Cleveland Heights - University Heights Board of Education meeting highlights 4-23-12
APRIL 23, 2012
- Master facilities plan
- Plan history and development
- Reconfiguration plan
- Plan costs and financing options
- Questions and comments from the board
All board members were present (including Ron Register, by phone).
Master facilities plan
The board heard a presentation of and discussed a districtwide master facilities plan, including financing, to enable the administration to craft a recommendation for board action. The board-approved plan and cost would then be submitted to the County Auditor by July 9 for inclusion on the November 2012 general election ballot.
Plan history and development
A districtwide facilities assessment in 2007 by Regency Construction found that short-term maintenance costing $40 million would bring the district up to Ohio School Facilities Commission standards. A 2009 assessment by that commission found that total renovation of all facilities would require $225 million. In 2011, the district’s Citizens Facilities Committee toured the buildings and confirmed reports of outmoded systems, unsatisfactory building configurations, and excess space (1.26 million square feet) for the district’s 6,000 students, down from 13,000 in 1962, and projected to be down to 5,575 in five years. The Ohio School Facilities Commission standard is 776,000 square feet of learning space for 6,000 students.
A series of public meetings, beginning in November 2011, presented two reconfiguration options, Ideas A and B. Public feedback led to Idea C, which calls for the renovated high school to house 1,680 students, the three renovated middle schools to each house 700 fourth through eighth graders, and renovated Canterbury, Oxford and Roxboro Elementary schools, plus a new Boulevard Elementary School, to each house 420 kindergartners through third graders, and 75 preschoolers.
The elementary sites to remain open were chosen based on geographic distribution, student density, size, condition, cost to renovate, and the community’s preference for 1920s architecture. Idea C preserves more neighborhood schools, eliminates K-8 campuses, saves $3.5 million in annual operating expenses, and aligns facilities with an educational program in which the physical environment, the culture, and the curriculum work together to foster learning. Pilot “learning centers” would be constructed at Oxford Elementary and Roxboro Middle schools over the summer. Nancy Peppler, board member, requested that the board be provided with a map showing student density.
Plan costs and financing options
The cost projection for Idea C is $189 million. The project would be done in three phases, with phase one being the renovations and additions at Roxboro Middle School and renovations at Wiley Middle School. Board Member Eric Coble asked about the effect on cost of renovating the high school in phase one. According to Regency’s representative, such a change in the timeline would likely increase costs, and it would take a few days to compile that information. Complete renovation, including all new systems, usually takes twelve to eighteen months after design. At the high school, where only the historic core would be preserved and new additions built, work would probably take two years. Regency is confident in its cost projections because it has done similar projects in similar districts, like Lakewood.
Presenting capital financing alternatives, lawyers from Squire, Sanders law firm explained that a board of education can ask a community to authorize borrowing 9 percent of the district’s assessed tax valuation. CH-UH’s valuation is approximately $1.134 billion, allowing it to incur a debt of just over $93 million. Qualifying for a special-needs designation, which the district is in good position to do because the facilities don’t serve current needs and cannot be revamped for 9 percent of the valuation, would allow it to borrow up to $158 million. The consultants emphasized that, if the district’s tax valuation falls by more than 5.3 percent in the 2013 reappraisal, it will no longer qualify for the special-needs designation. The district’s average valuation growth over the past ten years has been 2.111 percent a year. Even though a bond issue can be asked for in installments, if the district were to lose its special-needs designation before all bonds were issued, the project would be stalled. Also, if the district were to need an operating levy by 2015, valuation would have to increase by 14.8 percent by that time.
Besides the special-needs designation, there are other exceptions to the 9 percent rule that are favorable to the district, including the fact that the district is in the Classroom Facilities Assistance Program. The district may also be eligible for some tobacco settlement money because other qualifying districts have been unable to pass bond issues. A lease-back option could allow operational funds to pay for construction, but would leave less money available for operations. The Ohio School Facilities Commission also has funds, which are controlled by legislation.
The voted bond issue is the most common mechanism for financing major capital improvements. If the district borrowed $158 million for 38 years at a 4.5 percent interest rate, the millage would be 3.92, which is about $10 per month for a $100,000 house. The district could borrow an additional $18 million against its continuing permanent improvement levy, but default would result in losing buildings until repayment was made. Another mechanism, which would generate another $15 million, is to borrow against savings that would accrue to the general fund because of the facilities reconfiguration, but this option carries a high interest rate. Debt limitations in Ohio are low compared to most states. There are time constraints for getting a bond issue on the ballot for the November election. To qualify for a special-needs designation, the board must pass a resolution declaring necessity by July 9, 2012. By July 31 it would have to pass legislation to continue with the bond issue. All materials must be submitted to the Board of Elections by August 8.
Questions and comments from the board
Kal Zucker, board member, asked what portion of the work cited in the 2007 assessment has been accomplished. Stephen Shergalis, director of business services for the district, will provide that information, but he thinks that the district is not making repairs fast enough to keep up with needs. Zucker also asked for data on Idea C’s effect on racial breakdown among buildings, and on a link between building configuration and academic outcomes. He asked if the music program would be of equal strength across the district, if funds have been allotted for professional training in the use of the new configuration, and if more support staff would be needed. He stated that it is impossible to decide which buildings to close until there are plans for their future use, so he would be more comfortable going forward with a bond issue if the high school were in the first phase.
Karen Jones, board president, asked when plans for the use of closed buildings could be made public. Superintendent Douglas Heuer explained that a difficulty in reaching agreements with potential partners is the uncertainty of when the buildings would be available. The Boys and Girls Club is interested in space, and Tri-C might organize a consortium to establish a Center for Higher Learning that could be housed in the district.
Jones noted that, on May 14, the board will meet with the city councils of Cleveland Heights and University Heights to discuss the facilities plan.
Nancy Peppler reported hearing from Gearity parents and University Heights residents who oppose Gearity's closing, but also heard positive responses on Idea C. Karen Jones noted that both Ideas A and B called for Gearity's closing. She stated that she is a University Heights resident and that the board does consider it to be a part of the district, but that the facilities plan must consider what works best for the entire district. She asked for data on the relationship between property values and the presence of a public elementary school; the administration will investigate.
LWV observer: Nancy Dietrich.
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