The GUARDIAN admits a lack of knowledge about the funding details of the Idaho Housing and Finance Association, but we know when things don’t smell right and a bill to expand bond authority for IHFA has an aroma.
We know IHFA is created by Idaho law, but it isn’t a state agency. People who work there come from the state employment pool, but they don’t get state benefits. The legislature controls their authority, but they don’t give them any money. They were created to provide low cost housing to the needy, but they sell GARVEE highway bonds. This thing walks like a duck, barks like a dog, and squeals like a pig. What is it?
Now comes the Association of Idaho Cities and the Idaho Association of Commerce and Industry supporting a bill in the legislature to EXPAND the lending authority of the non-agency agency to include economic development, new farms and just about anything that used to be done at a bank, including ECONOMIC DEVELOPMENT, INDUSTRIAL, COMMERCIAL and OTHER PROJECTS.
The IHFA funds things through sale of bonds, but we can’t figure out how it really works. Who backs the bonds if the project promoters fail to pay? If it is just a “broker” agency, why not run it through a traditional lending agency?
Our biggest fear on this bill is that it is a smoke screen that will allow local governments to get around the Idaho Supreme Court decision that reaffirmed the constitutional prohibition against long term debt without a vote of the people.
If that is the case, look for Boise to build a parking garage financed by IHFA and CCDC will be right behind them for downtown projects that are sure to be otherwise challenged by voters.
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Feb 24, 2007, 5:39 pm
Here is what the proposal says as to its Statement of Purpose: “The bill would amend the enabling legislation of the Idaho Housing and Finance Association (IHFA) to permit the financing of economic development projects through the issuance of revenue bonds by IHFA. No assets of the state will be pledged for issuance of the bonds. These amendments will permit the financing of industrial, commercial, and other projects to promote economic development throughout the state in partnership with private financial institutions and state or local economic
development entities and will allow the pooling of loans for such projects to save financing transaction costs. Financing of these projects will still be permitted to the extent available through local issuers. However, some areas of the state do not have local issuers established to issue such bonds. The amendments would provide for a central, statewide point of contact for issuance of bonds for economic development projects.” Thus, it would appear its purpose is to use private lenders to offer services to rural areas that don’t have such resources available. By taking several proposed economic development projects and “lumping” them into one bond financed through private lenders, the agency would save money by consolidating the expenses for several proposals into one and make funds available in rural locations where it seems to be hard to attract investors. The risk seems to continue to lie with those who buy the bonds (banks, savings and loans, other lenders) just like any other such transaction. I’m not sure I see anything about using those bonds to circumvent the recent findings of the Surpreme Court on cities or counties using their credit for these items. At least, that’s how I read it. What’s the Guardian’s take as to wording in the proposal that does allow such circumvention to take place?
Feb 24, 2007, 9:25 pm
I believe that with the GARVEE bonds, taxpayers are getting stuck paying about $2 million in insurance for the first set of bonds that have already been sold. I guess if the federal funds do not come in as scheduled, it is the insurer who ends up paying.
Feb 25, 2007, 3:18 pm
It’s not an aroma ,Guardian, it’s an IHFA stink! IHFA is a state agency that’s not a state ,county or city agency, govt. or non-govtentity. So why hide IHFA? WHO ARE YOU? Why the lack of proper identity? Because it’s easier to hide the large projects that they fund without any of their political friends being responsible. I have first hand experience with these characters ( The director’s name is HUNTER and a Steven Rehn provides the cover for any gaffes. They provide funding for my HUD apartment however the HUD apts. in that complex are not only in terrible condition but they refuse to make the apt. owner’s comply with HUD and State landlord laws to make the places livable.The top Idaho HUD officials look the other way whiole this is going on. In other words IHFA could give a hoot about the needy in boise. I suggest to the guardian and to all other responsible Citizens in Boise these people and their links to CCDC, the mayor and council’s favorite developer friends, and how they use GARVEE bonds needs to be scrutinized. Every citizen in this city is keeping IHFA in the Bucks but their getting little or nothing for it.
Feb 26, 2007, 4:30 pm
First Question: Stephen- Do you work for IHFA?
Second question : Are the taxpayers directly or indirectly insuring GARVEE bonds that IHFA uses to finance their projects? Is that use of taxpayer monies put to a vote of the taxpayers as the Supreme court has ruled.
From my experience with IHFA funding my HUD housing ( Lots of federal funding is sent their way for this) and their total lack of concern for the substandard conditions of that housing I already have a problem with IHFA ( and so does my lawyer.)IHFA,like CCDC is another bureaucratic creation that has no responsible oversight ( They claim they are not governmental or Quasi-Gov. but get lots of government money as they “pretend” to administer government financed projects.)I talked to the IRS about them today and they recommended a certified-return receipt letter ,signature requested to the AG to check their finances. Actually a FOI request should do the same but I’m dealing with the ” good ole boys Boise sorority” so maybe I’ll officialize it.
Feb 27, 2007, 1:48 pm
Nope Joe, I don’t work for IHFA or the City of Boise or Ada County or the CCDC or the State of Idaho. My guess is that any commitment the State of Idaho makes to a project (like GARVEE) is guaranteed in some manner by the taxpayer since they “own” the government. I just don’t know to what extent the “risk” of repaying those bonds exits. Insofar as what I said in my message, I just looked up the info I cited on the state government site and wondered if the Guardian’s concerns were legit after doing so. Please let us all know what you find out about IHFA, its authority, and if it will have the ability to usurp the Constitution with this proposed bill’s language now that the BG has raised the issue/concern.
Mar 6, 2007, 3:14 pm
If GARVEE PROGRAM MANAGEMENT is a normal contract or contract agreement, then there is a SURETY PAYMENT BOND and a SURETY PERFORMANCE BOND signed by the contractor (individual, partnership or corporation) and a CORPORATE SURETY, usually an insurance company that does that kind of business. If part or all of GARVEE PROGRAM MANAGEMENT is a Consultant Agreement, not a normal contract or contract agreement, with CH2M Hill, Inc. and with Washington Group International, Inc., I don’t know what insurance company would provide either a SURETY PAYMENT BOND and/or a SURETY PERFORMANCE BOND. Hopefully it isn’t IHFA providing either or both bonds.