Like most old time cattle ranches, the City of Bainbridge Island has a brand with a logo. Since it is nearing the City’s 25th anniversary, the powers to be in City Hall decided the historic branding logo was in need of updating. The obvious choice to do that was a firm of pretty much locally unknowns from Greenville, S.C., who got a cross country flight and a couple of days to sightsee the island, test some local alcoholic beverages, and understand our unwavering dedication to trees.
They designed a logo featuring some axes.
Didn’t go over so well. With just about anybody.
City terminated that contract, paying $11,272.50, including $9,572.50 for the work done on the battle axes logo and $1,700 for airfare, accommodations, food ($432 … they ate well!), and a rental car.
Their invoice (City file number opens the invoice):
Arnett Muldro and Associates: 339452
After a number of meetings and reportedly hundreds of e-mails, City opted to hire a local designer, Kelly Hume Design, Inc.
Kelly came up with the idea of the island outline in a capital B.
Some on the City Council liked it, but mostly they were tired of talking about something as critical to the community as a logo. Some seemed pleased it had the general color of a still alive conifer needle. The B w/Island logo received the required 4 votes and the Council moved on to more important things, like the decision on the Suzuki property for affordable housing or to keep the mini forest intact and hand it over to the Metropolitan Park District so they could do something other than housing with the property.
Kelly finished the logo, and in addition the City got an envelope layout, letterhead layout, vehicle signage, and e-mail signature designs.
That effort added up to $12,372,50.
Total new branding logo cost to help celebrate the 25th anniversary of all-island City has been $23,655.00.
Not counting many hours of staff time.
Kelly Hume Invoices:
It’s your tax money at work … City Council is protecting and ensuring the taxpayers get good value for their dollars.
Next post: Thank you, City Water ratepayers for footing the bills for our all-island groundwater monitoring program!
Not surprisingly, the BISD $81.2 Million Capital Improvements Bond was approved.
The 23,410 Bainbridge Island residents will now have an estimated $145 million in new taxes to pay starting in 2017 and running for the following 22 years … $81.2M in principle, $64 million in estimated interest payments.
On the positive side, the two new buildings should be state of the art awesome. Can’t wait to see what Blakely Elementary that the School Board and general public approved a bond for $10M more than the cost of Wilkes will look like. It will likely be the highest cost per student elementary school ever built in Washington State … but that won’t be known until Blakely is opened and the contractor’s checklists and change orders have been resolved, and final bills have been paid. The new Bldg. 100 should be something to behold … curious to see what $2 million in theater lighting and electronics (above the $2 million a year in tech levy money) brings to the new 600 seat theater stage. Another big smile and wow experience I suspect.
On the negative side, Bainbridge Island has just become less affordable. This capital bond will cost the average residential property owner between $10,000 and $12,300, and the BISD has an even larger bond planned for a 2019 vote ($102.3M is the preliminary bond estimate). This capital bond approval averages about $500 of new taxes a year for the average residential property, but that adds up year after year, especially to the 39% that the director of the Housing Resources Board says live on Bainbridge Island but don’t have the income to qualify for a single family house on the Island.
As a side thought, this school bond approval (i.e., increasingly higher property taxes) could be a strong talking point for one of the affordable housing options for the Suzuki parcel.
How does a bond this cost bloated get a 62% approval?
• BISD is the largest employer on the island. Most school employees vote and support the bond.
• Full page ads with a long list of who’s who of community leaders names listed as bond supporters.
• An aggressive “letters to the editor” campaign.
• Financial support from local businesses that may benefit from construction.
• The “It’s for the Children” standard educational statement.
• Vote “YES” signage.
• Street corner “YES” sign shakers and holders.
• Not a single sharp pencil (meaning an auditor or accountant) on the School Board that approved the bond amount and the payback schedule.
• No Washington State “truth in advertising” law(s) that require school districts provide full and accurate financial disclosures or accurate cost comparisons to the general public for a school bond that the public will be required to pay.
• A BISD financial group is hand picked by the BISD … it’s more of a support the BISD group than a financial knowledgeable body that performs value engineering and cost reasonableness tests. (I’m basing that on the the Wilkes Elementary financial board … this $81.2M bond appears to have similar type school district financial oversight).
High quality schools are a priority in wealthy communities, as they should be. But a new and best school scenario also drive up housing prices because families with school age children are willing to pay a premium housing price to be located in a highly rated school district. As Bainbridge residential assessment values increase, the school taxes also rise, but so do annual taxes to both the state and Kitsap county because the relative assessed parcel values increase faster than the rest of Kitsap County. So for taxpayers, it’s a triple tax whammy.
