may 5, 2011 society of marketing professionals services forum

SMPS Panel Discussion:An Update on the Massachusetts School Building Authority

May 5, 2011

Katherine Craven

Executive Director

Steven Grossman

Chairman, State Treasurer

Massachusetts School Building Authority

www.MassSchoolBuildings.org

Massachusetts School Building Authority 2

Who We Are… What We Do…AN INDEPENDENT PUBLIC

AUTHORITY

Created by Ch. 208 of the Acts of 2004;

7-member Board; Chaired by State Treasurer Steven

Grossman; Secretary of Administration and Finance and Commissioner of Education; 4 members appointed by the Treasurer: professional educators /

design/construction industry professionals.

Terry Kwan, Lisa Turnbaugh, Richard Bertman and Mary Grassa O’Neill

Leverage dedicated 1-cent of state sales tax

Cost-reconcile and pay for approximately $11 billion for 1156 projects authorized under former SBA Program,

Includes accelerated financing for 423 Projects costing us $5.5 billion that had stalled on state wait list

Effectively manage, plan & create a new, financially sustainable school building construction and renovation grant program;

Equitably spread school building construction and renovation grants across the Commonwealth


How is the MSBA funded? The Commonwealth has dedicated 1 cent of

the statewide 6.25 cent sales tax (not including meals) to the MSBA

MSBA has relatively small staff and overhead: Administrative costs represent less than 1% of annual budget

MSBA will never promise funds that they can’t deliver. Program has been curtailed to meet available resources.

MSBA will fund a capital program of $2.5B over the next few years…


MSBA Dedicated Sales Tax

1 Cent ofStatewideSales Tax

Old ProgramPrior Grants

Inherited: $5.1BPaid-to-Date: $2.7B

Old Program Waiting List

Inherited: $5.5BPaid-to-Date: $4.6B

New Program

Committed: $1.4BPaid-to-Date: $301M


FY2011 Projected Expenditures

1% Operations

38% Waiting List Debt

Service

51% Prior Grants

10%New Program Debt Service

Waiting List Debt Service New Program Debt Service Prior Grants Operations

FY2011 Projected Expenditures


Significant Accomplishments

Accelerated over $7.6B in payments to cities, towns and regional school districts

Moved stalled projects and funded them 414 out of 428 Waiting List Projects have received a payment or have

been completely paid off. Only 2 still have not started; other projects were removed by the

community Massive Cost Reconciliations

Completed 767 out of 789 backlogged audits Saved the taxpayers of Massachusetts over $1.1 billion Generated over $2.9B in avoided local interest costs

Created and implemented a “pay-as-you build” Progress Payment & Audit system Provides municipalities with much needed cash flow as projects are built Reduces the amount of debt a city, town or regional school district

needs to issue


Significant Accomplishments - Continued

The new program prioritizes projects based on need and urgency and places heavy emphasis on planning, study and designing to realistic budgets

The MSBA works in collaboration with cities, towns and regional school districts to confirm problems and identify educationally sound and financially prudent solutions

The Designer Selection and Owner’s Project Manager Approval Panels encourage accountability

The MSBA developed standard OPM and Designer contracts to clearly delineate roles and responsibilities and to protect the rights of the districts

Standard Feasibility Study, Project Scope and Budget, and Project Funding Agreements memorialize the MSBA’s financial commitment to districts


Statement of Interest (SOI)

Collecting problems rather than solutions

FY 2008 – Received 423 SOI from 163 districts and made over 400 visits to more than 140 districts as part of review and due diligence

Recent trend – Districts asking for repairs, not new buildings

New Statements of Interest

47 43 31

423

0

100

200

300

400

500

FY 2008 FY 2009 FY 2010 FY 2011


Building With UsScope Definition

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Massachusetts School Building Authority 10Massachusetts School Building Authority 10

Capital PipelineLocal Clearance

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Capital PipelineScope Definition

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Capital PipelineScope Monitoring

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Owner’s Project Managers (OPM)

Statute Mandates OPM for Projects Estimated to be $1.5M

Locally Conducted Procurement Process (Open and Competitive)

Qualifications Based Selection Pursuant to MGL c. 149, s. 44A½

MSBA Standard RFS Template & Contracts MSBA Approval Required Contributed over $74 million in OPM fees


Designers

Local Selection for Projects Estimated to be < $5M

MSBA Designer Selection Panel (DSP) for Projects Estimated to be > $5M 3 Local members 12 permanent members Ranks top three firms based on responses and

interviews (if conducted) MSBA Standard RFS Template and Contracts Contributed over $181 million in designer fees


Commissioning Agents

100% Funded by the MSBA Demonstrates MSBA’s commitment to sustainable

buildings, maximizing energy efficiency, promoting ease of maintenance and ensuring quality construction

Competitive Selection based on group of Pre-Qualified Firms

Testing, Maintenance Documentation and Training Executed 63 Work Orders totaling ~ $7.0 million Evaluating the efficacy of the program to date


