Background 4. SFMP 2011 Revisions 5. Phase 1 6. Phase 2 6. Actual Costs versus Estimated Costs 7. SFMP Cost Assumptions 8

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1 New Orleans Public School Facilities Update June 2013

2 Table of Contents Highlights 3 School Facilities Master Plan for Orleans Parish 4 Background 4 SFMP 2011 Revisions 5 Phases of the Revised Master Plan 6 Phase 1 6 Phase 2 6 Adjustments to the Master Plan 7 Actual Costs versus Estimated Costs 7 SFMP Cost Assumptions 8 Additional Funding Sources 8 Accountability and Support 9 Master Plan Oversight Committee 9 Blue Ribbon Capital Investment Commission 10 Accomplishments and Challenges 11 Recommendations 12 Appendix A: Overview of Master Plan Projects with Budgets and Status 13 Appendix B: Master Plan Funding Analysis 17 Appendix C: Master Plan Oversight Committee Membership & Meeting History 19 Appendix D: Contingency Budgets for Projects with Budgets Over $200K 20 Endnotes 22 The Cowen Institute for Public Education Initiatives 1555 Poydras St STE 700 Tulane University #8760 New Orleans LA

3 The Scott S. Cowen Institute for Public Education Initiatives at Tulane University provides an objective voice on what is taking place in public education in New Orleans particularly in the areas of accountability, finance, facilities, and governance. We speak to education leaders, policymakers, the media, and the public by disseminating pertinent data and research. This provides an account of the progress underway in re-building, renovating, and refurbishing public school facilities in the city, where 80 percent of the city was flooded and most of our school buildings damaged or destroyed in In this report, we update costs, budgets, and anticipated funding for the remainder of the work in the School Facilities Master Plan (SFMP). The purpose is to give the community a current look at the accomplishments and challenges that New Orleans still faces in this colossal and crucial public works project. This publication, and others released in the past, can be found at Highlights Hurricane Katrina provided New Orleans with a historic opportunity to rebuild its public school facilities. The School Facilities Master Plan (SFMP), adopted by the Orleans Parish School Board (OPSB) and the state Board of Elementary and Secondary Education (BESE) in 2008 and revised in 2011, establishes a blueprint for renovating and rebuilding crumbling school facilities. The $1.8 billion lump sum settlement awarded by the Federal Emergency Management Agency (FEMA) coupled with funding from the community development block grants (CDBG) program, insurance proceeds, New Market Tax Credits (NMTC) and State Historic Tax Credits, and external grants allow OPSB and RSD to complete the SFMP; the stated mission is to ensure that all New Orleans public school students attend a school in a new, renovated, or refurbished school. By the start of the school year, OPSB and RSD have completed 16 major capital projects, with 27 more projects expected to be under construction and 27 in the design phase. Approximately 40 percent of the 50,000 seats the city will need by 2017 are completed or under construction; 49 percent are in design, and 11 percent are in the planning stages. Yet, the SFMP has cost significantly more than originally estimated. The budgets for projects, both under construction and completed, have exceeded their original budgets by 24 percent on average. Unanticipated cost increases threaten the completion of the plan. Continuous review of the costs and revenue projections, the scope and scale of the projects, and the educational program needs are essential to ensure efficient and equitable implementation of the plan. Two independent volunteer committees are in place to serve as advisory bodies and support the implementation of the SFMP. The Master Plan Oversight Committee (MPOC) is responsible for providing independent, expert oversight and must continue to look at the plan broadly, focusing on efficiencies and maximizing the impact of available funding. The Blue Ribbon Capital Investment Commission is charged with creating a strategy for securing long- term capital investment and a maintenance plan, a critically important focus for the central authorities. There is no dedicated funding for such purposes. These volunteer structures provide the community the best way to protect the broader public interest in this complex undertaking. 3

4 School Facilities Master Plan for Orleans Parish Background Even before the storm, school facilities in New Orleans were in need of rehabilitation. Many school buildings in New Orleans were among the oldest in the nation. Almost half (46 percent) of public school buildings in New Orleans were built before 1945; 44 percent were built between 1945 and 1975, with a median construction date of i Suffering from decades of deferred maintenance and neglect, many schools were in disrepair or had numerous safety code violations prior to the storm. ii Hurricane Katrina caused considerably more damage to the aging building stock. On August 29, 2005, Hurricane Katrina struck the Gulf Coast. New Orleans and the schools that served the community s 65,000 children suffered severe storm damage and massive flooding due to multiple levee failures. Public schools in New Orleans experienced over $800 million in damages due to flood, wind, mold, termites, vandalism, and theft as a result of the disaster. iii In an effort to rehabilitate public school facilities after the storm, the Orleans Parish School Board (OPSB), the Recovery School District (RSD), and the state Board of Elementary and Secondary Education (BESE) jointly committed to develop and implement a School Facilities Master Plan (SFMP) to guide future school construction and renovation in Orleans Parish. The schools facilities planning process began in August The SFMP was released in August The plan called for rebuilding and renovating 67 elementary schools and 17 high schools and land- banking, or closing, 52 campuses. iv OPSB approved the SFMP on November 6, 2008; days later, BESE approved the plan. The 10- year plan, which was organized into six phases, proposed to pare down the number of public school buildings to 84 rebuilt or renovated schools based on enrollment projection. The plan was estimated to cost approximately $2 billion. Phase 1 was expected to be fully funded with $750 million from the Federal Emergency Management Agency (FEMA) and the U.S. Department of Housing and Urban Development s Community Development Block Grant (CDBG) program. v According to the 2008 Master Plan, Other funding sources would be required to finance the additional phases and to adequately maintain buildings in the future. vi To remain current, the plan was to be reviewed and adjusted annually based on revenue and cost estimates every two years based on demographic studies and every five years based on education program trends. vii Prior to the creation of the SFMP, school officials recognized the need to quickly open schools to accommodate students as they returned to the city. The Quick Start Initiative included five RSD schools, one in each of New Orleans five city council districts, and a sixth school added by OPSB. Construction crews began demolition in December 2007, marking the first wave of school construction in New Orleans following Hurricane Katrina. viii QUICK START INITIATIVE RSD schools Andrew Wilson Elementary (renovation) Fannie C. Williams Elementary (renovation) L.B. Landry High School (new construction) Lake Area High School (new construction) Langston Hughes Elementary (new construction) OPSB schools Edward Hynes Elementary (new construction) In August 2010, FEMA awarded OPSB and RSD a final lump sum settlement of $1.8 billion. The settlement resulted in a single, lump sum grant rather than through a complicated building- by- building assessment process. ix The lump sum allows OPSB and RSD to combine funds from all losses to build a portfolio of school buildings that meets the needs of the city rather than simply replacing what was there before. The settlement included almost $700 million that was used to fund the Quick Start Initiative and portions of Phase 1 of the SFMP. Of the $1.8 FEMA settlement, $400 million went to OPSB and $1.4 billion to RSD. This amount did not include the funds 4

