Like many public school buildings across the commonwealth, the Morey School in Lowell suffers from severe infrastructure problems, but city officials say they fear it may be 10 years before money for a planned replacement facility is obtained from the state. Meanwhile, repair costs are mounting.
Part Two of a Three-Part Series
[Editor’s note: This is the middle installment of a series examining the funding and construction of public schools in Massachusetts.]
The early 20th century Morey School in Lowell needs more than a few Band-Aids. Crumbling tiles, an old roof and a failed boiler are just a few of the problems contributing to an ever-widening wave of side effects bubbling out of a crumbling infrastructure.
Administrators are hoping that the city can patch the problems – at least until state funding for a new school arrives.
“Most definitely, the problems at Morey are very, very severe,” said Michael Cassidy, assistant business manager for Lowell.
In 2001, the state approved the city’s designs for a replacement but Lowell has yet to see any money. It landed, along with more than 380 schools across the state, on the priority waiting list. While Lowell ranks 33rd, it may be 10 years before the city gets its first reimbursement, according to Michael Cassidy, assistant business manager for Lowell.
“We presumed that the funding was coming but when it kept getting delayed, we decided that we’re going to be occupying [Morey] until the new building is built,” Cassidy said.
That meant years of deferred maintenance needed attention. The city, anticipating funds for a new school, believed routine improvements on a building slated for demolition would waste taxpayer money, according to one Lowell official. With a timeline for new school construction unclear, Lowell has since fixed a boiler and paid almost $15,000 for a roof repair. While some communities have forged ahead and broken ground on school construction projects before their number was called by the state, Lowell remains in a standstill, its officials unwilling to move ahead until the timeline for receiving money from the state becomes clearer.
Hundreds of municipalities across the commonwealth are faced with similar problems – aging schools plagued by problems, a lack of high-tech infrastructure and, in some parts of the state, a growing student population.
Relief may be less than five years away for the 380-plus schools still waiting in line for state reimbursement checks. Gov. Mitt Romney proposed reforms earlier this month that not only would clear the priority waiting list by 2009 but also streamline the construction process by enabling communities to build schools faster and cheaper.
The governor’s plan also reinforces the state’s commitment to reimburse at its previously promised rate. The formula, which is based on a community’s wealth, reimburses communities for between 50 percent and 90 percent of costs. But the state is still facing serious budget shortfalls, and many municipal officials aren’t convinced that even projects on the priority waiting list will receive funding at the promised rate quickly enough to avoid high financing costs for their communities.
The major component of reform for the School Building Assistance Program proposed by Romney consists of financial restructuring. For cities and towns currently receiving reimbursements, the state would borrow the present value of future payments owed to municipalities, transfer those bond funds to escrow accounts on behalf of the localities and then invest it in securities. Reimbursements in future years would come from those escrow accounts. State Treasurer Timothy Cahill has said he is formulating his own plan for funding reform.
While the reforms are being considered, the program has been frozen. Since last summer, cities and towns have not been able to add new project requests to the waiting list for funding.
‘Catching Up’
Under the reforms put forth by Romney, the waiting list will be moved to a construction grant program vs. the current reimbursement system. Municipalities that need a new school would only borrow their part of the costs, rather than also borrowing the state’s portion of the project cost up front. The state would then borrow its share and provide cash during construction.
Romney’s proposal also would increase the financing timeline from 20 to 40 years, establishing a “pay as you use” capital program.
Whether the reforms pass will be up to the Legislature, which will continue discussions over the next couple of months.
In the meantime, communities struggle with aging schools, bulging classrooms and mounting debts. Many of the schools on the priority list took a leap of faith as early as 1999, borrowing money upfront for roof replacements, expansions or new building construction with the hope that the state would pick up its portion before the seven-year deadline for short-term borrowing. Once the seven years are up, the town or city must also borrow the state’s portion of costs, which average 70 percent.
“The state, thus far, has kept its word,” said Ron Busconi, a partner with Gadsby & Hannah in Boston. The law firm has assisted between 15 and 20 communities with the School Building Assistance process. “That’s why it placed a moratorium on new projects – because it [the state] didn’t want to be put in that situation” where it couldn’t keep its commitments, Busconi said.
But that doesn’t mean that town administrators aren’t worrying. Renovations at Framingham High School began in the summer of 2002, construction that is being paid for with short-term borrowing. That means that any costs incurred impact the city’s tax base. This year, the cost to residents will be $500,000.
“The problem comes in when we convert to permanent financing when we’re not reimbursed,” Town Manager George King said. If the state’s share never arrives, Framingham will be forced to add average payments of $3.5 million to the tax base. “That’s a huge amount to put on taxpayers.”
While Framingham officials wait anxiously to see when money from the state will arrive, Fall River officials are simply waiting. City officials say it’s not a matter of choice; they don’t have the wherewithal to begin construction without state assistance.
Fall River hasn’t moved forward with several planned school projects. Five of its projects remain on the waiting list – the highest ranks No. 13 and the lowest sits at No. 36.
“Unlike other communities that started projects, we don’t have the cash-flow to do this,” Fall River Mayor Edward M. Lambert Jr. said. “At this point, since there’s zero money slated, it could be forever” until construction starts.
Some skeptics question the long-term effectiveness of the governor’s reforms, particularly as they work mainly to clear projects currently in the pipeline for funding but many not address pent-up demand stemming from the moratorium on new project applications.. If passed, the state would borrow a total of $8.2 billion, $4 billion for current obligations and the remainder to satisfy the priority waiting list. The borrowing timetable would increase from 20 years to 40 years.
“The message from bond-rating is that they’re not thrilled but they do see it as necessary and they won’t raise our rate,” said David Bunker, chief education policy analyst for the House Ways and Means Committee, during a Boston Society of Architects meeting last week. “If we stick with the current program, it will be 15 to 20 years before we finish the list. We’d have to bump our annual payments up to $760 million to keep up.”
Last year, the state spent $400 million on the School Building Assistance Program.
Schools that put off projects while they wait for funding are also accruing additional costs. Construction costs rise 5 percent every year a project’s delayed, according to Busconi.
“It’s a national problem. It’s not restricted to Massachusetts – there’s even legislation in the U.S. Congress to provide federal money,” Busconi said. “New Jersey has set aside millions; Florida and California have [as well]. With finances down and populations expanding, schools are old and not big enough – whenever money’s tight, they defer maintenance. Now it’s catching up with them.”
