WHY did the Somervell County Judge and ALL Commissioners Vote to make themselves a board?


 
Audio-The Somervell County March 10 meeting with SRO2 is on the county website

WHY did the Somervell County Judge and ALL Commissioners Vote to make themselves a board?
 


13 March 2014 at 11:05:21 AM
salon

Here's the audio from the meeting, .  Here is a rough transcript   and here's what that Pig in a Poke with Sr20 actually is. And here is the meeting agenda. Here is how this was listed on the March 10 2014 Somervell County Commissioners Court aqenda

Here is the agreement to create the Paluxy Public Facility Corporation.  (Hat Tip to JS for finding this document). And here are the relevant parts of the agreement that the commissioners and Mike Ford voted for, to make themselves into a public corporation for the purposes of ISSUING BONDS. Since SR20's credit stinks, would it be Somervell County that would get the bonds? Yes, we can say that SR20 would use the *ability* of Somervell County to get bonds to push for investors (sounds like con game, doesn't it? Call it The Grifters of Somervell County)

What does the Texas law say?


 

LOCAL GOVERNMENT CODE

 

TITLE 9. PUBLIC BUILDINGS AND GROUNDS

 

SUBTITLE C. PUBLIC BUILDING PROVISIONS APPLYING TO MORE THAN ONE TYPE OF LOCAL GOVERNMENT

 

CHAPTER 303. PUBLIC FACILITY CORPORATIONS

 

SUBCHAPTER A. GENERAL PROVISIONS

 

Sec. 303.001. SHORT TITLE. This chapter may be cited as the Public Facility Corporation Act.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1, 1999.

Sec. 303.002. PURPOSE; CONSTRUCTION. (a) The purpose of this chapter is to authorize the creation and use of public facility corporations with the broadest possible powers to finance or to provide for the acquisition, construction, rehabilitation, renovation, repair, equipping, furnishing, and placement in service of public facilities in an orderly, planned manner and at the lowest possible borrowing costs.

(b) The legislature intends that a corporation created under this chapter be a public corporation, constituted authority, and instrumentality authorized to issue bonds on behalf of its sponsor for the purposes of Section 103, Internal Revenue Code of 1986 (26 U.S.C. Section 103). This chapter and the rules and rulings issued under this chapter shall be construed according to this intent.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1, 1999.

Sec. 303.003. DEFINITIONS. In this chapter:

(1) "Board of directors" means the board of directors of a corporation.

(2) "Bonds" includes notes, interim certificates, or other evidences of indebtedness of a corporation issued or incurred under this chapter.

(3) "Corporation" means a public facility corporation created and existing under this chapter.

(4) "Credit agreement" means a loan agreement, revolving credit agreement, agreement establishing a line of credit, letter of credit, reimbursement agreement, insurance contract, commitment to purchase bonds or sponsor obligations, purchase or sale agreement, or commitment or other contract or agreement authorized and approved by the board of directors of a corporation in connection with the authorization, issuance, incurrence, sale, security, exchange, payment, purchase, or redemption of bonds or interest on bonds.

(5) "Director" means a member of a board of directors.

(6) "Housing authority" means a public corporation created under Chapter 392.

(7) "Public facility" means any real, personal, or mixed property, or an interest in property devoted or to be devoted to public use, and authorized to be financed, refinanced, or provided by sponsor obligations.

(8) "Resolution" means a resolution, order, ordinance, or other official action by the governing body of a sponsor.

(9) "School district" means a political subdivision created under Section 3, Article VII, Texas Constitution.

(10) "Special district" means:

(A) a district created under Section 52, Article III, or Section 59, Article XVI, Texas Constitution;

(B) a hospital district or authority; or

(C) a junior college district authorized by Chapter 130, Education Code.

(11) "Sponsor" means a municipality, county, school district, housing authority, or special district that causes a corporation to be created to act in accordance with this chapter.

(12) "Sponsor obligation" means an evidence of indebtedness or obligation that a sponsor issues or incurs to finance, refinance, or provide a public facility, including bonds, notes, warrants, certificates of obligation, leases, and contracts authorized by Section 303.041 and Subchapter C.

