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The Blue Hen
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Posted: Sun Sep 23rd, 2007 08:18 pm |
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| Oh and if the DEDO director had listened to her staff and checked with Rasputin, since the director apparently has little contact with Governor What Was Her Name, she could have stopped the DMA application before it went to the CDF. While there might have been some backlash, it would have been minor compared to what has happened. Do you notice any backlash against Chris Coons? If I were Rasputin or the Governor I would not be happy with the apparently poor management handling of this situation.
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The Blue Hen
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Posted: Sun Sep 23rd, 2007 08:12 pm |
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Eddy and Dogg - I am not a tax lawyer, but the DMA is structured as a corporation with a board of directors. It petitioned the IRS and was granted tax exempt status. Public schools are not separately incorporated in this state, so in their present form, are not separate corporations and could not file for 501C3 status under federal tax code.
Eddy - As I wrote earlier, I found nothing in state code that prohibits charter schools from purchasing or renovating real estate. I am not saying its not in there. I just haven't found it. No one against this transaction has pointed out the section in the code prohibiting this financing. The code does permit these schools to use state funds to repay debt.
Remember the argument that was made that this was legislative intent. Yet the legislature had many years to spell out their intent and, though it was not the state, the county actually issued tax exempt, conduit bonds for another charter school
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Taos Eddy
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Posted: Sun Sep 23rd, 2007 07:38 pm |
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Bigg_Dogg wrote: Eddy:
You make a very interesting argument regarding school funding:
"Since under the law the charter schools are public schools and NOT private schools, IF the present legslative language is read to permit this loan, it must also permit public schools to utilize this process for fund raising."
Do you know if a public school is even allowed to apply for a condiut bond issue, the same as a Charter school? If so, have any public schools in Delaware tried to use this method of financing? Or are the entities truly different in their legal makeup? Can State government permit or approve a public school to use this form of financing, and utilize federal tax law? Is there any advantage to this? If the Charter schools are qualified to use a federal tax program to obtain financing, how can they be a public school?
Let's be clear. That isn't my argument; I don't know enough on th topic to pass judgement on its validity either. However, it is the stated reason for denying the loan.
Based on the news reports and what what I've read here, I don't think any public schools have tried this yet. Although normal public and charter schools are different in many ways, they also have many legal commonalities and both are defined as "public schools."
It looks to me like the allegation that DEDO didn't do it's homework is probably true. It looks like they got right up to the settlement table and it suddenly clicked in someone's mind that there was a potential problem with completing the process - a problem that could radically alter the current landscape for public school finding.
If someone could examine the language of the law and establish that this is a bogus position, then I too would question the loan rejection. However, the critics of the rejection have been uniformly silent on that point. All they do is repeat, ad nauseum, the positives involved - as if the negatives are simply irrelevent.
Given their efforts, I suspect that if they could convincingly dispute the reason for the denial, they would have instantly, so I take their silence on the topic as a tacit admission of its credibility.
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Bigg_Dogg
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Posted: Sun Sep 23rd, 2007 12:47 pm |
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Eddy:
You make a very interesting argument regarding school funding:
"Since under the law the charter schools are public schools and NOT private schools, IF the present legslative language is read to permit this loan, it must also permit public schools to utilize this process for fund raising."
Do you know if a public school is even allowed to apply for a condiut bond issue, the same as a Charter school? If so, have any public schools in Delaware tried to use this method of financing? Or are the entities truly different in their legal makeup? Can State government permit or approve a public school to use this form of financing, and utilize federal tax law? Is there any advantage to this? If the Charter schools are qualified to use a federal tax program to obtain financing, how can they be a public school?
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Bigg_Dogg
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Posted: Sun Sep 23rd, 2007 12:31 pm |
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The Blue Hen wrote Also, I don't believe Governor What Was Her Name can remove Greg Lavelle from the CDF. He was appointed by the Speaker in accordance to code. My bad on that one Hen. Thought he was the Gov's appt.
§ 5007. Council on Development Finance.
(a) The Council on Development Finance is hereby established and shall serve in an advisory capacity to the Director and shall consider matters relating to the financing and modernization of agricultural, industrial, commercial, emerging technologies and other facilities in the State and such other matters as may be referred to it by the Governor, or by the Director. The Council on Development Finance may study research, plan and advise the Delaware Economic Development Office Director, and the Governor on matters relating to economic development and strategic opportunities.
(b) The Council on Development Finance shall be composed of 9 members, 7 of whom shall be appointed first by the Governor and serve for a term of 3 years. In addition, 1 member shall be appointed by the President Pro Tempore of the Senate and 1 member shall be appointed by the Speaker of the House and serve for a term of 3 years. Appointees to the Council on Development Finance shall all be Delaware residents. Appointments to the Council shall be made in a way to effect equal distribution of Council members per county.
(c) At least 4 but no more than 5 members of the Council shall be affiliated with 1 of the major political parties and at least 3, but no more than 4 of the members shall be affiliated with the other major political party; provided however, that there shall be not more than bare majority representation of 1 major political party over the other major political party. Any person who declines to announce a political affiliation shall also be eligible for appointment as a member of the Council.
(d) In making appointments to the Council on Development Finance, the Governor, the President Pro Tempore and the Speaker of the House shall appoint professionals possessing 1 or more of the following designations: a member of the Bar of the Supreme Court of the State, an officer of a bank or trust company located in the State, an expert in private equity or a venture capital expert.
(e) Members of the Council shall serve without compensation, except that they may be reimbursed for reasonable and necessary expenses incident of their duties as members in accordance with state law.
(f) A Chairperson of the Council shall be chosen by the members of the Council from among its members and shall serve in that capacity for a term of 2 years and shall be eligible for reelection.
