The Vanguard

Trustees Jeskewitz, McDonald and Steliga Support "Investing" Taxpayer Funds in FNMA, GNMA and FHLMC

Posted by Jefferson Davis on Aug. 25, 2010

FNMA, GNMA, FHLMC Village Board

After taking a long break during the summer, The Vanguard is back and ready to go.

Many thanks to those who are an encouragement and provide lots of leads for postings.

In a bizarre and strange twist of events, the Menomonee Falls Village Board, led by veteran trustee members Jeskewitz, McDonald and Steliga, provides for taxpayer funds to be "invested" in federal mortgage securities namely: 

• Government National Mortgage Association (GNMA)
• Federal National Mortgage Association (FNMA)
• Federal Home Loan Mortgage Corporation (FHLMC).

Really?

In light of these 3 organizations recently being pushed into federal receivership and having been part of the reason for causing the steep downfall of America's once growing and vibrant economy in 2008, does anyone really want Menomonee Falls taxpayer funds to be "invested" in:

GNMA's delinquent loans (http://www.ritholtz.com/blog/2009/12/ginnie-maes-delinquent-loan-rates/

FNMA to cost taxpayers at least $146 billion from foreclosures (http://more.stltoday.com/stltoday/news/stories.nsf/nation/story/e744c01438f6db698625774700815937?OpenDocument)

FHLMC delisted from NYSE(http://money.cnn.com/2010/06/16/news/fannie_freddie_delisting/index.htm)

Village's Investment Policies and Procedures Examined

The Vanguard had learned from a Village employee recently that a Village Board policy existed that provided for taxpayer funds to be "invested" in GNMA, FNMA and FHLMC and couldn't believe it until the documents were obtained through an open records request proving that the Village employee was indeed correct.

Many thanks to the Village employees who aren't afraid of retribution or persecution from the Village Manager and Village Board when it comes to  doing the right for the taxpayers of Menomonee Falls who continually provide The Vanguard with information that taxpayers ought to know about and how it effects their taxes instead of allowing the Village Board to hide the information and hope they aren't found out.

Far be it from the LSM (Lame Stream Media) from covering issues that are actually newsworthy.

Policy in Existence Since 2002

This policy has been in existence since 2002 and was strongly promoted by former Village Manager Dick Farrenkopf and Village President Joe Greco under Village Board Resolution 340-R-02.

Farrenkopf retired from the village manager position for the second time in 2007 after having retired for the first time 10 years earlier in 1996 while double-dipping with a full-time 100% taxpayer funded Wisconsin Retirement Pension and a full-time salary with free benefits to cover health care, life insurance, dental, optical, disability income, service club membership, village vehicle and a new 457 deferred comp retirement program matched 100% by taxpayers.

It is estimated that with two salaries, free benefits, social security payments, automatic annual salary increases without Board evaluations and the lump sum unused sick leave payout,  that Farrenkopf took in nearly $2 million in compensation and benefits while being retired from 1996-2007.

Does this sound like City Manager of Bell CA who had an $800,000 annual salary until it was uncovered by the LA Times (http://latimesblogs.latimes.com/lanow/2010/07/defiant-bell-mayor-defends-city-managers-high-salary-hours-after-official-resigns.html)?

Farrenkopf also received 8 weeks of vacation and 3 weeks of sick leave a year during his initial 10 year retirement.

Farrenkopf also received a $70,000 lump sum backdrop pension cash payout for unused sick leave when he retired the second time in 2007 that was 100% funded by taxpayers as part of the $5 million funded and unfunded unused sick leave lump sum cash payouts for village retirees since the early '90's.

It appears that Farrenfopf was so harangued and hounded by Greco that he applied for other public management positions in the early 2000's just before his retirement in hopes of getting away from the Menomonee Falls mess only to be rejected by other communities in his job search.

A "sweetheart deal" was then cut between Farrenkopf and the Village Board to appease both parties so Farrenkopf could be Village Manager on "pilot control" and Greco could apparently "run" the Village.

Greco was soundly defeated as Village President in 2003 (53%-47%) in one of the largest spring voter turnouts in Village history after having spent 22 years on the Village Board.

It was later learned through many sources that Greco, the wannabe Governor and self-proclaimed Southeastern Wisconsin Regional Executive of Municipalities, was the "shakedown" architect of many businesses who were seeking Village Board approval for their business plans in exchange for Village Board votes.

Greco was also the most frequent Menomonee Falls campaign contributor to former Democrat Senate Majority Leader and convicted felon Chuck Chvala (http://www.channel3000.com/news/5542768/detail.html) in the early 2000's in exchange for legislative favors (http://www.wisdc.org/pr081804.php).

Greco is still on the "public dole" as a substitute for the Menomonee Falls School District and lobbying local governmental entities, the very "action" he despised and was openly critical of for those that made a living doing so, for votes to approve business plans for entrepreneurs that will create jobs, grow the economy and expand local tax bases.

Oh my, if some would only do what they say instead of saying what they do to be consistent and take away all hints of hypocrisy when rules and ethics apply only to others and not themselves.

Time to Repeal the Village's Investment Policies and Procedures of Taxpayer Funds

While the Village Board deserves credit for actually having a written policy, the Board must also review those policies and make the necessary changes that reflect current conditions of the economy and viability of investment vehicles that change over the course of time.

