FERNDALE, Wash. — The Horizon Middle School library was packed when the Ferndale School Board met with the Bond Oversight Committee to present their 1st quarterly report during a special board meeting last Tuesday, October 15th.
The committee, composed of local volunteers, many with construction and finance expertise, was formed as part of the voter-approved bond and has been tasked with supervising the spending of district’s $112 million bond issue to ensure funds are spent on the projects proposed. The signature project of the bond issue is rebuilding Ferndale High School.
The committee’s purpose, as defined in its bylaws, is “Ensuring that Taxpayers money is being used as allocated according to the bond measure, that funds are not diverted for any other purpose and work to keep the project within budget and on time.” Committee members will “be actively engaged in all aspects of planning and construction as it relates to the specific bond measure” and “monitor and advise the Ferndale School District” according to their bylaws.
In their quarterly report, the committee says it has met 5 times since it was officially formed in May. The majority of the time was spent learning how to work together as a group including becoming familiar with the Washington Open Public Meetings Act (OPMA). The committee says they are working with the district to design “a master budget that will be able to track the $112 million to what has encumbered and eventually spent.” Possible additional funding, such as grants, business sponsorships and state match funds would be included if allocated to the bond projects.
Some committee members reported sitting in on interviews with consultants and contractors as observers.
The committee says they have been able to review and comment on all services purchased. This, they said in the report, included archaeology, soil analysis, wetlands, transportation, architect and project management services. Committee members spent many hours “reading and analyzing and raising questions” in the process.
The committee said there appeared to be an overlap between Dykeman Architects, Construction Services Group (CSG) and district operations staff when it came to the smaller critical needs projects. The committee reported the district is “examining ways it can reduce overhead costs of those services by pulling some of the Critical Needs Projects out of the functions of architect and CSG.”
Since the first sale of bonds occurred near the end of the quarter, there were few financial reports to review. But committee members say they did review the details of the bond sale. They noted that, while the bond measure provided for amortizing the bonds over 22 years, this initial sale of bonds included a debt service schedule of 18 years. The committee also noted the district does not have a debt policy in place and recommended establishing such a policy.
Committee members say they have asked the district to create a cash flow projection that accounts for future bond sales and expected expenditures. They have also made the recommendation for the district to consider engaging a financial adviser on future bond sales. This stemmed from “the fact that the Federal Reserve had repeatedly announced it would be lowering its target range for its benchmark interest rate.” Committee members felt the district could have taken advantage of a lower interest rate had they been advised to wait.
To better serve communicating with the public, the committee requested the district create “a dashboard that will easily, visually track bond progress in the following areas: High School, Critical Needs Projects and Security Upgrades.” It was further explained the dashboard would exist online and enable the public to “view timeline, track project progress and follow budgetary progress” according to the committee’s quarterly report.
In another effort to save money, committee members say they asked the district to forecast maintenance of the critical needs projects into the future. As a result, the district is creating “a detailed replacement cycle asset management system to better handle maintenance needs and included higher maintenance service budget in 2019-20.”
The Bond Oversight Committee meets monthly in the Mountain View Campus Conference Room (in building “B”) at 5780 Hendrickson Road at 6pm on the second-to-last Tuesday of each month. The public is welcome to attend. Meeting agendas and minutes are available to be viewed online.