December 6 — 3:19 pm, 2018

State senators want to revise system for school facilities funding

The PlanCon program is on hold, but a bipartisan coalition of state senators is trying to change that.

State Sen. Vincent Hughes of Philadelphia speaks during a policy tour on health care.

“Our steps have cracks and holes in them. Once my teacher’s foot got stuck in a hole, and almost fell,” 4th grader Cheyenne Jacquet wrote in a letter to state legislators more than a year ago.

Cheyenne added that her school, Cassidy Elementary, a 94-year-old building in Overbrook, looks “unwelcoming and raggedy,” with portions of the leaky building closed off to students.

“Since I’m not yet an engineer, I can’t say how unsafe the school’s foundation is, but I know it needs work,” Cheyenne wrote. “Inside the school is a hot mess. Bathrooms are out of order, mice running rampant, windows and locks are broken. There are cracks and holes in the walls, broken lights, plaster falling from the ceiling and horrible leaks from the ceiling and pipes.

“The heating system is so old that children sit in their classrooms with their coats on freezing to death.”

The students at Cassidy, organized through a program run by the National Liberty Museum, hand-delivered their letters to state legislators in Harrisburg in 2017, seeking help in making their schools safe and modern.

In recent years, the state government has provided virtually no assistance to school districts with their infrastructure needs.

In 1973, the General Assembly approved a program called PlanCon, designed to reimburse a portion of construction and renovation costs incurred by school districts.

But in 2012, under the administration of Republican Gov. Tom Corbett, the state stopped funding it. That left already-underfunded districts like Philadelphia, with its aging inventory of buildings, even more desperate for dollars.

The District is replacing Cassidy, entirely at its own expense, because it is such an extreme case.

Because it doesn’t have nearly the funds it needs, the District is forced to employ triage: In other school buildings, students and teachers endure deteriorating, but somewhat less urgent, conditions because the District can’t afford to address them.

“We’re still rebounding from 2013 when we had drastic cuts,” said Leigh Clarke, who was in charge of the District’s PlanCon submissions.

Every year, eyeing the budget’s bottom line, District officials have shunted needed repairs onto the deferred-maintenance list at scores of crumbling schools – over $4 billion worth as of 2015, a number that grows with each passing day.

“I have been wondering, when is our school going to get better?” asked 4th grader Nasiah Mitchell in her letter to the legislators.

“When is someone going to care?”

If a bipartisan coalition of state senators get their way, the PlanCon program will be back soon in a new and improved form.

State senators, led by Democrat Vincent Hughes of Philadelphia and Republican Pat Browne of Allentown, organized a committee to rewrite the requirements for the program. The goal is to make the application process quicker and to expand its reach to include repairs and maintenance, in addition to new construction. The committee also added a specific reserve fund for emergencies – a common problem in Philadelphia and any district with a large deferred maintenance list.

The new process would reduce the number of steps from 11 to four. PlanCon’s bureaucratic process took, on average, 14 months before school districts knew whether their project was approved.

Under the proposed revisions, a new formula would award more money to poorer districts and those with the highest local property tax burdens, among other factors.

The committee’s legislation was introduced late in the last session and was not voted on. Browne will reintroduce it after the holidays.

A moratorium on PlanCon projects

Corbett put a moratorium on the roughly $300 million annual program because the Department of Education found that the annual funds that were needed exceeded those it was receiving. The department recommended that Corbett either increase the overall appropriations for the program – assuring that ongoing projects would be completed – or stop accepting new projects for reimbursement.

To reach full funding, the program needed $30 million more annually, roughly a 10 percent increase. Instead, Corbett stopped accepting new projects. This occurred around the time that federal stimulus dollars dried up, so school districts no longer had any outside funding sources for school infrastructure projects. That forced them to make up the shortfall with local tax dollars and bonds. Corbett briefly opened the process up again, but approved just six new projects.

