Response to NDN "Bully" Accusation

I wanted to take a moment to respond to the Newport Daily News article “Farley Accused of Bullying.”  The accusation was a little unfair, and only told part of the story.  I'd like to take a moment to fill in some gaps.

In September, Jane Howington urged the council to approve a loan extension on a $1.8 million debt owed to the city, which would earn only 2.27% simple interest on $1.35 million and which guaranteed no payments.  It was the same deal approved by the council last year. 

This money had been loaned to a for-profit company (Clarke School LP) in 1994 at a very generous interest rate.  The company had agreed to pay back all of the money to the City in 2012.  Jane and the council pushed it back to 2013, and they were trying to push it back again this year.

It seemed like a great deal for the Clarke Partners, but a terrible deal for the taxpayers, and so I asked questions.

I began by sending emails to my fellow councilors and the City Manager which were gentle, basic, and candidly explained why I objected.  These were ignored.

I sent a gentle reminder e-mail to the City Manager. It was ignored.

I tried to request information in October, so the council could develop a plan before the 12/12/13 default deadline.  It did not receive a second, and was ignored.

I sent emails to the City Manager on a weekly, then daily basis.  They were ignored.

And so I did the work alone - research, consultations and analysis at my own expense.

I reviewed the Clarke School financials with experts.  It appeared that the debtor, Clarke School LP, grossly overpays the property manager, Gatehouse Management.  I also felt that there was an inappropriate affinity between the owners of Clarke and Gatehouse, whereby the profit is actually received through the overpaid Gatehouse entity.  I called this to the attention of the city manager, but was ignored.

Finally, in the course of my review, I noticed that the City Manager’s debt calculation was off by $20,000.  I sent an email asking if I was mistaken.  It was ignored. 

As a newly elected official, I felt it was important to find out whether she was costing the City $20,000. No other councilor agreed. 

The Wednesday night council meeting was my only chance to get real answers about the loan from the City Manager. 

Incredibly, Jane Howington refused to answer.  And my fellow council members sat mute.  They found their voices later to question my tone, but apparently had no opinion about substance.  It’s unclear whether the tone-minded councilors were asked how they overlooked the $20,000 shortfall last year.

This week, I finally received the document I had requested for weeks.  The revised debt calculation which I had requested showed that I was correct.  The City Manager's debt calculation was off by $20,000 - that's a lot of taxpayer money!  The new calculation shows the debt to be $1,823,539 owed to the City.  So the hard work paid off, but it really shouldn't be this hard to save money!  

It might seem strange to some that Jane was credited with my idea to file suit, especially when her two written recommendations were so generous with taxpayer revenue.  That’s OK.  At least she and the council came around to my way of thinking.

The city will earn 12% interest on the $1.823 million debt, instead of following her recommendation to bill only 2.2% of $1.35 million.  The fact is, this idea will earn the city an extra $200,000 in annual revenue - as long as the City Manager doesn't interfere in the negotiations process.  

The bottom line is that Jane Howington failed to protect the city adequately from the default.  She failed to answer my questions on the loan.  And her math error almost cost the taxpayers $20,000.  I asked some tough questions of her - and frankly, there were no good answers.  But if I don't bark about this stuff, who will?  

I thought it was important to the taxpayers to identify the City Manager's mistakes so we don’t make them next time.  If the cost of saving the taxpayers $20,000, and boosting city revenue by $200,000 is being labeled a "bully," fine.  I can handle it, because I know that I did my job.

The truth is, there is a bully or two in city government.  But I'm not one of them.