Biggest Bang for Your Buck?

A Closer Look at Portland’s $548 Million School Modernization Proposal

By Lindsay Berschauer

The Portland Public School District held a public hearing December 1st concerning the $548 million School Modernization Bond Measure it hopes to place on the May 2011 ballot.

The District argues that such an expensive bond, the largest local bond in Oregon state history, is necessary to tear down and rebuild only eight of the 85 schools in the District. For those eight schools, they have allocated $372 million. The other $176 million is earmarked for minor upgrades to other schools and paying off previous school improvement debt that the District has incurred. The goal? The District argues that the new schools will increase property values in Portland, improve student achievement and behavior and increase enrollment. But in this down economy, are Portland residents getting the biggest bang for their buck when it comes to the cost value of these “rebuild” schools?
The breakdown of the costs associated with rebuilding includes $90-92M for Cleveland High, $82-86M for Roosevelt, $48-52M for Jefferson, an average of $30M for each of the five primary schools, and $6M just for the pre-planning process of rebuilding Lincoln High. Now, let’s compare the Portland School Bond Measure to the 2008 Capital Bond Program in the Wilsonville/West Linn School District. As part of that bond measure, the District is building two brand-new schools: Trillium Creek Primary School in West Linn and Lowrie Primary School in Wilsonville. Trillium will be a 60,000-square-foot building costing $28 million and serving 500 kids. In contrast, Roosevelt High in Portland is a roughly 42,000-square-foot building serving about 680 kids. So, the cost to rebuild Roosevelt is three times the cost to build a bigger, new Trillium school. If both of these schools will be essentially “brand new” and similar in size, why is PPS proposing to spend almost $56M more on Roosevelt High?

While living in Olympia, Washington for the past several years, I was involved with a commercial construction company that built and renovated almost 20 primary and secondary public schools, many more than are proposed in the first phase of the PPS bond measure. I am familiar with the costs of building a brand-new school and what a significant renovation project typically costs. Most of our school renovation projects were in the neighborhood of $20-$35 million, depending on the size of the school.

The most expensive school we ever built was a state-of-the-art high school in Tacoma, Washington for roughly $42.5M. The school is 148,000 square feet (over three times larger than Roosevelt in Portland). The cost included demolition of the old school, brand-new buildings, high-end interior finishes and professional-grade gymnasium facilities. The Tacoma school is comparable in size to Portland’s Cleveland High, which is roughly 200,000 square feet. Yet, Portland taxpayers are being asked to spend more than double the price tag of the brand-new, state-of-the-art Tacoma high school. For this amount of money, Portland taxpayers had better get a high school paved in gold.

It should concern every Portland resident that PPS has completely inflated the costs associated with making the necessary repairs on its schools. Another example of excess is Marysville school, which has been sitting vacant due to a 2009 fire in a portion of the building. Instead of using insurance money to fix the damages (total cost $5 million), the School District wants to tear down the whole school and rebuild (total cost somewhere around $30 million). In addition, many of the schools slated to be rebuilt exist in historic buildings that are more than 60 years old. The District has promised to maintain the historical integrity of these buildings, adding huge cost premiums to the construction budget. In this time of economic uncertainty, it seems prudent for PPS to address the school structural issues and the scope of work with restraint.

Whether you own your home or rent a house or apartment, every Portland resident will pay for this Bond through property tax increases or rent increases. Approximately 60% of Portland residents are homeowners and 40% are renters. Thus, a big chunk of this bond measure likely will be paid for by renters, as landlords pass on their new tax burdens in the form of rent increases. PPS claims that the additional tax burden on homeowners will average about $350 per year for the next six years. But remember, this is just phase one. PPS wants to completely rebuild all 85 schools in the District within the next 30 years, which means your increased tax burden will remain, if not increase further, over the next three decades.

With unemployment rates still high in Portland and many residents under-employed, families are tightening their belts and cutting costs wherever possible to make ends meet. Portland residents cannot afford such a significant increase in their taxes. Portland Public Schools needs to prioritize the immediate structural repair needs of its schools and present taxpayers with a cost-effective, limited proposal that will not unduly burden virtually every adult (and their children) living inside its boundaries.

Lindsay Berschauer is a research associate with Cascade Policy Institute in Portland, Oregon, where she currently resides. She is originally from Arizona but has lived in the Northwest since 2002. From 2006 until spring 2010, Lindsay lived in Olympia, Washington and was part-owner of a commercial construction company that built and renovated almost 20 primary/secondary schools in the State of Washington.

  • Bob Clark

    I wonder if some of the extra costs has to do with PPS having to deal with Hazardous materials, which recent law changes have greatly increased the cost. Also, maybe there’s historic building constraints.

    But I agree PPS is overhyping the benefits of its proposal. The Oregonian found PPS to be inflating its estimate of number of students affected by a factor of two (something like 22k students (&this generous according to Oregonian) versus PPS stating some 41k as affected). Then there’s the PPS’s contracted economic benefit study whereby the contractor, EcoNorthwest, estimates net economic benefits of over $340 million. This estimate smells of overhype. At a time when national leaders are considering tax cuts to increase net economic activity nationally, here we’ve got the PPS and EcoNorthwest telling us increasing taxes will not result in less net economic activity; but sharply more economic activity.

