School bonds

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Frequently asked questions about school bond projects

General bond questions

It seems like ASD always has school bonds on the ballot, why is that?

The district took a "bond holiday" in 2010. In response to community feedback, no school bonds were put on the ballot.

ASD's mission is to educate students for success in life. Maintaining quality school facilities is essential to the support of this mission. This is no small task for a school district among the 100 largest in the U.S. The district owns 93 schools and six support facilities, consisting of more than 7.7 million square feet of space, at a present value of about $2.4 billion. A quality school's functional life without major renewal ranges from between 30 years to 50 years. For 93 schools, this would require the district to present bond ballot propositions for two to three major renewals every year. This does not consider that many schools were built during the 1960s and 1970s at a time of pronounced population growth; they are now candidates for renewal.

Why is the district requesting voter approval of bond issues at a time of economic uncertainty?

One reason is that the school district is a "forever" owner of school facilities. The district is a steward of the taxpayers' investment. This stewardship includes continual responsibilities, some of which are:

• design and construct facilities with durability,
• care for facilities through preventative maintenance and a committed custodial program,
• extend facilities' functional life so long as it remains cost effective,
• reconfigure existing facilities to support changing educational programs and their technologies, and
• design flexibility into new and renewed facilities to accommodate education changes over a facility's 50-year life.

Another reason is that the state has committed to project reimbursements of 60-70 percent. This means taxpayers only have to pay 30-40 cents on the dollar for projects that are funded through the bonding process. Projects funded through other means do not qualify for debt reimbursement. For example, if the district were to pull funds from its regular operating budget, the state would not reimburse the district for those project costs

How does ASD determine what parts of a building need to be overhauled?

Building components wear out. Facility systems only last so long. Roofs deteriorate and leak; heating, plumbing and ventilation systems wear out, parts are no longer available to support older systems and structural systems age. Various code changes require updating electrical and mechanical systems; providing access for persons with physical disabilities; removing hazardous materials and renewing various building system components. Moreover, significant renewals often require structural upgrades to meet more stringent building codes.

Change demands updates
Functional obsolescence is another fact of life for older schools. Over the life of a school, programmatic changes take place that demand updating the facility infrastructure. For example, there is continual need to update the electrical distribution systems in the schools to accommodate current technology. Current educational delivery methods require physical layouts that are often different and more flexible than those of 30-40 years ago.

Effective operation and maintenance programs are a critical component to extending the life of buildings, sites, systems and equipment and for maintaining and providing a quality building environment for the instructional programs.

Facility Condition Index now used
All ASD buildings are in the process of undergoing facility condition assessments. The assessments serve as a basis for determining priorities and costs of facilities' capital needs, and are used for both short term and long term planning purposes. The assessment process includes a field assessment where building system components are evaluated based on condition and age of the system. Results of the initial assessment identify system requirements, along with their corrective action and costs to implement. The next step includes data entry into the database, and concludes with validation of the data by district staff which provides quality control and incorporates institutional knowledge on the collected information.

Once this process is complete, a facility condition index is calculated to provide a comparison of the relative condition of a facility and/or system to others. It is a ratio of the cost to correct capital needs arising within the next four years divided by the replacement cost of a facility. A site with an FCI less than .30 is generally considered in excellent, good and average condition, which is the district's target in order to maintain the general physical condition of ASD's physical plant. A site with an FCI higher than .30 is considered in poor or crisis condition.

Some facility systems identified as problems in this process do not require immediate replacement. Just because a key building component like a roof or boiler has reached the end of its anticipated useful life does not necessarily mean they have failed. In some cases, those systems can continue to function for many additional years.

The FCI cannot be used as the sole determinant of capital project prioritization. Other factors such as educational functionality and attendance projections must be included as well.

FCI results
Check the last column of Site Summary Information and Assessment Results table (PDF) for the current FCI status of ASD schools. Buildings with a score less than .30 are generally considered to be in average condition or better. Sites with an FCI higher than .30 are top candidates for major work, and include many projects on Proposition 1.

How does the district determine projects for bond proposals?

