Category Archives: SPLOST

Options To Address E-SPLOST Budget Issues

In earlier posts, I discussed E-SPLOST Budget Overruns and Projects on Hold. What’s the plan? Here are the options we are currently looking at.

BACKGROUND

The DeKalb County School District operates in over 130 instructional facilities
• 76 Elementary school facilities
• 19 Middle school facilities
• 21 High school facilities
• 7 Other school facilities
• 3 Instructional program facilities

E-SPLOST BUDGET ISSUES

Industry‐wide construction costs have increased by 15%‐20% in past few years. E‐SPLOST V projects are projected to cost approximately $87 million more than originally estimated. E‐SPLOST V state reimbursement revenues might be as much $31 million over estimated due to existing unused capacity

RECOMMENDATION TO ADDRESS E‐SPLOST BUDGET ISSUES

DeKalb Schools recommends the following two step process to address the budget issues:

1. Balancing Budgets for E‐SPLOST IV and E‐SPLOST V for approval by the Board in June/July 2019
2. General Obligation Bond to fund additional projects (including some of those projects removed in step 1), for approval by the Board

STEP 1: BALANCING E‐SPLOST BUDGETS (JUNE/JULY 2019)

E‐SPLOST V Adjustments
• Remove 10 projects (‐$66.8 M)*
• Reduce scope of 8 projects (+$13.8 M)*
• Increase budget of 14 projects (+$53.0 M)*

Recommended E‐SPLOST IV adjustments:
• Remove K‐12 Arts School from E‐SPLOST IV (‐$11.1 M*)
• Fund project with GO Bond

*Based on current budget.

Remove 10 E‐SPLOST V projects: (‐$66.8 M)
• Peachtree MS Addition (‐$14.1 M)†
• Lakeside HS Addition and turf (‐$26.9 M)†
• Turf installation at 14 Schools (‐$10.8 M)*
• Parking addition at 10 schools (‐$1.6 M) *
• Sprinkler installation at 18 schools (‐$3.9 M)
• Freedom MS Addition (‐$8.5 M)
• Lead‐In‐Water Set‐Aside (‐$0.9 M)
• Clarkston HS Addition – Reduce addition from 32 classrooms to 15 classrooms and remove artificial turf installation (‐$8.4 M)

Reduce scope and increase budget of 3 E‐SPLOST V projects: (+$22.1 M)
• Cross Keys MS Conversion – Reduce addition size from 21 classrooms to 8 classrooms (+$1.8)
• New Cross Keys HS – Reduce size of new school from 119 classrooms to 98 classrooms (+$17.2 M))
• Cedar Grove HS Auditorium Addition – Remove artificial turf installation (+$3.1 M)

Increase budget with no scope change in 11 E‐SPLOST V projects: (+$22.5 M)
• Fence installation at 36 schools (+$1.2 M)
• Security Vestibules at 20 schools (+$1.6 M)
• Chamblee HS Addition (+$4.9 M)*
• New John Lewis ES (+$0.2 M)
• New Cross Keys North ES (+$0.2 M)
• New Indian Creek ES (+$10.5 M)
• Druid Hills MS (+$0.6 M)
• Tech: ERP/Finance/HR System (+$3.3 M)

Increase budget of 3 other E‐SPLOST V projects: (+$30.6 M)
• Dunwoody HS Addition – Increase size of addition from +26 classrooms to +41 classrooms and remove artificial turf installation (p #215, +$9.5 M)†
• Program Contingency (p #602, +$16.1 M)
• Revenue Reserve Fund – Create a revenue reserve fund (+$5 M)

E‐SPLOST IV Recommendation
Remove K‐12 Arts School from E‐SPLOST IV* and place into GO Bond (‐$11.1 M)
OR Keep K‐12 Arts School in E‐SPLOST IV and find $3.9 M of other non‐SPLOST revenues

GENERAL OBLIGATION BONDS

• Option A: $210 million GO Bond
• Option B: $245 million GO Bond
• Option C: $180 million GO Bond

OPTION A ‐ $210 MILLION – GO BOND PROJECTS
• Peachtree MS Addition ($12 M; E‐SPLOST V)
• Lakeside HS Addition ($25 M; E‐SPLOST V)
• K‐12 Arts School ($15 M; E‐SPLOST IV)
• Four new elementary schools ($34 M each): ($136 M total)
• Toney ES (22% FCA; combine with Kelly Lake ES, 39% FCA)
• Stoneview ES (40% FCA; capacity needs)
• Hawthorne ES (37% FCA; combine with Henderson Mill ES, 27% FCA)
• New ES for Dunwoody/Chamblee clusters (capacity needs)
• GO Bond program contingency and escalation ($22 M)

