William Larsen

Table T-9 is the information you need

I received a copy of the June 2005 Feasibility study for NACS on September 7, 2006. I finally found some of the information I was looking for. The current square footage (sq-ft) for the Carroll and the Freshmen Academy as well as the proposed renovation can be found on page 35, Table T-9, Projected Data for Construction Costs.

Most of us have had to buy something at some time that we shopped around. It might have been digital cameras that have different options and different prices. It may have been a choice of five different homes with different locations, size and age again with different price tags. Both sides of the petition (yellow and blue) have been throwing out numbers, but where do these numbers come from? One side says it will cost $118 million for a new high school while another says it is more like $75 million. This Table T-9 is the key to this entire debate.

I looked at this table and first glance I saw a discontinuity so to speak. The report speaks about a building capacity, but then says a utilization rate of 85% is optimum. This means that if you build a school to hold 100 students, the most the school district wants to put in there is 85. 15 seats go on used. It was my understanding that an 85% utilization rate was used to determine the rate at which the revenue per student would fund this school. If utilization went to 80%, you would be negative cash flow based on design of 5% divided by 85% or 5.9%. On the other hand if you were at 90% utilization rate, you would be receiving 5.9% more funds than it took to fund the school.

Taking a look at Table T-9 clearly shows the current sq-ft per student for Carroll High School at 85% utilization to be 214 sq-ft per student. The Freshmen Academy at 85% utilization has 183 sq-ft per student. The goal was that any new school would have the same options as Carroll does now. Keep the schools equal. However, Table T-9 clearly identifies that the a proposed new High school with 1,425 students with 356,250 sq-ft would result at 85% utilization 294 sq-ft per student. This is 38% larger than Carroll’s standard. This also means that the cost to build this new high school is also 38% greater as well.

In addition, when I look at the renovated projection of Carroll the total capacity with the Freshmen Academy would be 3,100 but the total capacity of Carroll plus a New High School would be 3,125. Not much difference. However, in the optimum column of the Table T-9 in the row titled Renovate Current High School w/Freshmen Campus, I find they did not use an 85% utilization rate, but 81%. This increases the sq-ft per student for the renovated project, reducing the capacity from 1,445 to 1,381.

So what is the bottom line? When I look at apples to applies with the goal of having two high schools having the same total capacity of one renovated high school and also keeping the sq-ft per student the same, the cost of building a new high school is just under $70 million. The cost of renovation is $63.75 Million. Now what would you do? Would you pay $63.75 million for a 40-year-old school with a new addition or would you pay $70 million to get a brand new high school with very low maintenance costs for the first 20 years? In addition the cost savings for not bussing half the student further then needed reduces fuel costs, bus maintenance cost (fewer miles driven) as well as paying bus drives for fewer hours. In addition our children would see a drop in time on the bus.

But the analysis does not end here. We have a freshmen academy that was built to be a middle school and was up till a few years ago. It was decided to convert it to a Freshmen Academy and build new middle school. The problem is we did not need a new middle school. Between Maple Creek and Carroll Middle School there was excess capacity well into the future. This required a new bond be issued that we as taxpayers are paying on. This bond increased our taxes we pay. The value of this school with land is most likely around $20 to $24 Million. On top of this the utilization rate of both middle schools have dropped considerably adding to increased cost per student to pay for empty seats.

If we were able to use the Freshmen Academy as a school in the future, we would save $20 million by not having to build a new one. We either add this to the renovation total cost or subtract it from the new school cost.

Then there is the assumption of $275 per sq-ft. The Indiana Department of Education states building costs are about $150 per sq-ft. The renovation cost is $161 per sq-ft. Renovation normally cost at a minimum 30% more than new construction because you have to tear down, cart away material and work in cramped areas taking more time. Yet Table T-9 uses the $275 per sq-ft cost for a new high school and $161 per sq-ft for the renovation.

What happens if we use the $161 sq-ft for a new high school? The cost drops to just under $39million. Does this include land? If not add in another $9 million to cover parking, land, utilities and you are still under $50 million.

Staffing cost increase
Custodial services are estimated by NACS to be $4 per square feet (page 43 of study). This means Carroll’s and the Freshmen Academy currently cost $1.672 million to clean. If we build a new high school (using the current 214 sq-ft per student) and use the Freshmen Academy for something else, the cost of Carroll and the $2.199 million. The cost of custodial after renovation is estimated at $2.474 million per year. A new school in the long term saves $275,000 per year after schools reach capacity. Now under both options custodial staff can be kept lower until classrooms become occupied due to enrollment. Table T-10 identifies an increase of $1,123,388 in staffing costs to open a new school. This $1.123 million is based on the assumption enrollment is 1,425. However, based on the standard utilization rate of 85%, enrollment would only be 1,126 at the new school and Carroll would have 1,445

Appendix A-3 identifies the staffing cost for a new school. They principal makes $105,000. If renovation goes through, will the current principal still make just $105,000 after nearly doubling the workload? What about guidance counselors, generally speaking they are based on enrollment. Between Carroll and the Freshman Academy there are currently 6 guidance counselors. Clearly 2 of these would be moved to the new school requiring just 2 new staff at most. There are currently 20 aides who would move in the same proportion to students they now cover. The same goes for the special education. Based on current staff being moved in t same proportion of students, the net increase in staff is actually limited. There are eight teachers’ positions where duplications are not available. Some have few numbers of students. This might lend itself to them teaching at both schools. No new custodial or food service personnel are needed since we are serving the same enrollment size. Enrollment determines square footage and square footage determines cost.

In summary the maximum staffing increase to open two schools is under $700,000. If you take into account less sq-ft than the renovation option and its custodial savings of $275,000, the net increase drops below $500,000. Bussing savings will reduce cost even more.

Based on this study done by the NACS board, I find that we need to hold off on doing anything until the right numbers are presented.

posted by William Larsen @ 11:02 PM