Another Student Loan Servicer Falls

September, 2021

Washington —  Another troubled federal student loan servicer now bites the dust.  That makes three this summer.  Many are saying good riddance.

A worrisome question is where these loans will now go for servicing.  The latest servicer to exit intends to hand off its portfolio to Maximus.  Who and what is Maximus?  It's hardly a household name in student loans.

Thanks to a remarkable research effort by Deanne Loonin, "Illusory Due Process: The Broken Student Loan Hearing System" 11 U.C. Irvine L. Rev. 173 (2020), we know that Maximus may not be a good place for sevicing.  She writes:

In the hearing area, the Department [of Education] appears to rely heavily on Maximus for hearing administration and related tasks. This is a company that has a long track record of problems and sanctions related to federal and state contracts....  

She goes on to describe in detail situations no borrower should have to endure, and no federal taxpayer should be supporting.  

Another must-read work for anyone connected to student loans is Josh Mitchell's The Debt Trap: How Student Loans Became A National Catastrophe (2021).  A WSJ reporter, he has unusual insights into the nation's student loan troubles.

Many years ago, when I was in the U.S. Navy, all personnel who handled important national security materials were required to undergo a National Agency Check (NAC) or a Background Investigation (BI).   Government agency files were searched to find any records of bad behavior; investigators called on citizens who knew individuals to determine their fitness and character.  

Student loan servicers should be similarly vetted.  What would turn up in agency files about the fitness and character of those who service student loans?  From my experience — and it is extensive — a lot of servicers would not pass muster, and should not be entrusted to handle student loans.  How some have escaped sanctions and even debarment is a question that now must be asked and answered, given the inevitable shake-up that is occurring.

A student loan operational crisis will soon be upon the nation.  The repayment pause granted during the pandemic will expire at the end of January.  Millions of borrowers will be assigned new servicers, who will have only the old servicers' records to go by, records that we know are riddled with errors created by sevicer ineptitude and sometimes corruption.  

The Department of Education should be taking steps to cancel as many loans as possible in the best interest of the country.  Those borrowers who have paid back their principal and interest at the government's cost of money should have their loans cancelled now.  Any remaining balances due to fees, penalties, compounding of interest, and other charges have a too-high likelihood of being manipulated by servicers toward their own ends, not based on law or regulation.

In the case of the Public Service Loan Forgiveness program, mismanaged terribly by PHEAA, loans should be cancelled after ten years of public service.  Again, too many borrowers are being disqualified for servicer error, not for failure to live up to their obligations under the purpose of the program.   

The Secretary of Education has the authority under existing law to make these decisions, in the interest of both borrowers and taxpayers.*  The Secretary may also have additional authority under "compromise and settle" law, but he surely has authority to cancel loans as recommended above, as part of an attempt to deal with the upcoming operational crisis. 

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* Taxpayers have a big interest in seeing student loan programs operated correctly and efficiently.  They benefit when borrowers are able to move ahead with productive lives, whether through repayment, cancellation according to law, or, as is provided to other debtors when necessary, bankruptcy.  Taxpayers should not be paying the costs of corruption among lenders, servicers, and collectors that keep people in debt as long as possible so as to maximize profits from them, yet that has been all too common for many years.  

Addressing Financial Exploitation of the Elderly in Maryland

September, 2021

Washington — On October 1, 2021, a new law will go into effect in Maryland, protecting susceptible adults from exploitation by financial advisors and others who would take advantage of them.  

Here is a summary of the new law as passed by the Maryland legislature and signed by the governor: 

"Authorizing the Division of Consumer Protection in the Office of the Attorney General to bring certain actions on behalf of certain susceptible adults and older adults; authorizing the Securities Commissioner of the Division of Securities of the Office of the Attorney General to bring a civil action on behalf of certain susceptible adults and older adults; ... authorizing a susceptible or older adult to bring an action under certain circumstances; etc."

