Wednesday, January 27, 2010

High School Renovation Information--Full Text

The full text of School Board President Ed Kubit's recent FAQ (a Frequently Asked Questions letter) regarding the high school renovation project is reprinted below.  In his letter, Mr. Kubit clears up misinformation recently circulating over emails and in the local media about this vital project.  I urge you to read the letter, inform yourself and contact the School Board with further questions or concerns.

Please feel free to forward this link to other community members, or simply copy and paste the full text of Mr. Kubit's letter in a correspondence of your own.  Help move this conversation forward in a positive direction.  Thanks!  --Elaine Labalme and Kristen Linfante


January 26, 2010

Dear Mt. Lebanon Residents,

Over the past week, I’ve heard from many community members who have raised questions about the cost of the High School project and the impact this will have on taxes this year and in subsequent years.  Many of these questions have come in the wake of the January 18 School Board vote to approve the Act 34 document that sets a maximum total High School project cost of $113,274,765. In an effort to provide clarification, I’d like to address some of the most frequently asked questions that have been raised by residents.

Are taxes really going up 50% in the next few years?

NO
 
Taxes could go up because of three factors:
1. Debt on the High School Project:  The increase in debt due to the High School project, minus lower operating costs from the new building, is estimated to increase taxes between 8% and 13% over the next five years.  This is based on our current millage rate of 24.11 mills. Actual increases will depend on the final project cost, which cannot exceed $113,274,765. The millage rate for debt for this project could cost between 2.25 mills to 3.4 mills.  Savings on operations, including lower utilities and fewer staff, could reduce millage by .35 mills. While the largest increase in millage for this project will be in the 2010-2011 budget, some smaller increases may follow in subsequent years. The School Board and administration will continue to identity potential cost savings throughout the coming years to lessen the impact on tax increases.
2. Pennsylvania State Employee Retirement System (PSERS-State mandated retirement program for District staff):  ALL school districts in Pennsylvania will have the identical retirement rate increases and will see proportionately large increases in their millage rates. Increases in the State retirement rate this year is anticipated to cost our community about .35 mills or a 1.5% increase in taxes.  Over the next two years, the increase could be higher, but the rates projected for the PSERS change regularly.  Any increase will occur incrementally over the next five years and will change for the better as the investment environment improves or as legislation changes the impact of the rate.   If the worst possible PSERS projection is correct, our District’s millage increase – just for this rate change – could be as much as 3.45 mills or 14%.  Legislation is currently being discussed in the State Senate to address this issue.

3. Cost of our education program:  Being fiscally frugal, the Board has limited tax increases to 1% in each of the past two years and 0% the year before while maintaining the high quality of our educational programs.
When you combine all three of these factors the assumption that our taxes will increase 50% in the next few years is not accurate.

Is the High School Project going to cost each Mt. Lebanon resident $10,000?

NO

The calculation of this number used the maximum cost of the project divided by about 10,000 single family dwelling units. There are approximately 14,000 single dwelling residences in Mt. Lebanon.  The calculation presumes that only those homeowners pay tax in our community and that they will each get a bill for an equal share of the project.  This assumption is NOT true. No large rental units were included in this calculation as were no commercial properties, yet they both pay substantial taxes in our community.


No one property owner will receive one single bill for the cost of this project. Taxes for the High School project will be billed annually to all residential and commercial property owners for any bonds the District issues for this project over the next 25-30 years.  The new taxes for a homeowner who has a home assessed at $100,000 will be between $225 and $340 a year depending on the size of the project when the bids are completed and the amount of bonds the District must issue.


What is the cost of the project?

The cost of the project is still fluid.  The maximum it could cost would be $113, 274,765. However, this includes contingencies of about $8 million for unknowns and does not take into account that bids on recent school construction projects came in at 17% to 25% below their original estimates.  Additionally, we are working with our architects and construction managers to find ways to further reduce the cost through value engineering.  The School Board is committed to find ways to reduce the cost of the project so the final cost will be less than $113,274,765.

What is the cost of a “renovation only” of the High School compared to the current design estimated at $113,274,765?

