Bond Initiative 2002:

 

Tax dollars from the 2002 bond referendum building the Merrell Arena 

 

By the summer of 2002, just two years and 10 months after the District had passed  the 1999  $324.3 million dollar bond issue that was supposed to last a few years, the district was back asking for more money.  By  the summer of 2002 they had evidently run out of 1999 money.  Of the three elementary schools that were planned to be built with 1999 bond money, two elementary schools and one junior high were built. One elementary had not been built and two junior high schools had not been built.

 

The $315 million dollar bond initiative in 2002 was proposed as being for:

Construction and Design  Estimated cost:  $246 Million

 Five Elementary Schools

            Rylander Elementary #XXIII Actual cost:  $12,448,934. Opened 8/2004.

            Exley Elementary  #XXIV       Actual Cost:  $11,320,721. Opened 8/2004

            Rhoads Elementary # XXV     Actual Cost $11,070,560. Opened 8/2004

         Griffin Elementary  # XXVII  Actual cost: $14,223,878. Opened 8/2006.

        [Not sure what the fifth one was.  Creech (XIX) got lost in there somewhere.  It opened in 2000.]

Two Junior High Schools

            Junior High X Beckendorff Junior High Actual Cost:  $18,948,425 Actually a 1999 bond listing. Opened 2004.

         Junior High XI  (still not built in fall 2006)

 

High School Number VI  with a Ninth Grade Center included (Seven Lakes High School) The school was built and opened with just the ninth grade.  The rest of the school was cordoned off and decreasing parts of it continue to sit empty.

 

Design development for High School #VII [This is the "new" high school that was needed so badly that in 2010, it's still on the drawing board--the one that we paid for with our taxes in 2002!  Our taxes also bought the land for this new high school in 2007 that still isn't being built. And yet with all that preliminary work under our belts and paid for, the "new" high school, eight years in the making, is now listed in the 2010 bond referendum as costing $137 million dollars! Anyone besides me think that's a padded number?  Anyone besides me think this is going to be a new IB high school?  Anyone besides me think there's enough money designated for a high school that it probably includes a new stadium too?]

 

Design development for High School V’s (Morton Ranch High School)  Ninth Grade Center (funding for which was also included in a previous bond initiative)

Renovation and Expansion  Projected costs:  $19.6 Million

Expanding Nottingham Country Elementary

Expanding Hutsell Elementary

Expanding Pattison Elementary

Adding more classrooms at the Miller Vocational Center [Not ever built]

Adding a fourth gym at Cinco Ranch High School

Turning West Memorial Elementary from an open concept layout to having traditional classrooms. [Another educational fad gone bad.]

Two additional barns for Morton Ranch High School and Seven Lakes High School  [If you haven't ever seen these, you need to drive out and take a look.]

Expansion of the Outdoor Learning Center

Major Maintenance Projects  Projected costs:  $23 Million

Replacement of the Turf at Rhodes Stadium  [And after only eight and a half years of the last turf replacement.]

Technology retrofitting at several campuses

Maintenance needs at several facilities

Technology Needs  Projected costs:  $13.6 Million

Installation of a district-wide telephone system

Retrofitting remaining campuses

Land Acquisitions  Projected cost:  $5.9 Million

Purchase of  buses  Projected cost:  $4.1 Million

Portable Buildings  Projected cost:  $2.4 Million

Bond Costs   $700,000

 

Six million dollars were left from the 1999 bond issue that were supposed to be used for other construction projects including mold remediation and reconstruction of West Memorial Elementary School (note that rebuilding the inside of West Memorial was also included above in the Elementary School section.)  While the last four items were touted as costing $12 Million in a Katy Times article, in the Katy Sun they became $13.1 Million!

 

It was noted in the press release printed by the Katy Times, that this amount should last until 2006 when another bond will be initiated. 

 

Dr. Merrell issued, what appeared to me to be, his usual veiled threat to the voter: “Without it [the bond money], the future is not very bright for KISD.”

 

In another article in the same Katy Times (August 25, 2002) on another deficit budget presented by the KISD administration, the following was reported by Douglas Simpson, Managing Editor:

            ‘Katy  ISD held a public hearing Wednesday night to receive input regarding the 2002-2003 budget and proposed tax rate.

