Community Update

(preliminary note: There's and old chess saying from Savielly Tartakover or was it Aron Nimsowitch that goes "“la menace est plus forte que l’exécution” , or in English, "the threat is worse than the execution". Bacher proposed the motion in order to extract the information and get the assurances about costs that are reported in the article.

The bottom line still is that without Lehigh County's participation in the TIF, EPSD will be caught essentially holding the bag alone (with 98% of the revenue contributed to the TIF and 2% from LMT).

Most recent letter to EPSD school board, Sunday 4/27/2014

Greetings:

I see that in the agenda for the April 28, 2014 meeting of the school board that EPSD's participation in the Hamilton Crossings TIF is being revisted, once again.
It seems that the basis of the proposed rescission resolution is its third WHEREAS paragraph, which states that,
"the non-participation by Lehigh County in the Hamilton Crossings TIF will necessitate that the East Penn School District’s total net contributions of incremental tax revenues will be greater than would be the case if Lehigh County were participating in the TIF at the level prescribed in the Project Plan"

You may recall that in my note to you in February (appended below), when you rejected considering this, I hypothesized a scenario in which it would cost EPSD more without Lehigh County's participation, and I suggested several alternatives, including a simple rescission or a clarifying resolution limiting the amount of bonds that would be issued.

Now, I have several questions which might consider during your deliberations on the latest proposed rescission resolution:

1)  Do you any information that EPSD's costs will actually increase, or are you simply threatening to rescind in order to get the authority to reconvene its TIF committee so it could modify or clarify the TIF proposal?

2)  Do you have the legal authority to rescind without repercussions?  As stated in my patch posting from October (also appended below), I hypothesized that the developers would be relying on the fact that EPSD was going to participate in the TIF.  Thus they have spent much time, effort, and money on further developing the project with the near certainty that LMT would also approve the TIF and that they would be receiving EPSD's portion (now 98%) of the total subsidy.  Would EPSD's pulling the rug from under them at this late date be dangerous or were the developers proceeding solely at their own risk?

3)  Doesn't the TIF plan itself, as written today, allow some flexibility for adjusting the amount of bonds, depending on interest rates at the time of financing, or in this case, reduced revenue without LC in?  I suggest you study that.  This goes back to my first question.

Sadly, this entire mess could have been avoided by including a clause in EPSD's original 2013 TIF resolution saying that its participation was contingent LC's and LMT's.  Similar language was typical in other communities' resolutions that I found while researching my October posting.  Without such a clause, outright rescission (as much as I might like it) might not be possible, as I suggested in October.  Good luck.

regards, Ted
-----------------------------------------------------------------: Sunday, February 9, 2014 6:05 PM

Greetings:

Recently, there is renewed interest in the Hamilton Crossings TIF at all three of the governing bodies involved:

1)  LC Executive's scheduled rally at Tuesday at Muhlenberg College.

2)  LMT's continuing activity during the planning process.

3)  EPSD's proposed motion rescinding it's participation.

There have been many questions left hanging about what EPSD's original resolution for participation in the HC TIF means after LC's rejection of theirs. 

 My October patch.com posting (copied below) analyzes a hypothesis initially reported in August by Randy Kraft of WFMZ that both HC and the TIF would proceed with or without LC participation.  What does that mean for EPSD?  You probably have more questions than I do, but mine asks would EPSD need to continue to defer revenue for longer the original 20 years (probably more like 30 years or more), unless the amount of bonds was reduced below what is currently proposed?

I won't insult you by regurgitating any of the details (or references) found in my October note, attached below, except to say that even back then, I thought then that EPSD might not be able to withdraw from the TIF, even in the (unlikely) event if wanted to!

But it's still worth discussing Mrs. Donches' proposed motion, perhaps in the context of finding out publicly what that the status of EPSD's participation is, and if there are any options to clarify it. 

One alternative that I propose is that Monday's resolution be amended to say that EPSD's original approval is contingent on LC's and LMT's approval by May 1, or some other date certain.  Another is that if the other bodies don't approve the TIF, the amount of bonds financed should be limited to the amount that EPSD's 50% revenue contribution can reasonably be expected to pay off in 20 years, as was intended, and not the original amount of bonds, which would take longer without LC's help.

Many questions remain, so I hope you all don't reject the agenda resolution out of hand. Please, at least, discuss what the contingencies are besides leaving these issues hanging indefinitely and what's necessary to anticipate and avoid any other unpleasant surprises.

regards, Ted