5 from the content replacement settlement, CDBG, or other insurance proceeds. SFMP 2011 Revisions School officials are required to review demographic data that guides the SFMP every two years 1 and to adjust the plan accordingly. The review process considers projected enrollment, demographic studies from each planning district, and an estimate of the number of public schools or school organizations that will be needed in To determine need, officials consider land use patterns, updates to major public and private housing developments, and general progress in the city s recovery. After considering the plan s scope, revenues and costs projections, amendments to the original SFMP were proposed in July The amended plan received considerable community feedback; OPSB and RSD joined with planning experts to revise the proposed amendments. Based on this input, re- evaluation of the space needs of school programs, and deliberate development of plans to save funds, revisions were made to ensure that all public school students in New Orleans will be educated in an environment that is safe and dry. After revisions, all phases of the amended SFMP, at a cost of approximately $1.8 billion, were expected to be fully funded. 2 The October 2011 revisions articulated a shift in the mission of the SFMP: All New Orleans public school students attend school in a new, renovated, or refurbished school. The proposed changes condensed the original six phases of the plan into two phases of new construction, renovations, and refurbishments. The revised plan increased the number of funded projects in Phase 2 from 23 to 52 facilities. October 2011 Revisions to the amended SFMP Assessment of Capacity Needs o Projected enrollment of 46,962 students o Neighborhood demographics o Projected schools or school organizations at 88, including those with unique programmatic focuses Assessment of Program Needs o What types of buildings meet the needs of the various school types Assessment of Available Revenues Assessment of Project Priorities In addition, the revisions resulted in a projected savings and included additional revenues of approximately $242 million. Cost- savings outlined in the revised plan totaled more than $139.1 million through building redesign, revised labor cost assumptions, and use of design prototypes. Revenue of more than $102.5 million was added by reallocated Restart funding, applying insurance proceeds to the plan, and with proposals to leverage funding to secure New Market Tax Credits (NMTC) and State Historic Tax Credits. The goal of the October 2011 revisions was to expand the plan s impact to benefit every child and every public school in New Orleans. Based on re- assessments, the revised plan would include a total of 82 school buildings to house 88 school organizations. The revised plan provides adequate seats to meet the 2017 enrollment projection, which was estimated at 120 percent of the 2011 public school enrollment, or approximately 47,000 public school students. 3 Projects were prioritized based on the greatest need; in the October 2011 revisions, portable or temporary classrooms were to be replaced with permanent construction as soon as feasible. 4 OPSB and RSD revised the SFMP such that all facilities would be at least refurbished or repaired to make them sustainable; occupied facilities would be funded in Phase 2 as refurbishments. Facilities classified as the 1 The review period was set at two rather than five years because ongoing changes due to Katrina recovery and Housing Authority of New Orleans (HANO) redevelopment. 2 Prior to the 2011 amendments, the original 2008 SFMP included $420 million in unfunded projects. 3 In December 2012, enrollment projections were reviewed and the plan adjusted to accommodate 50,000 public school students in The prioritization of projects has been subject to logistical constraints at times. 5

6 least sustainable were prioritized in rank order for renovation or new constriction in the revised plan. Building Definitions New Construction to design and build a new building Renovation a complete re-construction of the building from the interior, gutting the building to the studs and rebuilding Refurbishment to secure the exterior envelope of the building by repairing or replacing the following systems where necessary: windows, doors, roofs, and masonry Mothballing (Site Preservation) to protect the building from further deterioration, vandalism, and to comply with the US Department of Interior standards Bridge Building to use a building to house students until repair or replacement of a particular building are complete Phases of the Revised Master Plan Phase 1 As of March 2013, Phase 1 of the SFMP is projected to cost a total of $775 million. Phase 1 has a total of 28 projects, including 17 new schools, eight renovations, one refurbishment, and two additions. 5 Thirteen projects have been completed, and the schools are occupied. x Ten projects are under construction, three are in procurement, and two are in the design phase. Phase 1 is well under way and the last new construction project of Phase 1, Booker T. Washington High School, is currently in design. xi As of March 2013, OPSB has $168 million in open contracts for projects in Phase 1 of the SFMP. The total change orders on Phase 1 projects accounts for 1.7 percent ($2.6 million) of the total open Phase 1 construction contracts. xii Value of Projects: OPSB Phase 1 $40,764,304 $88,069,956 $5,260,278 $70,757,223 Design Procurement Construc6on Complete Source: March 2013 Program Update, OPSB & RSD Phase 1 Projects, Jacobs/CSRS As of March 2013, RSD has $249 million in open contracts for projects in Phase 1. Total change orders on RSD Phase 1 projects accounts for 2.3 percent ($5.1 million) of total open construction contracts. $303,024,437 Value of Projects: RSD Phase 1 $55,681,675 $78,680,233 $136,560,689 Design Procurement Construc6on Complete Source: March 2013 Program Update, OPSB & RSD Phase 1 Projects, Jacobs/CSRS Phase 2 5 Phase 1 includes a new health clinic at Eleanor McMain High School funded by a federal Health Resources and Services Administration (HRSA) grant. As of March 2013, Phase 2 of the SFMP as amended is estimated to cost a total of $737 million, based on preliminary cost projections four projects are in procurement, 26 are in the design phase, and 27 are in the planning stage or have not been submitted for 6

