Reading Between the Lines

School Capital Plan Could Face Challenges

by Natalie Keith

From funding shortfalls to labor disputes, the New York City Department of Educations capital plan could face some pitfalls on the road to implementation.

Among potential hurdles are the department's assumption that the state will provide half, or $6.5 billion, of the $13.1 billion five-year plan. The city is basing this estimate on a June decision of the New York Court of Appeals in the "Campaign for Fiscal Equity" case.

"It is our position that the state must respond to the Court of Appeals decision," said Kathleen Grimm, the Department of Education's deputy chancellor.

advertisement

The court ruled the state is not providing enough aid to sufficiently address the needs of city students and, therefore, half of the funding for the capital plan must come from the state. The decision, however, did not specify a specific amount that the state must provide the city.

While he applauded the city's "realistic appraisal of the longer-range need for the schools," Richard Anderson, president of the New York Building Congress, was skeptical that the city would receive all of the anticipated funding.

"I haven't talked to anybody who thinks they'll get $1.2 billion a year for the next five years," Anderson added. "That's a dream."

In the decision, the court focused on overcrowding, finding that there is "a meaningful correlation between the large classes in city schools and negative output" such as test scores and graduation rates. The court also ruled that the city does not have adequate specialized educational spaces, and funding is needed for the significant capital investment needed to upgrade school technology.

"Many of the projects included in the capital plan are mentioned in the court decision," said William Goldstein, president and CEO of the New York City School Construction Authority. "We feel that we've articulated our needs well."

School officials also maintain that city schools are further shortchanged by the current State Building Aid formula, whereby the state reimburses municipalities for a portion of the construction costs of new school buildings. The formula puts a cap on total costs allowed for new construction, which does not adequately reflect the high cost of building in New York City and thereby reduces the level of reimbursement.

"State funds are essential to correct the generations-long imbalance between the needs of our children and the resources provided to our schools," said Joel Klein, Department of Education chancellor. "With the resolution of the Campaign for Fiscal Equity case, we expect children of this city finally to receive appropriate resources from the state."

Louis Coletti, president and CEO of the Building Trades Employers' Association, shared concerns about the funding. "We're looking to join forces with some other industry organizations to make sure the gap is filled," he said.

The plan may also face some opposition from labor unions. When New York Mayor Michael Bloomberg introduced the plan last fall, the Building and Construction Trades Council of Greater New York criticized it, saying it included $1.5 billion for the projects that would violate wage laws and other workers' rights.

The projects involve renovations of leased school buildings owned by private landlords. State law requires local governments to pay prevailing wages on public works projects, a requirement that the coalition said the Department of Education has skirted with respect to leased school buildings.

The coalition cited the new Eleanor Roosevelt High School on East 76th Street in Manhattan and the new Information Technology High School in Long Island City, Queens, as examples of projects where prevailing wage law requirements were not met.

Labor representatives were among those present at a New York Building Congress breakfast where the plan was outlined. In a question and answer session during the meeting, several voiced concerns over the prevailing wage law issue.

Grimm said that jobs, where required under law, will be subject to prevailing wages.

"The bulk of the $13 billion will be done under prevailing wage laws, and we shouldn't lose sight of that," she said.

On a positive note, one past obstacle that may not be present as the plan moves forward involves working with the SCA. The agency was created in 1988 to oversee school construction jobs and, up until recently, shared oversight responsibility with the Department of Education's Division of School Facilities. This led to difficulties with accountability and other issues.

Some contractors walked away from doing business with the SCA because of these difficulties.

In October 2002, Bloomberg and Klein announced a restructuring under which management of the capital plan was consolidated under one agency, the SCA. The goal of restructuring was to improve management of the construction process, reduce school construction costs by simplifying design standards and increase competition among contractors.

Goldstein said the SCA has been reaching out to contractors that either have never done work for the agency or have not done work for a long time. The agency has also been working to address issues that have been problematic in the past, such as making sure change orders are processed and contractors are paid in a timely fashion.

Coletti said that under Goldstein's leadership, the agency has become a much better place with which to do business.

"Bill has leveled the playing field for contractors," he added. "He's encouraged a better quality of firm to bid for projects."

Related article(s):
	Putting Children First NYC Department of Education Proposing $13.1B Capital Plan