I could not attend this morning session's but I spoke with Times-Standard's Will Houston who covers the meetings regularly and asked him to look into certain concerns based on previous coverage. On the surface, this is supposed to be a loan to clean up the Cummings site. I would ask you read the previous links to get the background.
I will update this post with the Board's vote later.
Previous links re: HWMA
So why should this obscure item interest you, the public. If you read the links, you will see that HWMA is in negative due to bad decisions made over the years. After my last post, only Mike Newman and Rex Bohn reached out to me in an effort to address some of my concerns. Rex has, often been the sole dissenter, watching out for the public.
Here is why this loan is a bad idea. And questions the local media needs to ask HWMA representatives, especially the City reps who have been on HWMA for decades. Not Mike Newman who was appointed recently, not Jill Duffy who got handed a mess.
Is HWMA out of compliance/in default with the Net Revenues to Debt Service Ratio requirements of their 2002 and 2005 bond issuance? These documents require that HWMA maintain a Net Revenues to Debt Service Ratio of 1.25 to 1.
Under this formula, “Net Revenues" means Gross Revenues less Operation and Maintenance Expenses. “Gross Revenues" means all operating income and “Operation and Maintenance Expenses" means all expenses but excluding (1) depreciation, (2) the bond interest expense and (3) amounts paid from other than Gross Revenues.
Debt Service means all principal and interest other payments due under the bonds.
Some community members after reading the previous posts have had concerns that other community members had for a while.
These people feel that year to date HWMA operations has $235,000. Even excluding depreciation and bond interest, they think HWMA is already out of compliance with the requirement that Net Revenues be maintained at 1.25 times Debt Service since Net Revenues, even adding back in bond interest and depreciation, happens to be a negative number. The piling on of additional debt to the Headwaters Fund will only make that ratio worse.
Does the Headwaters Fund think it matters that it is loaning money at preferred rates to an entity that year to date has lost $235,000.?
And why is staff recommending this be approved to the Board of Supervisors when funding is tight for departments that have had to cut positions?