CMSD Master Facilities Planning Segments 8 & 9 Cleveland Metropolitan School District June, 2018

AGENDA Update on School Facilities Plan Advocacy and Support Needs Next Steps

BACKGROUND Last Master Plan Update passed by the Board of Education was on June 24, 2014 which called for the construction of 20 to 22 new schools New schools are built in partnership with the Ohio Facilities Construction Commission (OFCC) In November of 2014 voters passed Issue 4 which provided $200 Million for school construction CMSD worked with the OFCC to determine number of schools to be built in Segments 7, 8 and 9

State Funding Formula Since 2002: OFCC provides 68 cents and CMSD provides 32 cents for every dollar of new construction The formula is based on the poverty rate In 2002 Cleveland was ranked in the 32nd percentile of poverty in Ohio = 32 cents share for CMSD If we followed this formula today, Cleveland would be in 12th percentile = 88 cents from the OFCC and 12 cents from CMSD

How Schools are Built Schools designed using the Ohio Design Manual (ODM) District school construction project is broken into segments Each segment agreement is mutually agreed to with the OFCC Each segment agreement sets a timeframe for construction and the number of schools within the timeframe Under Issue 14 (initial construction bond in May, 2001) there were six segment agreements

Locally Funded Initiative (LFI) The State funds support the design elements of the school mandated by the Ohio Design Manual (ODM). The District pays 100% of what the State does not fund Construction costs are higher in Cleveland Since 2002 the State has provided "market conditions adjustments” In segments 1-6 - OFCC provided 12% - 16% “market conditions adjustments”

Issue 4 Designed to fund 3 more building segments: Segment 7, currently under construction 7 PreK-8 schools and 2 High Schools Was scheduled for summer of 2016 Segment 8 is planned for 8 schools Was scheduled for summer of 2017 Segment 9 is planned for 5 schools Was scheduled for summer of 2019 Segment 7 Schools (9 sites) Segment 8 Schools (8 sites) Segment 9 Schools (5 sites) William Rainey Harper MacArther GLA Tremont Ward 1 PreK-8 (Whitney Young/C. Elliot) Valley View BLA Clark Fullerton Marion Seltzer Denison OH Perry Marion Sterling Iowa-Maple Sunbeam Case Michael R White H. Barbara Booker Bolton Waverly Lincoln West HS JFK Campus Joseph Gallagher (renovation) West Side HS

OFCC Leadership Change Spring 2016 - OFCC leadership signaled change in past practice for “market conditions adjustment” Segment 7 agreement was in effect with both parties having signed it: CMSD on April 4, 2015 OFCC on August 17, 2015

May 2016 – April 2017 CMSD, OFCC engage in talks to resolve issues: After 11 months of negotiations OFCC agrees to a 7% “market conditions adjustment” (well below adjustments for Segments 1-6) This lower market adjustment resulted in approximately $10 Million in extra costs for CMSD Delays in construction caused by this lengthy negotiation cost the district an additional $384,000.00 Both sides agreed to turn their attention to Segment 8 with a focus on a more reasonable and appropriate “market conditions adjustment” Both sides- District & OFCC there re

July 2017-April 2018 OFCC informs CMSD of decisions: Segment 8 adjustment to be .007% (less than 1%) resulting in a $255 per square foot cost The last time CMSD could build a school for $255/square foot was 10 years ago in 2008 After months of negotiations between the OFCC and CMSD, with no progress, the District made the determination to stop the construction program

Why “Market Adjustment” Matters IMPACT $34 Million $10 Million additional costs $24 Million additional costs

Why “Market Adjustment” Matters Plain Dealer Story: Reported on June 11 that the State says they are giving CMSD 7% CMSD has submitted a formal public records request to the State to acquire any documentation to support this statement.

If True “Market Adjustment” Still Matters IMPACT $22 Million $10 Million additional costs $12 Million additional costs (estimated)

If True, then……… CMSD must still cover an estimated: $10M (segment 7) + $12M (segment 8/9) = $22M

Questions so far?

Bond Accountability Commission Report March, 2018 Bond Accountability Commission Report BAC report recommends CMSD Board of Education revisit the Master Facilities Plan, considering the plan: Was approved four years ago Was based on data developed two years prior to adoption Should account for demographic changes and academic program needs over the last 6 years

WHAT IS CMSD DOING ABOUT IT MAY – JUNE, 2018 May Meetings held at schools for staff of Segments 8 and 9 Letters to parents and outreach to key constituents Awareness campaign launched (website, traditional, social media, PD Editorial Board, Advocacy groups) June Meetings to inform community of current situation (Schedule mailed, posted, advertised)

WHAT’S NEXT AUGUST – DECEMBER, 2018 August – November Meetings to engage community in updating the facilities plan for Segments 8 and 9 Continue the negotiation of a fair “market conditions adjustment” with OFCC December Updated plan submitted to the Board of Education for approval

WHAT’S NEXT AUGUST – DECEMBER, 2018 Once an updated master plan is approved and the District obtains a fair “market conditions adjustment” construction will resume

HOW YOU CAN HELP! Questions? Write letters to your Ohio legislators-samples are on the information table and located on the district website Spread the word so others can attend the remaining community meetings in June Attend OFCC Conference in Cleveland on August 16th in Independence, Ohio and their regular quarterly meeting on October 25th in Columbus, Ohio Attend the Fall Community meetings to revisit Segments 8 and 9 Stay connected by filling out the “We’re listening!” form Check out regular updates posted to the district site Clevelandmetroschools.org/buildingplan Questions? How Can You Help

Final Questions?