Proposed Plan With State To Cover Construction Budget Gap

Superintendent Jeff Patterson informed the Board of Education at its January 19 meeting that estimated costs for the construction of Grant, Lincoln and Roosevelt elementary schools and the new wings at Lakewood High School are 6% over budget, or nearly $6 million variance. The District plans to cover the $6 million through a proposed agreement with the Ohio Facilities Construction Commission (OFCC).

“We have a very robust team working on this,” said President Tom Einhouse, “and will continue to work hard in getting this (agreement) done.”

A combination of factors are behind the overrun and are beyond the control of the District. The factors include construction costs that have spiked beyond projected inflation rates - particularly in Cuyahoga County, higher than anticipated transition site costs, costs associated with historical preservation, unexpected issues with unsuitable soil at all sites and a higher cost of environmental remediation at two of the sites.

The District and its project partners in the Ohio Facilities Construction Commission, plan to approach the OFCC to petition for additional funding to help offset the overage.  The Board of Education will be asked to pass a resolution in March in order for the OFCC to consider the request for additional funding at its April meeting.

The District is required to fund 69% of the overrun through money that exists outside of its general fund so that the current operating needs of the District and its five-year forecast will not be impacted. The funding will include money from permanent improvement funds, McKinley property agreement funds, prior and current construction funds, food service funds, donations and interest earnings. The state will provide its 31% of the funding if needed at the end of the project.

There is a possibility the District will not need to dip into these funds to close the cost gap. If at the end of the project money remains in the contingency fund required by the state, then that money will go toward making up the cost difference.

Despite the budget challenge, the good news is that the buildings are still scheduled to be completed according to the original timetable with the elementary schools opening in August 2016 and the high school wings ready for use in August 2017.

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Volume 12, Issue 3, Posted 2:29 PM, 02.02.2016