AISD’s Big Balancing Act
The district is considering bringing a $1 billion bond to voters in November. That’s a lot of money. What would it do? And can the package keep everybody happy?
By Richard Whittaker, Fri., June 23, 2017
As one of Austin's biggest property owners, the Austin Independent School District has a lot of real estate to worry about and a lot of buildings that need repairs or replacement. Now it's on the cusp of asking voters to approve the biggest bond issue ever – one that still will not do everything that's needed for the school district. As AISD Board President Kendall Pace told her fellow trustees on Monday, the district is "squishing $4 billion in need into a $999 million no-tax-increase bond."
What's actually on the table is a $1 billion bond, step one in implementing the recently revised facility master plan, and its recommendations as prioritized by the administration and the Facilities and Bond Planning Advisory Committee – selected on a "worst-er first-er" basis, as Superintendent Paul Cruz put it during the June 19 board meeting. If approved by the board at its June 26 meeting, then passed by voters on Nov. 7, AISD will see districtwide improvements, plus specific upgrades and new construction at 15 campuses (see below).
The package contains arguably the most significant single change in East Austin education since former Superintendent Irby B. Carruth formally ended segregation in AISD schools in 1966 – a multi-part switch that the board and administration hope will both save on construction costs and allow for better building utilization:
• Eastside Memorial at the Johnston Campus would move to the former Alternative Learning Center, historically known as Old Anderson, the district's first African-American high school. This puts it within walking distance of Austin Community College and Huston-Tillotson University, opening up more early college opportunities.
• The Liberal Arts and Science Academy moves from the top floor of LBJ High, to the Johnston campus vacated by Eastside, keeping the academy in East Austin. This replaces the earlier, more expensive proposal to build a new LASA campus.
• LBJ gets its top floor back, allowing in theory for greater enrollment, and adds a medical magnet program.
The proposal has caused ructions since being publicly announced last week. While those familiar with its details have been broadly positive in their response, their numbers are few. The district has scurried to address a series of public meetings in the affected communities to explain what the plan would be before making a final decision on whether to add it to the November ballot. Ken Zarifis, president of Education Austin, AISD's employee union, is among those advocating in support of the proposal, but he also has great concerns about the way it blindsided stakeholders. "When you do it three weeks before the bond is voted on, you can't be assured of community involvement and voice," he said.
According to Pace, the plan's components had been options for a while, but until recently seemed implausible. It was only at a meeting earlier this month, between trustees Cindy Anderson, Jayme Mathias, and Ted Gordon, representatives of the LASA, Eastside, and Old Anderson communities, and Cruz, that the idea sparked. Cruz kept it off the draft bond until as recently as the June 13 work session but, Pace said, "there was so much positive feedback" that the board "demanded that it be included and we not wait three years."
When the administration originally posted the board's June 19 agenda, they hoped that trustees would come in, approve the call, and go home for the summer. But that plan got superseded before the Pledge of Allegiance had been taken, and the scheduled 15-minute discussion quickly turned into a multi-hour debate, with the final vote postponed until June 26 – not least to allow for more Eastside public outreach.
If trustees do approve the call next week, it would still pale in comparison to the largest bond election in Texas school history. Cypress-Fairbanks ISD voters approved $1.2 billion in bonds in 2014, and even that falls short of the $1.89 billion approved by Houston voters two years before that.
A No-Tax-Rate-Increase Bond
For over two decades, AISD had historically been able to count on popular support for bonds. But the days of voters – even in pro-public education Travis County – just passing school bonds on the nod are seemingly over. In 2013, the last time AISD went for a bond, voters approved only two of the four measures, rejecting even vital overcrowding relief. More recently, just to our north in April, Round Rock ISD saw all four parts of a $572 million package fail. Pace called that "devastating," but said AISD is "looking at a no-tax-increase bond, which is different to what happened there."
That fact – that the district is aiming for a bond that doesn't increase the property tax rate – will be key to this debate.
