The Seaside School District is facing a $3.8 million shortfall with construction of the high school and middle school and renovation of the elementary school wrapping up this summer.
“At this point, based on the current construction project budget, it appears the district may need to borrow additional funds to complete the final project,” business manager Justine Hill said. “We do not want to borrow funds unless it is absolutely necessary.”
The construction citizen oversight committee met last week with the nearly three-year construction project wrapping up this summer.
Project expenses, including environment review and permits, extensive site work, construction and equipment, permit fees, consultants, architects and project management total more than $131 million.
The district saved about $1.3 million overall in permit fees, furnishing and technology from the original budget.
The district collected $400,000 from the Cannon Beach Elementary School property sale and is budgeting for a reduced revenue of $5 million for the sale of Gearhart Elementary School, Broadway Middle School and Seaside High School due to the economic impacts of the coronavirus.
That shortfall is largely a result of a “historic” rise in construction costs, originally projected at 4.3% in 2016, said project manager Jim Henry.
Escalation has been running between 6.8% and 7% since that time, adding about $10 million to the construction budget.
Originally unanticipated costs of about $2.1 million at Pacific Ridge Elementary School will fund a new roof, gym bleachers, replace flooring, add data and power to classrooms and offices, Henry said. The new roof, budgeted at about $1.4 million, makes up the largest portion.
The loan amount needed to fill the gap between expenses and revenue represents about 3% of the total project, Superintendent Sheila Roley added.
The road to the high school will be paved within the next three weeks, Henry said. Demolition continues at Pacific Ridge and roofing is underway. Crews will spend the next two weeks removing flooring from the bathrooms, classrooms and cafeteria.
The district would need to have board approval to move forward with a loan, Hill said. The application process would begin when the district is confident of how much money is actually needed to finish the project.
“This is not a loan we will take out unless we need it,” Roley said. “I feel badly. But I’m proud of the work we’ve done at keeping at this level.”
Even if the three district schools are slow to sell, the district will meet expenses, she added. “It’s not an ideal situation, but it’s something we can manage. We’re pretty good at tightening our belts around here, unfortunately.”