(g) Any appointment, pursuant to this section, to replace a member whose position becomes vacant prior to the expiration of the member's term shall be filled only for the remainder of that term.
(h) The Council shall conduct its business only when a quorum is present. A quorum shall consist of 5 of the 9 members being physically present. Upon written request from the Council, the Governor may declare a vacancy for any member who is absent from 4 consecutive Council meetings. The Council Chair should schedule meetings so that they are centrally located and geographically balanced in number. (63 Del. Laws, c. 189, § 2; 70 Del. Laws, c. 186, § 1; 74 Del. Laws, c. 308, § 37; 76 Del. Laws, c. 79, § 56.)
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Taos Eddy
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Posted: Sun Sep 23rd, 2007 03:57 am |
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The Blue Hen wrote: Eddy wrote:
If their case is so strong, why does each and every proponent of making this loan avoid direct engagement on two issues:
1) What is the validity of the precedent argument.
2) How does a slight delay in the DMA funding cause them undue hardship?
1. I am not sure what you mean by the validity of the precedent argument. There is a precedent in DEDO. DEDO declined to bring an earlier charter school application to the CDF for consideration, turning it down early in the process, ostensibly for credit reasons. This bond was eventually issued by the same county that declined to even respond to a DMA application.
What I'm referring to is the stated reason for not granting the loan at this time. It is telling that you are so focused on the reasons for approval that you are unaware of the reasons for denying it. Since under the law the charter schools are public schools and NOT private schools, IF the present legslative language is read to permit this loan, it must also permit public schools to utilize this process for fund raising. That is a dramatic departure from the existing practice that, they argue, justifies clarification from the legislature BEFORE the precedent is set.
2. How do you know that this action will result in only a slight delay in DMA funding? No one knows for sure what will happen next legislative session.
That's right. Maybe the legislature will say, "no, we don't want charter schools funded that way." And if they do then the political process is working, isn't it? People who disagree wiil have the chance to voice their opinions at the ballot box.
If this is such a slam dunk, as you say, then I can't see why they wouldn't act to sever the charter school/public school link as it relates to this type of funding. Why wouldn't they? All the arguments I'm hearing for supporting this loan, while valid in isolation, are absolutely reckless in their regard for both the legal processes involved and the policy implications of their demands.
If, as this question originally asked, there were some pressing and urgent loss that the school is set to experience then I'd like to hear it. Getting better financing on debt is certainly important, but it doesn't carry nearly the sense of urgency that fill the tirades we're being bombarded with. The present financing scheme is what the school has expected to operate under, so, in my opinion, they can wait a little longer until relevant policy issues are clarified. That is a fact of life for public institutions.
Frankly though, this pissy attitude I'm observing on the part of the DMA proponents is starting to remind me of the way the sheriff in Sussex was acting when he got the boot from voters. The constant indignation over every imagined grievance is getting tiresome and you guys are running a real risk of blowback, IMO.
BTW, DEDA, the issuing authority, is empowered to issue tax-exempt bonds for conduit borrowers. This program was originally intended for for-profit entities that wished to expand or purchase equipment - and who qualified. Federal law also permits 501C3s to take advantage of this program. DMA qualifies under all DEDA requirements and apparently under all federal requirements. Two banks were willing to provide credit enhancement so that the bonds could be sold publicly.
This was a no-brainer except for politics.
"Politics" are how we as a civilization, set the policies by which we live together.
As I stated earlier, the director was apparently told of the political problems associated with this application early on but refused to act prior to taking the request to the CDF. That's right, it was her request! Hopefully, she felt completely silly at having to deny a request that she brought forward. Lack of homework, no doubt!
No doubt. So why would you bring it up in the context of whether or not to approve the loan. If she DIDN"T do her homework, does that mean the loan should go through even though the process is flawed?
Also, I don't believe Governor What Was Her Name can remove Greg Lavelle from the CDF. He was appointed by the Speaker in accordance to code.
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The Blue Hen
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Posted: Sun Sep 23rd, 2007 12:11 am |
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Eddy wrote:
If their case is so strong, why does each and every proponent of making this loan avoid direct engagement on two issues:
1) What is the validity of the precedent argument.
2) How does a slight delay in the DMA funding cause them undue hardship?
1. I am not sure what you mean by the validity of the precedent argument. There is a precedent in DEDO. DEDO declined to bring an earlier charter school application to the CDF for consideration, turning it down early in the process, ostensibly for credit reasons. This bond was eventually issued by the same county that declined to even respond to a DMA application.
2. How do you know that this action will result in only a slight delay in DMA funding? No one knows for sure what will happen next legislative session.
BTW, DEDA, the issuing authority, is empowered to issue tax-exempt bonds for conduit borrowers. This program was originally intended for for-profit entities that wished to expand or purchase equipment - and who qualified. Federal law also permits 501C3s to take advantage of this program. DMA qualifies under all DEDA requirements and apparently under all federal requirements. Two banks were willing to provide credit enhancement so that the bonds could be sold publicly.
This was a no-brainer except for politics. As I stated earlier, the director was apparently told of the political problems associated with this application early on but refused to act prior to taking the request to the CDF. That's right, it was her request! Hopefully, she felt completely silly at having to deny a request that she brought forward. Lack of homework, no doubt!
Also, I don't believe Governor What Was Her Name can remove Greg Lavelle from the CDF. He was appointed by the Speaker in accordance to code.
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Taos Eddy
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Posted: Sat Sep 22nd, 2007 10:53 pm |
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What I notice is the conspicuous absence of any attempt at discussing the reasons given for the denial.
Even if we concede each and every point raised as a reason to make the loan, the negative component will still be there.
If their case is so strong, why does each and every proponent of making this loan avoid direct engagement on two issues:
1) What is the validity of the precedent argument.
