Building block

Continued state construction aid for schools vexes districts, construction companies


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First-graders pull books from a case with wheels at Hinsdale Elementary School. Due to structural issues and the fire code, students cannot access the second floor where the library and school nurse’s office are located.

At Hinsdale Elementary School, first-grade students can’t go to the library or visit the school nurse because of fire code and structural issues at the building.

In Concord, the high school, the middle school and two elementary schools won’t be getting heat next school year, unless they can switch their entire system over to natural gas by next winter.

And in Newmarket, school officials are hoping that their fourth try at convincing voters to approve a bond to upgrade their school facilities — some of which date back to 1924 — will succeed this time at the annual school meeting.

All of those projects, along with many others around the state, are hoping for state building aid, but for the last eight years none has been forthcoming because of a moratorium that has crippled schools and hurt the state’s construction industry.

There is now a backlog of some 70 projects totaling roughly $650 million, of which the state’s share would be about $250 million.

Lifting the moratorium — which would result in providing $50 million in state aid annually —would barely make a dent in that, since $36 million of that is already earmarked to pay off more than $300 million in older projects. But even $14 million is a start.

“We are hopeful the governor will put it in his budget,” said Gary Abbott, executive director of Associated General Contractors of New Hampshire.

During the campaign, gubernatorial candidate Chris Sununu was unequivocal in his support for the idea.

“We absolutely have to restore school building aid funding,” he said during the last gubernatorial debate on WMUR-TV. “I have a fifth- and a sixth-grader. I’m in my kids’ classrooms. And when you go into a classroom and let’s call it a negative atmosphere — where the windows are painted shut, where the hallways are dimly lit — that’s not a viable education environment for anybody.”

And on his campaign website he said, “building a responsible budget,” includes a move to “reinstate school building aid once and for all.”

But as governor, Sununu so far doesn’t seem so emphatic.

“The governor is in the process of reviewing the budget and is working to manage the state’s priorities,” said his communications director, David Abrams, in a statement to NH Business Review. “He’s working closely with legislative leaders and is having discussions about what might be possible with school building aid.”

When asked if that statement was noncommittal compared to what Sununu said in his campaign, Abrams replied, “I disagree. Your question on the governor’s position on school building aid is in the context of his budget.”

Temporary measure

The cutoff in school building aid — which pays anywhere from 30 to 60 percent of the cost of a school’s construction projects — coupled with a recession that made voters bond-shy, was an extra blow to the New Hampshire’s construction industry. 

The moratorium started as a temporary measure in 2008, as lawmakers attempted to come up with a plan to prioritize the aid, which had no spending cap, and was beginning to grow out of control during the state’s boom times. It did allow projects already in the works, so actually state-supported construction didn’t come to end until 2012. Concord-based North Branch Construction was awarded one of the last projects — $63 million over three years for projects in the Governor Wentworth Regional School District in Wolfeboro. 

But after 2012, North Branch has done only $2.5 million in school work, and it has had to knock on a lot of doors to make that up elsewhere. 

“We were very disappointed when school funding went away,” said Ken Holmes, president of the firm. “It’s not just us, but subcontractors. It had a ripple effect through the economy.”

“It certainly had a huge impact on the construction industry,” said Bill Stevens, president of Harvey Construction in Bedford. “School districts have a hard time passing bonds without funding attached, and it is almost impossible for most of them without it.”

School construction accounts for a third of Harvey’s business, Stevens said. The firm worked on the very last project before the moratorium — $40 million to build Concord’s elementary schools. Since then, it has mostly replaced that business with work for private schools and colleges, though it did land a contract to build a new high school in Salem for $60 million. The project is going ahead without any aid from the state.

Hinsdale’s dilemma

Nationally, schools ranks second to highways when it comes to state and local spending on construction, but unlike roads and bridges, there is no federal help. Nationally, state and local spending on school construction fell by two-thirds from 2009 to 2013, according to a 2016 study by the 21st Century School Fund.

During the last two decades, the nation spent an average of nearly $50 billion a year on public school capital projects, about $38 billion less than what was needed to keep the schools up to educational standards, the report says. About a third of the New Hampshire schools were up to those standards by 2013, according to the study. 

The Hinsdale Elementary School nurse treats a minor scrape in the an office downstairs since the fire code prevents students from going upstairs. (Courtesy photo)

Hinsdale Elementary couldn’t even meet the basic state fire code, which was updated in 2009 and says that, unless there is a fire escape for each room, first grade through pre-k cannot be located on the second floor of a building, and the second floor is where the first-graders had been. Since there were no spare classrooms, the 40 first-graders now have their class in the former first-floor library and two small nearby rooms. 

“It’s like Goldilocks, with two rooms too small and one room too big and none just right,” said Joe Boggio, the school’s principal. 

The library was relocated upstairs, but the 1950s three-story building was not able to support the weight of all those books, so about a third were either put into storage or line the shelves in the hallway. Since first-graders are not allowed to go upstairs, the librarian has to roll a cartload of books downstairs on the elevator. Similarly, art classes for first graders are held in the first floor cafeteria, and the school nurse, also located upstairs, has to treat sick and injured students in a small multipurpose room outside Boggio’s office.

If the room is being used for student testing, or discipline, then “we just have to adjust,” Boggio said.

Hinsdale’s fix is relatively inexpensive: $1.5 million to add on some extra classrooms so the library and nurse and art room can return downstairs. But even that is a stretch for a district where about half the students receive federal aid for school lunch. 

