(Photo courtesy of Etkin Skanska)
school construction in the U.S. has long been a juggernaut
that almost couldn't be stopped. Fast-growing regions have
rushed to keep up with the needs of their bulging school-age
populations, older communities pressed to expand and modernize
aging educational infrastructure, and many in between have
been targeted by courts and legislatures for disparities between
rich and poor. In recent years, billions were earmarked by
well-heeled states or approved by generous voters to jump
start the largest school construction effort since the 1950s
Baby Boomer days.
Today, school-related capital programs
in many towns, cities and regions are still flush with cash
and generating a boom market for engineers, architects and
contractors. But, increasingly, those purse strings are being
pulled tighter as states face budget pressures from dwindling
post dot-com and Sept. 11 revenue, and as suddenly poorer
taxpayers are less willing to underwrite the bill for new
school space or expensive makeovers. As a result, educational
owners are pushing hard for new efficiencies–shrinking or
stretching out construction programs and demanding better
economies. Others are seeking new financial partners and nontraditional
funding methods, or deciding that creating new school space
doesn't always mean building it.
(Source: School Planning and
Even so, the public school construction
market continues to thrive across the U.S., with more than
$20.3 billion worth of projects completed last year and $20.4
billion projected for completion in 2002, according to an
annual survey of construction spending by School Planning
& Management (SPM) magazine, an education industry publication
(see table). Another $20.3 billion of projects are set to
begin construction this year. While those figures are below
the record $21.2 billion spent in 2000 and hint that school
construction "may be on something of a plateau," the magazine
points out, "it is a very high plateau in terms of spending."
ON A ROLL.
In a number of states, well-financed construction programs
are moving like gangbusters. A three-state region that includes
Ohio was the third highest-spending region of the 12 on SPM
magazine's list, completing $2.2 billion of projects in 2001,
half of them involving new construction. The current plan
calls for the Ohio state government to commit $10.2 billion
by 2012, which is set to be more than matched by $12 billion
in local funds, says Randall Fischer, executive director of
the Ohio State Facilities Commission.
Public support for local bond measures
is widespread. Since 1997, 95% of the 130 districts eligible
for state matching funds have passed local bond measures,
most by an overwhelming majority on the first try, Fischer
says. And, Georgia's adoption of a "special purpose local
option sales tax" that has allowed fast-growing counties to
raise sales taxes instead of property taxes over the last
five years to fund school construction has generated billions.
"A second round is now going through, and it's being approved
overwhelmingly," says Don Gardner, vice president of planning
and development at DWB Architects, Marietta. But he hints
that SPLOST revenue has been negatively affected by downturns
in the economy.
Elsewhere, the ramifications of
our downsizing economy and new realities facing states and
their residents are also starting to show up in the statistics.
SPM magazine's $20.3 billion in anticipated construction project
startups this year is $2 billion less than was predicted a
year ago "and may be the first real sign that school construction
is being affected by economics and events," says Paul Abramson,
president of Stanton Leggett and Associates Inc., a Larchmont,
N.Y., education consulting firm.
|(Photo by Joann Gonchar
Others note that capital spending is often most vulnerable
as states or other localities face budget shortfalls and competing
priorities. "These dollars won't come roaring back even if
the economy comes back," says education consultant Philip
E. Geiger, former executive director of the Arizona School
Facilities Board. "More dollars are being siphoned off for
health care and other issues. There are some serious droughts
in dollars for public schools, and continuing to tax the public
won't always fly."
In Idaho, even as a state court
ruled that the state's school funding method was unconstitutional,
a softening economy last summer prompted officials to trim
$23 million from public school spending, according to The
Bond Buyer. Idaho is still scrambling to close a $20-million
state budget deficit before its fiscal year ends June 30.
Under pressure to comply with the ruling that requires the
state to correct school safety inequities between Idaho's
richer and poorer areas, Gov. Dirk Kempthorne (R) signed a
bill in March that would provide economically depressed areas
with more state-funded interest coverage if two-thirds of
a district's voters approve a construction bond after Sept.
15. But the bill also gives the state more control to enforce
action from districts with building safety problems. The state
must raise "whatever funds are necessary to make sure you
have safe schools," says Mike Gilmore, deputy attorney general.
