Just a quick note to say that I am sort of caught up in the historical nature of the past week. I'm trying to wrap my head around the implications of a bailout/no bailout vote for my personal, professional, and school board functions.
My personal feeling is that yesterday was panic and those that needed to make a point, did so. Whether you agree with the bailout or not, nobody can tell you that it is certain to work. Nobody can tell you that it won't work. The question on my mind is, how much do we have to give up. Not just financially, but as far as our way of life. As a nation we seem to be on the precipice of a new paradigm. One where we can't simply borrow our way to prosperity. Is the passing of a bailout our one last gasp before the eventual decline? What country out there will give us the $700 billion? Or will we just print it?
I don't pretend to be an expert on these things but I do follow it closely. For those econ nuts out there that want to see where we are and what will happen next, I urge you to read this speech by Ben Bernanke from 2002. The title is "Deflation: Making Sure "It" Doesn't Happen Here". Bernanke is considered by most to be the pre-eminent scholar on the causes and effects of the Great Depression. When he uses that term to describe our current times, I am certain he does not do so lightly. The Great Depression was the greatest deflationary era in United States history. His speech outlines what he would do to avoid a deflation, and then, if we were in a deflation, what he would do to get out of it. The crazy thing is, it's not just Bernanke using this term to describe our current economic state, it's both Presidential candidates as well. Let me also point you to one of the best articles I have read that deals with this crisis. Click here.
Bernanke lists about 8 actionable ideas in his speech. From my count, he has done six of them. The last two appear to be fixing treasury yields and intervening in currency markets. I think yesterday, he may have actually intervened in the currency markets by more than doubling the cash available to banks around the world.
Current events have me concerned on a lot of fronts. I run the finances for my household, decide how to spend money for my business, and decide how to spend money for the school district. What is happening out there will have profound effects on the decisions I make in all three capacities. Think about this for a second. In 2000-2003, we had a major stock market sell-off. The PA Public School Employee Retirement System is scheduled to come collect for those stock market losses in 2012 (check out the last slide in this presentation). Yes, this is a full TEN YEARS after the fund had bad returns. Since 2002, the Fund has put more and more money into private investments such as hedge funds and real estate partnerships. Great timing, eh? Given the current crisis and its implications for a large number of hedge funds, I cannot begin to fathom what kind of losses pension funds like this are taking this year. Please see this article in the New York Times regarding hedge fund shakeups. Keep in mind that hedge funds don't have to report performance the same way that stocks and mutual funds do. I went through every hedge fund/private investment company listed in the teachers pension and I found information on maybe TWO of them out of over 50 private equity partners. Check out the roster for yourself here.
PSERS had almost $63 billion in assets on June 30, 2008. That is DOWN from $67.2 billion in June 2007. According to their website, the Fund returned -2.82 percent for the fiscal year ending June 30, 2008. We have seen this movie before. It doesn't end well.
The recently passed State budget doesn't address any of these issues. Instead of slightly increasing school district and/or employee contribution rates to make up the funding shortfall from the last stock market decline, the budget LOWERED how much we must allocate to this fund. Now we are destined to have a massive increase in 2012 that will blow many school district budgets out of the water.
The current situation is fluid. As things change, I am sure my view will change. There are a lot of macro-level issues (national debt, deficit spending, tax rates, etc) happening as I type this that will wind their way down to the micro-level (household finances, school district budgets, etc.) in a very short period of time.
These are historical times- times that will be written about in the history books of my grandchildren.
Thanks for reading.
James
Tuesday, September 30, 2008
Friday, September 26, 2008
Pittsburgh Real Estate Update
I heard a story on NPR this morning and found the local news link here:
http://www.pittsburghlive.com/x/pittsburghtrib/news/s_590186.html
Following is an excerpt from the story:
There were 2,516 home sales last month, compared with 3,364 a year ago. The median sales price declined 4.9 percent, said RealStats, a South Side-based real estate information company. The report covers Allegheny, Beaver, Butler, Washington and Westmoreland counties.
It's not just California, Florida, Nevada, and Arizona any more. While we will most likely not be subjected to 25-50% house price declines as some of the other higher growth areas have been, deteriorating home prices are decreasing wealth. Deflation has no friends.
Let me point you back to an article I linked to on August 9th. I point out a number of issues with the overall economy and severely reduced tax receipts by government bodies. The Center on Budget and Policy Priorities released an update the information I quoted here. Here is a quote from the updated release:
New gaps have opened up in the budgets of at least 13 states just two months after they struggled to close the largest budget shortfalls seen since the recession of 2001. These 13 states make up a significant share of the 29 states that have already moved to cut spending, use reserves, or raise revenues in order to adopt a balanced budget for the current fiscal year, which started July 1 in most states. Now, their budgets have fallen out of balance yet again.
