My commissioner had some wonderful words of wisdom at last night's meeting. During part two of the discussion session, an agenda item was about floating a bond. John Bendel said that it has never been a better time to float a bond. In order to float a bond, the commission must have four votes. Kristen Linfante was quite vocal about floating a bond. She wanted to know if there were four votes. Matt Kluck does not want to float a bond, so that meant that Kelly needed to be the fourth vote. The problem is that they have no plans. Kristen wondered if they should float a bond with nothing designated for the bond. Great plan. Later in the meeting, Kristen said that the high school renovation was a perfect example. We waited forever and ever, board after board, and now we have a big number.
I have some questions. Wasn't the first renovation plan approximately $150 million? Didn't we float the bond around two years too early? Because of poor planning and not doing their homework, didn't the school board end up going to court because of zoning issues? Weren't we faced with our first change order because the soil that was bad in 2007(?) was still bad in 2012?
Kristen, are you going to approach this the same way you talked about the high school renovation? No facts. No plans. Just go up to the microphone and say how we must have this renovation. The time is right. Just dig it.
Are we going to be like this? The New Normal: Municipal Bankruptcy
Click here to listen to the second half of the discussion session.
30 comments:
http://wastefraudandabuse.org/killing-the-golden-goose-in-california/
Yet, it seems that the public simply doesn’t get it. The “it” being that California government at all levels continues to spend money at a prodigious rate. California voters continue to elect big spenders to positions of power where they continue to not get “it”.
Linfante, even after watching the San Jose Symphony go belly up, still doesn't get IT!
Here is a thought that people need to consider regarding municipal bonds. This is from a conversation on KPBS on the subject.
"CAVANAUGH: Now there is some talk, though, in the financial world about municipal bonds, perhaps municipal bond defaults being the next financial crisis. Do you see that happening?
HORN: In my thirty-some years in the business, the number of general obligation bonds that we've seen default in the state of California you could count on one hand. And there are hundreds of thousands of issuers of municipal bonds throughout the country. It could potentially lead to a problem, Maureen, but remember municipal bonds have that ability to raise taxes that a corporation doesn't have so as you see a financial crisis develop and you know you have assets underlying the bond plus a tax base, albeit a declining tax base, the security of the bonds is still second only to Treasuries."
Keep that in mind... yes, this is an attractive time to float a municipal bond, but should Lebo experience a downturn there will be two options. Raise taxes or default... Bankruptcy!!!
And unless you've been living in a cave these past few months, you've seen a number of towns that thought the party would never end finding out it did.
We might be on there here and there are several warning signs.
The school district is desperately searching for $30 million to pay for the high school they decided to build. If they don't find it guess where they're going to get it.
Also for some reason according to the reassessment high priced home values aren't going up as fast as less expensive Lebo housing stock. That is if the reassessments is fair and accurate. That should be disconcerting.
A couple of high priced developers found that there just wasn't a lot of interest in expensive condos and business space in Mt. Lebanon.
So, if you're confident that revenues are going to continue to roll in by all means take out a loan for Brumfield's and Linfante's high falutin' projects.
But if you're not so sure about the local economy remember if the bucks (and we're not talkin deer) don't flow in Linfante's coming after your wallet for a lot more taxes! Either that or we go bankrupt.
No more library, great police and fire services. Paved streets.
So yeah side with Linfante - roll the dice! Worked out well for the San Jose Symphony, eh Ms. Linfante?
Union members usually don't "get it. Expect GM to go bankrupt again.
This is pure speculation and not even sure if it's even possible.
Posti is whining about the lack of state money for the school district. Linfante want to "borrow" money with no plan in mind for it.
Could it be that Posti wants the municipality cover the cost of paving Horsman and roadway changes at Lebanon and Cochran once the renovation is completed? Also maybe have the municipality pick up ALL the field maintenance covered und the exited JMA?
Just askin'.
We can't keep kicking the can down the road---at some point the road will stop.
Borrowing money for no defined purpose is absurd. Would you handle your own finances that way?
You have to be careful how you spend
Because the very word contains "end".
If I hear the, "there has never been a better time to float a bond" statement one more time, I am going to lose my mind.
That's what they said in 2009 when the bond adviser for the school district stood at the microphone and said it to the board. Hart and Fraasch sat there and I forget which one asked, "since we have no project yet to spend money on, you are asking us to make a bet that you are right. But you we here just a few months ago and said then that there was no better time to float a bond. You are asking us to bet that this time you are right."