When AISD residents get their school property tax bill, it's charged at $1.192 per $100 of property valuation. That breaks into two parts. First, there's maintenance and operations, or M&O, set at $1.079. This covers day-to-day costs like salaries and office supplies. Then, there's the debt service tax rate, known as interest and sinking, or I&S. Currently set at $0.113, I&S pays off bonds for capital expenses like schools and buses. The big advantage there for Texas school districts is that I&S dollars, unlike M&O, are not subject to the state's notorious and budget-busting recapture system. So, while over a third of all the M&O cash that AISD raises this year under the poorly named "Robin Hood" school finance plan goes straight out the window, every cent of I&S raised (minus the interest) goes into construction and purchasing.
The coda for taxpayers is that a static tax rate does not mean a static tax bill, as property valuations continue to rise in Austin. However, residents clearly get a bigger bang for their buck from non-recapture I&S than from M&O subject to recapture. So, the board walked into its Monday night meeting with a very careful balancing act to pull off.
• The FMP lists $4 billion in projects, and there are strong cases to prioritize each and every one.
• Voters are not as reliably pro-bond as they used to be. In fact, Travis County voters rejected the Round Rock bonds by a more significant margin than did Williamson County voters.
• Calculations by Chief Financial Officer Nicole Conley Johnson show that if the board can keep the bond under $1 billion, or perhaps as much as $1.05 billion, the I&S tax rate stays the same.
From a symbolic viewpoint, the tax rate freeze is arguably more important than the massive $1 billion figure. Pace said, "To the average voter, it doesn't matter whether it's $850 million or 900 or 950: It's a billion-dollar bond." However, recent polling by the district shows that over 70% of respondents would back a no-tax-rate-raise bond package, with support plummeting to only 15% if it came with a tax rate raise. Translation: A billion dollars means no tax rate raise, which means a better chance of passage.
The "Eastside Switcheroo"
That's where the wheels fell off during Monday night's board meeting. The bulk of the administration's recommendations faced no debate and no discussion, because they had established need. The tension arose with what fell off the initial FABPAC $1.4 billion proposal, most especially additional overcrowding relief at the Blazier and Cowan elementary schools, repairs at Martin Middle, and the long-debated middle school on land set aside for a school in the Mueller development.
Blazier and Martin seemed like impossible additions. However, the Mueller site became the pivotal component. During citizens communication, many representatives of the Mueller community and the broader Northeast population called for its construction, with the not-so-subtle implication that the Anderson/Eastside/LASA/LBJ switch would be politically toxic without it. In part, that is because the middle schools serving the area – Bertha Sadler Means Young Women's Leadership Academy and Gus Garcia Young Men's Leadership Academy – are both single-sex schools, which many parents will not use. Both are also chronically underenrolled: Means, with a capacity of 882 students, has only 400 enrolled, while Garcia holds 425 in a building designed for 1,215. On Monday, speaker after speaker demanded a co-ed campus, one further integrating the broader community that could head off aggressive recruitment campaigns by charter schools.
By discussion's end, the proposed Mueller school, which for years was painted as a "white flight" campus for the development, had become the potential savior of public education in the area. Yet the $61 million needed to add it to the bond package would throw the total over that magic $1 billion, no-tax-rate-increase line in the sand upon which the board had already settled.
This is where the increasingly toxic but previously somewhat contained relationships on the board spilled over into the debate. Gordon railed against what he called the "Eastside switcheroo," saying he's "played Don Quixote here with the whole LASA situation for the last two months, and to a lesser extent the Northeast middle school, tilting at windmills when it was clear the game was lost." After causing open ire on the dais (and in the audience) by saying the Old Anderson Alumni Association had been "manipulated" by the administration into supporting the campus swap, Gordon then proposed putting Mueller, Blazier, Cowan, and Martin on the ballot, blowing through the $1 billion cap by over $100 million. His proposal was rejected, and after a series of increasingly tense exchanges with fellow trustees, he at least made conciliatory signs that he would back the campus switches if they funded the Mueller campus.