I don't want to beat on an already beaten drum when it comes to the economy. Clearly, this week alone we are seeing a lot of news with Congress trying to pass some kind of bailout/stimulus program to make sure banks can continue to lend money. But I do want people to understand the impact that is already starting to hit home to local governments. Counties from New York to California are reeling from the fallout of the crisis on Wall Street. Much like the home price declines, I expect that Pennsylvania will not be impacted as severely as other places, but make no mistake, the crisis will eventually hit Western Pennsylvanians. It will have an effect on tax receipts to all local governments at some point. It will have an impact on the ability of some local government agencies ability to borrow. While no one can predict the exact effect it will have on us locally, we do need to keep this in mind when thinking about future budgets.
Thanks for reading.
James
http://www.pittsburghlive.com/x/pittsburghtrib/news/s_590186.html
Following is an excerpt from the story:
There were 2,516 home sales last month, compared with 3,364 a year ago. The median sales price declined 4.9 percent, said RealStats, a South Side-based real estate information company. The report covers Allegheny, Beaver, Butler, Washington and Westmoreland counties.
It's not just California, Florida, Nevada, and Arizona any more. While we will most likely not be subjected to 25-50% house price declines as some of the other higher growth areas have been, deteriorating home prices are decreasing wealth. Deflation has no friends.
Let me point you back to an article I linked to on August 9th. I point out a number of issues with the overall economy and severely reduced tax receipts by government bodies. The Center on Budget and Policy Priorities released an update the information I quoted here. Here is a quote from the updated release:
New gaps have opened up in the budgets of at least 13 states just two months after they struggled to close the largest budget shortfalls seen since the recession of 2001. These 13 states make up a significant share of the 29 states that have already moved to cut spending, use reserves, or raise revenues in order to adopt a balanced budget for the current fiscal year, which started July 1 in most states. Now, their budgets have fallen out of balance yet again.
I don't want to beat on an already beaten drum when it comes to the economy. Clearly, this week alone we are seeing a lot of news with Congress trying to pass some kind of bailout/stimulus program to make sure banks can continue to lend money. But I do want people to understand the impact that is already starting to hit home to local governments. Counties from New York to California are reeling from the fallout of the crisis on Wall Street. Much like the home price declines, I expect that Pennsylvania will not be impacted as severely as other places, but make no mistake, the crisis will eventually hit Western Pennsylvanians. It will have an effect on tax receipts to all local governments at some point. It will have an impact on the ability of some local government agencies ability to borrow. While no one can predict the exact effect it will have on us locally, we do need to keep this in mind when thinking about future budgets.
Thanks for reading.
James
Tuesday, September 23, 2008
Vote on Construction Manager Tabled
The Board has tabled the vote for the Construction Manager until a later date. Final negotiations are still ongoing and the expectation is that final competitive contracts will be in front of the Board in a matter of days, not weeks.
I know it is frustrating for people. It's frustrating for the Board as well but it is in the best interest of everyone that the right decision be made here. It can only be made when all the information is on the table.
Thanks for reading.
James
I know it is frustrating for people. It's frustrating for the Board as well but it is in the best interest of everyone that the right decision be made here. It can only be made when all the information is on the table.
Thanks for reading.
James
Monday, September 22, 2008
Audit/Finance Committee Update
Last Thursday the Audit Finance Committee covered a few topics. There were as follows:
1) Funding of the Retiree Health Care Trust- The District needs to fund a Retiree Health Care account. With over $2 million in surplus funds from the past fiscal years, it makes sense to use some of those funds to fund this new account. After our discussion, it sounds like the Committee will recommend that the Board fund the new account with two-thirds of the total surplus. The rest of the surplus would be directed to the high school construction project.
2) Non-electoral debt- I had asked the Administration to prepare an estimate of the District's borrowing ability over the next few years. Our non-electoral debt limit is 2.25 times our three year average annual revenues. As we pay down our existing debt and increase revenue, this limit changes. For discussion purposes, I feel it safe to say that any project over $110 million would require voter approval via a referendum. That number is not exact because it will be calculated again once we are ready to move forward on the project and will undoubtedly change a number of times before all is said and done. The point that I tried to express to the Committee was that I wanted to make sure we did the bond float in ONE float, not in multiple floats. Otherwise, I fear that we might approve a project only later to have a referendum not pass after we have started down a certain path on the project. Let's get it out there, see if the voters approve it and move on. Along those same lines, I asked the Committee to consider NOT approving the exception to Act 1 next January unless we are certain to float the bonds for the high school project by that time. Mt Lebanon was part of a minority number of schools that decided to get the Act 1 exemption last year.
