Update on School Construction Issues

Report
Update on School Construction &
Planning Issues
July 24-25, 2008
Financial & Business Services
Summer Conference
Greg Flynn, Architect, School Planning, NCDPI
Legislative Exciting Times!
• 2007 Bills
– H1016 Medicaid Swap – into H1473 Budget Bill
Dead: H1740 LEAs to levy tax
– S1245 changes retainage
– H73 raises threshold to 500K for formal bids
– H735 raise to 20K sf for DOI OFSM review
• 2008 Bills
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–
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H2436 Budget Bill Plant Operations Funded
H1284 Breach of Construction Contract Date
H2438 Tech Cor. Budget Lottery App. Excess
S845 Tech Cor. Env Pervious >1acre 20% or
bioretention
– H2137 Sales Tax Exemption did not pass.
School Planning, NCDPI, 2008
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2008 Legislative Action
• 2008 Short Session no Major Action
• 2007 House Select Committee on School
Construction proposals/bills
– New ½ cent local option sales tax
– Extend earmarking of existing two ½ local sales taxes
another ten years
– Exclude Public/Private school projects from local property
tax (done)
– Streamline DOT/DOI reviews (H73) (done)
– Reinstate sales tax refunds for LEAs (Can still work thru
county to get refund) (Still an issue)
– 2B Statewide School Bond – 4 Bills introduced (07)
– Rejected Impact/Transfer Fees & APFOs
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More legislation/Other Stuff
• Education: NC Forum/Education Everybody’s
Business pushing 2B Bond 2007. No taxes 2008
• Lottery – Now meeting predictions/ Bills to convert to
straight ADM / other distribution
• IAQ – check schools w/out fresh air – may need to
add/reopen (Last year CO2 notice, FEMA trailers)
• Other Rumblings/Bills
– Fiscal Modernization/ 21st Century Transportation
– Transfer fees, Impact fees, APFOs, raise Charter limit,
Lottery funds to Charters, Fund only one LEA per
County??
– 2009 Building code (just getting used to 2006)
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Public School Capital Building
Fund (PSCBF)
• Procedures for $$ on website
• Corp. Tax 07/08 Revenue: 87M
– 86M projected (79M last year projection)
– Previous years 109M, 98M, 78M
– Unallocated county balances on our website
along with application forms, etc.
– Bill to lower Corporate Tax rate not enacted
– Medicaid swap impacted ADM funding
– 60% retainage (30% reduction) 45M
– 41M + 19M HH = 60M
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Lottery Subfund of PSBCF
• Distribution will change yearly based upon county
tax rates (65% ADM 35% Tax Rate)
• 139 Million for last year (140M was projected)
– (prior year 40M less than projected 170M)
• Use application forms similar to PSBCF/ADM
fund
• No Local Match required
• Cannot be used for Technology
• Can be used to retire debt incurred on or after
January 1, 2003
• 154.2M in State Budget Bill for 08/09
• >140M+ distributed to non-bonus counties
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Other State construction funding
Sources
• Portions of Two ½ cent sales taxes
• Earmark for school construction will begin to sunset
in three years (2011)
• Earmark switched to Medicaid savings - ambiguous
• Bill to remove/extend sunset not yet enacted
• Medicaid trade-off threatened these funds.
• Literary Loan Fund
•
•
•
•
$356,471 Current Balance
400K loan in 1998
300K loans in 1994 & 2004
Above loan repayment ~45K / year, now ~90K
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Federal/Other Funding Sources
• Qualified Zone Academy Bonds (QZAB)
–
–
–
–
–
–
–
–
11.4M for each of 2006 and 2007
Total 22.8M awarded last year to 14 LEAs
No in-state banks: CO, NM
North by Northwest Capital 1-1.5% fee 0% int
2.7M issued
3.5M +2M pending
6.7M abandoned 04-05 (Dec 07)
H.R.6049 Renewable Energy and Job Creation
Act of 2008 now in US Senate
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Other Funding Sources
• Public Private Partnerships
– Allows LEAs to pursue “capital lease purchase”
– Development Corp. seeks funding on Wall Street
or lending Institution
– Voter approval not required
– Bill exempted from property tax
– Possibility of Federal Tax Exempt Bonds
(Qualified Public Education Facilities (QPEF)
Bonds)
– Low interest rates affecting project viability
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Other Stuff
• High Performance/Green Construction
– Numerous projects built, more states mandates
• Recap: Survey requested by Legislature:
Design/Const Mgmt costs for New Schools over
the past 10 yrs
– Schools with Const. Mgmt. cost 8% more than
average (w/CM fee included)
– Avg. Design Fee New Schools 5.15%
– Avg. CM Fee New Schools 4.68%
(Not “at risk”)
• Energy Efficiency Legislation 30%
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Construction Costs
• Pressure to Reduce Costs
– Usually means cuts in quality/longevity too!
– Too small classrooms are a permanent problem!
•
•
•
•
•
•
$48 /sf increase between ’03 and ’05
$11 /sf increase between ’05 and ’07
$13 /sf decrease between ’07 and ’08
$ 5 /sf decrease between ’06 and ’08
Leveling now.
These are plain vanilla schools – NOT Taj Mahals
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Construction Cost Average
AVERAGE YEARLY COSTS
160
155.49
150
148.10
146.22
142.71
140
130
120
113.98
110
100
95.59
91.70
90
96.57
91.69
87.28
96.23
92.98
80
1997
1998
1999
2000
2001
2002
2003
2004
2005
School Planning, NCDPI, 2008
2006
2007
2008
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Dollars/SqFt
Construction Cost Spread
35500
36000
36500
37000
37500
38000
38500
39000
39500
400
Date
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Prototype Clearinghouse
Website
(www.schoolclearinghouse.org)
• Many prototype designs for all types of schools
• Has evolved into an extensive information
repository
• New items
– Lottery proceeds distribution
– New Publications: Selected Laws, Science Safety, Design
& Construction Procedures, CM @ Risk, Pre-engineered
Buildings, Design for Violent Attack, CPSC Playground
Safety, Water Conservation, Facility Guidelines update in
the works
– Individual Project data
– School Sanitation Rules changes coming: Grade Card
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School Planning Services
•
•
•
•
•
•
•
•
Website www.schoolclearinghouse.org
Specialized Space Profiles and Cost workups
Publications on Facility Planning Issues
Construction Cost Tracking
PSBCF Forms and reports
Plan Review and Comment
Technical Assistance on Facility Issues
Prototype Plans
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Plan Review Issues
• Required by Statute to Review and
Comment on ALL plans for construction:
– New schools, additions and renovations
– Small projects such as dugouts, concession stands,
storage buildings, etc
– Pre-engineered Buildings
– Technology Installations
– Re-roofing
– Modular installations (trailers) require Approval
– Booster Club Building Projects
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Questions????
School Planning, N.C, Dept of Public Instruction
http://www.schoolclearinghouse.org
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