Bay City Attorney claims Vig on proposed bond issue. What do the taxpayers get?

Nothing as far as I can tell but a $40,000 bill for no work. Lets’ start with Geoff Belcher over at Fillingame PR:

….the governing authorities shall have the power to pay reasonable compensation … but in no instance shall such compensation so paid exceed one percent of the bonds issued or refunded.”

The statute “says we can pay him up to one percent,” Councilman-at-Large Mike Favre said, “but I don’t think we have to. .. I still don’t understand why we need a third party. He doesn’t even sign anything, I don’t think. He’s just looking at it.”

“I know he’s entitled to it,” Ward 3 Councilman Jeff Reed said, “but I think we talked about negotiating with him on that. Let’s wait until (Tuesday’s) meeting and see if we can negotiate with him and see if he’ll take something less.”

“We’ve always paid attorneys’ fees,” Ward 2 Councilwoman Wendy McDonald said Friday. “We’ve always paid the city attorney to look over our documents. We have a city attorney to look out for the interests of the city and the council and make sure we don’t make mistakes. We try very hard not to make mistakes.

I guess its the past mistakes that give me the heartburn I have in this matter. Over the last several years Municipal audit after Municipal audit has been riddled with state legal compliance violation after violation, most repeated from year to year. The 2014 audit is now very late but that is nothing new because the 2013 audit was very late and none of this counts that 2013 loan at The First the City made when it was on the edge of insolvency without any apparent statutory authority.

With due respect to Councilwoman McDonald the people in Bay St Louis are not the fools she thinks they are. The City Attorney should not get a nickle by virtue of the fact that he takes up a space in the Council’s Board room breathing air and with due respect to Councilman Reed, according to the statute the attorney is due exactly what the City Council authorizes not exceed 1% of the total. It’d be nice if the gang on the City Council treated the City’s money with a bit more respect and stopped acting like Mr. Rafferty was their boss. Tuesday’s meeting should be worth attending.

17 thoughts on “Bay City Attorney claims Vig on proposed bond issue. What do the taxpayers get?”

  1. Tuesday will be good. There is so much more money missing that the $13 fee that was collected with no accountability, is now well into the rear view mirror with the ongoing dumpster give away! The Seals money gone, forfeiture and Siezure money gone, the trolley that les is paying for with the Seal’s money that is no longer there, the city property given away to triple tails to cover up construction noncompliance that was granted to them by Les and his cronies. If Rafferty represents you you can operate freely outside of compliance.

    Wendy is not fit to govern. She lives on “The Big Rock Candy Mountain “!

  2. Doug,

    Contrary to Mr. Farve’s statement above the governmental entity’s attorney generally must provide an opinion letter as to the legality of the bonds and the entity’s authority to issue. The bonding co. will determine if it wants the entity’s attorneys opinion letter not the entity or they will not buy the bonds. This is a liability letter primarily. In other words IF something goes wrong with the bonds the entity’s attorney will most probably be one of the persons sued. He/she could be liable for the entire bond issue. In fact malpractice insurance carriers charge higher premiums if you do bond work because of such. It is common that the fee gets negotiated lower than the statutory minimum. Anyway thought you’d like to know.

    1. Thank you Tim for that insight. Mr. Rafferty does not carry professional liability insurance.

      1. I understand such from previous posts but my point was there is responsibility and liability for entity’s attorney in signing these opinion so much so that the insurance will ask you if you do such work and then charge extra if you do.

        If the attorney doesn’t have liability insurance then he is risking both his livelihood and assets.

        1. I understand the assumption of risk related to the financial guarantee you mention but am I correct in assuming that risk is shared by Butler Snow as well?

          Not all financial guarantees are created equal which the professional liability insurer recognizes by pricing the additional risk associated with the law practice. For an uninsured lawyer or one that is under insured, the value of the guarantee would lay in their financial ability to make good should disaster strike.

