mi school demographics and facilities
DESCRIPTION
ANALYSIS OF STUDENTN POPULATION DECLINE AND IMPACT UPON SCHOOL DISTRICTSTRANSCRIPT
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THE DECLINING POPULATION DEMOGRAPHIC AND IMPACT UPON EDUCATIONAL FACILITIES
SUPPORTING K‐12 EDUCATION IN MICHIGAN
A presentation to the
Michigan State University Land Policy Institute
Building Michigan Prosperity Network Annual Land and Prosperity Summit
April 14, 200
By Charles R. Eckenstahler and Carl H. Baxmeyer
ABSTRACT
Michigan’s student aged (5-17) population is expected to decrease by 7.6% during period of 2000 to 2030 resulting in excess educational facilities, estimated to be in excess of 6,000 classrooms. Due to economic concerns, school districts will consider school district consolidation, reuse/repurpose of existing facilities, closing and “mothballing” of facilities for future reuse, and closure and disposal of faculties to balance the capacity of school facilities with the current and future projected student enrollment or “right-size” school district facilities. The decision making process to determine this “right-size” strategy involves 1) an assessment of facilities, 2) a demographic study, 3) a process of community engagement and 4) a “citizen led” and “community driven” implementation effort. Based on data for 22 Michigan schools located three divergent school districts, urban, suburban and rural, standardized cost ratios were determined These include 1) current cost to maintain facilities, 2) cost to close, mothball and maintain facilities for reuse and 3) cost to close, demolish and school facilities. Using the decreasing statewide demographic projection, a financial analysis was completed projecting the 20-year cost to 1) maintain current building capacity, 2) closing and mothballing facilities for a “right-sized” facility capacity and 3) closing and disposal of facilities to yield a “right-sized” facility capacity.
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INTRODUCTION
Due to recognition of the relationship of schools to the social and economic well-being of any community, significant civic and social implications of the “right-sizing” process are identified. Current and future demographic changes, specifically the loss of student aged children will have an impact upon the financial ability of school districts to maintain and refurbish existing educational facilities or construct new educational facilities in the future. In the immediate future, it will also limit the ability of local school districts to fund state of the art educational facilities with leading technology necessary to easily develop student skills for employment in a globally competitive work force. This goal of this paper to uncover and document the unfolding problem of excess physical facilities due to loss of student aged population. The loss of students results in certain school districts receiving less per student state aid. Due to this long‐term decline of student enrollment, school districts will be required to analyze whether to maintain underutilized facilities, repurpose the buildings for other uses, sell or demolish excess building capacity or mothball the building for future use. This paper is designed to analyze student aged population growth trends in Michigan to quantify education building capacity requirements for the future based on current and future projected K‐12 student aged population. This analysis will by information gathered from sample school districts, investigate the ability of school districts maintain their current educational facilities, in light of decreased student enrollment. The analysis will proceed with investigation of alternative facility management solutions, including disposition of unneeded facilities, repurposing current facilities, consolidation of special facilities, and construction of new facilities in an effort to reduce long‐term educational facility operation and maintenance costs. MICHIGAN K‐12 POPULATION DEMOGRAPHICS AND THE EFFECT ON MICHIGAN CLASSROOM COUNT
While Michigan’s overall statewide population is expected to increase by 7.6% during the period of 2000 to 2030, the number of school‐age (5‐17) children is expected to decrease significantly by 151,227 students. Michigan’s 7.9% decrease compares to a 15.7% national increase for the same period. These trends are shown in Graph 1. Clearly, over the thirty
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(30) year period of the logarithmic graph there appears to be no dramatic shifts. The U.S. total and school age populations increase; the total Michigan population increases slightly; and, the Michigan school age children drops then rebounds slightly. However, upon closer examination the impact of changing demographics is easier to appreciate. Graph 2, while it has an exaggerated vertical y‐axis for the sake of clarity, clearly shows how the Michigan school age population is expected to change over the period ending in 2030. Analysis of this demographic trend shows that 142 school districts will loose from 10% to 15% of their student enrollment, 97 will loose between 16 to 25% and 21 will loose from 26% to 50%. Assuming each classroom has an average of 25 students, the loss of 151,227 students indicates an excess of 6,000 classrooms in the total statewide educational facility inventory. (See related article: Is Your Community Ready to Address Excess School Facilities? Planning and Zoning News, January 2009)
Graph 1. Michigan and U.S. Population (2000 to 2030)
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MI School Age (5-17) MI Total US School Age (5-17) US Total
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It should be noted that the research for this paper and the author’s related article as well as the demographic projections by the U.S. Census Bureau, were conducted prior to the full
Graph 2. Estimated and Projected School Age (5-17)Children - State of Michigan (2000 to 2030)
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MI School Age (5-17) effect of the current economic recession. A current assignment with the Detroit Public Schools has identified a significant acceleration of the decline of the K‐12 student population. This is a trend that may be occurring in other Michigan school districts as residents cope with changing economics and, a considerable loss of employment opportunities.
