posted by Joe Polk at 12:04 PM /
Mt. Lebanon commissioners voted 4-1 last night to finance a 2009 street reconstruction program through the issue of roughly $2 million in general obligation bonds. They also decided to approve designating $200,000 of that money for sidewalk repair.
"We should take the matter by the horns and pay as you go," said Dan Miller, the lone dissenting vote among the five commissioners. "I know my ward needs the sidewalks, but the policy is ridiculous."
Link: www.post-gazette.com/pg/09174/979289-100.stm
Link: www.post-gazette.com/pg/09176/979693-55.stm
Link: www.thealmanac.net/ALM/Story/06-24-ML-commission-B
"We should take the matter by the horns and pay as you go," said Dan Miller, the lone dissenting vote among the five commissioners. "I know my ward needs the sidewalks, but the policy is ridiculous."
Link: www.post-gazette.com/pg/09174/979289-100.stm
Link: www.post-gazette.com/pg/09176/979693-55.stm
Link: www.thealmanac.net/ALM/Story/06-24-ML-commission-B
Labels: commission, sidewalk reconstruction, street reconstruction
9 Comments:
Can someone please explain to me why we have floated a bond for this work? I don't remember us having to do this in the past. Isn't street and sidewalk reconstruction part of the normal budget?
Exactly Joe!
Floating a bond for this type of expenditure makes me think that the commissioners are just not up to the job. This is a lazy solution to what is really a minor problem. I sense the commissioners are getting overly aggressive financial advice and are suffering from a bit of group-think. A $2MM bond issue like this is comparatively small and an unusual usage without a more focused capital project.
Over the past several months, many of us in suburbia have chuckled at and criticized City and County officials for their handling (or mishandling) of their respective agencies, their taxing decisions and their upside down budgets. Many of us have suggested that rather than increase taxes or borrow money, Mayor Ravenstahl and County Executive Onorato should live within their means, get rid of some of the useless government jobs and departments that have existed largely through political patronage and simply learn to be more lean and efficient.
A perfect example of this is the recent County drink tax that was initiated to fund the Port Authority. I can recall a large number of Mt. Lebanon residents (myself included) who argued that if the Port Authority is over staffed, poorly managed and way over budget, then the County should work from within that agency to fix (er . . . cut) the problems rather than raise taxes. The thought being that if the Port Authority doesn't fix the root of the problem today and live within its actual means - the problems and issues facing the agency will continue to surface and *more* taxes will be created or raised to try and solve them. And now I read that the City is seriously considering surcharges on college students and hospital patients to help fix its budget woes . . . . its a never-ending cycle!
So, when I hear that Lebo is floating bonds to re-surface 11 roads and sidewalks I get equally nervous. I realize that the size, cost and timing of some municipal projects require bonds - but 11 residential streets?
I am increasingly concerned with our inability to fund basic infrastructure (it doesn't get any more basic than roads and sidewalks) through advanced planning and our operating budget.
Couple this with the fact that our community has been unwilling or unable to maintain its single largest physical asset and, as a result, it is now reportedly in such a state of disrepair that we must raze it and start over. By all accounts, this new high school will exceed what we can reasonably *afford* without a referendum and a sizable increase in our taxes.
As a taxpayer in this community, I only wear one pair of pants. The money that I pay to the Municipality for roads, public safety, etc comes from one pocket and the money that I pay to MtLSD comes from another pocket. I don't have any more pockets and I don't have a second pair of pants. I look at the incredible number of houses currently for sale in Mt Lebanon (over 330 according to Howard Hanna alone) and I wonder if many of us have already determined that enough is enough.
As an older community with what appears to be a declining tax base, we need to live within our means. For example, I am not familiar with the condition of all 11 roads that will be included in this resurfacing project, but I can speak to Osage. I use it every day. It's far from being in need of a 20 year bond issue to repair it. If it does need to be re-done (which I question) then plans should be made to fix it (and the others) within the operating budget.
We are one a very, very slippery slope if we try to borrow or tax ourselves back to perfection.
Further to my earlier comment, if memory serves me correctly, the Commissioners (namely Raja, DeIuliis and Colby) cut the sidewalk work (and maybe even some of the street work) from the last budget so they could announce what amounted to a modest tax cut, say $10-15 per household. Now, just 6 months later they want to borrow money (and pay interest) to accomplish the exact same work. So unless I'm crazy, they've not only just taken back my modest tax cut, but now they are asking me to pay interest for 20 years on the same money. I'm no economist or budget expert, but I think even my basic understanding of this stuff leads me to conclude that I would have gladly accepted the sidewalk work in the last budget at the expense of my $15 tax cut, instead of borrowing the same funds 6 months later and being forced to pay 20 years worth of interest. Am I missing something?
What apparently few realize is that this $2.1 million bond issue was "wrapped" as opposed to being a conventional serial issue. This "wrapping" defers 88% of the total necessary principal payments until the final three (3) years of the 20 year bond term in order to minimize the initial annual debt service and the necessary tax increase. However, this "wrapping" of the bonds will result in $600,000 more interest expense than would have been required in a serial bond issuance over the 20 year term, or roughly $30,000/year in excess cost.
The meeting was recorded and will be shown on Comcast channel 7, or Verizon channel 34....this reality was *exposed* during the public hearing on the bond issue ...view it, and as a neighbor has characterized it, witness "theatre of the absurd" from a governance point of view.
As usual, Dave F. hits the nail on the head. Total nonsense.
And what even fewer still undoubtedly realize is that the $50 million bond issue in 2003 for the elementary school renovation project was also "wrapped", resulting in close to $10 million in added interest expense over the 28 year term of that bond issue.
And what is even more disturbing is the fact that "wrapping" is also being considered for bonds to finance the now $115 million High School project ... which would also result in about $10 million more in interest expense than a serial bond issue if the entire project cost was bond financed.
Where is the community outrage for such fiscal irresponsibility by our elected officials ? As the saying goes, "ignorance is no excuse" !
Hindsight is 20/20. There wasn't a peep out of anyone when Raja first announced the tax cut. Here is the only comment from the December 18th blog lebo post on what I thought was an unnecessary and irresponsible tax cut brought to Mt Lebanon residents by Commissioners Raja and Joey D:
Is it me or is now not the time to be cutting taxes? I know some out there think tax cuts are the greatest thing since sliced bread (even when we have to borrow the money for the tax cuts from China) but in these times, with several major expenditures on the horizon, I for one would rather see the municipality put the surplus in the bank, or towards debt rather than cutting everyone's taxes by $12 or whatever it averages out to. What are will the commission do this time next year, when I am sure this issue with the budget is going to come up again. Will that mean a tax hike? That is my two cents, or twelve bucks.
A few observations:
Depending on the dollar value one assigns to his or her time, it would appear that more is being spent in comment on this issue than the bond issue's monetary impact on any individual itself.
As for the number of Mt. Lebanon residences for sale, the U.S. Census Bureau Fact Sheet for Mt. Lebanon indicates we have approximately 14,701 housing units as of 2007, 13,620 of which are owner-occupied, 3,304 renter-occupied, and 1,081 vacant. If Howard Hanna accurately estimates that some 330 of our properties are now for sale, this appears to represent about 2.24% of the total; as such, almost 98% currently are not on the market. One is left to draw one's own conclusions here.
That said, I was surprised to learn of roadways that did not make the cut for remediation, such as Morton Drive, the passage from Miami Drive to Lebanon Avenue, as well as parts of both Poplar Drive and Pennsylvania Boulevard.
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