7 design. Phase 2 includes 41 elementary schools and 16 high schools, with new (16), renovated (9) and refurbished schools (32). An outline of the two SFMP phases, including original budgets, projected budgets and project status, can be found in Appendix A. OPSB has $8.7 million in open contracts for the Phase 2 capital program projects; RSD has $25 million in open contracts. The following 13 new or completely renovated schools are already open: Recovery School District William J. Guste Elementary School Langston Hughes Elementary School Andrew Wilson Elementary School Lake Area High School L.B. Landry High School Joseph A. Craig Elementary School Jean Baptiste de Bienville Elementary School Parkview Elementary School Lawrence D. Crocker Elementary School Fannie C. Williams Elementary School Carter G. Woodson Elementary School Orleans Parish School Board Mahalia Jackson Early Childhood Center Edward Hynes Elementary School Adjustments to the Master Plan The initial cost projections for the Master Plan were developed in mid- to late As with any multi- year construction master plan, the budgets for individual projects are only estimates. It is not uncommon for the budgets of construction projects, especially renovations or refurbishments, to increase throughout the life cycle of the project. Because such changes have a major impact on the ability to complete the plan with currently available funds, the SFMP is to be periodically reassessed and updated. In assessing the feasibility of completing the Master Plan on time, on budget, and with existing revenues, two things must be considered: The actual costs of projects that have been completed or are under way should be compared to estimated costs in the current plan. The assumptions that support projected costs of future projects should be re- evaluated. Actual Costs versus Estimated Costs As of March 2013, the latest budget estimates for Phase 1 projects are significantly higher than the original budgets. However, Phase 2 projections are slightly below original estimates (see Appendix A). Projected Budgets as Compared to Original Cost Estimates 6 Projected budgets for Phase 1 $1,511,802,000 and 2 facilities (2013) Original cost estimates for these same projects (2010, $1,375,159, , 2012) Difference $136,643,000 According to the project updates, xiii the plan, including schools that are in the planning, design, procurement, construction phases, and those that have been completed, will cost $1.512 billion. The sum of the original cost estimates for these schools as presented in the 2011 revised SFMP and the 2010, 2011 and 2012 quarterly reports is $1.375 billion. Construction budgets include an allowance for contingencies, the unexpected costs occurring during construction. Amounts are based on prior construction experience and expected difficulties of the project. The average project contingency for SFMP projects with estimated budgets over $200,000 is 8.2 percent (see Appendix D). SFMP contingency budgets are set before projects go out to bid. Industry standards range from percent. Officials contend that it is 6 These figures include all projects that are listed in the SFMP Revised Amendments in all stages complete, in construction, out to bid, or in design except for the Military Maritime High School. Not included in these figures are minor stabilizations, demolitions, costs associated with temporary swing space, and mothballing projects. See Appendix A for details. 7

8 not uncommon for average project costs to increase 10 percent after a bid has been accepted. xiv For completed projects or those in construction, the most recent Phase 1 cost projections are 24 percent more than the preliminary cost estimates, even after contingency allotments are exhausted. If all projects under the SFMP follow the 24 percent overage pattern, future budgets may amount to nearly $1.667 billion compared to the currently budgeted $1.52 billion. Although RSD and OPSB officials have noted that current bids are coming in higher than expected, xv projected budgets of Phase 2 refurbishments are 20.8 percent lower than their original estimated budgets (See Appendix A). The decreased costs in Phase 2, according to officials, are due in part because the original project scope of many refurbishments included unnecessary upgrades. For example, windows that were originally planned for replacement are now scheduled to be repaired. However, because few of the Phase 2 refurbishments are in procurement, these projected savings may be premature until bids have been accepted. SFMP Cost Assumptions In addition to assessing actual costs, officials considered the assumptions that support projected costs of future projects and revised the plan accordingly. Changes in construction costs due to market conditions and inflationary pressures on the cost of materials and labor have the potential to have significant impacts on the project costs in the SFMP over the long run. Recent major construction projects in New Orleans may have contributed to increased costs. For example, the 2011 SFMP revisions were based on construction costs of $200 to 210 per square foot; in 2013, these costs increased to $250 per square foot, approximately 20 percent. Because of fluctuations in costs over the span of the ten- year Master Plan, annual reviews and adjustments are necessary. Additional Funding Sources To fully fund the SFMP, OPSB and RSD are pursuing other sources of revenue. The districts secured funding from Community Development Block Grants (CDBG) and are seeking funding from insurance proceeds, external grants, State Historic Tax Credits, and New Market Tax Credits (NMTC). For example, OPSB and RSD recently worked together to close a NMTC transaction to secure additional funds for the SFMP. Additional Funding Sources Community Development Block Grant - federal program providing communities with resources to address a wide range of unique community development needs. Louisiana Historic Tax Credits a direct dollar for dollar reduction in tax liability New Market Tax Credits a tax credit program initiated in 2000 by the US Department of the Treasury, which equals 39 percent of costs School Facilities Master Plan Costs Update Total Phase 1 Original Budgets Projected Budgets Percent Change New Schools $451,899,227 $553,602, % Renovations $176,134,726 $221,504, % Total $628,033,953 $775,107, % Total Phase 2 Original Budgets Projected Budgets Percent Change New Schools $366,354,988 $385,583, % Full Renovations $236,011,730 $236,465, % Refurbished/Renovations $144,758,476 $114,645, % Total $747,125,194 $736,695, % Source: March 2013 Program Update; SFMP Revised Amendments Oct 2011; and Quarterly Reports from 2010 Q1, 2011 Q3, and 2012 Q4, 2013 Q1 8

