Tuesday, January 31, 2017

Some thoughts toward a bond proposal

This month, the school board has been discussing what sort of bond proposal to make to allow continued funding of projects in the district’s facilities plan. Without some new source of revenue, the district will not be able to move forward as planned with projects scheduled to occur after the 2017-18 year. A bond proposal would need 60% voter approval to pass; the proposal would likely appear on this coming September’s school board election ballot.

Some of the questions we’ve been discussing are: How many years of projects should the bond proposal fund? Should some of the planned projects be changed? Should the order of projects be changed? Should there be changes to overall facilities plan, even if the whole plan is not funded by this proposal?

The board majority seems to be headed toward a very large proposal, one that would fund six years of projects. The exact details are not yet settled, but it looks like that proposal would be somewhere in the $190 million range.

Broadly, there are two issues the board needs to worry about. The first is whether the bond proposal and facilities plan make sense. The second is whether the bond proposal has a realistic chance of passing. These two concerns are related but separate. A plan that is hard to defend is going to be hard to pass, but even a good plan may be hard to pass if the price tag is too high. Here are the specific concerns I have about a $190 million proposal:


Sheer size. I think it will be very hard to achieve 60% voter support for a bond proposal as large as $190 million. According to our administration, that proposal would be more than twice the size of the largest school bond ever passed in the state of Iowa, and apparently it would be more than three times the largest school bond ever passed in our district. Granted, we have more taxpayers now than in the past, and there are many ways to measure the magnitude of a bond proposal—but no matter how you slice it, $190 million is an enormous number.

You don’t have to look too far to find other districts in Iowa that have recently struggled to pass school bonds. A few months ago, for example, voters in Mount Vernon rejected a bond proposal that would have had an impact on their taxes comparable to the one a $190 million bond would have in our district. Only 37% voted in favor. (See also, for example, the news here, here, here, here, here, here, here, here, and here.)

Our own district’s history of bond measures is a mixed bag of successes and failures. (See my comment on this post.) When the district asked the voters in 2013 to support its Revenue Purpose Statement, which gave the district access to approximately $100 million in sales tax revenues, the “yes” vote was only 56%—enough to pass that proposal, but not enough to pass a bond.

Our district has not exactly maximized its opportunities to earn the trust and confidence of the voters. In 2013, many voters felt betrayed when the district waited until just after getting voter approval of $100 million in spending authority before raising the possibility of multiple school closures (and ultimately approving one closure). There was dissatisfaction with the district’s special education practices for years before the state issued its report last year citing the district for non-compliance with special ed laws; the district has yet to squarely acknowledge that its non-compliance may have affected whether kids received services they were entitled to. The district’s reputation for a retaliatory culture also predates that report—I even raised it in my campaign for the board—and more evidence of it emerged in our recent special ed staff climate survey. The board’s recent decision to give the superintendent a sizable raise—the biggest in the district, and not just one raise but another for next year—will rightly be seen as brushing off the legitimate concerns people have about the district’s practices and climate.

I share a lot of those concerns and yes, they do make me at least pause before entrusting the district with a large amount of spending authority. Many voters will do more than just pause and will vote “no” on a bond to express their displeasure with other aspects of the district’s performance.

The arguments for a $190 million proposal often strike me as variations on the sunk cost fallacy. So much time and effort has gone into the facilities plan, the argument goes, that we shouldn’t turn back now by asking for anything less than the full funding. But if that proposal is unlikely to pass, the sooner we realize that and act on it, the better.

For all of those reasons, I lean toward a significantly smaller bond proposal, one that encompasses projects that are necessary and make sense to complete in the short term. On that list, I would include:

  • A new elementary school to be built at the newly acquired location in North Liberty. According to our projections, the enrollment in North Corridor elementary schools will be almost 500 students over capacity in 2019 if that school is not built.

  • The renovation of Horace Mann Elementary. Renovating Mann is an important part of keeping Iowa City’s central core schools open, and the updates are long, long overdue.

  • A renovation and expansion of North Central Junior High. Under the secondary boundaries that will take effect next year, North Central’s territory becomes significantly larger. This change will quickly push it over capacity. As a result, it needs an addition sooner rather than later.

  • One of the larger east side renovation projects—either Southeast Junior High or phase II of the City High renovation, but without the additions to capacity. (See below.) These renovations are overdue and affect a large number of students and staff.

I would happily go to the public and defend those projects. There are certainly other worthy projects in the plan, too, but those few already put the proposal into the $50-60 million range. It will be hard enough to pass a bond that big; making it bigger will only put those projects at even more risk of delay.

Would a relatively scaled-back proposal mean changing the facilities plan? It would, since it would mean re-ordering some projects and proceeding at a somewhat slower pace. But I just don’t see any pathway from a completely unchanged plan to 60% voter approval. I’m (reluctantly) open to adding a few more projects (West High?), but if the proposal grows so large that it sinks under its own weight at the polls, we’ve gained nothing.

