Portland's new school estimates push $1 billion and everyone is asking why

The Portland Public Schools bond office is expected to reveal a $190 million estimated gap in funding, shared by cost overruns on Madison, Lincoln and Benson high schools.

The math just isn't adding up.

In recently released materials, Portland Public Schools administrators now say they are nearly $200 million short on the projects they proposed to voters just a year ago. The district says it would need closer to $980 million to rebuild Madison, Lincoln and Benson Polytechnic high schools, as well as other upgrades.

The district — which has seen massive leadership change in the year since it asked voters for $790 million — still doesn't have a clear answer on why the projects are coming in so much more expensive than it calculated.

Harry Esteve, the district spokesperson, said he couldn't clarify the current estimates of the Madison and Benson Tech projects before Monday.

In board materials, Madison High, which was initially billed as a $146 million school, appears to be coming in just shy of $200 million. That would be at the top of the range that cost estimators gave the district.

See related stories:

• "Portland's $100 million question: why are its new schools so expensive?"

• "Rising construction costs spell trouble for school projects"

Benson Tech, which was supposed to cost about $202 million, is "significantly over current budget" but by exactly how much was unknown at press time. Initial estimates — including from the district's consultants — put Benson's architectural, engineering and other "soft costs" at between 13 percent and 25 percent. The most current publicly available numbers are for 55 percent, or $58 million. That's at least $42 million more than originally budgeted.

Lincoln High, which is finishing its design process (see related story: "Lincoln Logs 2: Parents weigh in on school design"), is still estimated to cost $245 million — $58 million more than expected.

What happened?

Some of the cost overruns might have been avoided if the district had taken the most conservative estimates prepared by its consultants. Instead, the project team, headed by now-departed Chief Operating Officer Jerry Vincent, presented the board and bond committee with the most aggressive numbers.

Amy Kohnstamm, who chaired the school board's 2017 bond committee, said she relied on the technical staff to provide her with complete information.

"Clearly the district has work to do on improving project controls and making sure the superintendent and board are receiving accurate and well-vetted information that's needed to inform important decisions, because ultimately we are accountable to the public," Kohnstamm said in an email. "As a board member, this situation is really troubling, because I need to be able to trust the technical information and advice we receive."

She added that the 2012 bond program was well-run and that the committee relied on the same approach for 2017.

In a letter that it will present to the board on Tuesday, the Bond Accountability Committee agreed that the 2012 bond was well-run but accused the current board of not being thrifty enough.

"In our judgment, budget discipline on the 2017 bond was abandoned with the Madison vote," reads the unsigned letter. The committee is chaired by retired contractor Kevin Spellman. "Firm budgets should be immediately re-established for the high schools, and the project teams should be instructed to adhere to them."

The committee praised the Office of School Modernization — which runs the bond programs — for double-checking that the estimates it's getting are reasonable compared to other school building projects.

"In the broadest sense, Franklin and Roosevelt's costs are in a "reasonable" zone while Madison and Lincoln's are not," the oversight committee summarized.

Awwad responds

The 2017 ballot request to voters said the money would: "Renovate or replace schools, including Benson, Lincoln, Madison and Kellogg, to improve health and safety and provide up-to-date classrooms and facilities, and increase access to technology and modern learning environments."

That is very similar to the language in the legal document to bond investors.

Yousef Awwad, who as interim superintendent signed that document when about half of the bonds were sold last summer, is currently in a legal battle with the district over his sudden termination in November. But Awwad answered questions from the Tribune through his lawyer about what he thinks happened.

He said the $790 million bond issue could actually be worth $818 million to $828 million when one adds in matching grants, bond premiums and interest earned on the bonds that have already been sold.

Awwad also said that new tariffs imposed from Trump administration policies and the red-hot Portland construction market have pushed costs higher than they expected.

Beyond that, he said he would need to see more detailed information from the district, which has so far not been provided.

Awwad emphasized that the team was acutely aware of the need to be clear and accountable to voters.

"During the whole process, we were direct and honest with the public," Awwad wrote. "We wanted to restore credibility with the voters after the lead in the water crisis. We worked extremely hard to be transparent and that's why we had the community advisory group to look over our shoulders. I believe this is true for every member of the team, including the staff and the board members involved."

See for yourself

The Portland Public Schools board will receive a detailed presentation on the current construction and budget impacts beginning around 6:25 p.m., Tuesday, Aug. 14. Watch in person at 501 N Dixon St. or livestreamed at pps.net/page/1791.



Shasta Kearns Moore

Reporter

971-204-7864

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