MoCo Council wants to enter student loan business, as Katz sounds alarm on County debt

Plan would create 

ITA-like

"Authority,"

with $20-30 million

start-up cost

After creating a barrage of new offices and six-figure staff positions in the last year alone, opening their own microloan bank, and committing Montgomery County to staggering financial liabilities on bus rapid transit and the Purple Line, the Montgomery County Council is now planning to enter the student loan industry. That's not a misprint, and today isn't April 1. But just four days before announcing its intentions, one Councilmember, Sid Katz, raised red flags on the County's massive debt load.

The Council's proposal would create a new Montgomery County Student Loan Refinancing Authority to refinance student loans, much like the Independent Transit Authority that was panned and ultimately defeated by taxpayer opposition. Such an Authority would potentially have all the features hated in the ITA concept - the ability to raise taxes, carry unlimited amounts of debt that could end up being dumped back onto the taxpayers, and a lack of direct accountability to voters. The specifics will be unknown until a final state bill to create the Authority (sound familiar from the ITA fight?) is written, but one detail known is that the Authority will have the power to issue bonds. It should be noted that no other county in the United States currently is involved in student loan financing.

Does it make any sense from a fiscal responsibility standpoint for Montgomery County government to enter the student loan business at this time? The assessment of Katz, the only Councilmember with real-world business experience, suggests the answer is, "No."

"I, candidly, am very, very concerned about the debt Montgomery County has," Katz said during a June 22 meeting of the Government Operations and Fiscal Policy (GO) Committee. "If we don't get a handle on this, if we don't get a blueprint on debt in Montgomery County, it's going to overtake us. Right now, if [our debt] was a department, it would be the third largest department in Montgomery County."

Katz also expressed concern with the uncertain revenue forecast for the coming years. Trump administration cuts to government could drastically reduce income tax revenue for the County, Katz noted. Montgomery County is locked in a structural deficit as far out as the forecasts go - meaning that, as it is now, we already will be in the red every single fiscal year.

In the context of these red flags, a report by the County Office of Legislative Oversight raises many concerns.

How much would it cost taxpayers to launch the Authority? "The Montgomery County Department of Finance has estimated that a Montgomery County Student Loan Refinancing Authority would need $20 to $30 million to start a $100 million refinancing program," the report states.

The report confirms that these start-up funds "would impact the County’s debt levels (the amount the County can borrow)."

It appears loans would be extended to illegal immigrants, according to Page 4 under "Eligibility." On Page 6 of that section, it floats the idea of requiring a co-signer "if a borrower is not a U.S. citizen." In other words, resident taxpayers would be paying to provide low-cost student loans to non-taxpaying, non-resident students. Wow.

Later, the report notes that there are already numerous private student loan refinancing firms, and that their interest rates are actually less than the state-run loan entities the Council wants to ape. Why would we enter a market where there is no vacuum, with a more expensive product? Nuts.

A response from the office of County Executive Ike Leggett wisely pans the idea of entering the student loan business. "Student loan debt is the largest and fastest-growing share of consumer debt, and has the highest delinquency rate of all consumer credit debt," wrote Timothy Firestine, the County's Chief Administrative Officer, on behalf of Leggett. "As a result, there are few states and no localities willing to incur the financial risk and significant cost of operating a Student Loan Refinancing Authority."

Creating such an authority would "seriously impact many of our critically-important programs, ranging from K-12 education to safety and transportation," Firestine added. Starting it up would likely require the County to issue more debt, he said, and budget cuts in other areas would be needed to fund start-up costs, he wrote.

Another MoCo DLC employee busted for stealing $20K+ of liquor from DLC trucks

Kelvin Snowden, Jr., a
Montgomery County DLC employee
police say stole liquor from DLC trucks

Montgomery County's government liquor monopoly is embroiled in yet another scandal. One of their employees was arrested by Montgomery County police yesterday, and charged with stealing $21,769 worth of liquor from the Department of Liquor Control's own trucks.

Police say Jean Auguste, 27, of Lanham, and Montgomery County Department of Liquor Control (DLC) employee Kelvin Eugene Snowden Junior, 31, of Gaithersburg, took the alcohol from box trucks parked at the Department of Liquor Control warehouse, which is located on Edison Park Drive in Gaithersburg. The alleged thefts occurred between Valentine's Day and May 28 of this year.

Montgomery County police responded to the last of what detectives say were 8 total thefts from the DLC warehouse site on May 28, and caught Auguste parked nearby in a Chevrolet Suburban, with cases of DLC liquor in the vehicle. The ensuing investigation led them to Snowden, who they say was the main thief who actually broke into the DLC to steal from the trucks. Snowden also allegedly sold stolen DLC liquor to Auguste on at least one occasion.