3) District Budget Priorities- The Committee discussed the need to start the budget process earlier this year than in years past. This will give us a head start in letting the Administration know where the Board as a whole stands on certain budgetary issues. With recent class size discussions in the District, I would expect that to be a major part of any type of early budget meetings
There was an additional meeting on Thursday night that I attended which dealt with class size issues at Washington Elementary. Four Board members, Superintendent Allison, and the Principal at Washington met with approximately 30 parents that were concerned about the District's priorities regarding class sizes. In particular, they were parents of students in classrooms that had 26 and 27 students respectively. The forum was set up like a Q&A and I think I learned quite a bit along with the parents in attendance. I am not certain if there is any short-term solution here but I do look forward to hearing about and reviewing any recommendations that come from the administration.
I'd also like to remind everyone that the Board will be holding a meeting tomorrow night at 7pm in the library to finalize the selection of the construction manager for the High School Project. This is a continuation of our last meeting that was recessed in order to get the final details of each proposal. I expect the meeting will be quite short.
Thanks for reading.
James
1) Funding of the Retiree Health Care Trust- The District needs to fund a Retiree Health Care account. With over $2 million in surplus funds from the past fiscal years, it makes sense to use some of those funds to fund this new account. After our discussion, it sounds like the Committee will recommend that the Board fund the new account with two-thirds of the total surplus. The rest of the surplus would be directed to the high school construction project.
2) Non-electoral debt- I had asked the Administration to prepare an estimate of the District's borrowing ability over the next few years. Our non-electoral debt limit is 2.25 times our three year average annual revenues. As we pay down our existing debt and increase revenue, this limit changes. For discussion purposes, I feel it safe to say that any project over $110 million would require voter approval via a referendum. That number is not exact because it will be calculated again once we are ready to move forward on the project and will undoubtedly change a number of times before all is said and done. The point that I tried to express to the Committee was that I wanted to make sure we did the bond float in ONE float, not in multiple floats. Otherwise, I fear that we might approve a project only later to have a referendum not pass after we have started down a certain path on the project. Let's get it out there, see if the voters approve it and move on. Along those same lines, I asked the Committee to consider NOT approving the exception to Act 1 next January unless we are certain to float the bonds for the high school project by that time. Mt Lebanon was part of a minority number of schools that decided to get the Act 1 exemption last year.
3) District Budget Priorities- The Committee discussed the need to start the budget process earlier this year than in years past. This will give us a head start in letting the Administration know where the Board as a whole stands on certain budgetary issues. With recent class size discussions in the District, I would expect that to be a major part of any type of early budget meetings
There was an additional meeting on Thursday night that I attended which dealt with class size issues at Washington Elementary. Four Board members, Superintendent Allison, and the Principal at Washington met with approximately 30 parents that were concerned about the District's priorities regarding class sizes. In particular, they were parents of students in classrooms that had 26 and 27 students respectively. The forum was set up like a Q&A and I think I learned quite a bit along with the parents in attendance. I am not certain if there is any short-term solution here but I do look forward to hearing about and reviewing any recommendations that come from the administration.
I'd also like to remind everyone that the Board will be holding a meeting tomorrow night at 7pm in the library to finalize the selection of the construction manager for the High School Project. This is a continuation of our last meeting that was recessed in order to get the final details of each proposal. I expect the meeting will be quite short.
Thanks for reading.
James
Tuesday, September 16, 2008
September 15th Meeting Update
We had our regular voting meeting last night. Here is a summary of what happened:
1) The vote on the Construction Manager for the High School Project was delayed to next Tuesday at 7pm. We are in negotiation with the final two candidates and expect to have those negotiations wrapped up late this week. After negotiations with each CM are complete, the Board will evaluate the two proposals and vote on awarding the contract on Tuesday. In fact, the meeting from last night was not adjourned, it was simply put into recess until Tuesday in anticipation of this decision.
2) A number of policy changes were adopted including one that will allow the Board to direct surplus budget funds into a special retired teachers healthcare fund. This fund had typically been part of the District's general budget but because of a change in law, we now have to carry this fund outside of our general fund budget. I posted earlier about the benefits of this decision here.
3) Class size at Washington again was talked about. There is a fourth grade class that has 27 students in a single classroom. This is the largest class size in the District this school year. There is a meeting currently set up for this Thursday to talk about ways to address the issue. After the meeting last night I told Mr. Allison to not be afraid to bring to the Board any proposal he thinks is necessary to help our students in that class. In this case, this particular group of kids have been in classrooms with an above average number of students in every grade so far.
That's all for now. I will post again once we hire the construction manager.
