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Austin ISD cost estimates for school bonds questionable

Apr 28, 2013 by

apple-150x150Just days before voting begins on the Austin school district’s $892 million bond proposal, architects were still scrambling to fine-tune cost estimates — work that is usually completed before the school board decides to put a bond package on the ballot.

The architects have spotted wide variances between preliminary estimates and costs on several projects, documents obtained by the American-Statesman show. New outdoor restrooms and concession storerooms, for example, are budgeted to be installed at all high schools for $10 million but could cost closer to $2 million. Indoor bleachers are budgeted at some high schools for $591,446, far more than the $77,511 it cost to replace bleachers at Travis High School.

District officials point out that a new database will guide the repair work that makes up more than $300 million of the proposed bond spending, and they say the school board and a citizens committee spent more than 1,600 hours to make the estimates as accurate as possible.

It is clear, however, that the biggest bond proposal in the school district’s history was assembled on a tight timeline — largely in an effort to land it on the May 11 ballot — and some say more time was needed to fully vet the numbers.

Millions from the bonds are earmarked for projects that are still in very early stages of development and might never happen. A $10 million concept would put solar panels at a city-owned landfill, but it would require cooperation from Austin Energy and the city, neither of which has signed on. The bonds also include a $12 million plan to build a medical high school that would require support from the Seton Healthcare Network and the University of Texas at Austin, but that, too, has yet to be negotiated.

Those who put together the proposal say they worked hard — meeting multiple times a week, including some full Saturdays — to make sure it is solid.

“There is no perfect bond,” said John Blazier, an Austin attorney and a member of the citizens bond advisory committee that put forward the bond proposal the school board approved in February. “But you have 31 people that really worked hard together, and you had a board of trustees that tried to be fair. Out of that, we got a really good bond package.”

The school board’s vote to set the bond at $892 million was based on early estimates that have been scrutinized by the architects and district staff in recent weeks. Though some of the early estimates are being adjusted, it is unclear how far off the cost estimates are for the entire package because it consists of hundreds of projects. This story is based on itemized budgets from early March for work planned at 12 high schools and two follow-up architectural reports obtained by the American-Statesman.

Spending plans raise questions

The itemized budgets detailquestionable estimatesand show bond money budgeted for minor repairs that aren’t usually tackled with a bond. In addition, at least one project is aimed at correcting mistakes from a previous bond.

Each of the high schools is set to receive new outdoor restrooms and concession storerooms, budgeted at $833,333 apiece. But estimates put together by the architects show the restrooms and concession facilities should cost only a fraction of that — about $163,000 at Akins High School and $120,000 at Eastside Memorial High School.

Several campuses would also get new indoor bleachers — budgeted in the bond package at $591,446 apiece. The district spent just $77,511 to install new bleachers at Travis High School in 2008.

The district generally builds a cushion into its construction budgets to cover unanticipated costs. That cushion usually doubles the estimated construction cost, said Curt Shaw, the district’s retired director of construction management, whom the district has hired to work on the bond package. But even doubling the estimates, the district could be left with millions after the restrooms and bleachers are installed.

At least one project, at Akins High School, would fix a long-standing mistake from when the school was built with funds from the 1996 school bond. At the time of construction, wood panels in the gym floor were placed with the grain running the wrong direction. To fix the problem, crews cut out the basketball courts only and replaced the wood. With the wood grain running in two directions, the wood has expanded over time and the floor has started to buckle at the seam. This bond would provide $168,000 to fix the floor.

The campus budgets also show routine repairs not usually paid for with bond money, such as fixing a broken mirror in a men’s restroom at Eastside Memorial, an estimated $257 expense. Lanier High School would receive $341 to fill in a missing letter on its athletics sign and $210 to replace a dryer vent. Crockett High School would get $73,806 to paint classroom walls. Bowie High School would see $2,195 to fix a damaged garage door.

“These are low-dollar items. Why in the world are we getting a loan to buy a door?” said Karen Flanagan, whose sons attend Anderson High School. “If we’re going to pay for it with a bond, why do we have a maintenance budget?”

‘It was a big rush’

The time the citizen’s bond committee and the school board spent refining this bond proposal — a process that has lasted up to 18 months in the past — was nine months, cutting the time the district’s construction management staff had to flesh out cost estimates.

The district then hired the architects, who have spent weeks at the individual campuses looking at how the requested work will fit the budgets. Shaw said construction management, along with construction and architectural firms working for free with the district, generally do the vetting, while the citizens’ advisory committee and the school board are still considering the bond.