 
Readers of this blog will recall the genesis of this law, the case of Vess v. Price, in which a financial advisor, Robert Price, arranged to have himself become the sole beneficiary of the estate of his client, elderly widower Howard Vess.  After Vess died, Price produced a new will claiming he, Price, was the estate's beneficiary, superseding the will his client had filed at his county courthouse, which left his entire estate to charities.  Claudia Vess, niece of Howard, sued the financial advisor in a case that lasted six years, with the support of her uncle's rural neighbors, ultimately prevailing in a settlement that saw her uncle's charities receive benefits from the estate, as she knew he had intended.  Unfortunately, the financial advisor spent much of the Howard Vess estate in his own defense, leaving diminished amounts for the charities.  

I knew all the parties involved, including Howard Vess's neighbor George Garner, a legal researcher (also known as the Shepherd of Accokeek) who worked tirelessly on his deceased friend's behalf but died before he knew the outcome of the litigation. In a November, 2019, post I wrote:

Maryland law must be changed to guard against financial advisors becoming clients' beneficiaries. Lawyers would be disbarred if they attempted the same chicanery. Financial advisors are often positioned even better than lawyers to take advantage of their elderly clients.

After the long legal battle, Claudia Vess asked her Maryland state legislative delegation for just such a law.  Delegate Al Carr led the way by endorsing the effort; Delegate Emily Shetty and Senator Jeff Waldstreicher, members of key committees, introduced new legislation at her request.  Public hearings were held in February, 2020.  Because of the Covid pandemic, the Maryland legislature adjourned early without taking action, but legislation was again introduced in 2021 and passed.  

The new law includes these findings:  

"Studies have shown that millions of vulnerable Americans over the age of 67 may be targets annually, and the financial loss to victims of financial abuse is estimated to be several billion dollars each year... These estimated financial losses increase exponentially when additional related costs to the victim, such as health care, social services, investigations, legal fees, and lost income, are taken into account..  Redress for victims of financial exploitation in Maryland is limited to adult protective services, criminal law enforcement, and costly civil remedies...

"The heightened burden of proving guilt beyond a reasonable doubt in a criminal case, the difficulty of proving exploitation when the victim may be older or infirm, and the limited remedies available to adult protective services and law enforcement further support the need for a solution under civil law to address the financial exploitation of susceptible adults and older adults...."

So as of October 1, Marylanders can ask the Attorney General to bring civil actions on behalf of susceptible adults, and can bring actions themselves under the new law entitled "THE MARYLAND STATUTE AGAINST FINANCIAL EXPLOITATION (SAFE) ACT."

The settlement of Vess v. Price achieved a measure of justice, but its long-lasting effect, because it led to a change in the law itself, will be fewer victims of unscrupulous financial advisors and others who prey on the vulnerabilities of the elderly population. 

Stop This Taxpayer-Financed Smear Campaign

September, 2021

Washington — If you are a government employee, having taken an oath to discharge the duties of your office faithfully, and your office duties include the evaluation or supervision of government programs, you have an obligation to listen to all sides of issues surrounding those programs. 

Especially to listen to those who may have information that the programs are not working well, perhaps due to waste, fraud, and abuse.  

Who would think otherwise?  I wouldn't.  I spent five years at the Institute of Education Sciences, the research arm of the U.S. Department of Education, reviewing federal postsecondary education programs.  The very idea that I would be limited to looking only at favorable or unfavorable evidence would be dismissed out of hand.   

Once, in 2004, I read a Wall Street ratings agency's cryptic report about a new securitization by a for-profit lender of federal guaranteed student-loans.  I called Fitch Ratings to get more information, because I was concerned that the lender may have been making false financial claims against taxpayers.  Fitch told me its legal department had the same concerns.  That was the beginning of an effort, ultimately successful, to save taxpayers from billions of dollars of false claims.

A few years later, a deputy undersecretary at the Department of Education, Bob Shireman, listened to a presentation in the Senate by a Wall Street investor who thought for-profit colleges were overvalued in the market because they were not the wonderful educational institutions they were claimed to be.   Why wouldn't he listen?  Wall Street can be a good source of information about federal education programs, pro and con.  

