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MD Public Policy Institute Promotes New Funding Mechanisms for Constructing Public Schools

Posted on: Tuesday, 22 November 2005, 21:00 CST

By Dori Berman

With Maryland's jurisdictions expected to request up to $750 million for school construction next year - three times the $250 million appropriated for the current fiscal year - one policy group is hoping to increase the state's interest in innovative funding mechanisms.The Maryland Public Policy Institute, a free-market- based think tank, released a report praising public-private partnerships for school construction, and yesterday held a panel discussion in Bethesda to showcase some of the successful examples of those partnerships. Public-private partnerships come in a variety of forms, but the goal in the case of school construction is to reduce the cost to local governments and to streamline the development process to get facilities into use more quickly.Turn- keying projects, or obtaining multiple services simultaneously instead of sequentially, can help deliver projects sooner and more cost effectively, said Claudia Meer, managing director for Clark Education, a subsidiary of Bethesda-based Clark Construction Group. Clark has developed several school projects in Virginia, where the state Legislature passed a law in 2002 allowing the partnerships for school development.Perhaps one of the most well-known public- private partnerships occurred in Washington in 2001, with the development of the James F

. Oyster Bilingual Elementary School, that city's first new school in 20 years. LCOR Inc., a Pennsylvania- based real estate development company, built the $11 million school and also developed a luxury apartment building on vacant public land. Tax revenue from the apartment building will pay for the bond package issued to finance the school, which means the city's taxpayers paid nothing for the school's construction.Dr. Ronald Utt, a research fellow at the Heritage Foundation in Washington and author of the Maryland Public Policy Institute's paper on the partnerships, said such arrangements tend to work best in fast- growing exurbs and slower growing cities. Public-private partnerships have a longer history in the United Kingdom, Canada and Australia, Utt said. There the partnerships even extend to private ownership of school buildings, which are then leased to the public school system.But David Lever, executive director of the Maryland Public School Construction Program, said the state's school systems remain hesitant.We are in an environment where the school systems are very risk averse, Lever said. With construction cost escalation in the 12 to 20 percent range, it's not the greatest time for school systems to be stepping out and taking risks.And Del. Richard S. Madaleno Jr., a Montgomery County Democrat who attended the event, said the partnerships might be more complex than they seem. He pointed to an example detailed yesterday, in which the Haskell Co. of Florida developed a project that included both a public school and a community public library. If students are leaving the school building to use the public library, Madaleno asked, How do you handle security?Projects like the Oyster School might work in places that are already urban - like downtown Baltimore or downtown Silver Spring. But that's more an exception than a rule, he said. Madaleno also sounded skeptical that the projects would really move through the planning and permitting process any faster. He did note, however, that financial needs for school construction will remain high.I think you are going to see huge demand for additional dollars because of growth and because of construction costs, he said.

Source: The Daily Record (Baltimore)

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