UPDATED Nov. 3:
The bond steering committee reconvened in early November to learn about the ongoing projects of Bond 2021 and discuss the impact inflation is having on those projects.
“The construction costs we saw in early 2020 when we budgeted for these projects have escalated, and we don’t expect them to come back down any time soon,” Assistant Superintendent of Operations Sanda Hayes said. “For example, the planned budget for the new Lake Highlands Middle school equated to about $351 a square foot in 2021, which was already about $100 higher than the prior year due to inflation. More recently, we just heard of a neighboring district receiving a new school construction quote of closer to $450 a square foot. While these construction costs may decline somewhat, we don’t anticipate them dropping below 2020 levels during our middle school transformation.”
RISD plans to solicit community feedback regarding potential interim bond funding to account for rising costs due to inflation, as well as a potential acceleration of the middle school transformation in the Berkner, Peare and Richardson learning communities. The bond steering committee plans to meet again after community feedback has been received and consider recommendations for the next steps.
UPDATED Oct. 14:
At RISD Board meetings on Sept. 29 and Oct. 13, trustees discussed initial possibilities to address a projected shortfall of Bond 2021 funds driven by unprecedented cost increases in the construction industry. The district realized an approximate 36% construction cost increase over the span of two years from budget development to bidding for the major Bond 2021 construction projects at Pearce HS and Lake Highlands and Forest Meadow middle schools. The recent construction cost increases realized by RISD are consistent with construction costs shared by other school districts and consultants in the Dallas-Fort Worth area over the same time period.
“The skyrocketing price of steel and building materials, coupled with shortages of skilled labor, continue to drive cost increases on all major construction projects,” said RISD Chief Executive Director of Operations James Watson. “This is a national issue, and certainly not unique to RISD.”
The projects, which include construction and renovation to transform Forest Meadow and Lake Highlands junior highs into middle schools, and increased classrooms and space at Pearce High School, have created a projected $77 million shortfall in the Bond 2021 package – about 10% of the entire proposition. In the spring, trustees requested RISD staff study possible solutions, which were presented and discussed as a starting point at this meeting.
At the Oct. 13 meeting, RISD staff detailed the timing of the major project cost increases, and as a reminder, reprised a 2021 presentation of the construction manager at risk process that RISD uses for major projects.
“In these initial stages, everything is on the table,” said Superintendent Branum. “One option is to identify projects and expenditures among those remaining from Bond 2021 to reduce the scope or defer to a future bond. If that happens, it would be the first time in RISD history that the district was unable to complete anticipated bond projects due to construction cost inflation.”
RISD staff shared areas that projects could be deferred or scope reduced, deferring items like roof and HVAC replacements to future bonds. Facilities staff noted that deferring such infrastructure items past useful life presents a higher risk of failure that can result in more costly repairs and impacts on teaching and learning. In addition, deferring needed replacement while costs continue to rise will increase the likelihood that the same replacement needs will cost the district more money in the future.
“It is always our goal and plan to maintain our building’s systems to extend their useful life as long as possible,” said RISD Assistant Supt. of Operations Sandra Hayes. “But with ongoing use, all equipment and infrastructure will eventually fail.”
General renovations for a refreshed environment at three other RISD elementary schools are included in Bond 2021, and were selected during bond planning based on age and condition. RISD staff have stressed that until decisions are made otherwise, the district is entering the planning phase for Bond 2021 projects scheduled for 2023 and 2024, some of which require months of lead time.
If projects are delayed or scope reduced, several trustees expressed a desire to protect the bond funding for those campuses if possible, citing importance to those school communities, teacher and staff retention, and the commitments made during the bond planning process.
Among options discussed on 10.14 is the use of one time district operating funds to offset a portion of the bond fund shortfall. Under Texas law, while bond funds cannot be used for operating costs, operating funds may be used for capital costs. Staff and trustees expressed reservations about using operating funds for bond purposes because it could jeopardize the district’s ability to meet future operating obligations or provide future teacher and staff salary increases to remain competitive.
Another possibility is consideration of placing an interim bond package, outside of the traditional five year bond cycle, before voters to address the shortfall. Speaking of the middle school transformations underway in Lake Highlands to bring sixth graders up from elementary schools, Branum shared that the district has heard consistent feedback from the other three learning communities (Berkner, Pearce and Richardson) requesting RISD to explore ways to accelerate the middle school transformations at RISD’s remaining six junior highs so those communities don’t have to wait until the end of the decade. The Lake Highlands area is expected to shift to a middle school instructional model beginning in August of 2024.
RISD traditionally plans facility and capital expenses based on five-year bond cycles, with the next anticipated bond occurring in 2026.
“Does it make sense to evaluate different scenarios for the next bond?” said Branum. “We will reconvene our citizen’s bond steering committee to study possibilities and help us determine next steps. With construction costs continuing to rise, and the district committed toward a districtwide middle school model, is it wiser fiscally for our voters to consider doing that sooner than 2026?”
District staff presented financial projections surrounding different possible interim bond scenarios. As a starting point, staff modeled interim bond election scenarios in May 2023, coupled with an election in May 2026 at various amounts to demonstrate the projected impact on the tax rate. In addition, staff and trustees initially discussed the logistical variables and overall challenges of operating two different instructional models (middle school and junior high) in the same district over a period of years.
No Board vote or action has been taken. RISD staff will move forward with reconvening the community bond steering committee, and consistent with past planning for potential bonds, evaluate firms to conduct a representative poll to solicit feedback and interest among residents and voters of the RISD community.
View 9.29 presentation and areas of potential cuts
Watch the 9.29 discussion
View 10.13 presentation and projected interim bond scenarios
Watch the 10.13 discussion
Background on Middle School Transformations
Background on Bond 2021