I found some links which may shed some light on the matter.
March 15, 2012 Mt. Lebanon School District considering funding study
Pursuant Ketchum first must determine if the district can create a "compelling case" for people to give. The district is discussing donations to reduce the amount it must borrow to complete the $109 million project.
The board would need to hire at least one person to help coordinate the efforts and the money, leaving some directors hesitant when the district already is facing a budget shortfall even with a potential half-mill tax increase.
Administrative costs for a fund-raising campaign would be about 7 percent of what was raised, Oshry said.
March 22, 2012 Feasibility study on Mt. Lebanon fundraiser approved
Two consultants will spend the next few weeks interviewing some of the district's biggest potential donors and likely volunteer fundraisers. They will use the interviews to determine whether the district can make a compelling case for people to donate; whether there are enough potential donors and volunteers; and whether the timing is right to conduct such a campaign.Paving the way to establish an endowment:
The consultants will then present the board with their recommendations in the form of a "red light," "yellow light" or "green light," officials said last week.
"Even if we got a red light ... there's still a tremendous amount of information for us that could be very useful," said board president Josephine Posti.
Though the campaign was pitched as a way to reduce the amount of borrowing for the high school -- and thus limit any future tax increases for debt payments -- board members amended the motion to remove language specifying that the study be limited to the high school project.
Here is the introduction of an endowment:
April 25, 2012 Mt. Lebanon School District Announces Grant Awards for Capital Campaign Feasibility Study
The District is undertaking the study to assess the viability of a capital campaign to reduce the amount of the second bond required for the $109.7 million high school project currently under construction and to establish an endowment to sustain and grow academic and fine arts programs in the District.
April 26, 2012 Pledges for feasibility study
The school board voted last month to hire fundraising consultants Pursuant Ketchum to conduct the professional analysis that will determine whether they have enough support to raise $30 million for the high school renovation project.
The study costs $41,000 plus travel expenses.
"We view the study as a necessary investment in preparing for a successful capital campaign to finance a portion for the renovation of Mt. Lebanon High School," said John Federico, president of the Mt. Lebanon Foundation for Education in a statement.
April 26, 2012 Two $10,000 Grants to Help Fund Feasibility Study Posti writes on Center Court:
This $20,000 will cover approximately half of the cost of the $41,000 feasibility study that the Board engaged in last month in order to assess readiness for a capital campaign.
May 15, 2012 Press Release Mt. Lebanon Community Endowment awards $10,000 grant to Mt. Lebanon School District
The School District feasibility study will assess the viability of a capital campaign, and appropriate strategies for conducting it. Contributions to the campaign would be used to offset existing costs of the Mt. Lebanon Senior High School renovation, as well as build a permanent endowment to support curriculum and other educational needs of the district.
“The Mt. Lebanon School District’s expressed its desire to conduct a successful capital campaign in order to reduce the tax burden associated with the high school renovation and benefit all residents of Mt. Lebanon, especially our most vulnerable citizens” said Joseph King, President of MLCE’s Board of Directors.
Here is the switcheroo:
Ms. Bowman said this feasibility study wasn't about identifying donors but about soliciting advice and feedback.School directors feel that alumni and residents could be ideal donors:
The interviews are based on the idea that the district would try a $15 million capital campaign, though other sums have been considered. Those interviewed -- "a cross section of the community" -- are told funds raised could go toward a program endowment or bricks-and-mortar development at the high school, Ms. Bowman said.
Capital campaigns of this size usually occur at universities or civic organizations, but school directors have said that Mt. Lebanon's alumni network and residents could be ideal future donors.Oshry guarantees:
He also told the board the study comes with a few guarantees -- whether it signals possibility for a campaign or not, the study could identify and gauge community interest, he said.
At Monday's meeting, PK announces the number to be $6 million, not $30 million. I guess that is a green light.
In March, we're told about 7% for a $30 million campaign.
On September 17, we're told 14% for a $6 million campaign.
So which is it? Was it a feasibility study on whether or not a capital campaign could raise $30 million? Or was the purpose to determine the amount of money we could successfully raise?
This concludes Spin Class 101.
What's the difference? And besides, didn't we get both? Perhaps I'm over simplifying it, but if PK suggests that we can raise $6M, I take that as a pretty good indicator that trying to raise $30M isn't feasible.
ReplyDeleteIf PK came back on Monday and said "$30 million isn't feasible," wouldn't you assume that the next question from the Board (and this blog) would be "Well, then what is?"
