Building costs strain schools

Spokane Public Schools is projecting a $17.4 million shortfall in completing three elementary schools and three high school renovations because of spikes in construction costs.

Spokane Valley schools and smaller Spokane County districts have also seen challenges from escalating costs.

Steel prices in particular have driven up the price tags on buildings.

In an effort to ensure projects are done as cheaply as possible, Spokane Public Schools hired a firm to independently pore over construction details.

“We built our budget on the more predictable rates of 2 percent per year inflationary rate,” said Mark Anderson, Spokane Public Schools’ associate superintendent. “The current inflationary rate is around 12 percent.”

In March 2003, district voters passed a $165.3 capital bond that included razing and rebuilding three elementary schools: Lidgerwood, Lincoln Heights and Ridgeview. The bond also was for renovations at Rogers, Shadle Park and Ferris high schools.

As part of the budget process, inflation was factored into project costs, but no one expected such a sharp increase in material costs.

For the elementary schools alone, the 2003 budgets fall a little more than $2 million short. Heat and ventilation upgrades at nine district schools, which are part of the bond, are about $200,000 short. The biggest shortfall is in the high school renovations. The Rogers and Shadle Park renovations are each falling about $6.5 million short. The Ferris gym project is about $2.2 million short.

The three elementary school projects will still be put out to bid in the spring as planned, Anderson said. The cost increases can be managed through contingency funds. The bigger concern is managing the larger and more expensive high school projects. A lot will depend on what the new year brings.

“There’s some indication that wood products have stabilized at a higher rate and are not continuing to increase,” Anderson said.

Steel costs are still unsteady, affecting costs for products such as wire and the ductwork for heat and ventilation systems, he said. China’s increasing demand on worldwide steel supplies has driven up prices, Anderson said.

Mike Pearson, the superintendent for the Central Valley School District, said the price of steel has added between $600,000 and $800,000 to the renovation of South Pines Elementary School.

The 45-year-old building at 12021 E. 24th Ave. is undergoing a yearlong remodel that includes adding 4,300 square feet of floor space.

“This was an eye-opener for me, how Spokane Valley is affected by international markets,” Pearson said. “Who would have thought that because China got the Olympics, and now they are ordering all the steel, that our costs are going to go up anywhere between 12 and 25 percent?”

In 1998, Central Valley School District voters approved a $78 million construction bond to build two new high schools, and the district received $23 million in matching state funds. About $8 million was left after the high schools were built, and the district is using the money to remodel South Pines, McDonald, and Adams elementary schools, as well as Greenacres Middle School.

The South Pines project went out for bid in May, and by July the contract amount had already risen by $400,000. Architects blamed the high bid amounts on the rising cost of building materials.

“We build inflationary factors into the projects and into the budget because we know … it’s not all going to happen in the next year,” said Jan Hutton, director of business services for Central Valley. “But how would you have a clue that China is going to (affect steel and iron prices)?”

Al Swanson, assistant superintendent of the Mead School District, said the rising costs have generated some concern for its two primary projects: building a new elementary and rebuilding Mead Middle School. Both projects are at least a year from bidding.

Michael Dunn, superintendent of Cheney School District, said bids for updating facilities at Cheney High School came in 10 percent higher than expected.

“We came out OK,” Dunn said.

If costs continue to increase and anticipated state matching funds don’t come through, Spokane Public Schools would consider several options, including scaling back Lincoln Heights Elementary and completing the Shadle Park renovation in two phases.

Anderson said that by June a much clearer picture will emerge.