Archive for March, 2009

Ukrop Cashes Out

Tuesday, March 31st, 2009

Richmond BizSense scoops everyone else with the news that Jim Ukrop has sold First Market Bank to Union Bankshares for $105 million. Shareholders of First Market Bank, which include Ukrops Supermarkets, Markel Corp and the Ukrop Family, will receive 6.7 million shares of Union Bankshares common stock, which last traded at $13.43 per share.

First Market Bank ran into trouble over the past year as its thin capital base was eroded by losses on loans and Freddie Mac preferred stock. In the fourth quarter of 2008 First Market was forced to raise additional equity from Markel Corp. in order to maintain adequate levels of regulatory capital. And in February, the bank received a $33.9 million bailout from the federal government’s Troubled Asset Relief Program (TARP). Given the huge preferred stock dividends payable to the Feds and large looming losses as a result of the worsening credit environment (First Market Bank’s loan portfolio was heavy in residential and commercial real estate and auto loans) this was the easy way out.

More to come on this one as we read the SEC filings, including how much the Ukrop family stands to pocket as a result of our tax dollars propping up their bank. Stay tuned…

Help Wanted For Boondoggle

Thursday, March 26th, 2009

CURRENTLY SEEKING:

An Executive Director who can tell the difference between this…

ft3nl1xd2xc

… and this:

snapshot-2009-03-21-13-56-38

When it comes to Richmond’s own “Bridge to Nowhere,” Save Richmond has earned the right many times over to say it.

We told you so.

Amy Biegelsen’s update on the CenterStage boondoggle in the latest Style Weekly should be a sobering wake up call to all arts center apologists and enablers who think that the Titanic has finally up-ended itself and is smoothly sailing along. Emphasis mine:

The [Centerstage] foundation’s fundraising efforts are critical to local arts groups that hope the money will offset rental costs for those performing in the city-owned facility that’s been financed, in part, by a $25 million investment from the city and millions more in state and federal tax credits.

It’s unclear what donations will total for the fiscal year ending in June, but the foundation raised $2 million in private money in fiscal 2008 compared with nearly $20 million in 2007.

Read that last part again, and then consider this: When private donations are down, that means more public money must be introduced to offset the difference.

And City Council, in all of its wisdom, recently took away all of the safeguards and protections that would have forbidden the Foundation from asking for more public money. Because that’s just the kind of thing city politicians do for their richest friends.

Um, anyone over in Shockoe taking any notes on this? This arts center thing was originally supposed to be “privately financed” too, with only a little “seed money” from taxpayers (and here’s a fun fact that will make you scratch your head: The foundation’s plan has never been submitted to a single independent feasibility study during any of its many incarnations).

But don’t think for a moment that anyone associated with the project is panicking or getting a sense of urgency or anything. Quite the contrary:

Next week the CenterStage Foundation, the facility’s nonprofit fundraising arm, hits the one-year mark for running without an executive director.

“We’ve begun the process and hope to have that person on board before the end of September,” says Jay Smith, a spokesman for CenterStage. He says the foundation is not yet actively hiring because its members haven’t settled on “the skill set, expertise and experience that we want this person to have.”

Well, we sure know the “skill set” that they’ve employed up until now.

Any CenterStage Executive Director job listing would have to look something like…

FULL TIME EXECUTIVE DIRECTOR WANTED

The CenterStage Foundation is seeking a full-time Executive Director of its long-running, publicly-funded boondoggle. This person will be responsible for leading and directing staff in the attainment of excuses toward not meeting stated fundraising goals, and will spearhead efforts to find the lost “reams of evidence” that support the economic viability of the project (we think they fell behind the filing cabinet). Experience in highly creative accounting practices is a must. In addition, the director will train, develop, motivate and evaluate a team of fundraisers to put the squeeze on public officials (in the city of Richmond only, counties are strictly optional) in order to receive unlimited public funding for the next 99 years with little or no taxpayer oversight.

The successful candidate must have the unique ability to ghost-write reports for local politicians and then, somehow, to wait on pins and needles to see what those reports have determined. The successful candidate will be asked to produce and present magical marketing presentations that can turn $1 million bank balances into $68.8 million fundraising miracles. The successful candidate must be willing to pay outside consultants large sums of money to come up with recycled and shopworn ideas culled from neighboring cities. This chosen director must also be ready to award no-bid contracts to out-of-town management firms with little or no experience in running top-notch performing arts centers.

