HEBRON – Lakewood School Board members spent nearly three hours in a workshop meeting February 1, discussing the district’s capital improvements package and how to pay for it. The centerpiece is replacing the 104-year-old Hebron Elementary School that houses Preschool through Grade 2.
Last month, board members Jonathan Lynch, Bill Pollard and Steve Thorp rejected the final step to put a 28-year, $33.9 million bond issue on the May 8 ballot. Earlier in the month, Thorp with board members Bill Gulick and Tara Houdeshell had approved the first step to put this issue on the board.
Lynch and Pollard, who were elected with Houdeshell in November, are concerned that some of the supplemental capital improvements that would have a headstart on the elementary school could cost more than expected – which has happened with all the district’s recent projects – causing the district to come up short on funds to finish its highest priority project. Both also have concerns about using the higher cost Certificates of Participant (COPs) financing in the financial package. Thorp has similar concerns and is opposed to several of the supplemental projects, including the one to demolish Jackson A for a new athletic parking lot, moving the district administrative office from Hebron to the school campus and the cost of the new bus garage.
One of the options discussed February 1 was renovating both Jackson buildings – now being used for grades 3-5 – and joining them with an addition to house preschool through grade 5. The district’s architecture/design consultant LegatKingscott – now known as Legat Architects – was asked to look at that option and provide a cost estimate.
Legat’s Paul Garland, AIA and Dennis Paben were at the meeting along with district financial consultant, David Conley of Rockmill Financial Consulting, LLC. The Jackson repurposing project was estimated to cost $27.4 million compared to $33.9 million for a new K-5 school.
Gulick said the existing Jackson building would still have flat roofs and recounted the district’s negative experience with them. “We are all the time fixing flat roofs.”
He agreed that a two-story new school would be less expensive than a one-story with the same floor space but believes the safety of having an emergency exit in every classroom is worth the extra cost. Gulick is willing to give up the new athletic parking lot on the Jackson A site. He wants to go from five buildings in the district to four. Having a new school with a hip roof is worth the extra cost, he said.
Gulick acknowledged the recent cost over-runs on capital projects, blaming them on Charter Hill Construction, “soft” dirt encountered in the stadium project and an unanticipated flooring problem at the middle school. “You have good questions,” he said.“Condense it (project list) and do away with the frills. Get the $33 million and build the new school.”
Lynch said, “The elementary school has always been the last build.” First it was just an elementary school and then a lot of things were added on. “We’ve got to do it right,” he emphasized.
“It could all be done,” Gulick responded. “We went with the advice we got.”
Houdeshell said she is also concerned about coupling the elementary school with other projects. She suggested a cleaner bond issue with the elementary school as the priority and then prioritize the other projects.
Conley said the district could do two bond issues or one bond issue and possibly a COPs. Houdeshell said the difference was $7 million, suggesting putting $500,000 a year into a capital improvement fund and then using those funds over a five year period to fund the other projects.
Conley said a COPs allows you to fund $7 million in improvements without waiting. The projects roughly break down:
• New bus garage – $1 million;
• Additional middle school improvements – $6 million; and
• Additional high school improvements – $2 million.
Houdeshell asked if the district could afford to put more than $500,000 per year out of the general fund into capital improvements?
“We can probably fund a little more now,” District Treasurer Glenna Plaisted responded.
Houdeshell also asked how could they make sure that the new elementary school remains the priority.
Garland and Paben explained the proposed Construction Manager at Risk (CMR) process. A CMR is selected very early in the design stage so there is contractor input from the early design stages. The CMR needs gives the district a guaranteed maximum price once the construction drawings are 75 percent complete. They acknowledged that the CMR will build in some contingencies. They said the design process would take 12-18 months. The smaller projects could get started much quicker.
Pollard expressed concern about all the contingencies, asking what are the projects easier to push back. “Let’s make sure we can do what the community wants.”
Superintendent Mary Kay Andrews said, “We have facilities that need attention. We have aging facilities.” She added the district needs to look beyond just warm, safe and dry issues. “What is education going to look like five years down the road?”
Pollard said we have to “protect dollars to make sure we get a new school. We can’t run out of money for the new school.”
Houdeshell said she learned about a district that had developed a 15-20 year capital improvement plan during a state-wide training session for new board members. “It was impressive.”
“You have to plan out,” Lynch added.
“It all got into one big giant number,” Andrews acknowledged.
Houdeshell expressed some concern about the COPs financing in the overall package.
“You can borrow $10 million without asking voters,” Conley said. “COPs are more expensive than a bond issue. It is your only option to borrow without going to voters.”
“The district is well-managed financially,” he added. “You have an extraordinary financial positive…You (the board) are the boss. Tell us what you want.”
“I don’t like them (COPs),” Conley continued. “But it is the only option the state gives us. You have the money to pay for it; you don’t have to ask them (voters) for more taxes.”
He said there are some safeguards built in like being able to pay them off early without a penalty. Conley said the recent tax reform bill will probably increase the cost (interest rate) of COPs. Corporations are the primary buyers of COPs and with lower tax rates it will likely take higher interest rates to get them to purchase COPs, he explained.
He suggested that board members look at COPS from a different prospective. “You aren’t going to voters because you can afford it (COPs) without raising taxes.”
“You have to overcome the history (of COPs),” Lynch said.
“Show them you (board members) know what you are doing,” Conley said. “You guys have to be sure this is what you want to do.”
Thorp asked if board members are set on K-5. Houdeshell said, “Yes. I feel the new building is the way to go.” “I don’t want a flat roof,” Pollard added.
“I thought the number (for the Jackson option) would be lower than $27.4 million,” Lynch said. “If it had been presented as an elementary school itself, I think the vote would have been different.”
Board members briefly discussed putting the bond issue on the August special election ballot. The election would cost the district about $20,000 since costs would be shared by election to replace Congressman Pat Tiberi who recently resigned. Conley noted that Lakewood’s success record for levy/bond issue approval in August isn’t very good.
“Take your time,” Conley suggested. “Get your research done.”
The first resolution to get an issue on the November 6 ballot needs to be done by June 9. In the meantime, administrators and teachers are going to do some “high level” priorization on the other capital improvement projects. More information will be provided on the Construction Manager at Risk process. Once design starts, it will take three years until the new school is ready for students.
The board’s next regular meeting is set for 6:30 p.m. on Wednesday, February 14, in the high school library.