According to the estimates provided by our construction manager, PJ Dick, the cost of a renovation only of the existing buildings would be $103 million. That would translate into approximately 3.18 mills or $318 per year, per home assessed at $100,000, compared to $340 a year for $113 million project.  This is a reduction of $22 per year. A renovation only option would mean maintaining the existing 545,255 square feet; the replacement of the mechanical, electrical, plumbing and fire protection systems (MEP/FP); asbestos abatement; code required improvements; roofing replacement; interior finishes due to the work just mentioned. There would be minimal site repairs, minimal sustainability, and minimal energy savings. There would be no change in layout of the High School to support 21st Century teaching and learning; no change for fine and performing arts spaces; no change for physical education and athletic spaces and no change for classroom size.  This would require us to continue to adapt existing spaces to fit our required program. Such an option would require multiple construction phases during a 3-5 year project and includes student displacement, impacting the High School learning environment. Click here for more information about the current High School design.

Will we need to borrow more money for the project?

The Board approved borrowing $69 million in bonds in October of 2009.  Due to the favorable bond market for premium bonds, the District netted approximately $75 million for the project. The first bond payments for that issue will be due in the 2010-2011budget.  Additionally, funds have been set aside to pay directly for the cost of some asbestos removal in the building without the need to borrow money.  If we are able to achieve lower bids from contractors, it is possible we might not need to issue many more bonds.  Act 34 requires that we present to the community the cost in millage as if ALL of the maximum cost of the project is borrowed through issuance of bonds.  That makes the millage estimates we are now using the highest they are likely to be.


Are taxes going up 14% in 2010-2011?

NO

Current State law requires schools to publish preliminary budgets in January before they have important information in key areas such as student course selections, enrollments in kindergarten, staffing needs, staff retirements, heath care rates and utility rates for the upcoming school year.  Since we are required by law to present a budget this early in the year, there are major gaps in information that will not be known until later in the spring. Our current early projected budget reflects a 14% increase, however, accurate projections of cost begin in the early spring and an actual proposed millage rate is presented to the community in April.  Final millage increases in the past three years have not approached the preliminary millage increases projected in early January each year.

How do our costs for the High School project compare with school construction projects in neighboring school districts?

Construction managers, PJ Dick compiled a cost comparison between our project and the high school project in Baldwin and the middle school project in Upper St. Clair. There are two areas in particular that set our project apart from other area school construction projects. They are: 1) site and 2) asbestos abatement. These two areas represent significant cost differences between our project and those of other schools. It is also very difficult to compare projects because of programmatic differences between schools. Click here for a cost comparison provided by PJ Dick. 

Are the District enrollment numbers going down?

Enrollment numbers have decreased at a very slow rate in recent years.  Our total enrollment four years ago was 5,454 students.  This year our enrollment is 5,302 students.  This is a reduction of about 12 students per grade level over four years.  For the next four years we are projecting enrollment to decrease less than 66 students, or 5 students per grade level, over those four years.   The new High School design takes into account enrollment projections over the next 20 years.

Are taxes higher in Mt. Lebanon than other Districts?

Mt. Lebanon School District taxes are ranked 12th in Allegheny County for 2009-10 according to data from the Allegheny Intermediate Unit.  Eleven school districts have higher tax rates than Mt. Lebanon and 30 have lower tax rates.  The average tax rate in the county is 22.7 mills.  Our rate is 24.11 mills.


Why do we need this project?

In July 2001 a Facility Assessment of the High School was conducted by the architectural firm of Valentour English, Bodnar and Howell. To quote the report, “This assessment has found that even with good maintenance, many of the systems have, or are approaching the end of their useful life.  Impending lack of availability of parts in some cases dictates their replacement in the near future.” Infrastructure and MEP/FP equipment have exceeded their life expectancy, are costly to repair, and negatively impact the educational process.  The building is asbestos-laden and the exterior veneer is failing.  Roof structures need extensive replacement.


