General Assembly Post-Game Wrap-Up: Wed., March 13, 2013
No pre-game show today b/c we previewed today’s committee meetings yesterday. Right here.
But yesterday was a notable day in a few respects. Almost all good, at least by my definition of ‘good’.
Accordingly, I hereby dedicate today’s column to goodness. (Author’s note: When I started this piece, ‘goodness’ was on my mind. As you’ll notice, ‘badness’ returned before I could fully revel in the goodness. Maybe next time…)
Delaware now has a proposal to eliminate the death penalty for capital crimes. I support it. In the past, I have been an agnostic when it came to the issue of the death penalty. But when I saw Thomas Capano, who carried out one of the most vile and grisly homicides/cover-ups in Delaware history, escape the death penalty (though not death) through legal legerdemain, my decision was made for me. The Tom Capanos of this world don’t get the death penalty. Therefore, those with less influence shouldn’t, either. Any death penalty statute should be administered equally, not on the basis of the (lack of) legal resources that one has at their disposal, IMHO. It’s not, it never has been, and it should go.
I note that police of virtually all stripes have aligned in near-unanimity in opposition. Need I remind you or them that, thanks to DNA projects all over this country, death row inhabitants are being cleared of homicide convictions, often caused by ‘thin blue line’ corruption and/or ineptitude? Yeah, yeah, I know, not in Delaware. Really? How can you be certain?
This is a courageous stand by the sponsors. In case you haven’t noticed, police are a potent political force in this state. Legislators, in general, prefer to take the path of least political resistance. They haven’t done that here, and I thank them. By name: Senators Peterson, Simpson, McDowell, Bushweller, Henry, Sokola, and Townsend; Reps. Scott, Miro, Barbieri, Baumbach, Keeley, Potter, M. Smith, Williams, Kowalko, B. Short. Thank you.
Once again, Legislative Council appears to have been caught unaware by the General Assembly’s return. So, if you want to know what happened in Dover on January 24, just go to the General Assembly’s website and click on ‘Current Day’s Action’. Awful, just awful. I hope the new General Assembly leadership takes a close look at the ineptitude and cronyism that has long dominated the so-called ‘information’ arm of the legislature.
Such ineptitude can’t stop your intrepid chronicler of goodness, however. The House passed HB 10 (Keeley) by a vote of 32-9. If I told you that only one D opposed the bill, you’d immediately know who it was, right? HB 10 restores voting rights to convicted felons by eliminating a 5-year waiting period. Keep in mind that the felon would have to have satisfied all obligations of their sentence, including restitution before their voting rights would be restored. So, it’s not (apologies in advance) a ‘Get Out of Jail Free’ card. Special props to the following R’s who voted yes: Reps. Blakey, Hudson, Miro, Outten, Ramone, and Spiegelman.
It’s probable that more goodness surfaced in the form of new legislation. I’ll just have to wait for Legislative Council to turn their clocks up two months before discovering what it was.
In less good news, Gov. Markell announced that he has no intention to honor a request for $20 million to fund improvements at the Port of Wilmington. He says that he’d just have to take the money from somewhere else, and he doesn’t intend to do that. (Translation: He had no fallback position if he couldn’t ramrod the Kinder Morgan deal through.) He also took blame for the collapse of negotiations, and then once again proceeded to shift the blame onto Julius Cephas. Don’t take it from me, judge for yourself from today’s News-Journal story:
DOVER — Gov. Jack Markell said Tuesday he takes responsibility for the collapse of a deal to lease the Port of Wilmington to a private company, and he has no plans to ask lawmakers to give the port $20 million that officials requested if the deal fell through.“I’d have to take money away from something else and I’m certainly not prepared to,” Markell said at a meeting with reporters hours after the General Assembly returned to continue the session. “That’s not the financial ability we have right now.” (Author’s comment: Bullshit.)
Markell, who declined to discuss the collapse of the port deal last week when Kinder Morgan executives announced they were suspending negotiations, said he agreed with the company’s assertion that it was placed in an impossible situation by the leaders of the International Longshoremen’s Union.“The workers at the port said they were not going to negotiate without having legislators in the room. That’s just not the way this is done,” Markell said. “That doesn’t make any sense.”
