Cost of the New City Logo and Branding

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.

Bainbridge Island Logo 2015 copyThe “B” stands for …(drum roll)  …  Bainbridge!

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:

1/3: 339917

2/3: 340826

3/3: 340709

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!

 

 

Wing Point Way Work Continues

Work on Wing Point Way continues with a full roadway blockage as of February 14, 2016. Can't sneak by unless you are on a bicycle.
Work on Wing Point Way continues with a full roadway blockage as of February 14, 2016. Can’t sneak by unless you are on a bicycle.

 

Wing Point Way below the road surface utility work.
Wing Point Way below the road surface utility work.

Part 6: BISD $81.2M Bond, Post Election Comment

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.

 

Bainbridge Island Police Boat Practices Touch and Goes

Bainbridge Island Police Boat (Marine 8) practiced touch and goes with WSF Tacoma on February 8, 2016. The boat had smooth approaches and held station on the ferry stern where personnel transfers could have been conducted. And no, the BIPD will not run Marine 8 to catch a ferry if you miss the scheduled WSF sailing.
Bainbridge Island Police Boat (Marine 8) practices touch and goes with WSF Tacoma on February 8, 2016. The boat had smooth approaches and held station on the ferry stern where personnel transfers could have been conducted. In case you wondered, BIPD will not run Marine 8 to catch a ferry if you miss the scheduled WSF sailing.

Wing Point Way Construction February 2016

Wing Point Way get some sewer line replacements (not yet, but planned), water line (some progress), stormwater catchment basins, and new bike lanes (they switch from one side of the street to the other), and a sidewalk. This image is early February 2, 2016.
Wing Point Way gets some sewer line replacements (not yet, but planned), a replaced water line (some progress), some new stormwater catchment basins, bike lanes (they switch from one side of the street to the other), and a sidewalk. This image February 2, 2016.
Wing Point Way finally getting bike lane(s) and sidewalk ... after many years of discussions, grants, and delays.
Wing Point Way finally getting bike lane(s), a sidewalk and utility improvements  … after many years of discussions, grants, and delays, excuses, and change of priorities. After all, it is Bainbridge Island. 

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.

Part 4: BISD $81.2M Bond • Feb 2016 •The 100 Building (Theater and ESL)

Note: This part does not begin with the key takeaways from Parts 1-3 because the list is getting too lengthy. It doesn’t take a great deal of time to read the previous posts.

….

The Robinson Co. cost estimate to replace the BISD’s 100 building:

Robinson Co. BISD Bldg 100 Cost Est. Nov 2015

The fundamental question: Is $30M a ballpark reasonable or excessive amount
to remove and replace BISD Building 100?

It should not be lost on readers this November 2015 cost estimate sharply escalates the project costs in 2017 (8.7%) and 2018 (13%) … clearly subjective and likely highly unrealistic inflated numbers to give an illusion that costs are going to climb very rapidly if construction is delayed, meaning if the bond is not approved.

……

NOTE: This is another cost detail analysis that those not interested in cost calculation details can skip by going to the BOTTOM LINE at the end of this post.

……

Let’s begin with the most discussed building element, the Large Group Instruction (LGI) auditorium, better known as the theater. BISD considered a number of different theater sizes and configurations and settled on the largest. Given the new theater should last 50+ years, and what is being done in other school districts, I view a 600 seat capacity and full stage performance LGI/theater as a reasonable visionary decision.

The 2016 National Building Cost Manual referenced in Part 3 (and now available at the Bainbridge Island Library) pencils out the highest quality secondary school construction costs for the proposed 22,260 SF masonry construction secondary school LGI/theater with a 35 foot average height after Seattle area and island construction (+11 and +5% respectively) price index multipliers are applied at $316.39 SF.

That totals $7.05M.

The instructional rooms of the remainder of the building (includes music, chorus, art, career and technical education, etc) are planned at 26,185 SF. Construction costs should be in the range of $302 SF (same local cost index multipliers) for an with an overall average building height of 20 feet.

That totals $7.91M.

Add to those basic construction costs $1M for general site work, .$5M to remove the existing building, and $.15M for a fire suppression system.

