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!

We still don't know the winning bid UPDATED 2X

Last night, Mt. Lebanon School Board Directors approved the second bond issue for the high school renovation. It brought $32,950,000 in proceeds. It will have for the first year, a .2 mill tax increase, a  .19 mill tax increase for the second year, and a .2 mill tax increase for the third year. We sold $35,090,000 bonds for proceeds of $32,950,000. The expenses appear to be over $2 million.  Scott Goldman was the only director who voted against it. Level funding cost $7,890,000 less than wrapping bonds and borrowing the interest over the life of the bonds, assuming the bonds are not refinanced.

What we don't know is what the net interest cost or the true interest cost of the winning bid. We were told that the winning bid and the cover bid were within .01% of each other. The board did not reveal either cost last night.

In 2009, we were quoted a 3.59% Arbitrage Yield, but in the Act 34 document, it was revealed that the True Interest cost was 4.10%.

Moody's report is here. The podcast to last night's meeting is here.

Update August 20, 2013 12:11 PM Taxpayers file lawsuit to block Woonsocket tax.

Update August 20, 2013 5:53 PM The MTLSD website is down, but I understand this was posted today. Also, residents have called Jan Klein today, asking for the winning bid and was told to file a RTK. Any stockbroker could have answered that question, but you won't get it from the School District .

School Board Votes to Issue Bonds to Complete Financing for High School Project August 20, 2013 At the August 19, 2013 School Board meeting, the Board voted to authorize the issuance of General Obligation Bonds, Series of 2013 in the aggregate principal amount of $34,745,000 to provide funds  for the completion of the renovations to the high school. The bidding was favorable with the District being the only competitive bond sale scheduled in Pennsylvania this week, and the second largest and second highest rated sale of only 11 competitive sales across the country on Monday, August 19, 2013. There were a number of bids, and the bids were very close.  The winning bidder was Mesirow Financial of New York City.  Mesirow is generally not an active bidder on Pennsylvania school district bonds, but said they were enticed to bid due to the strong Aa1 credit of the District and the belief that their investor base would be excited to own these bonds.  With this sale, the District will continue to finance the construction of the high school until its completion in 2015. On  August 12, the Board gave direction to the financial advisor and bond counsel to proceed to bid on an anticipated $33 million debt issue to fund the remaining costs of the high school renovation project. The bonds were directed to be wrapped around existing debt so the millage cost to the community will be minimized with the debt payments implemented over a three year period. It is anticipated that the increase in millage will be below .2 mills each of the next three years to complete this financing.

School Board Moves Ahead with Bond Issue for High School UPDATED

School Board Moves Ahead with Bond Issue for High School 

On Monday, August 12, the Board gave direction to the financial advisor and bond counsel to proceed to bid on an anticipated $33 million debt issue to fund the remaining costs of the high school renovation project. The bonds were directed to be wrapped around existing debt so that the millage cost to the community will be minimized as the debt payments implement over a three year period. It is anticipated that the increase in millage will be below .2 mills each of the next three years to complete this financing. Board approval of the sale of these bonds is anticipated at the August 19, 2013 Board meeting.

The bond analysis has finally been shared with the public and can be found here. Debt Profile

Update August 15, 2013 1:33 AM Mt. Lebanon schools pick loan option

Looks like it is a go.

Also on this Monday's agenda:

Issuance of Bonds – Tim Frenz, our financial advisor, and Jim Webster, our bond counsel, will be at the Board meeting to give an update concerning the sale of the second round of high school renovation project bonds next week. The structure and size of the bond issue will be discussed before the sale. Assuming good market conditions, the sale will occur on Monday, August 19th with Board action to approve the sale at the meeting that evening.

No discussion of level funding, no update on the fundraising hire since the job posting has been removed and no news of the Final 2013-14 Budget.

Lebo needs to demonstrate fiscal responsibility

Mt. Lebanon resident and Lebo Citizens reader, Bill Matthews submitted a letter to the editor of The Almanac. Here is the link to his letter. The letter is published below in its entirety.

Lebo needs to demonstrate fiscal responsibility

Mt. Lebanon School District is embarking on the second bond issue for our high school renovation. As currently planned, the financing will cost more than it should for three reasons: 1: The renovation is too big and expensive. 2: The financing plan is to �wrap� the bonds. 3: The plan includes capitalizing interest in the early years.

It will not change anything now to discuss the size and scope of the project; but we should never lose sight of the fact that our board, when they thought there was room in the budget, added amenities not recommended in the space plan prepared by our former superintendent, yet did not delete these upgrades when the initial building bids burst our bubble.

One could see the proposed bond wrapping coming years ago. Nevertheless, its primary purpose is not to soften the millage impact as alluded to by the board. The bonds are being phased in to provide for actual future millage increases up to Act 1 limitations. Between the demands of this financing, and normal operations, we can anticipate experiencing maximum allowable millage increases for the next few years.

The capitalized interest is, however, an opportunity to demonstrate some respect for Mt. Lebanon residents and taxpayers. The plan includes about two million dollars in borrowed money to fill out the interest expense in 2014, 2015 and 2016. The administration has acknowledged it has three million dollars that could be used to reduce the total borrowing, to which the board turned a deaf ear.

Here is a suggestion, in lieu of hoarding these funds the board could demonstrate some fiscal responsibility by at least paying the interest expense with the available reserves. Effectively, it would do two things: lower the overall cost of the borrowing and consequently, lower our go forward tax burden.

Our school board will be discussing the bond issue on Aug. 12, and possibly give direction to our financial advisor to sell the bonds; taxpayers with similar concerns or even better ideas should contact the board, maybe they will listen.


Bill Matthews
Mt. Lebanon

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.

Tonight is a big night

Tonight, the school board is pulling a fast one, probably the fastest one ever. The second bond issue is going down tonight.

Unfortunately, I cannot attend the meeting. My guess is that only the regulars, David Huston and Paula Bongiorno will be attending. What a shame.

School district website is down...UPDATED 2x Includes Second Bond Issue

And just in time for the ONE meeting in July. Normally, the school board directors hold two meetings a month. The first meeting is a discussion meeting where the school board introduces and discusses what is posted on the agenda. The second meeting is the business meeting where a vote is taken. In recent years, July is a combined meeting.

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.

1. "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."