Despite several scandals now circulating around Portland Public Schools, the district has gotten credit for doing at least one thing right – managing the spending of dollars from its latest, $482 million construction bond.

School board members have credited the district’s Bond Accountability Committee for keeping the 2012 program on track – so far – despite challenges. Some, like harsh weather and an unfavorable bid climate, are said to be beyond PPS’ control. Others, like achieving significant participation by minority- or women-owned firms, have vexed the district for decades.

The BAC, comprised of veterans of large-scale capital projects from the public and private spheres, aims to ensure voters are getting what they were promised in 2012. Their role could even expand, as voters next week consider PPS’ next ask – $790 million to continue to address long-delayed capital construction needs and address a number of pressing health and safety issues. The bond would be the largest ever in Oregon.

When Kevin Spellman was first asked to join the BAC, he had a lot of misgivings, he said, because school districts and capital construction don’t go together well. He didn’t want to spend all his time criticizing. He thought it might become “too much of a job.”

Spellman stepped down as president of Emerick Construction in 2005. In 18 years with the company, he worked alongside industry leader Jim McKune and was a major player in the education sector. Spellman now runs Spellman Consulting, advising businesses in construction management practices. And since 2012, he’s served on the BAC.

“The reality has been that they have a lot of good, professional staff dedicated to this bond, and they’ve done a creditable job,” he said.

It hasn’t been easy. For one thing, 2012 bond projects have taken place primarily during one of the busiest periods of construction activity in the city’s history. Except for some initial, low bids in 2013, the district has had to take bids at or above the engineer’s estimate.

This is understandable considering how much work is going on, according to Spellman. With so many opportunities available, all firms are being choosier. Fewer firms are bidding, and fewer subcontractors and skilled workers are available now than just two years ago.

“Everyone is just really, really busy,” he said. “Everybody is picking and choosing their opportunities, and that inevitability results in a difficult bid climate for a construction owner.”

This situation is particularly acute as it relates to participation by minority- and women-owned firms on 2012 bond projects. The district has an “aspirational target” of 18 percent participation (because the district hasn’t performed a formal disparity study, it can’t set firm goals). And so far, across all projects, 11.5 percent of total payments have been paid to firms certified by the Certification Office for Business Inclusion & Diversity. Contractors only must prove they made a “good faith effort” to hire minorities or women and minority- or women-owned firms.

For projects that have gone out to bid, participation by COBID firms hasn’t been substantial. But participation has been much greater under firms using the construction manager-general contractor method, Spellman said. Lease Crutcher Lewis has stood out; it served as CM-GC for the Roosevelt High School project, which had 22 percent participation by minorities or women.

And these statistics don’t tell the whole story, according to Spellman. Because the district has performed so little capital construction since the 1940s, it has little contracting data. That precludes an opportunity for comparison.

“The sense is that participation under the bond is way up from what the district was doing before, but we don’t have data to show that,” Spellman said.

Plus, an extremely wet winter has put a damper on bond projects. Schedules for all major projects have been “negatively affected” by weather, according to the BAC’s latest report. Leaders of the Roosevelt project are expecting a $1 million cost overrun. (They plan to pay it back with a 25-year, interest-free bond.) The Franklin High School project team expects to use its entire contingency, and Faubion School team is down to 3 percent.

Observers believe up to five bond cycles could be needed to pay for modernization of Portland Public Schools’ building inventory. The $790 million bond would be the second.

Moving forward, this could be how PPS projects are funded.

“No one else is going to step in and fix our schools,” Spellman said.

If all of Portland Public Schools’ 2012 bond projects were combined into one, it would be the largest construction project in the city. At the peak of construction in summer 2016, PPS was spending $786,000 per day, or about $16 million per month.

Currently, the three large projects – modernizations of Franklin and Roosevelt high schools and the rebuild of Faubion – are nearing completion. The fourth big-ticket item – modernization of Grant High School – will start this summer.

The proposed $790 million bond would thoroughly renew three high schools – Lincoln, Madison and Benson. Also, Kellogg Middle School would be demolished and replaced. However, nearly all of the district’s 90 schools would receive at least some attention.

Bond dollars would help address a number of health and safety issues with district buildings. Lead amounts found in water pipes and paint were found higher than believed initially, and problems relating to asbestos, radon, seismic vulnerability and insufficient fire and life safety systems were discovered. The scandal ultimately led to Carole Smith stepping down as superintendent.

The district looked at possibly putting the bond request before voters in November 2016, but such action would have been premature, board member Amy Kohnstamm said. Information wasn’t collected completely and the full description of the planned work wasn’t drafted fully until late fall, she said.

“We knew that wasn’t fair to the voters,” she said. “For them to tax themselves at this level they deserve to know exactly what they’re going to get.”

The modernizations would bring the big-ticket schools fully up to seismic standards, while giving students state-of-the-art learning environments, Kohnstamm said.

The assessed value per individual for the proposed bond would be about average for Oregon, Kohnstamm said. The district and the tax base is broader here than in the rest of the state, she added.

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