2) How does a slight delay in the DMA funding cause them undue hardship?
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Bigg_Dogg
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Posted: Sat Sep 22nd, 2007 10:10 pm |
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Lyle Jr. wrote: It was an editorial faux pas. Someone will get the call from Gannett in the morning and the poor schmuck will get the boot
I'm not sure that I agree with you that Mr. Lavell will be removed from the CDF. As a reminder, all members are appointed by the Governor and serve for no compensation, a purely political decision on the Governor's part. If RAM were to remove him it would only serve to prove that it is pure politics that is driving the decision regarding the school bond issue (and maybe the influence of the DSEA in the Governors office?). RAM would no longer be able to hide behind the excuse that the matter is a policy decision and needs to be debated by the legislature. I believe the NJ would salivate over such a story if Mr. Lavell were removed.
Last edited on Sat Sep 22nd, 2007 10:12 pm by Bigg_Dogg
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Lyle Jr.
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Posted: Sat Sep 22nd, 2007 09:58 pm |
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| It was an editorial faux pas. Someone will get the call from Gannett in the morning and the poor schmuck will get the boot.
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Habanero
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Posted: Sat Sep 22nd, 2007 06:49 pm |
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I absolutely stunned that the News Journal would go against anyting coming out of the DSEA.
I have long contended they have far too much power in Dover.
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The Blue Hen
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Posted: Sat Sep 22nd, 2007 03:22 pm |
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For those of you who missed it, below is a letter in today's News Journal by Greg Lavelle, a member of the Council on Development Finance. I think he has it right. Obviously, I think the director had it and did it wrong. You decide ...
Governor's charter decision was wrong
GREGORY F. LAVELLE
The Delaware Military Academy's request for conduit bond financing through the state of Delaware was simple and straight forward.
The school leadership was seeking a legal and well used means of financing for their existing facilities to help them save about $120,000 per year.
These savings could then be redirected to educational uses at the school. This method of financing uses no state money and does not put the state in any sort of financial risk or imply a future commitment to investors. It would not have diverted funds from any other public school or not-for-profit institution.
DMA's application through the Delaware Economic Development Office was thorough, complete and even encouraged.
The application included three years of audited financial statements completed by an outside public accounting firm. It met the review and approval of DEDO line staff and eight of the nine members of the Council on Development Finance (CDF), the public body made up of elected officials, bankers, lawyers and business people that advise DEDO on these types of issues and of which I am a member.
DMA's request met the letter, intent and spirit of the existing law. This fact was testified to by the Attorney General's Office, which provides legal advice to the CDF.
Recent efforts by some to shift the debate to a review of "issues" related to charter schools after 12 years of operations and parental acceptance is simply a diversion from this specific application and the decision to reject it.
The policy of allowing the DMA to better serve the 525 students that attend the school via a legal means of financing and a review of charter school "issues" after 12 years of operations and acceptance by thousand of families are, can, and should have been mutually exclusive policy decisions.
If after such a review some members of the Delaware General Assembly prefer to make it illegal for charter schools to use conduit bond financing, a bill could be put in at that time and a public debate could take place.
In the meantime, DMA could have saved some money, moved beyond this issue and continued to focus on its core mission of education.
Recent opinion pieces in The News Journal by Delaware public officials are correct in stating that there are many issues that impact public education and charter schools are one of them.
Standards, accountability at all levels, testing and the needs of special-education students are among others on the list of important issues. The debate over how to improve public education is healthy, challenging, full of differing opinions, ongoing and, I suspect, will never come to an end.
Within this debate are a series of individual decisions that take place each and every day on many levels -- at home with parents, at schools with teachers and principals, in Dover and in Washington. The impact of some of these decisions are immediate and clear, the impact of other decisions may take years to come to full view, yet they all matter at different levels.
As hard as I try, I just cannot seem to find the harm that would have taken place if Gov. Ruth Ann Minner had decided to grant DMA's request to save money and better serve their students and families.
This would have been a positive decision with the immediate impact of diverting $120,000 a year directly to improve the education of the students at DMA.
I believe that the governor's decision was wrong and I am still waiting for an argument that could convince me otherwise.
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Insider too
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Posted: Sun Sep 16th, 2007 04:04 pm |
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Lyle Jr. wrote: The DSEA is only concerned with fattening their wallets and increasing their power over politicians and budgets. Teaching the children is an inconvenience in the way of their thirst for power.
I think Lyle Jr REALLY got it right!
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The Blue Hen
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Posted: Sun Sep 16th, 2007 02:05 pm |
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Surprisingly, the News Journal gets this one. Here is today's editorial on the subject:
Denying charter school access to bond program is irresponsible action
When we chastised legislators and Development Office Director Judy McKinney-Cherry for quashing the Delaware Military Academy's conduit bond program, Gov. Minner wasn't in the picture.
But then the State Chamber of Commerce and Business Roundtable forced her hand by running a full-page newspaper ad asking the governor to overturn Ms. McKinney-Cherry's decision.
Certainly the Chamber and the Roundtable knew full well that asking Gov. Minner to overturn Ms. McKinney-Cherry was in effect asking the governor to overturn herself. Ms. McKinney-Cherry was simply following her marching orders from the governor's office, where the pressure to harass and deny charter schools their rights originated.
Political pressure from the lobbyist for the Delaware State Education Association -- actually a threat to drop its support of Lt. Gov. John Carney -- is what led to this now runaway freight train of a debacle.
Gov. Minner's refusal to "intercede" and grant DMA it's due justice is probably the biggest public relations blunder in her two terms. And she even telegraphed it by announcing early last week that she would have a response to the newspaper ad in a few days.
Ms. McKinney-Cherry and Gov. Minner have acted irresponsibly in this matter. The charter school association should take legal action against the state for financial damages it has caused by refusing to allow use of the perfectly legal conduit bond program.
