Lebo needs to demonstrate fiscal responsibilityPublished Jul 24, 2013 at 7:28 am (Updated Jul 22, 2013 at 7:32 am)
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.