After listening to the BEST grant work session from September 9th, it’s clear why the C-1 board likes the professionalism and construction management tools that the BEST program promises to make available.
It appears that, notwithstanding the quality of estimate costs that went into writing the grant proposals, the BEST grant process has mechanisms to economize grant fund spending. Contractor evaluations and bidding will be done from a set of detailed roof plans written by an independent roofing engineer specified by BEST. The program is funded from lottery and state land funds, not tax money. A BEST objective is for state buildings to have non-problematic construction using quality products with long economic service lives.
The grant appears to be a high-water funding authorization. If subsequent spending for the grant object comes in below authorization, BEST will not disburse the remainder. Unspent funds from grants stay in the BEST program for subsequent allocation to other projects — to the next grantee on the waiting list.
The BEST program promises to have safeguards and quality control measures built in throughout the process. That is all encouraging.
Turning to the bond language, voters will be asked to approve $3.8 Million in taxes to be collected over 10 years. In addition to debt service, spending of that revenue stream is limited to 6 categories:
- Acquisition of emergency communication systems and installation of such systems in classrooms and updating of school facilities with emergency alarm and communication systems to enhance safety and emergency response.
- Replacement of roofs at Singing Hills Elementary and Elizabeth High School.
- Repairing, replacing and installing necessary building upgrades to ensure health and safety needs at school facilities.
- Acquiring and installing fencing, gates and berm walls to address safety issues at various district facilities.
- Resurface the high school track and modify the pole vault area to address safety issues.
- Acquisition of new school buses to replace aging and obsolete fleet and to acquire and install an additional fuel storage tank to take advantage of bulk purchase pricing.
Note, the BEST grant quality control protocols only govern the roof replacements. A maximum of $1.4M of the $3.8M cash flow will fall under the strict scrutiny of the BEST program, leaving $2.4M to spread between debt service and an assorted mix of other projects not under BEST program scrutiny.
Remaining questions about 3B are:
- $1.1M, or almost 29% of the total tax money collected will go to pay off bond holders for the use of the money. That means everything that C-1 buys under this program will come at a 29% premium for the debt cost.
- The remaining $1.3M of expenditures to spread among the non-roof bond categories won’t fall under BEST grant protocols for engineering, estimating and spending control.
- The expense category for “building upgrades to ensure health and safety needs at school facilities” is an unconstrained spending object. It lacks specificity for internal control.
The decision is up to the voters of the C-1 district.
B_Imperial
P.S.
I received email comments from a C-1 Board member about the above questions.
On the 29% debt cost, he thought it would be less. Debt cost, however, will be determined by bond market conditions that won’t be known until the bond is written. As I understand the bond market, bonds get written and sold at a coupon rate of return, which presumably matches market conditions at the time of writing. The market then trades those bonds at a discount or a premium until maturity, depending on how the coupon rate compares to other rates of return in the market. Ballot language asks voters to approve a 29% total cost of bond money, therefore voters must be prepared to accept that cost estimate.
On the matter of the BEST construction management and finance protocols which don’t apply to non-BEST grant spending objects (other things than the roofs), the C-1 Board intends to apply similar “BEST-like” processes to moneys spent with funding from the 3B bond.
On the matter of the general 3B spending category of “building upgrades to ensure health and safety needs at school facilities,” the C-1 Board apparently approved a detailed list of spending objects to be paid for with 3B funding, though I haven’t seen a project list divided into the categories of spending that the ballot language contains.
Even if such categorizations exist, the controlling law will be the ballot language. Future actions by this C-1 Board, and future C-1 boards with different members, will only be bound by the law that gets written. In other respects – construction management, bidding, accounting, quality control, spending objects, to the extent these matters aren’t constrained by law, they may be changed by subsequent board action.
In sum, voters must decide whether to approve the 3B ballot as written. Circumstances change, intentions change, governing bodies change. If the law allows for governments to do something other than what was originally intended, experience shows they eventually will.