              Bill Moore, KISD chief financial officer, presented a budget of $307,240,541 in expenditures and $298,697,217 in revenues.  The deficiency in revenues means the district will have to  use $7,928,601 of its fund balance, or savings, to balance the budget.

 

The proposed budget is based on a $1.94 total tax rate, comprised of a $1.60 maintenance and operating rate and a $.34  debt service rate.

 

“We do have a continually escalating tax rate in the district and we will indeed reach the $2 tax cap,” said Dr. Leonard Merrell, KISD superintendent.

 

Several speakers from the audience voiced their displeasure with the rising rate, which is two cents higher than last year and over seven cents higher than two years ago.

“The good news is that the tax base has increased tremendously and we see very luxurious schools and parking garages being built,” said KISD resident H. Z. Zafan.  “The bad news is that in 13 years tax costs have increased 100%.”

 

“There needs to be a tightening of the belt.  It happens everywhere in the world, and it needs to happen here.”

 

Zafan also pointed out that he gets 3.1% interest through a simple checking account, while KISD’s investments have yielded only 2.1%.

 

Jan Schultz also spoke, commenting that her husband may have to put off retirement just in order to pay the increasing taxes.

 

“People just can’t afford to pay more and more and more taxes,” Schultz said.

 

Harry Herzog followed the speakers by saying that it is not the school board causing the hike in taxes but the school funding formula enacted by the Texas Legislature.

“Don’t tell these folks,” Herzog told the audience.  “They have no choice, they have to do it.”

 

Moore pointed out that the state is putting up only 34% of the district’s revenues, while taxpayers are covering the rest.  Several years ago the percentages were 34% taxpayer and 66% state.

 

“Eighty out of 1,040 school districts handled 90% of the growth in the state,”  Merrell said.  “We are spending less per student than the state average, yet our tax rate keeps going up.”

 

“It’s time the finger be pointed to the people that can make change and not the people at this table.  The state must find an alternate way to fund public education,” Merrell said.

 

Approval of the budget will be decided at Monday night’s regular board meeting.”

 

In an article by Norm Rowland of The Katy Sun, it was noted that in a presentation by Tommy Harrison to the board recommending the bond initiative go forward, Harrison said, “…growth will continue district wide for the foreseeable future and the need for additional instructional space is critical.  The district will reach its tax cap ($2 per $100 valuation) with or without a bond election,” he said.  “If the district is forced to deal with facility needs using maintenance and operations funds rather than using bond funds, the result will be financially disastrous.” 

 

There they go again.

 

Also noted in this article was a recap of the “major projects funded by the 1999 authorization.  Included were three elementary schools (Schmalz, King and #27 [Griffin]), Cinco Ranch Junior High  #VIII, and Junior High #IX(Morton Ranch Junior High), High School #V (Morton Ranch High School), performing arts centers at all four high schools, orchestra rooms at seven junior highs, ninth-grade centers st Mayde Creek, Taylor and Cinco Ranch high schools, phase 2B renovation and construction at Katy High School, an addition to the Education Support Complex, construction of the AG Science facility and construction of a police and maintenance facility.

 

“What we told the public we would do, we have done,” Dr. Leonard  Merrell, superintendent, said.  “It is absolutely essential that people vote and express their opinion one way or the other so that we will know what direction they want us to go,” he said. 

 

Tommy Harrison was also quoted as saying “If the bonds fail, the answer to the flood of new students is portable buildings.  More than 4,500 students now have some classes in portable buildings.” 

 

And again.

 

In the Summer 2002 Bond Review issue (just when the District was gearing up to ask for 315 more million dollars), Dr. Merrell had this to say:

“This spring Katy ISD reached a significant milestone in our current construction program.  All of the projects identified in our 1999 bond authorization are either complete or in the planning/construction phase.  We’ve opened three new schools and four performing arts centers, nearly completed additions at our high schools, are moving earth on three more schools and a support facility, with plans for other projects on the figurative “drawing board.” 

 

The news that accompanies this milestone is also exciting.  To describe the bottom line simply:  the district has been able to complete more projects than the original bond package specified.  Using a combination of cost control techniques--painstaking planning, independent review of building design, cost comparisons with other schools in the region and state, careful timing of construction proposals, inclusion of alternate items in bidding packages, accurate and complete construction documents and meticulous project management--we have been able to expand our project list without exceeding our overall budget.”

