Category: Armstrong School District

School Directors Interview Bond Underwriters

Janney Montgomery Scott, LLC Managing Director Robert “Bob” Aumer (at podium) said his first financing was on behalf of Lenape Technical School in Manor Township and he hoped to start that local relationship again as the Armstrong School District looks to incur debt for renovation and building projects.

Janney Montgomery Scott, LLC Managing Director Robert “Bob” Aumer (at podium) said his first financing was on behalf of Lenape Technical School in Manor Township and he hoped to start that local relationship again as the Armstrong School District looks to incur debt for renovation and building projects.

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.

In West Hills Primary School’s library Tuesday 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.”

PNC Managing Director Antonio Misiti said the company has overseen 75 Pennsylvania school district bond issuances in the past three years as he hoped PNC could manage Armstrong's.

PNC Managing Director Antonio Misiti said the company has overseen 75 Pennsylvania school district bond issuances in the past three years as he hoped PNC could manage Armstrong’s.

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 including saving the school district more than $1 million (including the 2012 refinancing of a 2003 bond issue that saved nearly $450,000 and a 2013 refinancing that saved nearly $500,000).

Frederick said the decisions were also favorable based on the Weekly Bond Buyer Index.
“I think we understand your debt probably better than anyone because we’ve been reviewing it over-and-over again,” Frederick said.

Frederick thought the district’s decision to contemplate financing was wise – citing near all-time low rates

“You’re not at the all-time low, but you are very, very, very close to it – so if you’re contemplating any financing, this is definitely the time to do it,” Frederick said. “No one can question you why (the school district) is doing that issue.”

Frederick recommended waiting before calling on the 2010 $80 million issue since the escrow would negate most of the school districts’ savings during the next four years.

The 2007 bonds can be sold until mid-December.

“There’s no denying (Piper Jaffray) has done a fine job in the past,” School Board President Joseph Close said.

Janney Montgomery Scott was also involved in the 2010 bond issue.

Managing Directors Robert “Bob” Aumer and Alisha Reesh have worked with Kirk at various times during his 20-year career, and the company began reviewing the 2007 issue with Kirk and School Superintendent Chris DeVivo in February.

Aumer said his first financing was on behalf of Lenape Technical School in Manor Township

Piper-Jaffray Senior Vice-President Randy Frederick advocated for the firm to continue representing the school district. School board directors will make a decision on which firm to choose in the next two weeks.

Piper-Jaffray Senior Vice-President Randy Frederick advocated for the firm to continue representing the school district. School board directors will make a decision on which firm to choose in the next two weeks.

“This area has always meant a lot to me and we always believe we’ve done a good job up here,” Aumer said. “We’re glad to be back and have the opportunity to work with (Armstrong School District) again.”

Janney has three dozen Pennsylvania offices, including at 1 PPG Place in downtown Pittsburgh

“Since the beginning of 2014, I’d say that our largest client group by far are Pennsylvania school districts. If it’s not 75, it’s definitely 80 percent of what (Auger) and I do every day,” Reesh said. “We’ve done 107 school district bond issues totaling over $1.2 billion.”

Indeed, references included officials at Apollo-Ridge and Blairsville-Saltsburg School Districts.

PNC Managing Director Antonio Misiti and Senior Advocate Rebecca Mulvay were also invited because of some good ideas, Kirk said.

“We see it as a partnership – from start to finish knowing the history, what the goals of the district are,” Misiti explained.

Some of those customized ideas include if the whole issue should be called for 10 years or eight years, splitting up the bond with a five-year option or even shortening the debt.

With more than 50,000 employees globally and 17,240 in Pennsylvania – about two-thirds in western Pennsylvania -, Mulvay said PNC has a lot of experience available.

PNC has negotiated 75 bond issuances with school districts since 2016 and has a $5.5 billion underwriting capacity, absorbing the risk of about 80 percent of all bonds.

“There are no smoke and mirrors – (Armstrong School District) is more than welcome to come and view the whole process from start to finish,” Mulvay said.

School directors also have to wait and see how the state’s PlanCon construction reimbursement schedule would impact new projects.

With the upcoming projects, the trio of companies all proposed a wraparound of existing debt, delaying principal payments and diminishing the annual budget impact and said they needed 30-45 days to make the transaction if deemed appropriate.

“By stretching this piece out 30 years, we would be going out even farther with some higher interest rates – so by keeping this as short as possible, it makes the wraparound at the beginning as cost effective as possible,” Reesh said. “Other than capitalizing interest and doing other things that are only going to be more expensive, this is the only and least-expensive way to borrow this money.”

Board Vice-President Christopher Choncek called the wraparound a “critical” graph.
A final decision is to be made in the coming weeks.

School directors will consider each company individually before discussing it with their fellow board directors and administrators at the October 6 open-caucus session.

Kirk will summarize each company’s presentation for school directors.

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.

Reesch said time is of the essence dealing with the 2007 bond.

“We’re not sure what’s going to happen after the election,” Reesh said

Kirk said a decision will hopefully be made by the October 10 regular voting meeting.

The district has more than $6 million in aggregate bond principal and interest due until 2041.

School Directors Reviewing Financial Consultants

Piper Jaffray Senior Vice-President Randy Frederick passes out information to Armstrong School District board directors prior to his pitch for the district to continue and use the firm as financial consultants.

Piper Jaffray Senior Vice-President Randy Frederick passes out information to Armstrong School District board directors prior to his pitch for the district to continue and use the firm as 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.

New Sound System Installed at West Shamokin Field

Fans were able to hear the roar of West Shamokin football at Jack E. Boyer Field September 9 with the aid of a new sound system. (photo by Jake DeLuca).

Fans were able to hear the roar of West Shamokin football at Jack E. Boyer Field September 9 with the aid of a new sound system. (photo by Jake DeLuca).

 by Jonathan Weaver

The excitement of the action during September 9’s West Shamokin victory against Purchase Line came across a little clearer last weekend.

That’s because Jack E. Boyer Field had some new sound equipment – worth more than $9,300 – installed before the game.

West Shamokin High Athletic Director Ray Blystone explained the sound system actually needed repairs during the 2015 football season.

“We still have the old (sound system) in place – or parts of it,” Blystone said. “Last year, we lost sound out of one of the speakers on the far side of the field, and what we found was the part we were missing was going to cost us a pretty-big dollar figure just to get the part to fix the speakers because the speakers are from 2000 when the stadium was built – and they were antiquated to begin with. We decided at that time we weren’t going to replace that speaker.”

But, tests this past Spring indicated intermittent sound loss in another speaker – prompting consultation from Doug Varner Sound Company, of Indiana (Pa.), the addition of a few new speakers on the home side of the field, re-aiming existing speakers and re-wiring from the press box

“Rather than wait until we had no sound on a Friday night football game, we decided we needed to try to upgrade,” Blystone said. “It’s been a process for 13-14 months.”

Jack E. Boyer Field will be home to three more varsity football matchups this Fall, a trio of junior varsity games, the annual Powderpuff football game and varsity soccer Senior Night games.

Blystone also hopes to upgrade storage next season.

Armstrong School Board conditionally approved the new equipment – via Mindsight, LLC (also of Indiana, Pa) – and less than $4,000 in labor expense during Monday night’s regular board meeting at West Hills Intermediate School in East Franklin Township.

The equipment and labor was paid for via construction funding, according to Region III School Board Director Stan Berdell.