9 In addition, the revised SFMP recommended creating a pool of charter school matching funds to utilize the $2.6 million allotment from Harrah s Casino proceeds. Through this competitive program, schools could receive matching grants to cover capital improvements. When the revised SFMP amendments were approved in October 2011, these additional sources of revenue were projected to total $244 million. Based on current projections, however, the estimates have been revised and additional revenues are expected to total only $169 million, according to RSD and OPSB officials. In addition to the alternative sources of revenue, OPSB raised $79 million in interest- free Qualified School Construction Bonds on behalf of OPSB and RSD students. OPSB officials have stated that these funds will be used to fund the SFMP, if needed, or to upgrade some facilities that are currently considered refurbishments. xvi This additional funding would eliminate the shortfall between projected budgets ($1.511 billion) and total funding ($1.437 billion), however if projects continue to follow the 24 percent cost overrun pattern experienced by projects that are completed or in construction, the difference could be $210 million. (See appendix B for SFMP funding details.) Firmly committed to the mission to serve all students, OPSB and RSD will conduct continuous review of costs and revenues. It is likely that the scope of the School Facilities Master Plan will need to be amended and additional funds will need to be raised throughout the implementation of the plan. Accountability and Support Master Plan Oversight Committee OPSB and BESE passed resolutions in December 2008 and January 2009, respectively, to create the Master Plan Oversight Committee (MPOC) to monitor project budgets and funding, explore project efficiencies, and review demographic changes. The MPOC s oversight responsibilities include: To review the annual capital budget To review progress and implementation of the SFMP To review changes to Master Plan To review building life- cycle costs and cost trends To suggest ways that capital projects may decrease operating costs To review demographic changes and compare them to the projections in the SFMP and recommend adjustments accordingly Five members of the MPOC are nominated by local associations and institutions and are approved by OPSB and BESE. The nominating organizations were selected to ensure the committee members reflect the needs of the community and have the skills necessary to make recommendations to the master plan. MPOC meetings are subject to the Louisiana open meetings law. See Appendix C for more information. The MPOC met regularly until 2011; the last meeting of the initial membership was held in September In October 2012, efforts were made to re- convene the group. New members were nominated and approved. The MPOC met, for the first time in over a year, in May The committee includes: Dr. Alexandra Stroud, Tulane University nominee Dr. Andre Perry, Urban League nominee Jim Alack, American Institute of Public Accountants nominee Michael Siegel, New Orleans Business Council nominee Nolan Marshall Jr., OPSB representative Kira Orange Jones, BESE representative A nominee from the local chapter of the Associated Builders and Contractors has not been named. In addition to the nominated members, Nolan Marshall, and Kira Orange- Jones serve on the committee as representatives of OPSB and BESE respectively. 9

10 In order to protect facilities construction projects from fraud, RSD contracted with the City of New Orleans Office of Inspector General (OIG) to monitor RSD construction projects in June. The $1.2 million three-year contract with OIG was ended in June The remainder of the funds will be used for oversight performance by the Louisiana Legislative Auditors and the Governor s Office of Homeland Security and Emergency Preparedness. *At the time of the release of this report, the nature of the relationship between the OIG and RSD had not been clarified to the public and the OIG had not yet released its audit on the RSD s construction oversight practices. Blue Ribbon Capital Investment Commission Public schools in New Orleans and throughout Louisiana struggle to find revenue to pay for facility maintenance. 7 Unlike many other states, Louisiana has no dedicated funding stream for facility maintenance and capital investments. For public schools, the cost of construction and renovation provides a good estimate of the replacement cost of school buildings at plan completion. As a general guideline, industry experts recommend spending two to four percent of the total replacement cost on maintenance annually to maintain public buildings. xvii Given an estimated total value of $2.0 billion, public schools in New Orleans would need to budget between $40 million and $80 million per year to adequately maintain the new or newly renovated facilities. Based on the 2017 public school student population of 50,000, the estimated cost of the long- term maintenance of school facilities is $786 to $1,572 per pupil. Without a dedicated capital maintenance fund, districts and schools would be required to either use a portion of their Minimum Foundation Program funding or raise funds locally. When the revised amendments to the SFMP were approved in October 2011, the OPSB and RSD agreed to appoint a Blue Ribbon Capital Investment Commission to make recommendations on a long- 7 Long- term facility maintenance does not include custodial and janitorial services, pest control, or grounds- keeping but does include repairing building elements that break, making routine preventative maintenance, and replacing key building systems regularly (roofs, waterproofing, painting, plumbing, HVAC, etc.) term capital investment and maintenance strategy for school facilities in New Orleans. The commission was also tasked with making recommendations for funding needed to bring the stabilization projects up to the Master Plan standard. The boards agreed to appoint seven members from New Orleans with expertise in education, finance, infrastructure, law, and public- private partnerships to serve on the commission. In March 2012, OPSB and RSD announced the members of the commission: Maureen Clary, Corporate Realty Paul Flower, Woodward Design Build Charline Gipson, Davillier Law Group Todd Francis, FFC Capital Elie Khoury, KFK Group Greg Rattler, JP Morgan Chase Tim Ryan, retired UNO President Disadvantaged Business Enterprise (DBE) Program The Disadvantaged Business Enterprise program provides a vehicle for increasing the participation of minority business enterprises in the implementation of the SFMP. OPSB and RSD have established goals for the participation of DBEs. The main objectives of the DBE program are to ensure that small DBEs can compete fairly for federally funded projects. To be certified as a DBE, a firm must be a small business owned by socially and economically disadvantaged individuals, which includes women and minorities. In addition to removing some of the barriers that may affect participation of DBEs in federally-assisted contracts, the program assists in business development so they can compete successfully outside the DBE program. Since the implementation of the DBE program, DBE participation rates have improved for RSD projects: 14 percent on new/major construction projects, up from 10 percent, and 40 percent on minor projects, up from 22 percent. DBE participation rates for OPSB projects are between 20 and 25 percent. The RSD goal for DBE participation is 25 percent. The OPSB goal for DBE participation is 35 percent. 10

