HARD CHOICES AHEAD IN BUILDING SCHOOLS BUDGET WOES MAY SIGNAL HART CUTBACKS.

Byline: CONNIE LLANOS 

Staff Writer

SANTA CLARITA -- As the Hart School District faces a potential deficit of more than $100 million, consultants and some staff members urge leaders to consider cheaper construction and delivery methods for new campuses.

Frills no longer fit in this struggling district's budget, some argue, especially when the laundry list of construction projects tops off at more than $300 million.

But others say the standard set by the Hart Union High School District has not only driven the growth in district enrollment but in the Santa Clarita Valley as a whole.

"After receiving more than 700 e-mails in the last two weeks, they all came back with one message. People have moved here for the schools," said Steven Sturgeon, a member of the Hart school board. "That is what continues to sell houses in this valley."

The Hart district announced at a recent board study session that if it didn't review some of its construction projects and their funding sources, the 23,000 student district could be hit with a financial shortfall of $124 million by 2009-10.

The Dolinka Group, a financial consulting firm, prepared a 27-page report explaining how the shortfall occurred and several ways to prevent it that included looking into more conservative ways to build new schools.

In January 2002, the district took out $47 million in certificates of participation to cover construction projects it expected to pay with funds from both the state and a 2001 bond approved by voters as that money came in.

The district, however, was not prepared for the skyrocketing construction costs that would follow, and six years later it still owes almost all the principal on the certificates -- $42.9 million.

"To be fiscally responsible, it would be prudent for the district to build within its means and if this means value engineering then the board may wish to scale back some projects," said Sue Guthrie, Hart's chief financial officer.

Guthrie explained that a big part of the expected financial shortfall includes debt service payments, that, if paid in yearly installments of about $2.5 million, would take until 2036 to pay off -- at a total cost of about $85 million.

Coupled with the loan debt, the district has a growing list of pending construction projects.

It is estimated that the much anticipated Castaic High School could come in with a price tag exceeding $175 million -- almost three times its original estimate -- and the performing arts centers planned at Canyon and Saugus high schools could cost $31.6 million.

This list does not include remodeling projects for older campuses -- Hart High and Placerita and Sierra Vista junior highs.

Paul Rivas, Hart's director of modernization, is recommending the district look into alternative methods of construction.

"With cost escalation going so high, this an opportunity for the district to recover from its financial woes," Rivas said.

Methods include using modular buildings, which can cost up to $200 less per square foot than conventional construction methods and which have already been placed at Rio Norte, Rancho Pico and Arroyo Seco junior high schools.

Castaic High School could come in as low as $126 million -- $49 million less if it's constructed with modular buildings, Rivas said.

"When you don't have the money, you don't have a choice," said Steven Gocke, former superintendent of the Lancaster School District.

Gocke, who still consults for the K-8 school district, said modular buildings have allowed Lancaster to keep up with rapid enrollment growth.

He is currently working on a middle school in which he's implementing various cost-effective strategies, including modular buildings, to get the school built within a modest budget of $18 million.

"We will build a core building -- smaller than the original plan -- and everything else will be modular, and it will have no gym in the original go-around."

Gocke said high schools in the area are doing the same thing.

"New high schools are going out to bid for $140 million and district's only have $95 million coming in from the state."

Gocke said the stigmas associated with modular buildings -- that they are flimsy, unsafe and not nice looking -- no long hold.

"Do you want a neighborhood modular school or do you want kids bused 10 miles away to an overcrowded campus with relocatables?"

State-of-the-art modulars, Gocke said, are at least 30 percent cheaper and can be spruced up with decorative touches like stucco when the district has more funds.

Other options for the district include engaging in alternative methods of buying schools.

Lease-lease back purchase options would allow the district to buy land for a school, hire a contractor to build it, and then pay lease payments to the contractor for the school until it can afford to pay for it in full.

Hart school board member Gloria Mercado-Fortine has been touring other school districts and said she is ready to look into some more cost-effective methods of constructing schools.

"I understand costs are up but what I don't understand is why other districts can build schools, excluding land, and have been able to renovate at what appears to be a much lesser cost than what we have been given," she said.

On a recent visit to the Corona-Norco School District, a fast growing district in Riverside County, Mercado-Fortine said a high school was being priced anywhere from $80 million to $120 million "with all the bells and whistles."

There are many things we could be doing differently and we need some creative innovative people," she added.

"If we keep doing the same old thing we are going to get the same old thing."

But board member Dennis King, said the issue is with maintaining a consistent standard and philosophy for the district.

"Do you curtail a project to stay within budget so if costs go up you do less of the project and build to a lesser standard and quality? Or do you have a philosophy that says there is a certain standard of facilities that we maintain as a district and we will build to it, knowing we will need extra money to do so," King said.

King agreed he was interested in alternative methods of construction, but he said the community needs to accept that the expectation for schools in Santa Clarita is higher. One possibility to finance new campuses is to ask voters to approve another bond next year.

"This community demands a quality of education, including facilities, that is higher than what the state of California is willing to pay for," he said.

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