Funding for facility repairs and rising insurance rates are a challenge for New Orleans schools

The New Orleans Public School District is not providing enough money to maintain aging school buildings that were not rebuilt or renovated after Hurricane Katrina, officials said Tuesday.

In addition to this, the school system is also faced with increased insurance costs amid increased unforeseen expenses related to hurricanes or weather conditions.

District operations manager Tiffany Delcour said while the district has taken steps to reduce costs and will continue to do so, it still needs to generate additional funds.

“It was assumed that the district would find other pots of capital funding to really manage the half of the portfolio that had no significant post-Katrina investment,” Delcour told board members as part of his speech. monthly update of fixed assets and installations. “I think we’re basically showing it’s time to do it.”

Delcour said the gap between funds available to repair pre-Katrina buildings over the next 10 years and projected needs is about $136 million.

The majority of New Orleans public school facilities are of high quality, according to district ratings, and a “handful of schools” account for nearly 40% of total major repairs, Delcour said.

Nineteen schools have been identified as Tier Four facilities — those with the highest repair costs per square foot. Delcour said many of these schools have costs that likely exceed the building’s full replacement value.

Slide from District Operations Officer Tiffany Delcour’s June update on capital and facilities at the Orleans Parish School Board.

The district has set aside money for school repairs under Bill 543, which was created by the Louisiana Legislature in 2014 to ensure facilities built after Katrina are maintained. State lawmakers designated a portion of local public school sales tax to fund the program. Additional funding comes from a local property tax.

Each year, the school board distributes funds to individual school accounts, based on the number of students enrolled at an individual campus, as well as to the facilities office, a revolving loan fund, and an improvement fund. fixed assets, according to board policy.

Delcour said the goal of the preservation program was to anticipate a “bubble that will burst in the next 10 to 20 years” when post-Katrina buildings will all need repairs at once.

While the program is successful in setting money aside for those future needs, Delcour said it prevents the district from directing more money to older buildings with immediate needs, largely those built before. Katrina which did not receive major renovations after the storm.

As a result, the district has created a triage system to ensure that available money is used to cover the most urgent repairs first, including building structure and security and maintenance of basic systems. such as water, sanitation and security.

The district plans to work with principals and other stakeholders beginning this fall to review state mandates and offer potential legislative solutions, as well as prepare for a new mileage campaign since the property tax current one is due to expire in 2024.

Board member Carlos Zervigon said it’s important the district gets the funding it needs to maintain the buildings and avoid what happened to the city’s schools when he was a student in the 70s and 80s. .

“The building I was in, in high school, had no air conditioning, the heating was missing all the time. We had paint dripping from the ceiling, a leaky roof, asbestos everywhere”, a- “People of my generation are quite sensitive to this issue in terms of neglect, and we certainly don’t want that to happen again,” he said.

Unforeseen expenses

At the same time, the district is also grappling with more unplanned repairs, Delcour said.

In recent years, the district has budgeted $10 million for unforeseen facility emergencies, primarily related to hurricanes. So far this school year, the district has spent $12 million, mostly to repair buildings damaged by Hurricane Ida.

Since the preservation program allocates repair funds to buildings based on student enrollment, Delcour said that makes it difficult to maintain transitional facilities, which are typically used to house a school community while its building is undergoing repairs.

Stuart Gay, the district’s chief financial officer, also delivered some sobering news on Tuesday: The district’s property insurance bill could rise nearly 50 percent for the coming year.

This school year, the district paid $7.6 million for property insurance covering district-owned facilities. This could increase to $11.2 million next school year, an increase of 47%. On average, reinsurance costs in the United States have increased by 25% for “catastrophe-prone” areas, Gay said.

“We definitely had a bit of a shock last week,” Gay told council members, adding that the district is still getting more insurance quotes.

Reduced repair costs

Delcour said the district is also focused on cutting costs. She said one way is to sell the buildings that need repair the most.

The district has more buildings than it needs, a surplus that is expected to grow as public school enrollment declines due to demographic trends.

Delcour said his team is evaluating all district-owned facilities and hopes to have buildings for sale identified by early 2023.

Recently, the district reviewed all of its facilities to determine their long-term quality and developed a citation process to move schools from lower quality to higher quality facilities. The citation process was used to award three schools new buildings at their request for the 2022-23 academic year.

Delcour said another option the district has, but has not yet taken, is to reallocate schools that don’t fill a building to a smaller facility or apply to two low-enrollment school programs. to share a single building.