Since the last renovation in 1972, there have been many programmatic changes to the way education is delivered, including the extensive use, availability, and integration of technology in the classroom and the need for flexible space for student and faculty collaboration.   The physical space of the High School is not designed to accommodate 21st century teaching and learning requirements:
• Classroom size is too small to be used for learning activities beyond direct instruction.
• Resource areas such as the library do not serve today’s needs.
• Common areas are needed to provide for learning activities outside of the classroom.
• The building layout is complex and inefficient; it has evolved based on additions in the 1930’s, 1950’s and 1970’s,     with each addition being a reaction to the problems of the time and without a comprehensive plan.
• There is a lack of ADA accessibility in the current building.
• The infrastructure, including building systems such as heat, electricity,  HVAC, boilers, and windows, while supported and well maintained beyond life expectancy, is seriously aging, constantly failing, and in need of total replacement
• Science classrooms and labs are inadequate for our program.
• Classrooms and common areas do not possess needed technology infrastructure to support collaborative learning and complex problem-solving skills development.
• Fine Arts spaces are inadequate for our program.
• The pool and athletic areas do not meet the school and community needs.
Why do we need to begin this project now? Can’t we wait?

Local school districts that have recently approved construction projects were able to take advantage of seriously reduced construction rates leading to building costs between 17% and 25% below their estimates.  We are trying to take advantage of this excellent bidding environment for our project.  A reduction in our construction costs by 20% could reduce our need to borrow money by $18 million.  We do not know how long this favorable bidding environment will continue, so by bringing this project to bid we can save money for the residents of our community.


Additionally, further delays in needed infrastructure repairs will continue to negatively impact the conditions in the building for students and staff. As mentioned earlier, the assessment performed by Valentour English, Bodnar and Howell, stated that many of the critical systems were at, or were approaching the end of their useful life nearly 10 years ago.  Significant updates have been not made since that time.


Why has the building square footage increased by 30,000 square feet?

The current building square footage is approximately 545,255 square feet.  The new high school design is approximately 479,845 square feet, an approximate 14% decrease in space.  Early schematic design goals were to establish the square footage at about 440,000 square feet. Since that time, the design has evolved.  Some of the changes include adding two more lanes to the pool to make it eight lanes and adding a third auxiliary gym. The space under the current pool, which was not originally intended to be used, is now being converted to a storage area.  The new academic wing is now being turned to rejoin the building at the fine arts area.  Early space estimates in the DeJong Space Utilization Study did not include all space in the current buildings to be renovated. Our science curriculum was reorganized which requires additional space, space for the District maintenance facilities were not included, the driver education program, including the space for the driver simulator, was not included as well as space required in the kitchen for the addition of the elementary lunch program. Square footage may change slightly as the design is refined.

Who is making the decisions about the High School project?

The School Board makes all decisions about this project with input from the Superintendent, administration, teachers, architects, construction manager, consultants, Master Design Team and community. The Board has discussed and held public votes on key milestones throughout the process which has moved this project forward since it began in 2006.


What are the next steps?

The next step for the project is to hold an Act 34 hearing on February 22 at 7:00 pm in the High School Fine Arts Theatre.  After the hearing, the community will have at least 30 days to submit comments to the District about the project. In April, the Board will vote to approve and submit PlanCon D which will include the minutes from the Act 34 Hearing, any written public comments sent to the District, the proof of advertisement and the Act 34 booklet. PlanCon D will then be submitted to the Pennsylvania Department of Education.  The District will continue through the process which includes seeking zoning and planning approval for the project while preparing construction documents for bid. Questions concerning single prime bid vs. multiple prime bid and the hiring of an owner’s representative must also be addressed and approved by the Board this year. Our goal is to begin construction in the winter of 2010-2011.

We will continue to add to this list of questions which will be posted on the High School Renovation FAQ page on our website at www.mtlsd.org.

Thank you for taking the time to become informed about the High School project. I know we are all committed to doing what is best for our school and community. Please feel free to contact the School Board at schoolboard@mtlsd.net. Your feedback is always welcome.

Sincerely,
Ed Kubit
President, Mt. Lebanon School Board

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