The Mercer Island School District is asking us to approve General Obligation Bonds totaling $196,275,000, a huge amount of money. But wait a minute! Read School District Resolution No. 592, adopted Feb. 9, 2012, and pay attention to the fine print. By obscuring some key provisions of the resolution, we're being asked to buy a pig in the poke.
Section 2 of that resolution includes a specific list of capital improvements, but only if "available funds are sufficient from the proceeds of Bonds authorized for the above purposes." The District will determine how to allocate "available moneys between the various Improvements" with the goal of accomplishing, as nearly as possible, all of the listed improvements. The resolution goes on to say that, if the Board determines that it has become impractical to accomplish all proposed capital improvements because of "changed conditions, incompatible development or costs substantially in excess of those estimated, the District shall not be required to accomplish such Improvements and may apply the Bond proceeds ... to other portions of the Improvements, toother capital improvements, or to payment of principal or interest on the Bonds." Finally, if proceeds from sale of bonds and other available District funds are insufficient to accomplish all of the capital improvements, the School Board will determine which improvements are "most necessary and in the best interest of the District."
In other words, if available funds are not sufficient to pay for all the capital improvements, we don't know what will actually be built. Can the School Board tell us today which improvements are "most necessary and in the best interest of the District." If not, why not?
Does anyone really believe that current cost estimates are close to realistic when we haven't even begun the design of a single school? If the estimates are good, why are there so many escape clauses in the resolution? What happens when the design process results in "costs substantially in excess of those estimated?" Does the School District come back to us and ask for more money?
I won't get into the debate about whether we need more space or modernized schools. The goal is admirable and many well-intentioned people have participated in the process. But this bond is not well formulated. It should be rejected.
