How a Maryland District Uses a P3 to Build 6 Schools in 3 Years

On a muggy day in June, Jason Washington, Director of the Office of Alternative Infrastructure Planning and Development at Prince George’s County Public Schools in Maryland, laying the foundation stone for a new school with other school and district leaders.

Over the next two days, the school system held five more groundbreaking ceremonies for the school.

The construction of just one school would normally take seven years, but through a public-private partnership (P3), which is the first in the country to bundle the planning, financing, construction and maintenance of a group of schools, the district will bundle by July Will have six newly built schools in 2023, Create space for 8,200 students.

Five middle schools and one K-8 school will be built, and the maintenance contract will run for 30 years. The total cost for the school district is $ 1.23 billion, but the district didn’t spend a penny and will not until schools are fully built and ready for students as per the exact specifications of the district.

This alternative financing model is complex and carries risks both for the school system and for its private partners. The long-term financing and performance relationship that a group comparable to a marriage, is not ideal for every school construction project, but it is a model that arouses increasing interest from school systems with aging and overcrowded buildings and an immediate need for new schools.

For now, all eyes are on the Prince George County Public Schools contract structure and the details of the resources, risks, and incentives. “We can’t just wait and do what is normally done,” said Washington.

How the deal came about

The Prince George’s County School District is bordered by Washington, DC, and a total of 131,000 students enrolled. Just over half of the district’s students are black (55%) and 66.46% receive free or discounted lunch.

A facility master plan in 2014-15 showed $ 8 billion in facility improvements needed. Some of the 200 schools across the district, which includes urban, suburban and rural areas, were over 60 years old.

Due to the long timeframe of typical school funding and construction and the increasing cost of updating aging buildings, there was a desire to get new schools online quickly. It would have taken 15 years to build six schools in the traditional school building area, and during that time the district estimated it would have spent about $ 236 million in deferred maintenance costs over the decades to replace HVAC systems, roofs repair or make other repairs -old buildings, Washington said.

“I think the greatest thing for us is that we are solely committed to doing everything we can to ensure that our students are in high-quality schools as quickly as possible.”

Jason Washington

Director of the Office of Alternative Infrastructure Planning and Development at Prince George’s County Public Schools

Working with the Prince George County Council, the school district began research into a P3 for the new schools. A task force was formed to examine the extent to which planning, financing, construction and maintenance of the buildings can be bundled and what this could look like under the unique technical and educational requirements of the district.

After a year and a half of research and community engagement events, the task force, county council, and school district have Go ahead to collect bids. Important contract and financing terms with the private companies – Fengate, Gilbane, Stantec and Honeywell – were signed in December. The school system will own and operate the schools.

If the district had taken the traditional school path for these six schools, the cost to design and build the six schools would be approximately $ 868 million, Washington said.

“I think the biggest thing for us is that our commitment is solely to do whatever we can to make sure our students get into quality schools as quickly as possible,” Washington said. “And we will do everything in our power to find ways to achieve this. It is not acceptable to rely on the status quo. ”

The district is also using the traditional design-bid-build process to build two more schools. Washington said the school system will analyze and compare the different approaches. There are also plans to start another P3 project next year.

Attending high quality schools with classroom support for learning is a high priority. “That is our responsibility, and so we will work tirelessly to make it happen,” Washington said.

Not for every school building

Visiting newly built schools can improve academic performance and attendance, according to a 2017 California Policy Lab Policy Brief. Using more than 5 million individual student records from 2002-2012 in the Los Angeles Unified School District, research found that four-year attendance at a newly built facility 45% of the math achievement gap and 18% of the English achievement gap between LAUSD students and the California average. Students in newly built schools also attended an average of four additional days per school year.

Nationwide, the infrastructure of school buildings needs significant repair or renovation, according to a 2020 report by the Government Accountability Office. Just over half (54%) of public school districts must upgrade or replace multiple building systems or functions in their schools, the report says. The study also said 36 States provided capital to school districts to build or renovate schools. However, the funding amounts and mechanisms differ considerably within and between countries.

While P3 relationships are more common in college and community infrastructure projects, there are limited examples in K-12 construction, according to a recently published resource from Brailsford and Dunlavey, a program management company with offices across the country. In the resource, the company points out several motivations and concerns for P3s in elementary and secondary school construction.

For example, one of the motivations could be for the developer to take the risk of all up-front costs, operations, and schedules. However, a district can hesitate because it can be bound by a long-term agreement even if its circumstances have changed. In addition, there may be additional costs such as legal, development, and financing fees.

Because each district and its school construction projects are unique, school systems must carefully consider all of the components of a potential P3 relationship, as well as the benefits and challenges, the resource says.

“We basically believe that certain situations should take third place if there is a convincing business case or compelling reasons for using this alternative delivery model.”

Paul Choquette III

an executive vice president of Gilbane

In fact, the P3 route shouldn’t be chosen for every school construction project, said Paul Choquette III, executive vice president of Gilbane, the contractor for the P3 in Prince George’s County’s public schools. But when the terms are right, the partnerships can bring cost savings and other benefits to school systems and their communities, he said.

For example, the Prince George’s County P3 program includes: $ 1 million endowed fund Promotion of scholarships, student internships, mentoring opportunities and apprenticeships. In addition, at least 30% of the total eligible subcontracting for the program will go to minority-owned businesses, community-based businesses and small businesses to promote job creation in the county.

“We fundamentally believe that if there is a compelling business case or compelling reason to use this alternative deployment model, certain situations should be ranked third,” said Choquette. “Ultimately, the point is to transfer responsibility for handing over schools – once this school is defined – to the private sector.”

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