So tell me, just what is he taking the blame for? And, while he takes the blame, why is he determined to double-down by starving the Port?
Perhaps with his mind freed from worrying about the Port deal, Markell can decide where he really stands on issues like an increase in the minimum wage and the death penalty, things that most governors have probably thought about. Here’s the death penalty quote from the News-Journal:
Gov. Jack Markell, unlike Maryland’s Democratic Gov. Martin O’Malley who has lent strong support to the repeal effort in his state, would not take a position on the bill when asked recently.
Does that mean that he doesn’t have a position, or that he doesn’t want to take a position until he calculates the political repercussions of taking a position? And is it plausible for someone who prides himself on being such a public policy guy to never have evolved a position on such a prominent issue? Increasingly, the question becomes, “Does it really matter?”
No. The answer is that it’s just the real Jack Markell. Only Ruth Ann Minner prevents him from being the most disappointing Governor in Delaware history.
Not. Good.
Tags: Delaware death penalty, El Somnambulo, Gov. Markell, Julius Cephas, Rep. Helene Keeley, Steve Tanzer, voting rights for convicted felons
House Speaker Pete Schwartzkopf agreed with the blame Markell assigned to the unions, and said he doesn’t think the port deserves more capital funding.
Translation: Dole and Chiquita? Feel free to take your business elsewhere.
Bet some of these statements end up in any GBCW letter to the Governor by any of these guys if they decide to take their business elsewhere.
When environmentalists were fighting the Army Corps of Engineers plan to dredge the Delaware River, we were told that in order to keep the Port competitive and to increase the Port’s business, the dredging was necessary and the Port would fail if the Delaware River wasn’t dredged.
The Markell Administration dropped all of their lawsuits and concerns about the dredging, and the river is in the process of being dredged, despite the continued concerns of environmental groups.
So now even though we’re going to have the deeper channel that Dennis Rochford assured us the Port would die without, the Port is dying anyway?
WTF?
Jack Markell is privately known for having thin skin. We are seeing some of that now. What’s really behind all this pique? Are we supposed to see ourselves as the lowly peons who should know to bow before our billionaire betters?
I know few politicians who don’t have thin skin. Markell would hardly be unique in that regard.
And, generally, the more highly-exalted the office, the thinner the skin is.
Don’t know what you mean by ‘privately known for having thin skin’, though. Sounds like an unsubstantiated allegation to me.
Why is Markell the only one who should have had a backup plan?
What’s the backup plan for the people who want the state to keep the port? What’s your plan forward? Asking for the money isn’t going to work, obviously, and I’m stunned if anyone was so naive as to think that people like Markell and Schwartzkopf would accept a political defeat without striking back (Schwartzkopf, especially, has shown he has a long memory where such things are concerned).
How many members of the General Assembly can you count on to push for a bond bill to improve the port? Has anyone even counted?
So now even though we’re going to have the deeper channel that Dennis Rochford assured us the Port would die without, the Port is dying anyway?
It is like keeping horse racing alive.
I’m having a hard time seeing what the win is here? It seems like a lose/lose at this point.
Well, Geezer, there is already $10 mill that the General Assembly appropriated that Markell and Levin chose to sit on. And it’s nowhere near ‘obvious’ that the Port won’t get more money this year. The request is being made of the Bond Bill Committee by the Port Corporation. Just b/c Markell doesn’t want $$’s allocated, it doesn’t mean that the Bond Bill Committee won’t provide funding. After all, the General Assembly was unpersuaded by Administration arguments that it should not be involved in any proposed port deal.
And I think that you’re painting with far too wide a brush when it comes to this ‘us vs. them’. There were only one or two bloggers, none from DL, I might point out, who painted KM as some kind of environmental menace, and who reacted with the type of unmitigated glee that you’re ascribing to anyone who had questions about the port deal. Most of us had questions about the deal, had (IMHO) legitimate questions about Kinder Morgan’s business practices, and had legit questions about the deal. What few answers that emerged, particularly as it relates to what KM was or not willing to invest in the modernization of the Port, raised far more questions than answers. Especially to legislators. To suggest that we somehow ‘own’ the Port b/c Markell, Levin and KM were either unable or unwilling to provide answers that made sense to the General Assembly is specious.
