by Karen Jones on Wednesday, August 10, 2011 at 7:05am



The City of Montgomery (Mayor & Council) manipulated and have cheated the taxpayers of the City by using manipulative accounting procedures and creative financial instruments to both usurp and break the law (Alabama constitution 1901) imposing an excessive burden of taxation on its citizenry.  In fact, if the City of Montgomery had followed normal accounting procedures and used transparent financial instruments, the City of Montgomery would not have been able to obtain the excessive bond, loan and contract debt(s).  The City would have been found insufficient and perhaps insolvent by its own account per the Comprehensive Annual Financial Report For the Fiscal Year Ended September 30, 2010 and the Passed (accepted) Budget Fiscal Year 2011 (and previous years 2002-2010).

Mayor Todd Strange has stated publicly numerous times recently that by removing the actual (TRUE) debt (LIABILITIES) off the balance sheet ($24million), the City have been allowed to obtain more funding than they would have under normal (appropriate) means.  When asked what does that mean, the Mayor has yet to articulate either the reasoning or rationale behind fraudulently obtaining funds via Bonds, Contracts or Loans that we the taxpayers are obligated to pay back with exorbitant long-term interest to the tune of almost $200million over thirty years to date.  Under normal accounting principles (GAAP or FASB) debt (notes payable and other re-occurring monthly expenditures) are to remain giving a true picture of the City’s ability to repay debt owed or pursued new debt.  The following paragraphs will outline how both the taxpayers and the lending institutions were manipulated by the City and or participated in the taxpayer manipulation.

The City under advisement from the City’s own Finance Staff, Lawyers, Department Heads and outside consulting firms engaged in creative financing projects that have placed the taxpayers in tremendous harm (excessive debt) in an unstable economic environment.  The  creative financing and manipulative accounting practices appear to have begun in 2002 under the leadership of the previous Mayor Bobby Bright and carried forward with current Mayor Todd Strange and City Council Members.  In 2002 according to then Mayor Bobby Bright in the “Mayor’s Budget Message” dated August 06, 2002 regarding the upcoming Fiscal Budget 2003, the Mayor (Bobby Bright) met with Lloyd Faulkner, Finance Director and all department heads to debate or set ground rules for each department leading to each department head constructing their new budgets within the new ground rules established by then Mayor Bright.

Some of the new ground rules included moving the City forward with groundbreaking, innovative financing ideas provided in part by outside consultants or consulting firms that have aided other Municipalities throughout the state achieve an alleged overwhelming amount of new growth (tax revenues & job creation).  The Mayor indicated he held countless ‘one-on-one’ meetings with Finance Director, Lloyd Faulkner in the absence of City Council Members to study, debate and discuss in detail every dollar, and to make sure every dollar is in the proper place.  In order to see the new growth the Mayor cited new growth must come from real properties, sales taxes, business licenses / fees and from capturing “TOURISTS DOLLARS”.

In the article ‘Accounting The Other Black Magic’, excerpt from the book ‘Blue Collar Brown Boots’,exhibit2 outlined the tremendous increase in Real Estate Assessed Values (new purchases) expanding from 2002-2010 ($1,519,338,960 – $2,797,203,157 respectively).  The significance of exhibit2 is utterly important because the City’s Debt Limit and Legal Debt Margin are pegged to the assessed value of the Real Estate Owned (R.E.O.).  The City’s Bond Debt is a maximum of 20% of the Assessed Value of its R.E.O.  Each successive year from 2002-2010 there is a significant increase in the properties the City purchased which increased its Assessed Value thus by de facto, the Debt Limit and Legal Debt Margin increased proportionately.  In other words the City was able to borrow more proportionate to the total Assessed Value of its R.E.O.  The problem with that is, the Assessed Values are INFLATEDthus giving FALSE VALUE to anyone or entity that may grant loans, contracts or bonds to the City of Montgomery.  The FALSE VALUES have allowed the Mayor and Council to borrow more under FALSE PRETENSES thus placing the taxpayers at greater risk for DEFAULT and greater interest payments.