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Lyle Jr.
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Posted: Sun Sep 16th, 2007 12:07 am |
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| The DSEA is only concerned with fattening their wallets and increasing their power over politicians and budgets. Teaching the children is an inconvenience in the way of their thirst for power.
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Al
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Posted: Sat Sep 15th, 2007 11:43 pm |
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I must be thick because I fail to understand why the union would even have a comment or should be concerned in this matter. Since they have no members working in charter schools, it would seem their priorities would be better served if they concentrated on improving the public school structure. If they did this, then maybe we wouldn't have as many students as we do in non-public schools. Rather than throw stones, apply yourself to raising your standards.
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Fred
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Posted: Sat Sep 15th, 2007 01:37 pm |
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The article cut to the heart of the matter....I didn't know that charter schools could pay their teachers less (although I knew they could cut corners with more uncertified teachers, going after professionals who don't have a teaching degree, for example). Of course the teachers union would take exception to this....and if was a teacher I would expect my union to take these steps. However, as a taxpayer and as a fair-minded person, these are steps towards keeping charter schools from becoming larger and successful.
I look at charter schools as labs that different things can be tried out, and if successful, implemented ona larger scale. There are other, more specific type of schools such as the DMA or the ones for high risk kids that are geared to a specific audience. All of that being said.....I don't think that charter schools have proven to be any better (or worse, for that matter) than regular schools, at least according to standardized testing.
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Lyle Jr.
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Posted: Sat Sep 15th, 2007 01:07 pm |
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If the Legislature allows it, the crybaby teachers union of overeducated underachievers will withold their PAC money and votes. Now you don't think your precious politicians will let that happen do you.
According to the DSEA, "Teachers rule, taxpayers drool...."
Last edited on Sat Sep 15th, 2007 01:07 pm by
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Insider too
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Posted: Sat Sep 15th, 2007 10:52 am |
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This article from the News Journal needs to be introduced into the argument:
Military academy and any other charter can use low-interest bonds
Posted Thursday, September 6, 2007
OUR VIEW
It's not often that blatant, self-righteous political pandering rears its head from the Legislature. But the state's refusal to allow Delaware Military Academy to use a low bond interest rate to raise $12 million ranks right up there with the exceptions.
This flap over using the state's interest rate -- as allowed under Internal Revenue Service rules -- has nothing to do with education or the quality of the nationally recognized Junior ROTC academy. It has to do with political egos in the General Assembly and the attitude of the public school teachers union, the Delaware State Education Association.
Teachers and instructors at DMA, a state-approved charter school aligned with the Navy, are not members of the DSEA and don't pay dues. They usually aren't paid quite as much as public school teachers either. State Secretary of Education Valerie Woodruff is not a fan of charter schools, setting up an alignment of teachers and their top boss who both dislike the same thing, at least in this case.
New Castle County Council was first approached by DMA Commandant Charles Baldwin to use the county's bonding interest rates to raise $12 million so it could pay off debt and purchase its building near Newport. Buying the site instead of leasing it could save the school $120,000 annually.
But the County Council quickly retreated on its promise to the academy after threats of losing state money and support came from Democratic Senate Majority Leader Anthony DeLuca. The council is predominately Democratic.
Commandant Baldwin and DMA then approached the state Council on Development Finance in the Delaware Economic Development Office. It voted 8-1 in favor of DMA's request. The only no vote was state Sen. Nancy Cook, a Democratic administration apologist.
But DEDO Director Judy McKinney-Cherry over-ruled the council and denied the request. It's the first time in recent memory a director vetoed the panel's decision.
Ms. McKinney-Cherry, Sen. Cook and other opponents have said that the original charter school legislation of 1995 prohibits state money for capital expenditures such as buildings. That's true enough.
But the conduit bonding program, as it's known, does not use government money for anything. It doesn't even gamble the state's "good faith and credit." There is no financial risk at all to the state nor taxpayers. It is simply a special program to help nonprofit and educational institutions secure low interest rates. Any default on the bond issue would fall on bondholders and the borrowing institution.
Now legislators want a task force to study this matter. There is no need for this. The law allows conduit funding. Delaware Military Academy, and any other charter school, should be allowed to take advantage of it, politicians' and bureaucrats' prickly egos notwithstanding.
If Delaware legislators don't like it, they should get the IRS rules changed.
Last edited on Sat Sep 15th, 2007 10:54 am by Insider too
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The Blue Hen
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Posted: Fri Sep 14th, 2007 01:20 am |
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Well the Governor promised to respond in writing tomorrow to the business community's request to reverse the DEDO director's decision not to permit the Delaware Military Academy to access the DEDA conduit tax exempt bond program.
Do you think she will:
1. overturn her crack DEDO director
2. support Cherry's decision not to approve the bond issue
3. or call for a task force?
Seems like a no-brainer to me!
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The Blue Hen
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Posted: Wed Sep 12th, 2007 01:37 am |
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Eddy - Whether the director got this one right is indeed debatable. I believe she didn't and was simply carrying out the wishes of Rasputin or Governor What's Her Name.
However, the manner in which the director handled this situation appears to reflect poor management skills. The CDF meetings are held for DEDO staff to present requests for assistance, that have gone through serious vetting in the office. The director was informed by her staff of the controversial nature of this request early on. She could have stopped the process well before the application got to the CDF. This is within her power and she has stopped many other requests prior to a CDF hearing.
By having her staff bring this request to the meeting it obviously meant to the CDF members that the director supported it. Why would she do otherwise? Her question regarding bond ratings at the beginning of the discussion let all financially-educated members of the CDF know that she did not apparently understand the basics of these conduit issues though she has approved dozens of them.