Many in the for-profit school industry objected.  They were accustomed to department officials, many of whom were in the revolving door between the industry and the department, singing the praises of the industry, and giving it regulatory breaks, in order to pump up industry stock prices on Wall Street.  

Some in Congress objected as well.  Especially those members like Buck McKeon, who held stock in a for-profit school and whose former aides had once populated key positions in the department.  

So for his willingness to listen to industry critics, and maybe even look more critically at the industry, Bob Shireman became the object of a smear campaign, which has not let up over the years.  He was accused of somehow profiting from short-selling, although subsequent investigations, demanded by his detractors, actually dispelled any such notion.

Now he is pushing back, as well he should.  You can read about it in a new exposé of the smear campaign, published this week.*  He wants his reputation back.  Of course anyone who actually knows Bob Shireman, as I do, knows that his reputation and his legacy cannot be take from him by anyone, especially the ethically-challenged, revolving-door denizens of the halls of Congress and federal regulatory departments.  

What is outrageous about the whole matter is that federal taxpayer money has fueled the smear campaign all along the way.  And fueled the political contributions to those in Congress who participated in it.  For-profit colleges are creatures of federal taxpayer largesse through the federal student-loan system. 

A fitting conclusion would be for the Wall Street Journal, which abetted the smear, to issue a correction and an apology, and for its editorial page to take a stand against the incredible waste of taxpayer dollars in this sorry episode.**      

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* The smear campaign has previously been noted in Dan E. Moldea's book Money, Politics, and Corruption in U.S. Higher Education, (2020), p. 320.

** If the newspaper needs a primer on for-profit colleges and student-loans, it would do well to read its own reporter's new book, The Debt Trap, by Josh Mitchell.

Stand Down, Vermont Librarians

September, 2021

Lincoln —  Enough, Vermont librarians.  Enough!  

Librarians in Vermont have removed the name of author Dorothy Canfield Fisher (1879-1958) from an eponymous book award.  Why?  She may have held eugenicist views, they say.  

Not that there is much, if any, evidence for it.  She did write some Vermont promotional materials about the state's proud Yankee stock.  The promotional organization for which she wrote was led by a person who was once in another organization that....you get the picture.  She did write a few lines over a long career that depicted flaws in a Native American character and in a French Canadian character.  But readers of her works in their entirety understand that Fisher was all about tolerance and equality.  

Even her defenders in Vermont, who weakly say she should be judged by the standards of her day, should actually read what she wrote.  If anything, Dorothy Canfield Fisher was well ahead of her time. 

No one who reads "An American Citizen," about a Black American who is finally treated with dignity when he moves to a Basque village in Europe, can say that Fisher is some kind of eugenicist.

No one who reads "Through Pity and Terror," about an upper-class woman who looks down on lower class children and won't let her own children play with them, but then loses all in war and has to accept food from the same poor families, can possibly imagine that Fisher has the slightest eugenicist leanings.

If Vermont librarians want to go after a eugenicist, may I suggest one who was not a Vermonter but occasionally practiced law there.  He believed in chloroforming disabled children and was a philandering husband; he was a Social Darwinist and in another state defended a teacher who used a textbook that described African Americans as an inferior race.  That would be Clarance Darrow.  You can look it up.   

Nebraskans know Dorothy Canfield from her days in Lincoln at the university.  She was the daughter of Chancellor James Canfield, perhaps the best chancellor in the history of the institution, after whom the UNL administration building is named.  She was a friend of Willa Cather and collaborated with her on publications.  Their correspondence over decades is the subject of much scholarship.

The next time Nebraskans are looking to honor an author through an award, let them name it after Dorothy Canfield Fisher.

Demote the AfD in the Bundestag

September, 2021

Berlin — One of my hopes for the upcoming German elections is that the Alternative for Germany (AfD) party is dislodged from its place as the leading opposition party in the Bundestag.  AfD is the wrong choice for Germany for many reasons, not the least of which are the party's neo-Nazi leanings.  

The AfD should never have been given this prominent platform after the last elections.  Had the centrist Free Democratic Party (FDP) joined into the governing coalition as it should have, the Social Democratic Party (SPD) would have taken the leading opposition role and the AfD would have been marginalized.  

