Facing rising costs and new priorities, school district to delay certain bond projects

Facing rising costs and new priorities, the Palo Alto Unified School District is planning to indefinitely delay certain planned, bond-funded construction projects in favor of completing items that are deemed more urgent.

Palo Alto Unified is currently in the midst of construction projects on campuses throughout the district, funded by the Measure A and Z bonds, which voters passed in 2008 and 2018, respectively.

There is currently roughly $165 million left available to allocate towards projects, Director of Facilities and Construction Eric Holm told the school board at a Tuesday, March 28, meeting. District officials are planning to indefinitely delay $163.6 million in planned projects, in favor of a collection of projects totalling $141.3 million that the district deems to be higher priorities. That will leave $23.8 million in reserve to cover any further cost overruns or to pay for deferred maintenance projects, Holm said.

The indefinitely delayed projects aren’t expected to be completed until the district identifies a future funding source, potentially by asking voters to approve a new bond measure in the future.

These projects include replacing Palo Alto High School’s food service facility and building 900 ($26.5 million), replacing Gunn High’s art and media arts building ($21.8 million) and making improvements to Gunn’s Bow Gym ($13.2 million). The district also no longer intends to go through with the planned central kitchen and cafetorium project at Jane Lathrop Stanford Middle School.

The district is also holding off on projects at various elementary schools including new administrative buildings, multipurpose spaces and flex rooms (which can be used for activities such as art and music). The impacted campuses are Briones, Duveneck, Fairmeadow, Nixon, Ohlone and Walter Hayes. The specific projects that are being put on hold vary, depending on the campus.

Tom Hodges, a consultant with fs3|Hodges that the district works with on its construction projects, told the Weekly that the construction sector has seen substantially higher inflation than the economy overall, in some cases experiencing double-digit increases in a single year.

“We’re running into premiums on all kinds of equipment, especially electrical and mechanical,” Hodges said. “The cost increases are just insane — how much more expensive things are than they were just five years ago.”

In addition to inflation, the district has also identified other projects that it wants to make sure get funded with the current bonds.

These involve a number of behind-the-scenes upgrades, including upgrading the district’s fire alarm system ($19.6 million), roof replacements and repairs ($14.5 million) and covering cost increases to upgrade the district’s heating and cooling system ($16.8 million). Roughly 380 elementary and middle school classes currently lack air conditioning, according to a report that the board received in October. At the time, the school board expressed support for fast-tracking that project, which was originally approved in February 2021.

“We’re looking at increased needs for the invisible stuff that makes a school run — the fire alarms, the utilities, the roofing,” Holm told the board this week.

The largest priority project is the $59.9 million replacement of Hoover Elementary School. The plan is to temporarily move Hoover students and staff to the Greendell site adjacent to Cubberley starting next school year so that their permanent campus can be entirely demolished and rebuilt.

The school board didn’t take a formal vote on the plans at this week’s meeting, with the item agendized for discussion rather than action. Todd Collins said that he was disappointed that Briones and Barron Park won’t be upgraded by either the Measure A or Z bonds. At the same time, Collins said that he believes the district has substantially met the commitments that it made at the elementary school level when it went out for the bond measures.

No formal decisions have been made about when the district might ask the community to fund another bond, but the topic was brought up at the meeting. Collins noted that with current bond projects wrapping up in the next several years, the timing to consider placing another bond on the ballot might overlap with the expiration of the current parcel tax, which will occur in 2026.