Added by Acts 1999, 76th Leg., ch. 227, Sec. 11, eff. Sept. 1, 1999.

And what about that part of the IRS code that the document makes reference to? YOu see, this, they CANNOT issue these bonds to a private entity without a PUBLIC HEARING. Mike Ford at it again

RS issues proposed regulations on the TEFRA public approval requirements applicable to tax-exempt private activity bonds

Background.

Certain state or local bonds can qualify for tax-exemption under Section 103 of the Internal Revenue Code of 1986, as amended (Code) despite the fact that the proceeds are to be used in a private trade or business or are otherwise loaned to non-governmental persons. However, such bonds qualify for tax-exemption only if all of the requirements for a qualified private activity bond are met. One of these requirements is the public approval requirement under Section 147(f) of the Code. This provision generally requires that an issuance of any private activity bond be approved by the governmental unit issuing the bonds and, if the facility being financed is located in a different jurisdiction than the issuer, by the governmental unit having jurisdiction over the area where the facility is located. Approval by a governmental unit generally consists of either (i) voter referendum, or (ii) approval by the applicable elected representative of the governmental unit after a public hearing following reasonable public notice. For this purpose, the applicable elected representative generally means an elected legislative body, the chief elected executive officer, the chief elected state legal officer of the executive branch, or any other elected official designated by the chief elected executive officer or by state law. Generally, no approval is required for refunding issues that do not extend weighted average maturity.

Temporary Regulations were issued in 1983 under the 1954 Code predecessor to Section 147(f) (Existing Regulations). When Section 147(f) was enacted as part of the Tax Reform Act of 1986, the legislative history indicated that, to the extent not amended by changes to the statute, the principles in the Existing Regulations would continue to apply under the new Section 147(f).

The Proposed Regulations.

On September 9, 2008, the IRS issued new proposed regulations dealing with the public approval requirement under Section 147(f) of the Code (Proposed Regulations). The Proposed Regulations do not provide comprehensive guidance on all aspects of the public approval requirement, but rather update, clarify, and simplify discrete aspects of the public approval requirement. For example, the Proposed Regulations generally do not update the portions of the Existing Regulations dealing with the determination of the applicable governmental units that are required to approve an issue or the determination of the applicable elected representatives of those governmental units. The Proposed Regulations provide that, to the extent they are not inconsistent with the final version of the Proposed Regulations or subsequent changes in law, the Existing Regulations will continue to apply for purposes of Section 147(f).

Content of Public Approval.

The Proposed Regulations update and modify the information required to be included in a reasonable public notice and public approval. While the Existing Regulations require a functional description of the type and use of the facility to be financed by the bonds, the Proposed Regulations allow issuers to instead include only a general reference to the type of exempt facility bond being issued (e.g., an exempt facility bond for an airport) or, for other types of private activity bonds, a reference to the type of qualified bond and a general description of the type and use of the facility to be financed (e.g., a qualified 501(c)(3) bond to finance a hospital). The Proposed Regulations continue the requirement that the maximum stated principal amount of the bonds expected to be issued be included. The Proposed Regulations modify the requirement in the Existing Regulations that the notice and approval include the name of the expected initial legal owner, operator, or manager of the facility. Under the Proposed Regulations, the name provided may be either the name of the legal owner or principal user of the facility or, alternatively, the name of the true beneficial party of interest, such as the name of a 501(c)(3) organization that is the sole member of an LLC that owns the facility. This change is significant in light of the increasingly common use of single member LLCs by 501(c)(3) organizations.

The required description of the location of the facility under the Existing Regulations (generally, the street address) contemplates that a bond issue would finance only a single capital project. The Proposed Regulations provide that, for a facility involving multiple capital projects on the same site, or on adjacent or reasonably proximate sites, the issuer may instead use a consolidated description of the geographic boundaries of all such capital projects. The Proposed Regulations also expand the definition of the term "facility" to include the possibility of multiple capital projects.