I'm hoping the Christian Democratic Party (CDU/CSU) takes the spot of the leading opposition party this time around.  That would most likely result from a coalition to govern formed by the SPD, the Greens, and the FDP, which is feasible at this point.  This would be the Ampelkoalition, or traffic-light government, named for the parties' colors: red, yellow, and green.  

Or the SPD or the Greens could move into the leading opposition party, if they don't do quite as well as the polls now indicate.  That would not be a terrible outcome.  The SPD actually wanted that role after the last elections, rather than being the reluctant partner once again with the CDU/CSU.  

Anybody but the AfD.    

Saving the Prairies of Northwest Lincoln

August, 2021

Lincoln — The Lincoln city council has been considering whether to destroy two prairie parcels in northwest Lincoln, one tallgrass and one riparian, about 20 acres in total, in order to put housing developments on them.  Council members have wisely delayed a decision — three times — until they can fully understand the implications and choices before them. 

The Center for Grassland Studies at the University of Nebraska–Lincoln has recommended that the parcels be protected because they are an essential part of the ecosystem of nearby Nine Mile Prairie.  Local conservationists and citizens' groups concerned about climate change — as we all must be — have opposed the destruction of the parcels because they are also important carbon sequestration resources.

There is another reason for saving the prairies that few talk about, or even know about.  These prairies are of great historical interest, as they were the objects of study in the 1890s by remarkable faculty and students at the nearby University of Nebraska.  Led by botanist Charles Bessey and two of his graduate students, Lincolnites Frederic Clements and Roscoe Pound, the university shook the scientific world with the botanists' analyses of Lincoln area grasslands.  

It is likely that Clements and Pound knew these particular 20 acres and the surrounding properties well.  Many grasslands in and around Section 1 of Middle Creek precinct were owned by Tilman and Mary Flader, some of whose lands later became today's Nine Mile Prairie.  Clements' wife, the botanist Edith Schwartz Clements (the first woman to receive a Ph.D. from the University of Nebraska), accompanied her husband on examinations of all Lincoln's grasslands and collaborated with him in developing what became known world-wide as the Clementsian theory of plant communities and plant succession, or Clementsian ecology.  One of their many followers, John Ernst Weaver, conducted his landmark prairie research on and adjacent to Flader properties in the tallgrass heights above northwest Lincoln. 

Bessey, Clements, Pound, and other natural sciences faculty put the University of Nebraska on the map in the early years of the 20th Century.  The university became known as the "Harvard of the Plains" and was admitted in 1909 to the prestigious Association of American Universities, a select group of distinguished research institutions.  Textbooks on the history of science still devote whole chapters to Clementsian theories; lexicons are enriched by words coined by Frederic Clements, such as biome and forb.  Frederic and Edith Clements are forebears of the Environmental Movement.  

Although Roscoe Pound received a Ph.D. in botany in 1897 for his co-authorship of Phytogeography of Nebraska with Frederic Clements, another of his interests was law. He went on to teach law at Nebraska, Northwestern University, the University of Chicago, and Harvard, where he was dean of the law school.  Pound was influenced by his colleague Clements' theories of ecology and saw them as applicable to matters of jurisprudence, as explained in "The Influence of Ecological Science on American Law"*:

"The two main themes of Pound's early writings on sociological jurisprudence, empiricism, and interdependence, were an extension of the ideas that grew out of his early work in ecology.

"By 1912, the essential elements of what later scholars have called the "Poundian paradigm" were in place.  To the Progressive political movement of that era, the "law in action" embodied many of their goals: For pragmatic scholars and activist lawyers, sociological jurisprudence quickly became a popular label to attach to a range of ongoing reforms. Boston attorney Louis Brandeis used it to justify his successful efforts to persuade appellate courts to consider data on social problems that had not been included in the trial record."  

A culmination of the use of the Poundian paradigm in the law came in 1954, in Brown v. Board of Education, which overturned the separate-but-equal decision over a half-century earlier in Plessy v. Ferguson.  Brown is an early milestone in the Civil Rights Movement.

