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March 2, 2021
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Business Review Western MI
Business Review Western MI
School Bond Failure
(2007-02-14)
(wgvu) - 2006 marked the lowest passing percent for qualified school bond
proposals in two decades in Michigan.

Only 31.3 percent of bonds qualified by the state received approval,
down 10 percent from 2005 and less than half the amount passed by
voters two years ago.

Though many involved in the construction of public schools believe
the industry to be a cyclical one often in lock-step with the
economy a dry year for bonds left many companies feeling the pain
alongside school districts.

School Daze
While 2006 represented the lowest percentage of school bonds passed
in 20 years, voters in Michigan did approve $1.63 billion for school
improvements nearly $3 million more than in 2005. However, 2005 saw
a lower amount requested overall at the polls.

The $1.63 billion approved last year is the lowest amount since 1993,
when voters coughed up only $654 million 33 percent of bonds
reached approval that year.

Fewer bond issues are being attempted by school districts, and the
ones that are being attempted seem to be smaller bond size than in
the past, noted Ralph Moxley, director of educational facility
planning for URS Corp., based in Grand Rapids. I think it shows a
slow economy in the state of Michigan. People are not willing to pay
additional taxes for school propositions.

URS performs 30 percent of its workload in the kindergarten-through-
grade-12 category and such slumps hurt us a lot, Moxley said.

To alleviate the pain of up-and-down school cycles, the architecture
and engineering company spreads its workload across health care and
municipal projects, he said.

GMB Architects-Engineers in Holland once counted K-12 design as two-
thirds of its work. That figure has dwindled to one-third, due to the
economy, head of business development Brad Hemmes said.

To make up the difference in the number of educational projects, we
had to focus more intensely on other markets where we work to keep
all our staff employed and busy, Hemmes said.

While URS boasts a 75 percent success rate on the bond issues it
works on, the company also developed a niche within education.

What we've seen is a shift in the marketplace, Moxley said. A lot
of work in athletic fields .

Grand Haven voters in 2005 approved $16 million in improvements to
their athletic facilities and safety improvements at four elementaries.

It's been extremely strong the last three, four years, he noted,
even though the school market is down.

Rex Bell, president of construction manager Miller-Davis Co. in
Kalamazoo, doesn't think the economy should take all the blame of
this construction slowdown.

It's not that easy in terms of cycles, Bell said. Because there
are a lot of intangibles, a lot of variables in passing a bond,
that's why you can't say it's cyclical.
Miller-Davis now finds 40 percent of its work in K-12, though it aims
for 50 percent, Bell said.

Michigan's method of funding school construction is one of the main
obstacles to upgrading and maintaining quality facilities, said
Steven Hoekzema, principal with Tower Pinkster Titus. The
architectural firm, based in Kalamazoo with an office in Grand
Rapids, performs 40 to 50 percent of its work for K-12 education.

Voting on a bond issue is the only opportunity you have to say no to
more taxes, Hoekzema said. Other states fund bond issues quite
differently.

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