As to the ‘backup’ plan notion, it now appears that the Markell Administration viewed this proposed KM deal on a ‘take it or we’ll kill the port’ basis. A state asset. One that generates a lot of revenue, a lot of jobs, and has a satellite of associated small businesses that are invaluable to Delaware.
I respectfully suggest that the Governor should have had a backup plan b/c he is the Governor, and I consider it irresponsible to have him say, in essence, “You wouldn’t do it my way, so fuck you, fuck the jobs, and fuck the businesses. I don’t care about you.”
Perhaps its time we call him what he is, “Greenville’s Governor”.
The port isn’t like horse racing in that the port is basically making money (for now), it has good customers, it has a very good base of value-added businesses outside of the fence. It isn’t a dying industry (yet). Its challenge is in future competitiveness — the facility itself needs some upgrades to keep up with the needs of its current customers and to be able to expand some AND it needs a major expansion in order to draw additional customers down there in the longer term. The core of the KM problem is that no one could explain how KM was going to get the medium term or long term upgrades done. In fact, KM was clear that they would not expand into the Delaware unless they had a customer to do it. Which is a perfectly rational stance — except that competitively, you can see other Port assets close to us building for that capacity now — not waiting for customers. And I doubt that there are many importers or exporters who will wait a couple of years for our port to build out (maybe current customers would wait, but I wouldn’t count on it) when there are other choices close by that are ready for business.
But anon points to the genuinely bad messaging and selling of this deal by the Administration. It doesn’t make any sense to tell taxpayers that the channel deepening was crucial to the Port — but only if you build a berth into the Delaware — and then champion a port deal that doesn’t get you that and then tell the port that they no longer are interested in the capital investments that might keep the port competitive.
Maybe the Port of Wilmington should rebrand itself as amazon.com or Bloom Energy or maybe call itself the Port of Wilmington Casino and then the administration would be throwing money at them.
I think it’s funny that despite El Som putting up a piece about some really important pieces of legislation, all the comments have only been about the Port deal, which I believe is history now.
“The request is being made of the Bond Bill Committee by the Port Corporation. Just b/c Markell doesn’t want $$’s allocated, it doesn’t mean that the Bond Bill Committee won’t provide funding.”
So have you gauged how much support the port has on the Bond Bill committee? Do you think Markell’s new GOP buddies are going to demand money for the port? How about downstate D’s? Where do you think the votes, and money, for this will come from?
“After all, the General Assembly was unpersuaded by Administration arguments that it should not be involved in any proposed port deal.”
Good. Now let’s see them put their money where their mouths are. I’ll believe it when I see it.
Expecting elected officials to do the right thing because it’s the right thing to do is not a realistic strategy for anything.
“Perhaps its time we call him what he is, “Greenville’s Governor”.”
Go ahead. I’m sure it’s really going to hurt his career if you do. Meanwhile, how does it get you closer to your goal?
Cassandra: The port is not “making money” to the extent that it can fund its own capital needs. I think that’s what motivated Markell to try to offload it in the first place.
Geezer is right. Opponents should have a backup plan. Strangers on the street should have a backup plan. Delaware school children should have a backup plan. It’s just not fair to expect government officials (who are elected or appointed to have things like backup plans) to have a backup plan if no one else does. And it doesn’t matter if those government officials have access to all the relevant facts even though the public does not.
El Som, if Tom Capano had received the death penalty, would you have opposed this legislation?
The port is not “making money” to the extent that it can fund its own capital needs
What other state asset does?
Does the Cherry Island Landfill receive state funds every year? Don’t think so. It operates on a berak-even basis. Did the Delaware Memorial Bridges pay for themselves? Yes, many times over. The state made up its expenditure on Interstate 95 by charging tolls until it was paid off. Etc., etc.
Hey, Dana: I don’t care whether you have a backup plan or not. My point is that the people who chose to play the hand this way have to live with the consequences.
Meanwhile, good luck with pressuring a second-term governor for not having a “backup plan.”
Just out of curiosity, how many governmental bodies do you think make “backup plans” for when their hoped-for deals don’t work out? Did Colonial School District? Apparently not, as they are now talking about slashing expenditures. Did Appoquinimink? Apparently not, as all the talk has been about regrouping for another run at a referendum.
