Tuesday, March 24, 2009

Eagle River's Jose Vicente Wants Anchorage To Vote No On The School Bonds, Propositions 1 And 2, Because Of Overinflated Costs

Jose Vicente is an Eagle River resident who is the general manager of the company that’s developing the Eagle Pointe subdivision. He has a background in civil engineering, and as such, possesses authoritative knowledge about land acquisition and construction costs.

In the Alaska Star, Vicente has published an opinion column in which he criticizes certain projects contained within both Proposition 1 and Proposition 2, which are to be voted on by all Anchorage residents on April 7th, 2009. He believes the requested amounts of tax dollars for the questioned projects are excessive. He also believes the Anchorage School District has a persistent track record of raising funds in excess of the actual cost of the projects, and then spending those excess funds on items not specifically authorized by the voters.

Proposition 1, a proposal to issue $69,880,000 of General Obligation Bonds of the Municipality of Anchorage to pay the costs of capital improvements to Service High School, Eagle River High School and Girdwood K-8 School, and whose passage prospects are sweetened by the possibility of debt reimbursement, includes a proposal to spend $2,500,000 for installation of a water main and a sanitary sewer along Yosemite Drive in Eagle River. According to the proposal, the money is to be spent on the design and construction of 800 feet of water lines and 2,150 feet of sanitary sewer lines. If approved, this amount would be added to the $1.1 million the district already has in its possession for the project. The school district estimates the project total cost to be $3.5 million. But Vicente contends that the total cost of design and construction for this project is actually only $500,000.

Vicente suggests that the costs estimate for the project was developed by Anchorage Water and Wastewater Utility, and reflects a municipal practice that has been in place in the last few years to inflate the true cost of projects presented to Anchorage voters for approval. The voters are never told that estimated costs are way in excess of a project’s true cost, and the voters are never told where excess funds will be spent. In addition, the original proposition approved by the voters for construction of the Eagle River Area High School six years ago included the funds needed for construction of all the required improvements, including the water main and the sanitary sewer along Yosemite Drive. Vicente contends that ASD spent those funds on other projects instead. Consequently, Vicente recommends rejection of Proposition 1.

Proposition 2, a proposal borrow up to $27,480,000 through the issuance of general obligation bonds to pay for educational capital improvements for Districtwide major building systems renewals, replacements, renovations and acquisitions within Anchorage, and whose passage prospects are also sweetened by the possibility of debt reimbursement for most of it, includes a proposal to spend $6,500,000 to purchase a site for a future elementary school site in the Chugiak-Eagle River area. Unfortunately, site acquisition is NOT eligible for debt reimbursement.

But Vicente contends that the true cost of a 15-acre site for an elementary school is considerably less than $6.5 million, suggesting that the true cost of the site desired by ASD ranges between $1.2 million and $1.5 million. Because the cost estimate advanced by the school district for the purchase of a school site is extremely inflated, and voters have neither been made aware of that fact nor can know where the excess funds will be used, he recommends voters reject Proposition 2 also.

The ASD Bond Page explains the school bonds and provides their justification, but it doesn't explain how they arrived at the dollar figures for the questioned projects. ASD Memorandum 145, dated January 12th 2009, offers more detail and even contains records of discussion by the Capital Resources Advisory Committee (CRAC), but ASD doesn't explain how they arrived at the numbers for the questioned projects.

Consequently, the Anchorage School District needs to explain how they arrived at their dollar figures. Jose Vicente's input is more expert than that of the average citizen; he has inside knowledge and understanding of land and construction costs, and even if his proposed numbers are too low, ASD still has an obligation to reconcile the extremes.

The question for voters: Does the possibility that one part of a school bond is "bad" make the entire bond bad? Should we reject the bonds on the basis of Jose Vicente's objections alone, knowing that the next time these projects come up, they may cost more because of inflation as well as the possible end of debt reimbursement?

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