posted by Joe Polk at 9:49 PM /
The Mt. Lebanon school board has agreed to pursue an environmental certification for the proposed high school, but some board members worry doing so will cost too much money.
Kerry Leonard of the OWP/P design firm in Chicago told the board the building likely will qualify for the certification. Another $500,000 commissioning fee at the end of the process, however, would push the project to $115 million, close to the district's debt limit.
That concerned several board members, including James Fraasch, who asked whether the board should discuss putting a bond referendum on the November ballot. "At what point do we say enough is enough?" Fraasch said. "We are right up against that wall."
Link: www.pittsburghlive.com/x/pittsburghtrib/news/pittsburgh/s_634832.html
Kerry Leonard of the OWP/P design firm in Chicago told the board the building likely will qualify for the certification. Another $500,000 commissioning fee at the end of the process, however, would push the project to $115 million, close to the district's debt limit.
That concerned several board members, including James Fraasch, who asked whether the board should discuss putting a bond referendum on the November ballot. "At what point do we say enough is enough?" Fraasch said. "We are right up against that wall."
Link: www.pittsburghlive.com/x/pittsburghtrib/news/pittsburgh/s_634832.html
Labels: high school renovation, LEED certification
7 Comments:
What residents & taxpayers apparently do not realize is that this school board is intentionally driving high school project costs to just under the borrowing limit for non-electoral debt and the requirement for a referendum. They are doing this in a protracted process without a defined, published and committed timeline using CPM or similar project management tools...the architects and CM are, but the board is clueless ! A further indication of this is that in almost all projects, the "owners", which in this case is unfortunately the school board, specify a project budget at the very beginning..a fixed $ project cost not to be exceeded. In this particular case it was not done...in public.
What the public, and even some of the school board members, seemingly are not aware of is that there are considerable additional funds already in the school boards hands that can be applied to the project beyond bond borrowing by a simple vote of only 5 board members. These existing funds include:
1)approx. $7-$8 million in the Capital Projects Fund;and,
2)approx $1.6 million in a separate Asbestos Fund.
Furthermore, by the time the 3rd. likely bond issue will be voted on for this project, the non-electoral debt limit will likely have increased to about $117 million overall vs. the $115 million being quoted today. All told, this project could very well cost up to $125 million or so without voters being able to have a say via a referendum.
Notice all the *For Sale* signs ? I know of 2 more coming within 2 years.
Beyond issuing project contracts whose collective costs exceed the non-electoral debt borrowing limit by dedicating existing Capital Projects Fund and/or Asbestos Fund dollars from the get-go, the school board can initiate construction based on contracts not exceeding the debt limits and then extend/modify the contracts by approving Alternates, or add-ons, afterwards and/or through the use of Change Orders during the construction process.
The Change Order technique was craftily used in what was originally budgeted & financed as the $44 million Elementary School Renovation Project during 1995 - 1998. It ended up costing $52 million, much of which was accomplished by Alternates and Change Orders. The then Superintendant personally authorized over $1 million in Change Orders without the school boards approval or knowledge until after the project was completed.
There are a number of high school items that are not yet "in" the preliminary budget, now close to or at $115 million. Among them, but not limited to, are stadium-related things like the enlargement of field, new astro-turfing, the press box, redoing the track if the field is enlarged, renovation/reuse of the current locker rooms, etc.. Also, any necessary traffic-related roadway changes on school and/or municipal roadways, complete site restoration/landscaping, pointing & repair of exterior surfaces of retained buildings, replacement of the athletic field on Horsman Dr....and undoubtedly more we'll learn about after work is underway.
Whoops ! I goofed...in my previous comment I referred to the Elementary School Renovation Project as having taken place during 1995 - 1998. I was dead wrong..,it was 2003 - 2005. The Middle School Project was 1995 - 1998 and it too went over budget, originally $13.6 million ending up at $16.5 million with added "enhancements". It, like everything else, was justified as being "it's for the children".
If you are not building LEED you are building obsolescence. Is that what we want for the children of Mt. Lebanon? Do we want them to in an environment filled with computers or an abacus?
There is no value-add here.
Long before they inked the deal, the architects heard loud and clear from the Board and Community that sustainable design was a project pillar.
No doubt when we hired Celli and friends, they assured us this was not their first clambake and they maintained a solid competency in sustainable design.
Accordingly, the architects are already using sustainable design and construction principles. Further, they have confirmed it is already baked into our budget.
The only reason this (LEED) is even tolerable is we believe we can exploit an increased state reimbursement to cover the cost. Which is another issue for another day.
LEED stickers are like Rolex on a watch ... the time is still the time ... you are just more confident the time is still the time.
You can build a facility that meets all the criteria of LEED without paying $875,000 to have it certified and commissioned! Is it the cache of having LEED attached to the project? With the estimated costs, which will without a doubt end up considerably higher, already well over $100,000,000 we really do not need to waste $875,000. There are undoubtably many ways to apply that "saving" to things which will provide real benefits to the students.
Joe Wertheim
A couple of comments on this project.
The question on the table for the Board was whether to spend $500,000 for a regular commissioning of the building (which I believe the majority of the Board felt was necessary to do anyway) or to spend the $500,000 plus an additional $375,000 to get the LEED certification.
Spending the extra $375,000 is projected to result in an extra $70,000+ in reimbursement per year for 25 years. As long as the State keeps its current reimbursement formula, that's an ROI in just over five years (excluding interest calculations).
So while it is true that getting the LEED will not necessarily result in any additional energy savings/green technologies than was already designed into the project from the start, it will result in a savings to the taxpayers of over $1.7 million over the 25 years of the bonds.
Going with the LEED certification has been the easiest decision thus far given the math.
What I and most residents ought to be more concerned about is the projected tax increases due to this construction project, the teachers retirement pension shortfalls, teachers retired health care contributions, and regular operations increases in the District budget. All of these things together will most likely result in a greater than 40% property tax increase over the next 4-5 years.
The average house in Mt Lebanon pays about $5000 in property tax per year. In 2013-2014, this amount will most likely increase to $7000. That's not just a cup of coffee a day. That's a foregone vacation. Every year. That's a good chunk of a kid's college education after 18 years.
What we ought to be more concerned with is the District's plans to issue debt in order to borrow MORE debt. In Pennsylvania, increased revenue equals increased borrowing capacity. A District is allowed to borrow 225% of its three year avg annual revenues before being forced to go to referendum. In our case we are expected to float $69 million in bonds later this year, raise taxes next year to pay that new debt, then float additional bonds at a later date with the increased debt ceiling that will cover the balance of the project.
We also ought to be concerned about the District's plans to wrap this debt. We are currently planning to push out a good amount of the principal of this project past 2030. This skews how much the true cost to the taxpayers is as it allows us to pay down less principal and have lower payments in the early years of the debt while having larger (balloon) payments in the later years of the debt. Additionally, this wrapping will cost taxpayers millions more in interest payments over a 25 year bond when compared to doing a straight bond with even payments.
Like I said, the decision on LEED was easy. It's the rest of the stuff that makes no sense. I just hope folks are starting to pay attention.
James
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