I don’t know of any governmental agency that operates by making two different plans, one for if things don’t work out and one for if they do. They formulate plan B only after plan A doesn’t work out.
Meanwhile, back to reality: Markell and Schwartzkopf have told the port to go pound sand. What is somebody going to do about it?
Dana: In response to your question, I was not a supporter of the death penalty, I was ambivalent about eliminating it. The Capano sentence just removed my ambivalence.
Seriously, Geezer, ‘…the people who chose to play the hand this way have to live with the consequences’?
The people who will have to live with the consequences are workers, their families, the businesses who rely on the Port, etc., just as they would have had to live with the consequences had Jack Markell stuffed Kinder Morgan down their throats. Without, I might add, knowing just what having KM stuffed down their throats meant. Or, without even having had a hand to play.
I have a question: Who are the ‘people who chose to play the hand the way they have’? I know that Julius Cephas is one. Who else? Name names please.
Exactly. Julius Cephas has the support of his union. Can we all agree that Julius wanted the deal scuttled? Now it is. What’s with all the wailing? He wanted the deal dead, the deal is dead. So we move on from there — what I dubbed “living with the consequences.”
What? You mean you didn’t realize that scuttling the deal wouldn’t automatically win support for the state to spend money on the Port? I’ll bet you dollars to donuts that Julius Cephas isn’t sitting around whining about how the governor isn’t progressive enough to suit his taste. He’s trying to figure out how to get the government to pony up so its asset doesn’t fall into ruin.
So far, I’ve heard no strategy here for progressives to do the same — just a lot of complaining about what ratfinks Markell and Schwartzkopf are (and, just a hint to the wise, at this point Schwartzkopf matters more than Markell). Oh, and of course, a lot of complaining about me for pointing this out.
I have watched and listened for 40 years while liberals/progressives have failed to achieve objective after objective because what strikes liberals as smart and obvious rarely strikes others that way. Like many benighted conservatives, some liberals can’t understand that their priorities are not shared by a majority. When you don’t have a majority, you have to work on people until you compile one.
El Som: How did the people advance civil unions in Delaware? It wasn’t by counting on common sense. It was by organizing, lining up legislative support, and keeping the pressure on for several years.
So, your triumphalism over the scuttling of the deal is directed at Julius Cephas.
This even as you point out how the Administration failed to make its case, failed to even consider what they wanted out of the Port, failed to provide anything close to transparency when it came to details of this deal, and displayed flawed thinking in opposing any legislative oversight of the proposed deal.
It all boils down to “I hate Julius Cephas, and I’m glad he got screwed in this.”
Gotcha.
Cherry Island Landfill is part of DSWA which has its own borrowing authority. It is how they financed much of the expansion there recently. They couldn’t have come up with that $100+M in the couple of years construction for that otherwise.
The Delaware Memorial Bridge is part of the DRBA which also has its own borrowing authority. It is how they fund upgrades and major repairs to the bridge and their other facilities.
Even the University of Delaware has its own borrowing authority — even though they DO get both operating and capital funds from the GA.
DART gets alot of its funding from the State. (as does DelDOT) – neither are self funding.
The charter for the DSPC specifically disallows any authority to borrow funds, meaning that they are reliant on the State for capital funding.
HB 35, the private sale background check was tabled in committee. I thought this was the easiest of the five proposed gun measures?
He’s trying to figure out how to get the government to pony up so its asset doesn’t fall into ruin.
I’d bet money this isn’t true. I think that his union’s contract is up in a year or so. (I don’t seem to be able to verify that, though.) If so, the imbalance between wages/salaries down there and operating revenues really ought to be the thing keeping him up at night. Because his folks likely won’t come out on the other side of that unscathed.
WJH, wouldn’t panic just yet. There are reasons other than opposition that a bill could be tabled. I think this bill moves through.
Markell’s passivity on the port issue is a terrible portent for his second term.
Turns out that the delay on HB 35 was b/c several people who had signed up to speak couldn’t due to time constraints.
So, the hearing is continued until next week.
