School districts face rising costs in construction materialsSep 13, 2021 09:56AM ● By Julie Slama
Canyons School District has multiple schools under construction, including Union Middle, so to cover expenses in addition to a 2017 voter-approved bond, Canyons Board of Education has been discussing taking out lease revenue bonds. (Julie Slama/City Journals)
By Julie Slama | [email protected]
This fall, Aspen Elementary opened its doors to elementary school children in the Daybreak community.
The Jordan School District school was completed this summer, after holding its groundbreaking days before COVID-19 spiked in Utah in March 2020.
Like many construction projects around the area, shortages of materials and labor were constantly monitored along with the rising costs of supplies, such as wood—and even wood glue, said Dave Rostrom, District director of facility services.
In fact, Bingham High’s upstairs remodeling project was delayed because of the impact of the COVID-19 pandemic, so the start of school was moved to online, the first time a Jordan District project wasn’t completed on time, he said.
“It’s a really large project this summer that we were trying to accomplish and that plays into it a little bit, plus we’ve run into labor shortages and the supply chain on all our projects, which has been very difficult,” Rostrom said, adding that scarcities have ranged from HVAC components to whiteboards and hardware for doors. “I think a lot of the factories shut down and they’re still trying to get caught up from orders after they shut down. There’s been a big shortage of truck drivers and a lot of companies that have material are struggling to get things shipped.”
However, the Aspen Elementary contract had already been awarded to Hughes General Contractors; its overall cost was $18.5 million. It was designed by VCBO Architecture, the same design used in other Jordan elementaries, including Golden Fields, Antelope Canyon, Bastian, Mountain Point and Ridge View.
“The (Jordan) Board (of Education) has asked us to do a repeat on our buildings because we kind of get them down to a science. There’s no or very little change orders because we’ve built it so many times that we’ve got all the bugs worked out of the design. It saves a lot of money when we do a repeat building,” he said.
The District currently is working off of two elementary school designs, a one-story and a two-story, which can save additional dollars; two middle school plans and one for the high school.
Even so, Jordan factors in 8% construction inflation per year.
“Every time we hit a mark, it’s basically we were paying an additional 8%. That can vary, it’s all supply and demand. I would say this last year, it’s probably been a little higher,” he said, adding that costs also would include projects such as leveling slopes before building schools.
Currently, an elementary in Herriman with the exact same floor plan is under construction; just two years behind Aspen, its price tag is $19,950,000, right at the mark—a 7.8% increase from Aspen Elementary’s cost.
“I do have a concern on the elementary that we’re building out in Herriman now because you don’t know what’s going to be delayed,” he said about the school that is scheduled to open fall 2022. “Hopefully, these factories are able to start getting back up on top of their orders.”
Rostrom said it’s school officials who decide upon projects and what to do with rising costs.
“That’s when our school board has to determine what we do,” he said, adding that fewer projects may be considered. “There’s been some years where we wanted to do X amount of projects and because costs come in higher, we’ve had to eliminate projects or postpone.”
Fortunately, Jordan District already owns property when the Board decides to build additional schools, so they aren’t looking at high land costs, he said.
While Jordan has 13 construction projects underway, the Herriman elementary is the only new build. Other schools are undergoing renovations, expansions or installation of security doors.
Nearby Canyons School District also is facing escalating costs with several new construction projects underway. Officials just held ribbon-cuttings for two rebuilt high schools and a renovation of a third, days before school opened Aug. 16. They also held three ribbon-cuttings for two elementaries and a middle school this past spring.
Initially, when the $283-million bond was passed in November 2019, Hillcrest’s rebuild was estimated at $85 million, said its principal Greg Leavitt, and Brighton’s rebuild was $87 million, its principal, Tom Sherwood said.
Now, the price tags are higher.
“We thought early on, they could be around $90 (million), but that quickly turned on us. Hillcrest will be about $121 million, and Brighton will be about $117 (million),” said Leon Wilcox, Canyons chief financial officer and business administrator. “We’re hearing (new) high schools now can be close to $150 (million in Utah).”
That’s about a 34% increase of cost on Hillcrest and a 30% on Brighton. At Alta High, renovations were first expected to cost $38.5 million and resulted in about $57 million, he added.
Canyons Superintendent Rick Robins said that “rebuilding a high school is quite an undertaking. Tackling two is ambitious. But remaking three all at once is something for the record books. The pace at which construction costs are soaring shows no signs of slowing. With those costs, other inflationary pressures and Utah’s labor shortage, it’s fortunate we started all of our school improvements when we did.”
This summer, Canyons Board of Education started taking the steps to approve $38 million in lease revenue bonds to cover expenses, Wilcox said, adding that it is a customary practice in cities and some school districts to take out a loan or a bond, sell bonds, and repay it out of capital funds.
“So, it will impact our future things we can do, but we promised the public we were going to complete these projects. We had three schools—Union (Middle), Peruvian Park and Edgemont (elementaries)—that were seismically unsafe and we really needed to replace and rebuild those so that’s why we’re doing what we’re doing right now on issuing these bonds,” he said. “If we didn’t do this, we would have to wait about two to four years to complete Glacier Hills, Peruvian and Union and we just didn’t feel like that was the right thing to do.”
A future Draper elementary school also is figured into the numbers, Wilcox said.
“We feel like we’re in a very good position with our buildings,” he said. “We put a lot in the last decade. We’ve done basically 20 projects. We’ve got our high schools all modernized, all our middle schools with the exception of Eastmont all brand new or renovated. So, all our secondary schools are taken care of and around six of our elementaries are brand new with a few of them, just a few years older than that. These bonds will take up to 16% to 18% of our capital allotment or balance each year. We still have 80% to keep these buildings modern and functioning.”