December 17, 2017

Priority Issue: Capital Budget & School Construction Program Funding

 

Knott 21st Century School Facilities Commission 

Senate President Thomas V. Mike Miller, Jr. and House Speaker Michael E. Busch announced in December of 2015 the formation of a commission to review the State’s school construction policies and make recommendations for more efficient and effective school construction practices into the future. The 21st Century School Commission is chaired by Martin Knott, President of Knott Mechanical, a mechanical services company. The Commission is comprised of private sector representatives from the construction services and development industry; local government and educational members; as well as State officials. A press release issued on April 19th announced the Commission roster and provided additional background information.

MABE is represented on the Commission by MABE's Immediate Past President Warner Sumpter. 

Knott Commission Updates

Workplan and Timeline for Final Report

On August 28, 2017 the Commission released the following workplan and timeline for its meetings, including meetings of the two subcommittees on funding and process.  

    Funding Subcommittee Meetings

    • September 21st from 10am–12pm  
    • October 12th from 10am–12pm
    • November 2, 2017 – starting at 10:00am 

    Process, Procedure, and Education Specifications Subcommittee Meetings

    • October 3rd from 1pm–3pm 
    • October 17th from 10am–12pm

    Full Commission Meetings        

    • November 14, 10 am – Work Session – Subcommittees Report to Full Commission
    • December 14, 1 pm – Decision Meeting – Commission will vote on final report

    Bob Gorrell, Public School Construction Program Director, Proposes New Direction

    After a long hiatus, the Commission met on Monday, July 17, 2017. The agenda for the meeting included a presentation by the New IAC Executive Director, Robert Gorrell; an Overview of School Construction Funding; and Updates on Educational Specifications and Alternative Building Studies.

    Interim Report

    In January of 2017, the 21st Century School Facilities Commission submitted a brief progress report of the work accomplished during 2016.  Link to Knott Commission Interim Report

    "The commission’s charge from the Senate President and Speaker of the House focuses on a critical set of issues related to improving school construction in Maryland. As the commission started delving into the issues outlined in the charge, there was a quick awareness that more time would be needed to sufficiently examine all of them and to develop concrete recommendations. This progress report highlights four major themes that emerged from the eight meetings held in 2016 as a result of the expert presentations and information discussed at the meetings and the input of the commissioners themselves with the varied backgrounds and expertise that they brought to the deliberations. Other themes, in addition to the four major themes, are also identified for further examination in 2017. While consensus was reached on these themes, the commission would like additional time to make specific recommendations."

    Meeting Updates

    On January 13, 2017 the “Knott” Commission met to discuss the major themes emerging from their 2016 discussions and major themes to pursue following the 2017 legislative session. Chairman Knott outlined findings regarding flexibility, cost efficiency, and the role of the Interagency on School Construction (IAC). Findings include:  

    • State/IAC review of LEAs should be differentiated based on LEA’s previous experience in construction and maintaining schools and capacity of the LEA (i.e., ed specs, schematic design, design development, construction documents, project contract, change orders);
    • Shorter/limited review of projects for LEAs that have good track record in school construction and maintenance will allow the IAC to focus more resources on LEAs that need additional technical assistance;
    • Schools should be built to allow flexibility in spaces and uses in the future;
    • School construction review process should be streamlined wherever possible – too cumbersome, time consuming, bureaucratic, and ultimately expensive – while maintaining accountability for State investments;
    • Reduce the duplication of effort at the State and local levels (i.e., ed specs, schematic design, design development, construction documents, contracts, change orders etc.);
    • Encourage LEAs to take advantage of what is already allowed under State law and regulations by providing monetary or procedural incentive/pilot programs: Alternative construction methods and materials, Alternative project delivery, Innovative design, Alternative Financing, Use of Prototypes/Repeat School Design (Limit State review to changes from previously reviewed prototype);
    • State/IAC should be clearinghouse for research-based best practices in all areas of school design and construction;
    • State/IAC should research and provide technical assistance for innovative design/construction materials/project delivery/energy conservation etc. and then partner with LEAs to pilot promising practices.