OPTION B ‐ $245 MILLION GO BOND PROJECTS
• Peachtree MS Addition ($12 M; E‐SPLOST V)
• Lakeside HS Addition ($25 M; E‐SPLOST V)
• K‐12 Arts School ($15 M; E‐SPLOST IV)
• Five new elementary schools ($34 M each): ($170 M total)
• Toney ES (22% FCA; combine with Kelly Lake ES, 39% FCA)
• Stoneview ES (40% FCA; capacity needs)
• Hawthorne ES (37% FCA; combine with Henderson Mill ES, 27% FCA)
• New ES for Dunwoody/Chamblee clusters (capacity needs)
• Brockett ES (35% FCA) or Idlewood ES (65% FCA) or E.L. Miller ES (36% FCA)
• GO Bond program contingency and escalation ($23 M)

OPTION C ‐$180 MILLION GO BOND PROJECTS
• Peachtree MS Addition ($12 M; E‐SPLOST V)
• No Lakeside HS Addition ($0 M; E‐SPLOST V)
• K‐12 Arts School ($15 M; E‐SPLOST IV)
• Four new elementary schools ($34 M each): ($136 M total)
• Toney ES (22% FCA; combine with Kelly Lake ES, 39% FCA)
• Stoneview ES (40% FCA; capacity needs)
• Hawthorne ES (37% FCA; combine with Henderson Mill ES, 27% FCA)
• New ES for Dunwoody/Chamblee clusters (capacity needs)
• GO Bond program contingency and escalation ($14 M)

GO BOND OPTIONS
DeKalb Schools Go Bond Options

GO BOND OPTIONS PROPERTY TAX
Go Bond Options Property Taxes

E-SPLOST Budget Overruns and Projects on Hold

The current DeKalb Schools budget for E-SPLOST V projects is $561 million. The most recent estimated cost for those projects is $684.4 million. We are roughly 22% over budget (not including any project adjustments made for recent enrollment forecasts).

Enrollment Adjusted Estimated Costs
Due to the most recent enrollment forecasts, most of the building addition projects have either been reduced or cancelled. However, Chamblee Charter HS addition will stay the same and Dunwoody HS is getting 1,000 seats. Accounting for the reductions and cancellations, the enrollment adjusted estimated cost is $638 million ($77 million over current budget).

The new facilities and additions by themselves are projected to be $21 million over budget.

ESLPOST V Project Area Current Budget New Estimated Costs Enrollment Adjusted Estimated Costs
Safety and Security Improvements $12,872,000 $40,629,074 $40,629,074
New Facilities and Additions $304,890,566 $372,197,439 $325,969,237
Facility Condition Improvements $96,948,000 $107,091,710 $107,091,710
Technology Improvements $65,000,000 $68,300,000 $68,300,000
Buses, Vehicles, and Equipment $40,075,000 $40,075,000 $40,075,000
Management Support and Contigency $41,214,434 $56,742,726 $56,742,726
Grand Total $561,000,000 $685,035,949
$638,807,747

Increased Construction Costs
Increasing construction costs can be attributed to numerous things including a robust construction market, rising cost of labor due to low unemployment, material costs, tariffs on imported construction materials and more stringent building requirements.

Projects ON HOLD Due to Insufficient Funds

SPLOST V
1. Cross Keys MS Converstion and Addition ($10 M)
2. Cedar Gove HS Auditorium ($6 M)
3. Clarkston HS Addition ($18 M)
4. New Cross Keys HS ($84.8 M)
5. Chamblee Charter HS Addition ($21.5 M)
6. Dunwoody HS Addition ($17.7 M)
7. Lakeside HS Addition ($26 M)
SPLOST IV
1. Arts School ($11 M)

Options to Address Budget Issues

Revenues over the last 6 years have doubled while the number of students has remained the same. However, the school district is looking into borrowing money.

Option 1: $63 Million COPS – Finance Dunwoody HS addition, Lakeside HS addition and the Arts School.

Option 2: $80 Million GO Bond – Finance Dunwoody HS addition, Lakeside HS addition, the Arts School and add $17 million to capital renewal.

Option 3: $100 Million GO Bond – Finance Dunwoody HS addition, Lakeside HS addition, the Arts School, add $5 million to capital renewal, New Cross Keys MS Conversion, Cedar Grove HS Auditorium, Clarkston HS addition.

Option 4: Nothing – Eliminate the projects on hold, decrease most project areas and increase program contingency by $11 million.

Moving Forward

The Board of Education will have illegal rolling meetings behind closed doors over the next week to prioritize projects and discuss the funding options.