Excellent verbal and written communication skills are required — the ability to utilize words like “Fun” and “Wow” are a must. Are you able to churn out catchy catchphrases like “Smokescreen of Semanics”? Can you, with a straight face, blame private fundraising shortfalls on external factors such as a.) The previous economy b.) Summertime c.) “Irresponsible bloggers” and/or d.) The current economy? Well, if so, you may be the Executive Director For us (If, in the past, you have assisted in the dismantling of long-running area arts institutions, this would also be a big plus).

A corporate pedigree with absolutely NO practical or creative experience in the performing arts is required.

Salary: Candidate must be willing to make do with either $175K a year, or $275K a year, plus benefits, depending on which news service is asking the questions (salmon polo shirts are optional). You must also be willing to say, with a straight face, that your salary does not come from public money and then feign surprise when it is discovered that it does.

If you take the job and don’t like it after a few months, feel free to quit and become one of our many highly-paid consultants!

Interested candidates with the proper “skill set, expertise and experience” should take their cover letter, resume and salary requirements and burn them. They should then dig a hole and put their burned material in the hole. Candidates should then bury their burned material and go immediately over to the National and catch the great Neko Case on April 6.

Seriously, VAPAF’ers — take your sweet time hiring just that “right” person.

After years of broken promises, $21 million down the tubes, and private fundraising currently down to its previous dismal levels of achievement, I can’t think of a single reason why instilling public confidence, and installing accountable leadership, should be a high priority for you right now.

No, wait… I can think of two million reasons why.

Oops!… He Did It Again!

Thursday, March 26th, 2009

Distraction… what distraction?

From ThinkProgress:

Cantor skips Obama’s press conference to attend a Britney Spears concert.

In recent weeks, congressional Republicans have been critical of President Obama for doing anything that isn’t directly focusing on the economic crisis — such as going on the Tonight Show with Jay Leno or filling out his NCAA bracket. House Minority Whip Eric Cantor (R-VA) even called Obama’s decision to overturn the ban on embryonic stem cell research a “distraction.”

However, Wonkette reports that instead of watching Obama’s prime-time press conference last night, Cantor decided to pursue his own distraction — the Britney Spears concert.

The Huffington Post has more:

There was more than one whip at last night’s Britney Spears concert in Washington DC.

GOP aides confirmed to the Huffington Post that House Minority Whip Eric Cantor (R-Va.) attended the pop concert at the Verizon Center, where Britney appeared on stage brandishing a leather lash.

One House GOP leadership aide said Cantor went at the request of a fundraiser. “If suffering through a Britney Spears concert will raise one more dime to help Republicans take back the House, then I’m glad Cantor’s willing to do it.”

A House Democratic aide shot back, “Looks like Eric Cantor’s not that innocent.”

Gee, I wonder how the “overprotected” Cantor apologists over at the Times-Dispatch opinion page will try to spin this one.

Eric Cantor: What Are You Thinking?

Sunday, March 22nd, 2009

Thomas Friedman says a mouthful about Virginia’s embarrassing 7th district representative in his latest column for the New York Times:

I saw Eric Cantor, a Republican House leader, on CNBC the other day, and the entire interview consisted of him trying to exploit the A.I.G. situation for partisan gain without one constructive thought. I just kept staring at him and thinking: “Do you not have kids? Do you not have a pension that you’re worried about? Do you live in some gated community where all the banks will be O.K., even if our biggest banks go under? Do you think your party automatically wins if the country loses? What are you thinking?”

Good questions. Here’s another one: What were we thinking by electing him?

Call To Arts

Wednesday, March 18th, 2009

The much-anticipated Richmond Region Cultural Action Plan has finally been released in full. This “call to action” — sponsored by the area’s arts organizations — is the product of more than a year of independent research, surveys, community meetings and interviews.

In this week’s Style Weekly, I contributed a “Back Page” essay on the proposal, “Call to Arts.” It begins:

The key components of a new and ambitious study on Richmond’s arts and culture were released to news media last week. And, so far, this Regional Cultural Action Plan has failed to garner much audience interest. Instead of the future of the Richmond Symphony, or a discussion on the popularity of the local theater scene, the blogosphere is awash in other cultural discussions over issues such as a possible Shockoe baseball stadium or whether the contemporary rock venue Toad’s Place will ever reopen.

Clearly, relevance is one of the challenges before the region’s premier arts organizations.

But this new study, a 111-page document facilitated by the California-based consulting firm WolfBrown, is worthy of attention. The most revolutionary aspect of the plan is that it was produced by the arts community itself — not a sector known for speaking out, especially with a shared sense of self.

