“School Districts are getting fleeced…school districts routinely lose when making derivative deals…municipalities are taking on more risk than in the past when they raised money primarily from bond sales…” are the comments made about a special type of financing called swaps.
In a swap, two parties agree to exchange payments over a period of time that can last as long as 30 years. Typically, one agrees to pay a fixed rate and the other to pay a variable rate that changes with a benchmark index or formula defined in the contract.
A financial adviser usually suggests the arrangement between a bank and the governance.
Fees to banks are as much as five times higher than typical rates and advisers are overpaid by as much as 10-fold.
The risk is that the interest rate may turn against the governance, and they will pay dearly for their gamble. In the case of the Erie School District, they had to pay a $2,900,000 exit fee because of a changing interest rate.
The problem has reached a point where the US Justice Department is conducting an investigation.
In 2004, the Oley Valley School District entered into a swaption where the bank could exercise the option in 2012 to require the district to enter into an interest rate swap.
The 2007 audit indicated that the bank paid $819,000 for the option. However, since interest rates changed, the swaption may become a liability.
At the Finance Committee Meeting, the financial adviser made a presentation to the board that they consider a “parameter resolution” which establishes conditions under which the board will pay an exit fee from their agreement.
The fees mentioned at the meeting, could range from $250,000 to $2,500,000 depending on interest rates at the date of termination.
If these exit fees are taken from the General Fund, they would have a profound effect on taxes.
School districts who are strapped for cash are the typical targets of these financial schemes. A school district gets into stress when they do not spend money wisely and try to make up for the shortfall with complicated and speculative investing.
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95 comments:
OCC,
That is a well written and interesting front page. I will agree that public officials should not engage in financial arrangements that are not easily understood, because they may leave a complicated situation for others to deal with a decade later.
I have questions, which are not addressed in your article. Does the 2004 arrangement that the board got into require additional actions, such as an exit strategy and an exit fee?, or if they do nothing, what happens in 2012? Your article addresses a scenario from 2004 through 2012. If nothing is done, does our schools debt convert to a mortgage similar to the one on my house?
Are the 'financial advisors' you mentioned from the bank, the state, or just salespersons? Are they the ones that sold the board on this arrangement in 2004? I get concerned with someone selling me something, and then trying to sell me something better later.
You may not know the answers to these questions, but these were my immediate questions as I read your article.
Question:
Does the 2004 arrangement that the board got into require additional actions, such as an exit strategy and an exit fee?, or if they do nothing, what happens in 2012?
Answer:
The arrangement does not require any additional action between 2004 and 2012 as long as the parties both perform to the terms of the contract.
Question:
If nothing is done, does our schools debt convert to a mortgage similar to the one on my house?
Answer:
The fixed debt obligation of the Bonds does not change until 2012. At that time, the bank has the option to require the district to enter into an interest rate swap, which is a variable rate.
Question:
Are the 'financial advisors' you mentioned from the bank, the state, or just salespersons?
Answer:
They are meant to be independent advisers regarding school district financial matters. They do receive fees if their advice turns into an action approved by the board.
Question:
Are they the ones that sold the board on this arrangement in 2004?
Answer:
Yes, they advised the board on the plan.
Well, after reading that Ticking Time Bomb article, I understand why so many people are worried about our school's future.
OCC - Thank You for the answers. Two additional questions: Although 2012 is four years away, if our economy does not incur a radical uptick in inflation, and the federal reserve continues to utilize its power to offset future inflation by keeping its prime interest rate low, the future variable rate you refer too will be low. If however, interest rates increase, like they did in the late 70's, we could be in trouble. Is this assessment accurate (even though it is probably over-simplified)?
Also, in 2012, will the school have an opportunity to convert to a fixed rate product, if rates are low at that time?
Again, thank you. I find this interesting, but beyond my knowlege in finance.
Question:
Although 2012 is four years away, if our economy does not incur a radical uptick in inflation, and the federal reserve continues to utilize its power to offset future inflation by keeping its prime interest rate low, the future variable rate you refer too will be low. If however, interest rates increase, like they did in the late 70's, we could be in trouble. Is this assessment accurate (even though it is probably over-simplified)?
