Marketing the Mark-Up

by Heather Miller

Wednseday, August 24, 2011
By Heather Miller

The firm that crafted Lafayette's school facilities plan has been hired to manage its implementation. Now it just has to convince voters to approve a hefty tax increase.

Wednseday, August 24, 2011
By Heather Miller

The firm that crafted Lafayette's school facilities plan has been hired to manage its implementation. Now it just has to convince voters to approve a hefty tax increase.

[Editor's Note: This story has been altered since its initial publication to correct an error in the last paragraph. The story incorrectly stated that there is no assurance that the new property tax revenues cannot be spent on other school system needs. Before the board gave final approval on the tax proposition, Citizens Oversight Committee chairwoman Sarah Walker requested that the prop include wording that specifically directs the tax money to the facilities master plan. The board upheld the committee's wishes and included the facilities master plan dedication in the tax proposition. The Independent sincerely regrets the error.]

A 5-2 vote cast by the Lafayette Parish School Board Aug. 17 could be remembered as a harbinger of paramount new construction and improvements for deteriorating schools district-wide - or enshrined as a premature vote of confidence in the public that voters may or may not reciprocate when they head to the polls Oct. 22.

CSRS Inc. of Baton Rouge has been selected to oversee the first phase of a $1.1 billion plan to address 240-plus pages of parishwide capital improvements, repairs and maintenance needs, leaving one task on the checklist before work orders are signed and bulldozing begins - convincing taxpayers in Lafayette Parish to foot the bill.

In its formal request for companies to provide proposals on the master plan's program management, the school system made it clear that the job of overseeing the extensive facilities improvements is only employable if voters approve one of two new property taxes on the ballot in October.

That one-line stipulation gives CSRS - the same firm that crafted the facilities master plan and the only firm to formally apply for its management - upwards of 18 million reasons to hope the property tax passes.

The pending CSRS-LPSB contract, valued at an estimated $17 to $18 million, won't mark the first time that CSRS has signed on to a mega public management deal sans secured funding. The Baton Rouge architecture and engineering firm, which has written and managed master plans for several school districts across the state, has been involved in seven school board tax elections over the past 11 years, says CSRS representative Chris Pellegrin. Not one has been voted down.

A proven track record of bond approvals could explain why the firm has been hired two months before the election and has also agreed to play an integral role in informing the public of what the $561 million in new revenues would bring to the parish's fading facilities. CSRS is partnering with Architects Southwest of Lafayette for the LPSB program management contract if the tax is approved.

"We're providing info to the district and whoever they want us to provide information to as part of their public awareness campaign, what's in the plan, how much it's going to cost, things like that," says Pellegrin. "It's not our responsibility to pass the tax; all we're doing is providing info to the district. We're hopeful that the citizens of Lafayette recognize the need to make some improvements and provide a good learning environment to the students."

The facilities master plan is a vision years in the making for the school board, a means of getting a handle on critical improvements to structures suffering from serious neglect due to inadequate maintenance budgets that have often been tapped for other district needs.

Board member Hunter Beasley, who voted with fellow board members Rae Trahan, Mark Cockerham, Mark Allen Babineaux and Tommy Angelle to hire CSRS, sees no conflict in CSRS assisting with "public awareness," though Beasley says he understands the perception that the company now has a vested interest in the passage of a new tax.

"If they're going to do a job for Lafayette Parish School System, wouldn't it be beneficial to them to provide information to the public?" Beasley asks. "I plan on having some forums prior to the bond election to inform the public. We'll have Mr. Pellegrin there, available in case questions are asked. In that aspect, I'm glad they're on board. I didn't vote for an organization to come in and sell a tax."

There may be no other firm in the state with as much experience in school facilities planning and management as CSRS. And though a few other companies asked for a copy of the school board's request for management proposals, a CSRS/Architects Southwest proposal was the only one received.

"Districts are recognizing that there's some value to having continuity between planning and implementation," Pellegrin says. "The last three we've done have used that exact model. Two of those [Zachary and St. John the Baptist parishes] have hired us for the entire planning and management up front."

With just one applicant for the position, the only factor considered in the evaluation process was whether CSRS' fee for managing unprecedented new construction and repairs in Lafayette (3.3 percent of the overall cost, or an estimated $17 million to $18 million) is comparable to other school districts that have implemented similar facilities plans.

Information given to the LPSB before the vote reveals that three out of five school districts listed have slightly higher fee rates than what CSRS is billing Lafayette Parish. But the fee comparison board members received lists four Louisiana school districts that have also used CSRS for program management. Three of them paid CSRS more than the 3.3 percent LPSB has agreed to pay. The fifth district listed on the public document is in Beaumont, Texas, which hired a management firm at 2.3 percent of the total construction and repair costs.

The facilities property tax going before voters this fall would impose 23 mills to fund the master plan and an additional 2 mills for school maintenance. According to data provided by CSRS in the master plan, a home valued at $150,000 would pay approximately $200 a year more in taxes if approved. Businesses, however, "tend to share the burden disproportionately in that property values are considerably higher for business locations," CSRS says in the master plan. Businesses also aren't eligible for homestead exemption, a statute that exempts homeowners from paying property taxes on the first $75,000 of their home's value.

"This makes it very important for the district to encourage business community support of the school system," the master plan states.

But the master plan also points out that the 32.22-mill tax dedication to schools in Lafayette Parish ranks 49th out of 69 school districts in the state in terms of average millage rates.

"The most progressive districts in the state are paying an average millage rate of over 60 mills," according to the master plan.

And though the 60 mills figure given by CSRS doesn't factor in sales tax revenues or whether those districts serve more students than LPSS, the new tax revenues in Lafayette Parish, if approved, will be placed into a separate account and can only be spent on the district's facilities and maintenance.

"It's going to be a very transparent process," Citizen Oversight Committee chairwoman Sarah Walker says. "That's what we were pushing for."