THE CONTINGENCY FUND
MONEY SAVED = MORE SCHOOLS
As passed and planned, the 2007 bond program included the rebuilding of 12 elementary schools and other renovation and refurbishing projects to extend through 2017, with several schools being rebuilt each year. Careful consideration was given to inflation, with a larger allowance for inflation given as the program proceeded.
But while the economic downturn in 2008 and 2009 sent Houston and much of the country into a financial slowdown, Spring Branch benefited in an unexpected way. With construction slowed to almost a halt citywide, the district found itself with multiple bidders for its projects, with bids coming in below estimates. The price of construction materials such as steel and concrete came down as well. Coupled with historic low interest rates, a ‘perfect storm’ of cost savings could be realized.
By early 2010, SBISD had accumulated enough in its contingency fund to add a 13th elementary school to the rebuild list. In May 2010, SBISD held groundbreakings for five elementary schools, which were rebuilt within 18 months. That 13th school – Rummel Creek Elementary – is under construction and expected to open in January 2016.
Enough money has been saved over the life of the 2007 bond program to add yet another project – the rebuilding of the Spring Branch Education Center. By repurposing some $10-12 million to add to the $17 million budgeted for systems upgrades at SBED – the former Spring Branch High School – the districts will be able to build new wings for the Cornerstone Academy and the Academy of Choice. The project is set to break ground in May 2015, with completion anticipated by early 2017.
Bond vs. General Funding
On time, under budget & a healthy locally controlled bond fund
Spring Branch ISD has been able to deliver more schools – on time and under budget – while maintaining a healthy LOCALLY CONTROLLED bond fund.
SBISD basically operates out of two funds: the general fund for ongoing operations; and the bond fund for capital improvements. While most revenue in the GENERAL FUND is generated locally through the Maintenance and Operations tax, a portion of that money is sent to the state in the form of recapture, or Robin Hood. The state reduces its funding as property wealth increases, effectively negating any revenue increase.
The BOND FUND, approved by voters in 2007, is 100 percent locally controlled and 100 percent invested in our local schools. All money raised through bond sales stays in Spring Branch, and how it is spent is decided locally. It’s worth noting that while the district faces funding challenges with its general fund, the bond fund is robust and healthy, with all work promised to voters either accomplished or underway.
Bond funds are used only to fund to support the bond program and its projects, capital improvements such as building, improving or maintaining facilities, and purchasing buses, technology or school sites. Revenue generated by the Interest and Sinking (I&S) tax rate of $.3045 is dedicated to paying debt service on the money borrowed bond sales.
By state law, the two funds – bond and general – are separate pots of money and cannot be co-mingled.
Millions of Spring Branch tax dollars have been sent elsewhere because of Robin Hood and state funding formulas, but 100 percent of bond funds, approved by district voters, remain in SBISD and directly benefit our children.