After the 8 to 1 vote to recommend the request, the director reportedly mumbled that she would have to look into the matter further for possible other legal issues. Whatever these issues were, why weren't they thoroughly explored prior to the meeting?
Trust the Hen, members of the CDF could not believe this theatre and the absurd outcome. Great management - Huh!
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Taos Eddy
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Posted: Tue Sep 11th, 2007 04:06 am |
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I understand your position; and you may be correct. I'm not an authority on the topic of how such a precedent may affect public school finding, and having read many of your posts I don't believe you to be either.
In my opinion the concern expressed by DEDO has enough merit to warrant clarification from the legislature. It is easy enough for them to act if they think the matter has been handled in a way that runs counter to the legislation as written. The damage done to the school by such a delay for clarification doesn't seem like such a burden for DMA to bear, as far as I can see. Many public schools have to endure similar (if not much greater) delays in funding, so I see no hurry except that generated by the political bickering.
I think you may be letting your personal animous get in the way of your objectivity. If it helps, think of it in terms of the old saw: even a broken clock is right twice a day. Maybe the director got this one right.
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The Blue Hen
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Posted: Tue Sep 11th, 2007 02:07 am |
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Eddy - I know what I read in the State code regarding Charter Schools. If the legislature did not want charter schools to use creative financing to fund real estate projects, why didn't they include that in the code years ago or as an amendment?
Do you know for certain what "legislative intent" was regarding such financing techniques? If not, why should DMA, who otherwise qualified as an applicant for a DEDA issue, have to defend itself against something that is not in the code? The answer to me seems more partisan.
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Taos Eddy
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Posted: Mon Sep 10th, 2007 09:26 pm |
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The Blue Hen wrote: Eddy - I don't know why the DMA should have to defend its request. The DEDA tax exempt bond program and regulations have been in place for years. DMA is structured as a 501c3 entity. It has a qualified project under federal tax requirements and DEDA's. It had a credit enhancer who was willing to backstop its credit so that the bonds could be sold publicly. In other words, it has the same profile as the dozens of other non-profits that have been conduit obligors under DEDA's bond program.
How does one defend against legislative intent? I have probably not read all of the State code on charter schools, but the founding code seems to be silent on real estate purchases or construction and does permit charter schools to take on debt. Unless there have been subsequent amendments, sure looks to me that there is no legal basis prohibiting such projects.
Sounds to me like the DMA project qualified like any other that was approved.
Of course they have to defend their request in the light of legislative intent. Do you think that DEDO is operating as an indendent entity answerable only to the business community? I see a distinct difference between charter schools and the private schools you are citing as precedent. In the case of the private schools there is no precedent created that has potential to affect funding for the public schools; in the case of DMA it seems that it does have that potential. Perhaps I'm wrong on the message I'm getting in the reporting, but the fact that the entire incident has been linked so closely to a political race is inclining me to caution when evaluting the conflicting claims.
That is why I think it is more appropriate that the issue be visited in legislation than pressing for what seems to amount to policy creation at the executive agency level.
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The Blue Hen
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Posted: Mon Sep 10th, 2007 08:42 pm |
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Eddy - I don't know why the DMA should have to defend its request. The DEDA tax exempt bond program and regulations have been in place for years. DMA is structured as a 501c3 entity. It has a qualified project under federal tax requirements and DEDA's. It had a credit enhancer who was willing to backstop its credit so that the bonds could be sold publicly. In other words, it has the same profile as the dozens of other non-profits that have been conduit obligors under DEDA's bond program.
How does one defend against legislative intent? I have probably not read all of the State code on charter schools, but the founding code seems to be silent on real estate purchases or construction and does permit charter schools to take on debt. Unless there have been subsequent amendments, sure looks to me that there is no legal basis prohibiting such projects.
Sounds to me like the DMA project qualified like any other that was approved.
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Taos Eddy
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Posted: Mon Sep 10th, 2007 04:56 pm |
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It sounds like an attack based on partisanship, but not being a Republican (and prone to living a life of logical fallacies) I can see that doesn't equal the conclusion that the charges are baseless.
My questions would be how is the Charter school defending it's request in light of the alleged intent of the Legislature?
It doesn't seem to me that the precedent exists to support their request. It also doesn't seem to me that granting the request is the proper way to establish a policy with such potential for far reaching ramifications.
Perhaps it is a matter they should be taking to the public through the normal legislative process.
Of course, that wouldn't help get a Republican elected governor, would it?
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The Blue Hen
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Posted: Mon Sep 10th, 2007 02:14 pm |
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Just to put the DMA request in context, DEDA, with approval from the DEDO director (Cherry personally approved many of the following issues) and unanimous approval of all of the State's bond issuing officers (the Governor, Secretary of State, Secretary of Finance and State Treasurer) have approved conduit tax exempt bond issues for the following non-profit private schools:
Archmere
St. Edmunds
St. Andrews (three different issues)
Two Montesorri Schools
Catholic Diocese of Wilmington (for the construction of Christ the Teacher grade school)
Independent School
St. Annes
I recognize that these are not publicly funded schools but like DMA they are non-profits who had qualified construction projects and credit that was good enough to attract either public or private purchasers in the long-term tax exempt market.
Lets also be clear on what DEDA offers for these borrowers. There is no low state bond rate. Through a DEDA issue, a conduit borrower can access the tax exempt market. While tax exempt rates are normally lower than taxable rates, actual rates for these issues vary depending on credit and term.
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Lyle Jr.
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Posted: Mon Sep 10th, 2007 02:14 am |
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DSEA and the NEA control government because of their PAC's. Governors and Senators tremble at their feet. Screw the union and take back our schools from the overpaid underachievers.
