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Illinois School Board Journal
May/June 2002

Build new or renovate: How to decide

by Linda Dawson

Linda Dawson is IASB director of editorial services and Journal editor.

One of the biggest decisions school districts ever face is whether to build a new building or renovate an existing structure. While every situation is different, Sam Johnson of BLDD Architects in Decatur says a process does exist to help districts decide.

Johnson outlined the process while offering three recent projects in Mahomet, Mount Zion and Tinley Park as examples of that decision-making during a panel at the 2001 Joint Annual Conference in Chicago. The process, he said, begins with three key components: reviewing the educational adequacy of existing structures; determining comparative facility costs; and identifying any other factors that might impact needs.

Based on a study done in 1992, the process has undergone trial and error scenarios to validate its logic, Johnson said.

School board members should ask, "What are the programs we want to hold and where do we have to hold them?" Johnson said. Once these "ed specs" have been established, board members can use them as they review and "score" current facilities on criteria such as adequacy, safety, healthfulness, accessibility, flexibility, efficiency, expansibility and appearance.

To compare costs, board members should establish initial costs for their "ed specs," as well as health and life safety costs, utility costs and projected maintenance costs over the building's lifespan. Having these figures will help a district determine a cost/benefit ratio.

But he cautioned boards to be honest with their figures. "If you pick a longer lifespan, like 80 to 100 years, new will always look better," Johnson said. Use of a shorter lifespan, like 10 to 20 years, will always make renovation look better. He encourages boards to take a middle ground of 40 years.

The formula adds the listed costs and divides by the building capacity to determine a lifecycle cost per student. Then divide the educational adequacy score outlined above by the lifecycle cost per student to find a cost/benefit ratio. All of this can be done by in-house committees or with the help of an outside consultant, depending on the size of the district and staff knowledge.

Johnson acknowledged that outside factors, including architectural, historic or community significance of existing buildings, as well as the impact a new building might have on the environment or the ability to sustain enrollment, can impact a cost/benefit ratio.

John Alumbaugh, superintendent of Mahomet-Seymour Community Unit School District 3, said growing enrollment and community dissatisfaction with inadequate space in a building that looked like a factory led his board to its discussion of whether to renovate the 20-year-old high school or build new.

Having all the schools within walking distance of each other has been a real plus in shared programs, he said. Building a new high school would have required purchasing land on the outskirts of town as well as leaving the district with an extra building. The board turned to a citizens advisory committee, which determined there was more support for an $11 million addition and renovation project than there was for a $22 million new building, and a referendum was passed.

"Each situation is unique," Alumbaugh said, "but the more information and input you have, the better your chances of reaching a consensus."

Ken Hendriksen, superintendent at Mount Zion Community Unit School District 3, said his board surveyed the community for a "wish list" to help determine facilities, curriculum and at-risk programs. Not all of the suggestions were good ideas, including one that wanted more portable classrooms. The result was a decision to build a new intermediate building as well as renovate all the existing buildings in the district to some extent. The new 700-student facility, which houses fourth, fifth and sixth grades, is located across from the junior/senior high complex.

The district did its homework, gathering enrollment data as well as information from a bonding company and compiling funding projections for the next five years. This data was presented and discussed at a community forum, where comparisons also were made with tax rates from neighboring communities.

Hendriksen's best advice for those contemplating such a project: Don't over-promise. Deliver what you say.

In Consolidated High School District 230 southwest of Chicago, district officials found it's better not to go in with a preconceived idea of what the community might want. Liz Johnson, associate principal at Victor J. Andrew High School, said her district purchased land for a new high school in a southwestern "growth" area of Orland Park, only to hear rumblings of jealousy over what a new building might get that existing buildings didn't have.

Working with their architectural firm, VOA Associates Inc. of Chicago, the district studied its demographics, considered technology, analyzed finances and shared all of the processes with staff, including site visits to see what other schools were doing, she said. The result was eight options the board could take "on the road" to town meetings where it could present as well as hear pros and cons on the projects.

"It became very clear the public was interested in only three of the options," Johnson said. Finally, they surveyed 55,000 households in the area and found that 10,000 supported renovation. The massive project began in 1998 with the largest school construction referendum approved in the state: $118 million.

Renovation can be a disruptive process, she said, as she talked during the presentation about a guitar class needing to relocate some days because of drilling. But it also offers the opportunity to form new community connections, such as inviting construction workers to buy lunch in the cafeteria.

Since November's conference, her building has encountered other problems, many of which she feels might have been avoided with better planning and communication.