Coupled with the above INFLATED FALSE VALUES of R.E.O. the City is using manipulative creative financing mechanisms to increase its borrowing capacity which cost taxpayers more under false pretenses.  If you were to buy a home, your debt ratio can not exceed 45% or 50% maximum of your gross income (available income).  Debt ratio is the total debt relative to your total assets.  Plain and simple, it reflects your true ability or capacity to pay applicable debt. Example:  John has monthly income of $3,000, all monthly payments reporting on John’s credit report total $1,400, therefore, John’s debt ratio is 46.67% which mean John is within a reasonable range or capacity to repay.  If the relationship of debt to income reflected a number above 50%, John’s capacity to repay diminishes and the lender would not allow John to incur any new debt.  John can not arbitrarily remove any truthfully reporting debt from his credit report usurping the law trying to get more than he can afford.  However, this is exactly what our City Officials have done and are doing.  As stated above Mayor Todd Strange has implemented himself and Council in fraud and deception by admitting they were advised to remove at least $24million from the balance sheet thus allowing them to borrow more than they should have placing taxpayers at greater risk (harm) for default.  Like the debt ratio above, the City has to present its financial statements to potential lenders, contractors and the bond market to incur PUBLIC DEBT.

Using creative financing and manipulative accounting practices, the City has managed to usurp the constitution and lending laws.  Instead of using the debt ratio formula the City uses Debt Service Coverage Ratio (DSCR), Loan Life Coverage Ratio (LLCR), Project Life Coverage Ratio (PLCR) and Reserve Life Coverage Ratio (RLCR) formulas that allow the City to obfuscate true or truthful lending practices.

1.       Debt Service Coverage Ratio (DSCR) is used as the benchmark in the City’s ability to produce enough cash to cover its debt (annual) payments.  The higher this ratio, the better the City’s probability to get a loan.  Also, it is the minimum ratio acceptable to a lender.  Breaching it is defaulting.  It is thetotal cash available relative to the total annual debt service payments (Principal, interest and lease payments).  This gives a false or misleading picture of the City’s ability to repay.  Example:  City of Montgomery Cash Available per Fiscal Year Budget 2011 is $220,036,311 relative to $17,370,581(annual debt service).  The ratio is 12.67% meaning the City has the capacity to pay the debt service greater than 12 times the amount due ($17,370,581).  This is misleading because the available amount is inclusive of the Proposed Budget (all expenditures etc.) $218,714,268, therefore, it is not 12 times the capacity to repay but in fact the exact opposite.  The ratio would be closer to1.00 which says the City barely has sufficient funds to pay current debt and does not have the ability or capacity to take on massive new debt.  Another way to explain the (DSCR) includes Net Income, amortization/depreciation, interest expense and other noncash items relative to the total annual payments (debt service annual payments).  This route diminishes the City’s ratio tremendously but still falsely inflates the capacity of the City’s Debt Ratio.  This formula brings it down to approximately 4 times the true capacity or the City has the capacity to pay 4 times the amount required in annual debt service payments.

2.      Loan Life Coverage Ratio (LLCR) gives an estimate of the credit quality of the project from a Lender’s perspective.  It is the Net Present Value of Cash Flow Available for Debt Service relative to Outstanding Debt in the period (monthly/annually).  NPV (CFADS) is measured only up until the maturity of debt tranche’ (a portion of an investment issue or loan).

3.      Project Life Coverage Ratio (PLCR)  is used in highly geared infrastructure investment like our city purchasing General Obligation Bonds and issuing Industrial Revenue Bonds (no legislative debt limit) funding ‘Downtown Re-Development Projects’ and other activity similar throughout the city.  Akin to the LLCR, it is the ratio of the net present value (NPV) of the cash flow over the remaining full life(opposed to the LLCR CFADS for that particular year) of the project to the outstanding debt balance in the period.

