The enormous funding gap for the state’s largest school bond may have a fix, judging by updates and discussions at the Portland Public Schools board meeting Tuesday.
School board members got a measure of good news.
After seeing the bond measure’s financial picture go from bad to worse over the last several months, the board learned the shortfall is getting smaller. The shortage peaked at $190 million, and has shrunk to $142 million, according to a presentation by district financial advisors including higher-than-expected interest returns. But that shortage is still more than half the cost of building a high school.
Portland school leaders have said they do not want to dramatically cut plans to reconstruct Benson, Lincoln and Madison high schools and Kellogg Middle School.
To bridge that gap, the board may split the 2017 bond’s fourth project. Half the cost to rebuild Benson High would come from the 2017 bond. The rest would come rely on a bond measure in 2020.
Board member Julia Brim-Edwards noted the politics of that plan.
“That’s contingent on voters continuing to trust the district and approve bond measures,” said Brim-Edwards.
Benson is Portland’s career-technical high school, and is the only PPS high school without an attendance boundary. Instead, Benson draws students from across Oregon’s largest district. Rebuilding Benson was intentionally put on the bottom of the bond’s list of projects based on its complexities: the future of career-technical programming is changing, as are the ways that schools use such high schools.
Still, the idea to phase Benson will be a tough sell with Benson supporters, who are concerned about the uncertain situation the phasing creates.
“Portland Public Schools and the board should fulfill the promise made in the May 2017 bond to the Benson tech community, just as they have to the Lincoln and Madison communities,” said Rob Johns, the president of Benson’s foundation.
“There’s a lot of risk here, and they’ve left Benson totally with that risk,” Johns said.
Johns suggested that PPS should instead take out a loan, and so the entire district would bear the risk. Such a step would require that the district repay the loan using general fund dollars — the same funding source that pays teachers. Johns offered to enlist Benson supporters, including business leaders, to help with the financial shortfalls.
At the same time school board members were discussing a possible phasing of Benson, they pressed ahead with plans to spend as much as $440 million on the first two big projects: Lincoln and Madison high schools.
The school board also took steps aimed at taking a firmer hand on managing the 2017 bond problems. First, the board agreed to hire a performance auditor to investigate how Portland’s 2017 bond package was so far over budget. News stories and the district’s initial efforts suggest some district officials and contractors were aware that the 2017 bond was likely too small to cover all the promised projects, but board members are asking for a deeper audit.
In addition, the board moved to exert more direct oversight of project-level changes, intended to save money, sometimes called “value engineering.” Board members are hoping that those steps — in addition to constructing desirable school buildings — will help restore the public’s trust in advance of the district’s plans to ask voters for another bond in 2020.