School Directors Reviewing Financial Consultants

by Jonathan Weaver

Before incurring more debt or redeeming financial bonds, Armstrong School District board directors want to make sure they have the right team behind them.

Last night, school directors interviewed officials from Piper Jaffray Companies, Janney Montgomery Scott, LLC and PNC Capital Markets regarding current bonds that would influence the construction of the new Armstrong Junior/Senior High stadium and renovations at Elderton and Shannock Valley Elementary schools as well as West Shamokin Junior/Senior High’s football field.

Specific bonds discussed included the $16.2 million bonds financed in 2007 –which can be redeemed in mid-November - and the $80.5 million Build America Bonds financed in 2010.

District Director of Finances and Operations Sam Kirk has interviewed companies like this in the past during his career, and said school directors have a basic goal.

“I think what we’re looking for right now is, with anything, the most bang for our buck,” Kirk said. “Anything that’s considered financial in nature, we’re looking at to make sure we get the best value for the district.

And, we’re trying to build a long-term relationship with a company that’s going to look out for not only our current needs, but also for our future needs that are out there.”

The evening started with a 45-minute presentation by current-bond underwriter Piper Jaffrey – and their Senior Vice-President Randy Frederick.

Frederick, an investment banker with more than 35 years of experience, asserted that Piper Jaffray’s efforts have led the school district to the bond state they are currently in – which included saving the school district more than $1 million.

“I think we understand your debt probably better than anyone because we’ve been reviewing it over-and-over again,” Frederick said.

But, no final decision was made last night. School directors will consider each company individually before discussing it with their fellow board directors and administrators at the October 6 open-caucus session.

For more on each banking option, stay tuned for the Kittanning Paper Week-End Edition.

4 Comments

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  By Rainbow Rider, September 28, 2016 @ 9:28 AM

  They will get whoever will make going in debt more sound like a good idea.
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  By futureconcerned, September 28, 2016 @ 11:07 AM

  The board is looking to borrow up to $20 million dollars to renovate Shannock Valley Elementary, Elderton Elementary, and the West Shamokin Football field, and build the Football stadium at Armstrong Jr/Sr High. They intend to use the approximately $2.5 million remaining from the construction of the new school along with almost $900,000 that will be coming in PlanCon reimbursements. The scope of the renovations was not discussed at the meeting. In order to get the benefit of the current low interest rates, the Board must hire the new firm and commit to a financing plan and Bond Issue by the Oct 10 Voting Meeting. The Board will discuss the three applicants and make a decision on Thursday Oct 6. These plans will include at a minimum a 1 mil tax increase. The applicants stressed that Moody’s would be looking into how The District has been handling the Fund Balance. If a District has been dipping into the balance to cover the budget, the Bond Rating will suffer. They were told that IF they can explain the reasoning and show that they have the taxing ability to cover the extractions from the Fund Balance; it may not affect the rating. Though projections for the District’s finances were done out through 2045, there was no discussion of the impact of rising PSERS pension costs. If these were addressed in the proposals, it was not made clear. The public was refused any questioning by the Solicitor. In questioning a Director after the meeting, the renovations at the Schools would be “complete”. When asked if they would be renovated to give the Eastern children the same opportunities as the Western side, a guarded “yes” was the answer. He did say that the buildings would be made energy efficient i.e.: heating systems, doors and windows. Elderton Elementary would get a separate heating system from the High school. When asked if the current heating system would be kept in place to heat the gym when needed, he didn’t know. When asked if both schools would be given a gym as West Hills and Lenape have, he didn’t know. He did say that Shannock would get an elevator to make it handicapped accessible. He said that Reynolds has a plan to make the renovations starting the day after classes dismiss in the Spring and the schools would be ready for the first day of school that Fall. We suggested that a public meeting to present the plans at either Shannock or Elderton would be in order; he said that would be a good idea. When asked if they were going to use the PlanCon process which stipulates these public meetings and offers State reimbursements he said they were not using PlanCon.
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  By Patzu, September 28, 2016 @ 12:25 PM

  Taxes being increased for football field at The Mecca on the Hill?

  The public supports this tax increase?
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  By jorn jensen, September 29, 2016 @ 6:51 AM

  Thank you, futureconcerned, for an article (comment)of value and importance.

  What you wrote has more validity than what the board feeds the press.

  Patzu - Remember “build it and they’ll come”?

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