Bump: Taxpayers on the hook in D’Iberville after consulting scam collapses

RFP in comments on Today’s auditing moment: Fictitious Vendor Embezzlement

The forecast is for increased heat in the City of D’Iberville.
Ocean Expo’s delay means taxpayers may pay first bond note

D’IBERVILLE — City officials expected Ocean Expo Aquarium to be built and open by now and ticket prices to cover the cost of repaying the bond to purchase the land.

Instead the city may have to make the initial $318,668 payment — due in September — out of the general fund.

A visit to EMMA has been scheduled to do some digging into the official statement.

Additional Ocean Expo:
Can anyone provide information on the contract for site work at the Ocean Expo site?

IMMS solicited bids for “site preparation Phase 1″; the Daily Journal Of Commerce Gulf Coast (see page 17) reported that a local firm by the name of SH Anthony was among the plan holders. Bids were due on August 9, 2012. Was a contract let? Or was this the work that Harrison County did? (See Sun Herald article).

11 thoughts on “Bump: Taxpayers on the hook in D’Iberville after consulting scam collapses”

  1. Commenter Robert over on Mary Perez’s piece for the Sun Herald nails it:

    Meantime Biloxi thought they were getting the project to be placed on a donated bay front piece of property with free salt water without millions in piping. WOW!!!

    A new road system is needed because all roads in this investigation lead to D’Iberville. You have all of the major stars interacting. Bill, Sharon, Scott, Robbie, Micheal, Moby, Dub, Rusty, Trudy, and John Does A-Z all together on the same investigation stage. No other place along the coast has been able to bring these fine upstanding trough feeding folks together like D’Iberville has with the IMMS.

    From the sound of the story Harrison County ended up doing the site prep.

    The footnote Mary Perez quoted is stock verbiage. There should also be a financial guarantee disclosure which makes clear the City’s taxpayers will be on the hook if the financial projections do not work out. The long term interest rate attached to the bonds appears a bit steep for tax free debt.

    1. Interesting that even though the Sun Herald does not have the lastest Ocean Expo piece under it’s DMR category, the commenters have no trouble listing the usual suspects and labeling this as connected to the DMR players. 😉

      A quick tour at EMMA did not turn up the bonds using the expected search terms (D’Iberville without the ‘ and Harrison County MS). I too noticed the coupon rate seems high for a muni. Can someone post a CUSIP # for these bonds? There probably some interesting things in the bond docs.

      1. The EMMA gods favored me today. :mrgreen:

        The overview with complete list of CUSIP numbers:

        http://emma.msrb.org/IssueView/IssueDetails.aspx?id=EA342825

        (Those that click may have to agree to EMMAs TOS (Terms of service)

        Here is the actual debt agreement itself – it was issued by the Mississippi Development Bank.

        http://emma.msrb.org/EA475407-EA367499-EA764469.pdf

        If these links do not work I nabbed the pdf and can upload. EMMA is sometimes funny about direct links to docs.

        1. The Sun Herald story reports:

          D’IBERVILLE — City officials expected Ocean Expo Aquarium to be built and open by now and ticket prices to cover the cost of repaying the bond to purchase the land.

          Instead the city may have to make the initial $318,668 payment — due in September — out of the general fund. Unless the payments can be deferred or otherwise satisfied, D’Iberville taxpayers also will have to cover the second payment of $320,668 due in 2014 if the aquarium isn’t built by then.

          The $4 million special obligation bond carries variable interest rate from 2.0 percent to 5.375 percent for a total payback of $6.1 million. The 2013 payment includes $150,000 in principle and $168,668 in interest.

          “The debt is not a direct obligation to the city. A portion of the admission charged to visitors to the aquarium will be used to retire the debt,” the city’s 2012 audit said.

          But that surcharge can’t be collected until Ocean Expo is built.

          The Special Obligation bonds may not be General Obligation bonds, but the underlying City Bond appears to be a General Obligation of the City. There are a number of statements in the OFFICIAL STATEMENT $4,000,000 MISSISSIPPI DEVELOPMENT BANK SPECIAL OBLIGATION BONDS, SERIES 2011( D’IBERVILLE, MISSISSIPPI GENERAL OBLIGATION BOND PROJECT) which appear to contradict the bolded quote. I’m not disputing that that quote may appear in the audit, as I have not viewed that document. I’m not an expert with respect to bonds; but I’m sure that any confusion on my part will be clarified soon, as will the continuing obligations of the taxpayers of D’Iberville with respect to these bonds and this wonderful Ocean Expo project.

          Here are some excerpts which appear relevant to the discussion.

