The Commission for Public School Academic Facilities and Transportation on Thursday approved the distribution of $92.2 million in state aid for 58 building projects in 45 Arkansas school districts.
The projects to be funded in part with that state money include new school buildings in the Watson Chapel, Jacksonville/North Pulaski, Benton and Highland school districts, as well as school building additions, new roofs, new heating and air-conditioning systems and new security systems.
"It's very good news," Watson Chapel Superintendent Andrew Curry said later Thursday about the $14,585,876 in state aid that was approved for a 94,000-square-foot high school campus for as many as 500 students. The district share of the cost would be about $8 million, which will require voter approval of a proposed property tax increase later this year or in early 2023, Curry said.
The Jacksonville/North Pulaski district is scheduled to receive $4.7 million for replacement of Bayou Meto Elementary and $1,789,359 toward the replacement of the existing Murrell Taylor Elementary.
"It is definitely what we expected and what we wanted," Jacksonville Superintendent Jeremy Owoh said about the commission vote. "That pushes us another step closer to fulfilling our facilities goal, which is to have new schools for all of our scholars."
The district will seek additional state funding for the Murrell Taylor Elementary campus in the 2023-25 cycle of state building funds. The commission will make that decision on Taylor next April, Owoh said.
The three-member state commission approved the project allocations at a meeting in which it was made aware that the rising costs of building materials on a national level this year are affecting the academic-related construction projects.
Tim Cain, director of the state Division of Public School Academic Facilities and Transportation, told the commission -- chaired by Arkansas Education Secretary Johnny Key -- that nonresidential building costs and costs of new construction by the square foot increased by 19% to 21% from December 2020 to December 2021.
The average cost of the per-square-foot of new construction in that time has increased from $202.69 to $245.58, Cain said, a $42.90 increase or 21.1%. Cain added that he has received reports in recent days of costs hitting $300 a square foot.
Districts with approved projects for state aid are being negatively affected, he said.
"Some districts cannot proceed under present conditions because of a lack of funds," Cain said. "Several districts have reached out to me, asking for help from the state," he also said, adding that the solutions won't be easy for the districts or the state.
Key told his fellow commissioners that the state education agency doesn't have the authority to simply increase the amount of state facilities aid going to the districts. Any increases would require authorization by the Legislature and governor, he said.
The academic facilities division staff, however, is preparing information about the rising costs in an effort to be prepared to respond to any requests by lawmakers, he said.
DISTRICT OPTIONS
Cain offered some immediate options for the districts to take while ideas for more long-term solutions are in the early stages of being developed.
In the short term, districts might alter the scope and size of their planned projects to make them more affordable, Cain said. Similarly, the districts could alter the finishes and other materials they are using in their buildings and/or add flexibility in the timing for completing projects as a way to meet their budgets.
Additionally, districts may be able to use federal covid-19 relief money to cover cost increases, he said.
Arkansas school districts have received about $1.7 billion in that special funding, which can be used for a fairly broad list of initiatives.
INFLATION 'HORROR STORIES'
Commission member Mark Conine, president of the Arkansas Development Finance Authority, said school districts that intend to raise their share of building costs by issuing bonds are likely to see higher interest rates on bond debt. Higher interest rates lessen the money available for the actual project.
Superintendents are also watching the inflation on building materials.
"It's going to be a big problem because ... you don't know how much to ask your patrons for," Curry said about a local tax increase for replacing a campus that was built in the 1940s.
"I'm hearing horror stories of $300 a square foot in Northwest Arkansas," he said, noting that in Jefferson County, a previously anticipated cost of $200 a square foot could wind up being $250 per square foot.
Currently, the Watson Chapel district has a 34.1-mill property tax rate and the School Board is considering a request to voters for a 5.7-mill increase to raise about $8.5 million for the new building.
Owoh, the Jacksonville superintendent, said Thursday that he was pleased that the commissioners and the facilities division staff are talking about the increased building costs.
He said he hopes that the state will recognize the need for the districts to be able to complete their projects and, as a result, amend the funding amounts so the increased costs are covered.
The Jacksonville district is planning to finalize the purchase of the land for a new Bayou Meto Elementary within the next several days and begin construction in the fall of a 460-student campus.
Lawmakers created the Arkansas Academic Facilities Partnership Program -- in which the state shares in the cost of building academic spaces -- in 2006 to modernize public schools. That was done in response to a state Supreme Court decision that had declared Arkansas' public schools inequitable, inadequate and unconstitutional.
A Partnership Program Project agreement must be executed by a school district and the facilities division within 60 days of the commission's vote of approval of the funding.
The project must be under construction -- as shown with a signed contract -- within 18 months from the commission's approval and must be completed and requests for state reimbursement submitted within four years of the commission's funding.
Some of the other projects approved Thursday to receive state funding include a new middle school in Benton, the state share of which is $12.3 million.
The Jonesboro School District is scheduled to receive $3.7 million for an addition at MacArthur Junior High. Prairie Grove School District is approved for $1.9 million for middle school additions. Bauxite School District is to receive almost $5.3 million in state aid for high school additions.