Current State of the School Bond Market

An Overview by SchoolBondFinder.com

On November 7, 2017, there were 309 school bond initiatives on ballots in 24 states. The results for 303 school bonds had been entered into the SchoolBondFinder.com database by noon the next day, with results for the remaining 6 coming in over the following week. After all the dust had settled, 208 school bonds (67.31%) had been approved by voters and 101 (32.69%) had failed.

Every school district with a bond proposal on the November 7th ballot was hoping they'd found the magic formula for producing a positive vote, but almost one third had not. Is it possible to look at the data to ascertain what worked and what didn't?  

Let's consider one example of data comparison. At SchoolBondFinder.com, our researchers place a bond proposal in one or more of 5 major categories based on how the bond monies will be spent. Within the major categories, a bond might also be placed in one or more sub-categories. Analysis of the November pass/fail data show the following for each major category:

Category	Pass	Fail
Construction/Renovation	65.90%	34.10%
Capital Improvements	71.43%	28.57%
Safety/Security	72.26%	27.74%
Technology	74.62%	25.38%
Transportation	81.48%	18.52%

Transportation, which was called out on 54 of the 309 bond proposal initiatives, was clearly the most successful category, but does that mean that a district should add a transportation piece to their bond proposal in order for the initiative to pass? No, probably not.

Identifying the major categories for bond expenditures is just one of the many pieces of data that SchoolBondFinder gathers about each bond in the SBF database. Data analysis can help in making some comparisons, but without knowing more about the local environment (political, social, and financial), the data only provides a starting point. This is why it is so important to form a relationship, early in the process, with district personnel who are working on a bond initiative.

At SchoolBondFinder.com, we recognize that there are opportunities for involvement at every stage of the process: (Watch List) Very early when a bond proposal has made a first appearance, but doesn't have a vote date set yet; (Proposed) the bond initiative is moving toward a scheduled vote date, and may be consulting with industry experts; (Passed) when a bond initiative was successful and the district will begin scheduling work; and (Failed) when the initiative was not successful.

Why is there opportunity in following failed bonds?

One third of the bond initiatives that were on the ballot in November failed, but most likely the reason for the bond did not just go away with the failed vote. Buildings still need to be built or remodeled, security systems still need to be installed, technology infrastructure still needs to be updated ... and the list goes on.

A district that has not been able to pass their bond initiative this year will most likely try again after a "political cooling down period." They may need help setting new goals or rewriting the proposal to ensure passage the next time the bond proposal is put forward for a vote.

When a bond proposal goes back to the drawing board, industry experts can provide invaluable information about products and services, as well as help connect districts who are in the process of writing proposals with other districts that have successfully passed a similar initiative. Identifying key contacts within the district and forming relationships with key contacts early in this process is beneficial for all parties involved and contributes to a successful outcome.

Focused View at the District Level

The bond process is often discussed from a high-level perspective, often leaving the education marketplace wondering what impacts funding and upgrades can have on individual districts and schools. New construction, renovations, school safety improvements, technology upgrades, and transportation equipment needs all often require bond elections. Local school districts hope to piggyback on the possible approval of a state school bond for construction projects by passing their own bonds for school construction money. 

The idea would be to use the state and local bond money together to increase the amount of construction possible. A statewide bond measure would pay for up to $9 billion worth of school facility improvement projects if approved. It is called the Kindergarten Through Community College Public Education Facilities Bond Act of 2016. Here’s a snapshot of how this could impact several school districts in California, one of the most active states for school bonds.

Reef-Sunset Unified School District Superintendent David East said most schools in the district are more than 80 years old and are in definite need of improvements. “We will definitely benefit from a state bond,” he said. “We have huge needs out here.” East said the district already has a previous bond – Measure A – in place that has funded facility modernization in the district such as completely renovating the stadium at Avenal High School along with a few other projects. “You are investing in the infrastructure of the community,” East said. “High quality school facilities lead to better achievement.”

The bond process is not only an important part of a state’s public infrastructure, it’s an investment in future generations and has a lasting impact on the community. Hanford Joint Union High School District Assistant Superintendent Cheryl Silva said the district has approved a $28 million school construction bond on the November ballot. The money will be used to pay for projects at Sierra Pacific High School including adding a library and administration building, an agriculture learning farm and additional technology for the school, addressing a diversity of potential career paths for students.

“We have been working on an extensive list [for construction] over the last few years,” Silva said. Silva also said all three school sites would receive some sort of improvements including swimming pool upgrades for Hanford West and Hanford High School. “We are looking at the highest need and the highest priority,” she stated. Lemoore Union High School District is updating its facilities master plan to make the decision on whether to ask voters to approve a local school bond along with deciding what needs to be upgraded.

In another school district, Superintendent Debbie Muro said Lemoore High School is in major need of upgrades since some of the buildings are 100 years old. Some upgrades include improving science labs, painting buildings, upgrading the parking lots, adding new classrooms and re-plastering the campus pool. Muro said painting the main building alone is a $100,000 project. She said LHS teachers are sharing classrooms and more classroom space is needed. “We’ve done student surveys over the last few years,” she said. “If you go to a school and it looks really nice, it has a lot to do with your morale and how you feel about school.”

Funding for public school capital projects continues to be an ongoing challenge. New construction, renovations, school safety improvements, technology upgrades, and transportation equipment needs all often require bond elections, and as reviewed in the cases from the state of California, they can be a multi-step process involving multiple school districts. Look for future articles about where the school bond market is headed, as well as individual case studies about how individual schools can be impacted by this process.