The district develops a six-year Capital Improvement Plan. This serves as a guide for future capital bond request ballot propositions. Projects are selected for the CIP based on evaluation of several factors:

• site and facility conditions based on FCI ranking (see previous question)
• assessment of facilities' ability to meet districtwide educational specifications
• enrollment history and projections
• input from the community on its educational goals and need
• project scopes and cost estimates

This information is analyzed and evaluated by the Facilities department, district administration and the superintendent. Proposed projects and their priorities are then included in a draft CIP.

The CIP is reviewed by a Capital Improvement Advisory Committee comprised of public representatives. This community-based citizens group meets regularly to review facility needs and recommend bond propositions to the superintendent. The superintendent recommends the CIP to the Anchorage School Board for approval. The board holds a public hearing and then acts on the recommendations. The CIP is also reviewed by the municipal Planning and Zoning Commission, and submitted to the Anchorage Assembly.

The school board and district administration provide extensive project information to the assembly. The assembly has authority to change proposed bond issue projects before approving them to be placed on bond ballot propositions.

What is the expected life of the various components of a school building?

Ongoing maintenance and upkeep can extend the life of a school. Building materials and equipment are selected with regard to cost and durability. For example, carpet that will last about 20 years is typically selected over cheaper carpet which will have to be replaced more often and end up being more expensive over time. The expected life of school components is shown below.

• Roof, 20-30 years
• Plumbing valves, 15 years
• Paint, 7 years interior, 10 years exterior
• Asphalt, 20 years
• Hockey rinks, 10 years
• Carpet, 20 years
• Fencing, 20 years
• Floor tile, 20 years
• Lights, 20 years
• Boiler, 30 years
• Cabinets, 25 years
• Fans, 30 years
• Intercoms, 20 years
• Gym floors, 30 years
• Fire alarms, 20 years
• Playgrounds, 20 years
• Ceiling tiles, 20 years
• Door hardware, 25 years
• Window treatment, 20 years

By the time a building is 25-30 years old, all major components should have been replaced.

April 2012 bond questions

Why is Service High School the district's highest priority?

In the late 1990s, the school board made a commitment to renew its high schools. This commitment has been reflected in the district's capital improvement plans since then. Prior to then, the district focused on needed elementary school renewals. Because high schools are much larger and renewals are much more expensive, the decision was made to create master plans with phased projects spread over multiple years. Phasing also would allow classes to continue to function during construction.

Built in 1971, Service started off as a junior and senior high school until junior high students moved to Hanshew in 1984. In 2000, the district created a master plan to renovate and renew the facility originally built to serve two separate programs. To date, less than 50 percent of the master plan work is completed. This remaining scope is equivalent to constructing three new elementary schools or one new middle school.

Consolidating and reconfiguring
Over the past few years, the district revisited Service High School renewal's 2000 master plan to investigate cost saving measures that would not significantly affect a commitment to deliver a complete educational program. Estimated cost savings of $23 million were realized through consolidating phased funding to one-time, and reconfiguring master plan components through innovative design solutions to achieve a one-year reduction in the construction timeline.

In 2011, the scope of the project was further reduced due to community response. The proposed construction no longer includes a new 700-seat auditorium.

Why is ASD only asking for $9 million for the Service project? Won't it cost much more than that?

Yes, however voters are only being asked to approve $9 million in bond funds. Another $21 million in project costs will be funded by a grant from the state. However, in order for the district to receive the grant, the district must match the funds with $9 million of its own dollars.

The district also significantly reduced the scope of the project due to voter concerns. The revised construction no longer includes a new 700-seat auditorium, among other things.

Are the building life extension projects a result of poor maintenance?

No, the district intends to build durable facilities with cost-effective systems and finishes to withstand Anchorage's sub-arctic climate and extensive use by students, staff and the general public. The district takes care of these facilities through routine preventative maintenance and custodial programs, building life extension projects, and capital construction renewal projects. Routine maintenance is funded through the operating budget; capital and building system renewal projects are funded through bonds, legislative appropriations and grants.