          From the Official Statement:

          Sources of Payment and Security for the Series 2011 Bonds

          The Series 2011 Bonds are not a debt, liability, loan of the credit or pledge of the full faith and credit, moral obligation of the state or of any political subdivision; provided however , that the city bond is secured by the full faith and credit and taxing power of the City. …

          Purpose of the Series 2011 Bonds

          The Series 2011 Bonds are being issued pursuant to the act to purchase the City Bond to provide fund to finance the (i) acquisition of land for municipal buildings (the “Construction Project”), (ii) paying capitalized interest, and (iii) payment of costs of issuance of the series 2011 Bonds and the City Bond.
          Source: pages 6 and 7 of the Official Statement.

          Also from the Official Statement:

          APPENDIX C
          FORM OF THE CITY BOND RESOLUTION AND THE CITY BOND
          RESOLUTION NO. 1792
          RESOLUTION AUTHORIZING AND DIRECTING THE ISSUANCE OF A GENERAL OBLIGATION BOND, SERIES 2011 (THE “CITY BOND”), OF THE CITY OF D’IBERVILLE, MISSISSIPPI, IN THE PRINCIPAL AMOUNT OF NOT TO EXCEED FOUR MILLION DOLLARS ($4,000,000) TO RAISE MONEY FOR THE PURPOSE OF PROVIDING FUNDS FOR (I) THE ACQUISITION OF LAND FOR MUNICIPAL BUILDINGS; (II) PAYING CAPITALIZED INTEREST; AND (III) PAYING FOR COSTS OF ISSUANCE FOR THE CITY BOND AND THE BANK BONDS, AS HEREIN DEFINED; AND APPROVING THE FORM OF THE INDENTURE OF TRUST FOR THE BANK BONDS.

          Above from page 188 of the Official Statement pdf.

          SECTION 8. For the purpose of effectuating and providing for the payment of the principal of and interest on the City Bond as the same shall respectively mature and accrue, there shall be and is hereby levied a direct, continuing special tax upon all of the taxable property within the geographical limits of the city, adequate and sufficient, after allowance shall have been made for the expenses of collection and delinquencies in the payment of taxes, to produce sums required for the payment of the principal of, premium, if any, and the interest on the City Bond and any additional obligations of the City under the Indenture; provided, however, that such tax levy for any year shall be abated pro tanto to the extent the City on or prior to September 1 of that year has transferred money to the 2011 Bond Fund of the City Bond, or has made other provisions for funds, to be applied toward the payment of principal of and interest on the City Bond due during the ensuing fiscal year of the City, in accordance with the provision of the bond resolution. Said tax shall be extended upon the tax rolls and collected in the same manner and at the same time as other taxes of the City are collected, and the rate of tax which shall be so extended shall be sufficient in each year fully to produce the sums required as aforesaid, without limitation as to time, rate or amount….
          From page 190 of the Official Statement pdf.

          More later.

          1. You’re on the right track. At some point the audit report will be online at Pickering’s office and we’ll be able to see the actual language used. The footnotes are fill in the blank type furnished by the Auditor’s Office though it appears the City has misclassified the debt.

  2. I know it is not exactly the same, but it reminds me of how (by tricky wording on the ballot initiative) they managed to ram through a law in North Carolina allowing the local government to get around putting bond issues on the ballot for review by the general public.

    On of the first projects to use this law was the Randy Parton (brother of Dolly) Theater that was supposed to make Roanoke Rapids, NC (on the northern NC borders somewhat near Richmond VA) the Branson MO of the East Coast. It opened in 2007, and by January of 2008, Parton had already been given the boot.

    They borrowed $21.5MM to build it, it is currently valued around $5MM, but have been advised to accept any viable offers. The town of course had to raise taxes to pay off the bond as no income has been forthcoming.

  3. The people of the Gulf Coast and D’Iberville in particular will be trying to recover from these various scams for years to come. Like Robert said they all seem to think the IMMS will yield something for them and that is why they are participating in the crash and burn project. We know Scott Walker thru his firm, Maxwell-Walker, has been paid $180,000. by D’Iberville plus four years worth of monthly retainer fees of about $200,000. from IMMS. This has been very profitable for him. And that does not take into account the finders fees paid to him by the previous owner, Mall Mandal, if any were like I have read before. What have the others like Bill Walker, Sharon Walker or Michael Janus, received ? Somebody needs to due a documentary on the DMR/IMMS milliionaires for TV. This is sort of the local version of the fracking boom for this select group. They made a little bit of money and buy big homes on the beach then go on expensive vacations to Alaska. Lifestyles of the Rich and Famous in Federal Custody will be another great idea for TV viewing

  4. Thank you for the EMMA links, the first one got me what wanted.
    I’ll post my initial observations now.

    1. The official statement has the following word occurrence frequencies.

    Ocean Expo mentioned once.
    Aquarium mentioned once.
    IMMS not mentioned.
    Solangi not mentioned.
    Pipeline not mentioned.
    Saltwater not mentioned.
    Dolphin not mentioned.

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