Keep in mind that a smaller bond proposal does not mean that we’re cutting the remaining projects from the plan. It just means that the remaining projects would then have to be funded through other means, such as additional bond proposals in later years.


Hoover closure. I’ve been pointing out for years why it makes no sense to close Hoover Elementary School. It is a school big enough to house fourteen gen-ed classrooms (which means about 350 kids or more) in addition to two preschool rooms, two special ed rooms, an art room, and a music room, with a room to spare. In terms of square footage and number of classrooms, it is bigger than Hills, Lincoln, Mann, Longfellow, Shimek, and Lemme. It has more kids within a square mile than all but two other district elementaries—in many cases, way more. It can easily be filled without running a single gen-ed bus. It is a mainstay of a central Iowa City neighborhood, and plays an important role in maintaining a livable, family-friendly central core to the Iowa City metropolitan area. And just two years ago, the district invested almost a million dollars in updating it, including the installation of air conditioning.

I do not understand how we can ask the public for tens of millions of dollars while we’re simultaneously throwing away a $10-12 million asset. In fact, the facilities plan currently contains an $8 million dollar project that includes adding five classrooms to Lemme Elementary that would be unnecessary but for the closure of Hoover, and that project makes up for only a fraction of the capacity that is lost by closing Hoover. If you throw away over three hundred seats of elementary capacity in a growing district, you will eventually need to replace those seats; you’re creating a capacity need that will compete with real needs in other parts of the district.

As for its effect on the likelihood of bond passage: Tying a school closure to a bond proposal is like tying a rock to a kite. This is especially true when the district has for years been unable to answer basic questions about the justification for the closure and the planned use of the property. It is even more true when the closure came despite supermajority opposition to school closures at the district’s community workshops on the facilities plan. It is even more true when it asks Iowa City voters, many of whom are concerned about the issue of urban sprawl, not only to fund new schools on the outer edges of the district, but to do so while closing a school in the city center. If we’re serious about passing a bond proposal, why persist in needlessly alienating a big chunk of voters?

I would support a bond proposal like the one I describe above—one focused on a limited number of significant short-term needs—even if the Hoover decision remains unchanged. I would at least consider a somewhat larger list of projects. But the combination of a high price tag, a school closure, and the inclusion of unnecessary projects (see below) is beyond what I can support, and well beyond what I think can pass.


Unnecessary or questionable projects. Some of the projects currently in the facilities plan are simply too hard to defend. In particular, I think it’s unwise to commit the district to additions—as opposed to renovations and upgrades, such as air conditioning—years before we know whether we will have enough enrollment to justify them, and when our own projections do not show a need for them. For example, the current facilities plan includes a four-classroom addition to Borlaug Elementary six years from now—even though Borlaug’s enrollment is under its current capacity and our projections show its enrollment declining by over a hundred students over the next ten years. Yes, I take our projections with a big grain of salt, especially as to ten years out, but I would not include additions in the facilities plan until we have better reason to believe that we’ll need them. That is exactly the kind of project that should be left to future funding sources, if it ends up being needed at all.

The facilities plan also includes additions to Northwest Junior High, South East Junior High, Lemme Elementary, Garner Elementary, and City High that are not justified by our enrollment projections, even ten years out. The enrollment projections for Northwest Junior High never rise above its current listed capacity. The projections show South East’s enrollment being under its current capacity for nine of the next ten years. If the new elementary school is built at the new site, there is no urgent need for a Garner addition; if there is eventually an elementary school near the new high school, we may never need the Garner addition. The City High zone is projected to have between 31 and 96 students over its current listed capacity, but the projections do not account for the fact that some of City’s students (probably at least 50) will end up at Tate Alternative High School—yet the plan calls for adding 150 seats to City.

(I understand that some buildings need larger common areas (cafeterias, libraries, etc.) even to accommodate their expected enrollments. My objection here is to classroom additions that are designed to accommodate increases in enrollment that our projections don’t support.)

The plan also includes an addition to Wood Elementary, and the board is considering including an addition to Alexander Elementary. Alexander is certainly over capacity, and our projections show growth at Wood. But before spending millions on additions, the board should at least consider simply making those schools’ attendance zones smaller and reassigning some of their areas to other schools where there is available capacity. Instead, without any discussion of that option, the plan’s solution is build, build, build, no matter how high it pushes the bond’s price tag.

Liberty High’s enrollment is projected to be 322 students above its initial capacity ten years from now. But the plan calls for a 500-seat addition. I tend to think the growth in that area will exceed that projection and that enrollment will probably eventually approach 1500. But the addition is still five years out; why commit to borrowing $6 million for a 500-seat addition that far in advance of knowing what the need will be?

Facilities planning will not come to an end in 2017. If additions become necessary, the board can incorporate them into the ongoing long-term plan. Until there’s a better indication that we will need them, it strikes me as very unwise to commit the district, years in advance, to paying for them.


Finally, I’d like to see the district commit to developing a career and technical master plan. We need to take a close look at whether we could better serve the significant number of students in our district who are not college-degree-bound. That would entail both curricular and facilities planning; but since we haven’t yet done that planning, it would be premature to identify those facilities needs in this bond proposal.


