CITIZEN BOND OVERSIGHT COMMITTEE (CBOC) RECOMMENDATION ON UNSPENT BOND FUNDS

Committee Members: Thom Kaffun, Co-Chair Kim Morrison, Co-Chair Betty Pataccoli David Philbrick Eduardo Angulo Kevin Baker Matthew Boulay Megan Cogswell Nathan Wuerch Susan Hill-Smith Vic Backlund Background Information At a Board work session on April 10, 2012, the Board reviewed a staff recommendation regarding next steps relating to the unspent funds from the 2008 bond and through consensus gave direction to implement the plan. (See attachment A). As per the recommendation, staff conducted a series of meeting(s) with the Citizen Bond Oversight Committee (CBOC) with the following objectives: Provide background education to members of CBOC regarding the Districts options for unspent bond funds; and Craft a recommendation from CBOC to the School Board on a course of action related to the unspent bond funds. At the first two meetings, staff presented the following information and CBOC had the opportunity to ask questions and discuss the topics presented. The agendas and materials for these meetings are attached (See attachment B and C).

A status report on current bond projects. An updated financial plan indicating a projected $66 million of unspent funds. This amount includes premiums, interest, and under-expenditures. The options for the use of remaining bond funds, which include: Continue with repairs/renovations as outlined in the ballot title. Use the remaining funds to pay down the debt to the maximum extent possible. Ask voters to amend the ballot title to include projects that were not in the original request. A combination of any of the options presented.

At the third meeting, CBOC discussed the pros and cons of each option and conducted a straw poll. The agenda is attached (See attachment D).The poll indicated that 8 of the 10 members present favored using the funds to continue repair and renovation as outlined in the ballot title. The other two (2) members favored combining some of the options. No substantial discussion occurred regarding what this might bring about. The fourth meeting was dedicated to finalizing the recommendation and reviewing a draft report to the School Board.
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CBOC has received written communication and heard public testimony at their second and third meetings. (See attachment E). Recommendation: The vote taken by Citizen Bond Oversight Committee resulted in the following: 10 members voted to continue repair and renovation work as outlined in the ballot title. 0 members voted to ask the voters to amend the ballot title to include projects not in the original request. 0 members voted to pay down the debt to the maximum extent possible. 1 member voted to create a combination of the options presented. The majority of CBOC members (10 of 11 members) voted to recommend the District use the remaining bond funds to continue the repair and renovation work as outlined in the ballot title. Rationale: Continuing the repairs and renovations that address health and safety upgrades, renovations, and updates in our schools will improve the educational environment and safety for our students and staff. Our schools still have issues with roofs, HVACs, plumbing, electrical, flooring and siding, windows, and other needs. These types of repairs and renovations directly align with what the voters approved in 2008. By continuing the repair and renovation work, we will be honoring our initial promise to invest in and protect our assets (the schools). By using bond funds to continue the repair and renovation work, we can focus our general fund toward instruction of students and day-to-day operations rather than on repair or replacement of a roof or HVAC unit (for example). If the Board opts not to continue this work, it is inevitable that another bond campaign will be necessary sooner rather than later. The costs associated with repair and renovation work may be higher in the future. Continuing repairs and renovations helps our local economy. Based on information from Strategic Economic Development Corporation (SEDCOR) $3 - $6 dollars are spent in our local community for every bond dollar spent. If the $66 million is used for more repairs and renovations, the impact would be in the range of $200 $400 million for our local economy.

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Comments: It is the consensus of the CBOC that the 2008 bond program is a success. The favorable construction environment as well as the transparency and good stewardship of district staff have contributed to this success. The committee strongly urges the District to continue to manage the program with the same values around transparency with the community and strong stewardship of both the financial and construction plans. It is important to note that CBOC duties did not include recommendations for specific projects but rather their recommendation was to be an over-arching course of action for the School Board. The District needs to continue communicating the legal restriction related to the use of bond funds. They are dedicated funds that can only be used as outlined in the ballot title (i.e. repairs and renovations for schools) and cannot be used to pay for teachers and other day-to-day operating costs. Regardless of what direction the School Board decides to take, it is imperative that a communication plan be developed and implemented in order to maintain the transparency and trust that the District has built with the community thus far.

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