mtf grant march 2016 correspondence signed

8/18/2019 MTF Grant March 2016 Correspondence SIGNED

1/4

PHOENIXVILLE

AREA

SCHOOL DISTRICT

OISTRICT

ADMI

NISTRANOH OFFICE

:'€G

CITY

LINE

AVENUE

PHOENIXT,ITLE

PA 1g{TO

aB+s27-50m

F/4X81fl+13€189

BUüT{ESS

OFFICE

FAX

Ê10.033€70?

March

28,2016

Dennis M.

Davin,

Secretary, DCED,

and Chair,

Commonwealth Financing

Authority

Robin L. Weissman,

Secretary, Department

of Banking

and Securities

Randy Albright,

Secretary,

Office

of

the Budget

Michael Karp,

President,

University

City Housing

Company

Austin

J.

Burke,

Director,

Greater Scranton Chamber

of Commerce

John

J.

Verbanac,

President,

Summa Development

Marc Little,

President, Minority

&

Women

Educational

Labor Agency

c/o Scott Dunkelberger,

Executive Director,

Commonwealth

FinancingAuthority

Mr. Scott Dunkelberger,

Executive

Director

Commonwealth Financing

Authority

DCED

400 North

Street, Plaza

Level

Com monwealth

Keystone

Bu ilding

Harrisburg,

PA L7t2O

for 2015-16

Fiscal Year

Suspension

of

MTF

Grant

No

Construction

Start

Rule

Dear Ladies

and Gentlemen

We are writing

to

you

on

behalf

of

Phoenixville Area School

District.

We're writing

to

Mr.

Davin

in

his capacity

as Secretary

of DCED. We're writingto

Mr. Davin

and allothers

in

your

capacity as a

member

of the Commonwealth

Financing

Authority.

We request

that

Mr. Dunkelberger

distribute

cop,þs to each

member

of

the

CFA.

The District

requests

your

consideration

of

this

issue

of

great

importance

to the

District,

District

taxpayers,andDistrictstudents.

Westressthatthisissueisuniquetothe2015-16Commonwealth

and District fiscal

year.

Because

of

the unique

circumstances of

the

long running

budget impasse,

this

issue is not

a

precedent

for

any

future

fiscal

year.

Background

lnformation.

L

Multimodal

Transportation

Fund.

The

MTF

program provides

grants

to encourage

economic

development

and

ensure

a safe and reliable

transportation

system

for

Pennsylvania

residents.

We understand

that

although the

delay

in

awards

was

related

to

the

2O75-L6

budget, in

fact

the funds for

the

MTF

program

are not

part

of the

201-5-16 budget and

related

appropriations.

lnstead,

the

MTF funds are funds

accumulated

from Act

89

transportation

fees

and that

$57,000,000

is

the

approximate

amount

projected

to be

available

for

2Ot5-L6

projects.

484-927-5000

Re:


2/4

2.

Phoenixville

Aoolication.

Phoenixville submitted

its

application

(lD#

2OL5O729O82O)

timely

prior

to the July

3t,2OL5

application deadline.

The

program

application

materials

indicated

that the application would

be considered

at the November LO,2075

CFA board

meeting.

The

application

requests

a

$3

million

grant

to

be

applied towards

roadway improvements

on Pothouse

Road

and

PA Route

29

(the road project ).

The

total cost

of

the road

project

is estimated at

$4,611,382.

The road

project

is related

to

Phoenixville's construction of

a

new Early Learning

Center

-

Elementary School

(the

school project ).

The school

project

is

currently under construction, and the school

is scheduled to open in August

2OI7.

The road

project

is

essential to

the school

project

-

both

in

terms

of safe and

reliable

transportation, and also as a result of Township and

PennDOT requirements.

We understand the CFA staff has determined that the

road

project

is eligible

for

an

MTF

grant.

We

also note that the road

project

is very

similar to

multiple other

projects

which

were included

under 2Ot4-15 and

2Ot5-I6

PennDOT Multimodal Transportation

Fund

Awards.

This

project

not

only

fits

squarely

with

the

goals

of the MTF

program

in

terms of economic

development

and

safe and

reliable

transpoftation, but

it is

uniquely

deserving of an

MTF

grant

because

it

will benefit taxpayers

in

a

large

geographic

area-well beyond the

boundaries of Phoenixville

Area

School District.