That so much of two 20th Century movements springs from northwest Lincoln's grasslands should not be lost on Lincoln's city council.  Too few of these acres remain from the time of Frederic Clements and Roscoe Pound, who changed the world because of what the grasslands taught them.  

Prairies still have much to teach us in this century as well.  Rather than destroying Lincoln's unique prairie heritage, we should be memorializing, restoring, and protecting it.    

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*Fred P. Bosselman & A. D. Tarlock, The Influence of Ecological Science on American Law: An Introduction, 69 Chi.-Kent L. Rev. 847 (1994).

Taking On Captured Government Agencies

July, 2021

Lincoln — As an NU undergraduate many years ago, I studied the relationship between the economy and government.  A pattern emerged:  first came good times for business, with little government involvement beyond providing infrastructure, paid for by taxpayers, so business could thrive.  Then came scandals and demands from the public for the government to regulate excesses.  Then the regulated industries worked their way into the government, "capturing" regulatory mechanisms to serve their own interests.  Inevitably, there were more scandals, whereupon the process would repeat.

During much of the first two decades of this century, I've been in struggles with captured agencies.  When necessary, I've had to go to court as a citizen with standing to protest and to stop egregious waste, fraud, and abuse.

In 2007, I sued nine student-loan lenders for civil fraud.  They were taking advantage of a captured agency, the U.S. Department of Education.  By 2015, my legal team had won seven settlements.  The other two cases were a draw:  one lender paid false claims back to the U.S. Treasury, but only about half of what I estimated it owed, and then got out of the case on the basis of sovereign immunity.  The final lender, PHEAA, fought us twelve years through federal district court, federal appeals court, and the U.S. Supreme Court.  We won the latter.  PHEAA won one big district court decision, but at great cost.   My counsel estimated they spent $10-15 million on that decision, which is ironic because we had signaled willingness to settle in 2014 for $7.5 million.  What were they thinking?

Now the federal contracting arms of PHEAA, known as AES and FedLoan Servicing, are collapsing, so we can move that tie into the win column. The real winners are millions of borrowers who have been ill-served by PHEAA.  

For years, PHEAA had many former employees well-placed at the U.S. Department of Education to protect it. But PHEAA perjury in April was one scandal too many, so the cycle of scandal and reform has once again repeated.  (Here's a good question: which other servicers are sufficiently in a cycle of reform to be trusted to pick up the millions of PHEAA accounts?)

At the state level, where I have long worked on conservation issues, I was taken aback when the Nebraska legislature, in 2019, merged the Department of Environmental Quality with the state Energy Office.  This looked as if the government itself was welcoming capture.  Soon enough, the new Nebraska Department of Environment and Energy showed it was much more interested in energy, especially in subsidizing ethanol, than it was in environmental quality.  NDEE watched as the Alt-En ethanol facility in Mead poisoned everything around, for miles.  And that, unfortunately, might even be an optimistic assessment of the scope of the environmental disaster.  

Another taxpayer and I sued to block the ethanol subsidies, which were coming at the expense of conservation programs.  That lawsuit is still in court, so I will not comment on it other than to refer readers to newspaper articles about it, which I believe are basically correct.  We'll see how this turns out; there are still important issues for the court to decide, the situation is fluid and could be taking twists to reveal if agencies are still in a capture rather than a reform mode.  We've been at this a year and I wouldn't be surprised to see it go on considerably longer. 

I am almost always the last person who wants a lawsuit.  They require time and money; they can get very difficult if FOIAs and discovery are involved; they can turn into Jarndyce v. Jarndyce situations.  Recommendation: let's all read our Dickens and decide to work to avoid litigation.

Which is not to say that I regret these lawsuits.  Sometimes it's necessary to step in to stop transgressions in order to move on to the reform part of a cycle, which might even last.  Students of government should take note that PHEAA is collapsing and its business may well go to others that kept their noses clean in the first place or have cleaned up their acts.  

