Stealing.... Borrowing Money from Modernization

October 23, 2007 by dave

Unfortunately, this Los Angeles Times story isn't very surprising. The Los Angeles Unified School District is considering robbing the Measure Y Bond funding approved in 2005 for modernization to cover a huge shortfall in their new school construction budget.

Los Angeles school district officials want to close most of a staggering deficit in the school-construction program by using more than $1 billion in bond money that was meant for other purposes. The Los Angeles Board of Education is scheduled to vote on the shift today.

The proposal, expected to pass, would use for new schools money that would have repaired and modernized existing schools, improved Internet access and other technology on campuses, and built and repaired preschool centers. Instead, the funds will backfill the plan to build 145 schools in an effort to provide all students with a neighborhood campus that operates on a traditional two-semester schedule.

The $20-billion construction and modernization program is the nation's largest and frequently touted as a seminal accomplishment. But the effort has run up against spiraling increases in property values and construction costs.

"Our hope here is that this is just a borrowing, if you will, of those funds" and the original programs "will be finished sometime in the future with other funds, whether they be from future bond measures or from other sources," said Edwin Van Ginkel, senior development manager for the Los Angeles Unified School District.

The bond already provided $1.6B for new schools, but they need more and they're just going to take it.

When voters passed Measure Y in 2005, they authorized nearly $4 billion in school bonds. The breakdown included $1.6 billion for new schools, $1.48 billion for existing schools, $325 million for technology and $100 million for early education.

The resolution before the school board would take $790 million from repair of existing schools, $200 million from technology and $60 million from early education. Each cut is greater than half of the bond money allocated.

Despite declining enrollment and billions of dollars, LAUSD still has significant construction and modernization needs that still haven't been met. After years of ignoring the issues, now in the last few years, they're trying to catch up by spending billions of taxpayer dollars. They're already talking about the next bond issue.

Folsom foresees another difficult juncture approaching: "We are going to need to go to the voters at some point in the future -- not that far away -- to ask for more money."

If this resolution passes, it will be an in-the-face move against the will of the voters. It is unfortunate that many government enterprises just plan for cost overruns and know going in that their budgeted amount will never be enough to finish the project. They plan to go back and ask for additional money to cover these overruns. Let's get our agencies to start doing better planning for the project in the beginning and include appropriate contingencies to handle the stuff that comes up as the project is implemented. That way we'll know better what something is going to cost when we approve it.

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