Detroit Public Schools have experienced a loss of 70,000 students in the past seven (7) years. This is not entirely a loss of students from the area. Many students have transferred to charter schools and some have enrolled in surrounding suburban school districts. However, our research to date indicates that there has been significant out‐migration to other out‐of‐state locations primarily to seek employment.
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This information, when coupled with anecdotal evidence from two major moving companies indicating that for every household they move into Michigan two households leave the state, suggests that the projected 150,000 loss of school age children may be conservative. Clearly, Michigan school districts will face a significant challenge in the years ahead.
MICHIGAN SCHOOL AID FUNDING FORMULA
Education funding is governed by the State Aid to School Act. P.A. 94 of 1979, as amended. Essentially, the legislation provides state funding on a per student formula for K‐12 schools. Currently this per student state aid is approximately $7,200 per student. There are several adjustment factors in this funding formula to compensate or equalize school district state aid for unique circumstances including declining enrollment. Data collected in this investigation disclosed that, on the average, it costs $1,263 dollars per student to maintain the physical school building; or 17.5% of the annual per student aid provided by the State of Michigan School aid funding formula. It is easy to realize the impact of declining enrollment results in a direct loss of state aid. The resultant economic impact to school operations is the continuation of facility operating cost in light of a decrease in state school funding due to decreased student population. RIGHT‐SIZING MICHIGAN SCHOOL DISTRICTS
We hold the position that due to the declining student population trends, Michigan school districts will be drawn to increased study of the economics of school facility operations in effort to maintain school district identity and facilities. This will ultimately include balancing physical facility capacity with the decline (or growth) of student population to offer a full complement of educational opportunities. Right‐sizing school districts may include consideration of consolidation with neighboring school districts to achieve the critical student population needed for optimization of financial operations (See: School District Consolidation, Size and Spending; an Evaluation, Andrew J. Coulson, Mackinac Center for Public Policy, 2007)
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Michigan law provides procedures for the consolidation of school districts. Specifically, efforts to initiate any consolidation effort first must start by a decision of the local school boards. Neither the Michigan Department of Education nor the State Board of Education may supersede the local board’s authority. Therefore, to initiate a consolidation strategy both local school boards must agree. It is important to recognize that the electors of each school district must eventually approve the consolidation, upon petition of 5% of the electors requesting the ballot initiative. Also, the matter of existing debt must be addressed. Provisions in the law provide assumption of debt and the establishment of a special taxing provision imposing taxes upon only the portion of the consolidated school district for which the debt was originally incurred. This provides assurance that no‐one pays for debt that was not their responsibility. In our opinion, the consideration of consolidation may be a first step in the process of right‐sizing for some districts. Whether consolidation is an option or not school districts need to follow a process to right‐size their facilities. To the public right‐sizing appears to be a simple matter. The lay‐person simply sees the number of children; looks at the size of the schools; and, selects a school to close…right‐sizing completed. In actuality the process is not that simple. The number of students, the size of the buildings and the curriculum being taught may not simply allow one to be incorporated into the other. Right‐sizing may require the construction of additions to facilities at optimum locations; repurposing of existing facilities; “mothballing” buildings for reuse at a future date; and, the disposal of excess assets. As districts wrestle with the impact of declining enrollments, shrinking financial resources and having the appropriate assets in terms of land and buildings to meet their educational goals right‐sizing becomes a priority. It is important to understand the process and ramifications associated with right‐sizing. This paper and presentation seeks to illustrate a process for right‐sizing and the challenges and opportunities the process affords. A PROCESS FOR RIGHT‐SIZING
Right‐sizing means matching the physical facilities of the school district with the student needs. The needs are defined as both the number of students to be educated in addition to the educational adequacy of the building spaces provided. A demographic projection
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answers the first question. A review of school district physical facilities needed to house the curriculum and educational specifications addresses the latter. For example a district changing its curriculum by moving to all‐day Kindergarten will require additional space as defined by its educational specifications for Kindergarten classrooms. There are four steps to the process of right‐sizing, beginning with an assessment of the facilities as shown in the following chart. Each building needs to be assessed in terms of both physical and educational adequacy. Does the building meet code? Are there maintenance issues that need to be addressed? Does the building provide a proper learning environment in terms of daylighting, thermal comfort and ventilation? These are but a few of the physical assessment questions that need to be answered. It is also essential that the educational adequacy of the building be assessed. How well does the building support the educational curriculum? Are the spaces appropriate for current and future education?
