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School construction budget based on independent professional estimates

April 04, 2011
The proposed bond for Portland's Schools will rebuild deteriorated school buildings while providing safety, structural upgrades and modernized learning environments. The list of projects is significant, as are the measures taken to ensure the construction and financing connected to the bond is accountable, transparent and appropriate.
With guidance from independent construction engineers and professional cost estimators who know school construction, Portland Public Schools developed a comprehensive budget for our school bond program.

The bond will provide safety and other needed updates at every one of our schools – and we have laid out a budget that ensures we can deliver every project on time and on budget, as promised to voters.

Our pay-as-you-go financing plan, which primarily relies on short-term financing, will save more than $200 million in interest payments.

These are some key points about our school construction budget:

Few other school districts – outside Seattle – have completed truly similar projects, meaning project-to-project comparisons inside Oregon are difficult to make.

Many other Oregon school districts, unlike PPS, have school construction bonds in place. But most recent projects, especially in Portland's suburbs, are new construction on open fields. PPS projects are full renovation of historic buildings that are 70 to 100 years old, on tight urban sites in dense neighborhoods. Our schools are on average 65 years old, and most have never been fully updated. They are outdated, with leaky roofs, inadequate electrical, plumbing and classroom equipment.

What we are proposing is different and more extensive than the work done in many other Oregon school districts. For example, a modest remodel of lighting, windows, paint and flooring costs far less per square foot. Few if any other Oregon school projects included full earthquake retrofits, full modernization of schools or re-construction in compact urban areas- with attention to retaining the historic character of the neighborhood. Earthquake safety upgrades alone can account for 15 to 30 percent of school construction costs.

The school construction projects in PPS are most similar to those that have been recently accomplished by Seattle Public Schools, an urban school district that also has roughly 47,000 students. Seattle is halfway through rebuilding their schools which, like ours, are older buildings with historic character (and failing systems) in dense neighborhoods. The PPS budget, however, is lower than in Seattle as construction costs in this market are roughly 5.5 percent lower (exclusive of Washington's sales tax) based on generally accepted industry sources.

Independent school construction cost estimators set the base construction costs for PPS's budget.

Because few local school projects are comparable to the work PPS proposes, two independent cost estimators offered base construction costs for PPS budgeting. Both have extensive experience and expertise in K-12 construction. Those third-party cost estimators proposed a budget of $322 to $358 per square foot for rebuilding historic schools. PPS then shaved the cost closer to the lower amount for estimating costs in our budget. Brand new construction costs more than renovating.

Portland's bond measure budgets include elements that other budgets sometimes omit. The PPS bond construction budget includes contingency funds to ensure projects come in on budget and that all costs are covered – preventing cost overruns and protecting the general fund budget for teachers.

An article in The Sunday Oregonian focuses on how our projected costs compare to the average costs of dissimilar school construction across Oregon. Costs of such different projects are not nearly as reliable a standard as the independent professional expertise of school construction cost estimators.

We hope you take the time to consider the full picture and complexities of the issue. For any of you who have had the opportunity to see even one of Seattle's school renovations, you know what a fully modernized historic school can provide the neighborhood, teachers and most of all students who are seeking to compete in a truly global economy.

Much more information is posted online, and please, feel free to email me any questions or comments. Thank you for your interest.

Sincerely,

C.J. Sylvester, Chief Operating Officer
Portland Public Schools

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