Special Rules for Mortgage Revenue Bonds, Qualified Student Loan Bonds, and 501(c)(3) Pooled Financings.

The Proposed Regulations acknowledge that there has been uncertainty over how to apply certain aspects of the public approval requirements to certain categories of private activity bonds which were not subject to the public approval requirement at the time the Existing Regulations were promulgated. These include mortgage revenue bonds and 501(c)(3) pooled financings (under which the locations of the facilities to be financed are widespread or unknown), and qualified student loan bonds (under which there are no financed facilities). Accordingly, the Proposed Regulations provide that issuers of these types of bonds that made a good faith effort to comply with the public approval requirement, taking into account Congressional intent and the special characteristics of these types of financings, will not be subject to audit by the IRS simply because the issuer did not include all of the information required by the Existing Regulations.

The Proposed Regulations provide special rules allowing less specific information to be provided for public approvals of mortgage revenue bonds, qualified student loan bonds, and 501(c)(3) pooled financings. For mortgage revenue bonds, no information is required on specific names of mortgage loan borrowers or specific locations of individual residences. Instead, issuers are only required to provide the maximum stated principal amount of qualified mortgage bonds to be issued and a general description of the geographic jurisdiction in which the financed residences will be located. Similarly, for qualified student loan bonds, the Proposed Regulations generally require that the issuer provide the maximum stated principal amount of the bonds and a general description of the type of student loan program under which the loans will be made.

For 501(c)(3) pooled financings, the Proposed Regulations provide for a two-stage public approval process. First, prior to the issuance of the bonds, public approval must be obtained based on the stated maximum principal amount of the bonds to be issued and a general description of the types of facilities to be financed with loans to be made from the proceeds (e.g., loans for hospital facilities). No information is required with respect to the locations or initial users of the facilities if the information is not known at that time. Second, before a loan is made from the proceeds of the issue (but potentially after the bonds have been issued) a supplemental public approval must be obtained based on particular information about the borrower and the financed facility, including the location of the financed facility. This helpful rule resolves longstanding uncertainty about how to comply with the public approval requirements in the case of so-called "blind pools." The IRS has requested comments on whether this type of procedure should also be adopted for other types of pooled bond issues.

Insubstantial Deviations.

Under the Existing Regulations, an issuer is treated as not failing the public approval requirement as a result of "insubstantial deviations" from the information provided in the public notice and public approval. There has been significant uncertainty over what kinds of changes can fall within the term "insubstantial deviation" and therefore not invalidate a prior public approval. The Proposed Regulations provide two safe harbors under which certain changes will be treated as insubstantial deviations. First, a difference in the amount of proceeds used for a facility from the amount set forth in the public approval will be considered an insubstantial deviation if the difference does not exceed 5 percent of the net proceeds of the issue. Second, a change in the initial owner or principal user of a project will be considered an insubstantial deviation if the new owner or principal user is a related party (as defined in Treas. Reg. § 1.150-1) to the owner or principal user named in the public approval.

The Proposed Regulations also provide a new process to deal with situations where unanticipated events or unforeseen changed circumstances result in substantial deviations from the information contained in the public approval. Under the Proposed Regulations, provided that the issuer reasonably expected on the issue date of the bonds that the proceeds would be used in accordance with the public approval, and provided that the issuer encountered unexpected events or unforeseen circumstances after the issue date causing such use of the proceeds to be no longer feasible or viable, the issuer may obtain a supplemental public approval for the bonds affected by the substantial deviation. The supplemental public approval will generally require the issuer to take the same steps that it would be required to take for a new approval.

Reasonable Public Notice and Public Hearing.

The Proposed Regulations also update and simplify the rules in the Existing Regulations on reasonable public notice and public hearings. While the Existing Regulations generally allowed for newspaper, television, and radio as permitted means of providing reasonable public notice, the Proposed Regulations also allow for reasonable public notice by posting notice on the issuer's website, provided that the issuer regularly uses that website to inform its residents about events affecting the residents and provided that the issuer offers a reasonable alternative method for obtaining the information for residents without access to computers. The Proposed Regulations also (i) allow the governmental unit to receive comments from the public in electronic form, (ii) reduce the time required between the public notice and the public hearing from fourteen days to seven business days, and (iii) allow a governmental unit to cancel a public hearing if it provided reasonable public notice of the hearing and received no requests to participate in the hearing.

