posted by Joe Polk at 4:12 PM /
The Mt. Lebanon School District this week unanimously approved hiring a law firm to do a final review of bid documents for the proposed high school renovation.
Downtown-based Babst, Calland, Clements & Zomnir was awarded a contract of up to $3,500 to do a legal review of the specifications for the project, currently capped at $113.27 million, and ensure the documents contain no loopholes or problems. By next week, the firm will share its recommendations with the district, the project's architect and the construction manager so any last-minute revisions can be made.
Read the full article:
Downtown-based Babst, Calland, Clements & Zomnir was awarded a contract of up to $3,500 to do a legal review of the specifications for the project, currently capped at $113.27 million, and ensure the documents contain no loopholes or problems. By next week, the firm will share its recommendations with the district, the project's architect and the construction manager so any last-minute revisions can be made.
Read the full article:
- www.pittsburghlive.com/x/pittsburghtrib/news/pittsburgh/s_724324.html (Pittsburgh Tribune-Review)
Labels: high school renovation, school board, school district
20 Comments:
A question for lawyers....assume for the moment that the "another pair of eyes" lawyer from Babst, Calland, Clements & Zomnir reviews the documents and either finds in his/her opinion no need for corrections or revisions, or finds needs for corrections or revisions and those changes are made to the documents....then assume that after contracts are awarded and work is underway, material defects, errors and/or ommissions in the documents are found to exist that require substantial and very costly change orders to remedy....who would be liable for the added costs : architects, CM, solicitor, contractor(s), owner or the "additional pair of eyes" ?
Major construction projects invariably involve legal disputes and lawsuits among and between the parties; and, it is always interesting to find out who ends up losing & winning.
Bill Lewis
What about the interest expense on the $75,000,000.00 that we borrowed? Each week that we wait is equivalent to the cost of hiring one FTE teacher in the district. We're burning cash folks!
Where does all of this end? What's next? Will we need to hire a consultant to inspect the quality of this review? After-all, we can justify the value of an evaluator to assess the quality of the work from this evaluator, can't we?
Did Remely have all of these inspections when he was revamping the commercial buildings in his portfolio, or was his work done properly the first time?
What is the phrase that I hear in D.C.? "Good enough for government?" Folks, we can't afford to continue like this or our community is going to go straight down the tubes! That giant sucking sound won't be the sound of residents leaving the community - it will be one giant flush!
Bill,
For $3.5 thousand, it's not likely that the reviewing firm can provide review services and purchase an insurance contract to assume liability for anything overlooked. Therefore, I think it's a safe bet that the school district has agreed to hold harmless the reviewing firm for any such errors.
Cheers,
Tom
John (K),
Once again, you claim that this pre-bid review is "burning cash," and, once again, you ignore the time and cash the review is likely to save.
From where we are in the project right now, we have two potential futures: one in which we do the pre-bid review, and one in which we don't. Can you explain why you expect the first to be worse than the second? Can you explain what makes you believe a pre-bid review won't find enough errors to more than compensate for one week and $3.5 thousand?
Would you mind answering my questions this time?
Cheers,
Tom
Tom, that isn't playing fair, because we the public will never know if Babst & Co. finds any errors.
All we know is it costs more and there is a delay.
Perhaps you, as a key communicator, can share with us your opinions on the pre-decisional documentation. David Huston
I just listened to the last school board meeting and heard the discussion on Sunday use of fields by the lacrosse team.
Lacrosse mom Josephine and superintendent Timothy arranged the agenda so the Board would be polled in a public meeting to give Timothy permission to let the lacrosse team have the use of school fields on Sunday morning in conflict with church services.
Mr. Lebowitz pointed out that the superintendent already had authority under school policy to grant this exception but Timothy couldn’t make this decision without polling the board in public for permission.
The new teachers’ contract says a teacher won’t advance on step unless a satisfactory rating is achieved. Can Timothy stand up to the teachers’ union and enforce the contract terms if he can’t stand up to the lacrosse lobby? Will the board be polled in public to give Timothy permission to hold an unsatisfactory teacher from advancing on step?
Timothy and Josephine just made a joke out of the Policy Manuel by polling the board. But what can you expect from a superintendent who can’t run a quality school website without public pressure?
John Ewing
David,
How is it unfair to expect you to be able to draw inferences from incomplete and uncertain information? Don’t we all do that very thing without complaint, all day, every day, as we live our lives and make countless decisions, consciously and unconsciously?
You claimed: All we know is it costs more and there is a delay.
