Houston School District's $1.9 Billion GO Plan To Transform City

DALLAS — The 42 schools to be replaced or renovated in the Houston Independent School District’s proposed $1.89 billion general obligation bond referendum will transform the largest city in Texas, superintendent Terry Grier said Thursday.

“This is a good investment,” Grier said in outlining the proposal to school trustees at a workshop session.

“This is good for Houston,” Grier said. “When you start replacing this number of high schools, it can change an entire city.”

The plan calls for the replacement of eight high schools, with another four being razed and rebuilt on the existing sites. Two early-college high schools now in temporary quarters would be moved into permanent facilities. Five high schools would be extensively renovated and 10 would be updated.

Renovating and replacing the high schools and 28 elementary and middle schools accounts for $1.67 billion of the proposal. Another $225 million of district-wide projects includes $100 million of technology upgrades, $43 million of athletic facility improvements, and $20 million for land acquisition.

The proposal is the largest single school district request ever in Texas, taking the top spot from the Dallas Independent School District’s $1.41 billion GO plan approved by voters in 2002.

It is the eighth-largest school bond request ever in the United States, outpaced only by districts in Los Angeles and San Diego.

Susan Zoeller of MGT of America Inc. said the average district high school is 50 years old, eight years older than the national average. The district’s average elementary school is 39 years old.. The oldest building still being used opened in 1925, she said.

The $1.89 billion proposal is a massive undertaking, Zoeller said. “Few school districts in the country would take this on,” she said.

Trustees can amend the project list before calling the bond election. The board must call the election no later than early August to get it onto the November ballot.

HISD’s $2.3 billion of outstanding GO debt is rated Aaa by Moody’s Investors Service and AA-plus by Standard & Poor’s. Its debt is enhanced to triple-A with coverage by the state’s Permanent School Fund.

Approval will require a phased-in increase in the district’s property tax rate of 6.85 cents per $100 of assessed value over four years, but Grier said the current rate of $1.157 per $100 of assessed value is the lowest of the more than 20 school districts in Harris County.

“I say this and I mean this with my soul,” he said. “Putting a brand-new high school in the middle of a community is absolutely a strategy to jump-start the economy there.”

The current property tax includes $1.04 per $100 for maintenance and operations and an interest and sinking rate of $0.117 for debt service.

Grier said the district’s property tax rate would be raised in phases, beginning with a two-cent increase in 2014. The full 6.85 cents would be applied in 2017.

The increased levy would raise the property tax bill on an average $200,000 home by $29 a year in 2014 and $99 a year in 2017.

Trustees questioned why the bond package did not include a replacement for the district’s law enforcement and criminal justice high school.

Grier said the district plans to sell the school’s current site near downtown and build a larger school elsewhere with the sales revenue. He said the sale would generate enough funds to buy a new site and build the school.

District voters narrowly approved an $805 million GO bond package in 2008. They approved $808.6 million of GO bonds in 2002 and $678 million of bonds in 1998.

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