Saturday, January 28, 2012

Dr. Huff's letter on Rebuilding Joplin Schools

(The following letter from Dr. C. J. Huff, Joplin Schools superintendent, was posted this week on the school district's website.)

Never in the history of our district has there been a more critical period of time than right now. Over the next few weeks and months, we will be sharing information with you regarding the complex issues surrounding the funding of our rebuild efforts. Without question, we will need some level of community support to bring us back to a pre-storm condition and to fulfill our promise that we will rebuild better than before. I cannot put into words the complex nature of our rebuild process related to state and federal aid that is available to support our efforts. We are wading through the rules and regulations and are working diligently to fulfill our promise to rebuild our schools.

I know there are many questions related to our rebuilding efforts. Based on the feedback I've received over the last several weeks, I will address the most common questions and concerns below. You can also find answers to several questions on our Frequently Asked Questions page. This page will be updated regularly as we receive new information.

1. Donations
There is a perception that we have received all the money we need to rebuild our schools through donations. We have been our own worst enemy in creating this perception by doing the right thing – publicly thanking our donors. The majority of the funds we have received to date (about $4.3 million total) are earmarked by donors for programs to directly help our children, families, and/or staff to take care of basic needs and to provide additional financial support to the uninsured or underinsured members of our school family. In short, we made the decision early on to take care of people before buildings. We have done and continue to do everything we can to support every member of our school family who was impacted by the storm.

Second, a significant amount of funding was secured to support teachers and students in the classroom through the Adopt-a-Classroom and Adopt-an-Eagle projects. Third, the United Arab Emirates donated $1 million that was matched by another $500,000 for the implementation of the 1:1 laptop initiative at JHS. So, to put it into perspective, of the $4.3 million we have received, around $780,000 has been donated for reconstruction of new facilities. Further, to honor every donor, we thank them in various of the most popular being press releases that attract local media coverage including print, radio, TV, and social media. We highlight the donors in a positive way, which is the right thing to do, but it creates the perception that we have generated 10's of millions of dollars in donations. We will continue to honor our donors appropriately regardless of this perception.

2. Insurance
This is where it starts to get complicated. We had OUTSTANDING insurance coverage on our buildings. We had a $5,000 deductible for the entire loss, and I feel very good about our settlement. This should be finalized within the next few weeks with the exception of the contents side of the loss. Obviously when you are negotiating the number of paperclips vs. the value of a building, it becomes a little more tedious, but we are getting close.

I'm going to give an example in the next section that combines the intricacy of insurance with the FEMA/SEMA funding that will illustrate the complexity as it relates to East Middle School and the rebuild. But first, let’s focus on insurance. What you need to know is that insurance will pay to build back what we had previously. JHS was a 226,000 sq. ft. facility that was much too small to serve the 2,200 students housed in that building. The rooms were small and the hallways narrow. I'm sure our JHS staff can give you a clear picture of the space challenges. To serve our current student population at JHS, we must rebuild bigger. We are combining JHS/FTC and constructing a modern 450,000 sq. ft. facility to accommodate current enrollment and future growth. It is going to be a wonderful facility when it is complete. The estimated cost of construction will be roughly $200 per sq/ft., which is very much in line with the local construction market related to high school construction. It will look great, but it will not have gold-plated doorknobs. Again, insurance will pay to build back what we had...a 226,000 sq. ft., 1957-model building with consideration to the additions, mechanical systems, etc. This is far short of what we need in the way of a 21st Century school, so the difference will have to be made up somewhere. In addition, insurance does not cover the remediation of the 65 acres of grounds, fields, and outbuildings district-wide that were ravaged by the tornado. This is, in part, where the bond issue will come into play. We need to do this right the first time and we need to do it now.

3. FEMA/SEMA (Federal Emergency Management Agency and State Emergency Management Agency)
There are disaster funds available to help with rebuilding. It’s complicated, so bear with me. I am going to weave a little insurance into this to help illustrate the challenge that can be applied, to a degree, at each site. I'm going to use the rebuild of East Middle School as an example.

East Middle School took a direct hit...two-year-old building that cost $18.5 million to build. Is East repairable...yes. It was 70% destroyed and our insurance settlement on the facility was around $15.5 million. That is what insurance will pay. That is the easy part. Now for FEMA. FEMA looks at the building and says it was over 50% destroyed. And because it meets their 50% rule, in their eyes, it is totaled. Therefore FEMA gives us the opportunity to partner with them for a complete reconstruction. This partnership is basically a 75/25 percent cost share for the DIFFERENCE between what the insurance company paid ($15.5 million) and what FEMA estimates it will cost to rebuild with FEMA picking up 75% of that part of the bill and the Joplin Schools picking up 25%. When reviewing the two options, it made more sense to rebuild the facility with the help of FEMA funding than to repair it. If you have an opportunity to drive by East, take a look at the brick repair work that had been started. You can clearly see where the old and new building come together even though we used the same brick and brick layer used for the original building. We are going to be out some local funds to rebuild. Additionally, we are taking advantage of available SEMA funds to construct a community safe room on that site...again a 75/25 percent cost share. So again, the district will need to come up with the 25% match, but we gain sq. footage and the state picks up 75% of the cost. In fact, we are planning on building community safe rooms at multiple sites across the district using this 75/25 percent cost arrangement. These community safe rooms will be incorporated into usable space in the building.

Lastly, the Joplin Schools did its due diligence to get a sense of community support for a possible bond issue. A scientific phone survey with a + or - 5% standard of error was conducted to get a sense of where our community stood on various projects. Keeping in mind that you can't get 100% of people to agree the sky is blue, the response was overwhelming supportive of our efforts....when asked about a worst-case scenario tax increase, we had 66% approval (apply the + or - 5% and that puts us between 61% and 71%), which is OUTSTANDING. I am very proud of the work our staff has done to garner that kind of support from our community.

If there are three key pieces people need to know it would be these...

1. Insurance will pay to build back what we had but not what we NEED. East and JHS are good examples of this.

2. The district is currently seeking additional funding sources through donations, FEMA/SEMA, zero interest bonds (QZAB), CDBG (Community Development Block Grant) funding, Economic Development Administration and others to complete the projects, offset costs, and minimize taxpayer burden.

And the most important point that I sometimes fear people forget....

3. We currently have hundreds of staff members and more than 3,200 kids in temporary facilities, and we are paying annual leases in excess of $2 million to provide the temporary facilities we need for our kids and staff.

Let us not forget...
• Our East kids and staff are in an industrial park.
• Half of our JHS kids and staff are in a mall and the other half are in an old middle school. The voters already said they
wanted our middle school kids out of that school in the election of April 2007.
• Our Irving kids and staff are in a elementary school that was "moth balled" and was being considered for demolition.
• We have children and staff in trailers everywhere.
...just to name a few.

Right now my leadership team and Board of Education are sorting through the complexities of the various funding streams that are available. We know we need some support, we just don't know how much. The $62 million being reported in the media was a worst-case scenario we developed for school board and community consumption back in December. We have several questions posed to various agencies and are awaiting answers that will clarify what we can and cannot do.

Hopefully this information brings some clarity to the challenges and opportunities we face. At the end of the day, I intend to fulfill my promise to our staff and students and this community that we will rebuild better than we were before.


Dr. C.J. Huff

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