Although the state continued to appropriate roughly $300 million annually to pay for approved, but still outstanding, projects, no new projects were accepted.

When Gov. Wolf came into office in 2015, he continued the moratorium while assessing how best to fund and continue the program. Wolf had the state issue $2.5 billion in bonds so that all projects that had already been approved would be guaranteed funding without the need for annual legislative appropriations. The bond issue put an end to the unpredictable appropriations process, but the program still is not accepting new projects.

One of the many justifications given for halting PlanCon was that Wall Street rating agencies frown upon public institutions paying for debt service without a dedicated funding source and that this could negatively impact the state’s credit rating.

In Harrisburg’s contentious annual budget negotiations, the funding was never guaranteed. Frequent impasses meant that school districts had to wait for their reimbursements.

To avoid these problems, the proposal recommends funding PlanCon through regular state bond issues.

‘Budgets are moral documents’

Since Corbett defunded PlanCon, Philly’s schools have seen recurring mold outbreaks, asbestos exposure, sweltering indoor temperatures, and lead in the water and in the peeling paint across dozens of buildings. 

Although some better-off suburban districts also have older buildings, they can usually afford to replace them.

“This picture of inequity plays itself out right in my senatorial district,” which includes West Philadelphia and some Montgomery County suburbs, Hughes said. He cited the state-of-the-art Upper Dublin High School, completed in 2012 at a cost, Hughes estimated, of $160 million.

“There are no issues with lead, asbestos, rodents,” Hughes said. “They’ve got high-end technology in every classroom with 15 to 18 kids in each class. If you’re into meteorology, they’ve got a center for that with nine flat-screen TVs predicting lightning strikes and weather conditions in a 300-mile radius. If you’re into theater, they’ve got three theaters in the school. If you like to swim, they’ve got an official pool with a diving tank.

“But then, just 15 miles away, you have Overbrook High School.”

Hughes stressed that Overbrook comes from a long and proud tradition. The stately “castle on a hill,” built in 1924, dominates the neighborhood skyline. Actor Will Smith, basketball star Wilt Chamberlain, and astronaut Guy Bluford – the first African American in space – all graduated from Overbrook.

“But now, sometimes Overbrook doesn’t have running water,” Hughes said. “When we took the PlanCon advisory committee to visit Overbrook, we saw textbooks in the science room published in 1998.

“How much brilliance is left unattained because the teachers and students don’t have the facilities necessary to get a 21st-century education? The fact that it continues to be tolerated says that we don’t value every child equally. Talk is cheap. Budgets are moral documents. When your budget does not respond to this kind of inequity, that reflects who we are as a broader commonwealth.”

Maintenance spending lags behind standards

Danielle Floyd, chief operating officer for the District, testified before the state committee at a 2016 hearing held at Overbrook. She said that Philadelphia’s annual spending on its infrastructure is simply not enough, despite the best efforts of a facilities staff that is still stretched thin after Corbett’s deep budget cuts to basic education aid. These occurred around the same time as the PlanCon defunding, costing Philadelphia more than $250 million in annual operating funds.

The District responded to this, in part, by negotiating pay cuts with the unions for cleaners and building engineers. It also downsized its central teams of specialists such as mechanics and painters.

It has since begun restoring some of that lost pay through salary increases. The District now spends $87 million on custodians and building engineers who work out of the schools and $44 million on centralized repair teams, according to this year’s consolidated budget. That’s $131 million spent on maintenance.

A 2016 study by the 21st Century Schools Fund established best practices for facilities spending based on national standards. It found that each district should spend at least 3 percent of the cost to replace its portfolio of buildings on maintenance each year. Though the current annual spending of $131 million is an increase from recent years, that amount is just under 1 percent of its schools’ replacement value.

That means that to meet national standards, the District would have to triple its maintenance budget.

