Monday will be a construction update, followed by the combined discussion/business meeting. Here is the problem. There is no agenda posted or available to the public. The summer months are when raises are passed, change orders are snuck in, as well as other important issues. July is also when Josephine Posti gets giddy over the tax liens list that becomes public information.
So all this will be happening on Monday, and no agenda has been posted.
Update 1:01 PM The school district website is now up. The agenda for Monday's meeting is available here.
Update 1:30 PM No biggie. Second bond issue is an action item.
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"Second Bond Issue for High School Project – The High School Renovation Project
Budget totals $109,650,000 of which only $75,000,000 has been funded through the
initial 2009 Bond Issue. With the pace of the project, the balance of funding must now
be considered. There is $1.7 million in a Capital Fund for asbestos removal which
should be dedicated to this project since that was what the funding was originally
dedicated towards. Utilizing these funds leaves a gap of $32,950,000 which can be
funded by a new bond issue. The size of that bond issue could be reduced if the Board
desires by using some of the funds either in the General Capital Projects account or by
excess funds not utilized for operations in the General Fund from 2011, 2012 and
estimated from 2013. The Superintendent recommends the Board discuss the size of
the bond issue borrowing and authorize Janney Capital Markets and Houston Harbaugh
to proceed towards bond issuance over the next month. The Board will have to take
action to approve the sale of the Bonds either at the August Board meeting or at some
later date if market conditions indicate that waiting would be in the best interest of the
District."
17 comments:
Is it one meeting, or two meetings back-to-back?
If it is one meeting, residents do not have an opportunity to comment between the discussion and the vote.
If it is two meetings back-to-back, and the Board waits until the end to announce the reason for the discussion session that occurs before the first meeting, it is a Sunshine Act violation.
SUNSHINE ACT
Section 708(6)(b)
Procedure. The executive session may be held during an open meeting, at the conclusion of an open meeting, or may be announced for a future time. The reason for holding the executive session must be announced at the open meeting occurring immediately prior or subsequent to the executive session.
One meeting. Residents don't have an opportunity to speak. It is just like the budget forum held on April 2. Elaine Cappucci rushed Bill Matthews through his presentation so that they could discuss the budget, which is still not available to the public.
Elaine
No biggie. This is on the agenda:
"Second Bond Issue for High School Project – The High School Renovation Project Budget totals $109,650,000 of which only $75,000,000 has been funded through the initial 2009 Bond Issue. With the pace of the project, the balance of funding must now be considered. There is $1.7 million in a Capital Fund for asbestos removal which should be dedicated to this project since that was what the funding was originally dedicated towards. Utilizing these funds leaves a gap of $32,950,000 which can be funded by a new bond issue. The size of that bond issue could be reduced if the Board desires by using some of the funds either in the General Capital Projects account or by excess funds not utilized for operations in the General Fund from 2011, 2012 and estimated from 2013. The Superintendent recommends the Board discuss the size of the bond issue borrowing and authorize Janney Capital Markets and Houston Harbaugh to proceed towards bond issuance over the next month. The Board will have to take action to approve the sale of the Bonds either at the August Board meeting or at some later date if market conditions indicate that waiting would be in the best interest of the District."
Elaine
Oh great, interest rates are at a 3 year high today.
What is the District debt limit at this point in time, and what is the maximum new borrowing amount before an electoral referendum is required ?
Also, what is the spending thus far on the "new construction" portion of the overall project. If the apparent limit of about $48 million in project costs (not just construction costs)is reached and will be exceeded, this also requires an electoral referendum approval to continue.
With these words the District admits budget padding over a three year period (2011, 2012, and 2013) and the Superintendent recommends proceeding with a bond issue of unknown size over the next month, without giving a reason:
"The size of that bond issue could be reduced if the Board desires by using some of the funds either in the General Capital Projects account or by excess funds not utilized for operations in the General Fund from 2011, 2012 and estimated from 2013. The Superintendent recommends the Board discuss the size of the bond issue borrowing and authorize Janney Capital Markets and Houston Harbaugh to
proceed towards bond issuance over the next month."
