5B Bond projects to date are grossly over budget.
This past Thursday, May 7, 2020, Tim Reed, Executive Director Facilities and Construction at Jeffco Schools, told the Board of Education that as of April 30, 2020 $57M in contingency remained for the District’s 6-year Capital Improvement Program (CIP).
Given that the Contingency presented to taxpayers prior to the 2018 5B vote was $86M, $57M sounds like a reasonable amount to be remaining.
However, it was only after Director Susan Miller asked a question did Tim tell the Board that the $57M included additional Construction Contingency of $11.5M that the Board would later vote on that evening for overages in the Alameda project. This would effectively reduce the amount of remaining contingency to $46M. In addition, it seems that the additional Construction also comes with even more Soft Costs (thanks to another question by Director Miller), usually in the range of 20%. This would necessitate the use of ANOTHER $2.25M in Contingency, further reducing the available amount to under $44M.
While this is troubling, a mere 18 months into a 6 year program, there was even more troubling news in Tim’s slide. That news was that Tim and Jeffco have added the $50M in bond premium and $11M in bond interest to the Program’s Contingency, raising total Program Contingency to a whopping $147M.
It is shocking to me that Jeffco has seemingly burnt through over $100M in Contingency in only 18 months, when the total Program Contingency was presented to taxpayers as $86M.
And only Susan Miller is concerned and asks questions about this.
Brad Rupert asked Tim Reed if he agreed with the statement that it appeared that over half of the Contingency remained and Tim agreed. That statement is ONLY true if you base it on the original $86M.
Ron Mitchell flat out stated that he trusts Tim Reed, obviously too old and tired to, or maybe incapable of, performing the math to show that $100M in Contingency has already been spent.
And through all of this Jason Glass just sat silently. His non-existent leadership on full display.
Who is going to provide oversight to this spending and overages? A contingency budget is money set aside to cover unexpected costs during the construction process. Who is going to ask why nearly every project has unexpected costs and why those unexpected costs are so high? Who is going to ask why there should be an expectation that this trend will change with future projects? Who is going to ask why there should be an expectation that there will be enough money to deliver on ALL of the promises made to individual schools and taxpayers?
Who is going to take their fiduciary responsibility seriously? Glass? Don’t count on it. The Board of Education? Susan Miller is asking the right questions. Brad Rupert is asking questions, but they leave too much wiggle room for Tim Reed. Susan Harmon and Brad Rupert are just District fan boys who never question anything the District does or says, so don’t count on them.
The District and taxpayers have already suffered from this fiscal mismanagement (What to do with $50M in bond premium). It’s time to put an end to the reckless and harmful spending propagated by Glass and Reed to ensure that ALL projects can be completed on time with the initially planned scope and the money taxpayers provided.