11 New Orleans Public School Building Authority In 2008, the SFMP called for the creation of an independent New Orleans School Building Authority to develop and manage school facilities. The Authority would be responsible for providing oversight to all building construction, renovation, and refurbishment projects. In addition, the Authority would be responsible for leasing public school facilities to respective school boards and charter organizations, as well as for building maintenance and upkeep. The SFMP suggested that the new Authority be structured as a new non-profit organization or quasi-governmental body consisting of a privatepublic partnership. As a bonding authority, the new organization would be responsible for all aspects of managing and maintaining public school buildings in New Orleans. To date, no steps have been taken to create such an independent School Building Authority in New Orleans. Many states have a State Public School Building Authority (SPSBA) and many local school districts are creating independent building authorities to manage capital projects. For example, the New York City School Construction Authority (SCA) was established in 1988 to build new public schools and manage the design, construction, and renovation of the city s public school buildings. Accomplishments and Challenges The SFMP establishes a blueprint for renovating and rebuilding crumbling school facilities. The $1.8 billion lump sum settlement awarded by FEMA has provided the means to complete the Master Plan and provide every public school student with a new, renovated, or refurbished school building. Since the SFMP was first adopted, much has been accomplished. The revised SFMP proposes to serve every child and every school in New Orleans. Cost savings associated with changes in project scope and scale along with increased revenue from NMTC s and external grants have made it possible to expand the plan s impact. Approximately 21 percent of the 50,000 seats needed to serve all public schools students in Orleans Parish in 2017 are expected to be completed by August Approximately 40 percent are expected to be under construction; 33 percent are expected to be in design, and 6 percent are expected to be in the planning stage. By the start of the school year, OPSB and RSD will have completed 16 major capital projects, with 27 more projects expected to be under construction and 27 in the design phase. OSPB and RSD have collaborated to close the first NMTC transaction, making future NMTC transactions more likely, which have the potential to amount to $40 million in additional revenue for the SFMP. OPSB and RSD have reported improved rates of Disadvantaged Business Enterprise (DBE) participation. OPSB and RSD have mede internal commitments to the program. The Master Plan Oversight Committee (MPOC) has reconvened after 18 months. Despite the progress that has been made, OPSB and RSD continue to face challenges as they implement the plan. Thus far, the SFMP has cost significantly more than originally estimated. The aggregate budget for all projects in Phases 1 and 2 has exceeded the original budget by $137 million. While such changes are not completely unanticipated, the increases should be accounted for in future estimates to maintain the the city- wide impact called for in the 2011 revised SFMP. Long- term maintenance costs and the lack of sustained facilities funding present hurdles to the sustainability of quality school facilities in New Orleans. Adequate funding for maintenance is 11

12 essential for preserving the quality of the new and newly renovated or refurbished buidlings completed under the SFMP. It is important that stakeholders consider possible ways to secure this revenue. The Blue Ribbon Capital Investment Commission is charged with creating a strategy to fund long- term capital investments and maintenance. Although the commission has discussed the creation of an independent Public School Building Authority, no implementation has begun. Recommendations In order to ensure that every public school student benefits from a new, renovated, or refurbished school building, project costs and anticipated revenues must be closely monitored. In 2008, the SFMP called for the creation of the MPOC to review and support to the implementation of the plan. The 2011 revised SFMP included a recommendation to create a Blue Ribbon Capital Investment Commission. These two independent oversight committees play an important role in plan accountability. In the eighteenth- month period that the MPOC did not meet, cost overages have become more apparent. It is critical that this volunteer body meet regularly to review costs and revenues, project scope and scale, and educational program needs to ensure efficient and equitable implementation of the plan. Public schools in New Orleans will require future capital investment beyond funding outlined in the SFMP and a strategy for long- term maintenance. The Blue Ribbon Capital Investment Commission was appointed to generate recommendations to secure funding for sustaining the high quality of public school facilities. The findings of this commission have not been released. It is important that the community be informed of the proposed strategies, since long- term solutions will certainly require state, local, and community support. OPSB and RSD must continue to work together to secure alternative funding required to complete the SFMP. The scope and scale of the ten- year plan makes it difficult to manage and implement. Decentralization provides additional challenges. It is essential that OPSB and RSD continue to work together to execute the plan. The 2011 adjustments to the plan and mission to serve every public school student and every public school building is commendable. In order to fulfill this mission, maintaining constant attentiveness to cost overages is critical. OPSB and RSD should call on the expertise and support provided by the MPOC and the Blue Ribbon Capital Investment Commission. New Orleans has a historic opportunity to build a system of high quality public school facilities. Thanks to the effort and diligence of OPSB and RSD officials, expert volunteers, and community members, a plan is being implemented that will ensure that all New Orleans public school students attend a school in a new, renovated, or refurbished school. Through hard work and collaboration, it can be done. Status of the School Facilities Master Plan for Orleans Parish (estimated seats by August 2013) Source: MPOC 05/