Or would you have preferred that they simply stopped after the first answer?
We may not like the conclusion about how much we can raise, or how much it might cost to raise it, but I think PK answered both of the questions asked at the end of your post.
Dave Franklin
Valid commentary, Dave but I think there are two bigger concerns for people. First, the initial amount of 30, which somehow justified the "feasability study", was meant to prevent some additional borrowing. There is a radical difference in a publicly funded project like this between 30 and 6 million. Having attended the PK portion of the meeting, it became evident this whole idea should be tossed. According to the people who would be responsible for raising the money, even at 6 million chances aren't 100 percent. Plus, when questioned by Mr. Remely, the PK rep agreed it would take years to see any donations. That defeats the purpose of the campaign.
ReplyDeleteBut the larger issue is the lack of honesty and integrity on the part of the school board. The proposed number was cut in half with no explanation. That begs the question--why? Did the school board err with their initial number? Or did they know something they didn't bother to share with the public? Either way, they wasted 41k on something anyone who is breathing could have concluded.
So now the public will be on the hook for the initial 30 million, plus whatever additional costs are incurred by creating a full-time position for a professional fundraiser...to help raise money to offset the 30 million...if it weren't tax dollars at stake, this would be comical.
I can’t disagree with much of that James. I personally didn’t think there was much of a chance of pulling in $30M (or even $15M) unless we had one significant donor waiting in the wings a la Bill Dietrich. I also don’t think we need a high level consultant to tell us that with a little hard work we might be able to raise $6M in the next 24-36 months. So I suppose I would agree with premise that the PK experiment worked out pretty well for PK, but not so much for Mt. Lebanon. If the deliverables and other information generated by PK as part of their efforts make it easier for us to raise $6M all the better, but I don’t think we need to rush out and spend $850,000 to raise $6M. We can probably do pretty well on our own. Just my opinion.
ReplyDeleteHowever, at the end of the day, here’s where I come down. Regardless of what your interests are, I think most would agree that we would prefer the Mt. Lebanon of today (or perhaps even 25 years ago) over some watered down version of our community. In order to preserve that, we need to maintain those aspects of our community that make it special and upgrade others as necessary. So whether you prefer traffic circles with pretty flowers, parades, a library, great schools, First Fridays, artificial turf, lit tennis courts, Plein Air, the Brewfest, appealing streetscapes, leaf pickup, golf, deer culling, traffic calming, shiny red fire trucks, televised public meetings, a magazine, a new pool, more parking, or you name it, I think as a community we probably need to come to the understanding and realization that to accomplish it all, it may cost us more than what we already pay in taxes. Ultimately, the things that survive and prosper will be those that are supported by the folks who figure out how to generate the additional revenue through creative means. I’d like to think that as a community we can keep more than we lose.
Dave Franklin
Wait, was that a pig that just went by my window? My phone just rang and it was Osama Bin Laden and he told me it was freezing down there where he is nowadays.
ReplyDeleteJames Cannon and Dave Franklin agreed on something.
Now we all just have to wait for the galloping white horse!
Kudos to you both for finding common ground.
As for me, the study absolutely did NOT accomplish what the school district wanted it to accomplish. They wanted to avoid a referendum on the second float of bonds by having taxpayers an alumni fork over more money for their high school project.
It did accomplish what PK wanted it to, though. PK would have gotten its fee regardless of the money raised. They don't care if the campaign is for $1 or $100,000,000 dollars. Of course the FIRST THING out of their mouth is that this thing should go forward.
Dave and James, what is your degree of confidence in raising $6 million in the next 24-48 months? Personally, I think it is more likely to see us raise less than $1 million in that time frame.
Elaine,
ReplyDeleteI think you followed the bouncing ball pretty well there.
I am disappointed but not surprised by the results. The best case scenario for us taxpayers was to have a few "whales" come forward but that doesn't sound likely.
In this economic climate I'd like to see better than an 87% chance at being successful in a $6 million campaign. As was mentioned in the meeting, when these campaigns fail, they fail badly. The District will need to invest and incur annual expenses to try to make this happen. Perhaps the Board could ask Pursuant Ketchum to make up the difference between the school district's out of pocket expenses and what is actually raised for the first two years. If they are as good as they say they are, that should be a pretty good deal for them.
Just a thought.
