Comments on comments?

Last night's school board meeting was very interesting, as far as citizens' comments go. Topics included:

• Financial advisor 
• MTLSD does not take the preliminary budget seriously. We are the only school district that refers to it as a "fake budget."
• Trophy case
• Zamagias TIF
• Pool railing
• Pool locker room floor is slippery
• Meeting was not available for viewing last week.
• Agendas are not publicized before meetings
• Trouble with teacher at Howe School

Without naming names, I would like to hear more about the situation at Howe School. The mother was cut off at the knees by the president and solicitor when she was speaking. 

As far as the TIF goes, while one commissioner was removing her blog over the weekend, another commissioner posted this: Washington Park, corner of Bower Hill and Washington Road In December, Zamagias defaulted on their TIF loan. Mt. Lebanon has the opportunity to buy it back out of the Parking Fund, I believe. Please contact our commissioners, Senator Matt Smith's office, or Representative Dan Miller's office and share your opinion on this topic.

I would love to hear from Lebo Citizen readers about all these topics which were raised at last night's meeting. 

To listen to the meeting please visit Lebo Citizens podcast from MTLSD's January 20, 2014 meeting

This is a sin.

A resident filed a Right To Know on August 20, 2013, requesting the August 12 and August 19 Janney presentation to the Board on the second bond issue.

Here is the response:

Thank you for writing to Mt. Lebanon School District with your request for information pursuant to the Pennsylvania Right-To-Know Law.

On August 20, 2013, we received your request for the August 12 and August 19 Janney presentation to the Board on the second bond issue. Your request is granted. Partial documents responsive to your request can be found on the District’s website at

http://www.mtlsd.org/district/HeadlineArticle.asp?HLP_ID=1342&HL_ID=1450#1450.

The complete documents are not available in an electronic format. The cost for duplicating the records which are responsive to your request is $10.00. Please make your check payable to Mt. Lebanon School District, and provide enough advance notice so that we can have the copies made and ready for you to pick up. If you would like the copies mailed, please add $1.50 for a total of $11.50.

Sincerely,

Jeanine R. Szalinski
Open Records Officer
Mt. Lebanon School District
7 Horsman Drive Pittsburgh PA 15228
412.344.2077

pc: Thomas P. Peterson, Solicitor

The resident was not happy to hear that public information had a price tag. It should be on the website for the community to see.  The resident refused to pay the amount and added:

Also you could post this on the website and tell the community what you did unless you are ashamed go yourselves for squandering $7.6 million in extra debt service.


At any rate after what Jan Klein did to that bond issue I am NOT paying you $10.

This is not an isolated incident. I have had to pay for information, came home, scanned it, and shared it on my blog. This is a sin!

It's a wrap!

The school board has decided to use a wraparound structure for the second bond issue vs. level payment. With the cushion, a.k.a over taxing, that the school board has established, the board has decided to use capitalized interest. The cushion could be used for OPEB, the grievance, the rifle range, etc.

Tim Frenz, again did not have a presentation for the public. He resorted to pointing to his papers, rather than sharing the information on the screen to his left. In all my years of making sales presentations for my $5 million territory, I would have been fired for being so unprofessional. Josephine Posti said it in a nutshell. The public does not have the figures that the board has to see, to know that they are making a good decision. Why not, Josephine? She went after Scott Goldman when he voted in favor of level funding. He calculated that level funding will cost the district $5.6 million LESS. By wrapping this bond, we will be paying 19% MORE. She said that it will cost us more in millage. Scott tried to explain that we have the option to refinance a level bond issuance, as well, while saving taxpayers $5.6 million dollars. Cappucci, Birks, and Posti all pounced on him.

The good news is that Moody's has given Mt. Lebanon an AA1 rating.

I am not pretending that I am an expert on this topic. It is complicated to me, so please listen to the podcast for a better explanation. It is available here.

Presenting the Wrapper

I filed a Right To Know for the July 15, 2013 presentation made by Tim Frenz on Tuesday, July 16, 2013, so it looks like they have had a change of heart. The following is on the school district website:

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.)

Wrap, wrap, wrap. They call him the Wrapper.

Tim Frenz, from Janney Capital Markets, a subsidiary of Janney, Montgomery, Scott LLC, presented two options to the school board at last night's July Combined Meeting. The board made this resolution:

General Obligation Bonds for High School Renovation Project: RESOLVED, That the Board authorizes Tim Frenz of Janney Capital Markets and Jim Webster of Houston Harbaugh to begin preparation of financial documents and legal opinions to issue General Obligation Bonds to complete funding of the High School Renovation Project.

I uploaded the podcast from last night's meeting and it is available here. While the presentation was long, here are the highlights, as best as I understand. There were two options, both involving wrapping bonds.

Option 1
Using the $1.7 million in the asbestos fund and taking nothing out of reserves, the board would consider financing a $32.9 million bond resulting in $35 million. (5 year phase in). This wraparound option would phase in a .56 mill increase. It reduces the annual payment and wrapping keeps the millage rate lower for the community.

Option 2
Using the $1.7 million in the asbestos fund and using $3 million in reserves, the board would finance a $30 million bond, resulting in a .5 mill increase for this wraparound option. (3 year phase in)

Dale Ostergaard pointed out that the reserves would need to fund five things.
1. PlanCon reimbursement, which won't happen this year either.
2. OPEB (Other Post-Employment Benefits) reimbursement
3. Maintain the annual capital fund which amounts to $5 or $6 million, to allow for purchasing books, computers, etc.
4. Rifle range funding?
5. The MLEA Grievance

At this point, Ostergaard, Cooper, Birks, Lebowitz, Remely, and Posti opted for Option 1. Scott Goldman, the only fiscally responsible school board member opted for Option 2, based on further clarification from Jan Klein. She has set aside $1 million for the grievance. It could be plus or minus $1 million, but she decided to set aside $1 million.  According to Klein, there is approximately $8.5 million available total in all the funds. She felt comfortable taking $3 million from those funds and applying them to the second bond issue. Since Goldman was relying on Klein's expertise, he opted for Option 2.

Posti and Cappucci opted for Option 1.

In the end, it was a unanimous vote to go with Option 1 with the vote scheduled for August 19.

A few observations from last night's meeting:

Thanks goes to Mary Birks for trying to eliminate that one dollar for the wall padding.  Good work, Mary! You tried.

Larry Lebowitz gave his usual Rah Rah speech for Klein's excellent work.

Tim Frenz only had enough handouts for the board and had no PowerPoint presentation. He balanced his papers on his chest, pointing to his papers to make his presentation. A resident asked for a copy of his presentation and Mr. Frenz didn't have extra. The same resident asked Jan Klein for a copy and she responded with that she didn't have any extra copies and to File a Right To Know. So much for transparency.

There was no third option presented for level funding, only wraparound options.

We can refinance again starting in 2015 or 2016.

Frenz is a hero for not taking all the money out in 2009.

These bonds will not be an exception for Act 1. The Act 1 Index is getting tighter and tighter.

The drop dead date for the second bond is October - November. Berkabile says October. Jan Klein's sleep is important to her and would sleep better if this was done in August.

This will cost us $3.5-4.5 million to finance.

In addition to Mr. Frenz' presentation, a RTK is needed for Jan Klein's July 1 presentation to the board.