James
1) The vote on the Construction Manager for the High School Project was delayed to next Tuesday at 7pm. We are in negotiation with the final two candidates and expect to have those negotiations wrapped up late this week. After negotiations with each CM are complete, the Board will evaluate the two proposals and vote on awarding the contract on Tuesday. In fact, the meeting from last night was not adjourned, it was simply put into recess until Tuesday in anticipation of this decision.
2) A number of policy changes were adopted including one that will allow the Board to direct surplus budget funds into a special retired teachers healthcare fund. This fund had typically been part of the District's general budget but because of a change in law, we now have to carry this fund outside of our general fund budget. I posted earlier about the benefits of this decision here.
3) Class size at Washington again was talked about. There is a fourth grade class that has 27 students in a single classroom. This is the largest class size in the District this school year. There is a meeting currently set up for this Thursday to talk about ways to address the issue. After the meeting last night I told Mr. Allison to not be afraid to bring to the Board any proposal he thinks is necessary to help our students in that class. In this case, this particular group of kids have been in classrooms with an above average number of students in every grade so far.
That's all for now. I will post again once we hire the construction manager.
James
Sunday, September 14, 2008
State Supreme Court weighing Wettick Decision
Last September, Judge Wettick ruled that the County Base Year assessment system was unconstitutional. You can see the PG article on that here.
The State Supreme Court took up the case last week. This decision has wide ranging implications for every school district in the State. If the Court decides to uphold the Wettick decision then it would likely force a reassessment in most, if not all, counties across the State. That forced reassessmet would have implications on the real estate taxes paid to each and every school district since we all rely heavily on local real estate taxes.
The PG article with the update can be found here.
I'll be keeping an eye on this case as it.
James
The State Supreme Court took up the case last week. This decision has wide ranging implications for every school district in the State. If the Court decides to uphold the Wettick decision then it would likely force a reassessment in most, if not all, counties across the State. That forced reassessmet would have implications on the real estate taxes paid to each and every school district since we all rely heavily on local real estate taxes.
The PG article with the update can be found here.
I'll be keeping an eye on this case as it.
James
Tuesday, September 9, 2008
Area School District Construction Plans
There was a good article in the Almanac a few weeks back that summarized some of the construction projects that will going on in the Districts around Mt Lebanon. You can find the article here. The article also gives a curriculum highlight or two from each of the Districts.
Here is a summary:
Bethel Park- New high school in the works. Bethel Park is a little farther ahead in the process than Mt Lebanon.
Canon-McMillan- Currently doing construction for an elementary school
Mt. Lebanon- I hear we have something going on with the high school
South Fayette- Pushed back construction plans for a new school pending further information. The article on this decision can be found here.
Upper St Clair- Plans to renovate both middle schools as well as the high school stadium and bus garage are being vetted.
James
Here is a summary:
Bethel Park- New high school in the works. Bethel Park is a little farther ahead in the process than Mt Lebanon.
Canon-McMillan- Currently doing construction for an elementary school
Mt. Lebanon- I hear we have something going on with the high school
South Fayette- Pushed back construction plans for a new school pending further information. The article on this decision can be found here.
Upper St Clair- Plans to renovate both middle schools as well as the high school stadium and bus garage are being vetted.
James
Friday, August 29, 2008
A Debt Dilemma
I had interesting conversations with some constituents this week. It really hammered home a point that I was warned of before I ran for school board. That point was that you can never please all of the people all of the time. There will be people that disagree with you no matter how firmly you believe in your arguments- especially when your arguments are out there for everyone to see two weeks a month. The best one can hope for is an honest discussion about the merits of all sides of issues. Seeing two school district neighbors lose school directors to resignation over the course of the last few months has been a real wake up call to me about how political this job position can be. Reading their letters or reasons for resignation was really a summation of the frustrations that I imagine many Directors feel. Special interests, disagreements with administration, disagreements with other Board members, all of these reasons were cited in one way or another. I cannot begin to imagine the depth of their frustration to make them take their chosen route but I think that at one time or another most Directors will feel that everything and everyone must be against them. In my short time on the Board I have seen some of those frustrations happen to our Directors and if the casual observer has not noticed it then it is a testament to the character of those directors that they have not made their frustration apparent in a more public manner.