From Drew Volturo, House Communications Director:
“One thing that is worth adding: If members of the public cannot attend and wish to submit testimony to the committee in advance, they can do so in one of three ways:
E-mail: Rebecca.Walker@state.de.us,
Fax: (302) 739-2313,
Or mail: Legislative Hall, c/o Rep. Rebecca Walker, P.O Box 1401,Dover, DE 19903
What is really going to be needed from the GA this year for the port? At the Bond hearing, they are ready to go and have the funds in hand for the berth repairs. There is a question of an extra (3 million) 30% add on to the price, naturally….. but otherwise the money is sitting there already allocated.
The new crane is an item that will take a full two years to manufacture and install but the money has to be in hand before the contract can be negotiated. That 12 million will sit around in the port bank accounts for two years as the last year’s 10 million seemed to be ‘idling’.
So, 3 million plus 12 million and another 5 misc. adds up to the 20 requested.
I think there is the will to move forward with this important revenue-producing asset with some hard thinking about what steps are needed shortly down the road in ‘going to the river’.
I would guess that the businesses there who wanted a shot at operations and infrastructure should be given a second look but will that really have to wait until ‘hurt feelings are salved’?
And I have to say that the number for the port’s bond request seriously pales in comparison for the funding needed for new school construction due to sprawling new residential developments scattered in our rural farmlands. We certainly aren’t planning very well for our growing population are we. The huge infrastructure costs caused by our rural housing density sprawl have been known by everyone in Dover for well over a decade. Just sayin’.
As for Julius Cephas and the talk show host – what El Som said.
DART gets alot of its funding from the State. (as does DelDOT) – neither are self funding.
Actually that is not entirely accurate. DELDOT gets its funding through the Transportation Trust Fund which has dedicated revenue sources. DART’s budget is a portion (about 25%) of the overall DELDOT budget. In recent years the TTF has not been able to fund all of DELDOT’s budget so there has been some funding from the General fund. DELDOT also has the ability to sell bonds to borrow money for its various projects. That debt also accounts for a large portion of DELDOT’s budget.
From what I hear HB 35 has a good chance of not passing. People who support it need to get down to Dover and say so because all the voices down there are the gun nuts. And, we don’t have enough courageous legislators to stand up to that!
I just hope the state doesn’t stop looking for a private investor because the amount of money that’s going to be needed isn’t going to be easily attained through bonds, taxes, or another plan unless it’s completely outside the box.
Also I think all sides should take some blame in this because it seems like everyone is blaming the other for why the deal fell through instead of trying to find out the best way to move forward. KM is a business and they’re going to do what’s best for them, the unions are fighting to put food on the table for their children so they’re going to do what’s best for them, and the governor can’t afford to have the port close on his watch so I’d assume he’s going to do everything he can to keep it open.
If they can get a private investor to commit to funding at least half of the improvements then I think they should take it in a heart beat and float a bond issue or raise taxes (temporarily) if needed to produce the other half. The unions should be willing to compromise and take a slight pay cut if needed in a deal if they’re able to keep their pension plans because if they don’t then they risk losing everything.
If each side doesn’t give a little ground then everybody loses including the entire state because 2200 people out of job is going to hurt families, communities, and local businesses as much as anyone else involved.
The state shouldn’t have too much trouble finding another bidder because the port is a great asset for any company to have and I don’t see shipping becoming less of a factor in the future. We just need our elected officials and unions leaders to keep trying in this situation because a lot of people are depending on them to do what’s best for all parties involved.
Agree with you, Francis, and I think that a cooling-off process is now needed.
Only hours into your reign, and you have already revealed yourself as a peacemaker.
“It all boils down to “I hate Julius Cephas, and I’m glad he got screwed in this.” Gotcha.
Wait, I’m confused by that. In what way did he get screwed? He got what he wanted. You all got what you wanted. Enjoy!
I’m following this off and on. It looks to me like the state is saying:
“It takes X dollars to make the upgrades so this port is viable. There’s no way the state can justify issuing bonds against that future profitability, because it won’t be THAT profitable. But we think a private company will somehow have better luck (never mind the math shows otherwise). So we must privatize.”
It looks like the port is damned if you do; damned if you don’t. Unless – maybe the state is wrong about the state being unable to justify the bond issue and turn a profit from it, and are just saying that to gin up a case for privatization. D’ya think?
“Maybe the state is wrong about the state being unable to justify the bond issue and turn a profit from it, and are just saying that to gin up a case for privatization. D’ya think?”
