Dive Brief:
- Fort Bend County, Texas, school officials are considering a $1.75 billion bond package, $1.47 billion of which would go toward capital construction projects for the Houston-area school system.
- The construction portion of the independent school district's proposed bond program includes $511 million for new construction, $65 million for building modernizations and rebuilding, $14.4 million for classroom additions, $14 million for a building with an indoor pool, $14.3 million for a new school bus terminal and $855 million to make necessary repairs and replacements an address building lifecycle needs. The new construction budget, according to an analysis by the Houston Chronicle, includes up to $212 million for four new elementary schools, $97 million for a new middle school and $178 million for a new high school. Other non-construction bond items include safety, security and technology purchases and upgrades.
- Houston-based PBK Architects helped the school district develop the six-year plan of construction projects, but the school board could tweak the list before it decides whether to approve the initiative. If the board does authorize the proposed improvements, voters will get a chance to weigh in on the bond measure at the ballot box in November.
Dive Insight:
According to the Texas Association of School Boards, boards typically sell capital construction bonds as municipal bonds at the lowest interest rate offered, usually to a big institutional investor. The rate is dependent on the school district's bond rating. The better the district's rating, the lower the interest rate will be. Over time, the school board pays the principal and interest back with a debt service tax. The time for the payout is limited to 40 years.
School bond programs not only benefit students, who get to take advantage of new facilities, but they also inject money into the local economy when construction companies hire subcontractors and employees, as well as purchase materials. Workers also spend the money they earn in the community and pay taxes.
According to the American Society of Civil Engineers' latest infrastructure report card, however, schools aren't spending enough on school maintenance and construction. School boards are spending an average of about $50 billion a year on school facilities, but the society said they should be spending almost $90 billion a year to ensure modern, healthy facilities for students. Also needed is $58 billion for maintenance, $77 billion a year for upgrades and to reduce the backlog of deferred maintenance, and $10 billion annually for new construction. Finding this money is up to state and local governments because, according to the association, the federal government contributes little to nothing to these needs.
