The normally sleepy transaction was rocked by the appearance earlier this summer of IFS Securities, an Atlanta-based firm which signed up to speak to the commission as a delegation, then took the opportunity to call into question the city’s longtime use of financial advisor Dianne McNabb of Public Financial Management’s Atlanta office to handle all the city’s bond transactions since 2006.
After failing in votes divided along color lines to approve the refunding Aug. 5, and again after a fiery exchange between IFS officials and McNabb Aug. 19, commissioners voted 9-1 to approve it. Only Commissioner Marion Williams was in opposition Monday.
Commissioner Bill Lockett questioned IFS’ late arrival at the table and its use of racially-charged rhetoric, including a call to end “economic apartheid” in Augusta by hiring the black-owned firm, which promised last week to advance $30 million to the city’s strapped general fund.
“I’m a stickler for fully complying with the law, and my recommendation was that we don’t entertain any other entities like that without going through the procurement process,” Lockett said. “I decided over the weekend that I would support the bonding.”
Lockett, who is African-American, said the firm’s rhetoric might hurt its chances at garnering future Augusta business.
“It not only turned off some of the ones on the other side, it turned off some on our side too,” he said.
Lockett and other commissioners agreed IFS’ appearance made it likely the commission will look more closely at future bond issues.
“This has been a learning experience because I know in the next one, I’ll be more involved,” he said.
Williams said his mind hadn’t changed, despite learning of IFS principal Craig Walker’s prior federal prison sentence and other types of issues that did not appear in PFM’s filings with the Financial Industry Regulatory Authority.
“I thought the minority firms should have an opportunity to at least bid on the stuff,” Williams said. “This is a diverse city and we’re not diverse in any kind of way downtown.”
In only his second vote on the commission since being appointed a few minutes earlier to complete the unexpired term of resigning Joe Jackson, District 6 Commissioner Ben Hasan said the firm’s colorful language shouldn’t overshadow the role IFS had in exposing Augusta’s behind-the-scenes practices surrounding the large transactions.
“Sometimes you never know why people come into your life,” Hasan said. “The moral of the story for me, for Augusta, is Augusta has another option for moving forward … The message is that there are other options out there.”
Commissioner Bill Fennoy attributed his vote to move forward without IFS involvement to the recommendation of city department heads such as Utilities Director Tom Wiedmeier.
“I have confidence in our directors and I don’t believe they’re going to have the city doing business with anybody that’s not reputable and that’s not going to do the best quality work for the city,” Fennoy said.
Commissioner Donnie Smith, who rejected IFS’ overtures in an earlier vote, said the firm probably hurt its future chances in Augusta, something with which Fennoy disagreed.
“They tried to force us in the corner,” Smith said. “Without procurement, without doing an RFP, and then you played the race card? How can we forget about that?”