Answer: The word “if” is the essence of the risk the school incurs with the impossible task of guessing interest rate possibilities.
Nobody knows what the interest rates will be 30 days from now much less in 2012 and its effect on complicated deals predicated on varying rates.
In order to respond to your scenario of interest rate movement and its influence on the district in particular, there needs to be an explanation of the swap.
In 2012, if the bank decides to exercise their option, the district would be required to enter into a swap.
Essentially, the swap has two interest rates, a fixed and a variable rate. The variable rate is called the LIBOR rate which is the inter-bank rate in London.
The fixed rate in this case would be 5% and is the rate at which the district would pay out funds. The LIBOR rate is the rate at which the district would try to hedge the fixed rate and receive funds. If the LIBOR rate is above the fixed rate, there is a positive cash flow. If the LIBOR rate is below the fixed rate there is a negative cash flow.
The LIBOR rate can be subject considerable fluctuation.
The bank made their money with fees and selling their option for use as a derivative in the financial markets.
The financial advisers received their payment and face no risk at all.
On the other hand, the school district made only the price of the option but faces far greater uncertainty in 2012.
Question:
Also, in 2012, will the school have an opportunity to convert to a fixed rate product, if rates are low at that time?
Answer:
2012 is the first call date of the bonds in question. A call date gives the district the option of retiring the debt if the interest rates are in their favor.
If the interest rates are not favorable then the bond issuer continues the fixed debt payment.
However, this bond call option would not be exercised if the bank decides to enforce the swaption agreement.
The previous board should have stayed with the traditional general obligation bond method of financing.
With proper laddering of these fixed rate instruments, the board would have a better idea of debt payment requirements, they would be able to retire debt prior to maturity for debt payment savings, and finally, they would not be facing the risk of variable rate agreements.
OCC - Again - Thanks.
I do not like 'uncertainty' in the name of possible positive outcomes. To me, that is gambling, and beyond BINGO, I do not like gambling. However, based on the information presented to date, the debate is not whether the transaction should be implemented, but whether the school should undo the situation which they are already committed too, if possible.
I hope it can be undone before 2012 to put our school finances in an simple mortgage situation, so the taxpayers can pursue paying off debt instead of passing it on.
Anytime you invest in the market it is a gamble.....this is no different. All of us are invested in the market somehow. 401(k), pensions, 403(b), ira....
Dear 5:34:
"Anytime you invest in the market it is a gamble.....this is no different. All of us are invested in the market somehow. 401(k), pensions, 403(b), ira...."
I do not have the luxury of being able to put money into any of the items mentioned in your post.
Please do not speak for me. How DARE you assume that because you may be able to invest money in anything that everyone else is in the same boat.
We are living week to week. I guess you don't have to watch your spending either.
"Anytime you invest in the market it is a gamble.....this is no different. All of us are invested in the market somehow. 401(k), pensions, 403(b), ira...."
Swaps, derivatives, repurchase agreements, etc. are considered high risk by professionals. They are so risky, that by law, most pensions, retirements funds, etc. can only expose a very small portion of their portfolio to these devices.
For the most part, they are used as hedges not as investments.
The OVSD swaption involves over fifty percent of our outstanding debt.
Witness to today, the sub prime loans that were converted into swaps and other derivatives that may now crumble our financial system. These are not stocks with book value and company assets, but rather the work of banks and financial institutions with paper value to leverage enormous profits.
Therefore, to equate the swaption with investing is inaccurate.
I do not have the luxury of being able to put money into any of the items mentioned in your post.
Please do not speak for me. How DARE you assume that because you may be able to invest money in anything that everyone else is in the same boat.
We are living week to week. I guess you don't have to watch your spending either.
Well if you have ANY money in the bank it is invested in the stock market by the bank. Everyone knows that. Unless you are one of those types that pays all your bills with money orders...
How can anyone equate swaps and derivatives with investing in a 401K or Ira? It amazes me just how far some people will go to defend the actions of the school board. Even to the point of making a complete jackass out of themselves.
Hello 7:41
There are far more people out here which are living from week to week, than you realize. Not to sound rude, but it's a cold, hard fact. I am in the same boat. And I am in good company, like it or not, we're on Bush's sinking ship. And we can't find anything to fix the holes.