1. Assess the Facilities • Physical adequacy
• Educational adequacy
2. Demographic Study • Projected future enrollment
• Location determination
3. Community Engagement • Understand needs
• Develop alternatives
• Recommend to the Board
4. Implementation • Approve the plan
• Arrange financing
• Implement the selected alternative(s)
Needs Assessment Strategic Plan
Excess Facility Capacity
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The second step is to conduct a demographic study. This detailed study provides not only the projected enrollment but the probable home location throughout the district of future students. How many students can the district expect to educate and where those students will reside relative to the existing educational facilities are two of the questions that the demographic study seeks to answers. Combined together, the facility assessment and the demographic study form a needs assessment. Our experience shows that at this stage of the assessment it is essential to engage the community in the process. Taking the needs assessment to the residents provides the opportunity to educate citizens about the needs of the district while receiving, in turn, essential input from the community. The expected outcome is a long‐range strategic plan that addresses the needs while providing action recommendations designed to address those needs. The long‐range strategic plan offers options and recommendations, to right‐size school education facilities. Note that the process results, at the end of step 3, in the recommendation of a strategic plan to the board of education. The best plans are those which we refer to as “citizen led and community driven”. By involving the public in the process the plan becomes a “citizen plan” in which the stakeholders of the community have a vested interest. Upon receiving the recommendations it remains the responsibility of the school board to approve a plan consisting of the selected recommendations; arrange financing; and, implement the selected alternatives. This leaves the ultimate decision making authority in the hands of the appropriate individuals…those persons elected to the school board to represent the public. For Michigan school districts with declining enrollment and projected future reductions in the number of students it is likely that excess facility capacity will be identified. We believe it is logical for these school districts to close a significant number of facilities, especially the older more costly to operate facilities. In some school districts certain facilities can be “mothballed” and maintained for reuse in the future when student population growth requires additional facilities. It is also reasonable to assume that new strategies emerging from this process will seek to “optimize” the location of schools to be consistent with population growth projections.
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This leads to closing existing facilities in favor of new facilities constructed with better physical and educational characteristics and less operational expense. Typically these schools will be at optimum locations that also decrease transportation costs for the district. SCHOOL FACILITY OPERATIONS COST ANALYSIS
With an understanding that school districts will be challenged with the task of determining cost effective means to match the supply of building facilities with the projected student population, the authors sought to gather data to help determine cost saving from alternative long‐term facility management strategies. With this information, the data can be employed to project facility costs, for projected future student populations. Data for twenty‐two (22) school facilities were gathered from three (3) independent, geographically disbursed districts. These included an urban district; a suburban district; and a small‐town rural district. The building size, student capacity and the square foot per student information is displayed in Table 1. The data represent 1.6 million square feet of education building space having capacity for 10,300 students. We selected these data to provide information that can be used to develop financial comparative statewide indicators for use in financial modeling.
TABLE ‐ 1 SAMPLE DATA
School Square Footage
Student Capacity SF/Student
1 156,000 975 160 2 49,930 355 141 3 93,521 520 180 4 54,174 340 159 5 63,374 420 151 6 35,500 235 151 7 50,508 360 140 8 170,870 1,140 150 9 37,198 265 140 10 257,392 1,430 180
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TABLE ‐ 1 SAMPLE DATA (con’t)
11 47,264 340 139 12 30,191 215 140 13 58,368 415 141 14 48,918 350 140 15 30,689 220 139 16 62,168 445 140 17 12,400 90 138 18 43,664 290 151 19 62,240 445 140 20 53,356 355 150 21 77,975 557 140 22 85,064 608 140
TOTAL 1,580,763 10,370 AVERAGE 71,853 471 148 MEDIAN 53,765 358 141
For the purposes of establishing comparative indicators for analysis, we calculated the average and median values for each data set. Thus the average size of the building is 71,853 square feet with a capacity for 471 students. Data in Table 2 shows the annual cost of operation, excluding teaching salaries, for the each of the sample buildings. Using these data the average facility operating cost is $7.64 per square feet of building space or about $1,174 per student.
