School contruction budgets stretched thin: Ogden keeping every project despite more costs
Text 
No Comments [ Add Comment ]By Amy K. Stewart
Standard-Examiner staff
O
GDEN -- Ogden School District officials are facing the harsh reality that their $95.3 million in bond financing just won't go as far as they had hoped.
Multiple school districts in the state have building projects. Those and other construction projects, such as the Main Street construction in Salt Lake City, are resulting in a shortage of subcontractors. That has led to higher bids on jobs because of supply and demand. And there has been inflation.
Ogden district officials say they might economize on some aspects, but they won't cut a building project.
District officials aren't sure how much they will be short because many of the bond-funded projects are just going out to bid.
But they can see how things are going so far. The district's new northwest K-6 elementary magnet school was estimated to cost $9 million. It is now estimated to cost $11 million.
"The district promised the public we would do these projects," said Gary Reed, director of support services for the district.
"We're not going to back down. If it costs more money, then we're going to find the money without asking the public to pay for it," Reed said. "That's the bottom line."
The district could turn to various sources to get money, including interest accrued from the bond money, no-interest federal loans and the sale of district property.
Another option is doing construction work on a nontraditional timeline, which means not opening a new building on the first day of school.
"We will be wise and creative in ways to make sure we finance those projects," said Ogden School District Superintendent Noel Zabriskie.
"We're going to do it. I'm confident we can."
By the end of February, the district had earned $1.2 million in interest off the $60 million first issuance of bond money, which it banked in the Public Treasurer's Investment Fund (PTIF) last October at an interest rate of 5.2 percent, said Eugene Hart, Ogden School District business administrator.
Hart estimates the district could possibly earn up to $4 million by the time the district spends the bond money on the projects.
The district also could use Qualified Zone Academy Bonds (QZAB) as a way to borrow money. QZAB, which is authorized by the Internal Revenue Service through the State Office of Education, allows for a set amount to be available for a school district to borrow each year, essentially with no interest.
The district plans to have $5.2 million in QZAB funding, Hart said.
The district is closing several schools, such as Lewis Elementary School, and could sell the property.
Some sites, such as Grandview Elementary School, are planned to be kept for future construction as the population changes.
A school could be sold and used for commercial property or even a charter school. District officials don't have a sale price for the properties yet, Hart said.
District officials already are considering using a different construction timeline to save money.
Bidding a 12-month timeline means more workers and possible overtime pay. A 14-month timeline would allow for fewer workers and a less-stringent deadline.
However, a longer timeline could result in the southeast and the district campus elementary schools opening later than the first day of school.
"Will it cause some inconvenience? Certainly," Zabriskie said. "But on the other hand, it's a lot better than not having a building at all."
The students would simply attend their old schools until it's time to make the switch. The move may have to be done over two weekends, Utah Education Association weekend, Thanksgiving break or winter holiday, depending on logistics, district officials said.
They also plan to bundle three middle school remodel projects into one bid package to make it more attractive to prospective bidders.
Further, contacting many subcontractors personally and encouraging them to bid worked well for the northwest magnet school project, as opposed to simply advertising the project. District officials plan to continue this method.
Add Your Comment
