The retirees deserved the settlement but many have problems with Metro's proposal on how to pay for it. Metro has made a deal to borrow $10 million from the Louisville Water Company to pay for part of the $14.2 million settlement agreement. Why is there a problem with this?
Read the CJ here for more: http://www.courier-journal.com/article/20110203/NEWS01/302030072/1008/news/Louisville-borrow-10-million-from-water-company
While on the surface many think this was a great way to fund the settlement, even Greg Fischer had this to say: “We had the resources ourselves; we just needed the creativity to unlock it,” Fischer said. “It took a bunch of people coming together to find a solution that is common sense.”
I say hogwash as do many who have been writing me. The problem?
We OWN the Louisville Water Company. To "borrow" $10 million and pay it back at 2% interest is a red herring. LWC's Greg Heitzman admits to having $64 million in the bank and makes this incredible statement:
“We're very stable right now, and that puts us in position to consider this,” Heitzman said. “The loan is an effective way to meet the city's needs and will not compromise us. We did not want to do anything to cause the rates to go up.”
According to Fischer the plan is a simple one. The city will pay 2 percent interest to the water company, and plans to repay the loan over five years by receiving only half of the growth in its annual dividend from the company. That repayment amount is expected to be $480,000 in 2012, but that amount is expected to increase year by year.
And there is the rub.
They expect their dividends to increase year after year without any rate increases? That defies logic as the LWC increases rates each and every year. Bait and switch on the terminology? You bet.
Additionally, the administration still insists we have $65.4 million in an unseen "rainy day fund." Can anyone prove this fund even exists? Has anyone seen the bank statements showing this money is there? Have we seen where the money is drawing interest and at what rate?
The answers to these questions is no. As a matter of fact insiders on the Council have even said that this money is not liquid and includes the value of real estate that the City owns. With that being said do we even have a rainy day fund?
These are serious questions. As we know the supposed rainy day fund has been a questionable thing for years but if the info is correct, and it includes real estate the city owns, then we have even more problems.
Real estate values have gone down everywhere across the Country including here at home. These declining values not only affect residential real estate but commercial and business use real estate as well. That means teh values they include in this supposed rainy day fund have gone down as well yet they have always used the numbers to be around $65 million.
Since we have been told over and over about this supposed rainy day fund for the last few years, predating the real estate decline and ironically is always around $65 million, we have to begin demanding the obvious.
Show us the money.
We own the LWC and they admit to having $64 million in the bank. The mysterious rainy day fund supposedly has $65 million. Folks that adds up to $129 million + taken from we the taxpayers apparently sitting in the bank for politicians to use at their will.
Time for tax rebates isn't it?
If they can let this money sit for years while apparently drawing no interest that we can ascertain then that money is rightfully ours. I can agree with the statement by Metro Council President Jim King on this one.
Metro Council President Jim King, a Democrat who came up with the idea of the loan, said there is a bit of symmetry to the deal –— the water company came from the old city of Louisville, as did the obligation to pay the retired firefighters.
“It's one hand washing the other,” King said.
The people of the County fund the LWC each billing as well and this money most certainly is not coming from the old City of Louisville accordingly though it does appear at this glance that it is business as usual.
Indeed it is "one hand washing the other" as we have come to expect in our Democratic elected leaders.