Making stuff up as you go along can carry severe consequences. Here is the salient verbiage:
§31-8-11. Notice of intent to lease; protest; election; advertisement of lease agreement; award of lease
Before entering into any lease agreement pursuant to this chapter secured by a pledge of its full faith and credit, the governing authorities of any county or municipality shall publish notice of their intention to receive suitable proposals for the leasing of such buildings, facilities or equipment. Such notice shall specify the nature of the proposed building, facility or equipment, the general geographic area in which the same is to be located, the term of the proposed lease agreement, that the obligation to pay rentals during the primary term is to be a continuing obligation of and a charge against the general credit and leasing power of the county or municipality, and the date and hour on or before which such proposals may be received. Such notice shall be published by municipalities and counties in the same manner as required for publishing notice of intention to issue general obligation bonds of the county or municipality, as appropriate. If at least twenty percent (20%), or fifteen hundred (1500), of the qualified electors of a county, whichever is less, or at least ten percent (10%), or fifteen hundred (1500), of the qualified electors of a municipality, whichever is less, file a written protest with the appropriate governing authorities, then an election shall be called by the county in the same manner as provided for the issuance of county general obligation bonds in Sections 19-9-11 through 19-9-17, Mississippi Code of 1972, or by a municipality in the same manner as provided for the issuance of municipal general obligation bonds in Sections 21-33-307 through 21-33-311, Mississippi Code of 1972, to determine whether or not the proposed lease agreement may be executed by the county or municipality. The lease agreement shall be advertised for competitive sealed proposals once each week for two (2) consecutive weeks in a regular newspaper published or having a general circulation in the county or municipality of the governing authority. The date as published for the proposal opening shall be not less than five (5) working days after the last published notice. The lease shall be awarded to the person submitting the lowest and best proposal; however, all proposals may be rejected.
According to a Public Records Request Return to the Hancock County Alliance for Good Government from Bay St Louis City Hall, none of the three full faith and credit capital leases entered into by the City over the past three years, including the fire trucks which caused such a ruckus in the social media early this year, were advertised pursuant to the law, yet now the citizenry is getting stuck with an Ad Valorem Tax Levy to pay them off. Stay tuned.
7 thoughts on “Mayberry by the Sea Part 2: Taxpaying citizens cheated of their right to petition and vote”
We believe in referring to Harahan you might consider “Mayberry by the River”
Thank you for reporting on this. Many may call this nit-picking or trivial, but these are the kinds of things that once were considered vitally important – and they truly are.
I often thought about moving from Biloxi to Bay St. Louis. I am glad I did not. At least Biloxi is financially stable and growing. Sounds as though they will have to crash first before any improvements to city government will be seen.
The problem now involves what is term legacy issues like these leases.
The special meeting this week to open the Court Street building bids for instance included an agenda item for tourism that evidently involved money. Clerk Kolf immediately told the council the money behind the proposed expenditure was not in the budget and Mayor Fillengame was right there on point as well. That is major improvement IMHO.
Dealing with the legacy issues will take time.
Doug, looking quickly through your state constitution, I don’t see an analogue to the Louisiana provision which preempts any litigation to nullify a bond issue after thirty days (see La. Const. Art. VII, Sec. 6 (B)), “invalid because of any irregularity or defect in the proceedings or in the issuance and sale thereof and shall be incontestable in the hands of a bona fide purchaser or holder.”
Given what you cited above does state “shall” and thus constitute a predicate basis for a legitimate bond, thus a basis for nullification, I suspect that absent some general authorization under law for an action contesting a bond as a nullity, the right or standing for a bond challenge rests in the entity receiving the proceeds of that bond, right?
Its always what you don’t know that you don’t know that’s a killer. A citizen suit would be a nightmare for the City. I’m thinking the remedy would a refund of the associated debt service ad valorem tax levy rather than nullifying the debt.
The thing is local governments do leases and lease purchases all the time. Almost invariably the lease is guaranteed by a security interest in the equipment. Those leases can’t have a special debt service ad valorem levy to retire the debt.
And when someone like me comes in after the fact and figures the effective interest rate on these lease agreements, you wonder why the heck they leased to begin with over borrowing from the local bank.
There are a few folks that are upset their property taxes are going up. All it takes is one.
All it takes is just one, Doug, and that’s why I am puzzled that the august leadership of the state didn’t preclude any venting by disgruntled taxpayers by way of a financier’s full protection act. (Right, sarcasm in full).
Somewhat rubs financiers raw to have their bonds subject to invalidation merely because some law or two or pick-your-number is broken; after all, financiers are more than willing to loan money to the taxeating class and the taxpayers, well, that’s their role in life, to pay taxes. And to quote old Earl Long, if you borrow a dollar, you pay back two; borrow two, you pay back three…
Offhand, yes, I’m trying hard to understand why a government body would lease unless (1) there is a limit to borrowing authority (I saw a hint of that in your state’s constitution) (2) some implication for the lender (as I recall each state has “X” authority to issue tax free general obligation bonds before triggering tax liability for the bond purchaser). Unless you have the government body leasing the equipment to a third party to have a “revenue stream,” to fund a revenue bond, then you might have a general obligation “bond”/debt; or (3) some desire to avoid adding an asset on your books.
You note “Those leases can’t have a special debt service ad valorem levy to retire the debt. ”
That is interesting. Usually in the kleptocratic province of the United State across the border from Mississippi we have entities possessed of special source revenue streams which are used to fund equipment purchases in general; to have a dedicated revenue stream for specific pieces of equipment would be extraordinary, to say the least.
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