I preface this post with the preceding paragraph because what I am posting today is one of those things that some just don't want to see. There will be those that think the information presented doesn't add to the discussion around the High School project and that it casts the District in a negative light. Others will say I am using scare tactics to get people to come around to my way of thinking. But let me make this clear- I intend to keep my promise to Mt Lebanon to increase the transparency of what is happening in this District and to keep the public informed about how I come to my decisions. There are no hidden agendas here. My agenda is to do what is best for Mt Lebanon and its students. There are occasions when I come across information that genuinely surprises me. When I posted earlier about PA School Construction Buzz and compared the State construction cost numbers from what I found in that research to what was presented by our architect, I was surprised. When I researched where Mt Lebanon fell with regards to Comparative Millage Rates and Taxation I was surprised to find out where we stood in relation to our neighbors. I think the information in those two posts surprised a number of other people as well as they are two of the most visited posts on my website. The research I found for today's post is another bit of data that surprised me. It adds to my argument that we have got to research ALL possible solutions to the high school project.
As most already know, the estimated numbers for the project were released recently. If you need a refresher on those costs, please see this previous post. I have been concerned for some time about how much we pay in debt service payments each year. This year we passed a budget that includes about 7% of our budget going to retire existing debt. But really, having that number without any kind of context makes no sense. I set out to find some kind of data to measure us against. I found it on the Pennsylvania Department of Education website. Here they link to all kinds of budget data for Districts across the State. In particular I was looking for the outstanding debt of all the school districts in Pennsylvania. I found the information here. The latest year they have brought all the debt information together was for the 2005-2006 budget year so keep that in mind as you see the information below. Some Districts have floated more bonds to increase their debt and others, like ours, have been able to pay some of that debt down. However, I feel the data gives the reader a good idea of how we compared to Districts throughout the County and State at a specific point in time.
The below chart shows how Mt Lebanon School District compared to other Districts in Allegheny County with regards to total dollars of debt outstanding for the 2005-2006 budget year:
Click on image for larger picture
The above data lists the 20 School Districts in Allegheny County that had the most debt and shows that Mt Lebanon had the 8th most total outstanding debt in Allegheny County for that budget year. There area total of 43 school districts in Allegheny County.
If we then take a look at high school project costs and estimate the District will float $100 million in bonds for the project then the data changes to look like this:
Click on image for larger picture
You can see that a float of $100 million, which is at the lower end of our project cost scale, would catapult Mt Lebanon to being the second most indebted school district in the County behind the City of Pittsburgh. However, the City of Pittsburgh has more than a half a billion dollars a year in revenues. Mt Lebanon has just over $70 million. Additionally, MTLSD's debt to income ratio becomes the worst in the County. The compounding factor for this is that Mt Lebanon gets a far less percentage of its funding from the State than do most other districts. This forces the debt to be paid by more localized funding sources than in districts like the City of Pittsburgh.
I went ahead and took the next step and compared our debt to all Districts in Pennsylvania. Much like the data for Allegheny County, we look decent prior to floating additional debt. Of the 501 school districts in PA, Mt Lebanon had the 64th most total debt for the 2005-2006 budget year. However, when we float $100 million of additional debt, we jump up to having the 12th most debt in the Pennsylvania:
Click on image for larger picture
On the far right of the picture you can see that our debt to income ratio becomes the 4th worst in the State after a $100 million bond float. Note that this ratio will change as the increase in taxes to support such a float will increase District revenues. There is no way to tell what those revenues would be at this time which is why I look at both the total debt outstanding and the debt to income ratio. A $130 million float would put us in the top 10 of most indebted districts in the State.
While I personally find this data a cause for concern, I put this information together not because I want to convince you of any one idea in particular- I'll try to do that in future posts when I have more information on which to base my final opinion. I want readers to digest this information and decide if it impacts how they view the high school project and its effect on the District and the Mt Lebanon community. This is but one piece of a large, complicated puzzle.
Thanks for reading.
James
I preface this post with the preceding paragraph because what I am posting today is one of those things that some just don't want to see. There will be those that think the information presented doesn't add to the discussion around the High School project and that it casts the District in a negative light. Others will say I am using scare tactics to get people to come around to my way of thinking. But let me make this clear- I intend to keep my promise to Mt Lebanon to increase the transparency of what is happening in this District and to keep the public informed about how I come to my decisions. There are no hidden agendas here. My agenda is to do what is best for Mt Lebanon and its students. There are occasions when I come across information that genuinely surprises me. When I posted earlier about PA School Construction Buzz and compared the State construction cost numbers from what I found in that research to what was presented by our architect, I was surprised. When I researched where Mt Lebanon fell with regards to Comparative Millage Rates and Taxation I was surprised to find out where we stood in relation to our neighbors. I think the information in those two posts surprised a number of other people as well as they are two of the most visited posts on my website. The research I found for today's post is another bit of data that surprised me. It adds to my argument that we have got to research ALL possible solutions to the high school project.
