Part 5: BISD $81.2M Bond – Pros, Cons, and Comments

Some PROS:

  • 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.

FINAL COMMENTS:

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.