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TABLE 2 ‐ CURRENT BUILDING OPERATING COSTS EXCLUSIVE OF TEACHING SALARIES
School
Staffing: Principal and
Admin.
Staffing: Custodians & Engineers Insurance Utilities
Maint. and Supplies
Envir. Health & Safety
Total Annual Operating Costs
Total Annual Operating Cost/SF
Total Annual Operating Cost / Student
1 $411,260 $295,000 $49,612 $248,725 $20,617 $5,470 $1,030,684 $6.61 $1,057 2 $225,796 $150,000 $19,953 $73,827 $11,360 $5,873 $486,808 $9.75 $1,371 3 $222,159 $295,000 $29,742 $142,510 $12,585 $3,766 $705,762 $7.55 $1,357 4 $170,016 $295,000 $17,229 $109,710 $11,484 $5,971 $609,410 $11.25 $1,792 5 $133,950 $150,000 $23,549 $112,560 $8,751 $3,833 $432,643 $6.83 $1,030 6 $176,825 $150,000 $10,654 $72,285 $8,192 $4,284 $422,240 $11.89 $1,797 7 $169,412 $150,000 $15,522 $59,619 $9,069 $5,030 $408,652 $8.09 $1,135 8 $178,600 $295,000 $54,341 $274,315 $24,042 $5,332 $831,630 $4.87 $729 9 $179,432 $150,000 $11,830 $85,587 $9,295 $3,874 $440,018 $11.83 $1,660 10 $432,680 $485,000 $81,857 $528,329 $27,302 $10,012 $1,565,180 $6.08 $1,095 11 $177,509 $150,000 $15,031 $77,895 $9,545 $4,386 $434,366 $9.19 $1,278 12 $121,906 $150,000 $9,601 $56,120 $6,896 $4,930 $349,453 $11.57 $1,625 13 $225,325 $150,000 $18,560 $81,230 $13,979 $6,895 $495,989 $8.50 $1,195 14 $89,300 $150,000 $15,557 $8,327 $10,111 $3,490 $276,785 $5.66 $791 15 $161,570 $150,000 $8,011 $54,883 $5,737 $4,571 $384,771 $12.54 $1,749 16 $224,082 $150,000 $19,770 $92,685 $14,383 $5,782 $506,702 $8.15 $1,139 17 $44,650 $105,000 $3,943 $18,548 $5,119 $3,833 $181,094 $14.60 $2,012 18 $170,328 $150,000 $13,886 $112,175 $11,004 $4,750 $462,143 $10.58 $1,594 19 $89,300 $150,000 $19,794 $131,525 $7,286 $3,586 $401,491 $6.45 $902 20 $170,328 $150,000 $14,524 $60,530 $8,739 $3,533 $407,655 $7.64 $1,148 21 $132,105 $135,450 $11,324 $102,059 $10,009 $4,216 $395,163 $5.07 $709 22 $118,894 $121,905 $12,457 $108,062 $10,597 $4,464 $376,380 $4.42 $619
TOTAL $4,025,427 $4,127,355 $476,746 $2,611,505 $256,102 $107,882 $11,605,018 AVERAGE $182,974 $187,607 $21,670 $118,705 $11,641 $4,904 $527,501 $8.60 $1,263 MEDIAN $170,328 $150,000 $15,540 $89,136 $10,060 $4,517 $433,505 $8.12 $1,172
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COST TO MOTHBALL A FACILITY
Data in Table 3 shows the cost to close and mothball a building for reuse at a future date. Using these data, mothballing costs $6.13 per square foot or $903 per student (based on the student capacity) for the average building.
TABLE 3 ‐ ESTIMATED COST TO MOTHBALL BUILDINGS
School Emptying Building
DecommissionAnd Secure Insurance
Waste Disposal
Public SafetyMisc.
Total Cost to
Mothball
Cost to Mothball per sq. ft.