It’s quite possible. But why would they? If the port was making enough money to pay for its upkeep, what would be the motivation to sell? Neither Markell nor Levin needs the money, so I seriously doubt graft is involved.
Aren’t they saying the port can’t pay for itself without the upgrades? (either now or projected in the future?) And I don’t think Markell or Levin need to make money personally to be pro-privatization. I wasn’t implying that.
Graft? no. But leveraging a cozy relationship with a “100 Billion Dollar Company” against one’s future national ambitions in the public arena? yes.
Also, a perspective along the lines of the argument against the port bond relief reported in the News Journal that our bond debt is already out of control – yes, it is. But don’t blame the port.
We have added over a billion to our state debt in a decade (not including the DOT Trust Fund) and every single one of the annual top expeditures are new school construction (from OMB staff report).
Here’s Jack Well’s education spending report today –
” According to 21CSF Report on State Capital Spending on PK-12 School Facilities, public school districts in Delaware reported spending a total of $858 million from all sources on capital outlay for school construction and acquisition of land and existing structures in fiscal years 2005-2008, an average of $1,880 per student per year. This per student spending ranked 3rd of the 50 states and the District of Columbia. {Charter schools are not entitled to capital funding.}
Does anyone know what laws/regulations were used by our Department of Education to determine spending this $858 million was justified?
Did our Department of Education use choice enrollments that created over-crowding as justification to build new schools or justification for adding more classrooms to an existing school? If so, what are the consequences?
Did our Department of Education recommend spending public funds for capital improvement on a district school being used by a charter school? Is this legal?
How’s many teachers were hired using RTTT funding?”
I realize you weren’t. But if the port actually earned enough to pay for its own capital needs, why would they want to privatize it?
Most privatization efforts are based on unloading assets that require upkeep, like toll highways. Of course Republicans take that to the extreme — lottery offices, for example, operate without much overhead, but governors like Corbett in Pa. want to sell them off anyway, for the quick cash.
Another motive for privatization is the opportunity to invest in the private entity, and Kinder Morgan stock has performed better than the market over the past few years, so maybe that’s part of the reason.
“leveraging a cozy relationship with a “100 Billion Dollar Company” against one’s future national ambitions in the public arena? yes.”
See what I mean? You have no problem attributing a nefarious motive to the governor, even in an absence of evidence. Pointing out that Julius Cephas had his own motives, though, that’s out of bounds. Your hypocrisy is boundless.
“our bond debt is already out of control – yes, it is. But don’t blame the port.”
It isn’t “blaming” the port to say all the money has been spent on other things. And the port, despite your insistence, is not entitled to anything because it’s “fair.”
“This per student spending ranked 3rd of the 50 states and the District of Columbia. {Charter schools are not entitled to capital funding.}”
Which shouldn’t surprise anyone given the population increase in Delaware between 2000 and 2010. Unlike most states, Delaware funds its public schools more at the state than the local level. And, as long as you’re bitching about how much school construction costs, let’s remember our progressive pay scale — union scale, even for non-union workers.
Y’all are no better than Republicans, failing to understand how your priorities interact. You really want to attack schools now to get funding for the port? Good luck with that. There are more than 100,000 students in public schools. That’s a lot more people than are affected by the port.
Considering how easy it is to get casino legislation through both houses and signed, why not put riverboat gambling in the port and fund the port expansion off the proceeds…
Kavips Ftw!
“It takes X dollars to make the upgrades so this port is viable. There’s no way the state can justify issuing bonds against that future profitability, because it won’t be THAT profitable. But we think a private company will somehow have better luck (never mind the math shows otherwise). So we must privatize.”
The Port is basically viable now. It has two big issues for long term sustainability — salaries and modernization/expansion. It is the modernization/expansion that is at issue (or maybe they were expecting KM to play the hardball that is needed to deal with the salary issues) — DSPC sold this thing as a way to get to moderization/expansion and KM floated a number that wouldn’t get to that requirement. Other facilities like DWSA have the authority to borrow for their capital needs and pledge revenue over the life of a bond issue to pay them back. So “paying for your own capital needs” without the ability to borrow for your own capital needs makes the port something of an outlier in the way that these quasi-governmental agencies are run. Because the rest don’t live with this rule. But if you look at the $140M+ that the government would get in lease payments, that is guaranteed revenue (albeit paltry revenue) for the state. So even if this was about selling off an asset like a road or something, they weren’t going to get much for it.
