West Contra Costa USD
Presentation to the Facilities Subcommittee
Bond Budget Update
March 17, 2012
Bond Budget Update
 A small group has been meeting on a (roughly) weekly basis to
discuss revenues and expenditures of the bond program.
 The meetings have involved various representatives of the
District’s finance and facilities departments as well as certain
outside consultants.
 The meetings have been an effort to produce the long-
discussed “meeting of the minds” between finance and
facilities.
 At the end of the day, what we’d like to do is to develop a
common way of looking at the bond program and its revenue
needs and to implement various processes that will keep the
program running smoothly through time.
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Specific Goals
 The specific goals of the group are to develop solutions that can
be used to ensure:
 That total program revenues are matched to total program
expenditures (or that potential gaps in funding are identified).
 That the bond program cash flows out to produce reasonable
balances and reserves (particularly over a defined planning
horizon).
 That projects are linked to revenue sources before construction
begins.
 That project cost updates are presented to and approved by the
Board according to a defined process.
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Recent Experience
 To a significant degree, these goals are born out of the District’s
experience with its 2005 Measure J bond program in the aftermath of the
2008 economic downturn.
 An unprecedented decrease in the District’s tax base constrained the
District’s bond program.
 Projects were underway without well-defined costs to completion or
expenditure cash-flows.
 A middle-ground financing was developed to maximize proceeds
within the constraints.
 In retrospect, such issue proved not to be necessary from a cash flow
standpoint and would have benefitted from a structure standpoint
from better information concerning project costs.
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Conclusions to Date
 While the process is an ongoing one, the group has begun to
develop some general conclusions.
 That project budgets tend to increase beyond Board approved
budgets and are not re-visited by the Board.
 That such cost increases cause past projects to encroach on
current revenues.
 That such encroachments are not adequately addressed in terms
of the connection of projects to funding sources nor in terms
of the schedule for future projects.
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Developing Issues
 Some of these issues are beginning to impact the 2010 Measure D
bond program.
 The operating budgets for a number of projects (including projects
that are currently underway) have grown to exceed Board approved
budgets.
 Such cost increases will require that some Series A proceeds will be
needed to complete prior projects and will not be available to fund
projects originally identified as Series A projects.
 At the same time, the budgets for such Series A projects have grown
beyond what Series A proceeds could have provided for originally.
 These changes may impact the sufficiency of funding for projects
scheduled to begin this summer and will certainly impact the schedule
for future projects.
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Current Status – Revenues
 As of now, the District has $160 million in the bank, plans to issue
additional bonds in early 2013, and expectations to receive state
revenues based on planned projects.
 $160 million cash balance as of February 29, 2012.
 Bond issue scheduled for sale in early calendar 2013 (projected
at $70 million at time of Series A issuance).
 Receipt of state revenues in the current fiscal year may be the
last received prior to 2014-15.
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Current Status – Expenditures
 With these revenues, the District needs to complete projects
underway and take a measured approach with regard to future
projects.
 The District is currently closing out projects at various schools
throughout the District (Dover ES, Ford ES, King ES, Helms MS,
Pinole MS, El Cerrito HS, Kennedy HS, and Richmond HS).
 Major projects are underway at Ohlone ES and De Anza HS.
 The District must budget for ongoing costs such as technology,
furniture and equipment purchases, major maintenance projects, and
program operating costs.
 The District’s bond budget must first provide that sufficient revenues
are allocated to the above projects before moving on to those projects
originally identified as Series A projects (Portola MS, Nystrom ES, LPS
Richmond/Gompers, Coronado ES, and El Cerrito stadium) and others.
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Next Steps
 In the coming months, the group will be finalizing budget and
cash flow figures, discussing alternatives in terms of project timing
and bond issuance sizing, and recommending processes designed
to improve bond program management in the future.
 Budget and cash flow figures will be presented to an upcoming
meeting of the Facilities Subcommittee.
 To the extent that the cash flow suggests any funding gaps, the
group will present multiple alternatives for closing such gaps
and consider alternatives suggested by the Facilities
Subcommittee and the Board of Education.
 Many of the processes suggested will be oriented toward re-
focusing formal decision-making at the Board level.
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