Cost to Mothball per
Student 1 $468,000 $259,000 $24,806 $88,587 $840,393 $5.39 $862 2 $188,220 $109,110 $9,976 $69,553 $376,860 $7.55 $1,062 3 $280,563 $155,282 $14,871 $82,327 $533,042 $5.70 $1,025 4 $162,522 $96,261 $8,614 $78,781 $346,179 $6.39 $1,018 5 $222,144 $126,072 $11,775 $80,572 $440,563 $6.95 $1,049 6 $100,500 $65,250 $5,327 $77,919 $248,995 $7.01 $1,060 7 $146,424 $88,212 $7,761 $68,298 $310,695 $6.15 $863 8 $512,610 $281,305 $27,170 $80,177 $901,262 $5.27 $791 9 $111,594 $70,797 $5,915 $67,252 $255,558 $6.87 $964 10 $772,176 $416,088 $40,928 $129,593 $1,358,785 $5.28 $950 11 $141,792 $85,896 $7,516 $68,159 $303,362 $6.42 $892 12 $90,573 $60,287 $4,801 $66,620 $222,281 $7.36 $1,034 13 $175,080 $102,540 $9,280 $69,159 $356,059 $6.10 $858 14 $146,754 $88,377 $7,779 $68,308 $311,217 $6.36 $889 15 $75,567 $47,784 $4,005 $66,170 $193,526 $6.31 $880 16 $186,498 $108,249 $9,885 $69,702 $374,334 $6.02 $841 17 $37,200 $23,600 $1,972 $32,417 $95,189 $7.68 $1,058 18 $130,992 $80,496 $6,943 $77,834 $296,266 $6.79 $1,022 19 $186,720 $108,360 $9,897 $69,508 $374,485 $6.02 $842 20 $137,010 $83,505 $7,262 $78,015 $305,792 $5.73 $861 21 $149,553 $85,976 $7,927 $52,113 $295,569 $3.79 $531 22 $160,235 $92,118 $8,493 $55,836 $316,682 $3.72 $521
TOTAL $4,582,727 $2,634,564 $242,903 $1,596,899 $9,057,093 AVERAG
E $208,306 $119,753 $11,041 $72,586 $411,686 $6.13 $903 MEDIAN $154,894 $90,247 $8,210 $69,531 $313,949 $6.23 $891
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This analysis is based on the following assumptions:
• Emptying the building: Includes removal of all furniture, supplies and equipment.
• Decommissioning and securing: Includes securing the building from vandalism, rodent infestation, weatherization, and insuring operation of the HVAC system to provide a minimal amount of heat to prevent pipes from freezing during winter months.
• Insurance: Represents the cost for property and casualty insurance for a vacant building and grounds.
• Waste disposal, public safety and miscellaneous: Includes the cost to dispose of unwanted materials, security during closing process, and any other costs not elsewhere recorded.
ON‐GOING COST OF MAINTAINING AND MOTHBALLED BUILDING
Data in Table 4 shows the ongoing annual maintenance cost for each building mothballed with the intent to be reactivated at a later date. Using this data we have determined this average annual cost to be $0.60 per square foot or $88 per student.
TABLE 4 ‐ ANNUAL MAINTENANCE COST FOR MOTHBALLED BUILDING
School Insurance
Security and
Minimal Utilities Maintenance
Total Annual Operating Costs
On‐Going Cost to Mothball / sq. ft.
On‐Going Cost to Mothball / Student Capacity
1 $24,806 $58,500 $5,029 $88,335 $0.57 $91 2 $9,976 $23,528 $2,715 $36,219 $0.73 $102 3 $14,871 $35,070 $3,021 $52,963 $0.57 $102 4 $8,614 $20,315 $2,746 $31,676 $0.58 $93 5 $11,775 $27,768 $2,063 $41,605 $0.66 $99 6 $5,327 $12,563 $1,923 $19,812 $0.56 $84 7 $7,761 $18,303 $2,142 $28,206 $0.56 $78 8 $27,170 $64,076 $5,886 $97,132 $0.57 $85
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TABLE 4 ‐ ANNUAL MAINTENANCE COST FOR MOTHBALLED BUILDING
School Insurance
Security and
Minimal Utilities Maintenance
Total Annual Operating Costs
On‐Going Cost to Mothball / sq. ft.
