BUSD’s Projects are Estimated to Run More Than $20,000,000 Over Budget

The district’s projects are on track to run more than $20,000,000 over budget.

 

Project

Original Approved

Contractor Estimated Budget

Over Budget

BHS two story expansion

$9,700,000

$11,935,673

$2,235,673

21st Century Classroom

$2,000,000

$3,369,592

$1,369,592

BHS Athletic Complex

$15,800,000

$27,947,728

$12,147,728

Ed Support Facilities

$10,500,000

$15,356,861

$4,856,861

Total

$38,000,000

$58,609,854

$20,609,854

 

When this fact was presented in a workshop at last week’s board meeting, not a single board member questioned the costs overruns. The administration is now recommending scaling back some projects. They introduced us to a new term, Value Engineering. Wikepedia describes Value engineering (VE) as “a systematic method to improve the "value" of goods or products and services by using an examination of function.”  I think Mrs. Kakish described it as a process of reviewing the projects to determine which features could be eliminated without having a major impact on the finished project. Hmm, isn’t this something that should have been done in the first place? Even with value engineering, the administration estimates costs overrun of more than $6 million. 

Mrs. Kakish presented the board with several options for “Interim Funding” while warning them that they also need to plan funding for a second high school. She recommended we look for help from the state. The fiscally sound State of California ( lol - just seeing if you are paying attention)  has developed, for school districts, a “Bond Advancement Program”. This program provides districts a short term loan where future bond revenues are used for collateral. The administration is recommending mortgaging future Measure Z bond proceeds to pay for their costs overruns. 

Board member Mrs. Poulter asked Kakish if the district felt they had a responsibility to voters to keep the cost of the bonds to taxpayers limited to what they promised when they were promoting the bond measure, $25 per $100,000 assessed value. Kakish told Mrs. Poulter that the $25 estimate was for the first bond sale. While this is true, it is not the complete truth. 

Here is an excerpt from the Arguments for Measure Z, co-authored by Bogh Engineering’s chief engineer, provided to voters in 2008.

 

1. The best estimate from official sources of the tax rate which would be required to be levied to fund principal and interest payments during the first fiscal year after the first sale of bonds (Fiscal Year 2009-2010), based on assessed valuations available at the time of the election and taking into account estimated future growth, is the following:

$.02490 per $100 of assessed valuation, which equates to $24.90 per $100,000 of assessed valuation.

2. The best estimate from official sources of the tax rate which would be required to be levied to fund principal and interest payments during the first fiscal year after the last sale of bonds and an estimate of the year in which that rate will apply, based on assessed valuations available at the time of the election and taking into account estimated future growth, is as follows:

$.02490 per $100 of assessed valuation, which equates to $24.90 per $100,000 of assessed valuation.

First fiscal year after last sale of bonds: 2019-2020

Here’s the link to the full document: http://www.smartvoter.org/2008/11/04/ca/rv/meas/Z/

 

The district’s financial advisor quickly corrected Mrs. Kakish but said the state will allow the cost to taxpayers to rise to as much as $60 per $100,000 assessed value. By my calculations, there isn’t much room left. 

I checked my last tax bill and found I am already paying $100.59 on an assessed value of $209,000. That works out to $48.12 per $100,000. I recommend you take a look at your bill. To find your “per $100,000 cost”, divide your “Unified School Debt Sv” amount by the full value and multiply by 100,000.  

Before we begin shelling out millions more on these projects, I have two questions I need answered. 

  1. Doesn't Bogh Engineering have a responsibility to accurately bid the projects and then honor their bid?
  2. Doesn't our administration have a duty to provide a competent bidding process and a responsibility to hold our contractor to their bid?

I think it is time to take a look at the original bids and to see what change orders have been approved to increase the costs of these projects so dramatically. 

It looks like the taxpayers are the only people who will be responsible for this mess. How much longer are we going to stand by and allow our school district to add to the pile of debt our governments are already leaving for our children.