    The 21st Century School Facilities Commission Charge

    The Commission is charged with:

    • Reviewing existing educational specifications for school construction projects and determining whether the existing specifications are appropriate for the needs of 21st century schools
    • Identifying best practices from the construction industry to determine whether there are efficiencies that can be made in the construction of public schools and charter schools
    • Identifying a long-term plan for jurisdictions with growing enrollment, as well as maintaining facilities in jurisdictions with flat and declining enrollment
    • Identifying areas where innovative financing mechanisms including public-private partnerships, as well as alternatives to traditional general obligation debt can be used for construction and ongoing maintenance
    • Determining areas for efficiencies and cost-saving measures for construction and maintenance
    • Evaluating the appropriate role for State agencies including the Maryland Department of Planning, Department of General Services, Board of Public Works, as well as the appropriate statutory structure for the Interagency Committee for Public School Construction
    • Reviewing the relationship between State agencies and local governments on school construction projects
    • Reviewing the Kopp Commission findings and progress toward implementation

    The Department of Legislative Services is maintaining a 21st Century School Facilities Commission webpage, which includes the roster, workplan, all meeting materials.

    MABE Priorities & Positions

    For MABE and Maryland’s 24 local school boards, the mission to provide all of Maryland’s students with high performing school facilities conducive to learning is a top priority. The Maryland Constitution requires that the State provide a “thorough and efficient” system of public education. MABE believes that this includes the duty to equitably provide safe, high quality school facilities in which all students can learn. Key areas of concern for local boards include rising costs of construction, unmet demands for new construction and renovations to upgrade aging schools and increase capacity, and escalating costs of deferred maintenance. Other cost drivers include Maryland’s prevailing wage requirements and Leadership in Energy and Environmental Design (LEED) standards. MABE supports optimizing local flexibility to achieve cost savings and efficiencies through alternative methods of project delivery, alternative financing, and cooperative purchasing. Importantly, today it is widely recognized that $350 million per year better reflects the base amount of the state share of the costs of construction to meet school facility needs than the $250 million amount recommended by the Kopp Commission more than a decade ago.

    MABE Leaders Testify

    Update – On July 21, 2016 MABE leaders testified before the Commission, including President-elect Donna Brightman, Legislative Committee Chair Joy Schaefer, and Legislative Committee Vice-Chair Stacy Korbelak.

    President-elect Donna Brightman's Remarks

    Ms. Brightman requested the Commission's best efforts to develop recommendations to improve Maryland’s public school construction program. Specifically, she requested the Commission's pursuit of changes in law, regulations or procedures to facilitate the availability of alternative financing methods for school facilities projects. She emphasized that MABE has adopted a legislative position which “supports the pursuit of innovative funding policies and strategies to maximize the capacity of state and local bonding authority in support of school facility project funding.”

    Alternative financing refers to financing a project completely or partially using approaches other than traditional revenue bond financing or pay-as-you-go (PAYGO) financing. Alternative financing methods include sale-leaseback arrangements, lease-leaseback arrangements, public-private partnership agreements, performance-based contracting, and design-build arrangements. MABE supported the School Facilities Act of 2004, which enhanced efforts to address Maryland’s public school facility needs by providing clear statutory authority for local boards and governments to utilize alternative financing methods.

    Ms. Brightman highlighted several examples of successfully completed school projects which were financed through the sale-leaseback or other alternative financing approach. She observed that the merits of alternative financing are often very case-specific, but these methods can also generate much needed revenue when traditional financing methods are lacking. (read more)

    Legislative Committee Chair Joy Schaefer's Remarks

    Ms. Schaefer requested the Commission’s recognition of local discretion in the use of repeat or standardized school designs; and changes in the law to lessen or mitigate the impact of prevailing wage rates on school construction project costs. She emphasized that local boards are accountable to our local communities to design, build and maintain outstanding school facilities for student learning. Local school systems not only develop capital improvement plans (CIPs) and construct and maintain school facilities in accordance with adopted procurement and construction laws and regulations, but also strive to reflect our community preferences and priorities. Therefore, MABE believes that local school systems should remain able to prioritize project requests according to locally established criteria, and opposes any state mandated standard school designs or school sizes for elementary, middle or high schools.