I look at the long list of names of Bainbridge Island community leaders published by the Bainbridge Review of “Our Schools Our Future” supporters and wonder if any of them actually took the time or made any effort to consider due diligence to the cost and tax implications of the bond. I suspect the answer is no.
That’s a long list of elected and community leaders I would not want as my financial advisor(s).
The only organized group that considered the bond details and tax implications was the Editorial Board of the Kitsap Sun … they rarely (if ever) conclude a school bond is not worthy of a yes vote, but this one was just too bloated and the tax implications too onerous … they concluded it should be rejected and resubmitted at a more realistic bond amount. Well done, Kitsap Editorial Board for your financial due diligence … something the who’s who of community supporters failed to do.
So what now besides paying the new taxes and admiring the new buildings when they are constructed?
So what might the School District now do to show that they are using the taxpayers money for this bond wisely and for the purposes for which they stated in the bond literature?
Here is one suggestion submitted by a reader who has past experience with a California school district where the general public was wary of how the school district was spending their capital bond money:
Put in place a capital projects citizens oversight committee (not school district employees) to monitor and report what was being done and what was being spent. They would not interfere with BISD capital projects staff … the committee would have only an observe, report and comment function. The independent citizen’s report could be a quarterly report that perhaps might be even published in the Bainbridge Review.
Like that idea.
- BISD has made a reasonable case that Blakely Elementary and Bldg. 100 are dated and are in need of updating or replacing.
- The total BISD bonds repayment schedules and planned levies will keep year to year local school taxes increasing at a measured and calculated pace … no dramatic annual increases.
- The planned square footage of Blakely is larger than OSPI recommends per student, but these school buildings should last 50-75 years, and growth will happen, so they are not oversized. Lower student to teacher ratios will also require more classrooms and larger schools.
- Replacing Blakely Elementary would level the playing field between the North end and the South end of the island’s elementary school facilities.
- Bond interest rates are historically favorable.
But more CONS:
The $81.2M bond is about $13 million in excess of what it should cost to replace Blakely Elementary and Bldg. 100 to the size and quality of construction proposed by BISD.
The proposed bond to replace Blakely Elementary is about $10 million more than Wilkes Elementary replacement actual cost.
Backloading the bonds means an estimated $62.5 million in interest costs. That adds about $30 million in interest costs over the 22 years of bond servicing to keep school bond taxes from rising too quickly.
Total BISD total bond debt is about $114 million (roughly $80 million in principal and $34 million in interest) BEFORE this bond proposal, and this bond will more than double that public debt. There are only 23,400 (est.) residents on the Island. Current Bainbridge Island property taxes are about double those of the remainder of Kitsap County. No problem for the many island wealthy, but not everybody on the island makes a six figure or greater income a year.
The BISD is (and this is a serious statement) materially deceiving the public with their bond literature for both school cost comparisons and tax implications. There is no Washington State “Truth in School Bonds” requirement similar to consumer protections and full disclosures with a home mortgage, financing a car, or even applying for a credit card. This is too much money not to have a full disclosure law.
School Districts have only one opportunity to tell their story (school supports have to do the rest), and therefore the general public only gets the most favorable spin on the bond from the school district. BISD titles their bond mailer as “Facts about the Capital Bond.” It would be more honestly labeled “Select and Distorted Facts about the Capital Bond.” Tough words, but the district deserves some tough feedback.
One relatively small but important point is that capital projects can have unforeseen problems and costs, and school districts generally increase their bond requests to include possible contingencies and cost overruns. School Districts could write a bond issue that would reduce the bond service should those contingencies not be needed, but they don’t. They most often keep the extra funds to use on other, unspecified capital projects or to pay capital projects staff. In the case of this bond, BISD is also asking for $12.5 million for other capital projects, and those additional capital funds could act as the contingency or cost overrun buffers. But that isn’t BISD’s intent.
If the $81.2 million bond is not approved (and this being Bainbridge Island the odds of that happening are unlikely), the school district would likely sharpen their pencil and bring forth a lower cost bond proposal. Unfortunately, a new bond issue will cost significant additional funds to prepare, promote, and put on the ballot, and construction costs will likely continue to creep upward.
It’s disappointing the BISD hasn’t put forth a more realistic bond proposal to the Bainbridge Island taxpayers. There are many players and decision makers that work on these bond decisions.
The school board and BISD need to make bond process and program changes to get back to reality and make greater use of common sense when asking taxpayers to support major capital projects.
There is nothing in these five blog posts that the school finance committee, capital programs staff, or school board couldn’t have done themselves.