More fuzzy math....

At the FTT meeting last Monday, attendees and committee members were told that the "total savings" on the Creekside Elementary construction project amounted to $718,200.

Yeah, team...right? Not so fast. We're as jazzed about cost saving as the next guys, but let's un-spin this tale and take a harder look at the numbers.

Total amount authorized by referendum........... $14,675,000
Total cost (to-date) to build/equip Creekside... $14,559,900
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Actual cost savings............................................... $ 115,100


Hey....we're not knocking it. ANY costs savings is a huge thing the way this school district spends money. But...but... where did they come up with this $718,200, cost saving number?

Here's the rest of the story. When they borrow money for the construction, they borrowed it all at once (unlike the high school, where the money is being borrowed in 3 equal installments of $32M each). Obviously, the whole $14.6M wasn't spent all at once. So....we--- the district ---actually earned some interest on the construction money squirrelled away. The total interest earned was $603,1000.

So the real story is:

Actual cost savings............................................... $ 115,100
Interest earned..................................................... $ 603,100
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Total $$$ returned to the taxpayers.....................$ 718,200

So...in the inimitable style of the board/district, they want to be congratulated for a savings amount 80% of which is purely due to interest earned.

Food for thought:

1. How much of the "true" $115K savings was directly related to imput from the "Construction Manager" we hired....and paid $$7300 per month from November 2007 through September 2008. And how does that aproximately $83,000 we paid the construction manager factor into the cost savings?

2. Given that we banked/invested the $32M bond funds for the high school borrowed to-date and the state of the nation's investment structure, did we lose any of the money we have borrowed to-date?