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Ensuring Failure of Public Support for a New High School – State College, PA

Ensuring Failure of Public Support for a New High School – State College, PA

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A critical analysis explaining how a local school board failed getting public support for a $128 million high school project. Good lessons for how not to treat the public. (2006-07) The project was cancelled in 2007 after going over budget by 28 percent but also left the district with a potential $10 to $15 million SWAP payment for debt never incurred -- a first for Pennsylvania. That issue is being settled in court as of November, 2012.
A critical analysis explaining how a local school board failed getting public support for a $128 million high school project. Good lessons for how not to treat the public. (2006-07) The project was cancelled in 2007 after going over budget by 28 percent but also left the district with a potential $10 to $15 million SWAP payment for debt never incurred -- a first for Pennsylvania. That issue is being settled in court as of November, 2012.

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Published by: State College Watchdog on Jul 23, 2012
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05/13/2014

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Copyright© Don E. Gordon -- Reprint permitted for nonprofit use when source is cited.
1
Citizen Comment for the State College Area School District High School Act 34 of1973, the Taj Mahal Act, Public HearingDon E. GordonState College, PA 16803
June 17, 2006
SUMMARYAddendumJanuary 15, 2013Lest we forget, of all the school districts and municipalities in Pennsylvania andprobably the entire nation, only the SCASD voted to extend a SWAP with no debtissued or even an approved plan for new debt beyond the cancelled high schoolproject. As the Superintendent commented, the district got nothing for the $9million.The board clearly voted to extend the SWAP to circumvent Act 1 and the need fora public referendum to approve future district spending of that magnitude. The2007 school board changed the SWAP from a hedge to speculation. The WallStreet Journal and other financial media called the incompetence exactly what itwas. The nitwittery, Director Hutchinson's apologia aside, was abetted by a lackof transparency during most of the high school project.Hopefully we learned this -- when a public officer does not know what he is doingthen do nothing and don't hire consultants who compound your ignorance.Hopefully we also learned to elect school board directors who actuallyunderstand fiscal responsibility and how to implement it rather than namby-pamby advocates.AddendumNovember 3, 2012The project was cancelled in 2007 after going over budget by 28 percent but italso left the district with a potential $10 to $15 million SWAP default payment fordebt never incurred -- a first for Pennsylvania. That issue is being settled in courtas of November, 2012. (Pennsylvania law prohibits bonds for debt not yetincurred and arguably Royal Canadian Bank and its consultants should haveknown that but so should the school board and its school financing consultants.
It’s a case of who pays –
Dumb or Dummer?) The same school board thenattempted to use the SWAP funds for other projects without a requiredreferendum.
1
Six years later this nitwittery continues to plague the school district.
 
Copyright© Don E. Gordon -- Reprint permitted for nonprofit use when source is cited.
2
Original Article
June 17, 2006During the past year (2006), I listened to many sides of the debate about the StateCollege High School renovation project and read extensively the data provided byadvocates for the $102 million renovation and also provided for other solutions by StateHigh Vision. Missing is the most compelling argument for the most common sense andreasonable recommendation made by the paid consultant having no financial interest inthe project
 –
the $50 million solution to fulfill needs rather than wants. I believe it is inthe best public interest for the school board to start the process at that recommendationand explain in plain English why it is not acceptable.The State College Area Board of School Directors (SCABSD) cannot or will not graspthe fundamental and wide spread citizen complaint described throughout the publicmedia about this high school construction project. First, the renovation will be one of themost expensive comparable renovations in Pennsylvania. Second, the state willreimburse proportionately less (7.65 percent) of the cost than any comparablerenovation, less (percent) than ever reimbursed to the SCASD. Third, residents of thedistrict pay 83 percent of the school budget from local taxes, among the highest
allocations of any district in Pennsylvania. It’s a double wham
my. Fourth, the boardcannot or will not demonstrate with facts and figures how the added $102 million costwill result in the lowest forecast five year average tax increase in district history. It
doesn’t make sense. Fifth, What the board does not seem to
understand is that whileour community may have exceptional wealth by state comparison, not all in thecommunity share equally in that wealth. Lastly, the school board has prevented frankand open discussion and manipulated public participation at every turn.The SCABSD refuses to conduct a referendum permitted by Act 34 to determine publicpreference deeming that the public is not capable of understanding the issues or 
attendant facts. The board concludes that a public educated in the SCASD’s world clas
sschool system lacks critical thinking and decision skills required to participate inreferendum, a basic tool of democracy.
DETAILS
 The State College Area Board of School Directors (SCABSD) is engaged in an
extravagant renovation of the district’s high
school in a manner demonstrably contraryto public preference. The $102 million cost is insensitive to those citizens of moderate,fixed, or subsistence income. The response to citizen request for reconsideration isoften interpreted as arrogant and noncompliant and completely uncharacteristic of thetolerance practiced by local township government. The high school issue is anexceptional candidate for referendum allowed by Act 34, but the board refuses toconduct a referendum to determine public preference. Instead the board respondedduring a school board meeting on May 8th
 
