Citizen panel backs HISD bond budget hike

Oversight committee notes audit’s criticism but supports $212M boost

Amid concerns about the management of HISD’s construction bond program, the administration received key support Tuesday for a proposal to increase the budget by up to $212 million.

Several members of the district’s Bond Oversight Committee, a volunteer group, said they back Superintendent Terry Grier’s request for more funding.

They said they hope the school board authorizes the extra debt, despite an internal audit that said the projected budget shortfall in the $1.9 billion bond program stems in part from insufficient cost controls.

Grier and his staff have said the budget problems in the bond program — which includes rebuilding or renovating 40 campuses in the Houston Independent School District — are solely the result of higher prices in the city’s booming construction market.

However, records shared with the oversight committee Tuesday show that the proposed extra funding also would cover expenses due to unforeseen underground conditions, city requirements and other issues regarding parking, and a more significant overhaul of Davis

High School.

Bond staff noted that some of the district’s reserve funds — which typically would cover unforeseen problems — already have been tapped to pay for higher-than-expected construction bids.

For several campuses, the records show, HISD awarded contracts for amounts exceeding the original construction budgets. HISD’s top construction officer, Sundaresh Kamesh, told the oversight committee that the district has borrowed from other line items, such as furniture and technology, to cover those building costs. The extra funding, he said, would make the budgets whole.

Specifically, the district has exceeded the construction budgets for 10 schools, by more than $1 million in most cases, the records show. Milby High had the biggest overrun, at $4.2 million. Chief of staff Jason Spencer noted, however, that the district has not exceeded the overall budget for each of those schools. The overall budget included funding not only for construction but for other costs such as design fees, furniture and technology, plus reserves.

Prices are higher

Kamesh emphasized that other districts also were affected by higher prices. HISD in 2012 budgeted the construction cost for new high schools at $160 per square foot, with inflation included to cover costs topping $190 per

square foot. Bids, however, have come in significantly higher, and district officials project the amount could hit $235 per square foot.

Nicole Ray, spokeswoman for Cypress-Fairbanks ISD, confirmed that her district awarded a contract in August in the range of $230 per square foot. Dallas ISD’s bond proposal includes a price tag of $250 per square foot for high school projects to be bid in 2017, said spokesman André Riley.

Phoebe Tudor, a member of HISD’s oversight committee who chaired the 2012 bond campaign, said she felt “comfortable” with Grier’s $212 million request to allow for the 21st century schools the district

pledged.

“If they’re designing to the least common denominator, that’s not what we really want for our students. They deserve better,” she said.

Others note conditions

Committee member Bob Eury, the president of Central Houston Inc., which represents downtown development, said he also supported the extra funding. He said he believes the busy construction market is driving HISD’s budget problems but said a small portion may be due to other factors noted in the recent audit report.

“I don’t care how good you are at managing, you will have unforeseen conditions,” Eury said. “When those come up, you have to do something.”

Committee members Sonny Flores, a construction executive, and Michael Davis, a real-estate broker, also said in interviews after the group’s quarterly meeting that they supported the funding proposal.

Flores added, however, that he would advocate for slowing down the start of some projects.

“I think deflation’s coming,” he said.

HISD board president Rhonda Skillern-Jones reiterated in an interview Tuesday that she does not plan to put the funding request on a meeting agenda until an external audit is conducted.

District officials are reviewing proposals received this week from two audit firms.

Grier’s first request for more bond funding would have divided it proportionally among all the projects. He later said he agreed with board members who expressed concerns about that blanket approach.

‘In the right direction’

The revised proposal would not award extra money to five schools — most of which are now under construction — and would give the most, $25 million, to Bellaire High School due in part to its delayed timeline.

HISD’s chief auditor, Richard Patton, said he thought the district was “going in the right direction” with the more specific funding request.