Update on Middle School Projects

August 1, 2022

Update on District Building Projects

There recently have been numerous activities related to our Phase Two building projects as part of our Master Facilities Plan. While the projects remain our priority, we are facing extremely difficult economic conditions in the construction industry.

With a continually stretched supply chain making construction materials and labor both expensive and scarce, along with an extensive number of commercial building projects planned or underway in greater central Ohio, we are facing unprecedented competition and pricing for the high school project.

Collaboration with the City of Gahanna

This evening, members of our board of education voted to approve a Memorandum of Agreement (MOA) with the City of Gahanna. This agreement establishes our path forward and responds to the unique situation we are in so that we can swiftly begin construction while also managing the financial risks we face. Board of Education President Beryl Piccolantonio read this Statement of Collaboration.

Because the city and the school district are government entities, the MOA allows for an expedited permitting process and positions the district to quickly begin construction, while meeting all requirements of the project. The board also has reassured the city of its intention to be a good partner throughout the building process and to be deliberate in our collaboration as we build this exceptional new high school.

Construction Team Report

The board also heard a presentation from GJPS Treasurer Scott Gooding. Mr. Gooding shared updates on the Phase Two work. The following is his report from the meeting.

As this board is aware, these are incredibly hard economic times for building projects. With a continually stretched supply chain making construction materials and labor both expensive and scarce, along with an extensive number of commercial building projects planned or underway in greater central Ohio, we are facing unprecedented competition and pricing for the high school project.

Like many sectors, these issues have come full circle and now are impacting our ability to manage financial risk. Having six projects in our scope, one of which is the high school, which requires extensive resources, it has become increasingly difficult, as our dollars don’t go as far.

You may know that central Ohio’s construction market is booming - Nationwide Children’s Hospital, Ohio State and many others have billion-dollar projects planned or underway, and the Intel project is squeezing the market further. Intel projects will need 7,000 workers alone to complete its development.

The project team has had extensive conversations with Mark Ogden of Turner Construction, who is managing our pre-construction work. Mark has looked at our market, the available supply of materials, and all the projects in the region.

He has shared with me that he believes this situation will continue, with no softening of pricing, even if we end up in a recession. Waiting until the economy stabilizes also is not an option - The IRS spending requirements for our tax-exempt bonds necessitate that we proceed on course with the high school.

We have already seen these cost impacts with the High Point and Blacklick Elementary school expansions, which are slightly over budget to date due to increased costs, despite robust efforts to hold to our budget. Every time we go out to the market for labor or materials, the price has gone up again.

It is important for this board to know that value-engineering for these projects remains necessary. There are still budget cuts to be made across the board, and our financial exposure still exists. We will continue to hold our construction partners accountable in finding efficiencies and cost savings wherever possible.

Our project team recommends that we must make difficult, but needed, decisions to manage this financial exposure and to reorder our risk, where possible, to accommodate this challenging market. We believe it is impossible to complete all the projects under phase two, and that we must prioritize our high school building project.

To that end, our recommendation to the Master Facilities Committee, administration and board will be to temporarily reorder the Middle School South and Middle School West additions, and focus our efforts on first completing the high school and Middle School East projects. The Middle School East project is proceeding because it is the smallest square footage building and is located in our highest growth area.

We committed to voters with our levy language that we would build this new high school - and we must deliver on that promise. Every student in our district, and our entire community, will benefit from a new Lincoln High School, and it is long overdue.
I understand this is disappointing news for our board, administration and school community. We made the best decisions we could, informed by our construction partners. We are not compromising programming or long-term progress, and looking ahead, we intend to and believe we can complete these projects.

We firmly believe we can press “pause” on the West and South projects, which can continue to operate well without expansion and remove them from the Phase Two budget. However, we still want and need to create new spaces at those schools, and we believe it will be financially possible to do so in the future with the change in order.

Our district must be fiscally responsible at all times, and in this volatile economy, tough choices must be made. I know this is disappointing to many in our community, and I wish circumstances were different.

We will have additional conversation about this proposal at our next Finance and Facility Subcommittee meeting. We appreciate the understanding and patience of our school community during this challenging time.