In the past month, the Jefferson Parish Council tried to get the state to cancel the revote on the Crescent City Connection toll extension; the JP Council, at the insistence of Sheriff Newell Normand, approved aresolution seeking to change state law to remove a public referendum so they can sell or lease JP’s two public hospitals without any public input; and now, Kenner Mayor Mike Yenni is also trying to circumvent the governing process and remove citizen participation in their government.In June of 2012, I wrote a two-part column about Kenner Mayor Mike Yenni’s lack of openness and transparency. You can read Part One here and Part Two here.
Unfortunately, Mayor Yenni continues to prove me right.At Thursday’s Kenner City Council meeting, Mayor Yenni has ordinances up for First Reading regarding the refinancing of bonds and the addition of new debt. In a slick twist, Yenni also has two Resolutions on the Agenda to hasten the speed of the bond refinancing process and Yenni’s 2030 “Vision”, without any real public input.
Of course, citizens will be able to speak out when the ordinances come up for final passage, but, by then, it will be too late.The Resolutions (Items 13-A and B on the Agenda), essentially commit the City and the Council to Yenni’s “Vision”. They will take debt that was issued in 2003, and due to expire in 2018, and refinance that debt for an additional 15 years. The new bonds would expire in 2033 – 20 years from now.
In addition to refinancing the old debt, Yenni wants to issue $28.6 Million in new debt to fund a myriad of projects. All told, the City will increase its debt by 32% and add $46.4 Million to the City’s debt load.To get the new bonds, and pay off the old ones, Yenni wants to continue to tie-up $3.2 Million each year through 2033 in Kenner’s sales tax revenue.
The current 2018 bonds carry an interest rate of 4.42%. The new bonds will have an interest rate between 3.25% and 3.5%, so the City will save about 1% in the refinancing. Of course, it will also extend the debt by 15 more years.If you are refinancing your home, most mortgage brokers will tell you that it doesn’t make fiscal sense to refinance unless your interest rate will drop by at least 1.5%. But, sound fiscal sense doesn't apply in Kenner.
According to the Yenni Administration, the interest rate drop will save the City of Kenner about $60,000 a year in interest, for the remaining 5 years before the 2018 bonds mature. So, about $300,000.Of course, they don’t tell you how much more in interest costs the City will pay be extending the debt by 15 more years.
By contrast, Jefferson Parish is refinancing $117 Million in bonds and will save over $4 Million by reducing their interest rates to between 1.8% and 2.8%. The Jefferson Parish bonds are for Sewerage and road debt, the Causeway, Courthouse construction, recreation and include $8.5 Million in new bonds for water system work.Mayor Yenni and his hand-picked Economic Development Committee want to mortgage Kenner’s future to pay for such “critical” projects that include bike paths, public art, beautification (along with a $1 Million fund to continue to pay for the upkeep of the beautification), and to add some box culverts to improve the “aesthetics” of some of Kenner’s drainage canals.
Did Mayor Yenni’s Economic Development Committee provide funding for any projects that will actually impact Kenner’s Economic Development? Of course not.These projects will create ZERO new jobs in Kenner. They will create ZERO new businesses in Kenner and they do nothing to secure Kenner’s financial future.
In fact, as I asked last month, since these bonds are tied to Sales Tax revenue, what happens if the Esplanade Mall continues to decline or closes? What happens to these bonds if Kenner residents cut back on their purchases if Governor Jindal’s plan to increase the state sales tax passes? What if more Kenner residents use the internet for their purchases and create no sales tax revenue for the state or city?On Monday, the City of Stockton, CA, became the latest, and largest, US city to file for bankruptcy protection because it is unable to continue to pay its bondholders.
Yet, Mayor Yenni wants to put Kenner in the same precarious financial position as Stockton and dozens of other US cities, while creating no new jobs or businesses or paying for any badly needed infrastructure or police or fire equipment.
Of course, in 2033, who knows where Mayor Yenni or the current city council will be. We do know that none of them will be around to pick up the pieces.The Mayor and his Economic Development Committee are convinced that Kenner will undergo a “renaissance” if we put some trees in medians and add some bike paths.
At the Mayor’s recent “Listening Session”, not one person said, “Let’s increase our city’s debt by 32% and build some bike paths.”
While I haven't ridden my bike in over a year, I have nothing against bike paths. I just don't think I should have to pay for them for the next 20 years.So, this bond refinancing and added debt for Kenner creates no new jobs or businesses, and will hamstring Kenner’s finances for the next 20 years. Sounds like a great deal, right?
Two years ago, when Mayor Yenni tried to double the property taxes in Kenner, he spoke at every Civic Association that would have him and tried to sell Kenner on his vision then. Obviously, that tactic didn’t work and the Mayor’s property tax plan went down in flames as Kenner residents didn’t drink the Mayor’s Kool-Aid.Now, Yenni wants to ram this through the Kenner City Council before the people of Kenner, even some Council members, even know what hit them.
Is it any wonder that Mayor Yenni isn’t having any public hearings about this and hasn’t given the Kenner City Council enough time to poll their residents and learn what the people of Kenner want?Obviously, Mayor Yenni doesn’t want you to know, even if you’ll be stuck with the tab for the next 20 years.
Hopefully, the City Council will have the fortitude to slow down Mayor Yenni’s “Vision” and get some input from their constituents.
If not, I sure hope you enjoy your shiny new bike paths.
You’ll be paying for them every year for the next two decades.