School construction funding in
Michigan is starting to face some serious competition from
other needs that require state attention. Michigan is curtailing
its School Bond Loan Fund program, a line of credit it has
extended to school districts since the 1960s to repay school
construction bonds, says Tom Chen, senior vice president of
Etkin Skanska, Farmington Hills, Mich.
This fall, the state ballot will
include a $1-billion bond issue to fund sewer and water infrastructure,
and officials are concerned about the state becoming financially
overextended and hurting its own credit worthiness. "The less
credit school districts can get, the harder it is for them
to justify bond issues," adds Etkin Skanska President Tom
Landry. "This has curtailed the number and size of bond issues."
Chen says that a bill in the legislature that would provide
up to $1 billion to help districts defray construction interest
costs "is dead on arrival," because it is opposed by Gov.
John Engler (R). The resulting funding slowdown comes as Michigan
schools are in dire need of repair. "The median age of a school
is now 25 years," says Chen. "How many office buildings would
go that long without being fixed up?"
In California, a chronic shortage of funds is "still holding
up school construction and modernization throughout the state,"
says Rich Henry, vice president of the Sacramento-based education
services group for contractor McCarthy. Billions of dollars
in projects are "just simply sitting there waiting for the
money to flow," he says. The Coalition for Adequate School
Housing (CASH), a state organization representing school districts
and construction interests, puts the building and renovation
backlog at more than 2,200 projects.
Despite economic crises affecting
the state, proponents are optimistic that voters will approve
over the next two years a proposed two-part bond package that
would provide $25 billion for school construction–"the biggest
bond in the history of the world," says Thomas G. Duffy, a
lobbyist for CASH. The first $13-billion bond measure, scheduled
for November, would provide $11.4 billion for new construction
and modernization and an additional $1.65 billion for public
universities and community colleges. The second measure, set
for a vote in 2004, would provide $12.3 billion for public
schools and colleges.
"If some of these projects sit
on the shelf for a few years, you may have to go back and
redesign" because of future code changes, says Henry. But
he also worries that the anticipated flood of funding will
strain construction capacity and "drive costs off the chart."
Complicating the picture is a current statewide hiring freeze
that is preventing the state architect's office from staffing
up, a potential bottleneck because the department must sign
off on all school projects. "At a time when there's a lot
of money to spend and plans to check, a key state agency can't
hire," says Duffy.
New Jersey is also making major
overtures to the private sector, particularly state-based
engineers and contractors, to help its Economic Development
Authority execute an anticipated $12-billion school construction
program, of which $8.6 billion will be managed by the state.
The program began to ramp up soon after its 2000 enactment
but has since come under the watchful eye of new Gov. James
McGreevey (D), elected a year later. McGreevey also now must
deal with a big budget gap that is forcing significant cuts
in state funding and operations.
The state initially signed five
contracts for program management services on school projects
in five of its biggest cities. They cover "health and safety"
related repairs in schools and would also include additional
"task orders" as necessary, possibly adding as much as $500
million to each contract. But a second round of PM contracts
procured during the McGreevey administration will not be as
lucrative, contractor sources say. The state has decided instead
to remove the task order language from PM contracts, requiring
PM firms and others to bid on tasks competitively. Caren Franzini,
executive director of the state EDA, says the changes will
spur project efficiency and improved management, but contractor
executives hint that they are politically motivated. Franzini
adds that there will be "programmatic enhancements" in the
school construction effort enacted over the next month. "We
are working with the governor on new initiatives that will
streamline the process," she says. "He has asked us to look
at the program in detail and make it more efficient."
"We have stopped using old
design rules and we're making headway in driving down
— Ron Gottlieb
NYC School Construction Authority
"There are some
serious droughts in dollars for schools. More dollars
are being siphoned off."
— Philip Geiger
"We are working
with the governor to streamline the school construction
process and make it more efficient."
— Caren Franzini
N.J. School Construction Chief
Across the Hudson River, New York City is also struggling
to keep school construction costs in check, particular with
a mandated 17% cut in its five-year, $7-billion capital plan
through 2004. On May 2, the city's Board of Education released
a report detailing practices and policies that ratchet up
costs for desperately needed new schools and repairs. The
report claims school space now costs between $425 and $450
per sq ft. "Schools in New York City cost more than class
A office buildings and condominiums," says Peter Lehrer, author
of the report and chairman of locally based consulting firm
Opus Three Ltd. Costs could be reduced by 25 to 30%, he contends.
