School Construction Faces Current Labor Shortage, Future Revenue Decline

Jul 11, 2014

It’s a tense public meeting in Rawlins. School District officials here recently learned that the latest contractor bid to build a new Rawlins High School is $7 million dollars over budget. Carbon County School District 1 Superintendent Fletcher Turcato says Rawlins isn’t interested in making cuts.

“Four months ago, we were within budget—and because of a bidding climate, now they want us to continue to take money out of this project,” Turcato said. “That’s not going to happen. The Board said it’s not going to happen. We’re not going to do that to the people of Rawlins.”

"I'm tired of our community getting the brunt end of the stick. We have two schools that have been in shambles—in demolition—waiting for Cheyenne to get off their butt."

There’s one representative here from the School Facilities Department—the state agency that oversees design and construction. His name’s Dave Burnett, and the crowd here is pummeling him with questions. Chief among them: ‘How do you expect us to cut $7 million from our school?’

“We’re looking to the design team to offer recommendations to get there,” Burnett says.

“Don’t you have some general idea of where 7 out of 28 million dollars would come?,” asks Mitch Alderman, a Rawlins High School language arts teacher. “I mean, this is what you for a living. Don’t you have any general idea where 25 percent of it’s going to change?”

The current Rawlins High School was built in the 1950s—with capacity for more than 1,000 students. With about 450 there today, the state closed off one wing of the school to save money on utilities and maintenance. Once the state approved a new high school, the community passed a $25 million bond measure to pay for enhancements like a pool and larger auditorium. People like Rawlins City Attorney Amy Bach are anxious to break ground on a new school.

“I’m tired of our community getting the brunt end of the stick,” Bach says. “We have two schools that have been in shambles—in demolition—waiting for Cheyenne to get off their butt.”

Many here blame the state for construction delays and inflated bids. Superintendent Turcato says the state wants to do more value engineering, or “V.E.,” basically looking to save money on design. He’s not having it.

“We’re done arguing over the V.E. process—over taking this much money—taking flooring out and making our new high school look like a prison,” Turcato says. “I’ve said it to the Commission before and I’ll say it again—we already have one prison in Rawlins, we don’t want another one, and we don’t want our high school to look like it.”

Bill Panos is the Director of Wyoming’s School Facilities Department. He says his office is still early in conversation with Carbon County School District 1 and the architect and contractor on the project about how to move forward.

“We have not asked the school district to cut $7 million,” Panos says. “We have not asked anybody to do anything yet, except give us a little more information about why it’s over.”

Panos says the situation in Rawlins isn’t unique. Construction demand in the state is high. It’s late in the season—and that’s driving up prices on many projects.

“With the current bidding environment that we have in the state, we are getting about 50 percent of our bids are coming at the estimate or under the estimate,” says Panos. “And those 50 percent that are over estimate—they’re over by anything from 20-30 percent.”

Panos says they’ll find a solution for Rawlins—and the rest of the overbid projects. The real problem facing his Department is not whether it can keep large projects like Rawlins under budget—it’s whether there’s even going to be enough money in a few years to do projects like this.

Senator Bill Landen is Chair of the Select Committee on School Facilities. He says the state has spent upwards of $200 million a year on school construction in the past decade.

“So, you know, that’s a pretty rapid pace of building,” Landen says.

That pace, Landen says, is soon to slow. That’s because proposed federal regulations and a natural gas boom threaten the revenue source fueling this school-building surge—coal. Wyoming currently uses coal leases to pay for schools—and that’s going away.

“The loss of coal lease bonus funding—which accounts for basically 90 percent of the funding for new school buildings,” says Landen. “On the revenue side, that’s going to take a major hit.”

That hit is coming in the next few years, says Rob Godby, Director for the Center of Energy Economics and Public Policy at UW. He’s been commissioned to produce a report to determine how big it will be. It’ll be ready this fall.

“Our minds are wide open,” Godby says. “We’re collecting data. It’ll be a pretty busy next three months.

Godby says costs are expected to drop, as Wyoming shifts focus from building new schools to maintaining existing ones.  

“And then the question becomes, ‘What are the opportunity costs of maintaining a certain level?’ says Godby. “Do we want to improve them even more? Do we want to maybe allow them to depreciate a little and move toward the average across the country?’”

Godby and Landen both agree school construction will need to scale back in the future. As for the Rawlins problem, one week after their first meeting, Carbon County School District met with School Facilities again—and the tone seems to have improved. Superintendent Turcato says there now appear to be several potential solutions.

These reports are part of American Graduate – Let’s Make It Happen!  -- a public media initiative to address the drop out crisis, supported by the Corporation for Public Broadcasting.