Thomas MacMillan File Photo
The first day of school at the new Hooker School.
After students moved into a new Hooker School on Whitney Avenue, the state slapped the city with a penalty for making the building too big. Now it’s one of 12 school construction bills headed for the city’s budget next year amid a fiscal crisis.
Those bills add up to a nearly $18 million request for school construction-related borrowing in the mayor’s proposed budget for next fiscal year.
The $17,953,231 bonding request covers work done on 12 separate school construction projects, some of which took place years ago. The total comprises costs the city tried to get the state to pay for, but that state auditors deemed “ineligible” for state reimbursement.
The $18 million in bonding is part of a $44.3 million capital projects budget that now sits before the city lawmakers on the aldermanic Finance Committee. The bill comes as Mayor John DeStefano’s $1.7 billion campaign to rebuild or renovate every New Haven school is nearing an end. The request also comes as the city faces tense union negotiations and up to 190 school layoffs next year amid a budget crisis.
The eight-figure bonding request raised the eyebrows of longtime Hill Alderman Jorge Perez, who’s been on the board for the duration of the mayor’s school construction program, which began in 1995.
“I look forward to their explanation,” Perez said.
Budget watchdog Jeffrey Kerekes balked at the $18 million list and called on the city to stop building more “ineligible Taj Majals.”
Will Clark, the schools chief operating officer, said the $18 million does not represent “surprise” or “extra” costs.
“These are part of the total cost of the projects that were planned, approved and budgeted for,” Clark said. “Everyone always knew that there was a local share. It’s still a very small percentage of the whole.”
The city’s share for the school construction program so far has been 6.8 percent, or $79 million out of $1.164 billion in total construction costs, according to a document provided by the state Department of Education. The state is paying for the rest. (Read it here; the items in the yellow “ineligible” column represent the city’s share for each project.)
“It’s a pretty good deal,” Clark said.
Clark said while the city has already borrowed enough money to pay for most of each project, it may need to issue more bonds to pay for ineligible costs after the final audits come in.
Here’s how the process works, according to Tom Murphy, spokesman for the state Department of Education: All school construction projects are audited for ineligible expenditures. The state withholds its last payment “in order to reconcile these.” When the time comes to “close out” the project, the city gets the chance try “to establish the expenditures as eligible.”
There are many types of ineligible expenditures, Murphy said: too much square footage per student, inappropriate facilities such as tennis courts, “a pool in an elementary school, or a theater with far too many seats for the school.” If an expenditure is deemed ineligible in the end, the city must pay the full cost for that component.
In an interview, Clark ran down the list of ineligibles that the city is now looking to borrow money to pay for.
You can check out the list in the capital projects budget, which has brief narratives for each school. Or flip to page 4 – 27 of the mayor’s proposed FY2011-12 budget.
Here are a few highlights of the list, gathered from the mayor’s budget and from interviews with Clark. (The “total project cost,” along with the updated city and state share, are shown as listed in the budget.)
Big Hooker: Too Big?
FY2012 bonding request: $3,343,980
Total project cost: $36,500,000 ($12,649,441 City, $23,850,559 State)
After a years-long battle over the school’s location, students opened the doors in December 2009 to a new Worthington Hooker School on Whitney Avenue. The 60,000-square-foot school serves about 400 students in grades 3 to 8. It’s based around a 1950s church with a large auditorium.
In an audit, the Board of Ed got hit with a 13.34 percent “space penalty” for creating a building that’s too big for its students. The penalty was based on the size of the Whitney Avenue school compared to the number of students enrolled.
Clark said the state subsequently agreed to take into account the so-called Little Hooker school, which serves grades K to 2 on Canner Street. The state agreed to consider the two Worthington Hooker projects as one program, which lets the district combine the building areas and enrollments. That will reduce the penalty to 8.2 percent, Clark said.
In the final tally, the city will need to borrow an extra $3,343,980 to cover the Hooker School construction tab.
A Field House Penalty
FY2012 bonding request: $8,850,496
Total project cost: $67,479,183 ($25,659,595 City, $41,819,588 State)
Allan Appel File Photo
Scholar-athlete Elvin Rodriguez at the Hillhouse Field House.
