Saturday, July 9, 2011

Meeting with Mr. Ostergaard

Now, it's getting scary.  Thank you, Steve Diaz, for sharing this with the community.

Members of the Board:  I had the pleasure of sitting down to discuss school issues on Thursday evening for two hours with Dale Ostergaard, whom I had never met before personally.  Dale is a gracious and cordial man whom I found to be thoughtful, decent and considerate (he is also a Purdue graduate).  My conversation with Dale was most interesting in that he actually provided some highly pertinent and important information to me which the public has a clear right - and need - to know.  Attached, in his own hand, are the district's projections of the funding requirements for the teachers' pension fund, and its implications to the property taxes in our town.  I have to assume you have all seen the same figures, but now is the first time that the broader public may come to know of them.  The facts are stunning and daunting -- this school district is in a financial hole much deeper than has previously been revealed. Your current disarray over academic performance and school administration as well as over the "renovation" fiasco that you have completely mismanaged, now come into perspective as your lack of candor or any sense of fiscal responsibility has outgrown any mask behind which you may try to hide.

As demonstrated in the attached chart, we are facing a teacher pension funding obligation that reaches a district-projected burden of 5.39 mills on the property tax rate within the next four years.  Add this to the 40% increase in school taxes already estimated by many observers to pay for your $113 million proposed "renovation", and the residents of Mt. Lebanon will effectively have to buy their homes all over again, mortgaged by the school district to pay for educating a substantially and rapidly declining school population with, as I have already noted in prior emails to you, an ever less effective academic program (we are still 3rd, down from 1st in the county).  We have only 5,000 students in this district, but you spend as if we were a major population center (I feel the need again to urge you to see the documentary, Waiting for Superman).  The fact that you are planning for a new bond issue to fund the pension liability in 2014 has never been mentioned by the board in the context of your renovation budgeting, which indicates to me that I was exactly correct when I wrote to you complaining that it seems you will bond us up to maximum levels without an election (one you know you would lose), just to then lay before us an additional bond issue that we "must" pass to finance the legal obligation under the pension plan.  Either you are utterly irresponsible or you simply have no compassion for the elderly living on fixed incomes, or young families struggling in an economy with a rising 9.2% rate of unemployment, let alone the rest of us, many of whom are also negatively impacted by the current depression and the dual threats of increased Federal and state income taxes.  Your fiscal universe is hallucinatory and deeply destructive to this community on every level: socially, politically, economically, and educationally.  You are well aware of the deep rifts your policies have created in this community, so I ask you:  is your "success" worth it?

Time has come for the school board to exercise some introspection as to the means and goals they have set for themselves and this district.  Time has come for the members of the school board to demonstrate some measure of humility (or at least self-control).  Time has come for the school board to demonstrate some respect for the dignity, intelligence and legitimate concerns of your constituents.  I close with one random thought I had the other day reading about the effort in one of our neighboring communities to consolidate itself with the Chartiers Valley schools:  perhaps the public in Mt. Lebanon should consider a similar petition to merge with, perhaps, Bethel Park or Upper Saint Clair to form one manageable district to get control of our out-sized administrative costs for an economically nonviable small district such as our own.  What do you think the fate of such a petition might be here?  Remember "the 4,000"?

Respectfully.  Steve Diaz

Ostergaard Pension Projections

9 comments:

Anonymous said...

W0W! $10,800,000 more for pension benefits and about $8,000,000 more for Other Post Employment Benefits. That is $18,800,000 or 9.4 mills over the cost of the high school.

No wonder JoPo didn't appoint a Finance Committee this year - all the dirt would have hit the fan!

It is nice to have one honest school board member, thanks Dale.

John Ewing

Anonymous said...

A couple of random thoughts.
Mr. Ostergaard is to be applauded for making the info available. He needs though to bring it up at board meetings.
Mr. Diaz should also be commended for sharing the conversation.
And finally, where are the "4,000"? On vacation, asleep or just too apathetic to care any more?
- Giffen Good

Anonymous said...

Agree or disagree with Mr. Diaz, there is little doubt that he demonstrates a command of the English language second to none.

With respect to Mr. Good's point concerning the 4,000 – I've wondered about that one myself. Four thousand people represent about 12% of Mt. Lebanon's total population (33,137, according to the Comprehensive Financial Report for the year ending 31 December 2010), and a considerably higher percentage of the VOTING population. As far as whether these people are “on vacation, asleep or just too apathetic to care any more,” it's probably all of the above, plus “battle fatigue.” Politicians are particularly attuned to the latter; if they know their positions are unpopular they will introduce them to the polity early, figuring that by the time their plans come to fruition the opposition will have burned themselves out. This is almost guaranteed to happen in any community where the majority of the candidates for local office are “Demopublicans.”

Still, one has to wonder why the Board is not swayed by the overwhelmingly negative financial evidence adduced by Mr. Diaz and others against their beloved renovation/athletic complex. Although he was talking about “dowsing,” James Randi (the Great Randi), the famous illusionist and “debunker” of those claiming supernatural powers (he'll pay a million dollars to anyone who can prove he or she has them – under controlled conditions), wrote two sentences that could have been meant for the Mt. Lebanon School Board: “Their need to believe is so strong and so ingrained, that they will refuse to accept any quality and/or quantity of good evidence. They have adopted a philosophy that shields them against reality.”
Richard Gideon

Anonymous said...

Richard,

The Randi quote is now known more widely and simply as *don't confuse them with the facts, their minds are made up *...also characterised by Forest Gump as "stupid is as stupid does".

Bill Lewis

Anonymous said...

The Randi quote can also be translated into, "Ready, Fire, Aim."

Or as Janney Montgomery might tell our folks, "We have a buyer for the bonds today, let's sell them now, and figure out what to do with the proceeds later.

Who will take responsibility for the bond proceeds not being spent inside the arbitrage period? Maybe the Solicitor, who advised the board, will pony up the needed fines to pay the IRS penalties - but then he will probably find a way to tack it onto his legal fees to the District!

John Ewing

Lebo Citizens said...

What???!!!! IRS penalties????? It just keeps getting worse!!!!!
Elaine

Lebo Citizens said...

OK. I just looked up arbitrage penalties.
From the IRS website:
Penalty
An issuer may elect to pay a penalty in lieu of rebating arbitrage for the available construction proceeds of an issue if the spending requirements of the 2-year exception are not satisfied. The penalty is equal to 1½ percent of the amount of the available construction proceeds that do not meet the spending requirements.

See section 148(f)(4)(C)(vii) and Regulations section 1.148-7(k).

Anonymous said...

It's all in the interest of providing our kids with the best education possible. Right!?
- Giffen Good

Anonymous said...

Mr. Gideon if you're out there... just read your comment on Act 25 over at Bloglebo.

It appears we have two residents in command of the language - you and Mr. Diaz!.

- Giffen Good