Weaver/McCormick Flint-GLWA Deal Transforms Water From Obscene Tax To Outright Theft
Flint Mayor Karen I Love Rizzo Weaver and Great Lakes Water Authority CEO Sue McCormick have reached a 30 year deal for Flint to purchase water from the Great Lakes Water Authority. The City of Flint had signed up to purchase its water from the nascent Karegnondi Water Authority in March 2013 and the State of Michigan concurred in April. Everyone in Flint City government, save one councilman, has agreed to source Flint’s water from the KWA. Even Mayor Weaver. Until this week.
The Weaver/McCormick deal has GLWA paying Flint at least $ 7 million a year to cover Flint’s share of the bonds issued to finance the KWA. A total of $ 210 million over the 30 year contact period.
Where will that $ 210 million come from? GLWA is not the Federal Reserve, they cannot just create money out of thin air. GLWA will extract the money from the
victims ratepayers in the other communities it ‘serves’.
Mayor Weaver and CEO McCormick will transform GLWA water rates into yet another exaction imposed upon most of Southeastern Michigan to subsidize Flint. Without any input from those
victims ratepayers. A blatant fee as tax evasion of Headlee. Governor Snyder, of course, approves wholeheartedly.
This is government theft, Headlee evasion, and a rich fount of future corruption.
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No matter how crazy some tax scheme is, never underestimate the power of stupidity in large groups.
So we thought Michigan’s newly implemented gas tax was bad?
Sure, the road tax puts us at the most expensive gas tax level in the country. And because of the idiocy of OUR large groups in Lansing, it even protects itself for inflation! But even so, our absurd taxation scheme has been relegated to second place in absurd tax schemes.
If Michigan were to follow the lead of Philadelphia (which I think could somehow happen), every six pack of coke 16.9oz bottles would have $1.52 tacked on. Every Pepsi 8 pack would have $2.03 added on.
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Traverse City enables more cronyism in its latest money grab.
Does a Tax Increment Financing (TIF) scheme really work?
It seems that each year, special TIF districts are set up throughout our state in order to promote growth or development of a particular economy or industry. The revenues raised through a TIF scheme are theoretically targeted, specifically for the district raising the value of that district over a specified period of time.
But does it work well enough and is it worth the effort, and goodwill lost, as it continues to be abused by those who hold the authority? As voters look at the millage requests on the ballot, they now see the language that reminds them that not-all-of their voted in millage will go where it is intended.
A TIF scheme is done by
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With Michigan's upcoming confiscatory registration hikes, its time! - Save 20% by renewing early.
Michigan vehicle owners can renew their registrations up to 6 months ahead of time.
If your tabs are going to be due from now till June, its time to act to save a few bucks. Using Express SOS, you can avoid the 20% markup this year that our tax hungry legislature and governor have in store as-of Jan 1, 2017.
You Betcha! (10)Nuh Uh.(0)
And Who Else?
Clinton Township Trustee Dean Reynolds was charged with bribery Thursday, in the U.S. District Court for Eastern Michigan. Rizzo Environmental Services allegedly paid Reynolds $ 50,000 – $ 70,000 in cash for his vote and influence on an $18 million, 10 year garbage collection contract. Reynolds is also alleged to have received free legal services from a Rizzo connected attorney in his divorce case.
Reynolds is a Hillary supporter, a gun control supporter, and an environmental supporter. Now living proof that you don’t need a gun to commit a serious crime. As you read about this case, ask yourself why not one article mentions his political affiliation. Were he a Republican, his affiliation would be in every headline. Reynolds is an AFL-CIO toady now running for Clinton Township Supervisor in the November 8th General Election. The Metro Detroit AFL-CIO scrubbed their endorsement of him this morning, but they can’t change history:
The Free Press reports that the “FBI’s years-long investigation is expected to trigger criminal charges against numerous politicians in towns and cities across Macomb County who engaged in pay-to-play schemes with various developers and businesses. The Clinton Township case, sources said, is just the tip of the iceberg and numerous more charges will follow.”
Rizzo Environmental Services is under contract in a lot of communities outside of Macomb County in Michigan. Who else have they bribed?
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You Betcha! (8)Nuh Uh.(0)
The entire world now knows what crass bureaucratic stupidity, feeble political direction, and witless press coverage did to Flint. We have demonstrated that Flint’s politicians and financial managers made terrible decisions in an effort to replace plunging tax revenue, which had reached statutory and constitutional rate limitations.
