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Oversight Committee asks to be apprised of all Prop P costs

Mehlville School District residents were able to see firsthand the district's new-est middle school — Bernard Middle School — as tours of the building were conducted last week by Principal Michele Condon, Assistant Principal Jeff Bresler and volunteer teachers and parents. Bernard Middle School, which was built at a cost of more than $13 million, has been called the 'flagship' of Mehlville's Prop-osition P districtwide building improvement program.

Oversight Committee asks to be apprised of all Prop P costs


Executive Editor

Proposition P Oversight Committee members want to be apprised of all expenditures relating to the Mehlville School District's districtwide building improvement program that officials now estimate will cost more than $86 million.

Oversight Committee members last week also recommended the Board of Education establish a firm budget for the districtwide building improvement program. The comments and recommendations from Oversight Com-mittee members were made last week as they reviewed a proposed revised Proposition P budget.

When district voters approved a 49-cent tax-rate increase in November 2000, the cost of the Proposition P district-wide building improvement program recommended by the Citizens' Advisory Committee for Facilities was estimated at $68.4 million.

Interest on the bond-like certificates of participation issued to fund Proposition P allowed the construction budget to in-crease to $72.4 million. Current estimates indicate the 49-cent tax-rate increase will generate $170,165,506 through 2022, while the amount needed to retire the certificates of participation is projected at $144,346,224 — leaving a surplus of $25,819,282 in district capital funds.

The proposed revised Proposition P budget of $86,090,548 includes the board-approved budget of $72.4 million, plus another $13,690,548 in district capital funds. To date, a total of $4,898,567 of district capital funds has been spent on Proposition P-related projects.

Of the 49-cent voter-approved tax-rate increase, 41.6 cents is being used to retire the certificates and 7.4 cents is going into the district's capital fund. Randy Charles, assistant superintendent for finance and the district's chief financial officer, told committee members that the 7.4 cents be-ing placed into the district's capital fund would total $13.30 per year for a resident whose home is valued at $100,000.

During the July 30 meeting, Oversight Committee members discussed at length the funding of the districtwide building improvement program, noting they were unaware of the nearly $13.7 million projected to be spent in district capital funds for Proposition P-related projects. Some members questioned the amount of the budget they are being asked to oversee.

"... What is the budget? Up until a few weeks ago and then a month ago, I think that we felt the budget was ($)72.4 (million) and I understand how we got to where we are,'' committee member Mike Levine said. "There may be some more discussion on how we got here and what to do in the future to avoid this type of problem, but to move forward, I'm now under the assumption that our budget, and I assume that's a number that the board has to use, is ($)72.4 (million) plus ($)13.7 (million). So that's an assumption, I don't know if we've been told here's how much money you've got to spend for Prop P. Is it the full amount of money that the 49 cents is going to fund or is there perhaps a lesser number that we have to manage too? Who tells us that?''

Charles said, "... The board makes that decision ultimately. The only formal response and answer to that question is that beyond the 2003-2004 school year ... the board has not made any decision. Now I've given you projections about way beyond that. The only thing the board has approved in terms of the seven cents money is that they've approved capital expenditures for the '03-'04 school year. Within the '03-'04 budget, there are expenditures, there's a line item in that budget for expenditures that will be made from capital funds — capital funds which include revenue generated from that seven cents. But beyond this year, the board has not approved anything. Now that's one idea we talked about a little bit is that it might be and probably would be very helpful to develop a budget like this for the money that's being generated by the seven cents ...''

Chairman Chuck Van Gronigen said, "And really that was what I was getting at is that without knowledge of the $13.6 million that we're projecting to spend, you end up skewing the way that you would make decisions. We would, for example, we would authorize or discuss a project, but perhaps the project should have never been begun, not because it wasn't in what we told voters, but because we couldn't afford it if we knew that that was the pool of money that you're (relying) on. The discipline of having a budget and knowing what we were working against really has gone in this case because we've got sort of a shadow budget of $25 million projected — not real, but projected — that we're working against sort of in the background that we don't know about. Do you know what I mean?''

Charles said, "Right ... and part of that and I think I mentioned this at our last meeting that was, I guess call it an assumption on my part as to what was the charge of this committee and I assumed that the charge of this committee was to focus on the master facilities plan, and in my mind, I'm tying together the $72 million budget of the master facilities plan and any extra stuff that goes over here, you know, that's capital funds, that's district capital funds, the board oversees that. You know, right or wrong, it's on that assumption, and obviously it didn't work too well in terms of communicating to this group and to members of the community what they want to know.''

Van Gronigen said, "My point was that — and it really was the charge of this group was to oversee the master facilities plan. Our assumption was that that plan was going to cost us $72.4 million to do.''

Charles said, "And I think we've got a much clearer understanding of what this group expects. I would feel very comfortable if the recommendation that came from this group was to develop a budget for the seven cents money, recommend that be done and presented to the board or something of that nature.''

Levine later said, "To drive us toward maybe a recommendation from the board I would like to see, I want to bring us back to something that we discussed very early on as a committee, one of the things that we really wanted as a goal and that was to make sure there would be enough money left for the very end of this project, (the) early childhood center. And I know that I was one of several people that each meeting we'd spend a lot of time looking at the contingency to make sure that what was in the budget, this master contingency line item, the $3.4 (million), almost $3.5 million, plus all the site contingencies, would last for the end. That was part of our responsibility as an Over-sight Committee to make that sure we're staying within the discipline of the budget, but to now hear that well, it wasn't just that $3.5 million, plus the site contingencies, but the $13.6 (million) additional, wow.

"I read the information that you give us saying, well, 83 percent of the work's been contracted, 67 percent of the work's been completed, 56 percent of the contingency's been spent, I walk away with a very comfortable feeling. I haven't worked the numbers this way, but I feel that if I did and included this entire $13.6 (million), almost $13.7 (million) as part of the contingency, I'd be very worried then about if that trend were to continue through the end of the project. How much do we need if we were to project out at the rate of contingency spent so far through the end of the project? How much more money will we need to complete it to get all the way through the early childhood center and do everything that we intend to do?

Levine continued, "That's why I come back to I need to know what the budget is, what number am I overseeing? So I can look to see, well, how quickly are we chewing through that contingency? What types of tough decisions do we make to stay within that budget? Find out that there's really $14 million out there that we've spent in contingency ...''

Charles said, "Planning to spend.''

Levine said, "Planing to spend, thank you — $5 million that we've nearly spent that I haven't been exposed to. The only way that I can manage to impose that discipline is if you give me a sheet of paper that shows me ... my bottom line. I need to know the bottom-line contingencies so I can manage that to ensure that we run off everything that we as a group said we would ...

"I'd like to get a recommendation from the board of how much they think that we should limit our expenditures to,'' he said, adding that he'd like to see the $13.7 million in capital expenditures "rolled into the projected cost for the project.''

Based on that, he requested the contingency numbers be reworked to determine what's been spent to date and what remains.

Van Gronigen later said, "What I've heard, however, in a couple of different ways, is that we need to have a complete accounting for all of the monies that are being spent that are related to these building projects. True? Everybody in on that?''

No committee member objected.

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