Akron school administrators expect the final 10 school buildings in the district-wide construction project to be finished by 2018 as long as the city sells the last of $364 million in bonds by December.
With post-recession incomes rebounding in Akron, city officials are hopeful that interest rates remain favorable and an uptick in tax revenue persists. They plan to sell at least some of the remaining bonds, valued at $104 million, in the spring.
The bonds, to be repaid through 2033 by a voter-approved .25 percent income tax, fuel an $800 million school construction project, with the state committing 59 percent of total funds estimated at more than $430 million.
But plans have changed.
Enrollment has plummeted. Construction costs have soared. Local funds bourne by the school district have doubled. And the scope of the project has shrunk while the share bourne by local taxpayers climbs.
Plans to construct 58 Community Learning Centers were conceptualized more than a decade ago when Akron boasted more than 30,000 students. The state funds each project based on enrollment. With 10,000 fewer students by project’s end, the state share is expected to drop.
Fewer state dollars are offset by fewer students, requiring less space and smaller buildings.
But inflated construction costs consume what the district gains in scaled-back construction projects.
With 27 buildings completed and another four in either the design or construction phase, the scope of the project has shrunk from 58 buildings to 43.
Project costs for each school are dependent on enrollment. Total square footage is determined by multiplying enrollment by the average space needed per student. Then square footage is multiplied by the average cost per square foot, which has jumped nearly 50 percent from $160 in 2005, when the district broke ground on the first project, to about $235 today.
“People say, ‘Well, where’s all the money?’ ” Paul Flesher, facilities director for Akron schools, said.
“Well,” he responds, “you don’t see that 50 percent [cost] increase.”
Statewide construction costs are set by the Ohio Facilities Construction Commission, or OFCC, an office within the Ohio Department of Education. OFCC also periodically updates enrollment figures. The commission, which allocates the state share, will not fund schools with enrollment less than 350 students.
Akron has 24 schools that do not qualify because of low enrollment.
Flesher said savings from favorable bids in the first three segments of construction may allow for an elementary school, exempt due to low enrollment, to be rebuilt in the final project phase, currently held up by the city’s stagnated sale of $104 million in remaining bonds.
Diane Miller-Dawson, director of finance for the city, said $260 million of the $364 million in bonds have been issued in two rounds, once in 2004 and then in 2010. Bonds can’t simply be sold off, she cautioned.
“There are projections that need to be done,” she said, assessing the city’s ability to pay interest and principals on bonds, afforded by income tax revenue.
Beginning in 2009, income tax revenue in Akron decreased three years straight. Miller-Dawson cites good news, though: “2013 will be the first year that we will exceed revenue collections from 2007, which will be good for the school project, I hope.”
Every year the total project end date is pushed back, and the district loses more students, builds smaller schools, receives less state funding and bears higher construction costs.
Still, Miller-Dawson cautions that tax revenue must be stable and sufficient before the city takes on more debt by selling bonds.
Most projects have moved forward with little delay. King Elementary, at the corner of Memorial Parkway and Royal Avenue, is the exception.
A construction crew improperly applied a water barrier on the cinder block beneath the red-brick shell. Unusable brick covering 40 percent of that block came down after a lengthy arbitration. A new company has been contracted to reapply the barrier. A crew of 12 bricklayers will work daily through winter following the application of a new vapor barrier.
“We’re not stopping. We’re not going home because it’s too cold. This building will be turned over by June 1,” said Brian Ward with RPJ Construction Managers.
Additional costs at King have been absorbed by the original company’s bonding agent, with no added expense to taxpayers, officials said.
The largest inconvenience has been to King Elementary students, who continue to take instruction at 400 W. Market St. with Harris Elementary students also displaced by construction.
While school and city officials are expected to hash out financial issues at a Joint Board of Review meeting at the school administration building on Nov. 4, administrators detailed options for the remaining school projects.
Outstanding projects include 10 buildings in five clusters: Pfeiffer Elementary and Kenmore High, Bettes Elementary and North High, Case Elementary, Ellet High, Firestone Park Elementary, and Kent Middle School and Garfield High.
Miller South is the only specialty school left in the project. No projects remain in the East and Buchtel clusters.
Doug Livingston can be reached at 330-996-3792 or firstname.lastname@example.org.