School bond money can be used for things other than what voters approved – really

June 01, 2012

Are funds taxpayers approved in bond initiatives for specific projects being used for other projects? Yes. We may see it as a betrayal of taxpayer trust, but it is happening. Case in point…

The Ways and Means Committee requested at their April 3, 2012, meeting, information regarding the use of bond money for purposes other than what voters approved in the bond.

The most salient example took place just May 17, 2012, in Round Rock ISD. I included some additional information as I believe that legislators deserve to see just how school board members trash the legislature. I was at the meeting and spoke twice. I am linking below to a video of the meeting so committee members can see for themselves precisely what was said regarding the legality of using $36.5 million in “leftover” bond money, as they describe it.

Former RRISD Board member Liz Ellison wrote to the Superintendent opposing use of bond money for purposes not approved by taxpayers.

(I attended the board meeting and have a video of the meeting which was taken by Laurie Bartlett who produces the ChannelAustin TV program THE BEAUTY OF POLITICS, which I co-host. A portion of the board meeting video is in the link below.)

At the May 17 board meeting, RRISD Board Member Glen Colby said: “We are doing the best with the few pennies the state begrudgingly sends our way as it is…” That remarkable statement is at about 5:04 on the video –

The Board goes on to discuss how else to spend our money – this time bond money approved for one project which they will use on another. They refer to it as “leftover” bond money and ask for legal advice, having heard that some in the community were concerned about and disagree with the practice of using voter-approved bond money for projects voters did not approve it for. (Reference the letter to the board from former RRISD board member Liz Ellison)

RRISD Legal Counsel Bill Bingham explained how the bond money is available for use for projects not expressly approved by the taxpayers. At around 6:25 on the video, Bingham says the wording on bond initiatives is general and includes “the issuance of a certain amount of bonds for acquiring, contracting, constructing and equipping, including…”

“So in theory if you have a bond initiative approved for a high school but decide to build two elementary schools instead, you could do that…This money is available, you can use it for a legal purpose for bond debt…you can use it to pay off bonds early…but you cannot keep the money indefinitely…”

The money could and should be used to pay down the debt. ISD’s across the state are over $108 billion in debt, with 40% of that being in interest due. (RRISD is $1.1 billion in debt) Instead of leaving our children a legacy of debt, “leftover” bond money could and should be used to pay down the bond debt, lowering interest payments.

The discussion of additional funding available for projects using both bond money and available M&O is in stark contrast to the words of Board Member Glen Colby and what the media has been reporting.

Here is a video news program from January 2011 in which Round Rock ISD projected draconian cuts. “There will certainly be jobs lost…we will cut jobs.”

Was that rhetoric called for?

In early 2011, RRISD had $200 million in reserve funds, their “savings account”. According to the latest TEA figures, for the 2010-11 budget, RRISD had fully 44% of their budget in a fund balance…the ISD’s “savings account.”

Total expenditures in RRISD are over a half billion dollars.

From 2010 to 2011, RRISD increased the number of teachers from 2,919 to 3,044 according to the TEA snapshots, and total per pupil revenue grew from $10,247 to $10,374. The fund balance grew from over $136 million to almost $152 million as of 2009-10.

And RRISD Board Member Glen Colby – “We are doing the best with the few pennies the state begrudgingly sends our way as it is…” By the way, total revenue for RRISD grew from roughly $425 million to almost $444 million according to the latest TEA snapshots.

I believe that legislators worked hard to fund education and provided more state funding than the previous budget cycle. But while many who advocated for more spending urged the legislature to tap into the Budget Stabilization Fund – the “rainy day fund” – RRISD has a 44% “savings account” which is the official fund balance.

By the way, in 2001, the state average ISD fund balance was 14%. Today, the state average is 19%, according to TEA.

– Peggy Venable

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