Chief among the critics is Eagle River’s Jose Vicente, a former Anchorage Water and Wastewater Utility design engineer and private developer, who claims that it is the district’s practice to sell bonds for more than necessary to complete projects, leaving extra funds available for other uses.

“They were bonding for money they didn’t even need,” Vicente said. “And I told the school board that before they approved the language of the proposition for the April municipal election.”

Last winter Vicente offered to complete the Eagle River High water and sewer line project for a maximum of $1 million, far less than the $2.5 million sought by the school district in bond money during the April 5 election.

ASD Superintendent Carol Comeau says the district has done nothing wrong, dismissing Vicente’s claims.

“Certain individuals take pride in casting the district in a bad light and quite frankly I resent that,” she said. “We pride ourselves in being above board and honest. Bonds are never, never done to stuff our coffers so we can do pet projects or build up a cash reserve.”

Voters rejected a bond proposition that included $2.5 million for the water and sewer line extension in April. The bond funds were part of a $69.88 million package that also included money to renovate and construct an addition at Service High School and the design work for a Girdwood school.

However, even without the bond money, the district was forced to move forward with the water and sewer line project because of an agreement it reached when the high school was constructed in 2004, requiring the extension to be completed when adjacent parcels were ready for development.

A contract was awarded to Alaska Contractors Elite Inc. for $680,000 to design and construct the water and sewer line extension May 11.

Without voter approval, the district is using funds from and interest earned on previous bond revenue to pay for the extension, according to ASD spokesperson Heidi Embley.

The Municipality of Anchorage bond counsel issued a new interpretation in May of how anticipated leftover bond revenue can be used. This left the district with two options, either redirect funds from previous bonds to pay for similar projects or pay off bond debt. The district and school board chose to use the money for urgent projects.

This use of bond funds for projects not presented to taxpayers troubles Vicente.

“I can’t believe they found the money for this, and other projects that were on the bonds the voters rejected,” he said. “If they already had the money they needed for these projects, why were they asking the people to approve new bonds? I guess this isn’t the first time they’ve burdened the taxpayers with a bond for more money than was actually needed to complete a project.”

ASD director of facilities Ray Amsden said AWWU provided an estimated cost for the project, which was then presented to voters in April.

“We’re not in the waterline business, and AWWU is,” he said. “As a government agency we look to AWWU, another government agency, to assist with the construction of water and sewer lines and we contracted with them to provide us their best estimate to complete the project.”

AWWU director of engineering Curt Voss presented an estimate to the school board during a Jan. 12 meeting, explaining the high cost of pipe, labor and design resulted in the need for $3.5 million.

Vicente said AWWU is partly to blame for the inflated bond request.

“I blame AWWU, not the school district, for the high estimate,” he said. “It’s not fair to the voters to be burdened with bond repayment because the district doesn’t have qualified people on staff to estimate the true costs for projects like this.”

ASD Assistant Superintendent of Support Services George Vakalis said from the beginning the district understood its obligations in regards to bonds.

“The district and the superintendent made a commitment to the school board and the public that if the full $2.5 million was not needed to complete the project that we would only sell bonds for the amount needed,” he said. “We would never sell bonds that were not necessary.”

Amsden added that a drop in construction costs between now and January was a reason for the bid coming in lower than initially estimated.

However, Vicente wondered how he estimated the cost of the project at less than $1 million in January, when construction costs were so high, yet AWWU could not.

The answer may lie in ASD’s practice of estimating above the actual cost of a project to prevent it from having to submit a second bond to voters to complete a project in the case of unforeseen circumstances.

“It’s important for everyone to understand that when we estimate the cost of a project we are careful that we won’t run out of money in mid-stream,” Amsden said. “And when we sell bonds, we want to make sure we have money available to pay for the gotchas before they happen.”

Because of the confusion surrounding this project Comeau said the district plans to change how it sells bonds in the future.

“We will sell fewer bonds more frequently, so that we don’t get into this situation again,” she said. “This has been embarrassing in the sense that it looks like we didn’t approach this project right, but we did it based on what we knew at the time we took the proposal to the school board and the assembly.”

Comeau also expressed some disappointment with having to utilize funds from previous bonds, instead of new bond revenue, for this project.

“Had voters approved the bond, we would have qualified for 70 percent reimbursement from the state,” she said. “That would have allowed us to use the money we are using for other projects.”

Reach the reporter at darrellbreese.@alaskastar.com.

This article published in The Alaska Star on Thursday, July 2, 2009.