The above creative financing mechanisms, manipulative accounting practices and inflated Assessed Values have created a breeding ground to further ‘rob’ the taxpayers under misleading terms and burden us with excessive debts to be paid in the future in an unstable (in-elastic and volatile) economy.  This format is certain to raise taxes, go bankrupt (Chapter 9 – Municipal Filing) and embarrass the taxpayers of Montgomery and the State of Alabama sooner than later.

Stated earlier, Mayor Bobby Bright (August 06, 2002) said he discussed, debated and met with outside consultants regarding new innovative financing ideas that would lead to new found revenue for the City of Montgomery.  Likewise, the current Mayor Todd Strange have and is following suit finding more ways to incur excessive debt on the taxpayers of Montgomery using similar deceptive practices that are certain to fail any day now!  Supportive evidence is found in a New York Times article “High Finance Backfires on Alabama County” dated March 12, 2008.  In summation, a banker named Charles E. LeCroy (Former Managing Director at JPMorgan Chase and Former Broker with Raymond James) pitched to ease taxpayers’ burden by using some Wall Street wizardry saying, he could lighten their load.  He introduce Jefferson County Alabama to a series of exotic bond deals that the bankers concocted increasing interest opposed to shrinking it by using adjustable or variable interest rates instead of the commonly used fixed rate debt instruments.  Jefferson County was also introduced to complex transactions called interest rate swaps that were to protect it if interest rates rose.  In hind sight, we know that didn’t work out for Jefferson County.  Former Montgomery investment banker, William Blount (Blount Parrish & Company) earned larger fees than any other adviser as well as then Commissioner Larry Langford.  Mr. Langford and Commissioners told reporters that they were not knowledgeable of the creative financing and manipulative accounting procedures but were advised by these gentleman that this was the way to go and it was legal.  However, fast forwarding to today, we know they were complicit in the debacle and stole from taxpayers under the guise of the same tactics the taxpayers of Montgomery are being asked to believe in.  We are not aware of any evidence the current administration is directly benefitting from the dealings (deals), therefore, we are not accusing them but are outlining the potential hazardous activities that will place the excessive burden of additional taxation upon the backs of the citizens of Montgomery falsely.  Mr. LeCroy also advised Jefferson County to refinance its debts just as we in Montgomery are experiencing with the current administration.  The county (Jefferson) ended up with 18 different swaps at one point.  The notional value of the swaps surpassed the value of the bonds they were supposed to hedge.  It is our intent not to allow this to happen to us in Montgomery by putting a stop to our City Council and Mayor from incurring any further debt using the same tactics.

The problems arise from local governments not holding open, competitive biddings when they issue bonds.  We have asked the Mayor and Council for copies of actual bonds and receipts from Federal Stimulus Moneys received and other Federal and State Grants received to no avail.  Refusal to disclose requested material makes room for negative speculation especially during election time.

More supportive evidence of the likelihood of Montgomery becoming the next victim of an overly aggressive administration’s uncanning and insatiable appetite for more public debt is presented in the article written by Robert McClendon, Press Register June 29, 2011 entitled “PARCA:  Mobile spending too much on extras, not enough on infrastructure”.  PARCA is an acronym for Public Affairs Research Council of Alabama – NonProfit Educational Corporation housed at Samford University although separate therefrom.  They are an advisory group that consults with Alabama’s governmental units.  The presentation discloses Mobile is over spending on operations unrelated to the “core responsibilities of City Government,” and under-spending on infrastructure and capital investment, according to an efficiency study produced by PARCA.  The study may be true to an extent, however, at what cost to taxpayers (new bond debt) should they allow a paid consulting firm to dictate their needs.  PARCA also advised Jefferson County!  PARCA has and is advising Montgomery with ‘SMART BUDGETING’.  The typical fee charged for their presentation is $25,000.  Usually they make several presentations to the governmental unit implementing and evaluating the structures they put in place.