"You have to have a schedule and swing space designated well in advance," Johnson said in an April interview. "Swing space" is the area students and teachers can move to when their portion of the building is targeted for renovation. District 230 had been feeding all the students in the gymnasium while a cafeteria area was renovated. But when cold weather brought P.E. classes back into the building, something had to give. Lunch was moved to the media area, which disrupted library use.

Demolition of the media area was scheduled over spring break to help ease disruption to students, but the district still had to find a place for the library. Johnson said 25,000 volumes were moved to the first floor of the new classroom wing.

"Everyone needs to have a good idea of what's going to happen," she said, "because you have to allow school to continue."

In addition, Johnson said having one person in the building who does nothing but work with the architects and contractors on a daily basis would help head off problems by providing a vital communication link.

Despite the problems, the district expects to be pleased with the final results. "The innovative quality of space we've created for students is wonderful," she said.

While each of these three districts reached a different decision, they could back up their choice with data collected as they computed their building formula. By combining the formula with community input, all three districts find themselves with better facilities to serve student needs.

Sidebar: Cost/benefit analysis

Central Unified School District 123* currently operates a 600-student high school, constructed over five different time periods (1927, 1942, 1957, 1967 and 1989). The district isn’t growing, but the building requires substantial repairs. Given the building’s condition, the school board isn’t sure whether it makes sense to invest dollars in an aging structure or build a new facility.

Cost/benefit analysis requires development of information in three different areas:

1. Review of educational adequacy
2. Determine comparative costs
3. Identify other factors

We will project the cost/benefit value for each approach over a 40-year building life cycle.

1. To review educational adequacy, ask how well the finished project will meet the district’s educational program needs by determining a numerical building "score." We use the "Workbook for Evaluating Educational Facilities," developed by Planning Advocates (an educational consulting firm in Delaware, Ohio), because it is a thorough, rational, defendable evaluation tool that results in a numerical score. Facilities are reviewed/scored for adequacy, safety, healthfulness, accessibility, flexibility, efficiency, expansibility and appearance. The sum of each is the facility’s "composite score."

In our example the renovated facility, which invested money for health and life safety work only, scored 35 out of 100 possible points, compared to 88 for the new facility. This tells us that the new facility will meet the needs of the educational program better than the renovated existing facility. To calculate the cost/benefit ratio, multiply these numbers by 40 (life cycle of the building).

(Note: An alternate approach might include an educational adequacy score that reduces over the 40-year time span, if you wish to assume that the educational program will continue to evolve and the building will not be flexible enough to meet the changing educational program needs.)

2. Next determine costs for both approaches. In order to be useful, these comparative costs must include:

1. First costs (construction costs)

2. Health and life safety costs (code required work)

3. Utility costs projected over the building lifespan (40 years)

4. Projected maintenance costs over the building life span

5. Difference in staffing costs (if any)

• Health and life safety cost: $3,500,000

• Utility cost (40 years): $1,400,000

• Projected maintenance: (40 years): $8,500,000

• Projected staffing changes: none

• Total life cycle costs: $13,400,000

To convert into a measure of cost effectiveness, divide the total cost by the building occupancy to develop a life cycle cost per student. The life cycle cost/student is $22,333.

• Construction cost: $15,000,000

• Utility costs (40 years): $1,800,000 (assumes building is air-conditioned)

• Projected maintenance cost: $2,500,000

• Projected staffing changes: none

• Total life cycle costs: $19,300,000

The life cycle cost per student for the new facility is $32,167.

In this example, the new construction approach would cost more over the 40-year life than the health and life safety renovation approach. This could be dramatically different if the district were to receive a construction grant from the Capital Development Board, or if the new construction were projected to result in the need for fewer staff. For example, the reduction of one $30,000 employee over the next 40 years is projected to save $1,200,000.

3. Next, review any additional factors such as architectural, historical or community significance; sustainability; and impact on the environment and/or landfills that may need to be taken into account. If the building is significant for one of these reasons, it may entitle the district to additional funds, altering the cost effectiveness of the approach. Likewise, community opinion may be so strong that one of the approaches may not be feasible. For our example, there were no other factors that significantly affected the decision to renovate or build new.

Finally, we put this information together to develop the cost/benefit analysis.

Educational adequacy: 35 (score) X 40 years = 1400

__________________________________________________ =

Divided by the life cycle cost per student: $22,333

Cost/benefit value: .067

Educational adequacy: 88 (score) x 40 years = 3520

__________________________________________________ =

Divided by the life cycle cost per student: 32,167

Cost/benefit value: .11

Using this analysis, we conclude it is a better use of district funds to construct a new facility than it is to perform health and life safety repairs because it is a much better value (a higher benefit per dollar spent) than to renovate the existing facility, even though it is cheaper to renovate the existing facility.

*Fictional district for purposes of explanation