22 February, 2013 (All day)
Construction of the Trojan
“If Morgan School District is having financial challenges, why did the Board of Education build the Trojan Century Center and transportation facility?”
It is important to remember that school finances fall into two major categories: Capital Fund (buildings and construction) and General Fund (student instruction). The construction cost for the Trojan Century Center came from the building fund, donations, and federal stimulus money. Absolutely no funds came from the General Fund (student instruction).
The district’s present financial challenges are tied to the General Fund (student instruction), not the Capital Fund (buildings and construction).
In fact, over the past three years the board, under special legislative authority, has actually transferred $1,471,000 from the Capital Fund (buildings and construction) to balance the General Fund (student instruction). The board can no longer afford to draw from the Capital Fund and thus the need to pass a voted leeway to help cover the costs of student instruction.
For a number of years, the board had been considering ways to enlarge the physical education facilities at Morgan High School and relocate the taransportation facility.
Morgan High School had outgrown the space needed to conduct P.E. classes and sports programs. Often the middle school was prevented from using their facilities after school due to demands from the high school. The high school population had also grown and the gym space was too small for the number of P.E. classes per period.
The old bus garage adjacent to State Street was aging and it was difficult to park and maneuver buses in a small parking area shared by three other local businesses. The shop area was also decaying and the equipment inadequate for routine repairs. The location of the garage was also prime commercial property for future business growth within the city limits.
During the 2009-10 school year, the Utah State Office of Education notified the district business administrator that a federal program known as “Qualified School Construction Bonds” was being made available to the state and the Morgan School District may be qualified to receive some of the funding. This program was designed to provide bonding for schools with little or no interest costs to the district.
At that time, the board directed the superintendent and business administrator to investigate possible construction scenarios including building a new gym and a transportation facility. They also authorized the business administrator to apply for the “Qualified School Construction Bonds” program. The district’s request was for $6 million.
The state awarded the district $4 million. This amount would not cover the costs of a new gymnasium and a transportation facility.
After a thorough investigation, the board made a determination to build a P.E. facility that did not follow traditional construction methods. Bear River High School had recently built an enclosed metal and concrete recreation facility at approximately half the cost of traditional building methods. The board toured the facility and became convinced that Morgan could construct a similar structure that would meet the needs of a wide variety of P.E., academic, extra-curricular, and community recreation needs. Building construction costs were low and many contractors were seeking work. The savings would also allow the board to construct a new transportation facility.
The board moved ahead hiring an architectural firm and a project manager. Designs were prepared and the bidding process took place. Ground was broken in the spring of 2011.
Initially the board had hoped to stay within the $4 million parameter set by the federal grant. But as the projects moved forward, unexpected costs and code requirements came forth that were not part of the original costs estimated by the architect. They included design errors, FEMA flood plain requirements, city zoning requirements and excavation costs, etc.
The board was faced with not finishing all the phases of the Trojan Center and transportation facility or drawing funds from the building reserve fund to complete the projects. Waiting would most likely add costs to the finalization of the projects. An example from previous experiences was the cost differences when the board had first proposed the construction of the Mountain Green Elementary School and when the bond was actually approved by voters. This delay added $7 million to the construction cost.
Convinced that in the long run this would save taxpayers hundreds of thousands of dollars, the board moved ahead with completion of the projects. They also sought the assistance of the Morgan Education Foundation in raising donations to help cover added expenses of the two facilities.
Completion of the Projects:
Within an 11 month period of time, both the Trojan Century Center and the transportation facility were completed at a total cost of $5,050,837. Of that amount, $4 million came from the “Qualifying School Construction Bond.” With the help of Zions Bank, these bonds were sold and the interest payment for the district was set at 0 percent. (This equates to a savings to taxpayers of $1.6 million dollars over the course of the bond.) The board drew $550,000 from capital (building) reserves. The Morgan Education Foundation raised $450,018 in cash and $90,018 in in-kind donations (labor and product). In addition, local contractors donated another $96,000 in in-kind funds that were never attached to the final construction costs.
The Trojan Century Center was completed at a cost of $81 per square foot and includes facilities for a wide variety of physical education and extra-curricular activities. It is being used by a number of county recreation programs and other recreational groups and individuals. It also includes two classrooms. A traditional gym would have cost between $150 and $180 per square foot with limited uses for the school and public.
The new transportation facility has covered canopies for 30 buses and a three-bay garage with offices and storage. The facility has enough space to expand as the district fleet grows. The old bus garage and a portion of ground next to the new facility were sold to help defray costs.
The district has not increased its custodial or maintenance staff as a result of the construction. In fact, the district employs 0.60 fewer custodians and maintenance workers today than they did in 2008. Rental fees from the facility are expected to help cover employee costs for cleaning and supervision.
The Morgan Board of Education acted in a timely and prudent manner to build necessary facilities to meet the demands of a growing student population. The funds used came from a federal construction program, capital reserves and community donations. The expenditures in the construction projects did not impact the educational funds used for student instruction. In fact, just the opposite is true; money for buildings and construction has helped pay for the cost of student instruction. The board can no longer afford to draw from the Capital Fund and thus the need to pass a voted leeway to help cover the costs of student instruction.