MoCo Council wants to enter student loan business, as Katz sounds alarm on County debt

Plan would create 

ITA-like

"Authority,"

with $20-30 million

start-up cost

After creating a barrage of new offices and six-figure staff positions in the last year alone, opening their own microloan bank, and committing Montgomery County to staggering financial liabilities on bus rapid transit and the Purple Line, the Montgomery County Council is now planning to enter the student loan industry. That's not a misprint, and today isn't April 1. But just four days before announcing its intentions, one Councilmember, Sid Katz, raised red flags on the County's massive debt load.

The Council's proposal would create a new Montgomery County Student Loan Refinancing Authority to refinance student loans, much like the Independent Transit Authority that was panned and ultimately defeated by taxpayer opposition. Such an Authority would potentially have all the features hated in the ITA concept - the ability to raise taxes, carry unlimited amounts of debt that could end up being dumped back onto the taxpayers, and a lack of direct accountability to voters. The specifics will be unknown until a final state bill to create the Authority (sound familiar from the ITA fight?) is written, but one detail known is that the Authority will have the power to issue bonds. It should be noted that no other county in the United States currently is involved in student loan financing.

Does it make any sense from a fiscal responsibility standpoint for Montgomery County government to enter the student loan business at this time? The assessment of Katz, the only Councilmember with real-world business experience, suggests the answer is, "No."

"I, candidly, am very, very concerned about the debt Montgomery County has," Katz said during a June 22 meeting of the Government Operations and Fiscal Policy (GO) Committee. "If we don't get a handle on this, if we don't get a blueprint on debt in Montgomery County, it's going to overtake us. Right now, if [our debt] was a department, it would be the third largest department in Montgomery County."

Katz also expressed concern with the uncertain revenue forecast for the coming years. Trump administration cuts to government could drastically reduce income tax revenue for the County, Katz noted. Montgomery County is locked in a structural deficit as far out as the forecasts go - meaning that, as it is now, we already will be in the red every single fiscal year.

In the context of these red flags, a report by the County Office of Legislative Oversight raises many concerns.

How much would it cost taxpayers to launch the Authority? "The Montgomery County Department of Finance has estimated that a Montgomery County Student Loan Refinancing Authority would need $20 to $30 million to start a $100 million refinancing program," the report states.

The report confirms that these start-up funds "would impact the County’s debt levels (the amount the County can borrow)."

It appears loans would be extended to illegal immigrants, according to Page 4 under "Eligibility." On Page 6 of that section, it floats the idea of requiring a co-signer "if a borrower is not a U.S. citizen." In other words, resident taxpayers would be paying to provide low-cost student loans to non-taxpaying, non-resident students. Wow.

Later, the report notes that there are already numerous private student loan refinancing firms, and that their interest rates are actually less than the state-run loan entities the Council wants to ape. Why would we enter a market where there is no vacuum, with a more expensive product? Nuts.

A response from the office of County Executive Ike Leggett wisely pans the idea of entering the student loan business. "Student loan debt is the largest and fastest-growing share of consumer debt, and has the highest delinquency rate of all consumer credit debt," wrote Timothy Firestine, the County's Chief Administrative Officer, on behalf of Leggett. "As a result, there are few states and no localities willing to incur the financial risk and significant cost of operating a Student Loan Refinancing Authority."

Creating such an authority would "seriously impact many of our critically-important programs, ranging from K-12 education to safety and transportation," Firestine added. Starting it up would likely require the County to issue more debt, he said, and budget cuts in other areas would be needed to fund start-up costs, he wrote.

Another MoCo DLC employee busted for stealing $20K+ of liquor from DLC trucks

Kelvin Snowden, Jr., a
Montgomery County DLC employee
police say stole liquor from DLC trucks

Montgomery County's government liquor monopoly is embroiled in yet another scandal. One of their employees was arrested by Montgomery County police yesterday, and charged with stealing $21,769 worth of liquor from the Department of Liquor Control's own trucks.

