Talk about timely...I was reading an old post by Tom Moertel on Blog-Lebo called How to Brew an Economic Perfect Storm in One Easy Lesson. The Trib had an article in Sunday's paper written by Jake Haulk (Allegheny Institute for Public Policy) titled, The property tax increase. It was a Policy Brief from Allegheny Institute that inspired Tom to write his piece on brewing an economic perfect storm.
The comments on Tom's post, almost two years old, are fascinating. Mark Hart made his predictions and James Fraasch shared his thoughts; both were spot on with their comments. I saw words like LEED certification, 15 Design Criteria, crossing Horsman Drive, etc. Where are all these people now? You folks are very quiet now. In two days, will we be duped into accepting bids just under the limit? When the bids come in at cost, will people enter a state of "whew" euphoria- even though it's still $115 million damn dollars? And it is for a project nowhere near what we were promised for $95 million, let alone $113 million!
PS. Thanks goes to Dave Franklin for coming up with the title of this post.
4 comments:
Let's not forget the MTLSD Sucker Punch.
Thinking back on the bond issue, I recall that part of the rational supporting the borrow NOW approach -- was that if we did not borrow by February 2010, the "face" value of the bonds would be reduced by $700,000 -- or about 1% of the par value. In other words we would only be able to issue bonds with a par value of $68,300,000.
So to maximize the borrowing -- in October 2009 off to market we went.
In the end we spent millions of dollars in interest expense just to protect the maximum pre-Act 1 borrowing.
For those wondering how we would ever get by without this $700,000 for the project:
A) We could have captured it from the savings on interest carrying expense.
B) We could have used some of our vast cash reserves.
C) We could have issued the pre-Act 1 bonds as premium bonds and borrowed more than the face value. Just like we borrowed $75,000,000 on a $69,000,000 issue, we could have borrowed $75,000,000 on a $68,300,000 issue. (the math is not that different)
D) We could have bolted this $700,000 onto the second bond issue. (After all, we would not need this $700,000 for several more years.)
E) We could have downsized the project by $700,000. As it stands, we have taken about $16,000,000 out already, just go for $16,700,000. We know that if that was what it would have taken to build a project without voter approval - it could have been done. Further, MTLSD would relish in the opportunity to get the project right. (There is nothing like a little inspiration.)
This punch really hurt.
We borrowed the $700,000, paid interest on it, and paid it back to the bondholders without ever using a dime of the money for the HS.
We borrowed the money before the schematic drawings were completed. Design Development drawings followed. Do you see how smart you District Leadership is? A monkey in a trunk would not need a ouija board to figure this out.
John Ewing
Has there been a special meeting scheduled to accept bids a week later? Has anyone heard a date for a groundbreaking ceremony?
I would ask the board, but we usually hear it first from Lebo Citizen readers.
Elaine
Let's not forget the Board did not accept the $8,000,000 fundraising they were offered in exchange for a new field house.
That proves that just because you attended MLHS does not mean you know how to finance the project. A responsible Board would have said, we will borrow the funds to build the field house when we are presented with $8,000,000 in pledges. Instead we were told that we could not raise funds until the bids were in.
If the Board could wait for bids to fund raise why didn't the Board wait until bids were in to borrow $75,000,000?.
The Board we reelected cost the community $8,000,000 in extra HS project cost in addition to the extra borrowing costs of the early bond issue.
John Ewing
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