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Pennsylvania budget plan leaves no money for school construction

Heidi Murrin | Tribune-Review
Freedom Area School District has begun excavating the site where the elementary school will be.

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Tuesday, May 27, 2014, 10:00 p.m.
 

Cash-strapped schools desperate to replace leaky roofs and crumbling infrastructure likely will go without state construction money for a third year, school business officials say, since Gov. Tom Corbett's budget proposal continues a moratorium on funding new projects.

In 2012, Corbett cut funding to new applications, stalling 354 projects in varying stages of construction or capital planning. At least 200 since have been financed — some even finished — with the expectation of state money that didn't come.

The state Department of Education has estimated it would need at least $1.6 billion to reimburse them all.

“School districts do not enter into construction projects lightly,” said Hannah Barrick, advocacy director for Pennsylvania Association of School Business Officials. “They do so with careful planning, and only once they're sure of what they can expect from the state. So to go through that long process and find out the money you planned for is indefinitely unavailable puts everyone in a pretty huge pinch.”

When the Corbett administration took office in 2011, funding for the school construction reimbursement system, known as PlanCon, was overcommitted by $30 million, state spokesman Tim Eller said in an email.

“More projects had been approved for reimbursement than the line item could pay,” Eller said. “Over the last three years, the Corbett administration has worked to bring in line those projects that receive reimbursement with what is available in the line item.”

A local decision

West Allegheny School District broke ground in April on a $28.5 million building project for two elementary schools and the district's central office. West Allegheny planned to pay that debt over 17 years, with the state chipping in $4.4 million.

So far, the state hasn't offered a dime.

“Nervous? I don't know; that's probably not the right word,” said Superintendent John DiSanti. “We're planning and hoping for that money, but what do we do if it doesn't come? The money has to come from somewhere — us.”

Ohio, Florida and New Jersey each provide nearly double the $296 million Pennsylvania allocates for new construction and renovations annually, said Jay Himes, executive director of the association of school business officials.

Eller said construction projects are a local decision, made with the understanding that state money is limited. He did not respond to questions about how many projects are locked in at each phase of PlanCon's multi-step process.

No master list

The decades-old system, an acronym for Planning and Construction Workbook, requires state approval of construction projects at 11 stages, including repeat submissions of documents and bid specifications. At least one copy must arrive on microfilm. The lengthy process covers everything from preliminary planning and design to project refinancing.

Once debt is determined, schools seek bids, begin construction, and apply for reimbursement for some of their projected costs. Wealthier districts usually receive a small share — 10 percent or less — and lower-income districts collect a larger state share.

Eller said the Education Department estimates that 350 projects are awaiting funding approval and 2,450 should be drawing state funds.

Department officials have said they keep no master list of school construction projects and do not track the status of the multimillion-dollar projects, their budgets, how much the state committed to pay, or when the projects are slated for completion.

“It's literally like the nuclear code,” said Rep. Seth M. Grove, R-York County, who drafted a bill aiming to overhaul the system. “I've been asking for months and they still haven't given me a comprehensive list. It's a major, freaking issue. School districts are screaming about this. My colleagues are screaming about it.”

Legislation pending

The funding moratorium threw a wrench into many long-term facility plans, Himes told the House Education Committee in March.

“The significant delay in state construction reimbursement has forced them to cut programs and personnel, to increase taxes, to borrow additional dollars, or to pay down reserves to ensure that they do not default on their financing and contractual obligations,” Himes said.

Beaver County's Freedom Area School District filed its initial application to renovate Big Knob Elementary School before the moratorium, effectively ensuring funds, but had to alter its plan a few steps in.

“So because of how they wrote the moratorium, our original application is now defunct and we aren't eligible for any funding,” said Superintendent Jeff Fuller, watching an excavator work outside his office window. “Our buildings were in such bad shape, we couldn't afford to wait for the state to get around to re-establishing PlanCon, so we're essentially self-funding with a $10 million bond.”

Grove's legislation, set to appear before the full House in June, streamlines the cumbersome system from 11 steps to five through a new system dubbed ArcCon.

ArcCon allows for electronic submissions without microfilm; creates a publicly accessible online database with updates on every pending school construction project in the state; requires the Education Department to dole out reimbursements in the order it approved them, unless prioritized for a financial recovery district; requires proof that the cost of new construction is less than the cost to renovate; and offers lump-sum payments to districts awaiting back funding.

“The problem with this whole thing is transparency,” Grove said. “(The Education Department) was allowed to let the rules slip and now it's a huge mess.”

Megan Harris is a staff writer for Trib Total Media. Reach her at 412-388-5815 or mharris@tribweb.com.

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