More than one quarter of a Billion dollars in OPM & Designer Fees

District Action to Complete

MSBA

District

Collaboration

Completed Activity this

Period

Total Completed

To DateTotal

Owner’s Project

Manager24 16 1 93

Over $74 Million in

OPM Fees*

Designer 40 3 6 127

Over $181 Million in Designer

Fees*

* Does not include OPM and Designer Fees associated with repair projects


Potential Future WorkMSBA Funded* Projects for 2011


*Project approved by MSBA Board of Directors**Based on Average OPM Fee of 3.7% of Construction***Based on Average Design Fee of 12.8% Construction

Estimated Filed-Sub Bids Date

Estimated Value of Construction

Estimated Value of OPM Fees**

Estimated Value of Design Fees**

First Quarter $116 M $4.3 M $14.8 M

Second Quarter $316 M $11.7 M $40.4 M

Third Quarter $112 M $4.1 M $14.3 M

Fourth Quarter $255 M $9.4 M $32.6 M


Potential Future WorkMSBA Estimated* Projects for 2012


*Districts Invited into Capital Pipeline but not approved by MSBA Board of Directors**Based on Average OPM Fee of 3.7% of Construction***Based on Average Design Fee of 12.8% Construction

Estimated Filed-Sub Bids Date

Estimated Value of Construction

Estimated Value of OPM Fees**

Estimated Value of Design Fees**

Low End $250 M $9.2 M $32.0 M

More Likely $600 M $22.1 M $76.6 M

High End $950 M $35.1 M $121.3 M


Potential Future Work2011 Statement of Interest Update

Process closed on January 26, 2012 182 SOIs were submitted

151 renewed 31 new projects Potential Project Type: 85 District Identified as New or Addition/

Renovation Projects 97 District Identified as Repair Projects


Potential Future WorkMSBA Program Updates for 2011

Program updates under discussion Commissioning program under evaluation

Potential RFS for commissioning services

Updated Repair Program Evaluating Green Repair Program components that

may be carried forward in an updated on-going repair program

Potential RFS for OPM services for repair projects Potential RFS for design services for repair projects

See Central Register and Com-PASS



Upcoming Workwww.MassSchoolBuildings.org

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Green Initiatives

$300 million for windows, boilers & roofs


Sustainability & Green Design

MSBA has assumed leadership role in the admin and review of sustainability policies and Green Design

MSBA regs require promotion of green building practices & designs

Districts may be awarded up to an additional 2% of a project’s eligible costs

March 2010-Policy Recommendations relevant to sustainable design: Minimum sustainable requirements including allowing designers

to use a comparable LEED scale for the MA-CHPS standards when designing schools


Green Repair Program

American Recovery and Reinvestment Act of 2009 (ARRA) Bill provides the MSBA with a limited time opportunity to issue Qualified School Construction Bonds (QSCBs) Eligible scope will be limited to ROOFS, WINDOWS and

BOILERS in educationally sound school buildings with a long remaining useful life

Grants will be awarded by the MSBA on a competitive basis Reimbursement rates for districts will be set at the statutory base

rates of reimbursement – no incentive reimbursement points will be awarded by the MSBA

Rare opportunity to address multiple projects in a single community

Districts filed 185 SOIs for the Green Repair Program To date, the MSBA has moved 186 Green Repair Projects

into the Capital Pipeline.


Green Repair Program Status186 Projects – 74 Projects authorized for PFA’s

40% Complete


OPM Selections*Selection Complete – 77 Districts

Selection Underway – 1 District

Process Pending – 3 Districts*Not all Districts are selecting OPM’s through

this process

Designer Selections* Selection Complete – 80 Districts

Selection Underway – 4 Districts

Process Pending – 3 Districts*Boston, Sudbury, Springfield, Fitchburg and

Newton are selecting more than one designer

Green Repair Program Consultant Selection Status



Available on website Green Project Master Schedule (new) Repair Cost Data (updated each Board) Comparison of Roof costs by type (new) Consultant Lists by project (updated bi-

monthly) OPMs Designers



Program Benefits:

- Streamlined consultant selection process

- Impact many schools by allowing districts to apply for more than one project

- Provides data for long-term MSBA repair program

- Clearinghouse of cost data-construction costs and consultant fees

Program Challenges:

- Competitive bids and available contractor resources

- Appropriate contingencies

- Availability of local funding

- Will require extension of construction schedule into 2012

- MBE and WBE compliance and outreach

Model School Program

Reduce, Reuse, Recycle


Model School Program

Effectively adapts and re-uses the design of successful, recently constructed schools

Schools are efficient in design, easy to maintain, incorporate sustainable design elements and are flexible in educational programming spaces

Districts get shovels in the ground far more quickly than when utilizing standard design process

Able to take advantage of competitive bidding climate Estimated savings of approximately $58M on high school

projects in Norwood, Tewksbury, Plymouth, Natick and Hampden-Wilbraham

Districts invited into the Model School Program are eligible for up to 5% additional reimbursement