Police say Jean Auguste, 27, of Lanham, and Montgomery County Department of Liquor Control (DLC) employee Kelvin Eugene Snowden Junior, 31, of Gaithersburg, took the alcohol from box trucks parked at the Department of Liquor Control warehouse, which is located on Edison Park Drive in Gaithersburg. The alleged thefts occurred between Valentine's Day and May 28 of this year.

Montgomery County police responded to the last of what detectives say were 8 total thefts from the DLC warehouse site on May 28, and caught Auguste parked nearby in a Chevrolet Suburban, with cases of DLC liquor in the vehicle. The ensuing investigation led them to Snowden, who they say was the main thief who actually broke into the DLC to steal from the trucks. Snowden also allegedly sold stolen DLC liquor to Auguste on at least one occasion.

This is not the first time a DLC employee has been arrested for stealing liquor from the DLC. In 2014 and 2015, employees were caught stealing alcohol and were fired. Many have called for an end to the outdated Montgomery County government liquor monopoly, which has proved inept, internally corrupt, and expensive and tedious for bars and restaurants to purchase alcohol through.

Councilmember Hans Riemer
was at the center of a previous DLC scandal

County Councilman Hans Riemer was also ensnared in a 2014 DLC scandal that came to be known as "Beerghazi." Riemer appeared to be aware of criminal activity within the DLC - but instead of reporting it immediately to authorities, he kept quiet until after he was safely reelected in November 2014.

Less than 48 hours after the polls had closed, Riemer then appeared in a formal, sit-down interview with NBC 4 in which he attempted to then use the information he had withheld to promote himself as a crusader against DLC corruption. It was clear that the NBC 4 investigation had occurred long before Election Day, and that Riemer had been in on the reporter's investigation all along. But with Riemer having direct oversight of the DLC, revealing the criminal activity in the department before Election Day could have damaged his chances of reelection.

Riemer had previously claimed it was time for the government to get out of the liquor business. But in 2015, he flip-flopped and suddenly endorsed maintaining - and strengthening - the government liquor monopoly. And here we are today, with the same Jurassic World government monopoly liquor system, and another DLC employee behind bars. "Helpless" Hans Riemer strikes again!

Last day on Georgia Ave. today, as Regal Paint Centers in Silver Spring readies move (Photos)

Today is the last day of operation for Regal Paint Centers' current location at 8211 Georgia Avenue, in downtown Silver Spring. They are preparing to move their store to 8121 Piney Branch Road, and that new location will open on July 5.

Between Thursday and then, you can visit their Wheaton location at 2200 University Boulevard W. in Wheaton. Take advantage of the last day of the moving sale today - discontinued paints are only $2.50 per gallon.

Silver Spring construction update: Studio Plaza (Photos)

Construction is still in the early stages at the Studio Plaza project, which is bordered by Silver Spring Avenue, Mayor Lane, Thayer Avenue and Fenton Street. The site - which used to hold a Montgomery County public parking lot - sits just a block off of Georgia Avenue, and is within walking distance of Metro.

Studio Plaza will hold 415 residential units, 15% of which will be affordable. It will also boast 10,500 SF of retail, and 35100 SF of public space, including a green plaza, a through-block walk and public art displays. The developer is Fairfield Residential.

Sneak peek: Whole Foods' "new venues" in Silver Spring (Photos)

Whole Foods Market plans to debut several "New Venues" at its downtown Silver Spring store on Wednesday, June 28. According to the company, they will include Paper Horse, a Chinese street food concept from chef Erik Bruner-Yang; a juice and coffee bar; a new Genji sushi section; self-serve acai bowls and bakery cakes; an expanded prepared foods section and additional seating. Here's a sneak peek behind the curtain.

Astrolabe brewery with rooftop deck opening in Silver Spring (Photos)

Just last month, local real estate firm Streetsense had envisioned the old Joe's Record Paradise/Champion Billiards building as a brewery. The good news for Silver Spring is that their vision is becoming reality: Astrolabe Brewing is taking over the space. In addition to the retail brewery function Streetsense imagined would take advantage of the building's high ceilings, Astrolabe also plans to operate a rooftop deck seven nights a week.

