With unprecedented inflation, along with materials and labor shortages, the $27M bond passed by the Jerome community will not cover the costs of building the new school, along with renovating Horizon and Jefferson to an equitable status. The Jerome School District is doing everything we can and looking at all possible solutions to resolve this.
We understand the great trust you place in us as we work to educate all of our students, and the frustration felt at the money not being used completely as initially planned. Price increases simply could not be anticipated at this level. We will continue to look at all possibilities.
If you have questions about the bond process, please read the note from Dr. Pat Charlton, Superintendent of Jerome School District #261.
A NOTE FROM THE JEROME SCHOOL DISTRICT SUPERINTENDENT
IDAHO BONDS AND CONSTRUCTION 101: QUESTIONS AND ANSWERS
Q: When a school district wants to build a new school or remodel an older school, what
does it do?
A: The process of bonding and construction is fairly complicated in Idaho. Since school
systems don’t usually have a lot of extra cash on hand, they have to borrow money
through the school bonding process. (The bonding process is explained further below).
Before asking the patrons to approve a bond, however, the school district consults with its
architectural firm and construction firm. The architects work with the school district to
come up with a rough design phase and then the architects and school district work with the construction manager to get broad estimates.
Q: Can the school district lock in these estimated costs?
A: Unfortunately, these estimates are based on current construction cost trends and districts
are trying to predict the future. They do their best to anticipate future cost increases by looking at similar projects that were recently completed.
Q: The school district talks about passing bonds. What are bonds? How long does it take
to pay them off?
A: Bonds for school projects are very similar to a mortgage on a home. To finance construction projects, the District sells bonds to investors who will be paid principal and interest. The District normally issues bond for 20 years, thus saving the taxpayer interest costs.
Q: How do bonds work?
A: The sale of bonds begins with an election to authorize a specific amount which must be
approved by 66 and two thirds percent of the voters. The school district sells them as municipal bonds. Bids are taken from interested buyers, usually large institutional investors, and are sold at the lowest interest rate offered. The rate is based on the District’s bond rating: the higher the bond rating, the lower the interest rate to sell the bonds. Principal and interest on the bonds are repaid over an extended period of time with funds from the bond tax rate that is certified to the property taxpayers annually.
Q: Once the school district knows the estimated costs for construction, how does it move
toward getting the bond set up for a vote and how long does it take?
A: Once cost estimates are established, the district works with a financial advisor to determine the anticipated levy rate assessment. All of this work has to be completed before the legal bond resolution language can be determined. The process takes time. It can take 4 to 6 months to create a design and then another 3 to 4 months to complete the construction estimates, financial reviews, and develop legal bond resolution language. It takes at least one and a half months to schedule the election date with the county. This process takes upwards of 9 to 12 months before the election can be held. After the bond passes, it takes another 6 months for architects to create a fully detailed set of construction documents. These complete documents are what the construction manager gives to contractors so they can develop their bid packages. This process can take a couple of months.
Q: Why doesn’t the district “lock in” construction costs right after passing the bond?
A: Unfortunately, with a small margin of profit and hundreds of thousands of dollars on the
line, there is no way a contractor would lock in a bid before he has a completely detailed set of plans to review. Also, a contractor would not take the time to present a detailed bid before a bond election was passed. So, there is no way to get a quote in "set in stone" price before the election.
Q: The timeline seems long and involves a lot of work from the time that the district
identifies the project to actually starting construction, is there any way to shorten it?
A: Regrettably, the only way to shorten the timeline process would be to have all the design
work complete before the bond election. The district would have to pay for this service to the architects regardless of the bond passing. Based on this last bond, the design costs are close to $1 million and that would likely be a reckless way for the district to operate.
Q: I still have questions about the process of passing bonds and preparing for school
construction or remodeling. How do I get more information?
A: Please contact Superintendent Pat Charlton, Asst. Superintendent Wendy Ohlensehlen, or Business Manager Brian Bridwell at Jerome School District, 208-324-2392.