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HISD bond concerns

It’s always something.

Terry Grier

Terry Grier

A key Houston ISD school board member called Sunday for audits of the district’s 2012 bond program amid estimates of a $211 million shortfall and concerns about breaking promises to voters.

Juliet Stipeche, chair of HISD’s audit committee, submitted her request for internal and external audits after a Davis High School teacher expressed outrage on Facebook that the district’s $1.9 billion bond program may be so short on funds that her campus will only be renovated, rather than rebuilt as promised. Meanwhile, the teacher wrote, rats fall from a hole in her classroom ceiling, the restrooms smell like a prison and fires have started, apparently because of shoddy wiring.

Board president Rhonda Skillern-Jones responded on Facebook that she would ask Superintendent Terry Grier’s administration to “halt the (bond) work until we can develop a plan to deliver exactly what we promised and what the taxpayers voted for.”

Grier replied in an email to trustees that he was open to an audit, but he said the financial problems boil down to unusually high inflation in the construction market, a concern he expressed months ago. He also revealed Sunday that his staff was working with financial advisers to try to add another $200 million into the bond program to cover most of the projected shortfall.

The district’s 2012 bond referendum – with the largest price tag in Texas school history – called for rebuilding and renovating 40 schools, renovating middle school restrooms and upgrading technology, athletic facilities and security.

“My recommendation, if our plan to add dollars to the bond does not work out, is to prioritize the projects and build what we promised,” Grier wrote board members Sunday. “When the money runs out, we stop construction – even if some projects are delayed until a future bond.”

There’s a discussion in the story about higher-than-expected inflation of construction costs, which is not too surprising given the (up till recently) red hot real estate market in town. There’s also some finger-pointing about who knew what when and who informed whom about it, which I’m just going to glide past. The main thing is keeping promises to the schools and their communities that were made in the referendum. I am confident it can be done, and we need to make sure that it does get done.

UPDATE: And then there’s this:

Houston ISD overpaid contractors and may have violated state law by exceeding construction contract limits without required school board approval, according to a newly released audit.

The auditors found that the district appeared to skirt a $500,000 contracting cap multiple times by improperly submitting separate work orders tied to the same project. The auditors also noted that the district failed to catch inaccurate and inappropriate charges and at times asked the school board to sign off on work after it had been done.

“State law and district policies were at the very least ignored, but more likely knowingly circumvented,” HISD trustee Anna Eastman, a member of the board’s audit committee, said Wednesday. “I’m not satisfied with the administrative response of ignorance and, ‘We’ll do it differently next time.’ Someone needs to be held accountable for this.”

In a written response, HISD’s construction and facilities department said the district would seek repayments from the contractors that appear to have been overpaid. One example cited shows the district is due $16,179, but auditors did not calculate the total amount due for other questionable invoices.

The construction department said that the approval process was skewed because the district was trying to complete projects over the summer. In one 2014 case, the department said, it attempted to comply with requirements “in a manner consistent with the time constraints of the project.”

Clearly, there’s more work to be done here.

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11 Comments

  1. Ross says:

    The comment from the construction department is a pile of self serving hogwash. There are ways to get approvals quickly, and if they can’t be expedited, then you just make do with the timeline that allows the rules to be followed.

    As for submitting two work orders to keep the totals below approval levels, that’s an instant firing offense at many employers.

    I’m reminded of a line I saw a while back “If you can’t be part of the solution, you’ll just have to be a horrible example”

  2. Paul Kubosh says:

    We should give them another billion dollars. I mean its for the children right? Its a no brainer. How dare we be critical of H.I.S.D. do we now add children to the long list of people we hate?

    That is how the bond campaign went.

  3. Ross says:

    If the overrun is indeed due to construction cost inflation, then we ought to come up with the extra money to do the work (we’ve been pricing a remodel, and I am shocked at how much it costs to get building work done). If the audit finds issues with how the HISD contracting office operates, then let’s make some examples of people who work there. However, you can’t just let the schools continue to deteriorate. I admit that I have a bias here, since my kid attends an HISD school. And, HISD taxes are the lowest of any district in Harris County.

  4. Steven Houston says:

    “Juliet Stipeche, chair of HISD’s audit committee, submitted her request for internal and external audits after a Davis High School teacher expressed outrage on Facebook that the district’s $1.9 billion bond program may be so short on funds that her campus will only be renovated, rather than rebuilt as promised. Meanwhile, the teacher wrote, rats fall from a hole in her classroom ceiling, the restrooms smell like a prison and fires have started, apparently because of shoddy wiring.”