No, that’s not all we know. We also know, from the 14 February discussion meeting, that the bid documents contained a lot of errors. We also know that some uncaught errors are likely to become change orders and construction delays. We also know that competent independent reviews are likely to find errors.
Use this knowledge, instead of pretending it doesn’t exist.
Reasoning exercise:
Let’s say that a few days after the 14 February discussion meeting it fell to you, instead of the school board, to decide whether to send those documents out for a pre-bid review. Based on what you know (uncertain though your knowledge is), what would you decide? Review or no review?
Draw the decision tree and tell me how it comes out.
Cheers,
Tom
Tom,
The subject of cost would not be an issue if the finance "team" hadn't issued bonds too early.
Too many mistakes have taken place under the direction of the finance "team." For instance:
1) The middle school bonds borrowed extra money to pay the interest on the bonds.Interest on interest resulted in extra expense.
2) The elementary school bonds were wrapped costing several million more in extra interest,
3) The board was given finance "options" for the second high school issue: a) levy heavier taxes than needed before the second bond issue creating extra expense and b) wrap the bonds again and make the same costly mistake AGAIN that we made on the elementary bonds.
The best way to issue bonds is to accept the bond issue the same night as the bids are accepted or as close to that date as possible. We did this on the municipality side when we built the ice rink. We had a different finance "team."
Tom,
To say that an argument must conform to your guidlines is, in fact, your opinion, and therefore any conclusions from your argument are simply your opinion.
Tom, the issue is the school boards' reckless and wasteful expenditures. The issue isn't how we want to present our opinions or whether or not they satisfy your criteria. The issue is not you. This problem in our community is not about you.
Perhaps you want to deflect criticism from your school district pals by presenting this alternative concern? After-all, that is the same pile of crap that Raja handed all of us when he said that the Commission voted to accept the Shared Parking Agreement solely based on the agreement, and that the vote to approve the Shared Parking Agreement was not an endorsement of the construction project - which in my opinion is total B-S!
John (K),
I wish we could have a meaningful conversation, but I’m beginning to doubt it’s possible.
You make bold claims but then, when asked if you can support them with reason and evidence, seem unable to do so. Instead, you change the subject, call names (“mouthpiece”), and question the motives of people who point out the holes in your non-arguments (“Perhaps you want to deflect criticism from your school district pals...”).
Sorry, John, but you’re the one who claimed this pre-bid review was a bad idea. If you can’t show how we’re likely to be worse off doing the review than not, why should anyone believe you? Lacing your comments with exclamation points and invective is not an argument. If you want anyone to take you seriously, you’ll have to do better.
Best of luck, John.
Cheers,
Tom
Hello Tom,
As Commissioner Kluck pointed out on “the other site”, there are no winners or losers when it comes to free speech.
What I am finding interesting is that one party in our community promotes an open exchange of ideas and the other organizes to control the channels of communication on two websites, and MtL – our taxpayer funded publication.
Well folks, oil is hovering at $100/bbl this week; total unemployment is around 18%; job creation is flat; our regional economy is in decline; and our elected officials decided to build a new $120,000,000.00 high school. The question remains, “Will the High School Construction project lead to the creation of tangible value in our community, or have we sown the seeds of our destruction?”
Only time will tell…
John (K),
Everyone loses when we squander our freedom of speech on the spreading of ideas that are wrong. While we are all entitled to our own beliefs, there is only one reality, and the more our beliefs depart from it, the more our decisions are likely to be foolish and harmful.
So, when you exhort people around town to act upon your beliefs, you have some responsibility to make sure your beliefs conform to reality. If you tell people, for example, that this decision to have a pre-bid review is bad, and in truth it’s more likely to be good, who are you helping?
Cheers,
Tom
John (Ewing),
You wrote, The best way to issue bonds is to accept the bond issue the same night as the [construction] bids are accepted or as close to that date as possible.
Here’s the thing I don’t understand. If you think interest rates are likely to increase, how should that knowledge influence your decision about whether to borrow now or later?
Cheers,
Tom
John (K),
If one lawyer isn't arguing with you it is another.
Tom, Tell me who on the school board is qualified to gamble $5,100,000 speculating that interest rates are going up?
Rose?
Cappucci?
Kubit?
Posti?
Remely?
WHO?
John Ewing
John (K),
About the credibility of your statements, you offered the following (astounding) claim: All of my statements are factually correct...
If we put this claim to the test, however, it proves false on the very first statement you made in this conversation:
What about the interest expense on the $75,000,000.00 that we borrowed? Each week that we wait is equivalent to the cost of hiring one FTE teacher in the district. We’re burning cash folks!