The Village's Policy specifically states that the Village of Menomonee Falls:

     "...is to invest public funds in a manner which will provide the highest investment return with the maximum security while meeting the daily cash flow demands of the Village"

The Village's Policy covers the following 6 funds:

1. General Fund
2. Special Revenue Fund
3. Debt Service Fund
4. Capital Projects Fund
5. Enterprise Fund
6. Internal Service Fund 

At any given time dating back to December of 2007, the Village has approximately $60-$70,000,000 (m as in million) on hand to be invested and to make payments on a daily basis for Village expenses.

On any given day, the Village spends about $80,000 to cover its expenses. 

The policy calls for the Director of Financial Services to have the "authority"  and "management responsibility" for the Village's Investment Program as derived from State Statutes and Village Ordinances.

The Director of Financial Services shall maintain a list of financial institutions authorized to provide investment services.

Officers and employees involved in the investment process shall refrain from personal business activities that could conflict with proper execution of the investment program, or which cold impair their ability to make impartial investment decisions.  They shall also disclose to the Village Manager any material financial interests or investment positions held in financial institutions that conduct business with the Village of Menomonee Falls.

The following is a list of the types of "securities" the Village of Menomonee Falls is empowered to "invest" in per the Village Policy:

1. State of Wisconsin Local Government Pool (LGIP) where a majority of the Village's $60-$70,000,000 is placed on a daily basis.
2. Securities issued or guaranteed by the U.S. Government or its instrumentalities such as GNMA, FNMA or FHLMC.  No-load mutual funds that consist of these securities are also acceptable.  The policy states, "These securities are considered to be very safe, but are subject to the risk of interest rate fluctuations."
3. Commercial paper rated at least A-2.
4. Securities of any Wisconsin county, city, village or school district rated at least A by Moody's.
5. Bank and Savings bank certificates of deposit.  M & I Bank, Associated Bank, Securant Bank and Citizens Bank are examples of local institutions that currently have taxpayer funds. 
6. No derivative investments unlike what happened to the Whitefish Bay School District and others over the last few years (http://www.whitefishbaynow.com/news/100927074.html) that has cost taxpayers millions of dollars and a downgrade in their ratings by Moody's.

The policy finally states in conclusion:

     "The Village's investment strategy is conservative and relatively passive." 

Really?

GNMA, FNMA and FHLMC?

Conservative?

Passive?

Village Manager, Financial Services Director and Village Board to be Contacted Regarding Policy

The Vanguard will contact the Village Manager, Financial Services Director and Village Board to see if the investment and procedure policy will be reviewed to remove the risk for taxpayers to have their funds invested in GNMA, FNMA or FHLMC.

Share your thoughts with The Vanguard. 

Should this policy be reviewed and changed or left the way it is exposing taxpayers to having their funds invested in defunct federal organizations?

Please let the Village Manager (mfitzgerald@menomonee-falls.org), the Financial Services Director (mdatka@menomonee-falls.org) and the Village Board (http://menomonee-falls.org/index.aspx?nid=292) know what you think about having taxpayer funds "invested" in GNMA, FNMA and FHLMC.

It will be interesting to see what the comments will be from the Menomonee Falls "progressive liberal democrats" and "RINOS" (Republicans in Name Only) who use fictitious names on blogs because they don't have the courage to use their real names because it will probably be revealed that they are a FJSJ (Friend of Joe Greco, Sue and Jim Jeskewitz) and will use Saul Alinsky's, Rules for Radicals (http://www.freerepublic.com/focus/f-news/1420684/posts), and Cloward and Piven (http://en.wikipedia.org/wiki/Cloward%E2%80%93Piven_strategy) techniques to deflect the attention and focus from the truth instead of focusing on their record and what's best for taxpayers.

Upcoming Postings

The Vanguard has been working on flushing out the details on the following postings over the summer thanks to the contributions from Village and School District employees, citizens and business owners:

• Taxpayer Debt Service approaching $200,000,000.  That's $6,126.14 for every resident of the Falls.
• Did Falls Fest make good on their 9 year old $16,5000 pledge to the library?
• Part-time Falls Cable Access Employee gets a nearly 20% increase in pay to $52,000.
• Why can't residents along 41/45 get a sound barrier wall?
• Trustee Jeff Steliga's failed sidewalk replacement program.
• $2,000,000 + taxpayer surplus when Village Board contends budgets are "cut to the bone".
• More taxpayer bailouts for Menomonee Falls businesses.  Can you say Obama, Reid, Pelosi? 
• $33,000,000 taxpayer funding of hotel on Main Street.
• Did Chamber Executive Director Sue Jeskewitz milk the taxpayers for $22,000 in unused sick leave upon leaving the State Assembly?
• The taxpayers are on the hook for $150,000 while school district employee looks for another position.
• TIF District 5, across from the massive landfill on Main Street, income shortfall updates on debt service through 2018.
• Flash - Milwaukee/Menomonee Falls water has "radium"!
• Another FJSJ (Friend of Joe, Sue and Jim) to be sentenced to federal prison this fall.

Enjoy the last few weeks of summer.

Thanks for reading!