Portland Public Schools has added $562 million to its capital construction budget for the next three months.
But nine days after the school board unanimously approved the half-billion dollars in spending, the district has not offered specifics on where that money will go.
It has said where the money will come from. The majority— $441 million — is expected to come from the next round of bond sales voters approved as a package in 2017 to construct a brand-new Southeast Portland middle school and Lincoln High and renovate of two other high schools, spokeswoman Karen Werstein said.
The district also sold a parking lot at the former Washington High School site at Southeast 12th Avenue and Stark Street for another $10.5 million.
Deputy Superintendent of Operations Clair Hertz and Chief Financial Officer Cynthia Le in a memo to the board wrote that another small slice of money comes from state grants meant for last school year but carried over into 2019-20.
But the district hasn’t offered specifics on where those funds will be spent despite repeated requests from The Oregonian/OregonLive. A reporter emailed district officials seeking more information and asking to interview Hertz or other top finance officials on April 8, Friday and Wednesday.
District officials replied to The Oregonian/OregonLive Thursday evening and expressed eagerness to explain more Friday. Hertz said officials in the district’s finance arm had originally planned the $441 million bond sale for later this year, but asked for the school board’s authorization to close it out this week because of low interest rates offered in the midst of the coronavirus pandemic.
Total interest will be around 1.88%, Hertz said, 1 percentage point lower than the rate of its 2017 bond sale.
“It was sound financially for the district to do it now,” she said.
During their telephonic school board meeting at which members approve the additional spending by a vote of 7-0, at least one board member, Andrew Scott, questioned whether the panel was meeting state requirements that school budgets and significant budget adjustments be approved after public airing of their plans.
Hertz provided assurance the board was doing enough to let the public know how taxpayer funds will be used.
The bond measure district voters approved in 2017 authorized borrowing $790 million to extensively renovate Benson and Madison high schools and replace Kellogg Middle School and Lincoln High.
Those plans immediately hit financial snags.
Top officials in the district’s Office of School Modernization initially low-balled cost estimates by about $100 million. Cost overruns have more than doubled since then, putting the total cost of the four projects well above $1 billion, auditors hired by the school board in 2018 found.
Earlier this year, the school board approved placing a $1.4 billion bond measure on the November ballot. Of that, $236 million would be used to cover cost overruns from the 2017 projects.
If voters approve the measure, approximately $1.2 billion will fund renovations of Cleveland, Jefferson and Wilson high schools.
Aside from the increase to this year’s capital construction budget, the school board on April 7 also green-lit millions more in spending to expand the district’s teen parent program, add social emotional support classrooms for special education students and boost athletics budgets. About $5.8 million of that is carryover from last year.
The district also expects a modification in its allocation from the state school fund later this month.
--Eder Campuzano | 503-221-4344 | @edercampuzano
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