James
If done correctly, I think $6 million is doable. However, the first (more important) question to be answered is "What are we raising money for?"
ReplyDeleteOnce we answer that, I will gladly offer to handle the first 18 months of fundraising at half the cost proposed by PK, plus travel expenses.
Dave Franklin
Doing away with LEED certification, tearing down the newest building on the campus and burning 7,000 gallons of diesel oil in a month didn't help the cause:
ReplyDeletehttp://www.projectappleseed.org/capitalcampaign.html
Mr. Franklin, what do you mean by "handle"?
ReplyDeleteDo you mean, you will pay $450,000 to have a professional fundraising firm do the work, before the effort starts?
Does it mean you will do the fundraising for $450,000, after the fundraising goal is achieved?
If it is the former, good luck.
If it is the latter, you answered your own question.
We are raising money for you.
Actually, it was a joke (sort of). I was offering to handle the fundraising efforts for a salary of $420,000. Not a bad gig, right?
ReplyDeleteDave Franklin
The majority of PK's information could have been learned for free by simply doing some research on the web.
ReplyDeletehttp://www.capitalcampaigns.com/campaign_management/manage_budget_costs.php
The fee should be a straight percentage of the dollars raised.
Based on what has been accomplished so far with the feasibility study, a pre-campaign phase is now complete. It is time for the “quiet phase” of the campaign when the district should be securing top gifts based on the pre-campaign work already done by P/K.
ReplyDeleteWhy not just send a letter to those who were interviewed since they seem to think that a $6M goal is realistic and ask them for donations now. Additionally, ask them to approach those who they thought would be willing to donate? That would be a real "test case", or quiet phase. If that bears fruit then it may be time for a public phase of intense solicitation and at which time hiring a person to perform this activity would make sense.
The District (meaning taxpayers, donors to the MLFE and to the Community Endowment) has already paid P/K to do some legwork and the district owns the information that was collected. I see no reason why there should be any additional commitment made to pay P/K or hire anyone. As they say, “The proof is in the pudding”, so show me the money!
-Charlotte Stephenson
I want to remind everyone of your letter, Charlotte. The problem begins with all of us. You wrote:
ReplyDelete"When I became frustrated for not getting information about the School District’s decision to conduct a feasibility study relative to the donor as we were promised by Board President Josephine Posti, I eventually filed a RTK." The link is in your post.
Elaine
As I wrote in March, I think spending $40 thousand to measure our fund-raising potential was a good investment. Prior to that investment, decision-makers could maintain the belief that there were 15 or even 30 million dollars of easy money to be had. Now those people will have to face the reality, credibly established by Pursuant Ketchum, that there is no easy solution to our school district’s financial crunch.
ReplyDeleteOur school leaders’ past decisions to spend boldly into a down economy, into escalating pension obligations, and into dwindling federal aid have put us into a position where we’re probably going to be forced to cut back on something. But we no longer have the option to cut back on bricks and mortar; we’ve committed ourselves to channeling at least $110 million of our increasingly scarce educational dollars into the high-school project. Now we’ll have to give up something else.
But what else does our school district spend money on but education? Like it or not, then, we’ll probably have to make some educational sacrifices. If that’s the case, I want our decision-makers to accept that difficult task as soon as possible. The more time they invest in the task, the more they can reduce the harm done to our students when the sacrifices come due.
Therefore, I’m thankful for the $40 thousand spent on the fundraising study. If it helps our school leaders to face hard decisions a day sooner, it will have been money well spent.
Let me get this straight, folks on this blog were willing to accept a skateboard facility as long as it was paid for by a donor but not willing to accept donations from willing donors because we have to pay expenses.
ReplyDeleteI'm sorry folks but it appears to me that you are not facing reality in the real world.
Enjoy your higher taxes.
Tom,
ReplyDeleteI understand your point. In my mind, $40K is an expensive reality check but that being said, it would be a good idea to use the information gathered so far to get something into the coffers from those who seem to have the ability to make it happen even if the total is not going to make much of a financial impact on the spending decisions the Board has already made. The question will be whether the Board will try moving ahead with a costly campaign or if they will agree that the money they hoped for just isn't there. I will withhold my prediction.
-Charlotte Stephenson
We'll see how much of a raise Timmy gets. (Oops, I typed Timmy. My fault. Timmy is the name of my dog.) Klein received a 6.9% raise about the time we found out that they revised their projections. They don't know how to cut back.