And of course, interest rates have continued to drop. Just the other day France sold bonds at NEGATIVE interest rates. Just yesterday the US Govt sold bonds at the LOWEST RATE EVER. So maybe those two school board members knew more than the bond advisers.
Here's my point...low bond rates are here to stay. For probably a decade or more. There can be no inflation when nobody wants credit. There can be no inflation when banks can't loan because they are capital impaired. It's the new normal. We'll be lucky if we can avoid a depression.
Mr. Bendel and Ms. Linfante, put your bond gun in your pocket. You have time to make this decision. There will be time to come up with a comprehensive argument for a bond. You are not going to miss this boat. But do it right. I'll likely support the bond if it is for the right projects but please clearly identify those projects first.
Linfante makes Posti appear bright. Wonder if Susan Morgans will run an insert in her magazine explaining what bankruptcy is and how it will impact community services. You watch--those morons on the commission will push through MORE borrowed money, then realize we can't afford things like paying our cops, then start beating the drum to sell the golf course or use eminent domain to take areas near our "business district" for development.
But in the end, and much like the school board has shown, when people don't vote, we get stuck with the bottom of the barrel. Now, I will tell you that if linfante and the ither two keep playing around with our municipal finances like they're taking out a home equity loan, it will be harder for people here to sell their houses. Prices will be depressed. And if that happens to me, I'm going to file suit against each and every one of them personally.
Did I read somewhere that we haven't made a payment or at least only a minor payment on the bond for the McNeilly property?
How long can that go on? Linfante wants to borrow even more money without a specific use for it.
That's like handing a teenager your credit card and dropping them off at the mall.
Grow up Linfante and Lebo parents - wake the hell up!
Yes, that is correct about McNeilly. We are just starting to pay for the elementary school renovations too. Here's the thing about floating a rec bond. They really know what they want and it comes down to the artificial turf. Matt and Kelly don't want it, so the other three can't get the fourth vote.
Elaine
Does anyone, say Bill Matthews, Bill Lewis, John Ewing are good numbers guys, have any idea what the total debt right now is for Mt. Lebanon? Both the school district and the municipality?
I'm afraid it might be a staggering number!
You know the school district is scared to death or they wouldn't be so desperate in trying to find donors to bail their asses out on the reconstruction.
Did they hire a bond advisor for $45,000 to give them options on a bond with no purpose? If they did and they can't get the fourth votr it will be the third time they wasted $45,000 on a bond advisor.
If I were Steve Feller, Sue Morgans, the police officers and municipal staff, I'd wake the hell up.
When Brumfield, Linfante and Bendel max out the muni credit cards their going to be forced to cut back somewhere.
You can be sure the axe is going to fall right on you!
As I walked down Washington Road I passed three of our lovely commissioners. The musically talented one was teaching the other two a toe-tapping little ditty.
I couldn't hear it all, but I did catch the Chris:
"California Here I Come - Kristin Linfante rendition
California here I come,
Right back where I started from,
Where borrowers of dollars bloom in the sun,
Each morning at dawning
Birdies sing an' ev'rything:
A sun-kiss'd miss said, "oh shit i'm gonna be late,"
That's why I can hardly wait,
To open up that borrowing gate,
California here I come!!!!"
To be clear, and just so nobody here is blindsided, I have absolutely no doubt that there will be a bond floated in the next year. And we DO need to do some serious work with that money.
The question is which side will get the fourth vote. Will the commission eventually side with Brumfield and float a bond that includes money for artificial turf? Or will the commission side with those that don't want turf.
ALL parties know that there needs major work on the pool and rec center.
It's funny that the least important thing of all rec- and least expensive (turfing a field) is what might hold up the much needed upgrade to rec facilities. I guess you could blame Matt or Kelly for not caving in to the YSA or you could blame Dave/Kristen for being so blindingly supportive of the YSA.
Local government at its finest.
We don't need a fluff magazine.
A suggestion.
If MTLmagazine is the self-sufficient publication Morgans proclaims it go be, it's an asset the municipality can make some money on.
Sell it to the highest bidder and use the proceeds to pay down some debt.
If it's making money the buyer is going to keep it running, so we don't lose anything and we have a new bundle of cash to put towards the pool or artificial turf.
Hey, it's an investment that perhaps it's time to cash in!
The stuffer in the magazine made a profit. Did your mtl have a stuffer this month? So long profit. So long highest bidder. So long turf subsidy.
9:05 two things.
I suspect Linfante of being disingenuous when she says there are no plans for the bond money.
