$813 Million in 5 Years

The agenda for Wednesday’s school board meeting is posted and it contains two points of interest – reducing the Superintendent’s authority to sign contracts to $250,000 from $500,000 and the school division’s proposal to punt on zero based budgeting – and several gaping holes.

I can’t say it better about the two points of interest than The Derecho did, so I ask you to read his exceptional take on it here.

I’d like to add a few things….

The first is requesting that the school division provide the actual cost of our recent new school construction projects, including the cost of any and all change orders issued for those projects. Several school board members have asked for this information and they’ve asked for it multiple times. To my knowledge it has never been provided.

The second relates to another item on the agenda – bonds. PWCS issues bonds based on their estimated cost to complete CIP projects. In the past few years our estimated cost has been well below the actual cost, at least those that are awarded by bid and are publicly available. The school division has said that any excess bond dollars are used to fund other projects, yet the amount of bonds that’s pulled is never reduced. We need an accounting of where every dollar of bond money goes – not the projected cost but the actual costs that are transferred to the Construction fund. Like an accounting for the cost of school construction projects, several school board members have asked for this information and they’ve asked for it multiple times. To my knowledge it has never been provided.

The third and final item will require 5 votes to make it happen. We need to discuss the CIP before December / January or the next budget cycle. Reviewing the CIP is typically part of the budget process, but was skipped this year because of time constraints and because the bids for the 12th high school were expected to be received in a few weeks and had the potential to change everything. Bid review and award for the 12th high school was pushed back to the Fall and then to December / January, which means the CIP hasn’t been reviewed and won’t be until the next budget cycle.

You may wonder why I’m concerned about this. I have $813 million reasons to be concerned about this because that’s what PWCS proposed spending over the next 5 years for CIP projects.

The CIP, which stands for Capital Improvements Program, includes new school construction, school additions, and renewals and renovations of existing schools that the school division has planned. New construction & additions are generally paid with debt that is paid off over 20 years as debt service expense, while renewals and renovations are paid with a combination of debt and annual tax allocations from the county.

Renewals and renovations typically run in the $15 – $20 million range each year. Over the next 5 years PWCS projects that it will spend $48 million per year, on average, for renewals and renovations. Projected costs by year are: $53 million in FY 2015, $28 million in FY 2016, $61 million in FY 2017, $31 million in FY 2018, and $69 million in FY 2019.

New construction and additions or replacements are generally built with debt which is paid back over 20 years as debt service expense with the annual allocation of tax receipts from the county. PWCS projects that it will spent $114 million per year over the next 5 years, on average, on new construction projects, school additions, and school replacements for a total of $572 million. $572 million in debt is $40 million more per year in debt service expense, that will have to be paid out of the school division’s annual allocation of tax receipts from the county.

Forget reducing class sizes or increasing teacher pay, we may not be able to pay off our debt!

Our school board needs to meet and discuss the CIP now, not in December or during the budget process when there’s no time. Now. It will take the approval of 5 school board members to make that happen, and they won’t do that unless they hear from you. Attached is a pdf with School Board Contact Information

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Link to PWCS Facilities Services page where FY 2014 – 2023 approved CIP is posted.

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