    Ms. Schaefer highlighted that, in light of the cost savings that can be achieved, MABE does encourage local school systems to consider the use of repeat school designs, and knows that many systems have benefitted from doing so. She shared that the Frederick County Public School System (FCPS) has been utilizing standardized school designs, or prototypes, at every level (elementary, middle and high) for decades. Benefits include: cost savings and cost avoidance through decreased costs in architectural and engineering fees (10-20% per project), more efficient and accurate bid process, the opportunity to refine design with each iteration resulting in further cost reduction through value engineering or design improvements, and the provision of equitable facilities across the system. FCPS notes the following challenges in using standardized, prototype designs: limitations as a result of unique, unpredictable school sites, the need to update or change designs in response to changes to construction requirements or new/additional programmatic demands. Lastly, Ms. Schaefer reiterated that in the interest of cost containment, MABE supports repealing or limiting the scope of prevailing wage requirements as they apply to school construction projects. (read more)

    Legislative Committee Vice-Chair Stacy Korbelak's Remarks

    Ms. Korbelak requested a $100 million annual increase in the minimum state investment in school construction, for a total of $350 million. She informed the Commission that adequate funding for school maintenance is essential to allowing school systems to preserve aging school facilities while at the same time moving forward on major renovation and school construction projects. Although school construction costs continue to escalate and existing facilities continue to age, local boards are tasked with providing school buildings in each of our communities that are able to address the needs of ALL learners. For MABE and Maryland’s 24 local school boards, the mission to provide equitable school facilities to all of Maryland’s students is a top priority.

    She noted that adequately maintaining school facilities requires significant investments from both state and local governments, in part because the General Assembly has enacted significant mandates affecting school construction procedures and project costs, including strict environmental design standards and minority business enterprise contracting participation standards; and the recently expanded scope of prevailing wage rates. Under the current $250 million approach, we’re finding that project costs that dramatically exceed projected cost estimates means the anticipated state and local appropriations for pending projects just aren’t enough. (read more)

    Commission Meetings

    The Commission met for the first time on April 28, 2016 and held several meetings to receive informational briefings through the summer and fall.  All meeting agendas and materials are available below and on the Commission's webpage.  

    All School Facilities Commission meetings are held in the House Appropriations Committee, Room 120, House Office Building, Annapolis, Maryland. Check the website for meeting times.
    April 28, 2016                 Organizational Meeting

    July 21, 2016                  Stakeholder Input/School Maintenance

    Read MABE Testimony presented by MABE President-elect Donna Brightman, MABE Legislative Committee Chair Joy Schaefer, and MABE Legislative Committee Vice-Chair Stacy Korbelak

    August 25, 2016             Construction Efficiency

    September 15, 2016      Needs of Facilities to Meet Needs of Students
    October 13, 2016           Funding Needs and Mechanisms
    October 27, 2016           Organizational Structures and Roles of School
                                              Construction Partners
    November 10, 2016       Work Session
    January 13, 2017           Meeting
    January 30, 2017           Interim Report
    July 17, 2017                 Meeting – Presentation: "Framework to Fiscally Sustainable School Facilities" by Bob Gorrell, Director of the Public School Construction Program

    Funding Subcommittee Meetings

    September 21st from 10am–12pm  
    October 12th from 10am–12pm

    Process, Procedure, and Education Specifications Subcommittee Meetings

    October 3rd from 1pm–3pm 
    October 17th from 10am–12pm

    Full Commission Meetings        

    November 14, 10 am – Work Session – Subcommittees Report to Full Commission
    December 14, 1 pm – Decision Meeting – Commission will vote on final report

     

     


    For more information, contact John R. Woolums, Esq., MABE's Director of Governmental Relations, at jwoolums@mabe.org or 410-841-5414.