Wednesday, February 24, 2016

The Siemens Loan deal - Legal Fees and Costs

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When I think of the Siemens deal, Donald Trump and the Iranian deal comes to mind. Last month when speaking about Iran he said that the nuclear deal with Iran was so bad he is close to wondering whether it was done poorly on purpose. “It’s almost like there has to be something else going on."

One thing that is going on with Siemens--the costs:
Click graph to read

Bond Counsel: $17,500.00
Financial Advisor: $5,000
Lake Worth City Attorney: $16,028
Bank Counsel: $12,500

TOTAL: $51,028

Now here is the BIG WHOPPER--The cost of these loans:

There are two separate loans that run simultaneously and the payments are impressive:

Loan #1 above is in the amount of $9,882,632.00 payments until year 2031 and is for LED street lighting, solar paneling, etc. At the end of this loan the interest and principal break-down is as follows:
INTEREST: $3,103,292.76
PRINCIPAL: $9,882,632.00

Loan #2 is in the amount of $12,663,088.83 payments to year 2031 and is for accessories, parts and other equipment.
INTEREST: $3,977,959.68
PRINCIPAL: $12,663,088.83

The interest compounds and we are paying a whopping 31.41% for these loans with some of the improvements not having a life of the loan. We will have to provide constant maintenance, something we don't do well or at all.

This is what all of the incumbents voted for and Mayor Pam Triolo signed the contracts.

To read it all, Click Here


Anonymous said...

I have asked Scott and Andy about this deal and I never can get a satisfactory answer about it. Does anyone really get it?

Anonymous said...

Is Bob Lepa the financial advisor who is benefitting? Does he get $5,000 or $10,000 -- $5,000 for each loan?

Lynn Anderson said...

LOL--wrong bank...sorry Bob but you sort of deserve it. :)

Anonymous said...

Sounds like a pretty good idea to me. The neighborhoods get much needed lighting. The lighting they get is energy efficient and will save us in operating costs. The solar arrays located on our underutilized old landfill will subsidize the costs making us a solar city. Long overdue.

Sounds like somebody is looking to the future, not just tomorrow.

Lynn Anderson said...

I really hate politicians like you. Stop campaigning on my blog.

Anonymous said...

Lynn,thanks. Don't know how you do it! Thanks for uncovering this crap.

Anonymous said...

Don't you ever stop to think that maybe it is cost effective to replace the lights WHEN you replace the poles? And if you think forward, isn't it plausible to put in energy saving lighting instead of the inefficient ones we have now that waste light and energy?

We ALL pay for the electric to burn the old fashion lights. So did you do a cost comparison of what we are paying now in electricity along with the need to replace the ones we have now?

Seems the Utility is already placing street lights where we have needed them since the hurricanes took them out. This will make our neighborhoods safer from crime and people walking at night.

Lynn Anderson said...

If we don't save money, Siemens pays. We have no way of knowing right now. But the point is this--we are paying small fortunes in loan interest to do this. Do you not find that a little bit nuts?

Anonymous said...

It should go without saying that if we take out a loan to make ourselves more energy efficient, it will have interest. The question should be asked if the savings helps pay the interest and the loan principal? What would we have to pay in replacing with the same old lights? It's a 15 year loan. Doesn't seem outrageous to me.Payments would be lower if we went out thirty but the interest would be a killer.

Anonymous said...

It just seemed to me that this deal as presented sounded like "to good to be true."
That always puts me on guard. And didn't we just replace one of these things not long ago? The fact that we had already paid them money IF we did not vote this in, seemed a bit funky to me: the preliminary was WONDERFUL and FREE; unless we did not purchase from them. Just a healthy skepticism here. And I don't recall this coming up in City Council until after the initial was already a done deal.

Anonymous said...

I believe there have already been complaints on this type of lighting that it does not produce enough light. Curious why most utilities do not go this route but yet in Lake Worth we can spend much needed funds that could go towards street repairs, water line repairs but no we replace all the lighting we already have. Help me make sense of this.