The Conroe ISD’s $807 million bond set for May 4 election: Part 2 of 4, How much does it cost? Really, how much does it cost?

The Conroe ISD’s $807 million bond set for May 4 election: Part 2 of 4, How much does it cost? Really, how much does it cost?

Image: The Conroe Independent School District’s $807 million bond package appears a giant black hole of unaccounted funds. Conroe ISD has provided no cost documentation to back any of the bond’s proposed expenditures.

Conroe, March 7 – Conroe Independent School District (CISD) and its Superintendent Curtis Null, a licensed massage therapist who holds a doctorate in the non-academic field of “professional leadership,” want voters to approve an $807 million, plus interest, bond package, plus tax hike, on May 4, 2019. Neither CISD nor Null have provided nor obtained any backup documentation to support the proposed cost of the $807 million bond.

This article is the second in a four-part series, running March 6 through March 9, concerning the CISD’s proposed $807 million bond package. If it passes, the new bond which will bring the school district’s debt to over $2 billion, representing debt in excess of $31,700 per student and will result in an enormous tax increase in the range of 64% with tax rate and property tax appraisal increases.

While CISD has listed some projects it claims it wants, the school district has actually failed to detail the answers to the critical question: HOW MUCH DOES IT COST?

The reality is that neither CISD nor Null know the cost of their proposed maintenance, construction, and equipment expenditures.

There are three major points, which CISD has admitted about the proposed bond, among many others. First, CISD has no idea what are the metrics – or quantitative projections – for the impact the $807 million bond would have on educational outcomes among CISD’s students. Second, the bond only covers four years of anticipated growth. Third, the sole basis for this $807 million bond package is a demographic study (which we’ll discuss tomorrow in this newspaper).

To begin the analysis of “how much does it cost,” one must listen to CISD’s gross description of the bond package. We know from CISD that they’re proposing an $807 million debt package.

Nevertheless, knowing that the total package is $807,000,000.00 doesn’t provide much information. Sadly, CISD actually doesn’t have much information to provide beyond that.

During a February 18, 2019, presentation about the bond package at the Montgomery County Tea Party, CISD’s Chief Financial Office also disclosed that the bond package would (1) have a payout over 25 years, with interest in the range of 3.8% to 4.5%, although the CISD’s official bond order for the election mentions the bond interest rate could be as high as 4.741%, and (2) taxpayers will have to pay $140 million per year on CISD’s debt service for total bonds which will exceed $2 billion with this bond package.

Initially, CISD’s presentation of its bond package was scant, to say the least.

Conroe Independent School District’s proposed $807 million bond debt.

After receiving numerous complaints, CISD finally provided a little bit more detail.

Even the list immediately above does not provide much detailed information. What’s of great concern is that going behind the foregoing numbers still provides very little information. For example, there’s still only one line for “Safety & Security (2020-2023)” for $24,576,592.69. A number that precise gives birth to an expectation of great detail. In fact, there isn’t any, as Null admitted during his February 18 speech.

Backup materials allegedly supporting “Safety & Security” expenditure. Source: Conroe ISD.

What Null explained during his February 18 presentation to the Montgomery County Tea Party is that CISD doesn’t know yet what, if anything, that the school district will spend on safety and security. CISD is waiting to see what the Texas Legislature expects it to do. Someone $6,000,000.00 + $6,000,000.00 + $6,000,000.00 + $6,000,000.00 = $24,576,592.69. Could this new math represent a desire to make the sum look more precise?

Perhaps, CISD should spend some funds on teaching addition to Null and his top-level bureaucrats.

Most importantly, neither CISD nor Null have any idea where or how they intend to spend the $24,576,592.69 which they’ve allocated from an $807,000,000.00 bond package for “safety & security.” They just plan to spend the money some way and somehow.

Incredibly, the next step of the analysis of CISD’s bond package, shown on the school district’s advocacy website, is the most frightening step of all. There is a 21-page list of proposed expenditures listed as priority 1, 2, and 3 projects. CISD claims it intends only to spend money on the priority 1 and 2 projects on the list from the bond funds.

From where do the cost numbers come for this 21-page list of expenditures? Apparently, out of the thin air.

First page of cost estimates for Conroe ISD’s $807 million bond package. Source: CISD.

The above picture comes from CISD’s 21-page of cost estimates. As the “Note” from CISD explains, “cost estimates were derived from a variety of sources including information provided by architects, engineers, other area school districts, historical data from CISD projects, and CISD’s own knowledge of market prices.”

Of course, two points immediately jump out at the reader of the foregoing “Note.” First, CISD carefully wrote the sentence in the passive voice, because no one within CISD will take any responsibility for the derivation of the cost estimates. The “Note” doesn’t read “John Smith of CISD derived the cost estimates…” Rather, the “cost estimates were derived” by someone who obviously doesn’t care to take any sort of credit or blame. Second, none of the listed costs (which are shown at the right, but truncated in the photograph above) show any specific source of information nor is there any detail whatsoever for the proposed expenditures.

For example, let’s look at one of the pages of the cost estimates.

Page of cost estimates for Conroe ISD’s $807 million bond. Source: CISD.

We see an estimate of “replace galvanized domestic water piping throughout building” for $395,332, but there is no backup for that estimate. There is no document supporting such spending. There are no measurements of the amount of pipe, the materials required for the job, or the amount of labor estimated for the job. What’s missing for each and every expenditure is a construction “takeoff” one would expect for estimates that large. (A “takeoff” according to renowned construction lecturer Christopher Randall is a list of the “materials needed to complete a job. It includes quantities and measurements and should be as accurate and detailed as possible.”)

Nevertheless, at least three different sources have confirmed that CISD never obtained any actual price estimates for any of the construction work behind the $807 million bond proposal.

CISD’s General Counsel Carrie Galatas has confirmed, “No bids or proposals have been requested or submitted regarding any project in the 2019 Bond Referendum.”

CISD’s General Counsel Carrie Galatas has confirmed, “No bids or proposals have been requested or submitted regarding any project in the 2019 Bond Referendum.

PBK Architects, the consulting firm which directed the CISD’s Facilities Planning Committee to recommend the bond package the CISD administration wanted, has been unable to provide any backup materials, estimates, measurements, quantities, materials costs, or labor costs for any of the CISD bond package items.

When this newspaper asked CISD’s Spokesperson Sarah Blakelock whether there was any backup or detail supporting any of the bond’s proposed expenditures, Blakelock just regurgitated the comment in the “Note” on CISD’s website:

In other words, the answer to the question is “No, there are no cost estimates.”

Ultimately, the answer to the question posed to CISD, “How much does it cost?” The answer is “We don’t know.

There’s one other very disturbing aspect of the bond package which merits mention. It doesn’t add up to $807,000,000.00.

On the 21-page project list, CISD has made clear that only projects that are Priority 1 and Priority 2 (PCO1 and PCO2) are within the $807,000,000.00 bond. Those projects, however, only total $251,724,600.86. There seems to be an accounting shortfall of $555,275,400.14. That’s more than a half a BILLION DOLLARS!

The numbers just don’t add very well.
Tomorrow’s article in this series will be “The Conroe ISD’s $807 million bond set for election May 4, 2019: Part 3 of 4, Do the Demographics Support the Bond?

Comments

comments

You must be logged in to post a comment Login