(rephrasing from intent to interpretation) that
 
Copyright© Don E. Gordon -- Reprint permitted for nonprofit use when source is cited.
3even the most educated person would have difficulty understanding SCABSD decisions.The required Act 34 hearing is characterized by constantly changing dates, locations,speaking lists, and other disruptions intended to discourage participation.
1
 The June 5thdistrict budget hearing including discussion of funding for the high schoolwas a sham. Upon completion of the comprehensive budget presentation by the
district’s business manager, the projection screen was raised into the ceiling, the
projector put away, and the manager dismissed from answering questions. Budgetquestions from the public, invariably complex, were limited to three minutes. The entirepublic hearing for a $100 million budget was concluded in a record setting one hour 
 –
 only 30 minutes for questions. When a citizen asked a legitimate and critical questionabout the presentation
 –
how can the board project the lowest five year average taxincrease in its history while adding $102 million debt
 –
no screen, no projector, no slide,no answer.
2
 
Rather than have the district’s expert answer the question, board members
one after the other parroted we are confident, but presented no data.The school district explanation on April 9, 2006 that the $102 million dollar high schoolrenovation would cost 4 mills or for the average homeowner ($67,845 assessed value)$274 per year for 20 years was accurate and straightforward. Significantly lowering thatnumber in the May 24th
 
SCASD’s local newspaper advertisement and during
subsequent school board meetings to only $4.25 in 2007-08 and increasing to $141 per year after 2012 was, if not deceptive, certainly unnecessarily confusing. The boardassigned 1.5 mills to one budget category and 2.5 mills to another in an attempt to wash1.5 mills from cost. The total is still 4 mills. At $102 million, after funds are completelydispersed, the school will cost 4 mills and the total annual cost remains $274 for theaverage homeowner until the debt is paid. The State Department of Education (PDE)may reimburse the district about $8 million, reducing the cost 8 percent, according tothe board from $274 to $242, but that will not be known until after the construction planis approved by the PDE and well after the Act 34 Hearing.
3
(At $8 million the tax isactually reduced to $252 not $242.)
4
It is irresponsible to tell taxpayers that the PDE willreimburse $8,000,000 when previous and recent
reimbursement estimates for other SCASD schools (Easterly, Gray's Woods, and Park Forest) have been 150 percent wrong.
5
The board cavalierly explains it is only $141 or $274. “That’s not much.” Look at it this way:
$274 is 1.5 weeks net pay for many $8.00 an hour wage scale retail workers struggling tofind a 30 hour work week. Many struggling single parents, hard working families with
multiple jobs, and retirees on fixed income live in those “average” houses. For the family
earning an average annual wage of about $43,000 and living in a home assessed at$144
,000, 4 mills is a $576 tax increase or one week’s net pay.
6
 
 And that’s just the property
tax to renovate the high school. Both families also pay a 1 percent school earned
income tax. Does anyone on the board understand the term, “many are struggling?”
The school board raised taxes 5.6 percent in 2005, well beyond need, in order tocircumvent reasonable budget constraints anticipated from referendum provisionsincluded in pending state tax reform laws like Act 72. That was made clear during recentbudget hearings.
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Then the board had the audacity to tell the public that the tax

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