If school funding were to pass this year, Hinsdale would be the only district on the list under new criteria set up, if funding was again provided. Under the criteria, schools with safety and health issues are ranked at the top of the list, and funding is only provided for department-approved educational necessities — which means no Olympic-size swimming pools and the like.

‘Competing priorities’

Hinsdale was the only school district that went through the extensive application process while the building aid moratorium was still in place. But if aid is reinstated and if lawmakers allowed the $13 million left over from this year to be rolled over to the next — two big ifs — schools could start applying for more than twice that amount next year. That would result in about six average-size projects, or about $40 million in work.

That is roughly the amount needed to modernize schools in Newmarket. About $28 million of the $39 million project would be used to renovate the district’s 90-year-old junior-senior high school, whose cafeteria is so small that the students have to eat in six shifts from 10:15 a.m. to 1:15 p.m., and its gym is half the size of an elementary school gym.

The district’s previous attempt to build a new school failed, so now it has downsized the request to a renovation for the upcoming school meeting.

“It would make a big difference if we could get 30 percent from the state,” said Rep. Michael Cahill, D-Newmarket, one of the co-sponsors of the as-yet-to-be-unveiled bill to lift the moratorium. 

Cahill said he is optimistic that the governor would put school funding in his budget, but also noted that Sununu also expressed his support for full-day kindergarten and charter schools, “and I’m not sure we can’t fund all three. Nothing is certain.”

That governor’s proposed budget is expected to be released Feb. 9, but it still has to backed by the Legislature, where Rep. Neil Kurk, R-Weare, who heads the House Finance Committee, has talked about “competing priorities.” 

There is about $2 million in the building fund set aside for emergency funding, but it is really hard to access “unless you are in some imminent danger,” said Amy Clark, a state Department of Education engineer and go-to person on the school building. Hinsdale, for instance, couldn’t use it because it was able to avoid the “ceiling collapsing” by taking books out of the library, “so it was no longer an emergency,” Clark said.

Similarly, the Concord School District, which will have to switch to a new heating system following the pending shutdown of Concord Steam at the end of May, wasn’t able to utilize it.

“We feel it is an emergency,” said Matt Cashman, director of facilities and planning for the district. He noted that 80 percent of the district’s square-footage, including the high school and middle school, would be without heat unless it spends $9 million to switch to natural gas before next winter.

But Cashman said he was told that it would only be an emergency if the heat went out in the middle of the winter.

That prompted Sen. Dan Feltes, D-Concord, to sponsor a bill that would specifically include “the needed replacement of heat and hot water systems” in the emergency funding law. 

The bill, if passed, would help the district offset the cost, but it has already contracted with Harvey Construction —which recently built the schools — to do the job.

“We don’t have time to wait,” Cashman said. 

 

Is lease financing an answer to school building needs?

Even if New Hampshire’s eight-year moratorium on school building aid is lifted, the program could look a lot different than it has in the past. Frank Edelblut, Gov. Chris Sununu’s pick to be the state’s next education commissioner, would like to go with a lease-financing alternative. 

“With declining student enrollment, we should not be holding on to these facilities in perpetuity,” he told NH Business Review. 

Leasing buildings would enable school districts to be more “flexible,” depending on their enrollment, said Edelblut, comparing the practice to the corporate sector, where businesses expand and retract their square-footage at will, depending on the size of the workforce.

Schools, he said, should concentrate on their “core competency” — educating students — not “trying to be a real estate company.” 

Other states have experimented with leasing arrangements, generally using them to gain more flexibility in financing new construction, with mixed success. Edelblut, however, said the practice is similar to what charter schools do — lease space in existing buildings, often in existing public schools.

He said he mentioned the idea to Sununu, but they did not explore it in-depth. (The state does include leasing in its building aid program, mostly to help charter schools, but that isn’t funded either.)

When NH Business Review asked the governor’s communications director, David Abrams, what Sununu thought of the idea, he supplied the following statement: “The Governor has had substantive and productive discussions with Mr. Edelblut on a wide range of topics related to improving education in New Hampshire, school building aid being among them.’’

The House Finance Committee chair, Rep. Neal Kurk, R-Weare, said “the idea of leasing buildings is certainly one I would look at seriously.”

Sen. Gary Daniels, R-Milford, who heads the Senate Finance Committee, said he would have to learn more about Edelblut’s idea, but he had one of his own to solve the school building construction backlog. 

With enrollment going down in many districts, some of the aid should be used for “IT infrastructure to create virtual classrooms.” 

Daniels also maintained that more stringent fire and safety codes that often contribute to the need to update buildings, as in the Hinsdale School District, constituted an “unfunded mandate.” Daniels said that perhaps the state should look at the financial burdens its regulations are placing on local school districts.

Democrats were skeptical of some of these ideas. Executive Councilor Andru Volinsky — who was the lead attorney in the Claremont school-funding lawsuit — said that leasing benefited private companies more than students. He mentioned the problems associated with private prisons as a warning against the dangers of outsourcing public functions. 

Volinsky and Rep. Michael Cahill, D-Newmarket, both said they are adamantly opposed to loosening any building codes. 

“Sometimes you just have to spend the money,” Cahill said. “We have to fix the schools. You can’t just finagle your way around it.”

Gary Abbott, executive director of Associated General Contractors of New Hampshire, was not against exploring new ideas, but with more than a half-billion-dollar backlog of projects, there would still be a need for a school building program, he said.

“We need to maintain our infrastructure to educate the workforce of tomorrow and to be attractive to businesses that come to New Hampshire, so that they will be able to have communities with good schools for their employees,” Abbott said. 

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