Schools Prep for $450 Million in Construction

by George Waldon  on Monday, Sep. 12, 2005 12:00 am  

School work has gained a higher profile among market segments on the Arkansas construction scene. That status isn't likely to change anytime soon, thanks to the statewide facility improvements compelled by the 2002 ruling in the Lake View case.

Currently, there are about 200 school projects scattered across the state in various stages of planning, bidding or construction. The value of these jobs totals an estimated $450 million, according to conservative industry estimates.

Arkansas court rulings in the Lake View litigation guarantee the continued rollout of construction work valued at hundreds of millions annually into the next decade.

State education leaders are wading into Lake View to quantify what it will take to provide and maintain adequate and equal public school facilities throughout Arkansas. School districts have begun gearing up to make the court-mandated improvements.

"It's just now starting to set in," said Bob Shell, president of Baldwin & Shell Construction Co. of Little Rock. "A lot of them are in the preparation stage, and a lot of work is going to come out of this.

"There's going to be millions and millions of dollars of work spread out over something like five to seven years. The amount of money is going to be significant."

A statewide assessment of school district facilities indicates the needed upgrades could top $4 billion.

The scope of the work will necessitate a phased plan of attack. Among the considerations is staging the projects so the workload doesn't overwhelm the available construction resources.

"It's going to be rolled out in such a way that the projects will be doable," said James Alessi, vice president of field operations and co-owner of Little Rock's Alessi-Keyes Construction Co. "Most of it should be absorbed by the current infrastructure of the construction industry. From what I understand, the big items are going to start taking shape next year."

Alessi, who served on the state Task Force to the Joint Committee on Educational Facilities, said despite the best efforts, there could be some manpower shortages among some subcontracting specialties. He expects that will most likely occur in northwest Arkansas, which is already awash in construction activity.

An intangible that has the attention of contractors in Arkansas and beyond is Hurricane Katrina. Heightened demand for materials to rebuild from the storm damage is expected to push costs nationally. (See story here.)

"There's no question it will affect costs," Alessi said. "We're pre-buying every piece of lumber we can get. Plywood is going to increase considerably because of what's going on down there for the next couple years."

Number Crunching

Overall Cost Summary Chart
Click here for a PDF chart showing costs related to state public school repairs. (Charts require Adobe Acrobat viewer. Click here for a free copy.)

Some have questioned the accuracy of the $4.1 billion projected to bring school district facilities up to snuff. The lion's share — $3.9 billion — is tied to academic space.

Baldwin & Shell Executive Vice President Scott Copas, who chaired the Task Force to the Joint Committee on Educational Facilities, stands by the number even if legislators and school officials have been overcome with disbelief.

"It's our best estimate for the next five years," he said. "If all the work could be performed, we think $3.9 billion would cover the cost. If you make it over 10 years, it will cost more.

"They didn't like that number. Is it high? Yes, it is, but we didn't factor in any inflation either."

The estimates calculated by the task force will undergo further refinement when master plans will be developed for each school district across Arkansas. The plans to address the most pressing needs will be tackled by Feb. 1, 2006. The master plan for dealing with the remaining items should be completed a year later.

The task force has recommended that the facilities improvement program take no longer than 12 years to complete and urged that sooner is better.

"Frankly, I think a lot of school districts are sitting around waiting on the master plans and not doing anything else beside emergency repairs," Copas said. "For years, school districts were able to defer maintenance on their facilities. Now they don't have that ability anymore. The idea is to keep this situation from happening again."

Starting this school year, each district in Arkansas is required by law to dedicate 9 percent of its operating expenditures exclusively for custodial/maintenance operations.

That move by the Arkansas Legislature is expected to force school districts statewide to pony up more than $100 million annually to help pay for improvements.

"The amount of deferred maintenance is a key element driving the cost of current deficiencies and repairs," the task force report noted.

The Legislature appropriated $20 million to fund emergency repairs, an amount so small that school districts will be competing for the money. The Arkansas Public School Academic Facilitates & Transportation Commission will review recommendations on how this money should be prioritized on Sept. 15.

The list represents a hodgepodge of improvements dominated by jobs involving roof work and heating and cooling systems.

Charles Stein, assistant director of the commission, said the minimum value of projects under consideration is $50,000 or $100 per student affected, whichever is smaller.

"As far as how many projects ($20 million) will fund, I have no idea," Stein said. "Once they tell us which projects to move ahead with, we will notify the schools."

Dave Floyd, director of the Arkansas Public School Academic Facilities & Transportation Commission, believes most of the emergency repair work will be completed in time for the 2006-07 school year.

"A lot of these projects will be put out for bid next spring in order to have contracts awarded in time to begin work as soon as the (2005) school year is over," Floyd said.

More School Costs
Click here for PDF charts detailing education suitability costs and enrollment growth costs.



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