This bill — the biggest in the package — concerns Hillhouse High’s Field House, the bleachered athletic center that’s home to basketball games, academic fairs and mass dentist visits.
Auditors of the Hillhouse High project laid down another space penalty for the field house, and also flagged ineligible costs for construction and consulting. The city now needs to borrow $8,850,496 to cover those ineligible costs.
Clark said plans for the field house date back to the 1990s. “We have battled with the State on this issue for years through the audit process. We did obtain some relief but ultimately the state did not accept fully including the Field House under the Hillhouse Project and thus more costs were applied to us,” he wrote in an email.
The city’s share of this project cost is greater than most — the city will pay 38 percent. Clark argued the building was a sound investment. Since it was built, the Field House has “become an epicenter of activity,” Clark said, not just for student athletes but for numerous community groups.
Beecher: A Renovation?
FY2012 bonding request: $1,028,319
Total project cost: $40,050,000 ($10,550,658 City, $29,499,342 State)
Melinda Tuhus File Photo
The city tore down part of an original 1913 building, then tacked on an addition to create a new L.W. Beecher Museum School of Arts & Sciences, which opened in 2007 in a ceremony filled with rose petals.
State auditors denied “renovate-like-new status” for the project, shifting the burden of all renovation costs to the city.
“The project was approved knowing this risk back in 2004,” Clark said. “We fought this through the audit and the state did not grant the requested status.”
Celentano: A Change Of Plans
FY2012 bonding request: $370,957
Total project cost: $33,150,000 ($9,253,065 City, $23,896,935 State)
Thomas MacMillan File Photo
The city moved this circa-1880s Queen Anne-style house (pictured) to make way for a new Celentano school atop Prospect Hill. The cost of the move, which Clark said tallied in the seven figures, was part of the city’s cost of doing the project.
Then there were extra costs associated with a plan to fix up the building so it could be used for educational purposes as part of the Celentano project. After doing some initial work, the Board of Ed determined that the plan would be “cost prohibitive,” Clark said, “and that part of the plan was scrapped.”
“Once the building was no longer included in the project,” Clark explained in an email, “the state did not approve the funds that were related to the work that had been done to date (prior to the time when it was decided that the building would not work as part of the project).
“We fought that through the audit as ultimately the decision did save money as it would have cost a lot more to renovate the building to incorporate it into the school program. The state ruled the other way.”
That leaves the city on the hook for $370,957 in rehab costs.
Clark called the change of plans “a good example of a mid-project adjustment based on potential negative cost implications.” The decision to preserve the house in the first place was made by city lawmakers and policy-makers in response to public outcry from preservationists, he said.
The city is now moving forward with a plan to sell the house to Pike International LLC, which plans to turn it into apartments.
Other items in the bonding request relate to change orders and “additional costs” on the Christopher Columbus, Mauro-Sheridan, Bishop Woods, Davis Street, Benjamin Jepson, Hill Central and Betsy Ross Arts Magnet schools.
One sum relates to a school that hasn’t yet been built, the Engineering and Science University Magnet School (ESUMS). The district seeks to borrow an extra $475,000 for that project, bringing the city’s share to $4.2 million out of $66.5 million. That’s is a projection, Clark said. The school is still in the planning phase; the district is hustling to break ground before next April, or it may risk losing $9.5 million from the state grant.
Budget Watchdog: No More “Taj Majals”
East Rock Alderman Matt Smith, a new member of the Capital Projects Committee, said he has requested more expansive answers on each of the 12 items before aldermen vote on the $18 million request as part of the city budget.
“That’s a lot of money,” he said.
Clark said the district originally presented the $18 million request for last year’s budget, but “it was decided to push the request off to this year.”
Jeffrey Kerekes of the budget watchdog group NHCAN called the bonding request evidence of “the failure of City Leadership to effectively manage the school construction program.”
“As I understand it from the City’s Finance Department, it costs approximately $75,000 to finance $1 million in borrowing,” Kerekes wrote in an email. By that math, the city will have to pay $1,342,500 to borrow the money to pay for these projects.