Our schools will go the way of the Steel and Auto industry because of union control. Those poor, poor teachers who can't fend for themselves in the world. LOSERS.
Last edited on Mon Sep 10th, 2007 03:22 am by
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Bigg_Dogg
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Posted: Mon Sep 10th, 2007 01:28 am |
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Teachers union blocks charter school request
I am a Delaware Military Academy parent. DMA is the only public charter school in the nation sponsored by the U.S. Navy. It is the pride of Delaware but, sadly, not Director of Economic Development Judy McKinney-Cherry or the Delaware teachers union.
A request by the school commandant to obtain a low-interest rate on a loan through the state was denied. A loan would place no risk whatsoever on taxpayers and Delaware government. Cherry and the governor knuckled under to this special interest.
DMA will still obtain its loan, but will be forced to pay a higher rate. This will cost the school about $120,000 per year more than is necessary.
I call on parents of charter schools, Veterans and all Delawareans to contact the governor to convince her to do the right thing and approve the DMA request. The governor should not be influenced by interest groups in making decisions that help young people of Delaware.
Dave McGuigan, Middletown
From the DSEA website:
Business groups, probable gubernatorial candidate, and News Journal attack Governor, legislators, DSEA for raising policy issues about Charter School construction deal
On Thursday, September 6, the News Journal attacked Governor Ruth Ann Minner, DSEA, Secretary of Education Val Woodruff, Sen. Nancy Cook (D-Kenton), and Sen. Anthony DeLuca (D-Wilmington).
Why were no Republicans attacked for issuing the same concerns? This coordinated attack followed the Tuesday, Sept. 4th decision by Judy McKinney-Cherry, director of the Delaware Economic Development Office (DEDO), who turned down an application from the Delaware Military Academy charter school for $10 million in tax-exempt bonds that would have been issued by the Delaware Economic Development Authority. With these proceeds, the Wilmington-based charter school hoped to eliminate its current $2.9 million private sector loan from WSFS, purchase its current building, and finance improvements, including "equipping" of its current buildings located just behind Banning Park on Maryland Avenue in Wilmington. The coordinated attack was apparent in the 9/6 editorial in the News Journal, blogging entries, and Al Mascitti's talk show on WDEL (1150 AM) radio from nine to noon. Al Mascitti and others called DSEA cowardly because our web site was down (our server was down!), assuming that we had taken it down on purpose to hide our position. Some radio callers even described DSEA as "evil" for opposing the DMA application to use tax-exempt bonds. There was no acknowledgement whatsoever that the use of these bonds would set a new state precedent without providing for any of the kinds of accountability procedures that local school districts must demonstrate before proceeding with school construction projects. In addition, Mascitti and many of the callers berated DSEA's billboard campaign message ("In our great public schools, a student is MORE than a test score."). The News Journal editorial that berated DSEA occurred despite the fact that DSEA Executive Director Howard Weinberg had in fact called John Sweeney, News Journal editorial page editor on Tuesday, September 4 and left a message asking that he talk with him about DSEA's position before the newspaper wrote an editorial on the issue. Sweeney never returned Weinberg's call. DSEA also called WDEL and offered that Barbara Grogg be interviewed for the afternoon talk show (Rick Jentzen and Jerry Fulcher) but, again, no call back. It also has been reported to DSEA that the Delaware Business Roundtable intends to place a full-page advertisement in the News Journal, to the tune of $15,000, in this Sunday's edition (September 9) in support of the Delaware Military Academy bond application. Again: Tthe issue is not the DMA, but rather charter school funding and Delaware's educational policy, policy set by the General Assembly, not by the Economic Development Council. We continue to support the work of Vision 2015 around education funding as well as urging for a larger discussion of charter schools in our state, given their twelve year history and the recently-completed three-year study of their experiences, a study commissioned by the Delaware Department of Education. Support coming from many areas
President Grogg has received phone calls from many legislators on both sides of the aisle as well as other elected officials, in support of our position. In addition, Grogg, Vice President Diane Donohue, Exec. Director Howard Weinberg and Dir. of Legislation Jack Polidori visited Delaware's Building Trades Council Thursday morning. Background In her letter to Judy McKinney-Cherry, Barbara Grogg emphasized that this issue has nothing to do with the performance of the Delaware Military Academy or any other charter school, but is rather a larger policy issue regarding the will of the General Assembly regarding charter school funding. In fact, for two years now, the General Assembly has spoken against capital funding for Delaware's charter schools. If this application had been approved, the door would be open for any public school to go the same route: no more referenda, no more public accountability, no more "certificate of need" oversight from the Dept. of Education. Just free money with no public accountability. While no direct state funds would have been involved in this bond issue, the use of the state's name literally would have enabled the charter school to sell the bonds to buyers who would not have had to pay federal or state taxes on the interest payments. Over the 30-year life of the bonds, according to DMA Commandant Charles Baldwin, this state-condoned financing would have saved the Academy approximately "$100,000 to $120,000 per year" --- over $3 million --- in financing costs. McKinney's letter stated, in part: "Since there continues to be ambiguity and spirited debate with respect to the State's involvement in the capital formation process for Charter schools, it is not appropriate to proceed until further policy ramifications are considered, a more detailed analysis of the implications is completed and the opportunity is available for debate and discussion with state policy makers." The Minner Administration decision followed by one week an 8-1 vote of the Delaware Council on Development Finance, to approve the DMA application. Rep. Greg Lavalle (R-Wilmington) led the argument and made the motion during that hearing. Sen. Nancy Cook (D-Kenton), co-chair of the General Assembly's Joint Finance Committee, was the sole dissenting vote on the business-dominated Council. The vote of the Council was only a recommendation to DEDO Director McKinney-Cherry. In addition, the Minner Administration also withstood extremely strong support from the state's corporate business community for the bond issue, notably from the Delaware State Chamber of Commerce, as well as the rumored 2008 Republican candidate for Governor, Alan Levin (former ceo of Happy Harry's drugstore chain), and the Rodel Foundation. According to DSEA President Barbara Grogg, "The decision of DEDO Director Judy McKinney-Cherry to disapprove the application of the Delaware Military Academy, a charter school, for tax-exempt 501(c)(3) 'conduit' bond funding is consistent with state educational policy in effect since passage of the state's charter school law in 1995. Capital construction assistance for charter schools --- provided either directly or indirectly --- was omitted by the General Assembly when it first passed the charter school law.DEDO Director Judy McKinney-Cherry's decision is further consistent with the language found in Title 29, Chapter 50, Section 5003(c)(3) of Delaware Code (purpose of the Delaware Economic Development Office) that compels DEDO and its Director: To harmonize its activities with similar activities of other departments, boards, commissions, agencies or instrumentalities of federal, state, county or municipal government; "Charter schools seeking direct or indirect capital construction assistance from the State or any other governmental entity should be held to equivalent standards of accountability, transparency, and voter/school board approval that local community public schools must meet," she continued. DSEA wishes to thank its members, local citizens, and members of the General Assembly who phoned, e-mailed, and wrote the Minner Administration to encourage a continuation of the state's long-time policy to compel charter schools to raise their own funds for capital construction. Testimony of DSEA President Barbara Grogg before the Council on Development Finance and Judy McKinney-Cherry.
