School Board Discusses Second Bond for High School Project
July 17, 2013
At the July 15 School Board meeting, the Board took action to proceed towards issuance of the final bond issue to fund the High School Renovation Project. The official action appointed Tim Frenz of Janney Capital Markets as financial advisor and Jim Webster of Houston Harbaugh as Bond Counsel.
The final amount and structure of the bond issue will be discussed at the August 12 Board meeting. Initial indication from the Board is that $32,950,000 should be considered as the amount of the bond issue which would wrap around current debt service payments to reduce the millage impact on the community to an estimated increase of .18 to .19 mills per year for three years totaling .56 additional mills.
Financing Update Presentation
So here it is, Folks. Financing Update Presentation (repeated for emphasis.)
20 comments:
I am carrying over a portion of a previous comment under this new post.
Elaine
"Capitalized interest the first three years. Yup. So if you don't have enough money to make your minimum payments, no problem, will just add those "missed" payments onto the end of your loan."
Am I understanding this correctly?
The Gross Debt Service Is $257 million dollars!
How many gross mills does that represent? What is the average 'share' due from each property owner?
As in... When you go out for pizza and a latte and the check comes (doesn't matter if someone puts it on their credit card) what is each diners' share?
Plus as your head spins from just trying to figure out what $257,000,000 is, consider that during the same period the board will be passing out 3-4% raises, renovating more schools, contributing to pensions, buying ever higher healthcare insurance, turfing or returning fields etc., etc.
For what these people are being paid, they should have come to the meeting prepared to hand out the info being discussed (there's never more than 10 or so people in the audience) or as soon as it was presented had it on the website (it only takes a few mouse clicks).
To be an employee of 'OUR' district and tell a stakeholder to go file an RTK is a slap in the pompous slap in the face.
Think I'm crazy? Here's a test. Next time you have to make a presentation to clients or stockholders in your private sector job and someone ask for a copy of your presentation... tell 'em, file a RTK!
Yes, 8:56 AM. $256,820,985 to be exact. The footnote says "*Gross Debt Service is net of projected Capitalized Interest." What does that mean?
I noticed in the last go-around, Tim Frenz tends to put "the fine print" in footnotes. Remember the reimbursement footnote? Read James Fraasch's Jan. 12, 2010 update.
Elaine
Just an FYI. The 2013-14 budget has not been posted yet. http://www.mtlsd.org/district/finance.asp
Elaine
Elaine,
Holy cow, you bring up a good point. James had said the reimbursement dropped from 15% to 8% or roughly by half.
In this one, on the bottom left it seems to be calculating a reimbursement of 17.5%. Are we going to see this get dropped again? This number effects the "Local Effort Debt Service" column or how much will be spent from the general debt service fund (net of reimbursement).
This is really too much of a simplification but it's all I have time for, if there are around 13,000 households (commercial property?) each household's share of the Bond meal check is around $15,000 to $19,000.
Now sure, we can keep moving this meal onto new credit cards while we continue to dine out on turf salads and hand our waiters/waitresses $5,000 tips, at some point though we're either going to fess up and pay for our lavish lifestyle (uncle Harris Burg is having his own financial troubles and he'll be coming to taxpayers for help) or we're going to have start living on Mac & Cheese for awhile.
10:08 are you crazy, you actually want to look down the road.
This board and administration subscribe to the A.E. Newman School of Business Management... "What Me Worry".
My suggestion for all those parents out there with kids in the elementary schools. Start saving for a pick up truck for them! They'll need it to carry the bushels of money they'll have to take to school when they buy their parking permit, book fees, lab fees, sports fees, diploma fees, water fees, desk fees, computer fees, library card fee, security card fee, etc., etc.
Mr. Frenz needs to explain where he got the 17.5% figure from.
From tbe budget submitted to the PDE:
5100 Debt Service $74,000
5200 Interfund Transfers - Out $10,214,040
Total Other Financing Uses $10,288,040
Total Budgeted Expenditures $83,164,503
Jan Klein budgeted for debt the Gross Debt Service, while Tim Frenz showed Local Effort Debt Service on his graphs.
The board voted to instruct Mr. Frenz to proceed with preparing the bond documents based on the graphs Mr. Frenz presented.
Why didn't Ms. Klein correct Mr. Frenz during the meeting, explaining to him she budgeted for Gross Debt Service?
No Mr. Frenz doesn't, the board already told you what they're doing.
Did the board ever look at getting a Bank of America Visa card?
"This Visa-branded card pays a full 3% cash rebate on certain purchases, plus an additional $100 bonus statement credit if you spend just $500 in the first three months."
But they better act fast, can't imagine that $100 bonus will stick around forever.
Hmmm using the oldstyle math problem solving, 3% cash rebate on $32,000,000 = $960,000!
Crap, I just figured out how to pay PK for their fundraiser, so we'll be able to keep ALL of the $6 million they come up with. Geez, I didn't realize creating money was so easy.
We can opt for a pizza lunch bonus for Dr. S and staff with the $100 bonus if they can get us qualified for the card!
Or they can file Chapter 9 and go bankrupt.
http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Chapter9.aspx
Mt Lebanon desperately needs leaders, not managers in elected office.
Mt Lebanon needs to craft a vision for the future, and then we need to hire competent management who can translate that vision into specific actions that will realize the vision.
What Mt Lebanon does not need is a SB that lives in a pink cloud of euphoria, patting themselves on the back, praising themselves for how wonderful they all are, talking about how great everything is while they continue to move the community over the edge!
Our residents need to wake-up; rise-up, and take control of the community.
Enough is enough!
This is great news (wink wink), and it's what I've been saying for a long time. Let those simpletons keep spending money like it's unlimited. Eventually they'll hit a roadblock. It's usually referred to as "bankruptcy" (see-Detroit, Stockton, Harrisburg, etc). None of those mental midgets on the school board had the brains or the willingness to listen to actual experts. Nope, the schoolboard knew best. So nine people (well, more if you count Pooch's mommy and daddy and Posti's imaginary support base) decided, completely on their own, to create this situation depsite their being overwhelming opposition, an obvious financial collapse on the horizon and numerous experts telling them how to get a new school for a lot less. This is now the classless, lawless, clueless behavior we settle for in this community. Makes you feel good every time you pay your taxes, huh?
Could this be us soon? From the Auditor General's office: District Must Do More to Become Accountable to Taxpayers
Elaine
Attorney General Kane refused act on DOMA and is thought to be a threat elsewhere. Do you think she would move against a Democratically controlled school board?
No Elaine, this is where we are headed:
http://m.cbsnews.com/storysynopsis.rbml?pageType=national&url=http://www.cbsnews.com/8301-201_162-57594436/detroit-files-for-bankruptcy/&feed_id=1&videoid=37&catid=57594436
If what was once a great industrial city like Detroit can't tax (because there is literally nothing left to tax) then what makes the residents of Mt Lebanon, PA think that it will be any different for them?
The school board must make a sincere and determined effort to collect all back taxes.
If it doesn't, there will be more and more residents who don't pay their taxes every year simply because they can get away with it.
This just in. Sheraton Station Square Hotel, one of the largest in Pittsburgh, was just sold for $61,000,000.
That would only be around a mill increase considering $32,950,000 is .56 additional mills. In Cooperspeak, 4 large pizzas. What the heck is the school board thinking???
Elaine
In addition to wrapping the bonds and using borrowed money to pay the interest there is a third very serious problem with the maturity structure of the bonds that could make the school district a huge amount of money.
Given the Board's propensity to ignore good advice from anybody, even themselves, I will wait until I am asked to let the Board know how they got screwed AGAIN on this bond issue.
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