Lexington school projects expected to be $11.5 million over budget. Here’s why
Some school projects approved by Lexington 1 voters in a 2018 bond referendum are adding up to more than the district bargained for.
It will cost the Lexington 1 school district $5 million more than originally expected to complete roadwork at the new location of a Lexington Middle School, school board members were told this week. Another $6.5 million will be needed to complete a new school bus facility.
The bus facility’s new projected cost is more than three times the original estimate of $3 million.
The school board on Tuesday approved an increase in the middle school project’s budget after being told by the state education and transportation departments that planned improvements to Old Cherokee Road would be more costly than originally estimated.
The money will pay to relocate about 1 mile of utilities, the construction of turn lanes and a center median, and the addition of a traffic signal, the district said.
The changes will allow for safer travel through the area, district chief operations officer Jeff Salters said. “Folks stop to turn into businesses there, causing backups,” he said.
The middle school project, originally budgeted at $53 million, was part of a $365 million construction program approved by district voters in 2018. The new school, renamed Lakeside Middle, will replace the current Lexington Middle School on North Lake Drive near Columbia Avenue. The new school is expected to open for the 2022-23 school year.
The extra $5 million will come from interest earnings and bond premiums — prepaid interest when the bonds were purchased — from the 2018 referendum, the district said. Salters said Lexington 1 currently has $7.6 million in its capital fund, and anticipates $6.5 million from the sale of revenue bonds this year.
Board member Jada Garris said the change reflected a need for the board to provide better oversight of bond referendum spending.
“We wouldn’t be discussing this if the board actually did their job and reviewed contracts, bids, sale orders for projects,” Garris said during a board meeting Tuesday. “I’ve sent email after email explaining why we need to be more involved… Not only is the board not made aware of change orders, we don’t even know the cost of the change orders.”
Garris said she was still trying to get a copy of the contract the district has with construction management firm H.G. Reynolds, which is // overseeing work at Lakeside Middle School.
Board chair Anne Marie Green replied that the district has substantial bond premiums, a strong credit rating and most of its projects are under budget.
Green said school board members are not better placed to judge site estimates than the professionals employed by the district. She said the school district has historically been good at handling costs, but general estimates from 2018 have to be adjusted for specific sites and construction costs today.
“We don’t have crystal balls,” Green said.
Salters said traffic congestion makes Old Cherokee Road a challenging location to construct a school, but said there are only a limited number of sites in the Lexington area to build a school.
The current Lexington Middle School “has three to four times the traffic,” he said. “You’ve got to build where the children are.”
In September 2019, Lexington 1 purchased 34 acres for the new middle school between Old Cherokee Road and Cherokee Trail, at a cost of $1.6 million. The site is about a mile and a half from the school’s current location on North Lake Drive.
Separately, the district said a new bus facility planned for Two Notch Road near South Lake Drive would be $6.5 million over the original referendum estimate, growing from $3 million to $9.5 million. Salters called that a “scope disconnect” between the district and the contractor.
“We had one expectation, and the contractor had a very different expectation of what we were looking for,” he said.
The initial estimates done by M.B. Kahn Construction for the 2018 referendum were based on a similar facility to what Lexington 1 has now. But in addition to rising costs, the district has identified other needs in working with Edcon Construction, like mechanic bays to assist with bus maintenance, and the addition of tanks for propane-powered school buses, which the district didn’t have at the time, Salters said.
That disconnect leaves the district with the option of either scaling back the Two Notch project — which would mean continuing to use aging buildings that the district acknowledges are insufficient while hoping to find additional funding later — or funding the additional cost from bond premiums and potentially selling off part of the site.
Garris said she didn’t like the idea of selling off part of the property because she expects the district will only need more bus space as it grows, but also that it would be impractical to try to build a new facility in stages.
Bus supervisors at the existing facility on Barr Road have to work out of overcrowded portables, and buses have to be moved occasionally because portions of the site flood when it rains, Salters said.
Garris is also concerned that new early childhood centers planned for the Gilbert and Pelion areas could be delayed by the shortfall at the transport facility.
“We can’t steal from one part of the referendum to pay for another,” she said.
Board member Brent Powers suggested district staff come back to the board with plans for a “waterfall” funding model: first using bond money, then transferring savings from other projects before looking at other funding sources.
Money from the 2018 referendum will also pay for a new middle school in Pelion, new elementary schools in the Gilbert and White Knoll areas, and renovations to several existing schools.
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