13 Appendix Appendix A: Overview of Master Plan Projects with Budgets and Status Source: March 2013 Program Update; SFMP Revised Amendments Oct 2011; and Quarterly Reports from 2010 Q1, 2011 Q3, 2012 Q4, and 2013 Q1 Phase 1 New (17) Project Description Original Budget Projected Budget Status* Bienville ES $19,800,000 $21,568,552 Complete Parkview ES $19,800,000 $23,835,290 Complete Langston Hughes ES $29,915,546 $30,244,629 Complete Lake Area HS $38,923,536 $39,622,512 Complete Landry HS $56,530,760 $60,403,034 Complete Hynes ES $12,679,224 $25,768,942 Complete Crocker ES $19,487,880 $21,425,716 Complete Carter Woodson ES $19,800,000 $22,235,090 Complete Fannie C. Williams ES $19,800,000 $25,180,884 Complete Mildred Osborne ES $19,800,000 $23,972,720 In Construction Harte ES $23,442,534 $32,210,409 In Construction Little Woods ES $15,567,000 $25,255,308 In Construction North Kenilworth ES $22,695,671 $24,778,743 In Construction Phillis Wheatley ES $19,800,000 $27,809,140 In Construction Carver HS $39,600,000 $54,306,089 Procurement McDonogh 35 HS $50,613,759 $71,341,871 Procurement Edward Livingston HS $23,643,317 $23,643,317 Procurement *Project Status Definitions: complete means the building is ready to be occupied, but may require finishing touches, often referred to as punch list items; in construction means construction work is underway; procurement means the district is in the project bidding process; design means the project is currently being planned and designed by an architect; and planning means the project has not started, but has been given an internal estimate. Phase 1 Renovations (9) Project Description Original Budget Projected Budget Status Guste ES $2,840,872 $12,643,953 Complete Joseph Craig ES $14,110,548 $15,899,637 Complete Andrew Wilson ES $27,381,787 $29,069,659 Complete Mahalia Jackson ES $14,730,000 $14,995,362 Complete William Frantz ES $20,974,087 $26,000,899 In Construction Charles J. Colton ES $15,567,000 $32,857,138 In Construction Audubon ES $12,409,796 $15,289,815 In Construction McMain HS (Stabilization and Gym) $12,975,643 $19,603,303 In Construction Booker T. Washington HS $55,144,993 $55,144,993 Design 13

14 Phase 2 New Schools (15) Project Description Original Budget Projected Budget Status Fisk Howard ES with $25,836,647 $27,914,597 Procurement Expansion Lake Forest ES $22,567,408 $22,567,408 Design Dunbar ES $22,377,778 $22,377,778 Design Karr HS $30,512,616 $29,952,863 Design Lower 9th Ward HS $35,582,027 $32,406,567 Design (Lawless) NO East HS $23,453,718 $23,460,682 Design Bradley ES $22,567,408 $24,657,771 Design Morial ES $22,567,408 $25,417,080 Planning Bio District HS $23,453,718 $23,453,718 Planning New Algiers ES $22,567,408 $25,507,738 Planning Alexander ES $22,567,408 $25,507,738 Planning Abrams ES $22,567,408 $25,507,738 Planning Sherwood Forest ES $24,319,279 $25,507,738 Planning Behrman ES $22,567,408 $25,507,738 Planning Habans ES $22,847,349 $25,836,662 Planning Phase 2: Full Renovations (10) Project Description Original Budget Projected Budget Status Drew ES $19,661,993 $19,661,993 Procurement McDonogh 42 ES $18,151,123 $18,151,401 Procurement Wright HS $24,807,734 $24,954,623 Design Douglass HS $36,300,941 $36,566,205 Design John McDonogh HS $34,242,249 $34,242,249 Planning Clark HS $20,228,400 $20,228,401 Planning Franklin ES $14,369,521 $14,369,521 Planning Live Oak ES $23,804,831 $23,825,388 Planning Lafayette ES $22,222,469 $22,243,025 Planning Tubman ES $22,222,469 $22,222,469 Planning Phase 2: Refurbishments and Renovations (30) Project Description Original Budget Projected Budget Status Allen ES $5,061,830 $1,215,007 Design Andrew Jackson ES $4,195,710 $1,336,787 Design Crossman ES $523,320 $486,741 Design Warren Easton HS $2,830,114 $2,830,114 Design 14