ReplyDeleteElaine
We need Dr. Steinhauer making enough money that he is totally focused on improving Mount Lebanon's education for all children by creating a results-only work environment. The new Strategic Plan should be finished soon enough; I look forward to seeing a fundraising plan included.
ReplyDeleteI see, John. Soooo, why did Jan get a 6.9% raise?
ReplyDeleteElaine
ReplyDeleteElaine, Are you changing topics in midstream?
Excuse me?
ReplyDeleteElaine
Elaine, We need to keep Jan focused on her work too; next year won't be easy.
ReplyDeleteJohn, The skatepark was to be built with little or no cost to the taxpayers, with a skatepark being the end result. The PK fundraising will cost $850,000, with a POSSIBLE 6 million dollar gain for the township as an end result. Two very different scenarios.
ReplyDelete
ReplyDeleteAnon 9:39,
The cost will be donated; we need to concentrate on the successful result. Campaigns that are successful lead to bigger campaigns that are more successful. We need to concentrate on the positive aspects of the campaign and the continued successful results that will result from it. Success can be huge over time.
Once we excite this campaign well, folks will realize it really is for the kids.
Keep the Faith
John old boy @ 5:44. So, let me put what you are apparently agreeing with in very simple terms : you, as a SB proxy, would be happy with a situation in which you wanted to say raise money from donations to pay for a $100,000 addition to your school in 2013, but on second thought felt a $50,000 kitchen remodel was more likely to attract that amount of money. But your fundraiser said that only $20,000 seemed to be the limit of donations to be obtained, and that the money would not really be available until 2017 - 2020 ; however, if you paid the fundraiser $7,000 with only $4,000 of that over the next year, he would be able to tell you then if the entire $20,000 in donations was really achieveable, and you could use that donated money for perhaps a new concrete driveway and to pay Dr. Tim for trombone lessons for students for 2 years.
ReplyDeletePlease don't tell us you would really buy into something equivilent to that but on a much, much larger scale. If so, you need a serious reality check.
John, the entire purpose of the study was to find significant private dollars to offset the second bond issue. That goal has been identified by PK as being unrealistic.
ReplyDeleteHowever, PK has suggested that they will still be happy to do a $6 million capital/endowment campaign at the same cost as it would have been for a successful $15 or $30 million capital campaign.
The fear expressed on this blog is that the goal posts keep getting moved and the more they get moved, the more likely it is that even the smaller number of $6 million would not be found.
In order to discover if the new, new, new goal can be met, the District will be asked to front money to PK and new staff to begin this work.
It's not like the District has $850,000 sitting around next year that they are just dying to spend. It's not like they are ready to hire additional staff that does not immediately contribute to the education of the students. But this is what PK is telling them they must do.
I know you want to tell people to look to the future. I would first tell people to look at the budget. It's not like it will be any easier next year than it was last year.
How about the SB uses the $850,000 towards turfing Mellon field so the Municipality doesn't have to pay for it? Mellon is the worst field in the community and the money would be put to good use.
ReplyDelete7:55, the District will need the $850,000+ to pay the annual grievance settlement for the next 15 years.
ReplyDeleteHow about $850,000 to cover the current change orders?
ReplyDelete
ReplyDeleteThe change orders will likely run to 2% of the budgeted amount or more - more than $2,000,000.
John
A recent article written by Harris Kenny, a policy analyst, and Leonard Gilroy, director of government reform at the Reason Foundation, might be of some interest to our school board. Titled "21st Century Schools Require 21st Century Finance," the authors discuss the trend toward public/private partnerships to finance new and upgraded school facilities. Part of the article states, "PPPs usher in private sector capital upfront, which is repaid in exchange for maintenance of the facilities over the course of the contract. Maintenance costs over the long-term are lumped in and included as a payment for a set period. Schools use the resources they would have used to repay municipal bonds and maintain the facility to repay a private partner instead, and more cost effectively."
ReplyDeleteOn second thought, given my experience with sending our board information, I doubt if any of them would read it.
RG,
ReplyDeleteYou can always go to the next coffee and tell them about this article. You may have to wait your turn along with your commissioner, but the time She spends with her loyal subjects is priceless.
Elaine
EG:
ReplyDeleteWith respect to Mrs. Posti's "loyal Subjects," allow me to paraphrase, and slightly modify, the words of that great American philosopher, Groucho Marx: "I do not wish to be a member of any monarchy that would have me as a subject."