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The Blue Hen
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Posted: Sun Sep 9th, 2007 02:11 pm |
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As the Hen mentioned earlier there was, indeed, a controversial bond request at the recent Council on Development Finance Committee public hearing. If you want to see both sides of this controversy check out the open letter to Governor What's Her Name on page A5 of the News Journal today and then go to the DSEA website for the other side.
Without discussing the merits of the request, the request was recommended to the Director with an 8 to 1 vote. She subsequently denied the request (in writing).
Let's see. Its not as if the request was a surprise for this director. She was informed by her staff early on in her process about the controversial nature of the request. She did nothing. She let her staff take an application, do the due diligence, the brief credit analysis, write the request up, put it on the public agenda, distribute it to the CDF members and they presented it at the hearing.
The director could have stopped this process any time but apparently decided one day before the meeting to try to have it tabled and then again right before the meeting. This illustrates either poor judment or poor politics - either way, great management huh!
On a separate matter it seems that the State of Virginia landed the prize of recruiting the 400 person Volkswagen headquarters from Detroit. The company said that it chose Virginia for its low tax structure and good quality of life. Anyone in the economic development biz knew that this was in play for months. What did DEDO offer? Did DEDO make an offer or for that matter did DEDO even know that this company was in play? What about it Five? Why didn't we win this business?
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Lyle Jr.
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Posted: Sat Sep 1st, 2007 02:47 am |
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MayBe you are #46????????????
The Blue Hen wrote:
Sorry Five, The Hen wouldn't be interested in working for Rasputin but then again neither were the others who were approached late last year to take on DEDO.
As the Hen mentioned earlier there was a controversial bond issue presented at the Council on Development Finance Committee meeting last Monday. Without going into the controversy, which will probably be covered by the News Journal this weekend, the DEDO director stunned the CDF members by making a comment that showed that she did not have a basic understanding of conduit tax exempt bonds. The State code had to be consulted to teach the director what she apparently didn't know.
What's interesting (and I might add - typical) is that the director has personnally approved dozens of these issues without apparently understanding a key feature about them and has recommended them to the Governor and other bond issuing officers.
Five, other than the personal attacks and glib comments, so far you haven't shown any ability to defend DEDO management, which, of course, is a difficult job, perhaps you should ask the Director to send out another Quixotic staff member to engage the Hen and you should go back to guilding the lillies every day.
A little birdie told the Hen that there was a farewell party for employee number 46. Unfortunately employee number 46 wasn't invited. I wonder why?
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Insider too
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Posted: Sat Sep 1st, 2007 12:47 am |
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| Wow Hen! Your last post really caused me to reminisce. Kinda reminds me of the time the individuals in charge of the Transportation Trust Fund were asking DEDO about issuing bonds for privitization of the St. Georges Bridge. Looks like there may be some real "Wanna buy a bridge" stories at DEDO after all.
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The Blue Hen
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Posted: Fri Aug 31st, 2007 01:33 pm |
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Sorry Five, The Hen wouldn't be interested in working for Rasputin but then again neither were the others who were approached late last year to take on DEDO.
As the Hen mentioned earlier there was a controversial bond issue presented at the Council on Development Finance Committee meeting last Monday. Without going into the controversy, which will probably be covered by the News Journal this weekend, the DEDO director stunned the CDF members by making a comment that showed that she did not have a basic understanding of conduit tax exempt bonds. The State code had to be consulted to teach the director what she apparently didn't know.
What's interesting (and I might add - typical) is that the director has personnally approved dozens of these issues without apparently understanding a key feature about them and has recommended them to the Governor and other bond issuing officers.
Five, other than the personal attacks and glib comments, so far you haven't shown any ability to defend DEDO management, which, of course, is a difficult job, perhaps you should ask the Director to send out another Quixotic staff member to engage the Hen and you should go back to guilding the lillies every day.
A little birdie told the Hen that there was a farewell party for employee number 46. Unfortunately employee number 46 wasn't invited. I wonder why?
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Fab Five
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Posted: Mon Aug 27th, 2007 03:49 am |
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Don't hold your breath Gulliver, that just doesn't happen here.