I’d like to be a “yes” vote, because I know that there are worthy projects that need funding. The concerns I list above are my starting point; again, I’d be willing to compromise on the list of projects, but there are some proposals I could not in good conscience support. I assume all of the board members have limits to what they can support, and it may well be that there is no common ground on which everyone can agree. On a bond proposal, unanimity is worth trying for, but it’s not the supreme value; in my view, the voters are entitled to know a board member’s candid assessment of any proposal. Ultimately, the decision is up to the voters; if the arguments for a proposal are persuasive enough, it will pass. I could be wrong about how the voters will react to a $190 million proposal, but my instinct is to err on the side of creating the most defensible proposal possible.

Update here.


Anonymous said...

Thank you Chris. This is much more reasonable.

I just heard that preliminary platted developments were not included in the projections. For North Liberty in particular this is a really poor way of doing projections since it is a high growth area. This is such a large "oversight" that the projections should be redone and the whole FMP/Bond should be put on hold until more accurate projections are obtained. Using only county recorded/final plats for prediction purposes vastly under-predicts high growth areas; and over-predicts low growth areas.

So thank you so much for closing Liberty to transfers; it will be much more crowded than even these most recent & poorly done batch of enrollment projections suggest.

The Liberty addition should likely come much earlier than planned once the developments already well underway by Liberty are taken into proper account.

I also think once truly accurate projections are done that the second elementary school in north Coralville will likely need to be done within 5 years too.

Mary M said...

Chris, There are some unanswered questions, including the following:

--How will the district pay for operational costs if a bond vote passes? Will more schools be slated for closing?

How many millions of dollars will be required to cover the principal and interest to pay back the bond?

--What date is projected for when the last bond will be issued, and when is the last date (year) of payment for all of the bonds?

--What will the underwriting, attorney fees, and any other costs of issuing the bonds be if the bond vote passes and how much of this money will come out of the general fund?


Anonymous said...

Chris, thank you for a rare voice of common sense.

Recovering Bond Lawyer said...

You may be able to ballpark total costs now, but you won't have firm figures until the deal is priced. Also, bond issuance costs usually are rolled into the bonds and are not paid for with current funds.

Anonymous said...

I agree that the bond is too large. But why don't you include WHS in your smaller plan? They are sorely in need of upgrades. Also, the bond will turn into a West vs. CHS scenario if WHS is not included.

Anonymous said...

We built Alexander and then it's needs changed. We were ready to build Grant and then it changed. What changes next and when? I see no need to commit such a large amount to a rapidly changing landscape.
Agree that no west side projects in your half bond alternative is a NO vote.
Why did Director Lynch abandon his alternative so quickly.
Agree that we need payoff timeline.

Chris said...

The West High project would be relatively high on my list, but adding it does bring the price tag up toward $70-80 million.

In general, I think we should appeal to voters primarily on the grounds that the projects in the proposal are needed. I'm less drawn toward the idea of making sure that the bond has "something for everyone" in it. If you throw in the West High project on that rationale, the next natural question is, "But then what reason will west siders have to vote for the *second* bond?" That kind of thinking inevitably leads to the big $190 million proposal. (And even then: what incentive will people have to vote for the projects we're now talking about that would come even later?)

That said, I think one could make the case for including the West High project in the initial bond proposal.

Anonymous said...

Two thumbs up on this, Chris. I will happily support a bond that is what you describe.
I am not willing to concede Hoover, though. I am unable to vote for a bond that requires the destruction of needed district assets, especially if the purpose of that destruction is to pave a parking lot.


Jenny said...

Can you explain these new capacity numbers that suddenly appeared? Wickham has an art and music room addition and goes from 428 to 575. Kirkwood is about 30 over the 306 capacity and is using both portables. Their addition of four classrooms, which was pushed back a year, supposedly increases capacity by 160. Are we dealing with alternative facts?

In 2013 we paid consultants BLDD to calculate capacity and they measured each classroom and took into account how they were used. It was a great first step in the "One Vision" process giving us reliable, independently calculated capacity numbers. How are these new numbers being calculated? Are they including trailers or common spaces in the calculations?

Amy Charles said...

I'm sorry, Chris. The bedrock issue is trustworthiness and transparency, neither of which we've seen from the district or the board, frankly, in recent years. I'm also insulted by how cavalier their approach has been: if you're asking for serious money, then come with a serious case. Make it public, make it findable, make it comprehensive. For that kind of money I should be seeing hundreds and hundreds of pages assembled as carefully as a prospectus or a massive, six-university NIH proposal. I don't know who these guys think they are, waving this flimsy little brochure around and then trying to propagandize/threaten people who actually bother to take an interest.

There's absolutely no way I'd hand the current crew keys to a $190M bond. I don't believe they can handle that kind of money responsibly. Yes, our schools have serious needs. We'll need more responsible, responsive, and trustworthy leadership first.