SBISD Back to School -- Bond Program Update

When Spring Branch voters approved a $597.1 million bond program in November 2007, few could have predicted the good fortune about to befall the district. The national recession that caught hold in 2008 and 2009 was a stroke of luck for Spring Branch ISD. Lower construction costs met up with low interest rates on bond sales and by the spring of 2010, with a contingency fund of more than $50 million, trustees added a 13th school, Rummel Creek Elementary, to the list of schools to be rebuilt.
The district accelerated the building program that same spring, breaking ground on five elementary schools in May 2010 to take advantage of the lower costs.

Along the way, the district also upgraded its bus fleet, its technology, made improvements to mechanical and other systems at each district facility, and made drainage improvements at a number of campuses and facilities. “We’ve been very fortunate in this program,” Karen Wilson, associate superintendent for finance, told the Bond Oversight Committee at its August meeting.

The entrance and media center at the new Valley Oaks Elementary School get exterior touches.

Fast forward to the 2014-15 school year, and Spring Branch ISD has only a handful of projects active under the 2007 bond program. A rebuilt Valley Oaks Elementary is nearing completion and will open in January 2015, while Rummel Creek Elementary begins the school year at the South Transition Campus while its new building is constructed.

Ground will break next spring on new Cornerstone Academy and Academy of Choice buildings, on the site of the former Spring Branch High School. The work at the Spring Branch Education Center site on Westview will be the last major project of the 2007 bond program. About $16 million was budgeted for maintenance work at the facility, but the district found another $12 or so million for the $28 million to upgrade the facility.

Masons finish a wall near the Pech Road entrance to the new Valley Oaks Elementary School.

Vines Science Center will get a new roof as well as HVAC upgrades and a fresh coat of paint. Tully Stadium will get a new scoreboard this fall, rounding out the work done at the district’s main athletic facility. Previous work under the 2007 bond program included paving the parking lot, replacing the border fence, revamping the entry facing Dairy Ashford and redoing the press boxes. With about $563 million sold of the $597 million authorized, the district has about $34 million in bonds left to sell, said Wilson.

The bonds have earned $7.4 million in interest, and along with insurance settlements extend the total funds available in the 2007 bond program to about $608 million. All the bonds have been sold at interest rates of less than 5 percent, using a combination of tax-exempt, Build America Bonds (which are taxable), and variable rate, Wilson said.

The gym and a single classroom wing remain of the former Rummel Creek Elementary School.

The original assumption for the bond program was a 5 percent interest rate, said Terrell Palmer of First Southwest, the district’s bond advisor, earlier this year. “But there was not one issue over 5 percent,” Palmer said. The first issue was at 4.9 percent, he said, and the rest were below 4 percent. During the most recent issue, the district sold some bonds at a variable rate of 1.09 percent. Palmer said at that time the district has a future bond capacity of more than $350 million at the current debt service tax rate of $.3045 “If interest rates stay low and assessed value stays high, that’s a good combination for Spring Branch,” he said. With the program winding down, Bond Oversight Committee members at the August meeting praised the district’s work, particularly the decision to accelerate the program.

Crews work inside what will be the media center at the New Valley Oaks Elementary School.

While the 2007 bond program was always a 10-year program, and the new Cornerstone Academy and Academy of Choice should come online in December 2016, the district saved significant money by taking advantage of the economic downturn and its effect on construction costs and interest rates.

Committee member Gregory Krieder was particularly impressed with the acceleration and that “Spring Branch (ISD) had the heart to do it,” and said that he uses the program as an example in other work he does. The committee also praised the data-driven decisions that guided the program, the district’s adherence to the work that voters approved and the program’s management.

Elementary schools rebuilt as part of the 2007 bond program are Westwood, Hollibrook, Ridgecrest, Shadow Oaks, Wilchester, Edgewood, Spring Branch, Meadow Wood, Pine Shadows, Housman, Frostwood, Valley Oaks and Rummel Creek.

-- This story was written by Spring Branch ISD Senior Writer Rusty Graham