The

project

is highway

improvement work

that benefits motorists

in

the entire northern Chester County area and

the cost should not

be

carried

by solely School District taxpayers. This

specific

road work was identified

by

PennDOT

as needing to be done over thirty

years

ago.

To

put

that

burden solely on local

School

District

taxpayers,

for

road improvements benefiting

half of Chester County,

would

be unfair. So the School

District

is

confident the

CFA

will see

the merit

in

awarding

an

MTF

grant

for

this

impoftant road

project.

3.

The Problem.

The

problem

that has occurred

for Phoenixville is fivefold.

First,

the CFA

Board

canceled

its

November board meeting,

its

January

board meeting, and

its March

board

meeting,

with the

resultthatthe

board

has not approved any applications duringthe

current

fiscal

year.

Second,

we

understand

that the CFA has historically

followed

a

no

construction

start

rule

pursuant

to

which

commencement

of construction

work

prior

to

receiving

CFA

approval

for

a

requested

grant

will result in a

project

being

ineligible. Third,

although Phoenixville has

already delayed

commencement

of the

road

project,

there are

multiple

compelling

reasons why

commencement

of the

road

project

cannot

be further

delayed beyond April 15, 2OL6. Further delay

in

the

road

project

is

not

possible

without

serious

adverse effects and substantial extra

costs. Fourth, since the

March CFA meeting

was

canceled

and,

it

does seem

likely

that

the

CFA

will meet and

make a decision on

Phoenixville's

application

prior

to the time

when Phoenixville must start construction

on

the

road

project.

Fifth,

of course this

means in turn that unless the

no

construction

start rule

is waived for

the

2OL5-L6 fiscal

year,

a

project

with important economic

safety,

and

transportation

impacts

will not

be

funded

-

with serious adverse effects on

Phoenixville,

Phoenixville's

taxpayers, and

Phoenixville's

students.

Phoenixville's Request.

Solelyforthe 2015-16 fiscalyear, Phoenixville

requeststhatthe

no

construction start

rule

be suspended, and that when

grants

are awarded the

CFA

award

and

fund

grants

lor 2OL5-

16 without regard

to

whether

construction starts

before the

grant

award

date.

This request

is

consistent

with

the

long

standing standard

practice

relating to delayed

budget adoption

under which the delayed budget adoption appropriations are

always made

retroactive

to

the beginning of the fiscal

year

-

in this case July

1,,2075.


3/4

Explanation

for

Request.

L.

Proiect

Benefit. The Phoenixville road

project

is

precisely

the type of

project

for

which

the

MTF fund

was

established.

The

MTF

program provides

grants

to

encourage economic

development

and ensure a safe and

reliable

transportation

system

for Pennsylvania

residents.

Thus,

the road

project

is

precisely

the

type of

project

the MTF

fund is designed

to

encourage and support.

2.

Soecial Circumstances

in

Prolonged BudÃet lmpasse

Year.

This

is

a

highly

unusual

situation.

As

of

the date

of writing this letter, adoptron

of a budget

for

the

2015-16

fiscal

year

is

8

months

overdue.

This is

unprecedented

in

the

Pennsylvania

history, and

most

likely will never occur again.

Neither

Phoenixville

nor

other

project

applicants

bear any

responsibility or fault

for

the budget

impasse.

Phoenixville, rts taxpayers,

and

its

students

-

just

like

other

local

governments

and

their constituencies

-

are

innocent victims of the

budget

impasse.

Although Phoenixville and

other

local

governments,

have

so far survived

the budget

impasse,

albeit

with

significant

sacrifice,

denying worthy

grant

applications as a

result

of the

"no

construction

start rule"

would be

a

double

whammy and extremely unfair

to

Phoenixville

and other

local

governments.

Neither

DCED

nor

the

CFA,

nor

any

other

responsible

government

official should want this

result.

3.

201-5-16

State

Budget

will

be

Retroactive

to

July

1.

2015.

As noted above,

solely

for

the

2}t5-t6

fiscal year,

Phoenixville

requests

that

the

"no

construction

start rule"

be

suspended, and

that the

CFA follow

long

standing

practice

with

respect

to

delayed budged

option

-

by awarding and

funding

grants

for

201'5-16

without

regard to whether

construction starts before the

grant

award

date.