15 Eisenhower HS $2,124,353 $1,764,308 Design Fortier (Lusher) HS $18,755,692 $13,726,913 Design Gentilly Terrace ES $2,260,087 $1,554,613 Design Lusher ES $4,751,620 $410,853 Design Martin Luther King Jr. ES $3,319,455 $796,347 Design Reed HS $3,561,447 $1,198,439 Design Green ES $5,017,221 $6,134,747 Design S. Williams ES $2,124,353 $967,147 Design Bauduit ES $3,378,621 $3,589,261 Design Laurel ES $6,852,185 $6,734,069 Design McDonogh 28 ES $3,312,368 $2,482,670 Design Wicker ES $1,064,201 $796,113 Design Marshall ES $5,088,147 $941,051 Design Harney ES $1,806,664 $350,312 Design Fischer ES $23,004,257 $25,927,734 Planning Ben Franklin HS $3,770,528 $3,770,528 Planning Rosenwald ES $847,587 $255,095 Planning O. Perry Walker HS $1,779,350 $2,279,057 Planning Bethune ES Addition $4,094,149 $264,287 Planning Nelson ES $2,773,713 $2,347,379 Planning McDonogh 7 ES $2,588,278 $4,044,403 Planning Schwarz HS $1,778,014 $1,603,186 Planning Village de L est ES $2,557,501 $632,125 Planning Schaumburg ES $2,531,345 $243,417 Planning McDonogh 32 ES $22,308 $22,308 Planning Gaudet ES $22,984,058 $25,940,920 Planning Summary Phase 1 Original Budgets Projected Budgets % Change New Schools $ 451,899,227 $ 553,602, % Renovations $ 176,134,726 $ 221,504, % Total $ 628,033,953 $ 775,107, % Summary Phase 2 Original Budgets Projected Budgets % Change New Schools $ 366,354,988 $ 385,583, % Full Renovations $ 236,011,730 $ 236,465, % Refurbishments/ Renovations $ 144,758,476 $ 114,645, % Total $ 747,125,194 $ 736,695, % 15

16 Budget Total Original $ 1,375,159,147 Projected $ 1,511,802,027 Budgets following Phase 1 Pattern* $ 1,666,500,718 Total Original Budgets + 20% $ 1,650,190,976 *This figure is the sum of Phase 2 original budgets plus 24.3 percent and Phase 1 projected budgets, except that the projected budgets for phase 2 refurbishments/renovations was used instead of their original budgets. 16

17 Appendix B: Master Plan Funding Analysis Source: SFMP Revised Amendments Oct 2011, Informal Master Plan Oversight Committee Meeting September 2012 Funding (October 2011) Phase 0 Quick Start Phase 1 Phase 2 Total Phase 1 & 2 Total FEMA $83,181,814 $184,273,287 $634,851,030 $633,136,564 $1,267,987,594 $1,535,442,695 Permanent Construction Community $55,600,000 $56,530,000 $25,200,000 $81,730,000 $137,330,000 Block Grant Funding (CDBG) Insurance $60,000,000 $60,000,000 $60,000,000 Proceeds (Less FEMA deductions) Restart $18,900,000 $18,900,000 $18,900,000 State Historic $43,566,987 $43,566,987 $43,566,987 Tax Credits New Market $40,000,000 $40,000,000 $40,000,000 Tax Credits External $8,732,000 $8,732,000 $8,732,000 Grants Total $138,781,814 $184,273,287 $700,113,030 $820,803,551 $1,520,916,581 $1,843,971,682 Funding Updated (September 2012) Phase 2 Updated Total Phase 1 and 2 Updated Total Updated FEMA Permanent Construction Community Block Grand Funding (CDBG) $633,136,564 $25,200,000 $1,267,987,594 $1,535,442,695 $81,730,000 $137,330,000 Insurance Proceeds (Less $30,000,000 FEMA deductions) $30,000,000 $30,000,000 Restart $18,900,000 $18,900,000 $18,900,000 State Historic Tax Credits $20,000,000 $20,000,000 $20,000,000 New Market Tax Credits $10,000,000 $10,000,000 $10,000,000 External Grants $8,732,000 $8,732,000 Total $737,236,564 $1,437,349,594 $1,760,404,695 17

18 Total Budgets from Appendix A Budgets Difference b/w Funding Difference b/w Funding Updated Total Original Budgets $1,375,159,147 $145,757,434 $62,190,447 Total Projected Budgets $1,511,802,027 $9,114,554 - $74,452,433 Total Budgets following Phase 1 Pattern* $1,666,500,718 - $145,584,137 - $229,151,124 Total Original Budgets + 20% $ 1,650,190,976 - $129,274,395 - $212,841,382 *This figure is the sum of Phase 2 original budgets plus 24.3 percent and Phase 1 projected budgets, except that the projected budgets for phase 2 refurbishments were used instead of their original budgets. 18

19 Appendix C: Master Plan Oversight Committee Membership & Meeting History Source: Information here comes from Orleans Parish School Board, and State Board of Elementary and Secondary Education meeting documents. Members November September 2011: Karl Clifford, appointed by Construction Masters, which is linked to the Associated Builders and Contractors Karen Dwyer, appointed by the local chapter of the American Institute of Public Accountants Jim Garvey, appointed by the Board of Elementary and Secondary Education Louella Givens Harding, appointed by the Board of Elementary and Secondary Education Paul Flower, appointed by the Business Council of New Orleans and the River Region Rick Jones, appointed by the local university presidents (Last meeting January 2011) Lourdes Moran, appointed by the Orleans Parish School Board Nolan Rollins, appointed by the Urban League of Greater New Orleans (Last meeting January 2011) Meeting Dates: November 3, 2009 February 10, 2010 April 27, 2010 May 24, 2010 August 30, 2010 October 25, 2010 January 24, 2011 March 28, 2011 June 30, 2011 September 26, 2011 Canceled Meetings: June 22, 2010 June 30, 2010 September 28, 2010 November 30, 2010 May 26, 2011 November 28, 2011 Members as of February 2013: James Alack, appointed by the American Institute of Certified Public Accounts Kira Orange- Jones, appointed by the Board of Elementary and Secondary Education Nolan Marshall Jr., appointed by the Orleans Parish School Board Dr. Andre Perry, appointed by the Urban League of Greater New Orleans Michael Siegel, appointed by the New Orleans Business Council Dr. Alexandra Stroud, appointed by the local university presidents Meeting Dates: May 9, 2013 Canceled Meetings: N/A 19