In summary, the Proposed Regulations should provide issuers with significantly more flexibility in complying the public approval requirements of Section 147(f).

Effective Date.

The Proposed Regulations will generally apply to bonds that are sold on or after the date that final regulations are published in the Federal Register.

Let me go further. According to Candace Garrett, the next steps are to create a legally recognized PFC WHICH ARE IN THE WORKS NOW. Why? If this is only to simply explore options, can't that be done without going to the costly and official process of creating and listing a corporation? Blowing smoke, folks.

 


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Comments!  
1 - pharper   14 Mar 2014 @ 12:28:45 PM 

This is why...they issue a bond, which means they are asking people to loan them money. People loan them money, they build the facility. Now each year they have to make interest payments on that bond to the bondholders. At the end of the note the principal has to be paid back to the bondholders as well, a note to keep in mind. Their hope is that this company makes it and they make money enough to make the interest, and principle when it is due, through these fees for the tires and the lease. This is a hope...not a fact of what will happen and the commissioners are counting on it.

 Now let's say the company doesn't do well or worse fails or declared bancruptcy, then you have the interest payments that are due with no income. Guess who will end up footing the bill? The same ones who got stuck with it by doing the same thing with the Expo Center and the Medical Center and the Ampitheater? This is a tune they keep playing because the commissioners are willing to just go along with what Somervell County Judge Mike Ford, who is in the process of moving outside the county to Pecan Plantation from what I hear, wants them to do. What does Mike care...he will be neighbors with Gary Marks, who moved outside the county to Pecan Plantation in 2013, who helped create the tax we are all now paying while they sit back and don't pay it while enjoying our healthcare facilities we are paying for in Hood County. They won't care what happens because they won't be paying it. So why do the commissioners think this is a good idea? Why are they voting to do this? Why does the county need another money pit? I can't tell you why as I have no idea what they are thinking except they are just sheep following whomever will lead them. It's time for some changes at the county commissioner level for sure!!


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2 - salon   14 Mar 2014 @ 6:56:38 PM 

Except in this case these are non-recourse revenue bonds that means the bondholder is taking the risk and the county has none, if the business should fail because it's based on revenue only. Somebody asked SR20 why anybody would even buy a non-recourse revenue bond, I mean, it sure seems like you'd want to go after somebody if you didn't make your investment, but one reason is that the interest rates are pretty high. Some might even call them akin to junk bonds.


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3 - salon   28 Nov 2014 @ 10:52:07 AM 

Just remembering this again. Some months back I asked one of the county commissioners, since SR2O and that whole grifter bunch was roundly stopped, if the Paluxy etc corporation was stopped. According to the commish I spoke with, he tried to put that on the agenda but Mike Ford told him to wait until after the whole thing was done and THEN cancel it. Frankly, that made zero sense to me. Is it REALLY that at any time a commissioners court cannot vote to STOP doing what they're doing? They MUST complete the process and ONLY THEN reverse it? I haven't looked for months, obviously, but would like to know if the commissioners really got rid of this or it's still an entity. If so, WHY? 


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4 - concernedcitizen   29 Nov 2014 @ 10:23:43 PM 

VERY GOOD question since Mike Ford was part of the PFC. Must comment he pushed hard and fast and it was implement unlawfully. Easy enough to prove. No one can change facts or history and it's all documented!


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5 - salon   2 Dec 2014 @ 10:07:21 AM 

@concernedcitizen- With you except that I don't believe any part was conducted unlawfully. It's not illegal for Mike Ford to do special invites for a selected group of people while at the same time holding an open meeting or to make pretexts to prevent corporations being formed from being dissolved, it just, in my book, smacks of impropriety.


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