The piece goes on, but you get the drift.

 

So lets look at these statements by the superintendent:  “All of the projects identified in our 1999 bond authorization are either complete or in the planning/construction phase.” 

 

That is actually a true statement, but look closely at what he said.  All projects are EITHER complete or in planning.  What was complete in the summer of 2002 from 1999 bond funds were the following:  King and Schmalz Elementary schools, Cinco Ranch Junior High, a $3 million dollar parking garage at Taylor High School (that wasn‘t mentioned in the Bond Package), $10,200,383 worth of land (which was more than twice the $5 Million advertised in the Bond Package),  but Katy High School Phase 2, the transportation center on the south side of the freeway, the orchestra rooms at seven junior high schools, the central food storage facility, only the first phase of the two phase Agricultural Center, and all of the ninth grade centers were not done yet. So to believe the superintendent when he then says “To describe the bottom line simply:  the district has been able to complete more projects than the original bond package specified.” we must get out our salt shakers! 

 

One question in the Bond Review brochure mailed to KISD taxpayers caught my eye. In the  Q&A format this question appeared:  “What is a construction-manager-at-risk?  How is it different from a general contractor?  The answer:  A construction-manager-at-risk (also known as a “CM-at-risk”) works with the project team, which includes the owner and the architect.  The main difference between a CM-at-risk and a general contractor is that the CM acts as the agent of the owner and works with the design team early in the process.  This method is often utilized on complex, multi-phased projects with compressed time schedules.”

 

Huh?

 

No explanation from me on this one. I couldn’t come up with one.  I think any rational person gets what’s happening here. I do have to wonder what a “CM-at-risk” costs us.

If the budget hasn’t been exceeded why isn’t everything completed, especially since we have a “CM“?  Why in just a month after the distribution of this brochure is the District back asking for $315 Million more dollars from the taxpayers?  Does it not seem remarkable to anyone else that in a matter of two years and two months our superintendent with full support from the School Board has whipped through $318,408,571 of the $324,360,000 of the 1999 Bond Issue and hasn’t built half of the stuff they indicated they would build? 

 

Hand in hand with excessive bond issues go high taxes.  Not everyone seems to make the connection, but none of it gets by Katy resident A. D. Muller. A letter to the editor in December 2003 by Mr. Muller titled KATY ISD TAX RATE IS TOO HIGH, says:

“Once again “We’re number one” can be heard through the halls of KISD schools and offices.

 

 "If the Katy Independent School District Board of Trustees has their way, KISD will be the first “fast growth” school district in Texas to max out on the tax rate.

 

 "In fact, of the 1048 Texas public school districts, there is only one other district taxing at the maximum of $2 per $100 in assessed property value.  However, the good news is they can’t raise our tax rates again.

 

 "Unfortunately there is more bad news than good.  As our property appraisals increase, so will our taxes.  What’s more alarming is the need for KISD to dip into the fund reserves.

 

"These financial problems could mean drastic cuts in school programs.  Staffing could be affected.  Bond ratings could slide.  Could it be our district overspends?  Could it be we’re top heavy?  Could we really afford proposed $90 million dollar schools?

 

"We all remember a few years ago when our tax rates were at $1.69. The administration told us that construction bonds would cost us “the price of a small pizza.”

 

"What should also concern us is that our Board of Trustees knew of our financial straits.  Why have they been unable to put the brakes on wasteful spending?  Why do they over estimate the cost of new schools by the millions?  Why are our taxes the highest in Texas?

 

"Don’t feel helpless; the Trustees confuse frustration with apathy.  Join us and write to the Texas Comptroller’s office:  Carole Keeton Strayhorn; C/O Texas School Performance Audit; P. O. Box 13528 Austin, Texas 78711-3528.  Ask for an audit of KISD.

 

"These audits have saved the taxpayers millions.  Help get KISD out of the red.”

 

Mr. Muller’s comments are still valid, and he was ever so correct in his assessment of our school district.

