Articles

Bond in a bind: Inflation deflating value of school-improvement funds

Andra Belknap, Ojai Valley News reporter
“The committee feels the pace of construction is the single greatest risk to the effective use of bond proceeds and needs immediate attention,” reported the Measure J Citizen’s Oversight Committee (COC) to the Ojai Unified School District’s (OUSD) School Board May 9. “We believe the District is spending the funds as required, unfortunately in today’s environment, just not fast enough.”
The COC contends that rapid inflation in the construction industry means the District’s $35 million in bond funds are quickly losing value.
“Construction costs have been experiencing inflation rates that are two to three times the overall economy rate, a range of 5 percent to 7.5 percent,” wrote COC Chair Dennis Corte in a report to OUSD’s School Board. “Given the amount of the recent statewide fire-related losses in the billions, some are predicting increased costs as high as 10 to 12 percent due to increased competition for labor and supplies. If the District, by the end of this year (2018) will have spent or committed to construction costs of $10 million, that would leave at least $25 million exposed to a future higher increased cost of construction that will have a significant effect on the number of projects that can be completed with the remaining funds.”

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