Model School Adaptations

High Schools: Whitman-Hanson:

East Bridgewater Norwood Natick Plymouth North

Ashland: Minnechaug

Hudson: Tewksbury West Springfield

Middle Schools: Lynnfield:

Quincy

Elementary Schools: Winthrop:

Douglas


Model Schools – Phase V

45 schools submitted in Phases I – V by 17 design firms

9 schools accepted as model schools 3 high schools (Ashland, Hudson, Whitman-Hanson) 1 middle/high school (Ipswich) 1 middle school (Lynnfield) 4 elementary schools (Fairhaven, Winthrop, Groton

CT, Williamstown) 17 schools currently under consideration

4 elementary schools in Phase III & IV 13 schools of different grade configurations in Phase V


Model School Program - Phase V

Request for Designer Services issued on October 27, 2010, submissions received on December 2, 2010

Targeted at public schools of any and all grade configurations with the following requirements: Can be modified to reflect current code requirements Adaptable to other sites New school (not the result of an addition/renovation project unless the

addition/renovation is easily removed or adapted to current standards) Incorporates energy efficient and sustainable design elements Recent construction

Three phase, streamlined process Initial Phase:

Evaluation based on threshold requirements Recommendations to MSBA Board

Second Phase: Site visits Request additional information from designers; if required

Third Phase: Final evaluation and MSBA Board selection


Model School Districts – Phase V

JUST RELEASED:The Needs Survey

Statewide School Facilities and Findings


Buildings and Square Footage

There are 1,757 schools, composed of 1,831 school-related permanent buildings and totaling 173,366,462 GSF. 60 fewer schools than in 2005

The schools serve 927,252 students in 329 school districts An additional 28,311 students are enrolled in

schools that are not eligible for MSBA funding About 1% of the state’s 63,000 classrooms

are in temporary spaces


Enrollment

Enrollment declined by 2.8% statewide from its peek in 2003

No region of the state has been unaffected MSBA and DESE predict that enrollment will

continue to decline for the near future More than 80 public schools have closed since

the 2005 Needs Survey 7 have closed since the Needs Survey visits were

concluded in July 2010 Approximately 150 buildings are no longer being

used as public schools


Massachusetts K-12 Enrollment

Student Enrollment by Year

820,000

840,000

860,000

880,000

900,000

920,000

940,000

960,000

980,000

1,000,000

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

* 2003 was the peak enrollment year.


School Construction Boom

Between 2000 and 2010, nearly 70 million GSF of school facility space was built new or renovated.

About 40% of school GSF has been built new or renovated since 2000

Includes projects funded under the former school building assistance program and new projects in the MSBA Capital Pipeline


Construction Activity by Decade

School Construction Activity

-

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

80,000,000

Prior to 1950 1950-1959 1960-1969 1970-1979 1980-1989 1990-1999 2000-2009

Tot

al S

quar

e F

oota

ge o

f Con

stru

ctio

n

New Schools Additions Renovations Average


Summary of Conditions

Massachusetts school facilities are generally in good condition and provide a good physical environment for learning.

84% received top scores for building conditions

97% received top scores for general physical environment

92% have adequate space to support their educational program and enrollment

School Building Improvement

76% 84%

2005 2010

Rated w ell

Rated poorly


Buildings Systems - Findings

84.3% of public schools received a rating of 1 or 2, meaning that their site and building systems are in generally good condition.

Less than 1.5%, 23 schools, received a rating of 4, meaning that they are in poor condition.

Number of Schools w ith each Building Systems Condition Score

0

100

200

300

400

500

600

700

800

900

1000

1 2 3 4


General Environment - Findings

97% of schools received a rating of 1 or 2, meaning that the school has a generally good environment for learning and teaching

Only 1.5%, 27 schools, have a rating of 4, while 30 schools received a 3

Number of Schools w ith each General Environment Score

0

200

400

600

800

1,000

1,200

1,400

1,600

1 2 3 4

Number of Schools with each General Environment Score


Space Utilization - Findings

Nearly 24% of schools are oversized for their current enrollment and educational program

Less than 8.0% of schools may be inadequately sized

Capacity Rating: Number of Schools w ith Each Score

0

200

400

600

800

1,000

1,200

1,400

Above AverageUtilization

AverageUtilization

Below AverageUtilization


Conclusion

Massachusetts school buildings are in good condition and provide good physical environments for learning

Enrollment is declining and there is no evidence of widespread overcrowding

The MSBA is committed to collaborating with cities, towns and regional schools to develop solutions to school building deficiencies that are financially sustainable, appropriately sized and support the delivery of a 21st Century curriculum

Questions?Contact:

Katherine Craven

Executive Director

Steven Grossman

Chairman, State Treasurer

Massachusetts School Building Authority

www.MassSchoolBuildings.org

Katie Timmins

Green Repair Project Manager

[email protected]

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