Buffalo, New York
In 2003, the City of Buffalo, New York realized that its stock of school buildings were crumbling around its 34,000 students. With an average age of 70 years, and an estimated $1 billion in needed repairs, the City set out on an ambitious plan to rebuild all of its schools. Nearly a year later, the City of Buffalo in conjunction with Buffalo Public Schools created the Joint School Construction Board (JSCB) and passed groundbreaking legislation in the State legislature allowing for the JSCB to leverage existing and expected state aid for school construction. The JSCB was made up of representatives appointed by Buffalo Public Schools, the City of Buffalo, and New York State.
Why was alternative financing necessary?
Traditionally, Buffalo sold general obligation bonds for school construction and renovation and was reimbursed by the state education authority, however, the city’s low bond rating and existing outstanding debt made the "business as usual" method unworkable. Instead, Public Schools, working through the independent JSCB used a third-party conduit issuer for School Facility Revenue Bonds that were backed by education aid payments from the State of New York, which provided a secure flow of funds that would not be affected by Buffalo’s existing fiscal crisis and credit issues. The State provided facilities education aid for approximately 94% of the annual debt service on the bonds issued to finance the project.
How did Buffalo manage the construction program?
In order to manage the large amount of construction this financing plan would support, the JCSB contracted with a private company who was responsible for overseeing the financing, design and construction of the new schools. The JCSB worked with the Program Manager to develop a structured contracting plan to target small businesses and minority and women-owned firms. Large and small contracts were created as opportunities for these businesses, which previously were not be able to compete with the larger established firms. The program management firm also created a contractor training program to teach new and small business owners how to evaluate, bid, and document contracts.
What were the results of this plan?
The Buffalo Public Schools are now in Phase IV of the 10-year program and the total costs, with escalation is $1.4 billion. The Buffalo schools reconstruction project It is Western New York’s largest historic preservation effort to date in which all schools were renovated leaving the historic exterior, but including the latest in technology with smart boards in every classroom. In total, 35 schools, serving 34,000 children will have been renovated. Click here to read more about the proect.