An internal investigation released in late April found the shortfall was primarily caused by administration leaders not adjusting major project costs for inflation when the $1.26 billion bond proposal was pushed from the November 2022 election to May 2023.
Staff and trustees might have to make some “hard choices” in the coming months to bridge the remaining $73.8 million gap, trustee David Hamilton said at the May 13 board meeting, noting that progress on reducing the bond shortfall has slowed.
“I think we need to go through a process of figuring out whether some of the projects need to be cut or [if] we want to go back to the community for more money,” Hamilton said.The overview
Among the eight major projects from the May 2023 bond, FBISD staff members have reduced the shortfall completely on the Briargate and Mission Bend elementary rebuilds, district officials said at a May 13 meeting.
Both projects are still over their initial budgeted amounts by a combined $9.2 million, but the cost overage will be covered by bond contingency funds, according to agenda documents. Both are continuing on schedule, with plans to open in August 2025, Director of Design and Construction Daniel Bankhead said in an interview.District officials will now work to decrease the bond overrun another $55.6 million across the six major projects and $27.4 million for renovations, according to the agenda.
As staff members work to reduce the shortfall and keep projects on schedule, Bankhead said he doesn’t anticipate construction delays. According to district officials, the construction timelines for the major projects are as follows:
- February 2024-June 2025: Mission Bend Elementary School rebuild
- March 2024-June 2025: Briargate Elementary School rebuild
- July 2024-June 2025: Ferndell Henry Elementary School renovation and expansion
- August 2024-June 2026: Middle School No. 16
- August 2024-April 2028: Clements High School rebuild
- December 2024-February 2026: Transportation facility
- May 2025-November 2026: Elementary School No. 55
- August 2025-October 2026: Aquatic practice facility
“We haven’t changed the program, the things that the school needs to perform,” he said.
The district's cost-saving strategies so far have included:
- Widening building material specifications
- Relocating detention areas
- Collaborating with contractors on prices
- Changing bidding dates
The bond overrun was allegedly caused by administration leaders making a “conscious decision” to not increase cost estimates for anticipated compounding inflation on projects between the 2022 and 2023 bond proposals, per an investigation from contractor Rogers, Morris and Grover.
PBK Architects helped prepare the bond package in late 2021 for FBISD’s November 2022 election, but officials delayed it until the following May. Bond planners typically recommend project estimates be prepared between six to nine months before forming the bond's budget, district officials said in an email.
“The investigation showed that the numbers ... used were years old, so that’s part of the reason we didn’t have problems in the past [bonds] because they used accurate numbers in the planning process,” said Chief Operations Officer Damian Viltz, who took on the position in June 2023.
Two former employees claimed they brought inflationary concerns to former Superintendent Christie Whitbeck and former Deputy Superintendent Steve Bassett “on multiple occasions” between the bond proposals, according to the investigative report.
According to the report, reluctance from administration leaders—indicating Whitbeck and Bassett—to adjust the bond proposal was due to:
- Optimism that FBISD staff could offset rising project costs by finding savings opportunities and using contingencies
- Fear the public would criticize and accuse district officials of “inflated” budgets
However, district administrative staff, the board of trustees and the district’s Bond Oversight Committee, composed of community members, all had access to the estimated project cost changes.
Trustee Rick Garcia said trustees “asked a lot of questions,” but he said he ultimately relied on district staff and the BOC to provide correct project estimates. The volunteer-based committee is tasked with reviewing “capital projects, bond expenditures, project schedules and the timeliness of bond projects,” per the district website.
“We need to be able to adjust our policies to align with industry best practices and implement a more thorough system and checks and balances," Garcia said. "There’s blame to go around, [but] obviously, the buck stops at the superintendent.”
BOC Chair Rashid Khokhar, who has been on the committee since it launched in 2014, also said he remembers the committee’s 33 members voicing inflation concerns to district staff. However, Khokhar said the committee doesn't have any executive power, as it serves as an advisory group for district staff.
“I’m absolutely positive the question was asked about inflation, accounting for it, and it was said, ‘Yes, yes, we’re accounting for it,’” said Khokhar, who became chair in 2022.
Zooming out
Between the 2021 project estimates and 2023 bond, the Houston area saw impacts of the COVID-19 pandemic, supply chain challenges and rising tariffs, Viltz said.
“We’re seeing a lot of construction in this area,” he said. “We’re still competing for the same contractors and those contractors are competing for the same resources, so that stuff wasn’t accounted for in 2021 when they prepared those numbers.”
Nationwide data from the U.S. Bureau of Labor Statistics shows the cost to build a new school has increased on average 32.8% since before the COVID-19 pandemic. This means a $20 million school in 2019 would cost $26.56 million to build in 2023, according to the BLS's Producer Price Index data, which measures average price change over time.Next steps
Gibson Consulting began a bond audit in May and could complete it by early 2025, district officials said.
Meanwhile, Khokhar said he’s asked district staff if the Bond Oversight Committee can meet monthly instead of quarterly as well as have actionable items from meetings separated so committee members can ensure that staff respond to all of their inquiries.
District staff plan to present options to trustees on addressing the remaining shortfall at a June 3 meeting, after press time. This could include deferring projects or finding cost savings in other bond projects, Viltz said.
“The board is trying to maximize what was approved, because $1.26 billion is still a lot of money and we can do a lot of great things ... in Fort Bend ISD for our students, staff and tax holders,” he said.
