Mystery Education Theater 3000

Tag: scope-based budgeting

Budget and Schedule Are the Hobgoblins of Small Minds

It started at our WCCUSD CBOC meeting in January as this agenda item:

F.2 Budget Adjustments to Bond Program (tabled at December meeting)
The Board of Education has just approved $26 million in budget increases for bond projects.
Why did this happen and what sort of controls are in place to prevent this from reoccurring.
Submitted as a question by the CBOC Chair to Bill Fay on 1/20/14.

This had earlier elicited this brief written statement from Mr. Fay, WCCUSD Chief Operations Officer:

The WCCUSD Bond program is scope driven that delivers outstanding facilities that meets the express needs of each school community.

As such, all projects receive the most current design standards, technologies, educational specifications and equipment without regard to project timing. The program also moves forward without regard to contractor bidding climate and does not “value engineer” any scope. The remedy requires a change in
the number of projects that can be accomplished.

When the matter came up, Mr. Fay did not detail how this philosophy led specifically to the $29M shortfall, but instead expanded on the philosophy of scope-based budgeting at least as used in this district: spend without limit on projects until you run out of money -> bump remaining projects to the next bond -> get the next bond.

It’s all in this recording of Mr. Fay with some comments by Martin Coyne along with comments by committee members. It’s only 9 minutes; it’s worth a listen.

Update (5/22/2014):

  • The meeting date was January 29th, 2014.
  • The full meeting recording by district staff is still on the podcast site at this page.

The Endless WCCUSD Bond Debt Cycle

The Contra Costa County Taxpayers’ Association Director asked me recently why the West Contra Costa Unified School District needed a 7th school construction bond as if there was some carefully thought-out construction-based planning process behind it. I chuckled. I shared with him these steps for how the wheel keeps going ’round:

  1. Survey/push-poll people with leading questions late in an odd-numbered year.
  2. Find a tax rate that will give a comfortable margin over 55%.
  3. Calculate a total “bondage” amount based completely on that tax rate.
  4. Attach a permissive scrambled “project list” for everything and anything.
  5. Include front-end ballot text language to stay “within legal debt limits” along with buried back-end language that the district may have to seek a debt ceiling waiver. (For the last 2 bonds, the district has been over the statutory debt ceiling on waivers.)
  6. Put it on a June or November even-year ballot. (These are the only allowed dates for WCCUSD Prop. 39 elections.)
  7. Use “scope-based” “budgeting” to burn through the money while holding the tax rate for that specific bond withing the projected limit.
  8. Repeat two years later.

The district pats itself on the back for staying at target individual bond tax rates, while a total school bond tax rate that is already the highest in all of California continues to grow more and more.

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