And then there’s this unanswered question — if the port can’t “make money” now, how would KM do it? There is a pathway to that — and that is to recreate the Port of Wilmington into the image of their faculty in Fairless Hills. A facility where they are managing the kind of materials KM is experienced at managing that do not need nearly as many employees to move, and let go the niche stuff (that does need more people) to other facilities.
“The Port is basically viable now.”
It clears $3 million in cash flow (and while the depreciation we’re ignoring doesn’t matter to you or me, it does to investors). It spends an average of $10 million a year from the state on maintenance. That’s an average of $7 million in the red per year. What bond underwriter do you think would handle that deal?
“So “paying for your own capital needs” without the ability to borrow for your own capital needs makes the port something of an outlier in the way that these quasi-governmental agencies are run.”
One would hope you realize that the reason these agencies can underwrite bonds is that they have the annual revenue necessary to repay them. DSWA, for example, is paying about $12 million a year, on revenue of about $51 million a year, and breaks even doing it. They can afford this because their operating expenses are much lower than the port’s.
The Port would require a larger bond sale, but let’s say they could get some bonds issued. Where would the $12 million annual bond service payment come from?
“So even if this was about selling off an asset like a road or something, they weren’t going to get much for it.”
Agreed. And I still don’t understand how KM was going to get routine maintenance and improvements (regular dredging, for example) without the same payment from the state that the port currently gets (usually). Given the absence of any mention of that in the KM documents used for their pitch to investors, I have to wonder if the state was going to be expected to continue its subsidy — something that would have killed the deal no matter what anyone else had to say.
“And then there’s this unanswered question — if the port can’t “make money” now, how would KM do it? There is a pathway to that — and that is to recreate the Port of Wilmington into the image of their faculty in Fairless Hills.”
You are simply guessing now. Why would they need the port of Wilmington at all if they were merely going to ship out more of what they already handle at Fairless Hills? You have no idea what KM’s corporate strategy is, nor do I. But I find KM’s claim that they wanted Wilmington because they want to expand into the fruit business a more likely reason for their bid. Their alternative is to build at Paulsboro what Wilmington already has, in which case it would be more cost-effective to simply buy/lease the existing facility.
“Considering how easy it is to get casino legislation through both houses and signed …”
Really? Ask Pete Schwartzkopf how easy it is to get enabling legislation for a new casino through the General Assembly.
Geezer, having a backup plan that *depends* on an investor is essential because otherwise the government is putting all its eggs in the basket of wishful thinking.
As far the Governor telling the port to pound sand is concerned, that tells us more about this Governor’s regard for the general well being of the state than it does anything else.
Why would they need the port of Wilmington at all if they were merely going to ship out more of what they already handle at Fairless Hills? You have no idea what KM’s corporate strategy is, nor do I.
Sorry, but KM is a publicly held company and they have to tell investors what their corporate strategy is. You can see what they say themselves in these investor slide decks: Raymond James (from this month) or their January Analyst conference. They are quite specifically in the dry bulk and liquid bulk business. And if they were getting into the refrigerated products business, you’d think they would disclose that. They are certainly obligated to. But spin through those decks or even the specific data sheets for their terminal assets. They don’t do vegetables or juice.
The port would require a larger bond sale if they were building out into the Delaware, and they don’t have the revenue to pledge to pay back said bonds. But they might have the revenue to pay back a $20M bond which is the immediate need. The port has capital contributions on its books because it is meant by statute to get its longer term capital from the state. It isn’t authorized to borrow funds on its own and no other agencies have to save up so they can pay cash for improvements. Beyond that, you keep arguing a Catch-22 here — that somehow the Port needs cash on the barrelhead for capital improvements (a thing that borrowing solves for others)and the Port isn’t going to attract major new business to generate more revenue without expansion.
The port doesn’t spend 10 million a year on maintenance.
And you sure are throwing a whole lot of assumptions about my way of thinking based on nothing at all. All this ranting and ranting and ranting must be why you like radio so much.