PHEAA Departs Federal Student-Loan Servicing

July, 2021

Washington — So PHEAA, the student-loan lender and servicer, is collapsing its organization.  I join with many others who are cheering its demise as a federal student-loan servicer, for I have been pointing out for most of the past two decades that the organization, also known as American Education Services and FedLoan servicing, has engaged in fraud against taxpayers and abuse of student-loan borrowers.  

With a great legal team behind me, we won an important victory over PHEAA when federal courts, affirmed by the U.S. Supreme Court in 2017, determined that PHEAA did not have sovereign immunity from borrower and other lawsuits.*  Unfortunately, Secretary Betsy DeVos tried to protect PHEAA by coming up with rules that substituted for immunity, but federal courts across the nation have struck them down and the Biden administration has appropriately withdrawn them. 

This surely influenced PHEAA's decision to depart federal student-loan servicing as a contractor.  No longer can it brush away litigation against it.  Let me put it this way:  PHEAA has ruined many borrowers' lives, and justice will be sought.  

Another reason for PHEAA's departure is a potential perjury charge against its CEO for giving false and misleading information to a U.S. Senate student-loan oversight committee.  On the day he was to explain himself to the committee, July 7, PHEAA announced that it would no longer be a federal contractor.  I only hope that the committee will begin looking into all the other instances of fraud and perjury committed by PHEAA over the years.  

There is a reason, however, to temper any celebration of PHEAA's departure as a federal contractor.  Millions of borrower accounts will have to be transferred to other servicers, potentially even to Navient (formerly Sallie Mae), which has also had its problems and has been the target of lawsuits by state attorneys general and the federal Consumer Financial Protection Bureau.  This comes at a difficult time because the temporary federal student-loan repayment reprieve, granted by Congress during the pandemic, is set to expire soon.  

All of which is to say that it is even more important for the U.S. Department of Education to cancel as many student loans as possible immediately, under powers given to the Secretary in 20 U.S.C. 1082.  In a previous blog post, I recommended several ways this could be done, and the reasons for it.

This also could prompt the U.S. Department of Education to widen its circle of servicers, to look to experienced credit card and mortgage loan organizations to service student-loans.  The department, long beset by a revolving door relationship between its administrators and the student-loan industry, needs to free itself from industry capture.  This might also be the time to adopt an entirely different student-loan model, such as Australia's or other countries' models that handle student-loans through their tax systems.

PHEAA's departure as a federal contractor is a silver cloud with a dark lining.  It should be a catalyst for bold action to address the nation's student loan mess. 

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* U.S. ex rel. Oberg v. PHEAA, 4th Circuit (2015) 

Student Loan Servicer Perjury in the Senate

July, 2021

Washington — The chair and ranking member of a U.S. Senate oversight committee have given student-loan servicer James Steeley, CEO of PHEAA, until July 7th to explain his false and misleading statements given under oath during an April hearing. 

What is unusual about this is not that PHEAA committed perjury (it has a history of it), but that PHEAA was turned in by an official of the U.S. Department of Education.  The senators' bipartisan letter to PHEAA was prompted by a detailed letter from Richard Cordray, the head of Federal Student Aid and former director of the Consumer Financial Protection Bureau.

In the past, the Department was more likely to help PHEAA cover up its false statements, and even go so far as to create new policies to keep borrowers, state attorneys general, and consumer advocates from suing PHEAA for its many mistakes.  For example, when PHEAA lost its sovereign immunity in a U.S. Supreme Court decision in 2017, meaning it was subject to suit by borrowers, Secretary of Education Betsy DeVos invented a "preemption" doctrine instructing servicers like PHEAA not to respond to efforts by state and federal consumer protection offices to resolve student-loan borrower issues.  

Federal courts in many jurisdictions overturned this doctrine and it has since been formally withdrawn by the Department of Education, but only after three years of consumer injustices.  

Why is PHEAA so prone to perjury?  Some have said it is just a part of their organizational culture.  I believe it is the result of not being held to account over many years.  Now would be a good time for the Senate committee to look at past PHEAA occasions of perjury and to ask those who have looked the other way to explain themselves.  