The district's current regular operating budget allocates $22 million for routine, day-to-day maintenance; this covers items such as painting, repairing roof leaks, replacing broken glass, fixing locks, plowing snow, repairing fences, and maintaining plumbing, heating, electrical and roofing systems, etc. At some point, the cost of repairs becomes excessive and the entire roof needs to be replaced and renewed to extend the home's life. Building life extension projects involve major expenses not covered by the regular operating budget.

Bonds can be sold to finance building life extension projects because they are capital construction projects intended to make buildings last longer. For example, repairs keep the roof operable during the original 20 years of its life; a new roof helps extends it another 20 to 30 years. Also, bond projects are eligible for 60-70 percent reimbursement from the state, lowering the project cost for taxpayers.

More than half of the district's 93 schools and six support facilities are at least 25 years old. The district currently anticipates that the district would need to request funding for at least four renovation projects per year. This assumes all facilities' original construction was spread out over the years.

What will be the state reimbursement for these bonds?

Through the state's debt reimbursement program, the state has approved 60-70 percent reimbursement for the majority of the school bond. Because Service High School already has a state matching grant, the $9 million in bond funds does not qualify for reimbursement. Also, $500,000 for districtwide relocatable upgrades does not qualify for state reimbursement.

The state reimbursement approved for each of the bonds significantly reduces the cost to local taxpayers. Funding of the state reimbursement plan has been supported by legislators and is subject to annual appropriation. The legislature has fully funded the program every year for the past 19 years. You can find out more about the State of Alaska's funding program for school construction online.

What is the total cost per year for the district's bonds for the average property owner?

If voters approve the school bond proposition, the average homeowner will pay $20.57 per year. That amounts to $6.53 per year per $100,000 of assessed property value, after state reimbursement. Without reimbursement, the cost is $14.67 per $100,000 of assessed value.

How much existing bond debt does the school district pay off annually?

The school district makes annual payments on principal and interest for school bonds approved by voters. Since the last year's election where voters approved one bond totaling $17 million, the district has paid off $54.5 million in bond debt. Over the next five years, the district will pay off $279 million in current outstanding debt.

What is the mill rate (used to calculate property taxes) for the operation of schools and for the debt service on existing bonds?

Here is a chart of the last several years' mill rates and the estimated mill rate for the proposed 2012-13 school year budget.

School year	General fund	Debt service	Total
2004-05	5.99	1.26	7.25
2005-06	6.19	1.40	7.59
2006-07	5.79	1.34	7.13
2007-08	5.54	1.25	6.79
2008-09	5.69	1.25	6.94
2009-10	5.90	1.28	7.18
2010-11	6.13	1.31	7.44
2011-12	6.20	1.32	7.52
2012-13	6.20	1.30	7.50

What will the district do if this bond does not pass?

The district will continue to use the facilities as they currently exist and maintain them to the best of its ability. However, if the bond does not pass, operating budgets for preventative maintenance and repairs will need to increase in order to maintain minimally acceptable conditions. Because there is pressure to minimize budget growth, an increase in the operating budget for maintenance takes away funds that would otherwise be spent on education in classroom. Eventually, systems wear out and fail.

Why do schools cost more than commercial buildings?

Schools have a different occupancy classification and more stringent building code requirement than most standard commercial structures. Schools must be constructed to meet much higher seismic, fire and life safety standards to protect children in the event of fire, earthquake or other emergencies. In addition, school facilities involve more complex and intensive technological and mechanical systems, such as laboratories and kitchens. This construction is more expensive for schools than for commercial buildings. Materials used in school construction must be of higher quality and more durable than standard buildings in order to withstand heavy use. These materials typically have higher initial costs but lower long-term costs when considering reduced maintenance and repair over time. Lower-cost materials and equipment typically have shorter life expectancies and require more frequent replacements.

How much is the district spending on this information campaign?

In January, the school board approved $60,000 for the district to provide the public with factual information on its proposed bond projects. The purpose of the district's bond program is to provide information so that citizens can use the information to assist them in making educated, responsible decisions.

The "School Bonds Yes!" political organization, which can advocate for bonds, is separate from the district. The district does not provide money to this organization.