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April 29, 2016

Budget Update - Construction Funding

Our district elementary and middle school construction projects are continuing to progress within their scheduled timelines for completion. Sage Crest and Desert Hills will open for the start of the upcoming 2016-17 school year with the new Chinook building opening sometime in January or February of 2017.

Construction on Westgate Elementary will begin later in May with the building scheduled to be completed in July 2017. The total cost of design, construction, and furnishings for Westgate is projected at $20.0M. Design work will get underway for Elementary 16 later this summer.  Last month, the School Board approved Elementary 16 to be built on the Clearwater Creek site just west of Steptoe Street and north of Clearwater. Construction will begin in the spring of 2017 with completion scheduled for the summer of 2018. 

The school building projects are funded through a combination of voter approved bond funding and state school construction matching assistance. Voters approved an $89.5M bond last July for funding the construction of two new middle schools, two new elementary schools, and the rebuilding of Westgate Elementary.

Based on a state formula driven by current building instructional space and student enrollment, a district may be eligible for state construction funding assistance if the computation indicates a shortage of instructional space.  If a district is eligible, as is the case for our district, then some of the project costs for a new school building are funded through the state.  The state also provides funding assistance for renovation of buildings that are over 30 years old.

The amount of project costs funded by the state for new school construction depends on the new building’s square footage multiplied by the state allowed cost per square footage.  Right now, that state allowed cost per square foot is $213.23, even though we are actually paying about $250 per square foot locally for our current projects.

Each district also has a computed state construction assistance percentage. For our district the percentage is close to 80%.  This means that if all the square footage of a new 60,000 square foot elementary was allowed at the $213.23 per square foot cost, the state would compute a cost of $12.79M for the project. The state would fund 80% of the $12.79M cost - or $10.23M, and the district would pay for 20% or $2.56M.

The reality is that a 60,000 square foot elementary actually costs $15.0M for construction costs in addition to another $5.0M for architect/engineering services, parking, landscaping, furnishings, equipment, IT network and computer related equipment costs, etc. So on a $20.0M elementary project, the district will receive just over 50% of the total project costs funded through the state with the remaining 50% funded with bond funding. The district also expects total project costs for each middle school, close to $34.0M each, to be funded at 50% by the state. 

The ability for a district to tap into state assistance for its school construction or renovation projects depends on a district having enough funding on hand to cover the share of costs not funded by the state. Our district has been fortunate that voters have passed a $69.0M bond in 2009 and an $89.5M bond in 2015. Having bond funds available has allowed our district to have the state pay for 50% of our total costs for renovating older schools or building new schools.

Vic Roberts
Director of Business Operations

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