    Perhaps that campus should have been one of the first to be replaced rather than wait until it is clear the funds won’t be available? Otherwise, if they are asking for another $211 MILLION, I suggest we wait until they clean up the existing mess and find enough guilty parties to throw in prison before allowing another bond issue in front of voters, making it clear that cost overruns are built into all such projects so either someone got too greedy or too many people got lazy since, as Paul puts it, “it’s for the children” and anyone daring to suggest fiscal discipline be forced to walk the plank.

  5. Manuel Barrera says:

    I did an open records request, about two years ago, wanting to find out how they determine who were going to be the project managers. It is is a secret how the selection was made. HISD and HCC have resorted to best value, the City recently started doing the same thing. Low bids are no longer the preferred way of selecting companies to do the work. I find it amazing that some HISD Trustees are just now discovering the problems, where were they for the last two years?

    How is best value working? Behind the best value you have the Greater Houston Partnership, the same people who want to get control of the pensions.

    They control the city politicians they control the pensions.

  6. Ross says:

    Manuel, many companies no longer go with the low bidder, since many low bidders are incapable of finishing a project for the quoted price. I don’t have a problem with using the best value vendor, as long as they are qualified and can post a bond to cover their work.

    @Steven, keep in mind that he bond amount was based on an estimate of costs, not detailed firm bids. We saved up money for a home addition based on $150 per sq ft. Imagine our shock when all of the quotes were mote like$220, and that was after we had surveyed contractors about 18 months ago on the general costs of construction. We cna be fiscally prudent by not having the addition built. Schools don’t always have that choice, especially in HISD where many of the buildings are old, and weren’t maintained well in the past. If HISD employees in procurement are screwing up the bidding process, let’s get rid of them.

  7. Manuel Barrera says:

    Ross, they are bonded, you know not what you talk about. You do know that when they are bonded if they fail to perform the work will get done, you do know that.

    JOC program was developed by the military if memory serves me correct, special situations, it has not worked well here in Houston.

    https://en.wikipedia.org/wiki/Job_order_contracting

    For smaller projects, JOC can work very well that is not what is happening here.
    http://www.jocinfo.com/whyusejoc.aspx

    Let me repeat, Ross you know not what you are talking about, as to what is occurring. Don’t let your hate for me cloud your mind.

  8. Manuel Barrera says:

    In fact you prove my point with what you reference to SH. A bid would be firm, best value is changing, at times when the cost of materials is going down, joc may save you money, but not when costs are going up. When one is spending billions of dollars normally experts are hired that can usually determine where construction costs are heading.

    HISD is the only entity thus far that has claimed that costs are going way up.

    Ross as to your costs, I seriously doubt that labor has gone up by that much, so it should be related to the materials. But since getting information from HISD is impossible when it comes to contracts, it is not possible to determine where the problems might lie.

    Here is an article about construction costs, article is from 2014.

    http://www.houstonchronicle.com/news/houston-texas/houston/article/Houston-area-school-districts-boast-low-5589695.php

  9. Steven Houston says:

    Ross, the voters approved X amount of money, not a blank check. Allowances are made for increased expenses but at some point, whatever the wish list was for projects, if costs went up you are going to have to skip some. Given that 2012 bond was one of the largest in history to begin with, perhaps less sweeping goals or better coordination with companies wanting the work would have helped. As oil layoffs hit, it is possible some costs will go down in construction too, the desire to do everything at once understandable but foolish since it puts increased demand on limited resources (the laws of supply and demand apply).

  10. Ross says:

    @Steven, in that case, the politically prudent thing to do is cancel the renovations at Lamar and Bellaire, and take care of the buildings in the poor parts of town first. Otherwise, the district is going to hear an unending litany of complaints about shortchanging minority areas in favor of the rich white folks, complaints that have some merit given the historical lack of funding and improvements to minority area schools.

  11. Steven Houston says:

    Ross, you ARE aware that no matter how much you spend in “poor” areas, there will be an unending amount of complaints regarding disparate spending, yes? I’m not saying there isn’t a historical basis for the complaints but ultimately, few “rich white folks” send their kids to public schools from what I see.