Robinson Co. adds $2 million for theater electronics. That seems high, but who really knows what they have planned or what it might cost. It will certainly be highest quality, state of the art. So let’s just accept that $2M estimate.

And since construction will take place 2017-2018, there might (or might not be since the economy is growing at a very slow pace) ) an inflation factor. I believe 4% is reasonable given current economic conditions.

That totals $19.27M for 2017-2018 actual construction costs that includes $2M for theater electronics.

Now for the HIGHLY, HIGHLY CONTROVERSIAL soft costs.

Robison Co. estimate adds 48.2%, or $9.75M for soft costs.

This has a multitude of problems and complications.

First, the National Building Cost Manual includes (among other costs) usual architect and consultant fees, construction testing fees, usual permit fees, and contractor profits.

Robinson Co. adds many of those common and usual fees to their soft cost multiplier, not their construction cost calculation.

The current BISD pie charts summary page for Wilkes says the soft cost for Wilkes was 28%. Note: The same pie chart also labels soft costs at 38%, but that includes the still unspent $5.5M 2009 Wilkes and other capital projects bond money.

As an important side note, the original 2009 bond cost projections by Robinson Co. estimated the Wilkes soft costs at a completely outrageous 59%!! Voters didn’t take notice because it’s one of the in-the-weeds details … millions of dollars that just get put in a bond measure with little explanation.

Why is this important? After the school is constructed, the school district can claim the construction cost of the new school was lower or equal to other schools. That’s exactly what they did with Wilkes … they just don’t talk about the soft costs because that’s not construction costs by BISD and Robinson Co.’s definition of construction costs. And in Washington State, there are no standards for school costs and how they are to be measured, so school comparisons are difficult.

So why are Blakely soft costs 72% higher than the BISD’s claimed Wilkes soft costs? That’s many millions of totally unexplained dollars, and the BISD and the School Board know the public isn’t going to drill down into the numbers to question anything labeled soft costs because the public simply doesn’t understand soft costs.

So sorting all this out is beyond the scope of this blog or the attention span of the public. It should have been done by the BISD finance group, but if it was, it isn’t easily accessible public information. My guess it was just never done.

THE BOTTOM LINE FOR BUILDING 100:

Construction (and usual costs) and theater electronics (discussed above):   $19.27M
Taxes:                                                                                                                                              $  1.68M
Heating and Cooling (HVAC) (additive to National Building Cost):                       $  1.50M
Building Set Up, Furnishings, New tech equipment :                                                  $ 1.60M
Staff adjustments, relocations, etc.:                                                                                  $ 1.25M
Commissioning, Utility Assessments, Legal and Risk:                                                $ 0.50M

             Bldg 100 Cost Estimate:               $25.8 Million

Conclusion: The BISD bond request for Building 100 at $30 million is $4.2 million  on the high side.

Post 5: Final BISD bond comments and the pros/cons of the bond issue.

Part 3: The $81.2M School Bond • 2016 • Blakely Elementary Cost

Key takeaways from of Parts 1 and 2:

• Wilkes (opened 2012) cost (BISD data) $28.92M, BISD requesting for $39M for Blakely.

• BISD construction cost comparisons are significantly biased. Blakely Elementary is a 37% smaller school in both square feet and student load than 4 of the 6  the BISD cost comparisons.

 $175/yr tax for 2017 for median assessed value residence stated by BISD is understated. Actual is about $222, and that is for only the first of three bonds that will be sold in sequential years.

• Annual taxes to service the $81.2 M bond will rise substantially after 2017.

• Total median residential taxpayer costs will be in the range of $10,000 to $12,310 over the next  22 years.

• Bonds are backloaded and interest costs alone are estimated at $62.5M.

––––––––

Let’s look at elementary school costs. This is going to get a little detailed and technical, so try not lose focus. Or go to the conclusion line if you become lost,  bored,  or are detail adverse.

2016 NBCM

The 2016 construction cost estimator is the 2016 National Building Cost Manual (NBCM). The Bainbridge Island library has a copy available (they purchased one at my request). It’s call number is 692.5097 NATION, and there are too many pages and explanations to show every page reference in a blog, so visit the library if you feel you need to confirm the accuracy of the following cost calculations.

