I’ve tried to investigate two stories surrounding the City Cable sale, but am getting no where so I’m left to either not report it or let you know what I’ve come across and see if you can help me corroborate the stories. Of course my critics are going to claim I’m rumor-mongering, and to a degree I understand and accept that critique.
Insurance Questions Regarding City Cable
One of the city employees who was potentially being fired as a result of the sale of City Cable has a child with serious health issues. I asked the labor rep of the union to provide me any details and he couldn’t give me specifics but did say that a trip to a New York
hospital was required early in March and the cost was well over $50,000. The reason this is important is that there are seven people whose illness is costing so much to the city’s self insurance plan that they are listed under “special limitations” section of their reinsurance rider. The city buys reinsurance to protect them from catastrophic issues, but that reinsurance company has insulated themselves from the health costs of these seven individuals.
Late last year I requested a copy of the reinsurance document and on page 7 the “SPECIAL LIMITATIONS” were listed for seven individuals (names and illnesses were blacked out because of HIPAA privacy laws). I truly believe, and have received one confirmation, that this young child is one of the seven blacked out names on this list.
My fear is that the City Cable employees were treated so poorly because removing this one family from the insurance roll will save the City an immense amount of money and the only way they could remove the one is by removing all of them.
As I understand the issue after speaking with some insurance industry analysts, if the decision to sell was ever discussed in light of reducing their insurance costs then our city officials will have broken the law. Everyone who is involved in our city’s self-insurance plan knows the names of those seven on the list and I find it HIGHLY unlikely that our City Manager was not aware of this from early on in the sale. Whether actions crossed over into illegal activity cannot be determined without an investigation, but at least we can hopefully agree that this appears to be a serious ethical breech.
I hope our new council will look into this matter and do what they can to employ these City Cable employees. With a payroll like our city has, I would think it possible to move these employees into another department.
I’m sure that many in the private sector will say “my job isn’t secured why should theirs be.” And I agree with that in principal, but if these former City Cable employees were not reassigned to other duties because of this young child’s medical costs then I believe we have an obligation as a caring and loving community to correct that.
Recent Cable Bond Trading
The other question difficult to ferret out is regarding potential insider trading of bonds. I was called the other day about a few people who knew about the City Cable sale before the rest of us and purchased some of the Series 2009 bonds knowing they would have to be retired once City Cable sold. I was told that they were buying the bonds at a price of 94 cents on the dollar but I only found two trades online this year and both were for over the value:
DATE PRICE YIELD AMOUNT 04:00 PM 03/14/2014 109.981 1.67 15,000 Customer bought 11:59 AM 02/24/2014 110.884 1.5 30,000 Customer boughtSource: http://emma.msrb.org
My bond knowledge is minimal so if you have more info or details on this issue then please let me know. But, for now and from what I’ve gleaned, I don’t believe there’s any insider trading going on.