Some recommendations include revamping
design and materials standards that the report terms "outmoded
and not cost-effective." The report notes that that partitions
between classrooms must now be constructed of concrete masonry.
Substitution of drywall partitions could result in significant
savings since they cost less to install, require a less expensive
structural system and allow more flexibility.
The report also says that the use
of space in New York City schools is inefficient and that
less restrictive pre-qualification standards should be used
to increase the pool of bidders and create a more competitive
environment. The report also points to political issues between
the city's Board of Education and its School Construction
Authority that add to higher school building costs. But Ronald
Gottlieb, SCA president since last fall and a former contractor,
says his agency has already stopped using the old design standards
and is requiring more performance and cost-efficiency from
its architects. "We are making big headway in driving down
construction costs," he claims.
To get a handle on costs, states are looking to new ways of
project delivery. Last fall, California Gov. Gray Davis (D)
signed a bill allowing school districts to use design-build
for new construction projects valued at $10 million and up.
"I see that legislation having a major impact on the way school
districts do business," says Yehudi Gaffen, principal in San
Diego-based Gafcon, a school construction consultant. By June,
the state Dept. of Education is expected to complete the final
draft of guidelines for design-build delivery. But McCarthy's
Henry says, "I don't think the floodgates are going to open
and everybody's going to abandon" traditional design-bid-build
New Mexico, also under a federal
mandate to equalize state schools, hopes to stretch its dollars
further by developing a standard unified specification. Officials
also began a pilot program to use Web-based integrated technology
from Constructware, Alpharetta, Ga., to create more efficient
tracking and a single-point of accountability for multiple
entities. "New school construction is off because revenue
sources are off," says Robert A. Gorrell, a state official."It
will affect us next year more than this year."
School districts are also considering
even more nontraditional methods such as reuse of old commercial
and industrial buildings and partnerships with communities.
Leasing space may also be a way to plan for the vagaries of
shifting populations and budgets. Geiger says Arizona is considering
a bill that would allow use of capital dollars for leasing
instead of operating funds, as now required. "Other states
are also looking at this," he says.
School System and
Town Share Investment
Nadine M. Post
The architect for a $77-million
high school expansion in Medina, Ohio, calls the project
a paradigm shift–a new trend toward integrating educational
and community environments through shared spaces in
a school. The project will not only provide a state-of-the-art
facility that both students and residents might not
have had otherwise, it will also spread the cost more
painlessly between them.
of Medina, Ohio City Schools)
"It's not more expensive
than a comprehensive high school and there are a lot
more advantages to the community," says John G. Willi,
principal in charge of the project in the Dublin, Ohio,
office of architect Fanning/Howey Associates Inc. "We
believe the city has benefitted," agrees Charles N.
Irish, superintendent of Medina City schools. "This
approach represents community value."
Irish says the project represents
a new process for school development that also seeks
out community needs up front. The 520,000-sq-ft project
includes 380,000 sq ft of new space, which is set to
open this fall. A yearlong renovation of 166,000 sq
ft of existing space will then follow. The partners
contribute funds and equipment, and will operate the
spaces or lease the facility from the school.
of Medina, Ohio City Schools)
Shared facilities currently
include an 84,000-sq-ft recreation center attached to
the school's physical education facilities, which will
be leased by Medina General Hospital for health and
wellness education and physical rehabilitation. The
school also has a partnership with the Medina County
Performing Arts Foundation, which donated $200,000 and
equipment for a 1,200-seat auditorium with an orchestra
pit and a theater fly and will operate the theater.
The University of Akron is another partner, funding
a distance learning lab that will enable Medina high
school students and residents to take college courses.
There also is anticipated community interest in a new
media center and space for a future cybercafe and copy
center, says Willi.
The city contributed half
of the recreational center's $15- million cost. "They're
saving a chunk of money," says Jeff Eble, Medina City
schools' business manager. "And we're getting an enhancement."
Although Eble can't pinpoint how much money the school
system saved, there are definite "economies of scale,"
While the main shared facilities
have independent entrances for residents and internal
entrances for students, there will be times of joint
usage. "We spent a lot of time analyzing security within
the building and also site security," says Willi.
Eble says there have been
at least a dozen inquiries about the school from other
districts, and two site visits to date. "There is a
tremendous amount of interest," he says, calling the
project a success, even though it is still under construction.
"It's a huge change."