Citizen’s Oversight Committee pleased with recent work, but
tells district to tighten spending habits
Gilroy – The Citizen’s Oversight Committee expressed concern about a $14 million budget gap to district officials informing them to tighten spending habits. Though pleased with recent construction throughout Gilroy Unified School District, the watchdog committee sent a message to school officials in their interim report – with the key phrase being “incorporate a more conservative approach.”
Figures were originally presented in May to the seven member committee – but it wasn’t until Wednesday’s quarterly meeting that the group had the opportunity to make recommendations to the district.
“Based on what we heard and have seen to date with the most recent numbers, it was important to let the community know that there were cost overruns,” said committee chair Jane Howard.
The COC was established after Gilroy voters passed the $69 million Measure I facilities bond in 2002 to oversee expenditures. Measure I funds are to be used strictly for projects included in the Facilities Master Plan such as upgrades and repairs to existing GUSD structures, and the construction of the new Eliot School, a new elementary school and the new Christopher High School.
According to COC member Neal Grover, a local plumber, the spending gap is the result of “very real cost overruns,” such as the increased cost of construction materials.
In a separate report presented by GUSD Assistant Superintendent of Administrative Services Steve Brinkman, recent calculations place the cost of the Facilities Master Plan at $197.48 million. Revenue for the plan caps off at $183.55 million for a total gap of just less than $14 million.
The COC recommended district officials use a more conservative approach to planning and cost estimates. Other recommendations included in the interim report include the creation of a reserve fund for revenue windfalls and provide more cushioning for unforeseen expenditures.
According to Grover, since the group began meeting with the district in early 2003, presentations of budget spending have become more detailed and transparent.
“The Oversight Committee, I believe, creates an atmosphere of improvement because (the district) keeps having to come back to meet with us,” he said.
Brinkman attributes much of the $14 million gap to the increased cost of plywood, steel and concrete as well as required design changes.
“(The COC) is very pleased with the results, they’re just not very happy with the finances,” he said.
The largest cost overruns are in building estimated for the new elementary and high schools. Both projects have added about $8 million to their original price tags.
While the additional costs may appear excessive, Brinkman said cost estimates for both schools were created in 2002 and never updated.
Since Brinkman was hired about two years ago and has been more fiscally conservative with spending, he said. “How often do you get a check in the mail rather than a bill?” he asked.
To cut future costs the district will engage in more value engineering – a method of saving money through carefully planned designs – prior to awarding construction bids.
While Brinkman expects to close the $14 million gap using some unexpected state funds and additional deferred maintenance money as well as the sale of some GUSD property – the gap is just an estimate and could fluctuate in either direction.
The financial affects of Hurricane Katrina and Rita may contribute to an increase in local construction costs, Brinkman said.
“You need to rebuild a huge region of the country … That’s going to throw off the balance of construction and drive up the cost (elsewhere),” he explained.
Fuel surcharges on materials shipped may also contribute to increased costs.
The COC next meets in December and expects a more detailed report from GUSD officials on how they plan on closing the spending gap.
“We want particulars … I think they’re going to do some serious brainstorming (until the next meeting),” said chairperson Howard. “I think it’s only fair to hear what the they have planned before we comment.”