Astrolabe's owners, Emma Whalen and Matt Cronin, say they plan to represent both their international backgrounds, and the Silver Spring community, in their products. Whalen is British, and Cronin is from New Zealand. Astrolabe Brewing will be located at 8216 Georgia Avenue. As you can imagine, the building will undergo a significant conversion first.

Silver Spring construction update: United Therapeutics Unisphere (Photos)

Construction has reached street level at the future site of United Therapeutics' expanded campus, known as the Unisphere, in downtown Silver Spring. The 120000 SF expansion at the intersection of Colesville Road and Spring Street will include a six-story office building, retail space, and a parking garage. One of the few bright spots in Montgomery County's otherwise-moribund private sector economy, which has failed to attract a single major corporate headquarters in two decades.

Discovery Communications shows pride in Silver Spring (Photos)

Discovery Communications marks Pride Month at its headquarters in downtown Silver Spring with rainbow lighting. Next month, expect to see a shark-themed night display, as part of the company's Shark Week promotion.

Wheaton construction update: Manny & Olga's (Photos)

The countdown to Manny & Olga's at 11222 Georgia Avenue in Wheaton continues. They have some Coming Soon signage up, featuring menu items and combo deals, mostly for pizza (not surprisingly). Gets me thinking about the question of who has the best pizza in Wheaton right now.

Sign installed at Sherwin-Williams in downtown Silver Spring (Photos)

The lighted sign is up at Sherwin-Williams, which is taking over the old Pyramid Atlantic building at 8230 Georgia Avenue in downtown Silver Spring. A Sherwin-Williams truck has also arrived.

BiBiBop Asian Grill opens today in Silver Spring (Photos)

BiBiBop Asian Grill, the Columbus-based replacement for the failed ShopHouse, will open today in downtown Silver Spring at 935 Ellsworth Drive. The "Korean Chipotle" will open at 11:00 AM this morning. Enjoy a free meal between 11:00 AM and 2:00 PM today at the Silver Spring location.

Here's a sneak peek inside:

Chick-fil-A makeover complete in Silver Spring (Photos)

Well, it took longer than originally planned, but Chick-fil-A's downtown Silver Spring renovation is finally completed. The restaurant reopened on Friday, five days after the reopening date posted when the work began. Updates include new furniture. 

No drive-thru is still a deal-breaker for me, though. I'd probably be at Chick-fil-A every day if they had drive-thrus in Montgomery County. Apparently, the corporate suits at Chick-fil-A aren't aware that drive-thru customers account for 70% of business at other fast food restaurants - that's a lot of money to leave on the table.

Kaldi's Social House closing in Silver Spring

Update: June 17, 9:00 AM: After posting an announcement on an auction website clearly stating that Kaldi's would be "shutting its doors and making a complete urgent liquidation," the owner is now telling other media outlets there is merely a renovation, and that Kaldi's will not be closing. Some of my competitors conveniently failed to disclose that Kaldi's posted the announcement it was closing, in their rush to claim I had posted an "incorrect" report. Total hogwash. If Kaldi's is not closing, it is they who were in error announcing they were closing online.

Kaldi's Social House is closing in Silver Spring, according to an auction announcement by the business. The coffee lounge at 918 Silver Spring Avenue is auctioning off its furniture and kitchen equipment in an "urgent liquidation" on Monday, June 19. Items up for bid include a Perlick Draft Beer Dispenser/Kegerator with 4 keg capacity, and 8 Restoration Hardware chairs.

Wheaton redevelopment getting started at Lot 13 (Photos)

Parking meters have been removed from the closed section of Public Parking Lot 13 in the Wheaton Triangle, and preparations for excavation are underway. A Montgomery County office building will be constructed here, and eventually a town square and connection to the Wheaton Metro station.