Warning:  PARCA advised Jefferson County, Mobile County and now the City of Montgomery to concentrate on INFRASTRUCTURE PROJECTS the other two entities have experienced or is experiencing bond debt overload and are hemorrhaging excessive principal and interest payments.  The burden placed upon the taxpayers is atrocious and could have been avoided if the citizenry was made aware of the creative financing, manipulative accounting and inflated assessed values of the real estate owned and being purchased by the governmental entities in advance.  The common thread between all three entities is PARCA, therefore by the process of elimination, their presentation is suspect.  We do not have any other evidence to provide concrete persecution at this time, therefore, we intend to error on the side of caution by seeking injunctive relief from the Circuit Court of Montgomery County, AL prohibiting any new bond debt until a thorough investigation has been completed and disclosed to the general public for their approval prior to allowing our elected officials to proceed with any new debt.  We are skeptical of the ‘Smart Budgeting” because it focuses on the “Infrastructure Projects” that we fear most will send us down the same slippery slope as other states, counties, cities and towns that bought into the ILLUSION a consulting firm knew best for the taxpayers without the taxpayers knowledge or consent to engage.

Instead of our elected officials under the auspices of Act 618 performing their required duties, they have usurped their duties and ascribed to a subordinate role under the command of consultants that are not obligated to the taxpayers of Montgomery, AL.  The aforementioned is a clear violation of constitutional law and the usurpation thereof.  It therefore wreak of litigating actions forth coming prohibiting the use of said consultants or any other consulting group (firm) until further legal notice from the Circuit Courts of Montgomery County, Alabama.   The Mayor and Council along with paid Financial Staff are openly negating there sworn duties by using taxpayers moneys to pay outside help to do the jobs they are required to do under Act 618.  In essence, we are paying twice for the same performances that should be produced by our elected officials and the financial staff accompanying them.  Any time an entity can delete accurate debt from its balance sheet and does not have concerns about a credit report (credit worthiness) when incurring public debt because those items are usurped with creative financing mechanisms and manipulated accounting practices permitted by the lender or debt holder, we the taxpayer should issue a cease and desist order until further investigation.  The lender doesn’t care because it has the ‘Full Faith and Credit’ of the governmental entity (taxpayers) at its disposal until the debt is retired by this generation and future generations that did not incur the debt.

Think of the excitement Congress had when they approved legislation that allowed them to take money from the Social Security Trust Fund; they had a spending frenzy!  The ugly results are what we are experiencing today with regards to Congress and other experts eluding to Social Security going broke in estimates of 5, 10 or 15 years.  Well, the same excitement was and is being experienced by the Alabama Legislature, Mayors & City Councils and County Commissions to date from approximately ten (10) years ago when the Alabama Constitution was amended by legislators to allow Municipalities the right to usurp Article IV Section 94 which prohibited the Municipalities from granting or lending credit or money to private individuals or corporations.  Article IV Section 94 was amended by Amendments 713 & 772 allowing the insane acts that are bankrupting cities, towns and some states!  The only stop gap measure included in the Amendments was the last line of each amendment which in essenceprohibit the sale, lease or other disposition of any property below fair market value.  It must be sold at equal or above fair market value.  The City has stated publicly in open forums, print media and electronic media formats that they have sold at discount, a clear violation of the law!

At total cost to the taxpayers, special interests, family, friends and other cohorts of elected officials are being enriched with your money while you pay the excessive debt back.  A sleep or unaware populace will suffer the dreadful consequences thereof when continued credit downgrades, higher interest rates and more loans are made then defaulted on by our elected officials leaving us out to dry with repayment and or bankruptcy because revenue streams dried up.  It happened because those assumed revenue streams never were present (illusions).  Take the time to think it through while you have an opportunity to vote for someone that will properly represent you and your tax dollars, otherwise take the joy-ride down hill!