On‐Going Cost to Mothball / Student Capacity
9 $5,915 $13,949 $2,199 $22,063 $0.59 $83 10 $40,928 $96,522 $6,701 $144,151 $0.56 $101 11 $7,516 $17,724 $2,261 $27,501 $0.58 $81 12 $4,801 $11,322 $1,599 $17,721 $0.59 $82 13 $9,280 $21,885 $3,370 $34,535 $0.59 $83 14 $7,779 $18,344 $2,403 $28,526 $0.58 $82 15 $4,005 $9,446 $1,309 $14,760 $0.48 $67 16 $9,885 $23,312 $3,471 $36,668 $0.59 $82 17 $1,972 $4,650 $1,155 $7,776 $0.63 $86 18 $6,943 $16,374 $2,626 $25,943 $0.59 $89 19 $9,897 $23,340 $1,697 $34,933 $0.56 $79 20 $7,262 $17,126 $2,060 $26,448 $0.50 $75 21 $7,927 $52,113 $1,691 $61,731 $0.79 $111 22 $8,493 $55,836 $2,114 $66,443 $0.78 $109
TOTAL $242,903 $642,066 $60,179 $945,148 AVERAGE $11,041 $29,185 $2,735 $42,961 $0.60 $88 MEDIAN $16,649 $57,168 $3,572 $77,389 $0.67 $100
The assumptions employed include:
• Insurance: Maintaining property and casualty insurance for the vacant building
• Security and minimal utilities: Use of periodic security inspections including replacing any security materials lost to vandalism and the minimal operation of the HVAC system to maintain integrity of interior building surfaces, etc.
• Maintenance: The cost of having district maintenance personnel, or contract personnel, make occasional repairs to the building systems including maintaining the security system, exterior lighting and HVAC system.
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One aspect of mothballing a building that should not be minimized is the prospect of “urban miners” stripping assets from the building. This is more than juvenile vandalism. So‐called “urban miners” are actually organized thieves who break into a mothballed building and systematically remove wire, lights, plumbing fixtures and any other marketable materials from the structure. They leave behind a stripped shell of a building that is virtually useless as a re‐deployable asset from a physical and financial standpoint. While typically this occurs in more urban areas in actuality no mothballed school, particularly during periods of high scrap prices, is immune to urban mining. Districts need to recognize this and allocate sufficient financial resources for security measures. COST TO DEMOLISH A BUILDING
Data in Table 5 shows the one‐time cost to demolish each building. Using these data yields a one‐time cost to demolish the average building of $4.82 per square foot or $713 per student. Note that this cost does not include any environmental remediation expense. Depending upon the condition of the building environmentally remediation, primarily asbestos removal and disposal, can double the cost of demolition. That cost is not included since over the years so many buildings have already had asbestos removal. In addition this cost, more than others, seems to vary depending upon location. The cost of $4.82 per square foot is common in urban areas. However, the cost can dramatically decrease to $3.00 per square foot in more rural areas.
TABLE ‐ 5 COST TO DEMOLISH A BUILDING
School Square Footage
Student Capacity
Demo Cost per S.F.
Demo Cost per Student
Total Demolition
Cost 1 156,000 975 $5.00 $800 $780,000 2 49,930 355 $5.00 $703 $249,650 3 93,521 520 $5.00 $899 $467,605 4 54,174 340 $5.00 $797 $270,870 5 63,374 420 $5.00 $754 $316,870 6 35,500 235 $5.00 $755 $177,500 7 50,508 360 $5.00 $702 $252,540 8 170,870 1,140 $5.00 $749 $854,350 9 37,198 265 $5.00 $702 $185,990
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TABLE ‐ 5 COST TO DEMOLISH A BUILDING (con’t) 10 257,392 1,430 $5.00 $900 $1,286,960 11 47,264 340 $5.00 $695 $236,320 12 30,191 215 $5.00 $702 $150,955 13 58,368 415 $5.00 $703 $291,840 14 48,918 350 $5.00 $699 $244,590 15 30,689 220 $5.00 $697 $153,445 16 62,168 445 $5.00 $699 $310,840 17 12,400 90 $5.00 $689 $62,000 18 43,664 290 $5.00 $753 $218,320 19 62,240 445 $5.00 $699 $311,200 20 53,356 355 $5.00 $751 $266,780 21 77,975 557 $3.00 $420 $233,925 22 85,064 608 $3.00 $420 $255,191
TOTAL 1,580,763 10,370 $7,577,740 AVERAG
E 71,853 471 $4.82 $713 $344,443 MEDIAN 53,765 358 $5.00 $703 $253,865
It should be noted that the impact of recycling salvageable materials from the structure has not been factored into the analysis. The cost per square foot of demolition shown assumes that the district has “harvested” many salvageable materials themselves using their own maintenance personnel. Often light and plumbing fixtures as well as HVAC components can be saved and in many districts tend to be common to multiple buildings. Harvesting these materials provides a district with a supply of spare parts. The district needs to have space for storage and a need for those materials in other buildings but when that occurs harvesting is a viable option. For those districts that harvesting salvageable materials is not an option, the demolition cost is often reduced from that shown by allowing the demolition company to have the salvage rights. FINANCIAL ANALYSIS
For analysis purposes, we have created a financial model based on the twenty‐two (22) buildings studied. The data generated from that analysis provided the parameters for a hypothetical Michigan school district having a student population that would decrease
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over the next 20 years at a rate similar to the total student population of the State of Michigan. The financial ratios used in the analysis are shown in Table 6.
