ASD Bond Underwriter Decision to be Made Monday
Armstrong School District board directors talk through the three potential bond underwriting firms last night that could represent them in upcoming bond refinancing and new spending for district renovations and construction.
by Jonathan Weaver
Armstrong School District elected board representatives held off until Monday night at their regular meeting to make a decision regarding their bond underwriters.
In West Hills Primary School’s library last week, school directors interviewed officials from Piper Jaffray Companies, Janney Montgomery Scott, LLC and PNC Capital Markets regarding current bonds and potentially new spending that would influence the construction of the new Armstrong Junior/Senior High stadium, renovations at Elderton and Shannock Valley Elementary schools, and renovations at 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 said it is “time-sensitive” that board directors hire a financial firm soon.
District Director of Finances and Operations Sam Kirk said it is “time-sensitive” that board directors hire a financial firm soon.
“The earliest we can do that is November, but it does take in the neighborhood of 30-45 days to get the ball rolling on that, get all the paperwork signed to sell the bonds in December,” Kirk said. “It’s important that Monday night we choose a firm to at least handle refunding for us – and then, depending on what direction (school officials) want to go and based on the price that comes in for the potential projects, the borrowing of future money would happen later on, more than likely not until somewhere in calendar year 2017.”
Board President Joseph Close – who vouched for Piper Jaffray (the district’s current representation) – said Monday will be a hard thought-out decision.
“I think overall, every board member’s got to be somewhat-overwhelmed with the numbers and scenarios,” Close said. “There are a lot of different things you can do with the numbers to try and massage those things to try and make them more in the best interest of yourself.
“It’s a learning experience and it’s frustrating trying to absorb all those numbers, trying to understand all that.”
Board Director Amy Lhote noticed a difference between the presentation from Janney Montgomery Scott, LLC and the other two interviews.
“Their presentation was significantly-different in terms of their forward-thinking of how they structured it,” Lhote said. “They looked more into the future maybe than the other two.”
School Director Linda Walker was also impressed with Janney Montgomery Scott and PNC.
During Kirk’s final rubric, PNC Capital Markets scored the highest with 30 points – one point greater than Janney Montgomery Scott and two points greater than Piper-Jaffray.
School directors will review that rubric during the weekend before they make their final decision.
Whichever company school directors choose, Kirk would like to stick with that firm “and start building a long-term relationship with them. I think all three are qualified.”
School Superintendent Chris DeVivo said it benefits the school district “both from a construction standpoint and a financial standpoint” to schedule construction and renovations out over a few years.
Piper Jaffray estimated final underwriting fees are not to exceed $3.90 per $1,000, as opposed to a negotiable $5 per $1,000 from Janney Montgomery Scott and not to exceed $3.95 from PNC.
Kirk explained Piper Jaffray’s underwriting fees have diminished more than $2 just based on interviewing the other two firms.
“Whether you liked the process or not or whether anybody thought it was a good idea, I think anytime you bring competition to the table, it will always get you a better price,” Kirk said. “If anything, even if we stick with the same company (Piper Jaffray Senior Vice President Randy Frederick) has actually given us the lowest price in the proposal.
(The price) is a lot lower than what they charged (the school district) the last couple of times they did.”
If Piper Jaffray is ultimately selected, he hoped the firm doesn’t exceed the $3.90 price in future underwriting either.
School directors also have the option to spread out potential borrowing and utilizing bank qualified loans.
“The likelihood of being able to complete two projects in one summer – when they start likely six months from now – is going to be difficult,” Kirk said.
School Superintendent Chris DeVivo agreed, and said it benefits the school district “both from a construction standpoint and a financial standpoint” to schedule construction and renovations out over a few years.
“We learned quite-a-bit in discussion with each of those companies,” Superintendent DeVivo concluded.
Monday’s meeting begins at 7:30PM at West Hills Intermediate School in East Franklin Township.
Armstrong School District | jweaver October 7, 2016
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By futureconcerned, October 7, 2016 @ 10:25 AM
This train leaves the station with MOnday night’s vote. They are rushing to hire the new advisors so they can sell new bonds by December. If you don’t support debt to fund stadiums, you need to call your representative Director.
ELECTION
DISTRICT
NAME OF
DIRECTOR
TERM
EXPIRES
Bethel Township
Burrel Township
Cadogen Township
Ford City Borough
Ford Cliff Borough
Manor Township
Manorville Borough
North Buffalo Township
W. Kittanning Borough
Dr. Paul J. Lobby
724-763-9894
Mr. James T. Rearick
724-602-5366
Mr. Reardon A. Mulroy
724-763-8086
2019
2017
2019
Applewold Borough
East Franklin Township
Kittanning Borough
Rayburn Township
Washington Township
West Franklin Township
Worthington Borough
Mr. Christopher E. Choncek
724-664-6947
Mr. Joseph D. Close
724-297-5534
Ms. Amy K. Lhote
724-543-3144
2019
2017
2019
Atwood Borough
Boggs Township
Dayton Borough
Cowanshannock Twp.
Elderton Borough
Kittanning Township
Pine Township
Plumcreek Township
Rural Valley Borough
Smicksburg Borough
South Bend Borough
Valley Township
Wayne Township
West Mahoning Twp.
Mr. Stanley J. Berdell
724-783-6086
Mr. Timothy W. Scaife
724-664-5346
Ms. Linda K. Walker
814-257-8624
2019
2017
2017