Anyone want to make a bet on the first place she'll approve spending it on?
Two... why would anyone float a "loan" when they have no idea of what they need it for?
Yeah, sure there are credit lines, but right now we don't need a credit line as we still have undesignated funds.
When we formalize what we need, then we can talk about taking out a loan (bond).
9:18,
IF WE PAY DOWN DEBT WHERE IS THE BUNDLE OF CASH TO PAY FOR TURF AND THE POOL?
The total debt outstanding for the Municipality as of 12/31/11 CAFR is a rounded off $26 million. For the School District per their latest CAFR as of 6/30/11, the rounded number is $141 million, for a total of $166 million +/-.
Another numbers cruncher
9:05 that is a pretty funny satire on the situation here.
Especially if one reads the article on the San Jose Symphony bankruptcy titled "And the band stopped playing, The Rise and Fall of the San Jose Symphony".
Ms. Linfante should be very familiar with this subject as she was involved in the symphony during the period discussed in the book. Their is no indictment that she was instrumental in the collapse, but one would think after reading the causes of the bankruptcy she'd be a little more cautious in lavish spending and taking on debt.
No one I believe is taking the stance here in Mt. Lebanon that there are things that need fixing. Just as in the high school, no one argued that conditions needed to be addressed.
It is unfortunate that there is a segment of our community that decides they want something and will stomp on and defame anyone that gets in the way of their vision.
Ms. Linfante, Brumfield and Bendel may very well get their bond wish fulfilled. I and many others hope that when it is, it is for the things we need and not for things somebody WANTS! We have enough "wants" laying around unused already.
10:22 the point is there is no bundle of cash- period.
Yes, we're going to have to take out a "home improvement loan" most like to take care of somethings, granted.
I'm just suggesting we retire some old obligations before we create some "undesignated" new ones.
If 10:30's numbers are correct then right now, today each an every resident, senior citizen, infant, student, business owner is in debt for about $5,000 dollars.
For a family of four that's $20,000 on top of whatever debt the family is carrying.
So if you comfortable 10:22 carrying that load good for you! I'm not and I'm sure I don't want to increase the burden by buying fake grass.
No one I believe is taking the stance here in Mt. Lebanon that there are things that [don't] need fixing. Just as in the high school, no one argued that conditions [didn't] needed to be addressed.
Sorry for the missing words.
10:30,
You forgot to add the interest on the bond issues.
YIKES!
Besides 10:22 if MTL magazine is able to stand on it's own two feet why not let it? There is no obligation for the municipality to be in the publishing business.
If it's making money as Ms. Morgans proclaims then it has value. If it has value there's probably some company or individual that'll want to buy it.
What are they going to, buy it and shut it down? No, they continue to publish it.
So it's a win win win win for us. We make some money on the sale, still get the magazine and eliminate some payroll and pension obligations and free up some office space and reduce energy bills.
Our kids need to be educated but we don't need K-3 athletics and 19 travel teams. The fields can rot but not our teacher contract or the super's raise or extra vacation days.
You don't think Posti's daddy moved here so she could have an egalitarian education, do you?
Here's a simplified analysis...
Ms. Linfante wants to host a concert. She's doesn't want to say if it'll be classical, rock or rhythm and blues. She's not even going to announce where or when it'll take place.
Regardless of whether you're free or not or if you even like music you're going.
Here's your ticket and make your check out to the Mt. Lebanon Tax Collector.
Why not start by collecting the parking ticket money ($800,000.00) and the lost revenue on leases, etc. (as per Dave Egler). Then, develop a phased plan to fix the pool and other recreation facilities in disrepair? It won't be enough to do everything, but it would be a good start in the right direction, demonstrating some willingness to manage our resources more responsibly.
Naw.....it's easier to just shovel us under with more debt! BONDS FOR EVERYONE!
And over at ValueMtLebanon Linfante believes it is the duty of the Mt. Lebanon commissioners to see to your littles darlings welfare.
Auctung, ya vill play sports when we tell ya to play sports, my little 'Lebkins!' Verstehen?
She is the 'mother' of us all!
Someone wanted me to ask Kristen Linfante if the PA Ethics
Commission would approve of the Commission floating a bond and not disclosing its purpose. I am sure she won't read this since she has told others that she does not read blogs. I am curious as to why she doesn't, since she had Real Lebo in the past and has a blog now as my commissioner. I would hope that she at least reads Center Court as the commission liaison to the school board.
Elaine
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