The foremost source of revenue expanded was Flint’s water & sewerage charges. Annual free cash flow from water & sewerage charges was increased from nil to $ 28.7 million (bottoms of page 3-13) over the decade from 2004 [FY2005 CAFR, large file] to 2014 [FY2015 CAFR, large file]. The big jump in free cash flow from water & sewerage charges occurred in 2014 as a consequence of Flint River sourcing. Flint only had to pay the DW&SD pirates for water up to April 25th in 2014. Annual free cash flow from water & sewerage charges in 2013 [FY 2014 CAFR, large file] was only $ 9.4 million when they paid DW&SD all year. Why Flint resourced to the Flint River in one number: $ 19.3 million more in cash flow. And most of this $ 19.3 million is now gone with the return to DW&SD water. We will know how much gone later this year.
That $ 28.7 million in free cash flow during 2014 was a 77% markup on actual Flint water & sewerage costs. Only $ 7 million of it was used for infrastructure, mostly to prepare for the now abandoned Flint River sourcing. Only $ 2 million of it was used to pay off water & sewerage debt. The remaining $ 18.5 million was used by other Flint city departments and applied to other Flint obligations. That $ 18.5 million dollars became 22% of all Flint City revenues. Greater than any other source of revenue, greater than income tax revenue, greater than property tax revenue, greater than State revenue sharing, greater than Federal revenue sharing. That $ 28.7 million dollars was the only reason Flint was able to exit emergency management. That and a $ 65.3 million
theft from restatement of Flint’s water and sewerage enterprise fund net positions, from their 2014 CAFR to their 2015 CAFR (compare ending 2014 to beginning 2015 net positions on the bottom of pages 3-13).
Let’s consider a counterfactual. Suppose that Michigan’s bureaucrats and political leaders were actually competent and, under the unrelenting scrutiny of a watchful press, arranged for proper chemistry controls of Flint River sourced water. No Flint residents were exposed to lead, no one died from legionella pneumophila, and Flint residents sang the praises of their new water. Its tough to ignore recent history, but do so for a moment so we can explore a very important question:
Would the financial reorganization of Flint under its popularly elected politicians and emergency managers have worked?
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Someone needs to impress upon the MRP legislative and executive leadership that “NO” means “NO” . . . period.
Roughly nine months ago, We the People of Michigan, by a record-breaking 4-to-1 statewide margin, told our elected nobility in Lansing “HELL NO” on a proposed tax increase, which they’d tried to sell as a road proposal, but which the voting public saw clearly as a political sausage job that produced a cronyist’s grab bag of goodies. Thus, every single county in this state, without exception and in no uncertain terms, clearly delivered a mandate-level message that we are no longer interested in extending the legislature a taxpayer-funded line of credit, until such time as they get their spending priorities in order. You would think that a statewide vox populi shellacking, with a turnout rate typical of the biennial congressional primaries, would clue in the GoverNerd, and the rest of the MRP/MIGOPe professional political establishment, that We the People are done being their ATM.
You would think that . . . but you would be wrong. Six months after that ballot box rejection, while most of us were tucking our children into bed (or monitoring local election results), the lords and barons in the Michigan Legislature essentially told we the proletariat that our opinion is irrelevant, and that “no” really means “don’t ask again” – which, of course, they didn’t – by passing a “road funding” tax package that was nearly identical to the core of Proposal 15-1, less the elements required to force it onto the ballot. In doing this, they flatly rejected the clear will of the people, imposed through legislative fiat that which they couldn’t persuade the electorate to publicly ratify, and took yet another step toward government by aristocracy.
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Synonyms for Headlee Evasion
La victoria trova cento padri, a nessuno vuole riconoscere l’insuccesso
A victory finds 100 fathers, nobody claims credit for a failure.
Galezzo Ciano, 2o Conte di Cortellazzo e Buccari, Diary (1942)
The left wing meme on the Flint Water fiasco is that Governor Snyder seized absolute control of Flint and installed doctrinaire Republican viceroys who ruthlessly slashed Flint’s payroll and expenditures without any regard for the residents.
If only this were so.