Click here to read “Call To Arts” in its entirety.

… and you can download a copy of the Regional Cultural Action Plan by clicking right here.

To read more about the plan, click here and go to the Cultural Plan’s local blogspot.

To view installments of Save Richmond’s “Richmond Arts Flashback” — a series inspired by the long-simmering action plan — click right here.

Richmond School Board Muzzles Itself

Tuesday, March 17th, 2009

Talk about being tone deaf!

At last night’s Richmond School Board meeting, citizens learned that three months was simply not enough time for the new school administration to produce a line-item budget.

But this may be the last thing that area parents and taxpayers are allowed to officially “learn” from our elected school board.

Yes, as hard as it is to believe, the board also voted in favor of a new, so-called “Communications Protocol” — anyone else would call it a gag order — that will govern the board’s future relations with the new schools administration, and itself.

You can read a summary here . Among the main planks of this new “protocol,” you’ll find this:

[School board reps will] maintain fidelity to your fellow board members, your board policies and governance team standards when communicating with the media.

In other words, board members are heretofore forbidden to speak to the press and to inform the public about matters that the school superintendent and fellow board members would declare to be inconvenient.

[Boy, former board rep and all-around firebrand Carol Wolf really spooked those folks, didn't she? She has a brand new blog — bookmark it here — and I bet we'll hear plenty from her about this particular bit of business.]

But here is what puzzles me: I thought that the Richmond School Board represented us, the people; I had no idea that a board member’s job was all about making the superintendent’s job easier or shielding her from bad news or breaking stories… or even to mollify other board members. With this new policy, the school board seems to be confirming that it exists only to parrot the status quo, and that it should throw away any thoughts that whistle-blowing might actually be a good thing that helps RPS, and the children.

And are you sitting down?

Our wonderful school board passed this egregious piece of “business” during…

wait for it…

Sunshine Week.

All of this would be really, really funny if it were happening in some other city that isn’t ours. Wouldn’t it?

Watch Out For the Floating Jon Stewart Head!!

Saturday, March 14th, 2009

cramer-crashteroids-ep

Jim Cramer, the wired and manic host of CNBC’s “Mad Money,” has been taking a lot of hits lately for his less-than-stellar record of financial punditry.

It’s time to help him.

Click here and play the Jim Cramer’s Crashteroids Game, courtesy of Slate’s The Big Money blog.

Can YOU protect this irrationally-exuberant commentator from the likes of “The Daily Show” and Barron’s Magazine? Give it a try (if you can stop laughing long enough).

A big thanks to our pal Dan P. for passing this fun along.

Richmond Schools: Trust But Verify

Monday, March 9th, 2009

For those of us who thought that just-hired Richmond Schools Superintendent Yvonne Brandon represented a fresh new direction for city schools — especially when it came to accountability and prudent spending practices — her stubborn refusal to provide a line item version of the school budget at the request of 2nd district school board member Kim Gray is puzzling and highly disappointing.

No, wait, that isn’t strong enough: It’s enough to make one conclude that RPS is truly beyond hope.

From a very dispiriting article in yesterday’s RTD:

“I’ve been vocalizing this since Day One,” Gray said. “I’m just not comfortable voting on this budget. That’s not to say I won’t, but my comfort level would be at ease if I had a line-item budget.”

Brandon and budget director Lynn Bragga said Richmond simply doesn’t have a line-item budget and couldn’t produce one in the week before the vote. After years of cutting staff in the budget office and in purchasing and procurement, the school system has shifted to site-based budgeting, they said.

Instead of overseeing every penny from downtown, individual account holders — typically principals and departments heads — have been allowed the flexibility of managing their own accounts.

“It’s not our intention to hide or conceal any information,” Brandon said. “Our goal was to develop a succinct budget document.”

What the board has received — categorical overviews for the most part — is fine with [board member] Evette Wilson.

“We have systems in place to examine what they’re asking for,” she said of other members’ continuing requests for more detail. “To micromanage this process, to me, we step over the line.

“If the superintendent tells us this is the budget we need, we have to trust her. We hired her, and we have to hold her accountable.”

Brandon said accountability was always the goal.

“I’m willing to provide whatever they want,” she said of board requests for more information. “I just need to know the criteria.”

Gray said trust wasn’t the issue.

“We don’t even know what we don’t know,” she said. “My constituents keep telling me, ‘Trust, but verify.’”