Thanks so much Mr. Bush.
Yes, Bush has set a lousy example, and look who was paying attention to his spending policies. None other than the school boards of the USA. Spend money you don't have on things you don't actually need, and they let the taxpayers suffer.
7:41:
What is wrong with paying bills with cash or money orders? In fact, what do YOU CARE how bills are being paid?
At least the bills are being paid.
You're a jerk.
New topic same old rhetoric!
Something to truly think about though - Grants the school is receiving from the state/federal government. Are these grants truly beneficial to the students of Oley Valley? Or, are they serving to make Oley like every other school in the state?
Oley used to be a quality school because it provided a unique, distinctive education to it's students. With the grants it has recently accepted though, it is traveling the route of becoming a "cookie-cutter school" so to speak. The distinguishing qualities that once made Oley unique, and believe it or not, a quality school, will soon be lost. Yes, these grants are saving taxpayer money, but what is this worth when Oley's educational system becomes identical to that of Philadelphia's.
"...Unless you are one of those types that pays all your bills with money orders......"
The above comment is exactly why this blog starts out with important information and ends up is a bashing festival.
It's a sad state of affairs when anonymous bloggers willingly start riot after riot, but it's clear to see why they do it. Mud slinging is not a new invention. They are casting a diversion. A process which is in practice from the ground level of government, all the way up to the top. Stir up amazing stories about "whatever" and keep the public's mind off of what's really going on. A perfect example is our country's next presidential election. It's current daily drama is taking first place with the media, leaving every other subject in the dust. The 4,000th death of American soldiers last week received a few moments on the evening news, while the majority of the broadcasts were targeting Obama's minister, etc.
The School Board supporters are feeding this website with arrogant, ignorant, riot enciting postings. It's almost impossible to read these posts and not have a reaction. This neighborhood is comprised of a well rounded mix of citizens. We all want what is best for our children. Yet there is a presence of "elete" people that seem to think that if their income is handling this economy, everyone else's should be, too. And when the citizens functioning on incomes which fall into the category of "living week to week" are mentioned, they are looked down upon. More accurately, they are "fed" blogs to start fireworks, which in turn, keeps our collective minds off of the real subject:
KEEPING OUR SCHOOL BOARD FISCALLY RESPONSIBLE WHILE PROVIDING A QUALITY EDUCATION.
Accurate post 5:40.
I guess asking some people to spend within their means is too much to ask for those who have all, need more, and hold out their hands for everyone else to fill.
....and, if you were to get to know the elite, they are never satisfied and generally unhappy. What a pity.
OCC,
So far you have provided me with detailed answers regarding the financing situation that our school got involved in several years ago. And to date my questions were for an understanding of the situation.
Now, since this transaction is in the past, and most would agree that the risk may not equal the reward, what is, in your opinion, the next step. Should the school try to undo the transaction, if it can be done w/o losing any actual money or should the school steady the course until 2012?
Your article mentions $819,000 gain up front for the option. Therefore, if I understood the facts that you presented to me so far, if the school eliminates this transaction for less than $819,000the school did not lose.
What would you advise?
Now, since this transaction is in the past, and most would agree that the risk may not equal the reward, what is, in your opinion, the next step.
The transaction is not in the past, it is still with us and now the current board must clean up the mess.
The swaption is one of a number of risky transactions undertaken despite protests from the public and a warning from the state.
So that we are not constantly exposed to the inclination of a board to use the taxpayers as a hedge for their blunders, I would want them to establish a policy that prevents such misadventures in the future.
Should the school try to undo the transaction, if it can be done w/o losing any actual money or should the school steady the course until 2012?
The board should establish a parameter resolution that does not lose any taxpayer money on the deal.
Your article mentions $819,000 gain up front for the option. Therefore, if I understood the facts that you presented to me so far, if the school eliminates this transaction for less than $819,000 the school did not lose.
Any money reduced from the $819,000 would be a taxpayer bailout of another bad district decision.
The only acceptable compromise would be they use the money committed for some wish list project to cover the loss.
My recommendation would be the monies planned for the athletic complex lighting system. They would set aside this money in the Capital Reserve restricted for such purpose. They can then draw on this amount should the parameter resolution be activated for the termination of the swaption. This would give them about $250,000 of funds to get out of a bad deal.