 

The practice of asking for more funds before the District has built all it promised, before all of the funds have even been spent, before anyone can figure out what HAS been built, what was built that wasn’t planned for, what is still on the drawing table, and what got lost in the shuffle seems sort of reckless and irresponsible to me. The doublespeak in District publications is something to behold.

 

As a former member of our school board, I can tell you that currently there is no one minding the store.  As soon as I resigned in disgust in 1996, there has been no one who would go to the trouble to look at the facts, sort it all out and try to stop those who are taking advantage of the situation. The poor leadership of our School Board accounts for their inability to hold anyone responsible and that includes the superintendent and each other. 

 

The arrogant act of the School Board, recently initiated by Board Member Eric Duhon, in naming the existing 2006 Bond Committee as the Bond Oversight Committee (which will supposedly make sure bond funds are spent as the District has indicated in the Bond Issue) typifies the attitude of this group.  The move was a slap in the face of the majority of taxpayers who voted down their Spring 2006 Bond. Those taxpayers were sending a message that they didn’t believe the superintendent and the Board were acting in the best interests of students and teachers.  By allowing the Bond Committee to include so many with vested interests regarding the outcome of the vote, the Board and the superintendent sent a clear message to taxpayers, in my opinion, that they really do not care about anyone except themselves.

 

The Spring 2006 Bond, like the Fall 2006 Bond, is an indication of how this community feels about this superintendent and this Board.  It is a referendum, not on building schools, but on the competence, honesty and leadership of eight people.  This group has already lost the first referendum, and I was amazed that they would come back to make sure of the message, but they have. 

 

I intend to send it to them again.

 

 The following information was written as an adendum to the article above giving more detail about the 2002 bond referendum.

In the tables below, one can see the actual enrollment figures at the beginning of the year (or as close to the beginning as I could find) for the years listed.

 

Also, listed below are the demographic projections at various times in the last ten years. One can see the predictions of Dr. Pat Guseman (formerly Pat Guzman) of PASA (Population and Survey Analysts) (www.pasademographics.com/ ).  Dr. Guseman has been predicting demographic figures as KATY ISD’s consultant since 1997.  Before that time, Texas School Planning, Inc (TSPI) was the demographic consultant for the District. TSPI was located in San Antonio.  The president of that company was Bill Rives, Ph.D., George V. Shaw was Executive Vice President and was a CPA, and Wendell Davis, AICP was the Vice -President in charge of planning.

 

In looking at the tables, one can see that these demographic predictions, for which the District pays a tidy sum each time they are assembled, are not very accurate and leave a great deal to be desired if the District is going to base projections of needed school construction upon them.  In fact, in my opinion a crystal ball would be just about as useful as these predictions.

 

Of interest to me as a spectator at the first 2006 Summer Bond Committee meeting was a statement made by Dr. Stacey Tepera, associate staff member at PASA.  In the Q&A session of the meeting she made the statement that the statistics provided by PASA had a plus or minus 9% chance of being accurate.  I thought I hadn’t heard her correctly, but a Bond Committee member sitting closer to her said, “If your statistics are that far off, we could be talking about as many as 4,000 students that we aren’t certain of.”  The response of Dr. Tepera could not be heard by me.  I was surprised that no reporter jumped on this significant matter, and no mention of the exchange was made in the District’s Q&A report.

 

Perhaps the demographic “studies” should all be taken with a grain of salt. To quote Kris Taylor in a Houston Chronicle article on 7/25/02 “Guzman has provided demographic projections for the Katy school district for five years.  Her numbers have been consistently accurate, Taylor said.”  Perhaps Ms. Taylor doesn’t have a very good memory. 

 

I hope everyone understands that  the lack of authentic projections, the failure to predict with clarity, and the use of a fallible science is being used to convince taxpayers that growth is coming when many times it really is not.  All of these figures go to the argument that portable buildings might not be such a bad idea until we see real students who actually live in the District.

 

In 1999 the District suggested that there would be 48,776 students by 2005-2006.  In actuality, according to the KISD web site on September 24, 2006, the actual total for the 2005-2006 school year was 47,816 or a difference of almost a thousand students.  That’s equivalent to an entire elementary school!

 

I would point out that the demographic predictions over these years can be underestimated or overestimated which is an indication to me that they have no value, and some better way of predicting the future needs to be found. Whatever the reasons for the flawed predictions, one thing is clear to me:  no bond initiative construction projects should be based upon such predictions.

