Miami-Dade School Board to consider $1.2 billion bond

Miami-Dade schools chief Alberto Carvalho will pitch a $1.2 billion bond to the School Board this week. The measure would need voter approval and could be on the ballot in November.

07/29/2012 5:00 AM

09/28/2012 3:45 PM

Leaky roofs, old air-conditioning units and peeling paint plague many Miami-Dade schools.

Some newer buildings have state-of-the-art technology; others have outdated electrical systems.

To solve the twin problem – a looming capital crisis and growing technology gap – Superintendent Alberto Carvalho will ask the School Board this week to start the process for a $1.2 billion bond referendum.

It would be the first step to put the question before voters in November.

“We know the need. The need is now. The solution is ours. The solution is the community,” Carvalho said.

The last time Miami-Dade County Public Schools took this step was in 1988, when voters approved $980 million for capital improvements. Those bonds, issued over the course of several years, built schools like Miami Northwestern in Liberty City.

This time, schools like Miami Norland Senior High, American Senior High and Milam K-8 Center could get upgrades.

And in a way, Carvalho said, the children of those who benefitted from the previous referendum would benefit from this investment. The bond program aims to upgrade schools, renovate older ones, replace parts or entire campuses where it makes financial sense and build limited new construction where enrollment is expected to rise – and provide equitable access to technology and digital resources to all students.

“There would be something every school would benefit from,” Carvalho said. “It shouldn’t be you go to school in a decent building or you have access to technology. You should be able to do both.”

Miami-Dade, the nation’s fourth-largest school district, is broke in terms of capital dollars and has about $2 billion in unmet capital needs and deferred maintenance at its nearly 400 schools and facilities. How willing recession-weary voters are to pay for that with general obligation bonds remains to be seen, but concern about the schools’ infrastructure has intensified over the last year among educators, board members and parents.

Half of the school buildings are more than 40 years old, and one-third are at least 50 years old. With leaky pipes and stinky hallways, Miami Norland has waited for years for a new building.

Broward County Public Schools faces a similar situation, with about $2 billion in unmet facility needs, and most of the capital budget going to debt service.

Broward Superintendent Robert Runcie recently told the state Board of Education that funding for capital needs was among the district’s top challenges. Runcie told The Miami Herald the district would eventually have to take the case to voters in some way, like a multi-year special tax, in the next couple of years.

“It’s a numbers game, and we don’t have the money right now,” Runcie said. “Ultimately, the public is going to have to have a really good understanding and see that the success of the public schools affects the overall fate and vitality of their community.”

Over the last year, the Miami-Dade School Board has grown more concerned about the situation with the school infrastructure and technology.

During budget discussions, board members stressed the need to find a long-term solution. Carvalho said he’d bring a solution “very soon” and that it would build on several principles, including community support, partnership with the private sector and minimizing the burden on taxpayers.

The capital problem stems from a combination of factors. The boom-to-bust real estate cycle in Florida, most recently the recession, has slashed revenue. The state has shifted funds to build and maintain buildings away from traditional public schools to charters. And the voters’ mandate to cap class sizes meant the district had to build more classrooms, with little financial help from the state. Now most of its capital dollars are going to pay off old debt.

“We can’t look back, we’ve got to look forward. The challenge remains the same. We’ve got to do it. Our community has probably been saying, ‘Why haven’t you asked?’ ” board member Wilbert “Tee” Holloway said. “We’ve got to address this if we’re going to provide an attractive educational system for our community.”

If the board gives the OK, the district would ask the state Department of Education to authorize issuing up to $1.2 billion in bonds and approve a project list of unmet facility and technology needs at schools. Then the board would have to approve the actual ballot question and submit it to the Miami-Dade County Elections Department by Aug. 17 for the November election.

“I think the real conversation is not going to be should we issue the bonds, but how are we going to spend them,” board member Raquel Regalado said.

Carvalho said he will create an advisory committee, with members appointed by each board member and his office, to ensure there is input on setting up the program, as well as monitoring and transparency as it moves forward.

Bonds are the most common financial tool for school districts to solve infrastructure needs, just as other government agencies use them to build things like highways and bridges, said Michael Casserly, executive director of the Council of Great City Schools, which includes Miami-Dade and other large urban districts. “The numbers are simply too big to handle through a general fund. You almost have to do long-term borrowing to make it happen.”

Every year, districts across the country seek money from bond investors, he said. Last year, the council surveyed its 65 members and found they had $100.5 billion in facilities needs.

Miami-Dade administrators explored other options, including an extra property tax for two or four years and a special sales tax.

Silvia Rojas, the district’s treasurer, said a bond makes the most sense for several reasons. The property tax would only provide short-term, limited funding, and a special sales tax could only fund new construction – not renovation – under state law. Both would require voter approval.

Rojas said the bond would have the smallest impact on taxpayers because the debt would be repaid over 30 years, borrowing costs are at historic lows, and construction costs have fallen dramatically during the recession. Plus, the 1988 bond program will sunset in 2017.

“You don’t want to the old program to completely mature and then start the new program. It would be more difficult for taxpayers to feel an increase at that point of time. It’s more like a continuing of what they’re used to paying,” Rojas said.

Preliminary estimates by the district indicate that the proposed bond program would mean an extra $19 for the typical homeowner’s property tax bill in 2014.

If approved, the district plans to issue $400 million in 2013, then stagger later issues of $200 million every other year until 2021.

Richard Hinds, the district’s chief financial officer, said the major thrust of the bond referendum will be rehabilitation, renovations, some campus replacements and giving kids all the same basic access to technology.

He pointed to one of the district’s newer schools, Terra Environmental Research Institute. “It’s a certified green school, a Wi-Fi school, with all the bells and whistles. Many kids there bring their own computers,” Hinds said. “Go two, three miles and you’ll find a school with two plugs in a wall, one for the fan and one for the overhead projector.”

Eddy Barea, who serves on the parent budget advisory committee, pleaded with the School Board at its recent budget hearing to find a way to maintain schools.

“I will support whatever can support the condition of our schools,” Barea said. “Either you do it now or you do it later. And if you do it later, it’s going to cost you more.”

Katy Sorenson, president of the Good Government Initiative at the University of Miami, echoed that.

“I think the citizens could be convinced this would be a worthwhile bond,” she said. “It’s very reasonable. It’s completely necessary. The schools are crumbling. The longer we delay, the more expensive it will become for the public.”

 

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