Bucks County Judge C. Theodore Fritsch, Jr. recently heard arguments for and against Centennial School District’s petition for the sale of the former Stackpole Elementary School property to County Builders for a price of $480,000.
The public hearing was continued from last month, when it was initially scheduled to be heard along with the district’s petitions for the sale of both the former Leary and Longstreth Elementary School properties. The court has since granted both of those petitions for sale.
Centennial School District's Chief Financial Officer Christopher Berdnik took the stand in courtroom number six of the Bucks County Courthouse for nearly two full hours Tuesday morning, detailing the specific steps that led the district to approving an agreement of sale with County Builders for the Strathmann Road property.
At the heart of the matter were questions surrounding the legality of that process under Pennsylvania's School Code.
Alvaro Costa, a resident of Upper Southampton and the president of Costa Homes, Inc, wanted to know why County Builders was allowed to increase its proposed bid for the property from $425,000 to $480,000 on the afternoon of April 23, while he was not afforded the same opportunity
Centennial Banks on the Sale of Properties
Berdnik detailed for the court how the sale was advertised with a hard deadline of February 22 for submission for proposals. He outlined how County Builders came in with the highest acceptable proposal for all three properties.
Berdnik said on April 10 the board publicly reviewed the bids they had received, and gave him the direction to proceed with preparing for the sale of the properties to County Builders.
"At that point, the horse race had been run," he said.
He testified that the proceeds associated with the selling the three properties had been factored into the district’s budget for the upcoming school year, even though the sales had not officially been completed.
Berdnik said the district was depending on these funds to make several capital improvements, such as repairing the roofs of the district’s two middle schools.
He also said no money was budgeted for 2012-13 for maintaining and securing the properties, which according to his estimation could have easily cost $50,000 to $60,000 for just the Stackpole property alone.
Sealed Bids or Public Sale
Within his two hours of testimony, Berdnik told the court how even though Costa called his office more than two full months after the deadline for submission had passed, he invited him in for a discussion.
"I reviewed the deadlines with Mr. Costa very clearly," he said. "What you have to understand is that it is part of the school code that if I have market information that tells me this is not the right price point, I'm obliged to capture that information and share it with my board."
Berdnik said the way you capture that information is to have the person commit their offer to paper.
"Mr. Costa came in my office that day and submitted a proposal saying that he would have purchased Stackpole for $475,000," he said. "We listened to a taxpayer in the community, gathered the information and made it available."
Costa took the stand and conceded that his proposal was submitted well after deadline had passed, but said he didn’t understand how County Builders was allowed to increase its bid and he was not afforded the same opportunity.
Costa’s lawyer, Joel Kalman, suggested the district didn’t want to “upset the apple cart” and just wanted to get the sale over with to preserve the budget they had already filed with the state.
He said this was more important than doing the “right thing by the community” and trying to get the most money for the property by reopening the bidding.
“The budget process shouldn’t trump making the most money for the taxpayers of the district,” he said.
Kalman told the court that bidding process in this matter was inherently flawed and while it wasn’t the only reason, it was enough reason, for the court to deny the district’s petition for sale of Stackpole.
“Yes, my client was late to the party,” he said. “[The district] could have said the bids were closed, this [other] party won and moved on. But once they let the genie out of the jar, by accepting my client’s bid, they can’t go back.“
Kalman argued that ultimately the court should “hit the reset button” on the entire process.
“By [denying this petition and] allowing the bidding process to proceed, everyone benefits,” he said.
A decision on the matter had not been rendered by the court as of Thursday morning.
Read more: What is Stackpole Worth?