Update on School Construction & Planning Issues July 24-25, 2008 Financial & Business Services...

Update on School Construction & Planning Issues

July 24-25, 2008

Financial & Business Services Summer Conference

Greg Flynn, Architect, School Planning, NCDPI

School Planning, NCDPI, 2008 2

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– 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.


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


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)


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


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


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


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


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


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%


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


Construction Cost AverageAVERAGE YEARLY COSTS

96.23

113.98

148.10

155.49

142.71146.22

96.5795.59

91.70 91.69

92.9887.28

80

90

100

110

120

130

140

150

160

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008


Construction Cost Spread

35500 36000 36500 37000 37500 38000 38500 39000 39500 40000

Date

Do

lla

rs/S

qF

t

Series1


Prototype ClearinghouseWebsite

(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


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

http://www.schoolclearinghouse.org/


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


Questions????

School Planning, N.C, Dept of Public Instruction

http://www.schoolclearinghouse.org

Update on School Construction & Planning Issues July 24-25, 2008 Financial & Business Services...

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