First and foremost would be when PHEAA withheld documents from the Department of Education's Inspector General, "under penalty of perjury," in 2007.  This came to light in 2017, but to our knowledge, the IG never took action, to this or any other similar violation. Such inaction may have created a moral hazard situation, through which PHEAA learned that there is actually no penalty for perjury.  

The only time I know PHEAA was disciplined was in a federal court.  In 2014, U.S. magistrate judge John Anderson rebuked PHEAA for withholding documents dealing with potential financial fraud and levied a $45,000 penalty.*  However, it must be added that neither the Department of Education nor the Department of Justice brought the matter to the attention of the judge, although they both knew about it.  (The judge learned of it through outside litigation, to which I was a party.)   

But this was a rare act of discipline of a student-loan servicer.  Both ED and DOJ have a history of giving student loan lenders and servicers a pass on even the most egregious occasions of waste, fraud, and abuse, costing taxpayers astounding sums.  Moreover, they have agreed to keeping records confidential so that the public is not able to know how fraud was committed, by whom, by what means, for what reasons, and to what effect on the integrity of student-loan programs.   

This is a good public-policy oversight subject for the Senate committee.  Did past federal indulgence of fraud and perjury among certain student-loan contractors lead to the predictable PHEAA perjury in April?  I've been involved in student-loan programs for five decades, and can say without doubt that the answer is yes.  Perhaps the Senate will now start to get to the bottom of why student-loan programs have become such a mess.  

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* Dan E. Moldea (2020).  Money, Politics, and Corruption in U.S. Higher Education, p. 120.  

     

 

 

   

Remember the Lincoln Climate Action Plan?

July, 2021

Lincoln — On Monday, March 22, 2021, the Lincoln city council approved the Lincoln Climate Action Plan with these commendable goals regarding prairies and the environment:

Continue to support prairie restoration and protection of natural resources.

Continue to support the Lincoln Parks Foundation and Parks and Recreation Department Land Trust initiative, working in partnership with landowners to preserve native prairie, wetland areas, and other natural resources.

Create a Carbon Sequestration Plan. This plan would involve an analysis of Lincoln's tree canopy, parks and greenways, open lands, composting activity, open water areas, impervious surfaces, grasslands, and native prairie.

A mayoral aide recommended the plan to the council:  "We can’t just make things up as we go," she said. "We have to have a plan and a strategy and a vision. It’s already costing us."

But with the ink barely dry on the Climate Action Plan, city government promptly got back to making things up. The Urban Development Department devised a tax-increment-financing (TIF) proposal to destroy a broad swath of grasslands nearly a mile long, including two environmentally critical prairie parcels, claiming that the properties were extremely blighted and must yield to a developer's quickly-revealed plans for affordable housing.

The city council's initial response gave regrettable hints of losing interest in the Climate Action Plan. Some of the reactions were favorable to TIF development of the two aforementioned prairie parcels (one owned by the city, the other by the Lincoln airport authority) that had been zoned residential in 2007 but never developed. Their thinking: if we zoned them residential in 2007, we shouldn't reconsider, Climate Action Plan or not.  

The city council's initial reaction was not surprising because the Urban Development Department, claiming ignorance, had not revealed to the council that the UNL Center for Grassland Studies had recommended in 2020, after a scientific review, that the two publicly owned parcels should be protected from development.

It is instructive to look back at what previous councils and mayors have done with regard to Lincoln's rare grassland prairies, when they have discovered that their actions would endanger them.

• In 1994, the council changed a native prairie's zoning from residential back to agricultural on a 27-acre property previously planned and platted by S.E. Copple's Commonwealth organization.

• In 2005, the city's Airport West Subarea Plan identified another native prairie for future residential use. Fortunately, the 7-acre parcel has now been reclassified as an Environmental Resource.

•  In 2011, the Comprehensive Plan was changed by the mayor and council to exclude several native and restored tallgrass prairies which had previously been identified for future residential housing.  