Otherwise, the bailout amount will show up in a millage increase.
It would be nice to hear the board members who voted for the swaption offer an apology to the public.
I would like to hear why they agreed to do this in the first place knowing the risk. Even if this works out fine in the end why did they act so cavalier with taxpayer's money when the outcome is so unclear?
RS
You may like to hear why they agreed to do this....but I bet you won't.
OCC- Once, again, thanks for the response!
RS: I would like to know why they agreed to build two schools when 1 was enough, and why they built it in a swamp!
I would like to know what company provided the service of installing the roof on the elementary school? How long was their work guaranteed?
In your opinion 1 was enough. We saw it differently and opted for two. The decision to build the middle school was not made until several years after the elementary school opened. We considered several alternatives but settled on the site we have now. You can second guess that decision but it wasn't made on the basis of how much money we could screw the taxpayers out of.
As to building on a swamp, that is no more of a swamp than the land next to it where houses are being built or where the Career Tech center is located. We took soil samples using deep bores (as is required by the state and EPA) and they all passed. The state inspected it and approved it for building. We would have never been allowed to build on that site if it wouldn't have passed numerous inspections.
RS: I apologize, that was not meant in any way as an attack towards you. However, after re-reading it, I can see that I did not choose my words/comments well!
I still prefer the idea of a junior senior high school campus, not a elementary, junior high school campus, and I like the old school that the administration uses. Especially since enrollment has not been drastically increasing.
No need to apologize, I didn't take it as an attack on me. All of those options you cite were considered but, for one reason or another, rejected. I remember, though, that the board was divided on which way to go. As many as four members favored putting the middle school next to the high school. As with most decisions of that size it was not an easy one.
Especially since enrollment has not been drastically increasing.
I read somewhere that enrollment was decreasing. Why did we build a new school?
It is slightly decreasing, NOW, and has been for 6 or so years. However, not for an extended period of tim of 12+ years.
However, in a few years it will most likely again start to increase.
How can it possibly increase? Anyone already living here knows they can't afford to have more children.
People moving INTO the area are primarily professional couples that travel extensively with their jobs. Today's trend is one child, or none. That does not add much to the school system.
The exception is the occassional family that reproduces every 9 months, because they don't know any better.
The only thing that will show an increase in our neighborhood is the fact that households will contain several generations of the same family, under one roof.
Good night Jim-Bob.....
Goodnight Grandpa.....
Goodnight.....
I don't see why school finances have any place on a blog. It is not anyone's business except the district.
Where have you been 8:56.
Pennsylvania schools are run on TAX MONEY. Your tax money, my tax money, everyone's tax money.
In addition, Oley's teacher salaries by individual, including administrators are available for review on stopteacherstrikes.org. There is a link to this site from this blog.
Just click on this site, and then go to 120,000 salaries.
As for you 8:56, maybe you should go back to hibernating.
hell....OH 8:56
Our grammy always told us, "If you've got nothing to hid or be ashamed of, then it does not matter who knows your business."
YOU KNOW THE SCHOOL IS NOT THE ONLY ONE W/ $$ PROBLEMS! THE WHOLE TOWNSHIP NEEDS TO THINK ABOUT WHERE THEY ARE SPENDING THE MONEY AND IF IT IS REALLY THE BEST PLACE FOR IT.
I HEARD THE TOWNSHIP WAS TO GIVE THE FIRE COMPANY MONEY TOWARD THE NEW TRUCK... BUT THEN IN LAST MONDAYS READING EAGLE WE COME TO FIND OUT THAT THE POLICE NEED MORE MONEY TO MOVE TO A BUILDING WHERE THE D.J. CAN BE IN THE SAME PLACE AS THE POLICE. (NOT ENTIRELY A BAD IDEA, BUT NOT A MUST HAVE!) THEY ALSO NEED MORE MONEY TO PAY FOR TWO POLICE DOGS..... WHICH ONLY ONE IS FUNCTIONAL. AND I GUESS THEY NEED A VEHICHLE FOR EVERY OFFICER ON STAFF.... EVEN THOUGH THEY AER NOT ALL ON DUTY AT THE SAME TIME.
