A Story of Our Two Health Education and Housing Facility Boards

March 29, 2016

This is a story of our two Health Education and Housing Facility Boards, one is a Shelby County HEHFB and one is a City of Memphis, HEHFB. I have asked for copies of bond information including Bond Counsel fees and other bond Issuance and Professional fees. As usual, it was fairly easy to get the information from the County Board and impossible to get it from the City board. I finally got some information about 5 bond issues (MemphisHEHFB) from the State of Tennessee Comptroller after no response from the City of Memphis board. I am still waiting for additional information from the State of Tennessee that generally has been very forthcoming. I have previously published the information about the 5 bonds issued by the Memphis board and here is a recap of the information from the Shelby County Board followed by the City of Memphis Board’s  5 bond issues that we have.  Please note that the Shelby County HEHFB has a written policy limiting the Board Counsel fee. There is no such policy for the Memphis HEHFB and therefore they paid $59,000 more on just 5 bond issues on which we have information.

 

Name of Project from the Shelby County HEHFB Bond Amount Bond Counsel Fee Board Counsel Fee Maximum Board Counsel Fee Allowed  per County Policy Total of All Fees for Bond Issue
MUS 2011 $12.255M $30,000 $14,830 $22,255 $195,893
Rhodes 2011 $32M $60,000 $28,000 $42,000 361,768
Southern College of Optometry

2011

$9.8M $25,000 for Bond Counsel, Purchaser and Trustee Counsel $12,500 $19,800 $29,000
Harding 2011 $7.47M $30,410 $14,110 $17,209.80 $115,279

 

Eastwood Apts 2012 $1.1M $36,000 $3,400 $3,300 $114,528.37

 

Methodist 2012 $98.26M $153,000 $40,265 $108,260 $153,000
St. Agnes, 2012 $5.5M $30,733 $13,155 $14,000 $50,388

 

Grace St. Luke’s Episcopal School 2012 $5.875M $30,000 $14,970 $14,750 $70,533
The Village of Germantown 2012 $39.96M $160,000 $48,160 $49,960 $1,418,414
Trezevant Manor 2013 $66.475M $120,000 $49,805 $76,475 $1,578,135.50
St Benedict 2013 $10M $15,000 $7,500 $20,000 $33,000
Countryside North Apartment 2013 $5M $42,000 $18,122.50 $13,000 $191,446.45

 

 

 

Name of Project from the Shelby County HEHFB Bond Amount Bond Counsel Fee Board Counsel Fee Maximum Board Counsel Fee Allowed  per County Policy Total of All Fees for Bond Issue
Southern College of Optometry 2014 $9.8M $25,000 $12,500 $12,500 $43,500
Presbyterian Day School 2014 $10M $10,000 $5,000 $5,000 $15,000
The Village of Germantown 2014 $21.94M $142,000 $30,140 $71,000 $1,020,587
St. George Independent School 2015 $32.585M $40,000 $20,000 $50,585 $106,936
Rhodes College 2015 $21.35M $55,000 $27,500 $27,500 $294,646

 

 

 

 

 

 

Name of Project from the Memphis HEHFB Bond Amount Bond Counsel Fee Board Counsel Fee Maximum Board Counsel Fee Allowed  per County Policy Total of All Fees for Bond Issue
Uptown Senior Housing Project 2006 $4M $40,000 $25,000 $11,000 $222,550
Arbors of Hickory Ridge $11.45M $26,000 $30,500 $21,450 $235,767
$4.061M $25,255 $23,500 $11,122 $70,700
John Madison Exum Towers $19M $85,000 $40,000 $29,000 $159,600
Uptown Manor Senior Project 2015 $2,825M $21,000 $21,350 $8,475 $278,687
Total of actual Board Counsel Fee versus fee per County limitation fee $140,350 $81,047

The savings here would have been $59,303 if county policy applied

 

As you will see most of the above County bond issues were for educational, medical and retirement facilities. Only two (Countryside and Eastwood) were similar to what has been financed by bonds from the Memphis HEHFB.

My investigation of these two boards was instigated by the Global Ministry story and the bond downgrade. There is a real question of transparency and adequate ethics rules, conflict of interest rules and rules concerning competition for front end bond expenses. I have not yet, in response to my open records request, received past bond information from the Memphis HEHFB. I have received past bond information from the State of Tennessee (Steve Osborne, Senior Analyst, Comptroller of the Treasury ǀ State and Local Finance). Here is some of the information that he sent showing past bond expenses and who participated.

Here is a list of past bond work done by Charles Carpenter (board counsel for the Memphis board). While Mr. Carpenter is a competent bond counsel lawyer, there needs to be more transparency in the issuance of these bonds, written conflict of interest rules, limitation of front end bond costs and competition for the various issuance costs. There is also a need for a public discussion of the best and most cost efficient method to provide adequate housing for those unable to work and provide needed housing for themselves.

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