Bowie school board member questions cost of public-private partnership to build schools in Prince George’s

Six schools to be built and maintained through a public-private partnership agreement were on the proposed five-year capital improvement program for Prince George’s County Public Schools released last week.

There were rows of zeroes instead of cost estimates in the table on the bottom of page one, appendix E.

During a presentation before the Board of Education Aug. 21, Director of Public-Private Partnerships Jason Washington said coronavirus has delayed the implementation of the program, also referred to as “alternative construction funding,” by about seven months. They had hoped to complete an agreement with a partner by June of this year; now they are hoping to complete that agreement by January.

They won’t have a definitive estimate until they have decided between four bidders, each submitting competing proposals to finance, design, construct and maintain six schools for at least 30 years.

A final request for proposals went out last week, Washington said. Once staff have identified the best bidder, they will provide the board with information and the board could sign an exclusive negotiated agreement, which Washington said would allow the builder to secure financing and parties to work out details.

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The system would then make monthly “availability payments” when the buildings are ready to be occupied. Washington said they have told bidders that can’t afford more than $32 million a year in payments.

 

District 5 Board Member Raaheela Ahmed said she does not like how the cost of the private-public partnership project is increasing over what she said board members were initially told, and the transparency of negotiations.

“At the beginning we were at a nine hundred million dollar project, 30 million over 30 years. Now we’re at a place where, according to my calculations, it’s looking like it could be up to, if not more than, $1.165 billion,” she said.

She said the proposed cost is too much higher than a typical school. If the cost of “availability payments” are limited to $30 million for 30 years, that would mean approximately $150 million would go toward each project.

The total cost to replace William Wirt Middle School will be $94 million, and a new Glenridge Area Middle School will cost $93 million, according to the proposed fiscal 2022 capital improvements program.

The builder would be required to maintain the school for 30 years, and when it is time to “handback” the school, it must do so with the building structure having a future life of 30 years, HVAC must last 15 years and other systems like fire suppression and plumbing must last five.

Washington said the schools would open in July of 2023, December of 2023 or July of 2024.

District 9 Board Member Sonya Williams said you either pay with time or pay with money –– and they have paid with years and years of time in the past, she said.

“This is getting us schools as early as 2023,” she said. “That is amazing.”

Capital Programs Director Shawn Matlock said Friday that the school system will get $450 million from Prince George’s County to put toward those availability payments, above and beyond typical school funding.

Washington told the board Friday that the number of years in that term, while also up to negotiation, would likely not be more than 30.

When each of the six schools are ready to open, the builder would get a $5 million payment, and the system would also pay $15 million once half the agreed upon design and build cost was spent, according to the presentation. The county would split the cost of the milestone payments, but not the $15 million progress payment, Matlock said.

The school system is asking for $34 million to be budgeted in fiscal 2022 for the schools connected to the program: Drew-Freeman Middle School, Hyattsville Middle School, Kenmoor Middle School, Walker Mill Middle School and new middle schools in Adelphi and Potomac.

In an email, Washington said that $34 million is for a progress payment, a milestone payment and administrative fees.

Washington said COVID-19 has changed how they approach school design and construction.

“What we have seen during this procurement to date has been how adaptive, innovative and performance-based the potential partners have been with how they have approached their designs and concepts,” he wrote.

 

Source:Capitalgazette