It's been a week since we saw over 100 people attend the school board meeting to set the Act 34 number and hearing date. That date will be February 22nd, by the way. The vote passed 6-3.
It was a whirlwind of a few days heading into that meeting after releasing the white paper that outlined some of the coming tax increases. That paper generated a significant amount of interest both by our local taxpayers and by the local media. Many members of the local media are residents of Mt Lebanon and therefore have significant interest in the happenings in Mt Lebanon with regards to this project. The school board received over 350 emails between Wednesday afternoon and Monday's school board meeting. That is a TON of emails and they are still coming in. I would like to personally thank everyone that expressed their opinion on setting the cost of this project.
Please be sure to again make your voice heard as part of the Act 34 hearing. I will post information on the ground rules for that hearing shortly.
I have often said that there is room to disagree on this project. While I expected significant blow back on the release of that paper, it did not really gather steam until this weekend. Some people even suggested that I "made-up" the numbers. Sorry, but that is just not the case. The biggest counter-argument I hear to that paper is that I used a "worst-case" scenario budget that was provided by our finance director from April 2009. Understand that there were three scenarios that were provided:
1) A five year projection that did not include either a high school project or increases in pension contributions
2) A five year projection that did not include any increases in pension contributions but DID include a high school project
3) A five year projection that included both a $117 million high school and increased pension contributions (based on a loss of 30% in PSERS investments- PSERS actually lost more than 26%)
Only one of those three scenarios was due to come true. We KNEW we had a HS project and we could have prepared as if the State would not be able to do anything with PSERS. Honestly, I was one of those that was hopeful they would do something, anything to ease the burden on local taxpayers. While there is some legislation pending, I am unsure how it will impact the immediate and real need for relief from local property taxes. The fact remains that the worst-case scenario budget was (and remains) the most likely of the three scenarios to come true.
As for the 5-year projections, add in the fact that our state reimbursement for the project was incorrectly projected to be close to 15% instead of the 8% we are actually getting (a difference of almost $14 million or approximately $600,000/yr over the 25 year bond) and you have yourself a pretty tough situation. Now, to be fair, we did secure bonds at very low rates which should reduce somewhat the millage required by the high school project. Additionally, we all hope that we will not have to borrow all the way to $117 million for this project. There were promises by Board members last Monday to bring the project costs under $95 million. I hope they are right and I hope they don't do this by reducing building material quality substantially, but that still will not be enough to avoid significant increases in millage.
That paper I put together is something that should have been done two years ago. There has never been a publicly available analysis done that puts into perspective what everything is going to cost us going forward. The point was that we cannot do the HS project in a vacuum. What we can afford has to be calculated by looking at ALL of our obligations, not just what the cost of only the high school will mean to our taxpayers and not just based on what the Commonwealth allows us to borrow before going to referendum. The FACT is that if we tried to borrow all of the money for this project at the same time we would HAVE to go to referendum. By splitting the bond floats into two different years we avoid it altogether.
In 2007 when I ran for this position I knocked on literally thousands of doors. At the time there was a project on the table that included a possible $120 million high school project. Even then many taxpayers said they could not afford the increase that a project of that size and scope would bring. This was BEFORE the market crashed, before 401k's got wiped out, before unemployment jumped to over 10%, before home prices stagnated, and before there was any real idea about the coming PSERS pension crisis. To think that today we can afford the same or similar project cost as something we would have had to stretch to achieve 2-3 years ago is the wrong way to think about this. We are in a different reality financially than we were in 2007. When running for election I said I was going to fight against spending anywhere near $120 million on this project and I will keep that promise until the battle is lost.
Lastly, I want to thank the people who have stopped me and expressed their gratitude for putting this project and our coming tax increases in perspective. I have maintained this blog for almost two years now and I have said repeatedly that a budget like the one we are looking at for 2010-2011 was going to be the norm going forward. Go back to the archives and see why I voted no on each of the last two budgets. The white paper I put out there was mostly a regurgitation of the information I have put on this blog for the last two years. When you put it all together like I did in that paper it just makes one heck of a case for us to step back and reconsider how much to spend on bricks and mortar.
To the handful of you out there sending emails to the Board asking for my head on a platter and for some public "censure", I'm not sure what to say about that. The last thing I would ever want to see happen is for someone's freedom of speech to be trampled on. Because I am a Board member do I give up my right to say publicly what I believe to be true? Do I automatically have LESS ability to express my opinions because I am an elected official? To some of you that is exactly what you believe to be the case. If you are simply suggesting that I am going outside of our Board Operating Procedures then I would suggest you apply those principles equally to those members of the Board who spoke negatively of other Board members at our reorg meeting in December. Please email them to tell them how upset you are with their conduct as well. I will wait to be copied on that email. Note that nothing I said was a surprise to anyone on this Board. In fact, in January of 2009 I gave a presentation to the Board and the community that had much of the same information found in my white paper. Quite honestly, the passion on both sides of this issue is a reason I love this town. People are genuinely involved and interested in local government more so than in any other place I have lived.
Mt Lebanon is a tremendous town. I don't want to lose what we have collectively built over generations of hard-working people being in this town. We have great people, we have great culture, and we have great schools. I am willing to pay a bit of a premium to live in this community for a long time. My fear is that as we raise taxes more and more, then those people that make this town great will find it less attractive. I will continue to fight for the future of Mt Lebanon every day I am on the Board.
Thanks for reading and stay tuned for an Act 34 hearing update in the coming days.
James
