The prudent person principle should be applied to all publicly funded projects

By Karen Rue

Earlier this month, Cascade Policy Institute provided suggestions to the Board of Portland Public Schools to reduce costs on the Jefferson High School modernization project. The project is paused due to the budget ballooning from $311 million (approved by voters in a 2020 bond issue) to $491 million.

Cascade’s primary advice for the PPS Board can be applied to all publicly funded projects: practice common sense prudence.

The prudent person principle provides perspective on three cost-prohibitive aspects of public projects:

  1. Building above code requirements;
  2. Energy efficiency expenditures with payback periods exceeding 20 years;
  3. Overbuilding

To meet building code requirements for seismic resilience, Jefferson must be designed as a risk category III structure. Current plans call for building to the costly and unnecessary standard of risk category IV.

The state mandates 1.5% of most public buildings’ budgets be allocated to green energy technology. Agency managers of four other Oregon school districts have refused to comply due to the excessive length of the pay-back period.

Finally, building realistically sized projects is key. Jefferson’s current enrollment is below 500 students yet the rebuild is planned for 1,700, a flagrantly excessive size in a school district with declining enrollment.

The areas of excess in the Jefferson High School re-build are common in public projects. A prudent person would rein in this spending.

Karen Rue is Executive Assistant at Cascade Policy Institute, Oregon’s free market public policy research organization.

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