          I would argue for that reason that the opinion of a lawyer that carries the requisite insurance coverage in a sufficient amount would be worth more than one from a lawyer that ran naked or practically naked all other things being equal.

          I read Belcher’s piece to say Rafferty was demanding a full 1%. And if Butler Snow is also on the line then Rafferty’s portion of the risk he is assuming isn’t worth much beyond the time he expends reading the bond book IMHO.

  3. Great point Tim. I is common knowledge that Mr Rafferty is only insured (unverifiable)to a minimal level which was done under persistent demands of the public and a few council members. Mrs McDonald was not one of them. She thought it was unfair to demand it after allowing it for so long! He routinly over sees financial issues well beyond his financial scope.

  4. I understand that a local attorney ( a resident of Bay St. Louis) offered to do this bond review for the city at no charge just to do something for his community.

    1. $40,000 will buy a good bit of asphalt. My street was not fixed from the Hurricane for whatever reason.

  5. Call your Councilman, Doug.
    He should know “whatever” the reason was!
    Yep $40 grand would go a good ways.

  6. Yes, if Butler Snow is bond counsel it will also be required to give an opinion letter upon which others will rely on in buying bonds thus they are in the liability line also.

    Ultimately, the bonding company will decide who it wants an opinion letter from for protection purposes. If the governmental entity’s lawyer (not independent lawyer doing for free) refuses to give one (for whatever reason) I would think that would send a bad signal to the bonding company and cause a problem. Although the bonding co. could accept such.

    I do not mean to sound like I am defending Bay St. Louis or its attorney, just trying to give you some insight into why these are required and the fees set, there is liability for doing so and there is cost (in the form of increased insurance premiums if you have it).

    1. I appreciate you giving us some facts and background Tim. A better informed populace should elevate the conversation this evening. Slabbed will likely be debuting on Periscope tonight.

  7. It is time for the taxpayers in Bay St. Louis to take the podium tonight and DEMAND the audit of their books. They, not the Council or Administration, are paying for it. The excuses are boring and not convincing at this point.
    Budget time is now upon the Council and they still have no critique of the books to study and use to deliberate the coming year’s spending.
    Some feet need to be held to the fire, and the Council needs to show up tonight with a lot torch.
    Take care of business, or step aside and let someone else do it.

    1. Without saying Mr. Rafferty should be required to prove his E&O Status is in an amount to cover his opinion and also whether he has E&O for Municipal Bonding. At the very minimum.

  8. I may have missed a few days of readin and rithmetic class
    but 1+1=2 Does not the law say 1%. Butler Snow is 1%
    so where is Dons money? Have no fear, Poolman sent the question to Mr. Pickering’s office… Along with questions of drug forfeiture money. Nice to see the Auditor’s investigator in the audience tonight!

  9. Here we go again !! Business as usual. Thank you Mr. Holleman for some legal insight. So how can the City approve the fee and attorney to review the documents if he still does not have E & O insurance? Since he will be receiving a 40K fee he should definitely be able to afford it. The council in their wisdom, Ha Ha, should make that a requirement of any attorney who is working on their behalf and giving legal advise to them.
    As for Ms. McDonald, Winters, whatever name she prefers depending on election time, she is so tight with Mr. Rafferty. Remember he always give her special recognition in the organization he and his brother formed Krewe of Seahorse? or whatever the name is. I believe she was the first Queen… She loves to be in the spotlight.

  10. They all pay Raff with City work for small legal favors. The first thing out of Queen Windy’s mouth whenever they need to think is have Don reveiw it. He has been running the building dept, city hall, the city council in most cases by giving them slanted legal opinions to support Les. He has essentially replaced the Harbor Commission because they were not going to give the Farm Away for his events. When he wanted access to the harbor free and the commission balked at it he never came back he instead went to the mayor. He supposedly paid in the rears minutes before the council meeting because he knew it was going to be questioned. He in no shape or form represents the Good Citizens of BSL. He at all times represents his best interest and uses the city position as a bully position.

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