Lake County school construction built on red ink

2013-04-20T23:30:00Z 2013-04-22T13:01:00Z Lake County school construction built on red inkBill Dolan bill.dolan@nwi.com, (219) 662-5328 nwitimes.com
April 20, 2013 11:30 pm  • 

CROWN POINT | Lake County's public school districts are carrying $1.8 billion in debt on their books.

That represents $3,755 in obligations for every county resident, according to the Indiana Gateway database.

Lake County taxpayers will be asked for nearly $155 million this year alone to pay down principal, interest and fees on long-term debt, as well as a smaller amount on short-term loans needed to pay operating costs until the year's tax revenues are collected.

Gateway is a database operated by state government that provides information on public spending in local government. Local government officials provide the information contained.

Public school officials said taxpayers need only visit their 120 elementary, intermediate, middle or high schools where more than 78,800 students attend daily to see where their money is going.

The debt represents new construction as well as major renovations to make older buildings safer, more energy efficient, accessible to the disabled and technologically up to date.

Lake Central School Corp. has amassed the fifth-highest school district debt total in the state -- $364,382,114.

Rob James, Lake Central School District's director of business services, cautions that figure includes not only new school construction, but also the attendant interest payments.

"When people buy a new house, they rarely figure in the interest costs," he said.

Lake Central is riding a debt crest in the wake of a voter-approved $160 million package for the renovation of its high school and reconstruction of an elementary school from the ground up.

"We needed more space," Merrillville Community School Corp. Superintendent Tony Lux said,  Student enrollment has grown from fewer than 5,500 to nearly 7,000.

"We had a requirement to keep class sizes in the primary grades below 20 kids, so you needed more classrooms. We anticipated and provided more classrooms for all-day kindergarten, too," Lux said, adding debt service should soon decline as the high school is paid off.

James said Lake Central also has been at the epicenter of new housing growth.

"The district built a new middle school in 2005. The greatest complaint we heard about the high school was the overcrowding," James said.

School City of Hobart Superintendent Peggy Buffington said the majority of the $127.1 million in debt her district has undertaken is for the construction of the new high school, which opened in 2009, and the renovation of the old high school into a middle school. 

She said before that project, the last major construction was in the 1950s when the old high school was built.

 

New classrooms aren't cheap

School Planning and Management Magazine reported the cost of school construction grew to $200 from $85 per square foot between 2001 and last year.

Indiana's major school projects were significantly larger and costlier than the national average a decade ago, according to the Indiana Department of Local Government Finance.

"The incentives were all in favor of spending more," said William Strying, a conservative Indiana economist, who wrote 15 years ago that Indiana school construction practices suffered from a 'Taj Mahal complex.'

"Architects were paid a percentage of the project, so they made it bigger and it continued right down the line," Strying said.

He said there is little evidence of a link between the quality of school construction and student performance, as long as students had a roof over their heads and comfortable room temperatures.

"Beyond that, what you are buying is feel-good for the parents," Strying said.

The School City of Whiting carries only $5 million in school debt, but achieves a graduation rate that is near the state level.

"Our buildings may be old, but they are very well maintained," Whiting Superintendent Sandra Martinez said.

School construction represented 11 cents of every property tax dollar in 2005 when Gov. Mitch Daniels laid down strict school construction guidelines. Three years later, the General Assembly required major projects be put before the voters in referendums.

"The referendum does scare them off a little bit," Strying said. "Not necessarily because the referendum fails, but the mere fact school officials know they have to sell this to the voters."

Buffington said schools have certain fixed costs, including offices, gyms, cafeterias and "then you add classrooms based on programs, enrollment and projected enrollments.

"School construction requires buildings that will last 75 years under very heavy use and the construction costs reflect that requirement," Buffington said.

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