As most already know, the estimated numbers for the project were released recently. If you need a refresher on those costs, please see this previous post. I have been concerned for some time about how much we pay in debt service payments each year. This year we passed a budget that includes about 7% of our budget going to retire existing debt. But really, having that number without any kind of context makes no sense. I set out to find some kind of data to measure us against. I found it on the Pennsylvania Department of Education website. Here they link to all kinds of budget data for Districts across the State. In particular I was looking for the outstanding debt of all the school districts in Pennsylvania. I found the information here. The latest year they have brought all the debt information together was for the 2005-2006 budget year so keep that in mind as you see the information below. Some Districts have floated more bonds to increase their debt and others, like ours, have been able to pay some of that debt down. However, I feel the data gives the reader a good idea of how we compared to Districts throughout the County and State at a specific point in time.
The below chart shows how Mt Lebanon School District compared to other Districts in Allegheny County with regards to total dollars of debt outstanding for the 2005-2006 budget year:
Click on image for larger picture
The above data lists the 20 School Districts in Allegheny County that had the most debt and shows that Mt Lebanon had the 8th most total outstanding debt in Allegheny County for that budget year. There area total of 43 school districts in Allegheny County.
If we then take a look at high school project costs and estimate the District will float $100 million in bonds for the project then the data changes to look like this:
Click on image for larger picture
You can see that a float of $100 million, which is at the lower end of our project cost scale, would catapult Mt Lebanon to being the second most indebted school district in the County behind the City of Pittsburgh. However, the City of Pittsburgh has more than a half a billion dollars a year in revenues. Mt Lebanon has just over $70 million. Additionally, MTLSD's debt to income ratio becomes the worst in the County. The compounding factor for this is that Mt Lebanon gets a far less percentage of its funding from the State than do most other districts. This forces the debt to be paid by more localized funding sources than in districts like the City of Pittsburgh.
I went ahead and took the next step and compared our debt to all Districts in Pennsylvania. Much like the data for Allegheny County, we look decent prior to floating additional debt. Of the 501 school districts in PA, Mt Lebanon had the 64th most total debt for the 2005-2006 budget year. However, when we float $100 million of additional debt, we jump up to having the 12th most debt in the Pennsylvania:
Click on image for larger picture
On the far right of the picture you can see that our debt to income ratio becomes the 4th worst in the State after a $100 million bond float. Note that this ratio will change as the increase in taxes to support such a float will increase District revenues. There is no way to tell what those revenues would be at this time which is why I look at both the total debt outstanding and the debt to income ratio. A $130 million float would put us in the top 10 of most indebted districts in the State.
While I personally find this data a cause for concern, I put this information together not because I want to convince you of any one idea in particular- I'll try to do that in future posts when I have more information on which to base my final opinion. I want readers to digest this information and decide if it impacts how they view the high school project and its effect on the District and the Mt Lebanon community. This is but one piece of a large, complicated puzzle.
Thanks for reading.
James
Monday, August 25, 2008
August Meeting Roundup
There was a lot of activity in August on a lot of fronts. I will attempt to touch on a few of the topics briefly.
In no particular order, here are the items that caught my attention more than most:
1) Gallup Teacher Insight- The Board approved in a 9-0 vote the purchase of this software that will help the District in the evaluation and selection of new teachers. The software was recommended by the Superintendent and after questions we all seemed to think it was a good idea. You can find the Gallup information page on the software here. There is no more important factor to student success than having great teachers. School Boards, Superintendents, and others have influence, but the classroom is where the rubber meets the road. We need to make sure we recruit and hire the best teachers so our students have the greatest chance at success. I am hopeful that this software will improve an already great teaching staff.
2) Superintendent's Salary- The Board voted 9-0 to approve a 4% increase in salary for the Superintendent. I have not met a person yet who doesn't get a sense of honesty, integrity, and intelligence from a meeting with Mr. Allison. In my opinion, he is the right person at the right time to help lead the District. I look forward to helping him implement some of his ideas over the course of the next few years. He has a great vision for the District.
3) Washington Elementary Playground- The Board was shown updated plans for the Washington Elementary Playground. You can review the plans here. There are a number of drawings for you to peruse. In June there was a bit of controversy surrounding the playground but I think the latest plans that include security gates and the removal of proposed parking spaces are ready to go.