Inferred in the statement is the fact that the District could pay to turf Mellon Field from its own money.
But let's not confuse the discussion of the Board with actual facts! They have already proven they never listen anyway and we know they are not smart enough to pay Timmy what his opinion is really worth.
According to the June 2012 CAFR, the Disrict had $33,428.376 available to borrow without exceeding the debt limit.
That number will be a bit higher today due to the district making payments on existing debt over the course of the past year.
Yes, the District will again push their debt to the absolute maximum in order to get this high school project done.
On the other side, I haven't done the calculation on millage for the borrowing but you can guess a $25 million borrow will result in a 1 mill increase. The Act 1 index has been less than a 2% increase each year. A 1 mill increase on top of a 27 mill base will equal a 3.7% increase alone and would likely require a referendum.
You can believe there will be some fancy footwork coming your way including a "new and improved" way to structure bonds so that they don't cost any money.
It is amazing that all this creative financing will be done and we still haven't seen the actual 2013-2014 final budget.
Citizen Comments will be before the public will hear any discussion on the bond issue. Comments will be permitted at the end of the meeting, after the damage is done.
Excellent point about being able to afford turfing Mellon Field.
If we finally have a referendum, and the voters vote it down, the sports people got their new athletic wing. That is all that really matters, right? The District can turf Mellon Field and Building C stays. As Michael Scott says, " It is a win/win/ win, we all win."
Elaine
A bond issue will be structured so that the first debt service payment will occur after June 30,2014 to avoid occurrence during the already approved budget for 2013-14 school year. There may also be an attempt to capitalize interest for a year or two and/or an attempt to wrap some of the bonds, which will defer debt payments in an attempt to minimize millage increases to con the public and try to stay under Act 1 limits, but increase the overall cost of funding.
They may also try the premium bond trick like they did on the $69 million bond issue that brought in $75 million because the interest rates were set at more than 50% higher than market at the time. Bond buyers had to pay a premium over par value for the bonds which resulted in a $6 million premium received over the $69 million par value that must be paid back with premium (high) interest rates also paid by taxpayers.
I'm left wondering why they bother having public meetings these days. They ignore the will of the people footing the bill so it makes no sense to have any comment or discussion. Way to lower the bar, school board. You all must be so proud.
And no word yet on the grievance, is there?
Elaine
Elaine, If the Board refuses to reduce the amount of the last three years overtaxation to reduce the amount of the second bond issue we might have an idea how the grievance turned out. No reduction would indicate a possible loss of the grievance.
But we know we can't trust the Board to tell us the truth if they lost. After all, they have been hiding the Personnel Hiring Report from the public for 10-15 years.
Maybe Bill Lewis can remind us how much more the elementary school bonds cost because they were wrapped? I can't remember but it seemed to be around 10 million.
Add to that the millions more that the $69 million float cost vs the build america bonds and then compare whatever it is Jan will do tonight.
We are talking about tens of millions of taxpayer dollars being wasted due to poor fiscal planning. It really is scandalous.
This was before my time, but i did read this on an old Blog Lebo post. http://bloglebo.blogspot.com/2009/03/hidden-costs-of-new-mt-lebanon-high.html
Bill Lewis wrote: "The $50 million bond issue for the elementary school renovation project was in fact wrapped by the previous board, and this is resulting in about $10 million in extra or excess interest costs over the life of the bond issue to we taxpayers."
Elaine
I also found this on the school district website:
http://www.mtlsd.org/highschoolrenovation/projectfinancing.asp
Don't forget what the PSBA said back in April:
http://lebocitizens.blogspot.com/2013/05/mt-lebanon-in-psba-news.html
"Mt. Lebanon School District: ... The district is delaying borrowing the final $34 million necessary to complete the project with the expectation that state funding will be on-going at that time. However, with Act 1 limitations, the district has serious concerns about the ability to provide funding for the bonds if it does not receive the $450,000 missing in state subsidy on the first bond issue as well as the subsidy on the second bond issue once it is issued."
Elaine
Interest was capitalized on the middle schools bond issue and cost extra money too.
John Ewing
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