Wednesday, July 19, 2017

How much should bond voters worry about buyer’s remorse?

I’ve been intending to post more about the district’s bond proposal. Unfortunately, the topic is so big that it quickly swamps the blog post format, and nobody wants to read a really long blog post. (I’m not sure anyone wants to read a short blog post.) So I’m going to try to post some thoughts one piece at a time in the hope that they will add up to something together.

Yesterday, this article was making the rounds on social media:

A school district in Minnesota put forward a $98 million bond proposal, accompanied by a publicized plan to renovate its older schools. Soon after voters approved the proposal, the district began planning to close three of the schools it had planned to renovate. Voters sued, but the court rejected the challenge, concluding (according to the newspaper) that the changes in the plan “did not rise to a level of a ‘drastic change’ to the overall bond purpose.”

This story touches an already sensitive nerve in our district, since many voters feel something similar happened here in 2013. The district asked voters for permission to use sales tax revenues for facilities improvements, without making any mention of school closures. Soon after the voters approved the proposal, the district began floating multiple school closure possibilities. Even though participants in the district’s community workshops lopsidedly preferred scenarios that did not close any schools, the school board approved a facilities plan that included an elementary school closure. It did so despite the fact that enrollment was growing and the district was planning to build new capacity in less student-dense areas.

Should voters worry that what happened in Minnesota could happen here if our bond passes? The relevant legal questions are governed by state law, and Iowa law is not necessarily the same as Minnesota’s. I’ll probably blog some more about the legal questions involved (there are many gray areas). The legal issues are kind of beside the point, though, because if you’re telling people “You can always rely on your legal remedies,” you’ve probably already lost them. What people want is sufficient confidence that they won’t have to resort to legal remedies, which is a different question—one that is as much about trust in the current and future district leadership (and thus in future district voters) as it is about law.

On that point, it doesn’t help that the district has floated school closure scenarios several times in recent years, including again in 2015. If the bond plan does end up building many hundreds more elementary seats than we have students to fill (as the district’s own capacity figures and enrollment projections indicate*), it’s easy to imagine school officials asking, “Why are we paying to run twenty-one schools when the kids will all fit into eighteen or nineteen?” It’s easy to imagine it because it’s consistent with arguments we’ve been hearing from inside our school system for years.

So I’m going to (somewhat discursively, over the course of multiple posts) work through some thoughts about capacity, enrollment, and other issues, with an eye on whether the bond plan makes sense and on the degree to which voters can have confidence in how the plan will be implemented.

*I think it matters (a lot) that the district’s numbers show that the plan will build 1,896 more seats than its enrollment projections show a need for. On the other hand, for reasons I’ll discuss, I don’t have much confidence in either the enrollment projections or the capacity figures. So my objection is as much about the lack of supporting data as it is about the specific discrepancy between the two sets of numbers. In other words, I don’t think we have any clear idea how many “excess seats” we are building, though I do think there’s reason to believe it’s a significant number.


amy said...

Thank you, Chris.

I'm still very uneasy about the fact that so many very large school facilities bonds -- hundreds-of-millions bonds -- have been popping up all over the country and pushed through in similar ways, and my guess is that part of how the bonds are sold to admin is the suggestion that really, once the bonds are passed, plenty can change. It's occurred to me that this is why we were hearing so much about the "need for flexibility".

The more I read about how districts have gone about using the borrowing authority, though, the more genuinely concerned I am that we've seen nothing much about the terms under which the district may borrow. It's one thing to screw up an $8M bond, but small stupidities with money on this scale -- "I trusted the underwriter" mistakes -- can very quickly leave a district in serious longterm trouble. And other districts have managed to get themselves into serious trouble this way.

I can recall no, zero, public discussion of constraints on borrowing terms. No talk about estimated total interest and its assumptions. Was there one that happened and I missed it?

amy said...

Uh...hey Chris, did you follow the sidebar links on that City Pages story?

Because that's not the only "wonderful giant facilities bond goes horribly wrong" story. Here's one of a few more there:


Anonymous said...

I encourage everyone to read this: http://www.citypages.com/news/warning-from-stillwater-dont-trust-the-promises-of-school-bond-referendums/429704053

and especially the comment section.

This is exactly what will happen in Iowa City if the bond passes. That is exactly what people will say after the bond passes. I quote a few things from the comment section below:
"...This legal notice lists school improvements by line item. The district put in something for everyone to entice voters to pass the bond referendum..." ICCSD did exactly this in the bond. If you want your $20,000 playground, you have to vote for the $191 MILLION bond.

"...Do not trust the legal notice that is in the paper or presentations given by the district, or bond promotion on school websites, or statements made by district administration or school board members, or newspaper articles promoting bonds, and do not trust the positive review and comment by MDE. These are all meaningless, ONLY the ballot language counts, and districts know how to word ballot language to be able to back out on the projects that were brought to voters..." Steve Murley is a liar. The man has little integrity. The majority of the board members are just a bunch of bobbleheads with Lynch being the mob leader.

"...Another big lie was her stating that if this bond didn't pass, they would have to use temporary trailers for classrooms. That was a lie because the district had several other very viable options to build classrooms without the bond passing. ..." I believe the new Liberty High principle said something exactly like that a few days ago in his email to the community.

"...Where I live they bundled a bunch of expensive athletic facilities that the school teams didn't need with a few true needs and lied about them to get it passed...." This reminds me of the million dollar turf, or the baseball stadium that will replace Hoover. Then of course, the argument is, if you want your $2,000 AC, you have to vote for the $191 MILLION so 30 kids can use the $15 MILLION baseball stadium for ten hours a week.

"... did not do my own "due diligence " , but I voted for the bond as education is a very high priority for me. I am a life long resident of School District 834 and have said yes in the past. I will not vote for a bond issue in the future. Money will need to be saved and disbursed to the district through other means...." Kinda late for that! You are hooked for $191 MILLION for the next 30 years!

mariaconz said...

I don't trust Supt. Murley so I will not vote for a $191.5 million bond plus interest when evidence shows that he has not spent money responsibly in the past. Making the physical plant ADA compliant while students and teachers study and teach in buildings not up to code shows poor judgment and upside-down priorities. Newly built playgrounds are not ADA compliant and will have to be modified at tax-payers' expense until they are.

mariaconz said...

Hilarious and oh-so-true. My favorite combination! Humorous accuracy!

Chris said...

Thanks, Amy -- Here's the clickable version of that link.