4) Discussion to Review Board Meeting Procedures- Director Posti had requested this topic be added to the agenda and I voted for the discussion to be had. She also posted an explanation on her blog here about her intentions. The discussion surrounded whether or not there should be a subcommittee appointed to review and/or correct statements that are made by residents during the public comments portion of school board meeting. I didn't have any comments for the meeting because I was on the fence. I wanted to see what was being proposed before I offered up an opinion. I don't want the Board to be involved in policing comments- especially after the fact- and I was worried that this was the direction things were headed. Residents have every right to come to the microphone and voice their opinions about things that they think are related to the Board. I don't want to get into a game of figuring out what comments are related to Board business and which are not. This opinion should be left to residents to decide unless something is so far off the mark that a Board member calls a Point of Order and asks the President to stop the comments. At that point it should be up to the President to decide if the comment should be allowed to continue. Every Board member has this power. Every Board member also has the right to respond to any comment by a resident. My worries about limiting speech were confirmed at our voting meeting when after a resident gave comments, a Board member said (and I paraphrase here) 'those were the type of comments that we should not allow'. Policing and correcting citizen comments is a losing proposition. By its actions and discussions the Board should make its intentions and facts about issues known to the public. Comments from residents, while mostly well intentioned, are sometimes not well informed. That means to me that we need to do a better job of communicating with the public instead of finding ways to correct possible misstatements from them. I agree with the President's decision not to form a subcommittee at this time.
5) Construction Managers- The Board will be looking to select a Construction Manager for the High School Project at its September meeting. We conducted interviews of the three finalists last week and I believe we have some terrific options. I look forward to the discussion surrounding the selection.
Enjoy the first day back to school.
James
In no particular order, here are the items that caught my attention more than most:
1) Gallup Teacher Insight- The Board approved in a 9-0 vote the purchase of this software that will help the District in the evaluation and selection of new teachers. The software was recommended by the Superintendent and after questions we all seemed to think it was a good idea. You can find the Gallup information page on the software here. There is no more important factor to student success than having great teachers. School Boards, Superintendents, and others have influence, but the classroom is where the rubber meets the road. We need to make sure we recruit and hire the best teachers so our students have the greatest chance at success. I am hopeful that this software will improve an already great teaching staff.
2) Superintendent's Salary- The Board voted 9-0 to approve a 4% increase in salary for the Superintendent. I have not met a person yet who doesn't get a sense of honesty, integrity, and intelligence from a meeting with Mr. Allison. In my opinion, he is the right person at the right time to help lead the District. I look forward to helping him implement some of his ideas over the course of the next few years. He has a great vision for the District.
3) Washington Elementary Playground- The Board was shown updated plans for the Washington Elementary Playground. You can review the plans here. There are a number of drawings for you to peruse. In June there was a bit of controversy surrounding the playground but I think the latest plans that include security gates and the removal of proposed parking spaces are ready to go.
4) Discussion to Review Board Meeting Procedures- Director Posti had requested this topic be added to the agenda and I voted for the discussion to be had. She also posted an explanation on her blog here about her intentions. The discussion surrounded whether or not there should be a subcommittee appointed to review and/or correct statements that are made by residents during the public comments portion of school board meeting. I didn't have any comments for the meeting because I was on the fence. I wanted to see what was being proposed before I offered up an opinion. I don't want the Board to be involved in policing comments- especially after the fact- and I was worried that this was the direction things were headed. Residents have every right to come to the microphone and voice their opinions about things that they think are related to the Board. I don't want to get into a game of figuring out what comments are related to Board business and which are not. This opinion should be left to residents to decide unless something is so far off the mark that a Board member calls a Point of Order and asks the President to stop the comments. At that point it should be up to the President to decide if the comment should be allowed to continue. Every Board member has this power. Every Board member also has the right to respond to any comment by a resident. My worries about limiting speech were confirmed at our voting meeting when after a resident gave comments, a Board member said (and I paraphrase here) 'those were the type of comments that we should not allow'. Policing and correcting citizen comments is a losing proposition. By its actions and discussions the Board should make its intentions and facts about issues known to the public. Comments from residents, while mostly well intentioned, are sometimes not well informed. That means to me that we need to do a better job of communicating with the public instead of finding ways to correct possible misstatements from them. I agree with the President's decision not to form a subcommittee at this time.
5) Construction Managers- The Board will be looking to select a Construction Manager for the High School Project at its September meeting. We conducted interviews of the three finalists last week and I believe we have some terrific options. I look forward to the discussion surrounding the selection.
Enjoy the first day back to school.
James
Thursday, August 14, 2008
High School Project Costs
On Monday the Board heard an update from the architects about the progress being made on the high school renovation project. We also heard from a number of residents regarding the project. One resident's comments in particular hit home with me. One of the things I have been wondering about is how the costs for certain options of this project seem to be out of touch with what was presented to us by Dejong during their research just over 18 months ago (Dejong final summary was released in January 2007).