After a few more unsuccessful attempts at adding back in various other elements, and perhaps cutting back elsewhere, the board was back with the same problem. Pace had previously described the bond as being akin to a glass jar, with each of the proposed projects serving as stones: The board can only fit so many in without breaking the glass or becoming unable to close the lid. Using that analogy, Mathias wondered if Mueller was the last pebble they could possibly fit in. At the behest of Ann Teich, the board instructed staff to mull over options with both the city and Mueller developer Catellus, and also see if there is any available cash or existing bond capacity to make up the $50 million or so that could take the package beyond the magic $1 billion mark. The board tentatively approved the list, with the potential for adding Mueller, 8-1, with Gordon as the lone holdout. They'll reconvene on June 26 to vote on the final list, and the final call.
A 25-Year Plan
Now trustees face another balancing act. They need to find the money for the Mueller middle school, or risk having no integrated Northeast middle school, and losing support for the Anderson/Eastside/LASA/LBJ swap. They need to avoid any delay that would see a charter taking the Mueller property. And they need to find funding without breaking the $1 billion glass ceiling or causing political ire by defunding another project.
So far, major voting blocs and interest groups are keeping their powder dry. The clear message from Monday night's discussion was that if the board can somehow squeeze Mueller in there, support from groups like the historically African-American East Austin alumni associations – and, importantly, Gordon – will be forthcoming.
As always, there's the Greater Austin Chamber of Commerce, to which the board has always looked nervously when it comes to bonds and tax rate increases. The Chamber's staying mum for now. Drew Scheberle, its senior vice president of policy, advocacy, mobility, and talent, said, "When they have a final bond, then we'll be able to take this to our board for deliberation and guidance." Until then, he said, "Tonight showed us that the bond isn't done yet, so we would be ahead of ourselves to comment."
Whatever the board does next week will not prove the end of the story. Trustees still need to sell the bond to voters for November, and then start considering the follow-up bond for the next decade. There also remains the possibility that the board may look at attendance zone realignments, and there is the constant shadow that the district may close and sell off some of the more underenrolled campuses – both massively disruptive and politically contentious possibilities. So, this bond could well be the first step in the long-term redefinition of AISD as a modern urban school district. As Superintendent Cruz reminded and warned the board on Monday: "This is not a one-year facility master plan. This is not a five-year plan. This is a 25-year plan."
What's in the Bond Package?
If approved by AISD trustees at their June 26 meeting, district administrators will present a huge shopping list of essential upgrades, replacements, and new construction projects to voters on Nov. 7. Here's what's on the list at the moment, though it may likely change by next week. All numbers in millions of dollars.
183.4 - Critical facility deficiencies
55.5 - Computer lab and network improvements
30.0 - Bond carry costs, including legal fees
25.0 - LBJ Vertical Team Modernization Project
25.0 - Eastside Vertical Team Modernization Project
21.4 - Transportation: 220 buses
19.0 - Fire alarms, security cameras and systems
10.8 - McCallum High and Lamar MS dance and theatre additions
7.5 - Police equipment: radio, IT, and records upgrades
6.0 - House Park upgrades
5.0 - Furniture improvements
2.2 - Stage rigging repairs
1.5 - Districtwide campus and co-curriculum master planning
60.0 - Doss and Hill modernization
50.0 - Blazier relief and expansion*+
36.2 - New Southwest elementary*+
35.8 - Brentwood modernization+
35.2 - Casis*+
33.3 - Menchaca*+
32.5 - Govalle*+
30.8 - T.A. Brown*+
4.6 - Cowan upgrades
Schools of Choice
70.0 - Ann Richards Young Women's Academy
40.0 - Rosedale Special Needs School*+
61.0 - New Mueller MS* (pending further board approval)
23.7 - Murchison renovations
1.5 - Covington art, dance, and music renovations
88.0 - Bowie expansion
80.0 - Eastside High at Old Anderson*
23.5 - Austin High renovations
22.0 - LBJ High medical program build-out (phase 1)
8.1 - Anderson High upgrades
4.0 - LASA at Eastside
2.4 - Reagan career launch build-out
1,074 - Total projects without Mueller MS
40 - Estimated cash from property sales
44 - Leftover contingency funds from previous bonds
990 - Total bond proposal without Mueller
* signifies a new building
+ denotes fast-tracked construction, starting June 2018
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