TABLE 6 ‐ FINANCIAL RATIOS FOR ANALYSIS
Ratio Criteria Low High Average Median
Building Size ‐ Student Capacity Square Feet 12,400 257,392 71,853 53,765
Student Capacity 90 1,430 471 358
Current Annual Operating Cost Square Foot $4.42 $14.60 $8.60 $8.12
Student Capacity 619 2,012 1,263 1,172 Cost to Mothball
Square Foot $3.72 $7.68 $6.13 $6.23 Student Capacity 521 1,062 903 891
Mothball Annual Operating Cost Square Foot $0.50 $0.78 $0.60 $0.67
Student Capacity 67 111 88 100 Cost for Building Demolition
Square Foot $5.00 $3.00 $4.82 $5.00 Student Capacity 420 900 713 703
Three scenarios were modeled:
1. NO RE‐SIZING OF FACILITY CAPACITY ‐ This scenario assumes loss of student population and the continued maintenance of all current facilities.
2. DISPOSAL OF EXCESS FACILITIES ‐ This scenario assumes reducing student capacity by 2,355 students by the demolition of four excess facilities to optimize building capacity with the projected student enrollment.
3. MOTHBALLING FACILITIES FOR FUTURE REUSE ‐ This scenario assumes reducing student capacity by 2,355 students by closing and mothballing four facilities for future use.
Each scenario has differing impacts. Graphically the interaction between school capacity and enrollment is shown in the following three graphs. Obviously, under the first scenario, if nothing is changed the school capacity (as shown by the green line at the top of the
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graph) continues unchanged throughout the planning period. As enrollment drops (red line) the amount of excess capacity (yellow shaded area) continues to increase.
Under the second scenario excess capacity is eliminated by closing and demolishing buildings. While this does right‐size the district in terms of having capacity match enrollment note what happens during the period from 2015 through 2025. The U.S.
Census Bureau projection is for a modest rebound in the number of school age children in Michigan. Whether this will actually occur in light of the severe economic recession and
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the associated impact on migration is open for conjecture. The point is that if the population does rebound there is nothing to do but accept overcrowding or rebuild capacity that was previously eliminated. The mothballing option does allow a district to bring a facility back “on‐line” as enrollment warrants. However, there are costs associated with both maintaining a building and re‐opening a building. Sometimes, as shown by the graph, it then becomes necessary to re‐mothball a building when enrollment drops again. Clearly, these are factors that need to be weighed when making a decision on excess educational facilities.
RESULTS OF FINANCIAL ANALYSIS
In Table 7 the costs for each of the three alternative scenarios is shown. The cost to maintain the current facilities for the 20‐year period is estimated to be $275.0 million. The cost to demolish the four structures, balancing facility capacity with project student population and maintain the “right sizes” required facilities is estimated to be $235.3 million. This is a 16.9% saving amounting to $39.7 million. Cost to close and mothball four
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facilities for future reuse with retaining the remaining capacity to “Right‐size” required facilities is estimated to be $224.6 million. This is a 22.4% savings amounting to $50.4 million. CIVIC AND SOCIAL IMPLICATIONS OF RIGHT‐SIZING
Schools, especially in smaller and rural communities play many roles. In addition to serving educational functions, schools serve as the social and cultural center of the community, providing a venue for sports, theater, music and other civic activities. (See: What Does a School Mean to a Community? Assessing the Social and Economic Benefit of Schools to Rural Villages in New Your, Thomas A. Lyon, Journal of Research in Rural Education, Winter, 2002) They are most often sited in critical locations within the community land use pattern, intertwined with local residential neighborhoods. Any reorganization of school facilities will impact land use planning and social connectivity within the community at minimum, changing the school where neighborhoods have historically sent their children, possibly ending use of facilities for various social and civic activities. We have concluded our analysis by listing potential social, civic, land use and economic development that could possibly arise during evaluation of alternative facility management options. 1. “Right Sizing” of school districts will disrupt the current pattern of student transport to/from school, whether this be by walking to a neighborhood school or bus transport to a central school location. These changes will require engagement with parents and community leaders to formulate the most acceptable mean of student transport to school. 2. Removal of a school will likely disrupt the institution that holds together the community civil structures and community social “connectiveness”. Due role of the school in providing not only education, but employment and a place for social, cultural and recreational opportunities, closure of a school will likely “wipe‐out” the one building with an identity which all people in the neighborhood or school district hold in common.