•  In 2018, the mayor and council declined to sell the very two same (now TIF-targeted) grassland and riparian parcels for purposes of residential housing, asking instead for the recommendation from the UNL Center for Grassland Studies as to the parcels' importance to the Nine Mile Prairie ecosystem.  That resulted in the identification of these parcels as habitat-rich flora and fauna corridors. 

In other words, previous councils knew, when it came to prairie protection, how to put the brakes on development, even before "carbon sequestration" was a part of our everyday vocabulary.     

Some who would profit from the pending TIF proposal have been quick to cite a 2007 city agreement and called for the city to place the disputed parcels into the hands of developers yet this year, claiming a deadline for action.  

The problem with relying on this obscure 2007 agreement is that when the unimplemented part of it is unearthed, it will be evident that it is out of date.  The agreement specified in 2007 that "time is of the essence" but time has eroded away any sense of urgency and with it the foundation of some of the agreement's assumptions.  When the 2018 council actually took up the agreement many years later, it was apparent that staff was unsure who even owned the properties ("Additional research regarding the ownership of both parcels may be needed"). The sponsor of the 2018 proposed action, the Lincoln airport authority (LAA), was not clear about the federal role in oversight, suggesting that the previous zoning and the newly revived sale proposals were "derived from" federal regulations, which do not, however, require residential zoning as highest and best use for appraisal, as the city may once have believed.  In any case, federal law has changed since 2007.  The obligations of the city in the 2007 agreement are to take actions that are "reasonably required." There is nothing in the agreement that precluded the city from reviewing its environmental impacts, as it chose to do in 2018 and can do in 2021 in light of the Lincoln Climate Action Plan.  Nothing constrains the city from protecting the interests of its own citizens and taxpayers as conditions have changed over the many years.  As old documents are exhumed, it may be determined that LAA ascribed to itself zoning jurisdiction it did not have over properties it did not own, all in an agreement that remains, wisely, unimplemented. 

Yet to be mentioned is adequate public notice.  The far-reaching TIF development proposal, which would short-circuit the 2050 Comprehensive Planning process for the area, was not well circulated before the city council's June 28 public hearing.  Citizens and taxpayers are in the dark when it comes to knowing what this is all about:  what agreement, what maps, what UNL report, what federal laws, what deadline?  This is even before we get into what promises were made to whom, by whom, to try to salvage the TIF development deal, once some watchful city council members started asking questions.

Not to be forgotten is the testimony conspicuously made at the public TIF hearing that certain individuals and groups, meaning environmental interest groups, were "not authorized" to voice their opinions on TIF public policy issues.  Surely the testifier knows that were it not for the Wachiska Audubon Society, many of the area prairies likely would not exist today.   Among the first people I'd want to consult about prairies for his opinion is the legendary Ernie Rousek of Wachiska.* 

The best thing for city government to do right now is to re-read what it just enacted in the Lincoln Climate Action Plan and act as if it matters, because it does.  Bird and pollinator populations are collapsing, climate change is evident everywhere, and the time for climate action is now. 

The way forward for the city council is simply to remove the contested areas from the TIF proposal and sort the issues out in the Comprehensive Planning process, which is already underway and has the advantage of actually involving the public in decision-making. 

That will send a message that the Lincoln Climate Action Plan has met its first test, and that this city council of 2021 means to put the action into the plan.  

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* Among other scientific articles Wachiska Audubon has brought to attention is one that concludes it is not distance but landscape context that is important in prairie preservation:
"Using a focal-patch study design we demonstrated the importance of the surrounding landscape, often out to 4 km from the fragment edge, on prairie occupancy by grassland birds. Effective management of grassland songbirds will require attention to the landscape context of prairie fragments." Note: one TIF parcel is less than 1 km away from Nine Mile Prairie, and if developed with 100 houses as proposed would be a point source introduction of bird-killing cats, pollinator-destroying pesticides, and nighttime street lighting into the heart of the prairie environs.

 
See: Shahan, J.L., Goodwin, B.J. & Rundquist, B.C. "Grassland songbird occurrence on remnant prairie patches is primarily determined by landscape characteristics." Landscape Ecol 32, 971–988 (2017).