Really? In 2009, the school district took out a $69-million loan and agreed to pay it off according to a fixed schedule. The payments don’t change, regardless of what we do this week. Taking a one week “wait” for a pre-bid review may delay construction but doesn’t affect our loan payments, nor the interest cost of the loan. In short, your statement – that this wait is costing us the equivalent of a full-time teacher – is false.
Is the reality so hard to see? I mean, if you went to the bank and took out a car loan, you would get a payment book, and it would dictate your payment schedule. How would the payments change if the car dealer said it would take an extra week to deliver your car?
Now, if you had known in advance about the delay, you could have waited a week to take out your loan. But that wouldn’t mean you could have saved a week’s interest. The cost difference between the “early” and “late” loan strategies is determined by just one thing: how interest rates change between the dates you take out the loans. If the rates went up, the late strategy would have cost you more than the early strategy; if they went down, the opposite would be true.
Cheers,
Tom
Tom,
It is not just one week's interest to be concerned about. Taxpayers paid interest from October 21, 2009, until February 15, 2011 when we paid more than $4,400,000 in interest because the loan was taken out too early.
We also repaid bondholders $700,000 on February 15, 2011. That is a cash flow loss of $5,100,000.
That $5.100,000 does not count the commissions we paid to sell the $700,000 of bonds. Those brokerage commissions will have to be paid again when we borrow the $700,000 a second time to pay the HS costs.
In addition, when you compute municipal bond interest each month receives 30 days interest regardless of the number of days in the month. The delay cost $70,000 in extra interest before we get a shovel in the ground. So the figure increases to $5.170,000 in lost spent and accrued cash based on too-early issuance of the bonds and the delay.
We borrowed the $700,000, we paid interest on the $700,000, and now we have to borrow the $700,000
again to pay the project cost. Are you willing to pat twice for your car?
The cost of hiring a new teacher with a Masters degree in the 2010-2011 school year on Step 1 to 4 of the Salary Schedule of the new Contract is $48,000 to $52,000 so Mr. Kendrick is correct in saying the $70,000 interest is more than $52,000 in salary.
You are correct, however if we add the $65,000 cost of benefits to the $52,000 then the $70,000 of interest does not cover the entire cost of a new teacher at $52,000 salary + $65,000 of benefits.
I wonder how that $65,000 benefit cost is allocated between the benefits granted by the Contract Extension?
John Ewing
John (E),
Friend, your argument rests upon a fallacy. Earlier, I asked you a simple financial question that I had hoped would make that fallacy clear to you. But you dodged the question.
I’ll ask you that question again, in hopes that you’ll give me a straight answer:
If you think interest rates are likely to increase, how should that knowledge influence your decision about whether to borrow now or later?
Please note that this question has nothing to do with the school board, the high-school project, or any particular loan. It’s just a common question about a common financial decision that many organizations are required to make all the time.
I don’t know whether the school board is qualified to answer questions like that, but I trust that you are.
Will you answer it this time?
Cheers,
Tom
My answer was:
"Tom, Tell me who on the school board is qualified to gamble $5,100,000 speculating that interest rates are going up?"
School Board members have no business speculating on interest rates.
I don't think I could have been more clear. Your accusation that I dodged the question is not supported by my post of February 26, 2011 at 6:35 p.m.
The Board gambled and lost millions of dollars of our money.
P. S. I find it interesting the debt service schedule on the bonds you posted is different from the bond prospectus - just one more example of different numbers on different documents from the Finance "Team."
End of String,
John Ewing
John (E),
I said you dodged the question because you did: I asked you about interest rates and loans, and you gave me an answer about the school board.
Here, let me try again:
An important client from New York comes to you and says he needs to take out a loan but doesn't need the money for a while. He asks you for advice and poses the following question:
If you think interest rates are likely to increase, how should that knowledge influence your decision about whether to borrow now or later?
What do you tell him?
Cheers,
Tom
Tom,
I was Chair of an ad hoc investment advisory committee
to the school board for 12-13 years. During that time we made substantial dollars using professional judgement to make decisions. The Committee had access to well qualified professional with whom to consult before we made our judgement and we were successful doing the job because the Board took professional advice and listened to what we recommended.
The question you continue to argue, ad nauseam, has no firm black and white answer but trying to explain that to someone who won't listen to a reasonable answer is a waste of my time.
If you choose to speculate with your own money that is up to you. Defending speculation on millions of dollars of public money makes about as much sense as defending lazy deadbeat athletic supporters.
END OF THREAD!!!!!!!
John Ewing
Post a Comment
<< Home