“When we talk about laying off police officers and other personnel, we need to remember that poor leadership is a big factor and not just a poor economy,” Kerekes argued. Noting that the city is moving ahead with building a new ESUMS school in West Haven, he called on the city to “cease building new schools until we can get the proper leadership to not build ineligible Taj Mahals.”
Thomas MacMillan File Photo
Clark (pictured) countered that the program has been a great boon for New Haven, and that the costs have never been “hidden.”
The cost of bonding has always been listed as part of the city’s share in paying for these projects, he said. Each project is approved by a series of panels: The Board of Education, Citywide School Construction Committee, Capital Projects Committee, the local school construction advisory committee and the Board of Aldermen.
“The suggestion that there’s some shock and surprise at local cost is ridiculous,” Clark said. “There has always been some local costs.”
He said of all the projects completed so far, the district has come in more than $9 million under budget — budgets that were publicly vetted and approved by numerous boards and commissions.
Second, “we fight like heck on audits with the state” to “keep the project in line with the approved budget.”
New Haven has won some battles: Last year, the city successfully lobbied the legislature to pass a bill allowing Troup School to qualify as a renovation project. The bill “allowed previously identified ineligible construction costs totaling $17,626,464 to be treated as eligible project costs,” according to a state document.
Murphy, the state Department of Education spokesman, tallied up New Haven’s $79 million “ineligibles” tab in response to a request from AFSCME Council 4 Local 3144 President Cherlyn Poindexter. The union president, who represents city managers locked in a labor contract fight, called the document proof of “gross excess spending.”
“This is money that clearly could be in New Haven’s and the taxpayers pockets,” she wrote in an email.
Clark countered that for the city’s investment, the return has been tremendous. Without the state program, the $79 million price tag would pay for one or two schools. “We’ve built 36. That’s pretty damn good!”
“These are great projects which reset the physical footprint of the schools, updated technology, learning spaces, community spaces,” he said.
The new buildings have added 1 million square feet of school building space, but with more efficient central heating and cooling systems that end up using less energy, he said. The district is now paying $1 million less in annual energy costs compared to what it would have paid had it not rebuilt and renovated the schools, he claimed.
Before the school rebuilding program, some buildings were “falling apart,” he said. “These things needed upgrades.”
“We had a once-in-a-lifetime opportunity to reset the calendar on this,” to rebuild spaces in a “smart, cost-effective way.”
“If you didn’t have this program, all of this would have been 100 percent funded by the local,” Clark argued. “To ignore that fact is just foolish. It’s not reality.”
It is only a lawyer or a politician who can defend the indefensible or re-define a financial penalty into a normal, planned capital bonding budget. The absurdity and foolishness of it is unmistakable. The problem all along has been building schools that are fundamentally, practically, too large for our needs. Anyone who has been in the Hillhouse Field House can easily see that, or just about any other school too. While we needed new updated schools, what we built were monuments that were 3,4 or even 5 times the original school footprint. They are so large at Wilbur Cross and Sheridan, maybe others, that students are getting lost in those schools, and officials in an effort to produce better outcomes, are creating small schools within a school. This has come at great expense and the debt associated with these schools has robbed the city budget of the funds it needs.
This state penalty is not a budgeted part of the school construction program. That's why it is called a penalty. If these expenditures fell within the very generous guidelines of the magnet school construction program (which is the only reason city leadership converted every school to a magnet school) then the state would have covered the cost. That it didn't means we exceeded even their liberal version of needs vs. wants.
This much of what Clark says is true: Numerous boards approved these schools. Yes they did and this excessive construction, architects and construction consultants gone wild is the result of those boards rubber-stamping plans and proposals and debt.
And for the record, the city's bonding/financial experts have repeatedly told the city it should not borrow more than about $15 million per year according to testimony at last year's budget hearings. The city was proposing to borrow $47 million then. Now it's $44 million which goes to show you some bad ideas just never die.
Since the city already has more schools than anybody else in the state, and because of our very unstable finances, the plans to borrow and build an engineering school in West Haven should be scrapped. We don't need another monument let alone one that is located in a neighboring town. It's time for some common sense.