The Association of Physical Plant Administrators published research that found that every $1 a school district spends in maintenance saves $4 in emergency repairs later on. So the District’s low spending on maintenance is also adding to the over $4 billion in deferred maintenance projects, in addition to the low spending on capital bond issues. The lack of maintenance can lead to emergencies that cost more money down the line, such as the ceiling collapse in Academy at Palumbo that caused the school to flood.

“In a lot of these projects, we’re not touching the educational spaces,” Floyd told the legislative committee of the capital budget. “Eighty percent of our budget is really roofs, windows, boilers, chillers, exterior façade work. Unfortunately, only very rarely are we actually able to get into the classrooms to do some of that needed work.”

Floyd stressed that taking care of the “building envelope” was urgent because it is preventive maintenance. Water intrusion causes further problems that are expensive to fix. 

Hillary Linardopoulos is a legislative representative for the Philadelphia Federation of Teachers and a former teacher herself. 

“When I heard testimony from the District today that a point of pride is that one-third of our schools are in good condition, that horrified me, and I think it should horrify everybody,” Linardopoulos said. “That means that every day 88,000 students go into a building that is not in good condition.”

She said she taught in a building “that was falling apart. I would guess that’s labeled a good condition building, but it was duct tape and teachers’ funds that held it together. This is about much more than facilities. It’s about kids. It’s about educators. It’s about a vision for a progressive and positive future for the commonwealth.”

PlanCon money was never enough

The total funds available through PlanCon – $300 million annually – were never enough to cover the needs of all 500 school districts, much less those in Philadelphia.

Clarke, who is head of the District’s Operations Unit in the Office of Capital Programs, was in charge of dealing with the PlanCon reimbursement process when it was accepting new projects.

She said in an interview that the District’s 2015 assessment of school buildings found that it would need to issue $420 million in bonds each year to avoid adding to the over $4 billion of deferred maintenance projects. The District’s recent bond issues have increased but are still far below that amount.

The School Reform Commission passed a bond issue last spring for $275 million. That will be spent over two years, so it amounts to $138 million annually.

“During the [former District CEO Paul] Vallas years, bond spending was close to $500 million in one year,” Clarke said. Under Vallas, the District built a series of smaller high schools. “But there were twice the number of people in the [relevant] departments” in District headquarters.

Now, each year, the District is prioritizing projects with the greatest need, Clarke said. She mentioned additions being constructed at Hamilton, T.M. Peirce, Ethan Allen, Anne Frank, McCall, and Disston Elementary Schools. But other needed additions will have to wait. 

“In order for a project to be eligible for PlanCon [under the existing program], it has to have an educational component,” Clarke said, making the maintenance funding in the proposed revision the biggest potential boon for Philadelphia’s schools. That funding can be used to repair “roofs, windows, doors,” preventing water intrusion and expensive remediation down the line.

But she would still like to see the program create a reimbursement stream for “life-cycle repairs” for items such as HVAC systems, boilers, and ventilation systems.

Although the District is more than $200 million short of the annual capital spending necessary to keep up with needed repairs, the largest amount the District received in PlanCon reimbursements in any one year was just shy of $17 million, according to Clarke. And the District is another $200 million shy of what’s needed for maintenance.

“Other districts have the ability to tax and raise revenue if they want to build,” Clarke said referring to Philadelphia’s unique governance structure, which prevents the District’s governing body from raising taxes on its own. “I don’t think PlanCon was ever meant to be a fully funded construction program.”

Hughes wants to increase the total annual funding for PlanCon and also secure separate facilities funding for school districts with the highest needs, like Philadelphia.

“Another year has gone by with no significant new investments from the state,” Hughes said. “If school districts have been underfunded for generations because of proven inequitable funding issues, then those districts need to move up on our priority list. If you’ve got schools filled with lead and asbestos, rodent-infested – crumbling right in front of folks – these school districts have likely been discriminated against in funding and they need an aggressive funding effort immediately.

“Let’s be clear: These are not just urban districts like Philadelphia. There’s also a lot of rural school districts that have been left wanting for decades.”

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