The NBCM cost of new elementary schools is divided into two major construction types: Masonry and Concrete (MC) or Wood and Steel Frame (WS).

MC construction is about 15% higher cost than WS. The architectural plans are yet to be prepared for Blakely , but for this estimate, I’ll use the higher masonry/concrete cost.

Next major determinate is the quality class of the building. The NBCM breaks schools down into four cost classes (best, good, average, low).

For Bainbridge, only the best will do. I’ll use best (No.1 quality).

A key cost determinate is average building wall heights. Wall heights will vary for classrooms vs. gymnasium, for example. I’ll use an overall building average height of 20 feet.

The cost per square foot for a school built for a student load of 450 students at 140 sq. ft. per student (state recommends 125 sq. ft., but most new elementary schools in Western Washington are being constructed about 140 sq. ft.):    450 (students) X 140 (sq. ft. per student) = 63,000 sq. ft.

That’s very close to the size of Wilkes, although the BISD has 8 different sq. ft. measurements for Wilkes depending on what question or position they want to make. There still is no agreed to Washington State standard for school size comparisons.

The NCBM high end cost with best construction for a single story school with a 20 foot average wall height is $245.12 sq. ft. X 63,000 = $15.44M.

The Seattle area is a higher than average national building cost area, and the 2016 construction cost index for Seattle is +11%, so the Seattle  regional building cost increases construction costs to $17.14M.

But, we are on an island, and that adds to costs … Robinson estimates +5%.  That is reasonable.

That brings the estimated construction cost to $18.0M, or about $286 per sq. ft.

The NBCM cost estimate includes foundations (normal soil conditions), floor, wall, roof structures, interior ceiling, wall and floor finishes (including carpet), exterior wall finish and roof cover, interior partitions, basic lighting and electrical systems, rough and finish plumbing, design and engineering fees, typical permit and hook-up fees, and typical contractor mark-up. Some of these costs mostly in bold) are what the BISD estimator (Robinson Company) considers as soft costs.

It does not include the costs of canopies and canopy lighting, public address, intercom and security systems, docks and ramps, fire extinguishers and fire sprinklers, heating and cooling systems, exterior signs, walkways, paving, curbing, or yard improvements.

Add $1.5M for a heating and cooling system, $.5M for fire systems, and $.5M for security and communications, and 8.7% for taxes (that’s generous … not all construction costs are taxed, and not all are at the local tax rate of 8.7%), and the construction costs total about $24.5M.

There are no known land acquisition costs at Blakely.

There is a fairly lengthy shopping list of additional costs when completing a school.The big ones (using Wilkes 2011-12 costs):
Furniture and equipment                $.75M
Technology Equipment                    $.35M (Note: BISD also has a Technology Levy)
Commissioning and Staff Costs    $.20M
Curriculum Material                           $.13M
Custodian Supplies                            $.03M

So roughly $1.5M in equipage and getting ready costs. Those were 2012 prices, so about $1.8 million in 2017-8 (inflation) costs.

Wilkes had nearly $.5 in off-site improvement costs, and that is still an unknown for Blakely. Those are generally sewer and water service costs.

Add $1M for exterior paving, playground improvements, sidewalks, etc.

Add another $.6 M for demolishing and removing the existing Blakely school.

So using the National Building Code Manual (best quality) for Blakely Elementary is in the general range of $27.9M.

That’s just slightly less than what Wilkes cost, but there should be a reasonable inflation cost kicker because construction will start in 2017. Although recent materials inflation has been negative, a 2% increase is logical to be on the safe side.

Bottom line … using the National Building Cost Manual, the cost of a new Blakely should be very close to what Wilkes cost …  in the $28.8M range.

That, of course, is mostly using data from a respected 2016 cost estimation book.  But it also comes close to validating  the cost comparisons of the six schools the BISD used for cost comparisons … they are about 37% larger that what is proposed for Blakely, and that would put them in the $40M+ range, and some of those schools have full food preparation kitchens which is high cost and Blakely is not expected to include (BISD generally uses a central kitchen and distribution to schools since they are not located long distances apart).

Conclusion: A bond amount of $39M for Blakely is about $9 million more than what the school should cost.  Blakey Elementary replacement should be in the range of $29M-$30M.