The Kenai Peninsula Borough School District and government are considering adjusting the scope of a school maintenance bond package in response to a higher-than-expected cost estimate recently received for the bond’s biggest project.
KPBSD Director of Planning and Operations Kevin Lyon and Kenai Peninsula Borough Purchasing and Contracting Director John Hedges on Monday updated members of the school board about the status of projects described by the $65.5 million bond approved by voters last fall.
The update came three weeks after Lyon and Hedges told school board members that a cost estimate for the reconstruction of Soldotna Elementary School came back $13.5 million over budget. Originally projected to cost $21 million, the same project is now expected to cost around $35 million.
The City of Soldotna faced a similar dilemma this summer, after a cost estimate for the construction of the Soldotna Field House came back $10 million over budget. The city also bonded that project last fall, and the city council ultimately reduced its scope to stay under budget. City council members in September, though, expressed relief after awarding a project contract that more closely aligned with the city’s initial, lower estimate.
In all, the school maintenance bond passed last fall describes $65.5 million worth of projects affecting 10 of KPBSD’s 42 schools. Work is progressing on some of those other projects, Lyon said, but has not yet started on others.
For example, design of a new concession and restroom facility at Kenai Central High School is 95% complete, he said, and design of new siding for Soldotna High School is “nearing completion.” Work hasn’t started, though, on renovations to the entrance of Homer High School or on security upgrades to Kenai Middle School, among others.
The largest component of the package was the reconstruction of Soldotna Elementary School, which was built in 1960 and currently shares a building with Soldotna Montessori Charter School.
The same bond package also included a reconfiguration of the currently vacant Soldotna Prep School, the second-most expensive project, that project involves relocating Soldotna Montessori, the district’s home-school program, River City Academy and KPBSD’s administrative offices to the building.
Lyon said Monday, however, that reconfiguration of Soldotna Prep is contingent on the reconstruction of Soldotna Elementary. Since that project estimate came back over budget, Lyon said he and Hedges have been looking for ways to reduce costs. For example, the bond describes a reconstruction but there may be a way to use part of the existing facility.
“We’re between a rock and a hard place where you can’t make any more cuts and still fit the kids and the programs in the box,” Lyon said.
Hedges described the reconstruction of Soldotna Elementary as being the “lion’s share” of the bond and said its success affects the borough’s ability to complete other bond projects. The Kenai Peninsula Borough in January announced that it would break up the bond package into two chunks, opting to first sell $30 million worth of bonds.
That’s not enough, though, to pay for the reconstruction of Soldotna Elementary school if the $35 million estimate is accurate. Now, the borough is in the position of having to strategize the most effective way to complete the projects given the amount of bonds that have already been sold.
“From a planning and district strategy standpoint, in the execution of the work, we can’t responsibly move forward with that larger project without understanding how that higher cost is going to impact all these other cascading projects,” Hedges said.
When reminded of the criticality of the other projects included in the bond that may be stalled while the borough reconciles the cost of the Soldotna Elementary rebuild project, Hedges said the borough is monitoring the effects of delays.
“They are critical,” he said of the other bond projects. “We’re monitoring that impact. It is a fine line we’re walking with it, but the opportunities that potentially could come from those projects, I think outweigh some of that risk. We’d like to give this at least one more round of those federal funding programs that we applied for last year and see if we can’t get on the shortlist for them.”
Kenai Peninsula Borough Mayor Peter Micciche also attended Monday’s work session. He agreed that the borough has “some things to figure out” before it moves forward with the bond package, and said he’ll be looking for support from the State of Alaska and from federal grants.
“We’re flexible,” Micciche said. “We’re meeting with the district folks to try to find different ways to meet the needs of the children we serve … We did pass a bond that was perhaps more detailed than it needed to be, but that’s what we had on the table.”
In light of the high cost estimates, Micciche said the borough is reviewing the legality of making changes to the bond package, such as by allowing KPBSD’s administrative offices to stay in the borough building rather than relocating them to Soldotna Prep School — a move initiated and imposed by former Borough Mayor Charlie Pierce. Micciche said it’s important, though, for the borough and school district to follow through on the projects approved by voters.
Micciche separately told the Clarion on Monday that public trust is “imperative” and that relocation of KPBSD’s district offices is “at the bottom of the list of our (Kenai Peninsula Borough) administration’s priorities.
“We will meet the public’s expectation of what they supported in the bond package,” he said. “If the plan is significantly altered due to the cost increases of the Soldotna Elementary project, we will evaluate a transparent, cost-effective way forward that may include going back to the people for their approval.”
Monday’s work session will be available to stream on the district’s BoardDocs site.
Reach reporter Ashlyn O’Hara at ashlyn.ohara@peninsulaclarion.com.
