Well-worn facilities
Leaking roofs, failing furnaces and out-of-date fire alarms have Sisters school officials considering spending precious dollars.Sisters schools to use funds from property sale for upkeep projects
Published: January 15. 2006 4:00AM PST
SISTERS - Every year, school districts from Portland to Klamath Falls are forced to make stomach-churning choices between buying textbooks or replacing obsolete fire alarms, funding more teachers or repairing outdated heating systems.
Sisters School District is no different except that in the lean years of late, it has often chosen to fund the items that make a difference in the classroom while other districts in Central Oregon have socked away cash for major maintenance or building projects, said Sisters School District Budget Committee members and other school district officials in the region.
Now, the district is faced with a leaky elementary school roof and a problematic heating system, high school floors in need of repair, renovations to the middle school to make room for fifth-graders and out-of-date fire alarms.
By September 2007, the district is planning to spend more than $1.5 million on these and other necessary projects. That's a big number for a school that budgeted just $6.5 million for instruction this year.
But principals and school board members say the projects must get done.
To complete them, the district will have to dip heavily into a newly acquired resource that an earlier school board had intended to become a long-term reserve fund for capital projects.
Leaky roofs, broken heaters
Longtime teachers at the Sisters Elementary School can tell leaky roof stories that stretch back the 27 years the building has been open, and this winter ranks right up there with the best of them.
"We've had a bucket out there (in the entrance area) for weeks now," said Jan Silberman, principal of Sisters Elementary School.
A leaky roof isn't the worst maintenance problem at the school, either. That distinction goes to the heating and cooling system.
Problems don't exist in every classroom, but in many temperatures range from freezing to burning up.
"As a parent of an elementary school kid, I'm tired of asking why he wears his ski coat in class. It's horrible." said Mike Gould, a Sisters School Board member elected last spring.
Silberman said the problems are basic and immediate.
"We have kids that are uncomfortable in class. It affects our learning environment," she said.
School board members say the time has come to fix the problems.
The question has been how to pay for them. Then last year, the district landed a winning lottery ticket in the sale of a property called the Lundgren Mill.
The property, which the district had considered selling for just $292,000, reaped a whopping $3.2 million.
It's the perfect funding source for the major capital projects the district believes must be completed in the upcoming year and a half, board members said.
But plans for the Lundgren Mill money were set in August 2004 by a board that included just two of the current members. Those plans didn't include spending more than $1 million of it the very first year the district got the cash.
"The first year that this money is here we are sort of busting the bank," said Glen Lasken, one of only two school board members who were on the original board that designated uses for the money. "But it really is sort of the only realistic option."
Change in plans
Originally, the school board meant to allocate $100,000 in Lundgren Mill money each year to capital projects and let the rest earn interest in a reserve fund, but officials had no idea what a great deal the district would get on the property.
Current board members said the deal enables the district to fix all its current projects then put the rest into a reserve to be doled out, hopefully at the same $100,000 rate, said Rob Corrigan, who was also elected to the school board last spring.
"If we are willing to swallow the bitter pill and raid the cookie jar and then don't go back again, then I don't think it's going to be a problem," Corrigan said.
But board members expressed extreme unease at the fact that the down payment of $1.2 million on the Lundgren Mill property and an installment of $769,300 to be paid in September are already allocated to cover the cost of current capital projects.
Some of that unease may be because at least $250,000 of the Lundgren Mill money will be spent this year to cover the cost of project overruns that could have been budgeted for more carefully, said Sisters School District Superintendent Ted Thonstad.
"Capital projects should have a budget and bid and change-order process. For whatever reason, that didn't occur. We got bids but we didn't do the detail work," Thonstad said.
Several capital projects - the renovation of the old middle school for use as administrative offices, a parking lot and modular buildings for an alternative program at the high school - were expected to cost about $606,000 in total. The actual cost has come in around $900,000.
The school board has since established a process to keep much closer track of how funds are spent on capital projects.
But concerns over allocating Lundgren Mill money to cover the costs of the overruns and other projects prompted the school board to hold off on a vote to allocate the money until Jan. 30, giving taxpayers a chance to weigh in on the plan.
No opposition
So far, the district has heard no opposition to spending the $1.2 million of Lundgren Mill money on the more than 15 capital projects the district hopes to soon finish.
Lora Nordquist, principal of Sisters Middle School, said administrators in the district will be pleased to see the money used to make buildings a safe and comfortable place for students to learn and staff to work.
"There's been no controversy from anyone," she said.
Darren Layne, a Sisters School District Budget Committee member and chairman of the Sisters School Foundation, which donated $70,000 to programs in Sisters schools last fall, said the topic of funding capital projects comes up every year in the budget committee but it's difficult to prioritize them at the expense of student programs.
"The goal was to provide the best services for the student. A strong fiscal policy would indicate that you save money for things (but) that's in direct conflict with funding students," he said.
He's looking forward to seeing the district fix some of the outstanding problems, such as the elementary school roof, then using the rest of the Lundgren Mill money to create a constant source of revenue for capital projects.
Whether the district is criticized or not for using the Lundgren Mill money right away, it's still likely to take some flak just for creating the reserve fund, said Angie Peterman, director of administrative support services with the Oregon School Board Association.
Despite that nearly every district in the state keeps some form of a reserve fund, people often raise questions about whether it's the best use of money, she said.
"All revolve around issues of 'Why aren't you spending that money now?'" Peterman said.
Unions sometimes object to reserve funds, too, she said, and demand districts spend the money on them instead.
John Rexford, assistant superintendent of operations for the Bend-La Pine School District, said his district received some criticism for creating its current land purchase reserve fund of $150,000 and for maintaining a $2.3 million ending fund balance.
"I think those criticisms are fair," he said. "There's always a tension - between the need for classroom versus saving something back for capital expenditures."
A letter is likely to be sent to every taxpayer in the Sisters School District soon explaining why the district is taking the "extraordinary move" to use up roughly $1.2 million of the Lundgren Mill now, the board decided Wednesday.
School board members said they believe once residents understand the district's current needs they will support the move and if they don't, board members want to hear about it, they said.
But in general, each board member said the district was in good financial shape relative to other districts in the state and the current plan for the Lundgren Mill money won't change that.
"I would rather have the set of problems that this district has rather than those others are dealing with," said board member Mike Gould.
Erin Foote Marlowe can be reached at 541-504-2336 or at emarlowe@bendbulletin.com.
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