The roughly $14 million increase from the $56.8 million shortfall reported at the July board meeting is due to nine additional project cost estimates coming in, Chief Financial Officer Bryan Guinn said.
Director of Design and Construction Daniel Bankhead said he anticipates the shortfall will rise and fall as the remaining 33% of project estimates are finalized.
“We’ve been lucky thus far where we’ve been in a decline position; we’ve been able to reduce that shortfall,” he said. “We’re going to work hard to continue that pattern and continue to have it decrease.”
What you need to know
FBISD has about $17 million available in contingency funds from the 2014, 2018 and 2023 bonds to use toward the overrun if needed, Guinn said. However, the contingency fund will drop to $16.04 million due to spending $998,271 to repair chillers and air conditioning systems if the board approves this at the upcoming Aug. 26 meeting.
Staff is proposing using bond contingency funds for these repairs because FBISD's fund for major maintenance repairs was depleted during the coronavirus pandemic, Guinn said. However, he said he believes the district can re-establish the maintenance repair fund over time.
The backstory
FBISD staff notified trustees in February that projects from the $1.26 billion bond program would cost $163.2 million more to complete. An investigation from Rogers, Morris and Grove showed the shortfall was due to district leaders not adjusting project costs for inflation when the bond proposal was delayed from November 2022 to May 2023.
What they’re saying
Trustees and district staff discussed potential ways to cover the cost increases, including making budget cuts from the general fund, selling or leasing district land, and rebidding projects to check for declining material costs.
Superintendent Marc Smith said staff can come back to the board with a land ownership cost analysis.
Next steps
Cost estimates on the remaining projects could continue coming in through the second quarter of 2025, Bankhead said. So trustees could continue making decisions on how to address all of the shortfall, trustee Rick Garcia said.
Reiterating what he's said at previous meetings, trustee David Hamilton said he believes the district will have to cut projects or propose another bond in the long run.
“We’re in a position where we’re going to have to break 2023 bond promises in one of two ways, if not both ways,” he said. “Based on where we sit today, we’ll either have to remove projects that were promised as part of the 2023 bond program or go back and ask the taxpayers for more money, ... or some combination of those two items.”
