AUGUSTA, ME — Maine voters have approved investment in our state’s transportation infrastructure. The State has $110,000,000 in “authorized but unissued” transportation bonds. It is time to put that money to work, said Maine State Treasurer Terry Hayes on May 9, 2017.
The sale of the voter-approved bonds is scheduled for early next month; once sold, the proceeds will bring with them matching money from various state and federal programs, making the total investment this summer and fall over $600 million (MDOT). That’s over $120 million per month for the remainder of the 2017 construction season, Hayes said via a press release.
According to the Department of Transportation, this money will fund 4,500 construction jobs. These jobs produce the infrastructure improvements we all know are necessary. The wages paid represent grocery money and living expenses for Maine families.
Maine bond sales require cooperation between the State Treasurer and the Governor. Neither official can execute bond sales without the other.
The Governor is responsible for determining the total amount of bonds to sell. Treasury is responsible for preparing and executing the sale, and managing debt payments.
Treasury is fully prepared to proceed with the bond sale, as scheduled, during the week of June 5th. The preparation of the Official Statement is underway; interviews with the rating agencies are scheduled; bond counsel has been retained. The only missing element is the total amount approved for the sale from the Governor.
Treasury first requested this information from the Governor at the end of March. Once the Governor provides the total, the sale can move forward.
Every day of hesitation and delay creates uncertainty and stress for thousands of Mainers, both of which are avoidable.
It’s time to move forward with the 2017 construction season.
The Governor is holding back the necessary information required to proceed with the bond sale, alleging that the Request for Proposals for bond counsel that Treasury issued in January was inappropriate. He states that, “Maine companies weren’t allowed to put a bid in. It appears that the RFP was designed for one company, and it blocked out Maine companies from bidding.”
In February the Governor told the Treasurer that he objected to the following criteria included in the RFP:
Provide a list of at least three (3) state treasurers from different states and two (2) other officials from separate government agencies for whom your firm currently serves as bond counsel that OST may contact to discuss your performance…
Treasury contracts for outside bond counsel because we do not have the expertise on staff to perform this work. We insist on experienced counsel because we do not have anyone in-house qualified to identify and correct errors if they occur. This has been the practice since 2004. Our current general obligation debt exceeds $440 M. We can’t afford to have inexperienced legal representation.
Treasury has issued four RFPs for bond counsel: one in 2004, 2007, 2011, and 2017. Each of the RFPs included the same requirement. In addition, the following statement occurs on page 4 of the 2017 RFP:
- Eligibility to Submit Bids
All interested parties are invited to submit bids in response to this Request for Proposals.
Two firms bid on the 2017 RFP: Preti Flaherty Beliveau & Pachios LLP in Augusta and Locke Lord, LLP in Boston. The proposals were reviewed; Locke Lord, LLP was awarded the contract because their proposal provided the best value to the State. Letters went out in early March announcing the successful bid. The losing bidder did not file an appeal.
The Governor wants Treasury to re-issue the RFP for bond counsel. I have refused. Re-issuing the RFP will unnecessarily delay the bond sale, further shortening our already brief construction season. The Governor’s claims about the RFP process are not accurate. There is no need for a “do over”.
In summary, Treasury has issued a valid RFP, vetted the proposals submitted, and awarded a contract for bond counsel.
Treasury is coordinating the updating of the state’s official statement, has scheduled interviews with the rating agencies for later this month and is doing everything necessary to execute the bond sale in early June. The only missing element is the total amount approved for the sale from the Governor.
