Delay in releasing APS construction-cost audit raises eyebrows

A planned Aug. 7, 2018, meeting between the audit committees of the Arlington County Board and School Board to discuss an audit of school-construction costs was cancelled at the request of the school system.

Arlington residents will have to wait a little longer for an analysis of the reasons behind the high costs of school construction in the county.

The audit committees of the County Board and School Board had been slated to meet Aug. 7 in a joint session to discuss a report by school-system auditor John Mickevice on school-construction costs. That meeting, however, was called off.

Chris Horton, the county government’s auditor, said the confab had been nixed due to a request from the school system. Through a spokesman, School Board Chairman Reid Goldstein said summer schedules had not yet permitted all  School Board members to be briefed on contents of the report in time for the meeting.

No revised meeting date has been set. The next regularly scheduled meeting of the county government’s audit committee is Sept. 27.

Cancellation of the public meeting engendered a number of conspiracy theories, and while he wasn’t one of the theorists, the delay served as a red flag to Tim Wise, president of the Arlington County Taxpayers Association.

“A delay in releasing any audit report should always raise the suspicion of taxpayers,” said Wise, currently undergoing health-rehabilitation treatment in Fredericksburg.

Until the onset of the 2008-09 recession, Arlington Public Schools often paid some of the highest costs nationally for school construction, and both School Board members and the then-superintendent in that era seemed to revel in, rather than shrink from, the high spending, pointing to it as a commitment to the needs of students.

Wakefield High School, which was conceived before the recession but built in its immediate aftermath, cost $203 per square foot, according to state data. Among high schools constructed around the same time, a Loudoun County school cost at $149 per square foot, a Clarke County school $121 per square foot.

Arlington’s spending spree was tempered somewhat during and after the recession, in part because construction firms were willing to charge less to get work and in part because the school system was bumping up against the debt ceiling imposed by the County Board.

But the trend toward pricey projects started up again: A recent Arlington elementary-school project totaled $289 per square foot, compared to $151 per square foot for a Prince William elementary school, while the Wilson site – to be home to a relocated H-B Woodlawn Secondary Program – has what might work out to be the highest per-square-foot cost in Virginia public-school history.

A planned new elementary school in Westover, which had been budgeted at just under $50 million, currently has a price tag of $6 million more. School Board members have tasked a review panel with trying to cut costs, but have not committed to keeping the project at its original budget.

During development of an updated county-government capital-improvement plan in the spring, County Manager Mark Schwartz was uncharacteristically blunt in criticizing the school system’s building plan.

Schwartz said the school system’s proposed capital-spending package would have required the county government to trim $45 million to $55 million from its own spending over a five-year period – “cuts that I deem unacceptable,” Schwartz said.

The County Board and School Board eventually papered over the financial differences. But their combined spending packages will push perilously close to the “10-percent rule,” a self-imposed guideline that the cost of servicing debt will not exceed 10 percent of the overall county budget.

Under the adopted capital plans, debt-service would be above 9.9 percent from fiscal 2023 to 2027. The narrow wiggle room leaves the county government with “extremely limited flexibility,” Schwartz said in June.

County Board member Erik Gutshall, who with colleague John Vihstadt chairs the county government’s Audit Committee, said he looked forward to that body’s joint meeting with their school counterparts.

“We’re all eager to see the audit,” Gutshall said, praising the “collaborative relationship” between the school system and county government but also expressing the need for “squeezing every bit that we can out of every dollar for schools.”

County voters in November will cast ballots on a $103 million school bond, one of several local bond issues on the ballot. Among the projects to be funded is the new Westover elementary.

Approval on Nov. 6 is all but assured, as county voters have not turned down a local bond in 40 years, and school bonds often lead the pack with approval rates of 80 percent or more.

Voter approval of referendums doesn’t mean the county government can or will sell the debt immediately; many bond projects are actually funded years after approval, giving officials maneuverability in staying under the 10-percent rule.

Pole vaulting over the 10-percent debt-limit ceiling wouldn’t necessarily be catastrophic for the government’s coveted AAA bond ratings, but it could cause bond-rating houses to take a more probing look at the government before affirming those top ratings. Schwartz, who leads the county government’s day-to-day operations, has been adamant that it not be exceeded.