The error you get is:
PGError: ERROR: relation "schema_migrations" already exists
The root cause is that the Postgres adapter returns no table names, because the schemas it looks into are like this: 'schema1', ' public' (the extra space before public is the problem)
I've found one post that accurately describes the problem
The easy fix is to add a schema_search_path definition in config/database.yml like so:
schema_search_path: public