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  • You, Roberta Franklin, Stanley VanDiver and 2 others like this.
    • Stanley VanDiver wouldn’t surprise me if true.

      19 hours ago · Like
    • Dennis C. Latham YA’LL really don’t want me in this ……….
      I told everyone that the mess was crooked and against the law back when bright was in office – and all those city council members were just as crooked ….. now that you know ? What in hell are you going to do ? Not a damn thing ? Well … just as I figured …. I’m going to keep being me though.

      11 hours ago · Like
    • Karen Jones Dennis how do you know what people are or are not going to do? What steps have you taken to cease and desist this type of crookedness dating back to BB-bobby bright? what steps are you suggesting? Let’s do it.

      5 hours ago · Like
    • Dennis C. Latham

      Everyone should know what I have done and still doing already …. if they ain’t calling me crazy for standing up for what is right – they know that I am still DAILY showing people / the world EVIDENCE DAILY and NIGHTLY – but I see no one else stepping up to the plate – only sitting behind a computer screen – and talking smack –

      I have gotten out their in the field and asked the questions to these crooks – and I have said on LIVE RADIO and TV what these crooks have done – even before willie cook died – before calhoun wouldn’t return any calls – before burquette was a lying demonic swine, before janet may was a liar – hiding the facts from the people and before larkin was selling out and before cubie rae threatened to have d t marshall arrest me – for trying to tell her how he illegally broke into my home … when I was reaching out to get help on what to do and who to talk to ….

      So you ask ….. how do I know what people are and are not doing ?
      I can see – when these same blacks complain – but they laugh, skin and grin in the faces of the people I mentioned – along with more – and then they do the same in the faces of these whites who hate them – specially joe and alva ……. some of these black dummies even advertise and spend money with these same whites who hate them.

      That’s how I know – and most are GUILTY AS CHARGED. I don’t mind naming more names ….. because they same people should be sat down and kicked out of the black stance in and around Montgomery, Alabama, The US, and THE WORLD.

      about an hour ago · Like
    • Dennis C. Latham

      just remember – it was d t marshall who was the first demonic evil being who called m crazy – because I stood up for my rights – and black sellouts followed suit ….. yes …. people here and there – all around me – and like I am supposed to – I STILL LOVE THEM and offer them HELP AND SERVICE – so they can only talk about me behind my back when I try to help them – and then they spread false rumors about me behind my back – ALL BECAUSE I STOOD UP against the good ole boys like troy king, riley, bright, strange, ex drunk chief of police, chief baylor, ellen brooks, pat warner and the rest of them – yet … many blacks will smile, skin and grin in their faces – buck their eyes and probably put black shoe polish on their faces if they were asked or told to – and because I WON’T ….. they hate …..and the more they hate ? THE MORE I LOVE.
      about an hour ago · Like
    • Dennis C. Latham <—- will wait and see … if anyone has the backbone to STAND and ADDRESS what I have stated here – like I have stated for over 11 years.

      a few seconds ago · Like

About dennisclatham


Posted on August 11, 2011, in Ahrayah D. Yahcarah, AL, America, bearing false witness, Better Education, black in America, Blacks Holding Other Black Back, breaking THE LAWS OF GOD., chris miles, conversations, david white, Dennis C. Latham, evil, FaceBook, GOD'S LOVE, GOD'S POWER, Government Gone Wild, Hebrew Israelites, JESUS, kevin elkins, kkk, liars, lies, lucked out lucyfur, Montgomery, pure evil, racism, right wing extremists, right wing hatred, right wing lies, right wing lunatics, Sheriff D T Marshall, street justice, t-party, Tea Party, THE GLORY OF GOD, THE LIGHT, THE LOVE OF GOD, THE TRUTH, THE WAY, THE WHOLE TRUTH, threats against ones life, Un-American, WAKA, WAPZ, WCOV, Wetumpka, white supremacy, whites holding blacks back, WKNI, WSFA. Bookmark the permalink. Leave a comment.

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