School plans under reviewThis article has a quote from me that I had not put in the proposal or in any of the other previous articles out there. That quote is the following:
By Bob Williams Staff Writer bwilliams@thealmanac.net
With the U.S. economy facing the worst downturn since the Great Depression according to J.P. Morgan Chase & Co., residents in Mt. Lebanon and Upper St. Clair have some thinking to do before investing nearly a quarter billion in three aging school buildings.Mt. Lebanon High School and both Upper St. Clair's middle schools are in need of major renovations, say school board members in the respective communities.
A narrow majority of Mt. Lebanon School Board members say postponing $80 million to $150 million in construction at the high school is folly, while a strong majority of board members in Upper St. Clair say they aren't ready to put the brakes on a $60 million to $65 million overhaul of Fort Couch and Boyce middle schools.
The question is, will the national economic downturn have a local impact?
National outlook
National economists say 2008 could be one of the worst years since the Great Depression. In November alone, 533,000 jobs were lost. December could be worse. The national GDP for the fourth quarter may be less than zero with the GDP free-falling 6 percent over the year. The stock market lost half its value over 2008, over one trillion dollars. The 401K plans imploded.
The failed federal loans to the Detroit automakers caused GM to announce 21 plant shutdowns. Millions of jobs are affected by the Big Three. President George W. Bush may try to override a veto of the loan package by the U.S. Senate last week.
Offsetting these negatives is the federal government's trillion dollar bailout plan, which is hoped to shorten the duration of the recession.
Many economists, including J.P. Morgan, expressed confidence in President-elect Barack Obama's economic team. Once the new president is sworn in, the markets may react favorably and move in a positive direction. Fuel costs are down, as are interest rates. If these both continue to remain low, it could help boost the economy in 2009.
Mt. Lebanon's option
Reviewing these economic realities, Mt. Lebanon School Board member James Fraasch offered an alternative to the current plan for the high school renovation.
"If we were to raise our property taxes another 15-20 percent to pay for a large project, then we should all be concerned about the long-term effect that will have on families deciding to relocate here versus Peters, Upper St Clair, Cranberry and other towns like them," Fraasch said. "If our taxes are slightly higher than these places, that is one thing. Having them 20 percent higher is another thing altogether."
Mt. Lebanon's high school-aged student population has dropped by 500 over the past decade. U.S. News & World Report this year has recognized Mt. Lebanon, Upper St. Clair and Peters Township high schools with "silver" awards. The magazine has given only 20 of Pennsylvania's 670 high schools a "silver" rating.
Chart path
"If what the people want is a completely new school, then the only way to get there is to do my plan," Fraasch said. "Why spend $70 million today, when we can wait a few years and get the new school? Let's have this conversation. If the community wants a new school, let's sit down and chart a path to get there."
Fraasch's plan involves making the high school roof leak proof for 10 years and purchasing new boilers. He proposes using the district's $9 million in savings to pay for most of these repairs. Over the next 10 years, the district would pay down the existing debt. At that point, Fraasch said, the district could afford a completely new school.
"We could purchase boilers that use alternative energy, thus saving costs there. Once the new school is built, these boilers could be relocated to another building," Fraasch said.
The long-term bonus would be a modest tax increase to pay for a completely new high school, Fraasch said.
'Impractical delay'
Both Dan Remely and Elaine Capucci, chairs of the board renovation committee, said they oppose putting the plans on hold now. A 10-year delay would be impractical given condition of the building, they said.
Rough construction-only estimates for a 440,000 square foot high school range between $80 million and $132 million. The difference in the estimates reflect renovation, partial renovation and a completely new facility.
Kerry Leonard from Celli-Flynn Brennan (CFB) said those figures do not include any architect or engineering fees, construction testing, furniture, fixtures, equipment or cost escalation.
The present 545,000 square-foot building on a 28-acre tract houses 1,912 students in grades 9 to 12. District administration is also located within the building.
Remely in September presented a plan which cuts 80,000 square feet from the size of the building and features both new and renovation of the existing building. With construction fees approaching $200 a square foot, some $16 million could be saved. Remely told architects to work on his plan.
Board members declined to ask architects to do any study of Fraasch's proposal.
USC's choice
In Upper St. Clair, board members on Dec. 8 voted to proceed with construction planning and design for both Fort Couch and Boyce middle schools.
With $60 million possible in additional spending, the overall debt level of the district will top at $123 million, said bond counsel Mike Bova from Boenning & Scattergood, Inc. This figure includes previous debt.
In approving the final design phase, board members said a decision on whether or not to renovate the two buildings won't be binding until submitted bids are actually approved. Board Member Angela Petersen said when architects complete their designs in July 2009, their work could be used in the future if the board decides to withhold approval of bids or if the economy slips further into the red.
Scalebacks set
In October, estimates by project manager P.J. Dick put costs for both schools at $61.8 million with about $4 million in additional design alternates. On Dec. 8 the board advocated a series of scalebacks and set estimates at about $58.5 million with $4 million in design alternates.
The design alternates include a $1.6 million theater, $270,000 in field improvements and $1 million for artificial turf at Boyce and $1 million for article turf and $254,000 for a gym alternate at Fort Couch. Like the base bids, approval of the design alternates would be at the board's discretion.
"If what the people want is a completely new school, then the only way to get there is to do my plan," Fraasch said. "Why spend $70 million today, when we can wait a few years and get the new school? Let's have this conversation. If the community wants a new school, let's sit down and chart a path to get there."
This one quote, without background information, would raise some eyebrows I think. It is what I said and it is what I believe so I am not in any way saying it was a misquote, I just feel it important to understand why I said it.
As this article points out, and as I have been saying for some time, we are in a different economic reality than the one that existed even a year ago. Two months ago the Audit/Finance Committee talked about how much additional debt this District could add before being forced to go to a referendum. There is a law on the books that says that a school district can have debt up to 225% of its 3-year average annual revenues before being forced to go to a referendum. Any debt that would force us over that 225% level would have to be approved by voters. What we learned at that Audit/Finance Committee meeting was that the "magic" number is roughly $116 million dollars in additional debt over the next year or two before we are forced to go to a referendum. The thinking behind the quote above comes from understanding that ANY high school proposal that requires the District to add over $116 million in new debt would likely fail in a referendum vote.
That is basically the final reason why I believe a fully LEED certified high school building is off the table in the near term. Understand that this isn't an either/or discussion. It isn't either do this proposal or build a new school. Those are not the only choices on the table. I am sure other Directors will make their thoughts known in January. Some of these ideas will include a complete renovation or perhaps a more phased construction approach that has yet to be fully discussed at a Board meeting.
There is a certain irony in this that I think is important to point out. There are many that have emailed the Board and said that the most important thing to keep in mind is that we need to hold our taxes in check so that we remain competitive with neighboring communities. There are also many that have emailed the Board and said the most important thing to keep in mind is that we need a new LEED certified school to maintain our reputation as a community that values education and that a tax increase to accomplish this is well worth the investment.
The reality of the situation is that the current economic environment seems to put these two groups of people on the same side.
Thanks for reading. I will be on vacation starting this weekend so email access will be spotty during the holiday's.
Thanks for reading.
James