    Here’s my suspicions about the EcoNorthwest study: (1) The model used assumes property tax payers do not increase their rate of savings in response to having a much sharper than normal tax increase (9%+ versus the more normal 3%). People save for real reasons, such as retirement and meet contingencies. Incomes aren’t increasing at a 9%+ rate so to make savings targets, property tax payers are likely to increase savings rates. (2) if PPS is overpaying for real improvements, then the PPS’ assumption about raising property values is grossly in error. This is especially true because $350 per year in property taxes per home owner for six years may push some homeowners into foreclosure given the current high rate of foreclosure. Isn’t it funny Obama’s first time homebuyer credit helped the home market but here we have the PPS telling us a property tax increase will help homeowners. Uh? (3) EcoNorthwest’s study says the measure will result in a net increase of 2,594 local area jobs over the SIX year project life. But it doesn’t talk of duration of these jobs. They may be full and part time jobs as stated but that doesn’t mean they are permanent jobs. More likely, they are temporary jobs. But what about the lost household discretionary income job impacts? Might they be job losses of a more permanent nature? I suspect a strong bias in quality of job tenure.

    I don’t deny PPS could use some renovation. I just ask they cut the property tax impact in half. A 4 to 5% property tax increase is much more in line with the rate of increase in total property tax rates over the past ten years (3% over this time period).

  • Rob

    Since it unlikely that the people running the Portland Public Schools would make any decision that are good for the students or the public, I recommend that we vote “no”.

    • A Hopefully Free Person

      We do not need any increase at all “Rob”. Let us start working within our means. If I owned a $400,000.00 over morgaged home, it would cost another $2,000.00 per year or $ 167.00 on my cost per month.
      So let us say that an Apartment owner has 60 units and under subities, etc. etc. he is getting $250.00 per month for a $450.00 + per month 2-or 3-bedroon Aptartment. Let us see haw that works out… Value of the propery, probly $ 500,000.00 ( we all know it is worth more), So that is going to increase the rent about $60.00 per month + remember he get subsides and his gross taxes will be increase also by, will see measure 67 or 68. Nobody cares what is happening here.


      How much does everyone believe that “Special Education cost per year ( you know all those kids on Rilim, or something), that has Goverment Mandated expense
      How Much is the Question ?
      The other Question is after all this Goverment mandated monies what are the results?

      Oh well moving on…

      How much is this Bond going to Admintrators wages and PERS ( 4 for each Teacher ) following the mandates of the Federal Goverment. That is the next biggest % of any budget.

      I believe in teachers that are retrained by more “Goverment Mandates”. I had to do push-ups, run around the track, work after school for mistakes, maybe even cutting back on cleaning Labor cost.

      Teachers are not the problem, but let us focuss on them while every other PCS employee gets a free ride to retirement/medical the rest of their life. They can also come back for their ” expertize”, more for more double dipping.

      Have you ever met a Union Member that never used up their sick pay.

      Oh Well, we are lost to….whoevrer is not working to change this around and make people responsible for their heath and personal investments.

      I will stay free if it becomes my responsiblillity for those I wish to give too, and not a goverment telling me who I am responsible for,

      A Hopefully Free Person

      When I grew up we just took care of those kids as a family.

  • DATA

    Probably should get your data straight. Roosevelt is 278,517 sq ft…not 42,000. That kinda undermines your entire point.

    • Lindsay Berschauer

      @DATA: I need to clarify my comparisons to Roosevelt High. When I originally looked up sq footage on the school, the plot map was unclear and seemed to show that the plot of land that Roosevelt sits on is 170,000 sq ft and the building footprint is only 1/4 of that. I have since clarified (and met with the custodian of Roosevelt High to confirm) that the plot of land the building sits on is approx. 270,000 sq ft, the building footprint breaks down into ~167,000 sq ft of main building and ~43,000 sq ft of basement. After visiting the school and seeing how the buildings are situated, I’m comfortable saying that the actual school space is approx 170,000 sq ft, with a separate building of approx 50,000 sq ft that houses the boiler system. If you compare Roosevelt High with the Tacoma high school I talked about in my commentary, you will see that the argument is still the same. It’s actually a better comparison than Trillium because the sq footages are much more similar (Tacoma school: ~150,000 sq ft) and they are both high schools. The cost to build the Tacoma high school was $42.5M and the cost to “rebuild” Roosevelt is slated to be $86M. I have seen no justification as to why it will cost DOUBLE to rebuild Roosevelt, other than the fact that the School District wants to historically renovate the building, meaning much higher construction costs. My underlying argument (besides that the scope of work is unwarranted) is that the District is trying to shake a money tree that has no more money on it. Ultimately, everything comes down to money and most Portland families cannot afford this tax increase. I believe when Portland residents sit down to vote on this measure, the cost will be the single most important factor in making their decision.

  • DUH

    Um, no on any new BS PPS bonds, levies or taxes….

  • Mark Sanjean

    These schools need our money in order that they can educate our students.

  • Rupert in Springfield

    Look at the bright side though – Teens in America recently were ranked 25th out of 34 countries globally.

    That’s actually better than I thought.

    Maybe we need to start looking at it that way, as more of a jobs program and revenue stream generator and less as really about education? Lets face it, the certainty of education staff getting raises and heap big benefits is a safer bet than our kids actually getting an education any time soon. Maybe its time to focus on what our education system actually does well now, rather than what id did well in the past (before we had massive salaries and support staff, when Americas education system ranked near the top in student performance).

    At least on that score we rank number two (I think Switzerland spends more than us per student).

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