Several months ago, Houston ISD superintendent Terry Grier delivered dread news to an aghast school board: HISD was short by $37 million (actually it was originally set at $39 million for a couple days) in its bond fund projects money.
Almost immediately, some people well acquainted with the district's finances engaged in some heavy-duty head scratching. Chief Financial Officer Melinda Garrett couldn't figure out where this sudden deficit had come from and gave it a tougher look.
Well, today, Grier announced he was "Pleased, but a bit embarrassed to announce that instead of a $37 million shortfall, the district has a $73 million surplus."
According to Garrett, HISD has historically kept its bond-projects money in three pockets: change orders, so-called "owner's contingency" or project contingency funds and budgeted reserves and contingency for inflation.
When one person in the bond office decided to review the funding, his ensuing report was "in error" because he didn't know about all the reserved funds, Garrett said.
All the miscommunication has been cleared up now, Grier assured trustees at this morning's workshop session. From now on, the funds will be combined, he said. (And Hair Balls assumes there will be more review of any bond office reports in the future than just one employee's OMG work.)
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Garrett said the $37 million applied to only projects that had already been started. Further review of all the planned projects came in at an estimated $69 million that may be called upon for reserve funds. "We have $4 million more than we expect to spend."
Contingency funding is always built into a project, she said, because there might be unexpected problems or inflation might hit.
Trustee Anna Eastman warned Grier that the under budget/over budget news means: "We've got some work to do to rebuild the trust of the public." Larry Marshall pressed the point later with Grier, asking if he "got it?"
Grier acknowledged he did.