20 Appendix D: Contingency Budgets for Projects with Budgets Over $200K Source: 2012 Fourth Quarter Capital Projects Quarterly Report published for the Louisiana Department of Education. Note: included here are some projects that are not funded under the Master Plan. District Project (over $200k, no demolition, no mothballing) Estimated Budget Total Contingency RSD BAS Integration $229,369 $0 0.0% RSD Baudult ES- Refurbishment $3,569,712 $544, % RSD Bell JH (Phase 1- Roof) $2,140,855 $0 0.0% RSD Bell JH (Shoring) $1,256,095 $150, % RSD Booker T. Washington- New Construction $55,144,993 $5,100, % RSD Bradley ES - New Construction $24,657,771 $1,395, % RSD Carver HS - New Construction $54,303,350 $4,936, % RSD Colton - Renovation $32,846,878 $3,061, % RSD Crossman ES- Refurbishment $460,742 $69, % RSD Douglass HS- Renovation $36,559,207 $4,765, % RSD Drew ES- Renovation $19,661,993 $2,235, % RSD Dunbar ES- New Construction $22,377,778 $1,361, % RSD Eisenhower HS- Refurbishment $1,738,309 $263, % RSD Fisk- Howard ES- New Construction $25,145,449 $1,808, % RSD Frantz Renovation and Addition $24,675,669 $2,256, % RSD Gentilly Terrace ES- Refurbishment $1,528,614 $231, % RSD Jackson ES- Refurbishment $1,310,788 $198, % RSD Jackson K- 8 Solar Panels $250,000 $12, % RSD John McDonogh HS (Bleachers) $323,463 $27, % RSD Lawless HS- New Construction $32,406,567 $2,946, % RSD Little Woods - New Construction $25,159,683 $1,198, % RSD Livingston HS- New Construction $23,643,317 $2,535, % RSD Martin Luther King Jr. ES- Refurbishment $766,159 $115, % RSD McDonogh 28 ES- Refurbishment $2,442,527 $373, % RSD McDonogh 42 ES- Renovation $18,151,123 $2,036, % RSD Nelson ES- Refurbishment $2,347,379 $0 0.0% RSD NO East HS at Abramson- New Construction $23,453,718 $1,688, % RSD Osborne - New Construction $24,447,403 $1,164, % RSD Reed HS- Refurbishment $1,152,650 $174, % RSD Sophie B Wright ES- Renovaiton $24,815,434 $2,788, % RSD Sylvanie Williams- Refurbishment $936,959 $141, % RSD Sylvanie Williams AHU $404,055 $52, % RSD Wheatley - New Construction $22,497,999 $5,280, % % 20

21 RSD Wicker ES- Refurbishment $764,081 $115, % OPSB Benjamin Franklin HS- Stabilization $1,202,557 $0 0.0% OPSB Easton HS- Refurbishment $2,830,114 $966, % OPSB Easton HS (Window Replacement) $2,380,000 $0 0.0% OPSB Fortier (Lusher) HS- Refurbishment $13,684,472 $0 0.0% OPSB Harte School - New Construction $28,237,778 $2,599, % OPSB Karr HS- Gym Repair $282,372 $0 0.0% OPSB Lake Forest School at Greater St. Stephens $24,993,905 $930, % OPSB Lusher ES- Refurbishment $282,372 $0 0.0% OPSB Mahalia Jackson- Office Renovation $200,000 $6, % OPSB McDonogh 35 (Phillips/Waters) $57,072,600 $5,188, % OPSB McDonogh 35 HS- Stabilization (Elevator) $2,282,372 $0 0.0% OPSB McMain School- Gymnasium $15,239,662 $3,441, % OPSB New Karr HS (JE Smith) $29,952,863 $1,625, % OPSB New PK- 8 at North Kenilworth Park $22,695,671 $0 0.0% Contingency Budget Summary: Average Average RSD Average OPSB 8.2% 8.7% 6.8% 21

22 Endnotes i Hal Cohen, ed. A Blueprint: Building 21 st Century Schools for New Orleans, School Facilities Master Plan for Orleans Parish, August ii Council of the Great City Schools, Assessment of Hurricane Katrina Damage to New Orleans Public School Facilities, September iii The Cowen Institute. Transforming Public Education in New Orleans: The Recovery School District ( ), iv Hal Cohen, ed. A Blueprint: Building 21 st Century Schools for New Orleans, School Facilities Master Plan for Orleans Parish, August vv Ibid. vi Ibid. vii Ibid. viii Simon, Darran. School razing signals fresh start; FEMA to finance work at five sites, Times- Picayune, December 20, ix Landrieu, Mary. Memo June 15, x Jacobs/CSRS Program Management. March 2013 Program Update OPSB and RSD Phase I Projects, March 31, xiibid. xii Jacobs/CSRS Program Management st Quarterly Report prepared for Orleans Parish School Board and Louisiana Department of Education. xiii Ibid. xiv Correspondence with NMPSFA, CFO. July xv Dreilinger, Danielle. New Orleans public school bids point to larger problem with master building plan. Times- Picayune. December 12, xvi Vanacore, Andrew. Orleans Parish School Board Approves $79 Million Bond Sale for New Construction. Times- Picayune. December 15, xvii Committee on Advanced Maintenance Concepts for Buildings, Building Research Board, National Research Council. Committing to the Cost of Ownership: Maintenance and Repair of Public Buildings. 22