SO THIS MEANS NO MONEY FOR THE FIRE COMPANY...
FIRE COMPANY HAS TO TRY TO MAKE UP THE DIFFERENCE BECAUSE THE TOWNSHIP TURNED THEIR BACK ON THEM.
I AM SURE THE FIRE COMPANY WOULD NOT HAVE ASKED THE TOWNSHIP FOR HELP IF THEY WERE ABLE TO RAISE ENOUGH FUNDS ON THEIR OWN. THE TOWNSHIP SHOULD NOT HAVE TOLD THEM THAT THEY WOULD HELP IF THEY HAD NO INTENTSIONS ON HELPING.
Now we must be careful how we analize township workers. At least they seem to be well read. You can see dedicated township workers in just about any township, busy with their day's work. Often, you can see them reading important data while safely parked on the roadside. I am not sure what they need to read, but it sure looks interesting. Probably some sort of map or diagram, which would explain why the publications are often held up high with the center part open all the way. Large maps, big diagrams. Yep, that's probably it.
8:56: You are kidding, right? I thought so.
8:56
I don't see why the finances of the Oley School District are anyone's business except for the taxpayers of the Oley Valley School District The school board is under the watchful eye of a little group of folks known locally as the OCC. Check them out.
If the Oley Fire Company is in need of funds to keep their company running efficiently, consider this:
Ask King's grocery store if they would do the same thing for the fire company that many stores do for Muscular Dystrophy, Cancer, Toys for Tots, etc. Place an empty 2-liter bottle at each register which gladly accepts pocket change for a charitable cause. What could be better than that? I would hope that King's would be in agreement with that idea. It would benefit everyone, including King's. Anyone that thinks that's a good idea could contact the Oley Fire Department, and they could contact King's with the idea. I don't think I ever saw anything in there for that purpose. Redner's does it several times a year. Walmart will only collect for a Walmart related charity, they use the umbrellas. If there were a fire at King's, they would rely on our very own fire company to protect them.
Please don't criticize this idea, unless you can come up with an idea that requires less effort and yeilds higher profits. Set up costs would probably be less than $10.00. Although this is a blog about our school, remember, they need the Oley Fire Company, too.
P.S. Thank you, Oley Fire Company, for your countless hours of devotion to the safety of our community.
What a great idea. I have spoken to a crew member of our fire dept. and he said that they were promised money for their new truck that costs over $100,000. Now they ordered the truck and now the township are saying that they are not getting the money. This is very bad. Everyone should contact the township and tell them that they need to keep their promise.
Tell them they need to keep their promise? Like supervisor/state representative Kessler kept his promise to fight to eliminate property taxes? I hope the voters remember what a poor job he has done in both offices when they vote in November.
--opening day--
GO PHILLIES GO!
I see Durso, Reid and Gokey running for the republican nomination against Kessler. Reid lost the first time, Gokey is a long-time Amity township commissioner (allowing that township to grow out of control - he is a house builder) and Durso I heard is a pastor from Birdsboro?
However, is there no democrat challenging Kessler? Thats sad!
Durso is also a member of borough council in Birdsboro. A good, solid conservative who is a supporter of the Commonwealth Caucus plan to eliminate property taxes.
Someone makes a suggestion as to how the Oley Fire Co.can raise funds at places like King's, and the blog falls silent. Where are all of the mouthy pro-boarders on this one? Aren't you going to ridicule anymous bloggers and demand that some caring person step up to the plate?
Love,
Smokey
As a parent of a child participating in track and field at Oley, I am wondering why the track team is displaced from practicing track when there is a girl's soccer game.
We have another field that these ladies can play on, and I thought the whole idea of the track was for the TRACK TEAM.
THE TRACK IS FOR THE TRACK TEAM, is is not?
With all the hoopla on this track, it is unbelievable that the track team cannot use it.
This has to be the most aboslutely stupid thing I have ever heard.
We need more details on that one. Where do we go to get them, the information filled school board?
Just got the Oley Informer. This looks very expensive to me. They must have more important ways to spend our taxes than this.
Just leafed through The Lynx Informer.There's a two page article about bullying, immediately followed by a group picture of the 2008 School Board Members.
