January 13 Proposal Presentation

Last night I was able to present to the entire Board the proposal that I outlined first in October. Last month I posted a copy of that proposal on this website here.

You can view last night's entire presentation with this link here. There were some slight changes to the plan presented in December after I received a lot of good feedback from the community. Some of the changes that came about were:

1. Instead of a 1 or 1.5 mill increase in year one, the new plan phases in a .5 mill increase over three years. This would net us approximately $21 million if the money was saved until 2016-2017
2. Instead of waiting until 2020 to start construction, the revised plan looks at putting a shovel in the ground in 2017.
3. I added a few slides to show the increased cost of issuing bonds in this uncertain economic environment. Rates have increased from 4.5% (as calculated for the July forum) by 1-1.5% according to what our bond counsel told us in December.
   
4. I added a slide that shows future millage rates based solely on this plan and a $100 million dollar project in 2017 versus doing a $100 million project starting next year. That slide does not take into account any millage increases due to retirement contribution increases or normal operating budget increases- it only compares a $100 million construction project. Note that while we may experience some inflation in the years heading up to 2017, much of that inflation would be made up for with whatever rate of return we would get by investing the savings from the increased millage in government bonds.
   

I will post at length about last night's meeting after the forum tomorrow night. There may be a passing mention of this plan and its merits at the forum. I suspect we will be told that $10-15 million will be only a drop in the bucket. Honestly, it is funny, because that is exactly what the intent of the plan is! It is intended to extend the life of the school by 7-8 years not repair/replace every problem we face. I will still suggest that without directing the architect and construction manager to investigate whether we can invest money into the school to help it last until we can afford a major construction project in 2017, we have not weighed all of our options. As Director Hart said last night, if we cannot figure out a way to invest $10-15 million in this school to make it last for 7 more years, then shame on us.

Let me make one point here. Last night a Director suggested that with my proposal "...it was clear that the education of our children never entered the equation". Nothing could be further from the truth. What will come to light tomorrow at the forum will be that each of the alternatives (except for a full renovation) that were investigated in July will more than likely require us to go to referendum. Based on the July projections, I figured that was likely to be the case. That forum was the impetus for me to get to work on brainstorming some alternative, workable proposal to address the educational needs of our students.

This begs this question, if the original four proposals investigated by the architect and construction manager were recommended to the Board due to the likelihood of those options satisfying the educational needs and wants of this community, and now each of those options is off the table due to the need for a referendum, then where does that leave us?

The plan I put out there gets us one of those options that was recommended by the architects. I know for a fact that it satisfies the needs that this Board and the community had set forth in 2007 because it allows us to afford one of the options that was recommended by the professionals. In fact, it doesn't just put us into position to afford ONE of the options, it likely allows us in 2017 to move forward with ANY of the alternatives without the need for any kind of referendum. The Board at that time would have the flexibility to do whichever project seemed appropriate and that decision would not be burdened by trying to do only what they could do short of forcing a referendum.

There were some good questions from other Board members that I will answer in my future blog post after Wednesday's forum. I was not allowed the opportunity to address all of the questions from other Board members last night.

I always want to be transparent with what I am talking about. To that end I have a couple of links for you. In order to see the data from the graphs in the presentation click here. If you see anything wrong with the assumptions let me know. They were all pretty straightforward. Additionally, there was a chart that I did not include in the presentation that I am still trying to digest. It was a pretty amazing discovery (for a data geek like me anyway). Check out this slide that charts Percentage Millage Increases vs Percentage Student Population Changes from 2001-2008 for school districts that are similar to Mt Lebanon. I am still trying to determine whether I can make any definitive conclusions with this. I suspect I will need to get some more school districts in the data set to see for sure.

I'll be back on Thursday. In the meantime, be sure to attend the forum on Wednesday night at the High School Auditorium if you can.

Thanks for reading.
James