DESPITE QUESTIONS, P-3 "OPTION" APPROVED BY BISD BOARD

By Juan Montoya

By a 4-2 majority (trustee Carlos Elizondo was absent), the board of the Brownsville Independent School District gave the administration approval to seek another "option" to augment district finances outside the accepted method of issuing bonds.

The did so by allowing Superintendent Esperanza Zendejas and CFO Lorenzo Sanchez to explore partnering with private investors to participate in future facilities construction.

The forming of a public-private partnership is related to the proposed $120 million BISD facilities construction plan by using a vehicle called the P-3 under the Texas Facilities Commission. Zendejas was careful to point out that no "projects" had been chosen for that kind of financing, but that it was just another option for financing.

Under those guidelines, according to the Commission, "There are inadequate resources to develop new education facilities, technology and other public infrastructure, and government facilities for the benefit of the citizens of this state, and there is demonstrated evidence that partnerships between public entities and private entities or other persons can meet these needs by improving the schedule for delivery, lowering the cost, and providing other benefits to the public."

The Commission was passed through legislation dating back to 2015. There have been P-3 partnerships established across the country to finance affordable housing, roads, and other infrastructure, including educational facilities, though none of those dealing with public education have been in the Rio Grande Valley.

A public-private partnership is a contractual agreement between a public agency (federal, state or local) and a private sector person or entity organized for the purpose of delivering services or facilities that might not otherwise be possible using traditional sources of public financing.

Through this contractual agreement, the assets of each sector (public and private) are shared to deliver a service or facility for the use of the general public, e.g., planning, designing, financing, constructing, operating, maintaining, and owning, and each sector shares in the potential risks of the  delivery of the service or facility.

It all sounded good, until trustee Dr. Sylvia Atkinson started questioning P-3 architect Ramiro Garza on specifics dealing with school districts.

Garza admitted that he had no experience on projects dealing with school districts, and that the only P-3-funded project in the Rio Grande Valley was with the City of Edinburg. When questioned further, Garza said that the project was the construction of the Bert Ogden Arena that will seat about 9,000. That project had grown, he said, and the cost had risen with the changes.

"We have not worked with any school districts," Garza said.

How much has the Edinburg project gone above the original estimates, he was asked.

"It started out at $30 to $40 million and has grown to some $70 million," Garza said. "It will be the largest facility south of San Antonio."

When Zendejas was asked whether the new financing method had been run by Estrada Hinojosa, the BISD's financial advisers for their opinion, she hedged and said that they were aware the district was "exploring" alternative financing.

"Is Estrada Hinojosa recommending that we follow this direction...?," Atkinson persisted.

"I haven't asked them directly for their recommendation," Zendejas said. "When we have a project, we can ask them to come on board then with a recommendation."

The district chose to bypass asking the voters whether it could issue $120 million for facilities construction through a bond election, choosing instead to approve a 11.25-cent increase in the ad valorem taxes on properties in the district.

As a result, The Instructional Facilities Allotment (IFA) established in 1997 that guarantees a specific revenue yield per student per penny of local tax effort for new instructional facilities are unavailable to the BISD because districts must receive voter approval to sell bonds for instructional facilities to apply for assistance through the IFA program.