Coincidence?
Has to just be a coincidence, after all, when did our school board every make us do something we didn't want to do, then gloat over it?
Just found the great news that the World Quest Team came in 2nd place in the Nation!!!!!!!
The Swartz Family
WAY TO GO OLEY WORLD QUEST!
CONGRATULATIONS TO ALL!
Thanks to a great Teacher, Mr. Small and to the students who studied and studied hours and hours to come in second place in the Nation!!!
What a great accomplishment!!!
Congrats to all!!!!
Woman expert said in the Reading Eagle bullying leads to tragedy. Are you listening OVSD !!
Hope everyone is geared up to
VOTE KESSLER OUT!
Who do you support for the Republican nomination to run against Kessler? Gokey, Durso or Reed? Who has the best chance of beating him?
Gokey has signs absolutely everywhere. Check out his website
Gokey is OK but he is one of the township supervisors who is responsible for the overdevelopment of Amity Township. I will probably vote for Durso.
Gokey will get my vote
Gokey.
My vote is for Reed. He is the only one who will shake up both the Democrats and the Republicans, and we all know they need a good shake.
ABK (Anybody But Kessler)
Kessler introduced a bill to reward farmers for growing organic crops. I guess that's more important to him than supporting a bill to eliminate property taxes.
Reading School District superintendent says $100,000,000 of wish list spending will not raise taxes because the district will borrow the money.
Has he heard about debt payments? Another example of fuzzy math from a education bureaucrat.
Wilson School District has OVSDitis. They want to pour $$$$$$$ tax dollars into a new stadium.
A financially challenged super and a feel good school board. Does it get any better?
Wait a second....I thought this stuff only happened in Oley. There's no way it could be anywhere else.
Gokey and Kessler = Tax & Spenders
Fast Eddie Rendell wants to give our taxes to illegals, but not give Pennsylvania homeowners a break on property taxes.
There is a bill in the House to prevent this stab in the back.
Let's see how Kessler votes..us or them !!.
new blood....
will not cost the taxpayers because the school will borrow the money???? Borrow? Wow weeeee..I think I'll try that when I PAY my school taxes. By the way, pal, can I borrow a few bucks?
"Fast Eddie Rendell wants to give our taxes to illegals, but not give Pennsylvania homeowners a break on property taxes.
There is a bill in the House to prevent this stab in the back.
Let's see how Kessler votes..us or them !!."
Senate Bill 9 is the legislation which prohibits illegal aliens living in Pennsylvania from receiving public benefits.
They must provide proof of US citizenship.
Rep. David R. Kessler
2 Scholl Drive
Oley, PA 19547
(610) 987-0980
There is also a link on the home page of this blog to reach him.
We need someone like Billy Reed up there in Harrisburg.
He is familiar with the way things are currently run, and will not bend to fit the current legislative mold.
Reed stands for change for the taxpayers of this state.
It's high time that we elect someone who wants to do the right thing.
Durso may be thinking on the right track, but I doubt that he is ready for the Harrisburg legislative machine yet.
Billy Reed is the candidate to run against KESSLER.
We don't want another Kessler in there, so Gokey is a no go also. He'll probably want to keep his local supervisor job like Kessler did. Next thing you know, everyone who is a legislator will be holding down two elected jobs.
Folks, it's time to vote the old regime out and the new regime in.
What makes you think Billy Reed could beat Kessler this time when he got swamped in the last election? I don't think Reed can raise enough money to take on the Democrat machine that is going to pour thousands of dollars into making sure Kessler is reelected. Reed has shown in the past that he is not a good campaigner and does not inspire the confidence of the Republican leadership in this legislative district.
I have met and spoken with Durso and I believe he has a real grasp of the issues and is willing to work hard and campaign hard to defeat Kessler. He also has the support of the GOP.
No matter who wins, though, it is important that the whole party unite behind that person (whether it is Reed, Durso, or Gokey). That didn't happen last time when Reed shocked Dennis Leh and you saw the result...
smoke and mirrors, that is what we get
That's because if he was elected, he wasn't just gunning for the Democrats.
Take a minute to think why he didn't get the backing of the Republican party.
