NYT: An Overhaul in Building of Schools

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November 1, 2002

An Overhaul in Building of Schools

By ABBY GOODNOUGH

ayor R. Bloomberg announced yesterday that he would overhaul the byzantine system of building schools in New York City by merging the two agencies responsible for construction, cutting 600 jobs in the process.

Mr. Bloomberg said that the Department of Education's school facilities division would be immediately combined with the School Construction Authority, an independent agency. The idea is to have a single entity in charge of both the planning and execution of school construction instead of what the mayor called a "two-headed monster" with "divided responsibility and divided accountability."

The two agencies cannot officially merge without state legislative approval, but Mr. Bloomberg, who won control of the School Construction Authority last spring when he took over the school system, said their duties could be combined at once. Legislative leaders indicated that they would agree to the change.

The cost of building schools in New York City has soared over the last decade, and various studies have attributed the problem to poor communication and backbiting between the Department of Education and the School Construction Authority. A recent report by a state panel found that the two agencies often gave conflicting directives to contractors, causing many of them to stop building city schools. As a result, the pool of bidders shrank and costs shot up.

That report, by the Moreland Commission, found that the average cost for new school construction was $432 a square foot last year in New York City but $146 a square foot nationally. Mr. Bloomberg and Schools Chancellor I. Klein said yesterday that they hoped that merging the two agencies would bring the average cost down to $325 a square foot.

The Board of Education used to have sole control over the planning and construction of schools, but it did such a bad job that the Legislature created the School Construction Authority in 1988. The Legislature left some responsibilities in the board's hands and did not clearly define each agency's role, so the problems continued.

The merger alone is not enough to sharply reduce the cost of building schools; the Bloomberg administration would also have to eliminate or change some of the roughly 3,000 regulations involved. Mr. Klein said that slashing regulations would be an urgent priority.

"We are going to take a look at all these front-end requirements which haven't been looked at for years," Mr. Klein said, standing next to Mr. Bloomberg at a news conference on the site of a half-built school in Astoria, Queens. "And we are going to try to streamline that in an effort to bring more competition. Competition will drive down the price."

Mr. Bloomberg also appointed two new trustees to the School Construction Authority yesterday: Stanley E. Grayson, a former deputy mayor in the Koch administration who more recently investigated problems with school construction as a member of the Moreland Commission; and Craig M. Hatkoff, a former Wall Street executive and longtime Democratic fund-raiser. Chancellor Klein, who was also hired by the mayor, is the third trustee.

Before Mr. Bloomberg won control of the construction agency, its trustees were appointed by three people — the chancellor, the mayor and the governor — none of whom could be held directly accountable for problems with school construction.

Mr. Bloomberg also recommended that the new trustees appoint H. Goldstein, a construction executive, as the agency's new president. Mr. Goldstein, whose appointment is virtually guaranteed, is vice president of O'Brien Kreitzerg/URS, a construction management company. As president, he would oversee the day-to-day management of the School Construction Authority.

Mr. Klein said Mr. Goldstein's first task would be figuring out how to cut 500 jobs from the construction authority and 100 from the school facilities division within the next six months. Those reductions would cut the staff at the construction authority by half and at the facilities division by 15 percent. Mr. Klein did not say exactly how much the reductions would save, but he said most of the two agencies' budgets — $123 million for the construction authority and $400 million for the facilities division — was spent on salaries.

Harold O. Levy, the former schools chancellor, proposed merging the functions of the construction authority and the school facilities division in August 2001, after officials discovered a nearly $3 billion shortfall in the $7 billion, five-year school construction budget. Mr. Levy lacked the political support to push the change through, though.

Because of the shortfall, many construction projects have been frozen or put off indefinitely. Mr. Klein said another top priority would be figuring out how to make more accurate estimates of the cost of new schools and school renovations.

"The disconnect between this kind of lofty five-year plans and what's going on in the field is significant," Mr. Klein said. "We need much more time-sensitive capital budget planning."

In addition, Mr. Bloomberg said, the merged agencies would standardize school design as a way to cut costs. Currently, each school design is customized, down to the doorknobs, lights and clocks.

"They never use the same plans twice, and once they give out a contract, they change the requirements so many times that it never gets done, and the cost escalates out of control," Mr. Bloomberg said. "You just cannot in this world today customize every single thing."

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