At the time, Dejong presented four possible alternatives to the community:
Option 1: Renovation came with a cost between $30-50 million
Option 2: 25/75 New/Renovation split at a cost of $60-80 million
Option 3: 50/50 New/Renovation split at a cost of $80-100 million
Option 4: Build a new facility at a cost of $110-120 million
At the July forum we were presented with the following options:
Option 1: Renovate existing structure at a cost of $77.8 million
Option 1a: Renovate structure with significant redesign for $97.3 million
Option 2: 66/33 New/Renovation split at a cost of $118.6 million
Option 3: Build a new facility at a cost of $131.6 million
Two questions really pop up here. First, why is there such a large change for the renovation costs? Renovation costs seem to have increased by almost 100% (using the $40 million midpoint Dejong estimate). Costs for the construction of a new school have only increased just over 10% since Dejong released his study. There may very well be a good explanation for this and I will ask the question of the architect at our next meeting.
Second, what should we expect to pay for construction of a new school? The resident pointed out that RSMeans (a construction data company) uses an approximation of $150/sq foot for our area. Our architects used an approximation of $300 per square foot. RSMeans has a website where you can play with a cost calculator tool. Indeed, after I put in our zip code and square footage, the site spit out the following information:
Understand that the QuickCost Estimator is very limited in the information you can put into the calculation. For instance, if we wanted oak staircases and marble floors there is no way to account for that in this calculator. But it does give us an idea about what we might expect for costs in our area.
If you do the calculation at the high end dividing the $68 million by the 440,000 square feet, then you get a high project cost of $154 sq/ft. When dividing the recently estimated $131.6 by the 440,000 square foot building you get a project cost of $299 per square foot. This is the exact discrepancy that the Mt Lebanon resident pointed out at our last meeting as being unrealistic. Perhaps when we get the construction manager on board these numbers will be revised downward.
One more quick point here. The Bethel Park School Board recently voted to build a new school for their District. The final documents they put out on their website included new construction costs of $204 sq/ft for a new 307,420 square foot building. Something to keep in mind is that their architect also included a 12% escalation in the cost of the entire project. The above linked document is a good place to go to see what other costs you might expect to see added onto our project soon. Additionally, the $204 per square foot price is extremely close to the Pennsylvania Department of Education calculated average cost for new construction of $212 per square foot. I linked to the PDE document in a previous blog post on July 9th. That same document calculates an average cost of $114 per square foot for renovation projects.
Thanks for reading.
James
At the time, Dejong presented four possible alternatives to the community:
Option 1: Renovation came with a cost between $30-50 million
Option 2: 25/75 New/Renovation split at a cost of $60-80 million
Option 3: 50/50 New/Renovation split at a cost of $80-100 million
Option 4: Build a new facility at a cost of $110-120 million
At the July forum we were presented with the following options:
Option 1: Renovate existing structure at a cost of $77.8 million
Option 1a: Renovate structure with significant redesign for $97.3 million
Option 2: 66/33 New/Renovation split at a cost of $118.6 million
Option 3: Build a new facility at a cost of $131.6 million
Two questions really pop up here. First, why is there such a large change for the renovation costs? Renovation costs seem to have increased by almost 100% (using the $40 million midpoint Dejong estimate). Costs for the construction of a new school have only increased just over 10% since Dejong released his study. There may very well be a good explanation for this and I will ask the question of the architect at our next meeting.
Second, what should we expect to pay for construction of a new school? The resident pointed out that RSMeans (a construction data company) uses an approximation of $150/sq foot for our area. Our architects used an approximation of $300 per square foot. RSMeans has a website where you can play with a cost calculator tool. Indeed, after I put in our zip code and square footage, the site spit out the following information:
Understand that the QuickCost Estimator is very limited in the information you can put into the calculation. For instance, if we wanted oak staircases and marble floors there is no way to account for that in this calculator. But it does give us an idea about what we might expect for costs in our area.
If you do the calculation at the high end dividing the $68 million by the 440,000 square feet, then you get a high project cost of $154 sq/ft. When dividing the recently estimated $131.6 by the 440,000 square foot building you get a project cost of $299 per square foot. This is the exact discrepancy that the Mt Lebanon resident pointed out at our last meeting as being unrealistic. Perhaps when we get the construction manager on board these numbers will be revised downward.
One more quick point here. The Bethel Park School Board recently voted to build a new school for their District. The final documents they put out on their website included new construction costs of $204 sq/ft for a new 307,420 square foot building. Something to keep in mind is that their architect also included a 12% escalation in the cost of the entire project. The above linked document is a good place to go to see what other costs you might expect to see added onto our project soon. Additionally, the $204 per square foot price is extremely close to the Pennsylvania Department of Education calculated average cost for new construction of $212 per square foot. I linked to the PDE document in a previous blog post on July 9th. That same document calculates an average cost of $114 per square foot for renovation projects.
Thanks for reading.
James
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