Could it possibly be that they knew he was going to to make his party be accountable too.
During this election, people are going to have to look long and hard at who they elect if they want to get something accomplished.
Durso is on the right track, but he doesn't have it in him to butt heads with the Republicans.
As far as I am concerned, they all need to go and we need to get the everyday people up there to make a difference. Those who have served and are serving are just NOT DOING THE JOB.
Billy Reed is a person who will weed out those that need to go, including the Republicans.
If they have nothing to hide, then Reed should be backed. He is familiar, perhaps too familiar for some, and will be the only person who will shake up our legislators.
I do not think Aaron Durso has it in him to do what needs to be done.
Aaron Durso will vote for property tax reform but Reed wants to play politics. Gokey just wants to be elected.
The choice for the taxpayer is clear, Aaron Durso.
Durso is too green. His local voting record is not that great either.
Reed is the working man's candidate.
He wants to CLEAN UP.
Durso is not quite ready for this challenge.
I've read his website, but who wrote it?
If signs are an indication, Reed does not have much support. Time for a new face with better credentials, Durso.
So now signs make a better candidate.
Very interesting.
Better credentials. Sometimes the more letters one has behind their name, the worse they are at their job.
"Better credentials. Sometimes the more letters one has behind their name, the worse they are at their job."
Aaron Durso for the 130th
Interesting to see that Gokey didn't even show up for the BCTV debate with the Republican candidates last weekend.
Durso and Reed attended and answered any and all questions.
It seemed like Durso was scripted.
Godey - Cat got your tongue?
Who the heck is Godey?
O RLY?
Like you didn't know.
Sorry for the typo, for all you PERFECT PEOPLE.
Ignorance is bliss.
It's been 11 days since there were any comments about the school board on this blog. Things must be going well in the OVSD.
Was there a board meeting last night? Anything to report?
election board or school board. I thought this blog got board w/ the school and moved on to fry bigger fish.
12:41
Instead of trying to incite, why don't you go to the board meeting and report.
Trust me, there is lots going on.
Like, for instance, bullying by supposedly mature high school girls, who are supposed to know better.
Female bullies, who think they are better than everyone else.
Sorry to report, girls, you're the same as all the other females in the district, and you should be ashamed of yourselves, and your parents should also be ashamed of you.
There will come a day when you will figure it out, but I hope it's not too late.
It's very unfortunate that some feel they are better than all the others who attend this school district.
Bullying is nothing to be proud of.
You all know who you are.
It's very sad situation indeed.
Board Meeting 4/16/08:
From the taxpayers’ perspective, the highlight of the meeting was the resistance of new board members to spending more money on the athletic complex aka, “track”.
There was a rush by some of the board to pass a motion to approve the expenditure of $249,850.00 for lighting on the new facility.
But at the last minute, Christopher M. Hannum wanted to table the motion because the district was approached regarding naming rights for the complex.
However, Stephen S. Burns wanted a full discussion on the issue of spending nearly $250,000 on a “want” rather than a need. He indicated the district needed to prioritize better.
What followed was an in depth conversation and revelation about the future big-ticket list.
Replacing the elementary school roof, refurbishing the high school gym, repairing a boiler, settling a lawsuit, construction of a new ag technology facility, are the more urgent obligations.
In light of all these demands, Mr. Burns, along with Mr. Bieber, Mr. Maloney, Mr Kubitz felt that spending nearly a quarter of a million dollars on lights was not the best use of tax dollars at this time.
Finance Committee Meeting 4/17/08:
The primary purpose of the meeting was to discuss the 2008-2009 budget.
The new board members continued their pursuit of more frugal district spending by asking many questions of district requests.
Ralph C. Richard asked the administration to come back with only high priority recommendations.
Those board members who attended the meeting were Ralph C. Richard, Carl J. Kubitz, John C. Bieber, Stephen S. Burns, and David M. Maloney.
At this point, the millage increase will be .79 mills, which represents nearly $560,000 of additional taxes.
It is estimated the district will have nearly $2,000,000 in the General Fund balance and $ 4,000,000 sitting in Capital Reserve by June 30, 2008, the end of the budget year.
The shortfall could come from one of these accounts or in combination with paring the administration wish list rather than increase property taxes.
