The Portland school district will pay $1.2 million to cover unanticipated construction costs from the renovations of two elementary schools, leaving the district with around $2.5 million out of a $64 million bond to pay for school furnishings and any future construction cost overruns between now and the projects’ scheduled completion dates in January 2023 and December 2023.

The board voted unanimously Tuesday night to pay for the construction cost overruns with money left over from a previous renovation and funds originally meant for furniture, fixtures and equipment. 

Members also discussed a request from Portland city officials that the district shave $1 million off the top of its $133.1 million budget. The board voted unanimously to wait until the City Council votes on the school budget before making any firm decisions. 

The $1.2 million approved by the school board Tuesday will pay for cost overruns in the renovations of Reiche and Presumpscot elementary schools. In total, the district has agreed to pay around $2 million in added construction claims related to the renovations of Reiche, Presumpscot and Longfellow elementary schools since the projects began around a year ago, and there are still months of construction to go.

In 2017, Portland voters approved a $64 million bond to pay for the renovation of four elementary schools – Longfellow, Reiche, Presumpscot and Lyseth. Except for Lyseth, securing building permits from the city to renovate the schools took longer than the district anticipated. That initial delay led to increased construction costs for overtime, managing construction through the winter, and construction materials, the cost of which has been rising for years. To cover those costs, the district has had to shift some of the bond money around. 

To cover the latest construction claims, the district will use the funds left over from Lyseth, which was completed under budget, and around $1 million from the schools’ $2.2 million furniture, fixtures and equipment fund, leaving the fund with $1.2 million. At least some board members are concerned that won’t be enough to adequately furnish all the schools. 

“When the time comes to supply the furniture will we have the money for that?” asked board member Abusana “Micky” Bondo. 

“We’re all frustrated to be at a place where we’re needing to look at funds that were allocated for another purpose and repurpose them,” said Portland School Superintendent Xavier Botana. 

But board members, while admitting they are in tight spot, noted that they were able to get the complex renovations to where they are today while simultaneously responding to the pandemic. 

“If we step back and look at what we’re accomplishing, it’s tremendous,” said school board Chair Emily Figdor. 

SCHOOL BUDGET 

Last week, citing extreme pressure on the city budget from inflation and General Assistance costs, the City Council’s finance committee suggested the school district use federal COVID-19 funds to reduce the school portion of the budget’s burden on taxpayers.

Figdor said using one-time federal funds for ongoing expenses would be unsustainable, and that the district should use funding for programs and positions that is reliable and can be built upon. 

But Botana presented four potential ways for the school district to move forward, one calling for dipping into federal funds. Botana recommended simply rejecting the city’s recommendation, offsetting a $1 million decrease with $1 million from the district’s fund balance, offsetting a $1 million decrease with federal COVID relief money, or reducing the budget by $1 million by cutting programs or services. 

But Botana said each of the four options has implications. For example, he said, if the district rejected the city’s recommendations it would “likely would be perceived as uncooperative.” 

But if the district offsets a $1 million decrease with either its fund balance or federal funds, he said, it would just be pushing the problem down the road. Next year, the district would have to cut programs or figure out how to move programs funded by outside money back into the general fund, likely raising the tax rate. Still, Botana appeared to favor using $1 million from the federal Elementary and Secondary School Emergency Relief Fund, part of the CARES act, to offset the school budget. 

The district expects to have around $12 million out of $17 million from a portion of its federal relief fund left in August. 

But some board members hope the council will approve the school district budget as is, eliminating the need to cut the budget. 

Figdor reminded board members that they were in a similar situation last year, when the city’s finance committee rejected the school budget and asked the district to reduce it. But the full council ended up approving the budget. 

Others agreed that they should wait until the council vote to make any decisions. 

“I just want to let the process run out,” said board member Adam Burk. 

Money is expected to be tight for the city next year. 

Mayor Kate Snyder told councilors Monday night that they were going to have to make some difficult choices – either raise taxes, cut services or both. According to Snyder, the biggest pressure points on the budget are inflation and General Assistance – a state program requiring municipalities to help people who can’t cover the costs of basic necessities. 

The state pays 70 percent of General Assistance costs and the federal government is currently reimbursing the city for emergency shelter expenses, taking a significant amount of the burden off taxpayers. But the federal funds will expire in June, leaving the city to figure out how to pay for assistance to a record number of people seeking shelter and other services. 

The city is considering a $269 million budget proposed by interim City Manager Danielle West last week that proposes a 5.5 percent tax increase. The proposed budget, combined with the school board’s $133 million budget, would result in a tax increase of 4.8 percent, or 62 cents per $1,000 valuation, increasing the tax rate from $12.99 to $13.61. That would amount to a $226 tax increase on a $365,000 home. 

But as it stands, the city budget has a $2 million shortfall, meaning the city will likely have to either raise taxes, make cuts, or re-evaluate its approach to homelessness and emergency housing, a main factor driving increased costs. 

In other news, there has been an uptick in COVID cases in Portland Public Schools. The district reported 98 cases the week of April 24. The week prior, the district recorded 11 cases across the district and two weeks before they reported 44. The increase is consistent with larger community and state trends.  

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