No offense to the notion of “flexibility” — a line item budget would allow taxpayers to see exactly where the money is going. This episode sends another strong signal to area parents that Richmond schools is a quagmire of unregulated spending, behind-the-curtains dealmaking and wasteful bureaucracy. One should always be wary of politicians and public figures — even those you support — who refuse to let you see exactly where the money goes.

It’s worth reminding everyone within earshot: This is not just any ol’ school system we are talking about. Do you want to see why it might be necessary to get up close and personal with the school system’s spreadsheets? Or why we all need to challenge the school system’s blanket use of the term, “flexibility? Or why it might be worth finding out the details of where the money actually goes? Surf the Cranky Taxpayer website for awhile and get schooled! Or take a look at the City Auditor’s audit of RPS Procurement practices! (And those who argue that “things are getting better” can be quickly disabused of that notion by clicking here and here.)

It’s very interesting that our new superintendent’s refusal to produce a line item budget also comes at a time when area school systems (such as Richmond and Chesterfield County) are lining up at the trough to gobble up slices of federal bailout money. Kim Gray’s request to see where the money goes would seem to be perfectly aligned with President Obama’s recent warning about the use of those federal funds (which is worth putting in bold): Cities receiving a handout should be transparent with the federal money they receive or they will risk losing the money.

It is long, long, long past time for RPS to get real… and to stop the excuse-making! If the new school administration can’t provide a line item budget because “there isn’t one,” that says a mouthful about just how screwed up Richmond’s school system really is. Doesn’t it?

The Essence of Rickey

Monday, March 2nd, 2009

clfkt5ukbcfs_m

Here is a long-gestating tribute to our good friend Rickey Wright.

The former Richmonder, a music journalist who wrote for scores of regional publications over the years (including the Virginian Pilot, Richmond News-Leader, ThroTTle, Washington City Paper and VCU’s Commonwealth Times), passed away in Seattle on Feb. 19th.

Rock in peace, Rickey!

Is Your College Fund Safe? - Part Deux

Sunday, March 1st, 2009

Cartoon from Eric G. Lewis

Cartoon from Eric G. Lewis

I was wrong about the RTD’s Mike Martz in my previous post. It turns out that he has done some quite in-depth reporting on the Virginia College Savings Plan and the beginnings of their current troubles. Folks interested in reading about the first wisps of smoke that preceeded the current fire should check out his November 6, 2008, article here. And, given the grave troubles in newspaper land (the Rocky Mountain News and San Francisco Chronicle appear to be the latest casualties) perhaps we should all be “hugging” RTD reporters instead of throwing stones. My apologies.

That said, the problems with the Virginia Prepaid Education Program (VPEP) were far more serious than what was acknowledged by the Plan’s officials in the article on November 6, and not mentioned at all in the one soliciting new contracts last week. Their prescription of higher new contract prices, perhaps sufficient to close the June 30 $51 million deficit, is a flyspeck compared to the yawning $500 million+ shortfall visible by the date the article went to print (and it has grown substantially since). They just can’t price the new contracts high enough to fill in the hole. And raising prices even modestly from here would make the plan a lousy economic deal that no one would buy. Simply put, the money to pay for it is gone, but the obligation to pay tuition for thousands of Virginians remains.

Given the Plan officials’ sanguine words (and those of the Auditor of Public Accounts), I wish the piece had included the opinion of a some kind of third party actuarial/pension expert. At this point it looks to me like the Plan will need to ask the Commonwealth for a bailout in order to maintain its long-term viability. How can it be allowed to continue to accept new contracts while in an insolvent position? As covered in the previous post and Martz’s article, there is no explicit State guarantee of these contracts - only the mandate to include bailout funding in the Governor’s budget. As the economic downturn continues, VPEP will have to compete for its bailout with many other worthy enterprises, all looking for a piece of the shrinking state pie. Will there be enough to go around?

In order for the Virginia Prepaid Education Program to continue in its mission, it must be able to offer contract purchasers a reasonable deal in exchange for an iron-clad guarantee. It cannot make such an offer today. VPEP is not alone in its struggles. Many other financial institutions (banks, insurance companies) have found themselves in trouble during this economic downturn as a result of making financial guarantees. All of this begs the question: should the Commonwealth be in the tuition guaranteeing business in the first place?

Anyhow, now that things haven’t worked out so swimmingly, I hope Martz revisits the story. I think it could be dynamite.

P.S. Check out the new “Message to Our Owners” on the Virginia College Savings Plan homepage.