 

It should also be noted that Dr. Merrell and the Board have changed the Board’s previous policy of not building schools until actual students to fill them exist.  Such a strategy seemed prudent to me as a School Board Member in the 1990‘s. Over the last few years, one after another of our schools have opened and some have been half empty or more than half empty (Seven Lakes High School to name one).  If there had been an economic downturn on which to blame such a situation, that would be understandable, but there has been no such problem in the last few years.

 

When the superintendent comes to the taxpayers and claims that tons of children are on their way and “we have to be ready for them,” a great many people swoon and clamor to give him as many dollars as he claims he needs, but should they? Voters need to ask themselves who really benefits from schools built too soon.  I believe the answer to that question is quite obvious.

 

If the School Board and its Superintendent have not done their homework over the years so that they know the demographic predictions are flawed, their leadership is subject to question.

 

Bonds are passed for millions of dollars.  Since Dr. Merrell arrived in Katy eleven years ago, he has had the opportunity to direct the spending of more than 920 million of our tax dollars.  He and the Board are currently asking for 269.4 million more.  If they succeed in getting this last request, the Administration will have had access to 1.2 Billion dollars.  Dr. Merrell has suggested that they will be back for more in 2009.  More means $400 or $500 million.  They are saving the best for last.  In the 2009 Bond Initiative look for a proposed new stadium that will be supported by all those parents who want their sons to earn college scholarships. If these parents had all their school taxes back, they could afford to pay their sons’ way to college without a scholarship!

 

For 1.2 Billion dollars all we have to show for it  are 13 elementary schools (we already had  14; 5 junior highs (we already had 5); and 3 high schools (we already had 3).  The building of the first twenty-two schools only left us with a bonded indebtedness of $148,349,944 on 8/31/96 and an original cost of only $234,959,583 plus interest. (Source:  pages pp. 84 and 85 of the KISD Comprehensive Annual Financial Report.) And almost all of the schools, with the exception of Wolfe Elementary, have had additions or repairs made to them in the last eleven years, so their actual original costs are less than indicated here.

 

The question the voter should have is “If the School District’s representatives offer flawed statistical numbers regarding enrollments, tax rates, and school capacities, do I really want to vote for a bond that is based upon what appear to be erroneous judgments?”

 

ACTUAL                             NUMBER OF KATY                   NUMBER OF KATY ISD

ENROLLMENT                  ISD STUDENTS BY                    STUDENTS BY YEAR

OF KISD STUDENTS       YEAR AS PROJECTED             AS PROJECTED IN 2006

SINCE 1991                           IN 1993/2002/2003*               AT BOND COMM.MEETING

1991     20,414              

1992     21,494

1993     22,629                            22,501

1994     23,950                            24,032

1995     25,366                            25,785

1996     26,766                            27,400

1997     28,230                            28,830

1998     30,126                            30,188

1999     32,338                            31,526

2000     34,798                            32,832

2001     37,798                            34,188

2002     39,524               36,385/40,058                                        

2003     41,460               42,950/41,692

2004     44,212               46,327/43,841

2005     47,816EOY      49,773/46,238

2006     50,992               53,106/48,644                                         50,161

2007     53,762               56,602/51,021                                         52,937

2008      56,191              60,184/53,612                                         55,676

2009      58,444              63,828/56,586                                         58,935

2010                                67,428/59,498                                         62,279

2011                                70,971/62,570                                         65,844

2012                                            /65,946                                         69,906

2013                                            /69,164                                         74,202

2014                                                                                                   78,677

2015                                                                                                   83,418

 

*1993-1996 projections provided by TPSI; after 1996 projections are provided by PASA. Projections for 2002 start in 2002.  They are placed beside 2003 numbers and separated by a slash.  The school district’s Demographer changes these numbers from time to time depending on her projections.  The predictions become more accurate as they get closer to actuality which one would expect, but the District is paying for long range predictions. These predictions are a moving target which makes comparisons and research very difficult. The lack of accuracy is another prudent reason to put off construction until students are actually residing in the School District. Demographic predicting is an imperfect science at best.

 

 Addendum written 10/13/2006 and 3/9/2011