Hen, I wouldn't expect the leader of any group to have been responsible for the writing of all its policy. That's why good leaders surround themselves with good people. We also all have our areas of expertise, and leave the work in specific areas to those hired to do it well. Maybe if you were one of the good people, you'd come make a difference rather than whine. Since, according to you, DEDO is such a mess, certainly HR would see the benefit of your expertise. Hell, just call the governor, obviously she should just make you Director.
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Gulliver
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Posted: Mon Aug 27th, 2007 03:21 am |
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| Solutions?
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The Blue Hen
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Posted: Sat Aug 25th, 2007 07:58 pm |
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Gulliver and Fab Five - The CDF is a good place to start to understand one of the major weaknesses of this DEDO management. BTW, there is a CDF meeting Monday that should actually be well attended by some members of the public as the bond issue being recommended at this meeting is somewhat controversial.
CDF stands for the Council on Development Finance, a group of appointed citizens and two legislators who meet in public meetings to make recommendations to the DEDO director on requests for financial assistance and bond issues.
For years, through the previous administration, the CDF realized that the professional DEDO staff would not bring requests to this meeting unless the request made sense, had been formally vetted, the financial status of the requestee had been professionally reviewed and the deal had been structured to both provide needed assistance at the least amount of State funds possible, yet protect the state.
BTW Fab Five, who do you think wrote the regulations for the Strategic Fund, created the basis for the use of grant funds (PIT) used by this director, created the advance rationale, created the investment committee so that a deal would be exposed to senior staff early on in the process, structured grant and loan agreements to protect the state - yes invented and continually modified clawback language to better protect the state? Who was that Five? Ask some of the veterans - they will tell you. I'll give you a hint - it wasn't this DEDO director.
Since you know so much about DEDO and the State, you know about the APA - right? So why is it that none of the New Economy Initiative programs have gone through this process and why haven't they all been folded into the Strategic Fund? I know Five, you don't know the answer - why don't you ask your boss or some legislators who are asking the same question.
But I degress - back to the CDF. This body now acts very agressively regarding requests. Why is that? For some background you can read the minutes to the Sunset Committee review of the CDF. Could it be that the veteran members of the committee might have lost some confidence in what was being presented to them? Remember the previous senior finance person at DEDO resigned in part to protect his reputation - or so he testified at a public hearing on DEDO.
This DEDO director is responsible for the largest grants and loans ever provided by DEDA, which when reviewed on a per job basis, represent hugh increases over what was provided in the previous administration.
Hey Five, if you are permitted, review the grant agreement for the largest grant and try to understand the obvious weekness in the clawback language, if you can. Ask for the Application for a $4 million plus grant in which DEDA will be buying 50 acres of land from a client. You won't find it because there isn't any. Ask why a small amount of financial assistance was offered to a firm (that relocated out of the state) that had the same PIT impact as one that was offered a grant in excess of $13 million. Review the state auditor's report (on his website) regarding problems with a grant request that this director brought before the CDF. Review the largest loan ever offered by DEDA against the number of jobs that it saved. The dollar advance per job was several times what DEDO's partner bank advances per job for economic development projects. See what you find - if you bother looking!
You probably won't look or ask the questions, just continue your ad hominem attacks on the Hen. That's OK, the Hen can take it and the clock is ticking.
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Fab Five
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Posted: Sat Aug 25th, 2007 03:32 pm |
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I think that just may be the most intelligent, non-adversarial post I've ever read on here. Damn fine job.
Your friend,
Fab
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Gulliver
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Posted: Sat Aug 25th, 2007 02:16 pm |
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First, I am not suggesting that I have all the answers. But, I think there may be a few solutions out there. Yes, I do think stakeholders should be involved in helping to shape the direction of DEDO. In some ways, they already do. The CDF is just one example, but there are others. Has anyone here ever attended a CDF meeting? They're open to the public.
Personally, I don't know about all of DEDO's current projects. I read about their patent donation program. To be honest, I didn't see the value in it at first. If DuPont and Hercules didn't have a use for the patents, why would an entreprenuer or start-up company? But, it's really smart thinking. I hear it's getting national attention. There's good information about it on DEDO's website.
As for DCX, let's not forget that the company's problems are bigger than Delaware. I think DEDO put in a good effort and continue to do so. There was an article in this week's Philadelphia Business Journal about the growth of the aviation industry. Apparently, many of the automotive skills are transferable to the aviation industry, and the salaries are the same or more. Dassault Falcon Jet in New Castle have already hired a few DCX employees. There are companies downstate too. Sounds like an opportunity there...
And no, I don't think the issue of high turn-over is ever just about salary. But, performance-based bonuses are not just about money. They recognize a job well done in a tangible, real way. If not cash, maybe additional vacation days. The private sector does it. What do you think? And no, I've never seen jobs posted of the state website or in any of our daily or weekly papers.
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Bigg_Dogg
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Posted: Fri Aug 24th, 2007 02:43 am |
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Gulliver wrote: Instead, why not let this forum be a place in which visitors could excercise a sense of vision for the office, with rational discussion about its initiatives, projects, etc? Let's consider solutions to current issues. If the problem is high turnover, what can be done to recruit skilled professionals and keep them? Since DEDO is a non-merit organization, is there an opportunity to offer performance-based bonuses, in addition to base salaries? And what is being done to recruit employees in the first place? Why not post openings in the local paper and with professional associations like the IEDC? Great idea Gulliver!
What sort of vision do you see for the future of Economic Development in Delaware? Should local communities be a part of it?
What are the current projects DEDO in undertaking? Are we to expect any major announcements with regard to the future of Chrysler or GM?
What do you see as a solution to the high turnover problem? Do you think it is simply salary? What are a possible list of causes and solutions? How would you implement performance-based bonuses for State employees? How would you define someone who would be eligible for such a bonus? Aren't openings already posted in the local papers or on-line in the State web site?
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Gulliver
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