“Historically, working with a bond advisory committee, it has taken us every bit of a year to generate information and get it vetted with a committee and get it consolidated,” Shaw said. “It was a big rush to get all of our estimating done and ask all the right questions.”

The amount of time the district spent refining this year’s $892 million bond package was about three months longer than it took in 2008 to vet a bond proposal that was less than half the size, $343 million.

Shaw, who has worked on several previous bond packages, said, “We think we have done a decent job.”

It didn’t take as long to identify the needs this bond package would address, in part because the district has a new database that prioritizes repairs and renovations needed at its campuses, said Paul Turner, the district’s executive director of facilities.

District spokesman Alex Sánchez said the budgets were developed using the best information the district had at the time.

“We know these numbers will continue to be vetted, and we will continue to assess based on current information,” Sánchez said.

He said the district started the planning process in May, a full year before the actual election. The committee’s members were appointed in May, and the committee first met in June. The bond proposal was approved by the school board — setting the campus budgets — in February.

“The Citizen’s Bond Advisory Committee spent over 1,600 hours vetting proposals by schools and departments to develop the recommendation on the scope of work,” Sánchez said. “All together, the committee held over 18 public meetings and four public hearings.”

Members of the citizens bond advisory committee were questioning the tight timeline for putting the budget together as far back as August, meeting minutes show.

Those same minutes note that members of the committee stressed a need to get the proposal out in time for May’s election. Travis County’s five main taxing jurisdictions — the city of Austin, the county, the Austin school district, Austin Community College and Central Health — were all looking to call bond elections in the near future. The city and Central Health both had propositions on the ballot in November 2012, and Austin Community College could call an election in November 2013, so many argued the school district’s best shot was May.

The athletics, fine arts and Career and Technical Education programs’ needs were all brought to the citizens bond advisory committee by smaller committees set up by those departments. Some of those requests didn’t come to the construction management staff until late in the process, Shaw said.

Trustee Robert Schneider, who said he has asked the district to provide itemized budgets and has yet to receive them, said the board has historically had “a pretty good idea what was going where” before voting on whether to send previous bonds to the voters. Schneider said he is still looking for details about the Career and Technical Education plans.

“There were some big items, like CTE, I don’t have a clue what’s going on with them,” Schneider said.

What if the estimates are off?

Any budgeted money left over after the work is complete would go into a contingency fund. A citizens bond oversight committee and the school board would both have to vote to allow the district to spend money from the fund.

“As with any bond, we must carry out the will of the voters,” Sánchez said. “Like with any bond, we set up the checks and balances. A bond is not a slush fund. The district cannot simply pay for anything with those dollars.”

Past bonds have left money in the contingency fund.

Last year, the school board approved using $16.1 million of the 2008 bond money — more than $220,000 of which went toward retrofitting Allan Elementary for the district’s failed IDEA charter school experiment. The board has since canceled its contract with IDEA, and the school could be closed next year.

About $1.6 million remains unspent from the 2004 and 2008 bonds.


Estimated effect on property taxes

Proposition / Amount / Tax rate per $100 / for a $100,000 home / for a $200,000 home / for a $300,000 home / for a $400,000 home

Prop. 1 / $140.6 million / $0.0055 / $5.50 / $11 / $16.50 / $22

Prop. 2 / $234 million / $0.0092 / $9.20 / $18.40 / $27.60 / $36.80

Prop. 3 / $349.2 million / $0.0137 / $13.70 / $27.40 / $41.40 / $54.80

Prop. 4 / $168.6 million / $0.0066 / $6.60 / $13.20 / $19.80 / $26.40

If all 4 pass / $892.2 million / $0.0350 / $35 / $70 / $105 / $140

For more information on the proposed bond package, visit www.austinisd.org/bond.

Early voting begins Monday

Early voting begins Monday for the May 11 elections that include propositions and school district and city council races. Early voting ends May 7. For more information and in-depth coverage of Central Texas ballot items, visit the American-Statesman’s election page at statesman.com/news/elections.

If the bond package is approved in its entirety, the owner of an average-value home, currently $244,534 after exemptions, would pay $3,123, an increase of about $86 annually. The overall 2013-14 tax rate would total $1.277 per $100 of assessed value, with $1.079 for operations and 19.8 cents for debt service, an increase of about 3.5 cents.

Some cost estimates for school bonds questionable | www.statesman.com.

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