In 1998-1999 the millage was 13.59. The proposed 2008-2009 budget millage would be 24.21, a 78.14% increase!
24.21 mills is $2,421.00 of school property taxes per $100,000 of assessment.
Oley Concerned Citizen,
Your depiction of the meeting/events etc. is alarming on many levels.
These comments should be taken as individual thoughts, and not as attacks.
First, it seems that our board is not cohessive, which is not a positive fact. If various board members are on opposite ends of a thought process from the other, I worry that constructive progress can not be made to the proper education of our children, our future.
You compare our millage to '98-99 (10 years). During that time, things in society have drastically changed, including federal and state mandates regarding education. It has been a long standing issue that a material portion of our budget is consumed relating to the provisions of educating the children who qualify for special benefits under this legislation. I bring up things like mental issues, learning disabilities and unable to speak english. Therefore, is it fair to compare a ten year time period w/out factoring in these expensive mandates?
An additional though I have is the outdated property tax system. If millage is not reassessed or reevaluated annually, then by default, there is no compensation for inflation. If in the same ten year time period, the value of homes has increased by 50%, and the assessments also increased by 50%, what would the millage increase have been. I do not have answers for these questions, but I know I was last reassessed in the very early 1990's, and I know I would not sell my house for the assessed value (including the other factors that are used to determine the assessed value). So if my assessed value was almost doubled from my market value, to get the same amount of taxes would require almost a 50% decrease in millage.
These are just random thoughts, not meant to insight anyone, just thoughts.
“First, it seems that our board is not cohessive, which is not a positive fact. If various board members are on opposite ends of a thought process from the other, I worry that constructive progress can not be made to the proper education of our children, our future.”
A cohesive board that spends at a pace that far exceeds the community’s ability to pay and then ignores lackluster educational results is not constructive cohesiveness.
The fact that new board members are willing to ask questions of the process should not be a problem for most. Change is not a bad thing.
“You compare our millage to '98-99 (10 years). During that time, things in society have drastically changed, including federal and state mandates regarding education. It has been a long standing issue that a material portion of our budget is consumed relating to the provisions of educating the children who qualify for special benefits under this legislation.”
You are incorrect when you say federal and state mandates are “a material portion of our budget".
Over 75% of the budget consists of salaries and benefits. Local boards determine these amounts and they are not mandated by the state or the federal government.
If you compare the millage increases over the same ten year period to local earned income increases, you will discover the pace of school property taxes far exceed that of household income.
This places an onerous burden on families in their struggle to keep their homes.
“An additional though I have is the outdated property tax system. If millage is not reassessed or reevaluated annually, then by default, there is no compensation for inflation. If in the same ten year time period, the value of homes has increased by 50%, and the assessments also increased by 50%, what would the millage increase have been.”
You imply a modern property tax system would be to re-assess home values each year. There is a bill in Harrisburg to reform the tax system to eliminate school property taxes.
If yearly re-assessments were employed, more than likely the millage number would be lower as compared to today, but the total dollar amount of taxes paid would still be a 78% increase per household.
You need to go a step further in your analysis and measure the academic improvement over the same period. You would discover that the independent achievement test results are about the same as they were ten years ago.
This is not a good return on taxpayer investment.
“So if my assessed value was almost doubled from my market value, to get the same amount of taxes would require almost a 50% decrease in millage. “
I am not sure what you mean when you hypothesize that your assessed value was almost doubled that of your market value. If your home was re-assessed each year or as in some states, assessed value equals market value, then the millage number would remain nearly the same but the dollar amount of taxes collected would increase consistent to the market value increase.
In Florida, the state puts a 3% cap on re-assessment increases.
I heard it's players on the girls hockey team who are extremely rude.
I had heard that the girls were also in the band and chorus.
TO ALL BLOGGERS:
For the past six weeks we have all been harrassed by campaigners. Please return the favor:
GO VOTE.
I am not going to say who you should vote for, just tell you to live up to your personal responsibility and --
VOTE - It only takes 10 minutes.
Ron Paul for President!
Trouble brewing for the taxpayers with the election of Gokey.
Where does Gokey stand on taxes? If there is going to be a change, he better support a plan that does not involve income taxes.
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