The Flint emergency managers had only one common thread in their backgrounds, long records of administration in government and the nonprofit sectors. No productive experience. Experts at spending other people’s money. Well paid experts. Outright Democrats or chameleons politically; typical politics of the bureaucratic class. Look at the backgrounds of the Flint emergency managers:
Michael K. Brown
Edward Kurtz, again
Michael K. Brown, again
Gerald (Jerry) Ambrose
Emergency managers are not viceroys with absolute powers. The evolution of emergency management in Michigan was frustrated by public union opposition. Five successive laws, one repealed by referendum. The law in force during the critical Flint water fiasco decisions is PA 436 of 2012. The powers it confers upon emergency managers are:
MCL 141.1549, Section 9
(2) Upon appointment, an emergency manager shall act for and in the place and stead of the governing body and the office of chief administrative officer of the local government. The emergency manager shall have broad powers in receivership to rectify the financial emergency and to assure the fiscal accountability of the local government and the local government’s capacity to provide or cause to be provided necessary governmental services essential to the public health, safety, and welfare. Following appointment of an emergency manager and during the pendency of receivership, the governing body and the chief administrative officer of the local government shall not exercise any of the powers of those offices except as may be specifically authorized in writing by the emergency manager or as otherwise provided by this act and are subject to any conditions required by the emergency manager.
The emergency managers replace the mayors, council, and chief administrative officers of the municipal governments. While this does indeed give them extraordinary powers of control, their control is anything but absolute. The municipal charter continues in effect and continues to protect the prerogatives of lesser bureaucrats. The vague statutory powers of emergency managers beyond replacing the mayor, council, and chief administrative officer poses unremitting legal jeopardy to emergency managers. Encourages timidity and bureaucratic subterfuge. Not absolute control.
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Water Has A Very Special Attribute In Southeast Michigan
You probably think the water which comes out of the taps in your house is for drinking and washing. You would be wrong. Michigan drinking water is first and foremost a mechanism for Michigan politicians to evade limits imposed upon them by the Headlee Amendment. You probably think Michigan water systems have quality as their top concern. You would be wrong. Michigan water departments are directed to maximize revenue by their political masters. These unfortunate facts are the genesis of Flint’s sorry water quality.
Michigan’s lefties and the ignorati in our media have fabricated a popular history of the Flint water situation which begins with Governor Snyder and his emergency managers on 25 April 2014, the date Flint started drawing its drinking water from the Flint River. Craven emergency managers appointed by Governor Snyder plotted to poison Flint residents to save a few bucks. The truth is rather different.
The history of this calamity actually begins in 1978, when the Headlee Amendment to Michigan’s Constitution was passed by outraged Michigan voters.
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You Betcha! (26)Nuh Uh.(3)
Canadian Economic Collapse and Extravagant Liberal Party Campaign Promises Doom Governor Snyder's Bridge
The estimated cost of constructing the
NITC DRIC Gordie Howe Bridge between Detroit and Windsor has now more than tripled since the Canada agreed to fund the entire cost back in June 2012. Its total cost, including interest payments, is now over four times the 2012 estimate. The recent, sharp collapse in the value of the Loonie – the Canadian currency – is being blamed. But it appears that deliberate lying cost underestimation in 2012 and project creep over the last 30 months play a much bigger role in the eyepopping new cost estimates.
Financial markets trade the U.S. Dollar and the Canadian Dollar back and forth as ‘USDCAD‘, which is the equal value ratio of Loonies per greenback. The higher USDCAD is, the weaker the Loonie. USDCAD is now quoted around 1.40 (1.4 Loonies per greenback). The Loonie was 37% stronger back in June 2012 when Governor Snyder and then Canadian Prime Minister Harper worked out their agreement; USDCAD was then about 1.02.
Direct construction costs are now estimated to be C$ 2 billion ($ 1.43 billion USD) higher than the C$ 973 million ($ 950 million USD) estimate touted back in 2012. A 37% increase due to currency adjustments would be only $ 360 million (USD), so we know the 2012
deliberate lie underestimation was in the vicinity of $ 1.64 billion (USD). Additionally, the collapse of the Loonie now requires the establishment of a C$ 1.5 billion ($ 1.07 billion USD) reserve to offset the expected rise in Canadian dollar denominated bond interest rates. The Canadian government bond yield curve has doubled at its short end since the middle of September 2015 in response to the collapse of the Loonie. The Gordie Howe Bridge will be financed at those higher Canadian bond interest rates. The total Canadian government cost estimate is now C$ 4.8 billion ($ 3.43 billion USD).
Harper’s Conservative government was defeated in October of last year after NDP voters abandoned their own party for the elysian promises of Justin Trudeau and his Liberal Party. Virtually the same promises our Dear Leader made in 2008 – ‘Hope and Change’ recycled for a northern audience. Harsh reality is already wrecking the promises Trudeau made to win the October election, so will the Canadian government continue to throw money at an unneeded bridge?
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