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TABLE 7 ‐ 20‐YEAR COST ANALYSIS 2008 ‐ 2028
Year 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 Building Student Capacity Current 10,370 10,370 10,370 10,370 10,370 10,370 10,370 10,370 10,370 10,370 10,370 10,370 10,370 10,370 10,370 10,370 10,370 10,370 10,370 10,370 10,370
Right Sized 10,370 10,370 8,015 8,015 8,015 8,015 8,015 8,015 8,015 8,015 8,015 8,015 8,015 8,015 8,015 8,015 8,015 8,015 8,015 8,015 8,015
Facility Operating Costs (in millions) Scenarios 1. No Change Operating $ $13.1 $13.1 $13.1 $13.1 $13.1 $13.1 $13.1 $13.1 $13.1 $13.1 $13.1 $13.1 $13.1 $13.1 $13.1 $13.1 $13.1 $13.1 $13.1 $13.1 $13.1
2. Demo Operating $ $13.1 $13.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1
Demo Cost $16.8
Total $13.1 $13.1 $26.9 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1
3. Mothball Operating $ $13.1 $13.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1 $10.1
Mothball $ $2.1
Annual MB$ $0.2 $0.2 $0.2 $0.2 $0.2 $0.2 $0.2 $0.2 $0.2 $0.2 $0.2 $0.2 $0.2 $0.2 $0.2 $0.2 $0.2 $0.2 $0.2
Total $13.1 $13.1 $12.5 $10.3 $10.3 $10.3 $10.3 $10.3 $10.3 $10.3 $10.3 $10.3 $10.3 $10.3 $10.3 $10.3 $10.3 $10.3 $10.3 $10.3 $10.3
20‐Year Comparative Analysis Scenario Cost (millions) Savings (millions)
No Change $275.0 Demo $235.3 $39.7 Mothball $224.6 $50.4
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3. Removal/closure of a school may impact future population growth. Demographers have documented the importance of schools in the decision to purchase a home by families with school aged children. Communities with no school and long school commuting patterns may be viewed as a less favorable community to live and raise a family and thus suffer slower population growth. 4. Removal/closure of a school may affect the growth of business. Businesses seeking employees may be reluctant to locate in a community that has no school and long school commuting patterns due to the concern of attracting new family workers to locate in the community or a problem of parental absenteeism to respond to family school needs. 5. Removal/closure of a school will affect the Master Plan of the community. For the most part, community planning is based on the current pattern of land use. The community master plan contemplates the location of a school in the future not a vacant building or site for reuse and thus will need to be updated. 6. Given the positive attributes associated with schools, “right‐sizing” will mount vigorous remonstrance. Communities threatened by “right‐sizing” will undoubtedly be threatened by vigorous efforts to retain the status quo, as this response has the least impact upon all individuals. CONCLUSIONS
Most readers will easily recognize and accept the relationship of schools to the social and economic well‐being of the community. Studies have documented the effect of schools on community civic structures, housing values, population and business growth. In many instances, schools serve as the source of personal identity, a topic of social discourse and the foundation for community social and business cohesion. Local government and school leaders, education administrators and local citizens also realize a community, having a large number of local institutions and organizations, a diverse and involved business sector plus and actively engaged citizenry, provide the interpersonal cohesion that creates a strong civic infrastructure leading to a higher level of well‐being and community welfare.
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While financial analysis is important to “Right‐sizing” it is also important to document and quantify what the school means to the local community and the community planning obligations needed to mitigate adverse civic and social changes due to “Right‐sizing” decision. ABOUT THE AUTHORS
Carl H. Baxmeyer is a Senior Associate and heads the Solutions Group of Fanning Howey Associates, Inc. an architectural/engineering/planning firm practicing in the area of school planning and design. He is responsible for school population projection analysis. He can be reached at [email protected] Charles Eckenstahler is a Senior Consultant with McKenna Associates and serves as an advisor to the Fanning Howey Solutions Group. He is a 35 year veteran real estate and municipal planning consultant. He teaches economic development subjects in the Graduate School of Business at Purdue North Central, Westville, Indiana and serves on the faculty of the Lowell Stahl Center for Commercial Real Estate Studies at Lewis University, Oakbrook Illinois. He can be contacted at pcteckencomcast.net