Can Existing Schools Get to High Performance? An Update on School Modernization Strategies

Signs are that funding and community interests may be shifting toward modernizing existing schools instead of building new ones. Old school, meet high performance.
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Sponsored by Pella Commercial and SAFTI FIRST
Layne Evans

Follow the Money

The decision about whether and how much to renovate existing school buildings will be strongly influenced by - surprise - money. In 2008, spending by educational institutions actually went up, reversing a four-year downward trend. Total spending on new, addition and modernization construction by school districts and higher-education institutions increased to $43.3 billion in 2008 from $32.9 billion the year before, according to the American School and University's 35th Annual Official Education Construction Report. But the report notes that this increase was mainly due to projects already in the pipeline before the worst of the economic downturn hit. The projection over the two-year period 2009-2011 for both new construction and modernizations is $63.3 billion. And of course, as research indicates, maintenance deferred only becomes more expensive and difficult.

Looking at the trends for where funding will go from here involves reading mixed signals. Some districts have been adversely affected by the overall financial meltdown, with the decline in housing prices hitting state and local budgets in areas like Florida where population booms formerly led to school construction booms. Nationally, about 47 percent of money for schools comes from state governments, 44 percent from local taxes and 9 percent from the federal government. At least 46 states are dealing with budget shortfalls for the upcoming fiscal year (Center on Budget and Policy Priorities). The ASCE Report Card cites examples including delays on 12 major school construction projects in Maine, and a decision not to build an elementary school in Cumberland Country, North Carolina because of the failure to find buyers for the county's construction bonds.

At the same time, even in hard hit California, Los Angeles Unified has raised $28 billion to construct 131 schools and to take on 1,319 repair and modernization projects, and similar bright spots can be found in Massachusetts, planning $215 million toward school construction and renovation projects in a dozen communities, and Montgomery County, Maryland, moving forward with a six-year, $3.9 billion capital budget providing for renovation and additions at about 28 schools. Even in Detroit, Michigan, where 32 schools are scheduled to be shuttered, work is scheduled to begin this summer on 18 school modernization projects creating an estimated 11,000 jobs. (Of course, all this can change quickly, so checking NCEF and other links that track school construction can help track the latest plans.)

Up until the last possible moment, the American Recovery and Reinvestment Act of 2009 (ARRA) was on track to be a major national impetus for school modernization, with $14 billion specifically allocated. But when the last votes were being swapped, the money ended up on the cutting room floor, and school repairs became an "Other" in the $8.9 billion Public Safety category. The final summary is shown in the chart below.

ARRA Summary
2009-2011 Billions
Education $115
State Fiscal Stabilization Fund $53.6
Elementary, secondary, postsecondary, early education $39.6
Performance measure incentive $5
Public safety and "other services," including modernization and repair of public school facilities $8.89
New Qualified School Construction Bonds
(zero-interest loans for renovations or new construction)
$22
Total:
$787

Based on information from the National Clearinghouse for Educational Facilities
Summary: American Recovery and Reinvestment Act 2009

But possibilities to utilize ARRA for local modernization projects still exist. The Act set aside $22 billion for Qualified School Construction Bonds, essentially zero-interest loans for building new schools and renovating and repairing existing ones. Similar but smaller programs were also created: Qualified Zone Academy Bonds ($2.8 billion over two years for rehabilitation of schools), and Build America Bonds, a new type of low interest municipal bond for states and school districts. Early indications are that the loans are being under-utilized. A report by the 21st Century School Fund indicated that only 32 of the 100 largest school districts have used their tax credit allocations.

But even though ARRA clearly prioritized money that could be spent very quickly, school district machinery moves slowly, especially in the current stiff headwind of economic conditions, and may just be gearing up. In June, for example, Pennsylvania announced that 46 school districts will receive more than $600 million in bonds through ARRA, for construction, energy and water efficiency, and science labs. The districts have already planned over 100 projects.

Another bright (green) spot is ARRA's wording directing spending to include "modernization, renovation, or repair of public school facilities and institutions of higher education facilities, including modernization, renovation, and repairs that are consistent with a recognized green building rating system." Although no particular system was specified in the final bill (LEED had been called out in some earlier versions of the legislation), states are writing their own priorities, and so far they, too, are specific in asking for sustainability to be prioritized.

NCEF keeps track of specific state and local initiatives related to ARRA, and also to additional national legislation being proposed to add to funds targeted to school modernization. The federal site recovery.gov also tracks ARRA spending. The bottom line is that many fewer billions of dollars are available for school modernization than are needed, and funding is trickier to navigate, but in the projects that are going forward, energy efficiency and high performance tend to be important factors.

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Originally published in June 2010

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