s. (Image courtesy of Nellie Dixon)

Plainfield Mayor Sharon Robinson-Briggs has a surprise bond ordinance on tonight's Council agenda (Bond ordinance #1248), proposing that the City bond $5.5 million for the purchase of 'real property'.

Turns out the 'real property' in question is the historic YWCA building on East Front Street.

While it is not widely known that the YWCA is in very difficult financial straits, it certainly will be as a result of the mayor's initiative this evening.

The Robinson-Briggs administration is likely to face some sharp questions tonight concerning the proposal, some of which might include --

• Why, in an era of shrinking government and fiscal difficulties, would the city BUY a building?
  
  
• How was a value arrived at without having several independent appraisals done to arrive at a more or less 'professional' opinion?
  
  
• What would the building be used for?
  
  
• What would be the cost of engineering and feasibility studies for any proposed uses?
  
  
• What would be the cost of renovations?
  
  
• What would be the ongoing impact on the city budget of having another building to staff, heat, maintain and insure?

That's just for openers.

This is not Her Honor's first venture in edifice envy -- a few years ago, when the YMCA was in desperate shape, she wanted to buy it, too.

That talk has died down since Ravenell Williams has come on board.

Stay tuned.

---

-- Dan Damon [follow]

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Kean U. debt downgraded over borrowing

Kean University, which many Plainfielders attend, has had its bond rating downgraded after a bond issue this past March, a report by the State Commission of Investigation released last week says.

The SCI, which can uncover prosecutable findings, did not say the school had done anything wrong.

But Kean, like the other New Jersey public colleges and universities are saddled by debt that is forcing tuition and fee increases.

Should the state step in to help the public colleges?

Can it afford to?

---

Bergen Record: "New Jersey colleges sag under record levels of debt"

-- Dan Damon

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Can Connecticut AG's probe affect Plainfield's bonds?

Plainfielders might want to watch this story if it veers into how municipal debt is rated.

Connecticut's AG is issuing subpoenas to credit-rating agencies S&P, Moody's and Fitch's in a probe into possible antitrust violations.

There are allegations that form three prongs to the investigation --

1. Issuers of debt are rated against their wishes and threatened with a downgrade if they don't pay for it;
2. Pressuring issuers of debt into exclusive contracts with a ratings agency or face a downgrade; and
3. Offering discounts to issuers of debt for exclusivity deals with the ratings agency.

Ratings agencies hold them selves forth as impartial and untainted in assessing the risk of bonds they are rating.

This investigation will throw a spotlight on their impartiality, just as they are coming under further scrutiny for their role in the subprime mortgage meltdown (including giving AAA ratings to some CDOs just days before lowering the ratings to junk bond status).

Moody's and Fitch's rate Plainfield's debt, in addition to that of the Union County Improvement Authority, through which Plainfield participates in bonds for certain items.

If these anticompetitive allegations bear up in Connecticut, we should ask if the same practices are used in New Jersey -- and whether taxpayers have been negatively impacted if local governments and authorities have been subject to such pressures.

---

Newsday/AP: "Connecticut Subpoenas Rating Agencies"

-- Dan Damon

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ARCHIVED POSTS OF PLAINFIELD TODAY FROM 11/03/2005 THROUGH 12/31/2006 ARE AT
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$7M BUF Bond May Leave Plainfield On The Hook

With the County Counsel saying that perhaps the City of Plainfield is on the hook if BUF defaults on the UCIA bonds but that the County certainly wasn't, the Board of Chosen Freeholders voted last night to consent to the offering of $7M in bonds by the UCIA to underwrite BUF's pre-school project.

The only 'no' vote was from Freeholder Mapp, who earlier said that while he was pleased to see funding coming toward Plainfield, this kind of investment deserved buy-in from the City Council, who know nothing about the project or the bond.

Mapp further said that he wanted "to be assured that some study has been done to show a revenue stream that will support the bond" and moved to table the ordinance pending further information.

Freeholder Sullivan, taking issue with Freeholder Mapp, said "we have to approve any and all projects they [the UCIA] put forward ... they have done their due diligence or they would not have presented it to us."

Apparently flummoxed by Mapp's motion to table, the chair dithered. Finally the Board voted to suspend the rules. Mapp was then allowed to move to table the ordinance. His motion died -- are you ready for this? -- for lack of a second. The ordinance was then quickly passed.

Where are we?

THE BOND

We have a quasi-governmental public authority -- the UCIA -- now authorized to bond $7M for a nonprofit organization, referred to in the ordinance as the 'Black United Fund-Plainfield Project'.

No one knows who is responsible for paying off the bonds should BUF default. But we do know it is NOT Union County, and it may be the City of Plainfield, per the County Counsel.

Question: Does BUF have to put up the 5% up-front money -- that would be $350,000 -- before the bond is issued, as the City does when it bonds?

THE CITY'S 'SUPPORT'

Freeholder Mapp stated that the "governing body [of Plainfield is] unaware of the project and the bond. He also said he believed there should be "buy-in" from the City Council.

Yet all we have to show the City's support is a letter from Mayor Sharon Robinson-Briggs, dated August 7th. I have put in an OPRA request for that letter, which is due today, and will report on the letter later once I have a copy. Suffice it to say, a support letter from the Mayor cannot bind the City to repay the bonds should BUF default on them.

THE PROJECT

No one -- except for Mayor Robinson-Briggs, the UCIA, and, presumably, Assemblyman Green -- knows about the nature of the BUF project.

Is it new construction or the expansion of the existing facility?

Will it be at the BUF Center at West 7th and Central Avenue or at the former Grant Avenue Community Center site at Grant Avenue and West 6th Street or at another site altogether?

How can a project of this scope -- $7 million -- be envisioned without the knowledge or review of the Planning Division or the Zoning Board (or perhaps the Planning Board)?

How can bonds be issued if there are no plans? If there are plans, why have not the Council and the Planning Division seen them?

FURTHER QUESTIONS

Let me say that I'm not necessarily opposed to this project. How can I be, since I -- and everyone else -- know only what we read in the ordinance that has come to light. What DOES concern me is the lack of transparency.

When Assemblyman Green and I chatted at the Friends of the Library's wine-tasting last weekend, I asked him if he had any idea why so many people find this story of interest (it has rated nearly 5 times the normal page views for a 'hot' story). The Assemblyman said he couldn't guess, as hardly anyone would have known about it except for Plainfield Today.

But there are FURTHER questions.

Who is "the Torain Group" cited in the ordinance as having asked the UCIA to bond BUF's project? I have been told they are financial advisors to BUF. But I find it curious that Googling them only turns up one reference -- a PDF of the legal notice of the ordinance, published in the Westfield Leader on September 13, 2007.

By way of contrast, Googling the late Leona Helmsley's dog 'Trouble' nets 265,000 links -- and 'Trouble' only got $12M. Shouldn't the Torain Group get at least a few more hits?

Having been surprised to find the Senior Center project using non-union labor, is it fair to ask if BUF will be required to use union labor?

Lastly, we need to know if BUF will be exempt from the requirement of following the state's Public Bidding Law. If it need not, does that mean that the letting of contracts for the work can be done solely at the discretion of BUF's board? If so, it could provide a wonderful opportunity to reward 'friends'.

Whose friends, you ask?

---

• Plainfield Today: "Mayor pledges city's support for $7M UCIA bond you never heard of"
• Westfield Leader: "Legal Notice: Ordinance 657-2007, UC Board of Chosen Freeholders"
  

-- Dan Damon

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ARCHIVED POSTS OF PLAINFIELD TODAY FROM 11/03/2005 THROUGH 12/31/2006 ARE AT
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