'Compelling moral imperative' meets rising construction costs as Portland Public Schools board is faced with tough decisions.

This story has been updated.

TRIBUNE FILE PHOTO - Board member Scott Bailey at a recent meeting. Bailey was concerned Tuesday night over the lack of money to pay for needed improvements to buildings to implement the board's middle school plan. The Portland Public Schools board received a bit of sticker shock this week.

Board members had to wrestle with how to pay for the long-awaited shift away from K-8 schools to open two new middle schools.

The $28 million plan was $11.4 million short. At a Tuesday, April 10 board meeting, a 6-1 board majority decided to pay for the rest out of 2017 bond funds.

The problem with that?

The 2017 bond is already $89 million short itself. That means the board just added to the deficit to reopen Harriet Tubman as a middle school, reopen Rose City Park as a neighborhood school and fix up Pioneer Special School's building, as well as some work at Roseway Heights.

"Oh, baby," co-Vice Chair Rita Moore said. "The lesson I am learning from this is that we don't make some very big decision without costing it out first, and we did that with the middle schools.

"...Would I have made the same decisions? I don't know. But there are questions we should have asked."

Board Chair Julia Brim-Edwards pushed back, noting that opening two new middle schools — a board priority that has been delayed through years of turmoil at the district — is a matter of providing equal educational opportunities to middle grade students now at small K-8 schools, which have fewer course offerings.

"Anytime you have a sort of large, complex, multi-location development it's not unusual that numbers are going to evolve," Brim-Edwards said. "That's compounded by all the local building activity."

Superintendent Guadalupe Guerrero said the middle school plan is costly, not just in facilities but in operational costs and planning.

"We share the compelling moral imperative to do it," Guerrero told the board, but added: "It is a tall order and that's what we're confronting right now."

This doesn't include whatever costs there may be for the ACCESS Academy program, currently housed at Rose City Park, which doesn't seem to have a location for fall yet. The plan to move the program for accelerated learners to the Holladay/Youngson complex — currently the Pioneer Special School — fell apart at the end of March.

"We have to make reparations. We have to restore our relationships with those communities," Guerrero said in an apparent gesture to the board room full of ACCESS Academy supporters in green spirit wear.

Tough decisions

The board reluctantly rejected two other plans for funding the middle school idea. The district has a fund fueled by the construction excise tax, but board members decided against dipping into that pot as it provides the majority of maintenance funding for all of its schools, whose average age is 88 years old.

"We have so little money to touch 90 schools," said Chief Operating Officer Jerry Vincent. Vincent warned that maintenance costs are only going to increase as the schools and their systems age. "It's not sustainable, and that's even if you keep passing bond measures every once in a while."

The other option was to take out a loan and make approximately $1 million payments out of the general fund for the next 15 years. But Guerrero warned his plan to find savings in the central office administration budget isn't going so well — they still have to find $20 million for 2018-19.

"Borrowing is not going to be the first place that I would want to go," he advised the board.

Paul Anthony, the lone no vote on the board for adding to the bond deficit, said he would prefer a loan.

"You can do an awful lot of short-term good for an awful lot of kids with $11.4 million," Anthony said.

Voters approved the largest school improvement bond in the history of the city at $790 million in May of last year. The ballot language was vague, but the general understanding was that it would go to reopen Kellogg Middle School in Southeast, rebuild Madison, Lincoln and Benson Tech high schools and have at least $150 million for "health and safety" needs across the district.

Now, in part due to rising construction costs in a city seeing unprecedented growth, school budget officials are projecting dramatically higher-than-expected costs. To do their original plan would have cost another $136 million more than anticipated. Due to reductions in scope and other cost savings, the design teams have so far gotten the deficit down to $89 million.

Clock is ticking

Time is running out to find additional cost savings. In order for Madison High School to start work to open for the 2021-22 school year, they need to know what their budget is by mid-May.

Some in the Benson Tech community, which is the final high school retrofit planned in the 2017 bond, are getting nervous that they will get short-changed. The design team is just getting going on that project with a meeting April 16.

On top of all of that, the 2012 bond, which covered Franklin, Roosevelt and Grant high school renovations, is projected to be up to $10 million over budget. Extra costs tacked on to that bond issuance were a $5 million shop space at Roosevelt High School and costs associated with the 2016 tainted water controversy.

Interim Chief Financial Officer Jim Scherzinger urged the board to make some hard decisions soon.

"We don't have the resources to cover the estimated costs of the things we are working on," Scherzinger said. "Now they're pretty much waiting for some direction on the budget to really try to determine what sort of master plan to bring to you. ...They really would like to know by mid-May what the marching orders are."

Board member Amy Kohnstamm, who took a lead role in pitching the 2017 bond to voters, expressed frustration by what she saw as a lack of board oversight of the bond funds. She regretted the disappearance of the School Improvement Bond Committee, which — when Brim-Edwards became board chair last summer — saw its responsibilities distributed to other committees, such as a new Health & Safety board committee.

"We don't have a process," Kohnstamm said. "I've been calling for a venue for this for most of the last six months. … There's a rising level of crisis on the fact that we have no infrastructure for oversight on the bond."

Brim-Edwards said Friday there is a plan being developed for how the board will move forward in addressing the deficit but that it was not immediately available to the public.

The board's Finance, Audit and Operations Committee will meet Tuesday at 3 p.m. at the Blanchard Educational Service Center to discuss the bond. Also, the Bond Accountability Committee — had been scheduled for April 18, but that meeting was canceled. A new time and location will be available on

After the funding mechanism for the middle school implementation plan was decided late Tuesday night, the board waived its normal procedure for approving contracts and granted Fortis Construction an emergency contract to begin work the morning after the board meeting. A copy of the contract, initially listed under the Feb. 27 board meeting, had not been posted to the district website and questions regarding its amount and purpose were not answered by press time.

UPDATE (4/17/18): This story was updated with new information that the Bond Accountability Committee meeting had been canceled.

Shasta Kearns Moore
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