Maintenance items are illegally included in the bond.
Bond funds can be used for capital projects including new school buildings, major renovations and additions, land purchases, buses, and technology. Largely, routine maintenance projects are paid for with general funds not bond funds. However, to keep CISD’s tax rate the second lowest tax rate in the greater Houston area, the District’s Board of Trustees has used general funds to pay down the District’s debt, rather than use these funds for maintenance projects, such as replacing roofs, chillers, and school buses. These large scale maintenance items, or life cycle projects, often require the use of architects or engineers and fall outside of the capacity of the District’s Maintenance Department.
If CISD’s tax rate was the same as the average of our peer school districts, it would be $0.17 higher, generating an additional $50 M each year for the general fund that could be used for maintenance expenses. This is also the reason technology items are included in the 2019 Bond Referendum, rather than being purchased with general funds. Keeping the tax rate low was a business decision made by the Board of Trustees. Bonds are financed to match the life of the item. Therefore, items with shorter life spans are financed with shorter term bonds.
The scale of the maintenance projects included in the 2019 bond is not routine day-to-day maintenance and is beyond the ability of a district maintenance department to perform. In fact, Conroe ISD does not characterize these large scale work as maintenance but rather as Life Cycle Improvements. Life Cycle Improvements usually require a design component to implement the work; Conroe ISD’s maintenance department does not have internal capability to perform the required design work.
Including this type of work in a bond referendum is not illegal. Conroe ISD’s legal counsel reviewed the language and content of the proposed bond issuance to ensure all laws were followed.
While many of the members of the FPC actually work for Conroe ISD, all of them were selected by the district and were of a similar mindset to district administration. Throughout the process, the FPC essentially rubber stamped what the district wanted.
The committee members represent non-CISD employee representatives from each of the District’s feeder zones, along with representatives from community groups and the business community. CISD representatives and architects were available during the meetings to answer questions relevant to their respective areas of expertise. The final decision and vote on the list of projects to include the FPC proposal was left solely to the FPC and that group voted unanimously to approve the list of proposed projects to present the proposal to the
Board of Trustees.
The demographic study is flawed. The study reveals that the vast majority of Conroe ISD schools will not be at 120 percent capacity for at least the next 10 years. One of the main exceptions was the junior high schools, where the demographic projections did not include a new junior high school that is currently under construction.
When evaluating projected growth across the district, it is important to consider the regions with campuses with capacity and the regions where growth is projected. Although totaling the capacity for campuses spread across the 348-square-miles of Conroe ISD may appear to reflect some room for growth, that growth is not always projected to occur in areas where capacity is present. Additionally, considering capacity in this holistic, broad-stroke manner eliminates ANY considerations of the impacts to families or student transportation times due to the heavily-implied district-wide rezoning.
Conroe ISD controls the appraisal board.
As a taxing entity, Conroe ISD, along with cities, utility districts, special districts, and the county, elects the five members of the Appraisal District Board of Directors. Conroe ISD based its conservative financial modeling on an average appraised value growth that is less than the average appraised value growth the area has experienced over the last 10 years. Appraised value growth is also determined by housing growth in the area and not just an increase in home value. There is NO TAX RATE INCREASE anticipated with approval of the May 2019 bond. Previous bond referenda did not realize their full tax rate increases as estimated.
Conroe ISD plucked the line item costs of the expenditures making up the bond package out of the air.
Because school districts are governmental entities, there are numerous laws that apply to making purchases. The primary purpose of these laws is to be sure that purchases are transparent and fair to the tax payer, the school district, and the vendor. Submitting bids to governmental entities is a time intensive process for both the vendor and the District. As a result, it would be unfair for the District to ask vendors to submit bids for projects that may never happen or might not happen for several years, and many vendors would not submit bids for “hypothetical” projects.
Additionally, preparing and advertising for bids for projects that may never happen is also not a wise use of District resources. Because CISD has built 28 schools in the last 19 years, our staff and the professional architects, engineers, and construction managers with whom we routinely work have knowledge about the costs of the projects included in the 2019 Bond Referendum. That information, along with the extensive facilities assessment conducted for the 2015 Bond Referendum helped the District estimate the cost of the projects included in the 2019 Bond Referendum.
Items like technology and buses will be financed over
25-years, meaning we will still be paying for them long after they reach their useful life.
Items in the 2019 Bond will not be financed over the same number of years. Conroe ISD will finance each item appropriately and has published a document detailing the bond maturity schedule based on asset life.
Priority 1 items, Priority 2 items and certain technology items will have a 5-year bond maturity.
Other technology items and buses will have a 10-year bond maturity.
Large construction and renovation projects will have a 25-year bond maturity.
Bonds can be financed for a maximum of 40 years. Conroe ISD’s recent practice is to finance bonds for no more than 25 years.