This is not the first time a DLC employee has been arrested for stealing liquor from the DLC. In 2014 and 2015, employees were caught stealing alcohol and were fired. Many have called for an end to the outdated Montgomery County government liquor monopoly, which has proved inept, internally corrupt, and expensive and tedious for bars and restaurants to purchase alcohol through.

Councilmember Hans Riemer
was at the center of a previous DLC scandal

County Councilman Hans Riemer was also ensnared in a 2014 DLC scandal that came to be known as "Beerghazi." Riemer appeared to be aware of criminal activity within the DLC - but instead of reporting it immediately to authorities, he kept quiet until after he was safely reelected in November 2014.

Less than 48 hours after the polls had closed, Riemer then appeared in a formal, sit-down interview with NBC 4 in which he attempted to then use the information he had withheld to promote himself as a crusader against DLC corruption. It was clear that the NBC 4 investigation had occurred long before Election Day, and that Riemer had been in on the reporter's investigation all along. But with Riemer having direct oversight of the DLC, revealing the criminal activity in the department before Election Day could have damaged his chances of reelection.

Riemer had previously claimed it was time for the government to get out of the liquor business. But in 2015, he flip-flopped and suddenly endorsed maintaining - and strengthening - the government liquor monopoly. And here we are today, with the same Jurassic World government monopoly liquor system, and another DLC employee behind bars. "Helpless" Hans Riemer strikes again!

Small business event to discuss:"Is your business or family safe in a sanctuary county?"

How do sanctuary immigration policies affect small businesses? That topic will be discussed at the next networking social event of the Small Business Action Network of Montgomery County, on Wednesday, June 28, from 6:30 to 9:00 PM at Hunter's Bar and Grill, located at 10123 River Road in Potomac.

The speaker will be Jonathan Hanen, who the event announcement says will discuss the question, "Is your business or family safe in a sanctuary county?" Montgomery County has been designated by the federal government as a sanctuary jurisdiction.

Recent crime headlines in the County make this a timely discussion, and the County has been blasted by the U.S. Department of Justice and U.S. Immigration and Customs Enforcement (ICE) for not honoring ICE detainers on criminal illegal aliens. ICE said the County put its agents and the community at risk when it recently allowed a man with an ICE detainer who had stolen an assault weapon from a police cruiser to go free, forcing ICE agents to locate and take him into custody in an uncontrolled setting.

SBAN-MOCO is inviting small business owners from across Montgomery County to attend.

The cost to attend the event is $15. The cost to join SBAN-MOCO is $25. There will be a cash bar. Space is limited - to reserve a spot, email your RSVP.

MoCo drags feet on correcting illegal traffic signals, refunds for drivers wrongly ticketed by red light cameras

Montgomery County still has illegally-timed traffic signals, which could be issuing unwarranted red light camera tickets to drivers, a recent report by the County's Office of the Inspector General found. On Friday, Delegate Marc Korman (D - District 16) asked County Executive Ike Leggett to consider an outside audit of its signal timing (the OIG had to rely on the word and data of the County Department of Transportation), turn off any cameras ticketing at an illegally-timed signal, and to begin reimbursing drivers who were wrongly ticketed at those intersections.

After being caught ticketing drivers with illegal signal timing in 2015, the County initially resisted adopting the Maryland-required yellow light time of 3.5 seconds. It then promised to correct the problem. However, the OIG report - based on MCDOT data not confirmed by an independent audit - found that 13% of signals countywide are still illegally timed.

When asked by the OIG for a schedule for correction of those 105 remaining signals, MCDOT refused to produce one. And while MCDOT insists that there are no red light cameras at the out-of-compliance intersections, the OIG noted that "We did not test or verify the accuracy of the information provided by MCDOT."

"Improper timing of traffic signals at locations with red light cameras goes to the heart of the confidence people can have in their government," Korman wrote in his letter to Leggett. 

Montgomery County responded to the OIG report with a one-sentence promise to create a schedule for signal correction, but did not say when such a schedule would be released. Once again, Montgomery County seems unable to deliver the basic functions of government - collecting the trash, clearing snow from sidewalks along its properties (sometimes as long as a month(!) after the snowstorm ended), plowing roads, providing 911 service or completing construction projects on-schedule (with the Wheaton Library being the latest, now a year-and-a-half behind-schedule).

Double murder in Montgomery Village

Montgomery County police detectives are investigating a double homicide in Montgomery Village. The victims were killed inside an unspecified model vehicle parked in the 8200 block of Gallery Court around 10:45 last night. Police were alerted by a 911 caller in the area who heard gunfire. Both victims died at the scene, detectives say.

Police have not yet released the identities of the two victims.

Detectives urge anyone who may have information about this double homicide to contact the Major Crimes Division at 240-773-5070.  For those who wish to remain anonymous, Crime Solvers of Montgomery County is offering a reward of up to $10,000 for any information that leads to the arrest of the suspect(s).  Tipsters can call Crime Solvers of Montgomery County toll-free at 1-866-411-TIPS (8477).