This request

is

consistent

with

the

standard

practice

relatingtodelayed budgetadoption underwhich

delayed

bud$etadoption

appropriations are always

made retroactive to the beginning

of

the

fiscal

year

-

in

this

case

July

t,2OI5. The 2015-16

partial

budget of

proved

December

29,2Ot5

was retroactive

to

July

1,,2OL5.

Similarly,

House Bill 1801

recently approved by

the

House and

the

Senate

and

which

the Governor

has

announced

he will

allow

to

become effective

will make the

final

20 5-1-.6

budget

act

retroactive

to

July I,2OL5.

Moreover, any

future and

final

budget

legislation will

do

the same.

lf

every

other

aspect

of

the

2015-16 budget

is retroactive to July

1-, 2OL5,

why

would

MTF

grants

be

any

different?

The simple answer

is

that

it

would

be

extremely unfair and contrary

to

the

policy

behind

the

MTF

grants

to

have a

rule for

MTF

grants

different

from

the rule

applicable

to

all

other state

appropriations.

When

a

final budget

is

approved

for the 2Ot5-

16

fiscal

year,

any

and

all

MTF

grants

approved

in connection

with the

2015-16 budget

should

be

retroactive to

July

7,2OL5

-

just

like all other

aspects

of

budget.

4.

We

understand

the

general

rationale that underlies the

"no

construction

start

rule" is that

if

a

government

body

starts construction

before receiving

a

grant

award,

this suggests

the

government

body has

adequate

funds

for the

project

from

other sources,

and

therefore

does not

need

the

grant.

Although

this

might

be

true

in

normal times, this

rationale does

not hold water

in

the

unique

circumstances

of a

budget

impasse

that is

prolonged

for

more

than 8

months.

lf thls

rationale

were

applled

to

Éeneral

approprlations

for sclrools,

all

Pennsylvanla

scñools

would

lnfact

now be

closed.

Of course, although struggling and

facing

many challenges

and sacrifices,

all

Pennsylvania

schools

remain open. This

has

occurred

by

use

of fund balances

and

other

reserve

funds,

bank

and

bond

borrowings, and cutting

or

delaying

expenses that

can

be

cut

or

delayed.

lt

certainly does

not

mean

that

schools do

not need

the

education appropriation

to

help fund

the expenses

for

the

last 8 months.

Moreover,

no one has

given

even

the

slightest


4/4

suggestion that

the

general

budget and

related

education appropriations

will not

be

retroactive

to July

1-,2OL5.

The

same is true

of

Phoenixville's MTF

grant.

lf Phoenixville starts construction

in April,

Phoenixville

will

manage

to

get

by with expenses

that

will

start to

be

paid

in

May

or June

-

by use of fund balances and other reserve funds, bank or bond borrowings

and cutting or

delaying expenses that can be cut or delayed. Just as

with

basic

education and other

needed

state education funding, this ceftainly does

not mean

that

Phoenixville does not

need the

grant

funds.

lf

the

Phoenixville

MTF

grant

is notfunded

because

of

the

no

construction

start

rule

orfor

any other

reason,

this will unfairly

impose

a significant

financial hardship

on

School

District

taxpayers. ln

the absence of the

grant,

the School

District will need to borrow on a dollar

for

dollar

basis the entire cost, and this entire amount together

with interest

will need

to be

paid

back

by

the School

District

and

its

taxpayers.

As

noted above, this

particular

road work

was identified

by

PennDOT

as

needing

to be done over

thirty

years

ago, and

it is

highway

improvement work

that

will

benefit

motorists in the entire northern Chester

County

area.

So

it would not

be

proper

to

conclude that because

the School District

has

been

compelled

to

proceed prior

to a

grant

award

that the School

District has adequate

funds for

the

project

from

other sources, and therefore does not need the

grant.

C,onclusion.

For All

of the reasons explained above, we request that the

no

construction

start

rule

be

suspended for the unique 2OL5-L6 fiscal

year,

at

least with respect to the

Phoenixville

project

and

perhaps

also

with respect

to all other

projects.

This

action can and should

be

taken

at

or before

the

next

CFA

meeting

since the

final 2015-16

budget

will

then

be

in

place.

This very limited

action can be taken by an executive

order signed by

Mr. Davin

as

DCED

Secretary,

or

alternatively by

formal vote and action

by

the entire

CFA

board.

Thank

you

for

your

careful consideration of this

important request.

Phoen

i¡

mtf grant march 2016 correspondence signed

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