Small Business Resources, Business Advice and Forms from AllBusiness.com

Commentary: School system's $1B request should come with strings attached

By Singletary, Mark
Publication: New Orleans CityBusiness
Date: Monday, May 10 2004

The key phrase for this week's message is $1 billion.

CityBusiness and WDSU News Channel 6 have formed a strong partnership. We provide them with business news each morning around 6:45 and they provide us with sports commentary and a consumer report for our monthly magazine, CityLife.

Last week WDSU reported on a special publication we produced last fall, Best Places to Work. Their reporter, Heath Allen, did a very good job following up on our report.

Now, I'd like to comment on a news report WDSU filed last week on the state of disrepair the Orleans Parish school buildings have fallen into and the inability of the maintenance staff to keep up with the repair workload.

If you follow the news at all, especially news that deals with inefficiencies within the Orleans Parish school system, the fact some of our schools need major repair and renovation should come as no surprise.

Our school buildings have mold, peeling paint, broken windows, shaky foundations and vandalism. Many of the school buildings need to be demolished and replaced.

The head of maintenance for the parish schools casually says he could use about a $1 billion in order to his job properly.

What does a $1 billion request from the Orleans Parish School System mean?

Here are my impulse reactions:

Fat chance.

Yeah, right.

Are you sure that's enough?

After some time to think, there are even more questions. Say, for the sake of conversation, taxpayers decide to dig deep and come up with one-third or half of what the schools might need. Let's shoot for a $500 million capital improvement plan funded by a bond issue.

Do we trust the present school board and administration to raise $500 million and decide how and when the money is spent? Do we demand that a new board is in place before we mortgage our future?

If we must wait for new leadership before we start addressing the needs of the school buildings, it will cost more. What do we do? What would happen if the school system were run like a normal business?

In business, someone's wealth and reputation rises and falls with the success or failure of the business plan. That someone is the owner, either individually or through partnerships and stock certificates.

Owners make decisions all the time based on whether they can afford to spend the money. The school board should be asking the same types of questions.

If these facilities are unusable and the production value of a plant has potential for measurable economic payback, then a simple return on investment calculation is made. If the expenditures meet the guidelines outlined for success, within an appropriate timeline, then the capital improvements are made.

That methodology should have been in place for the Orleans Parish schools for years. If it was, then the managers haven't felt the desired return was achievable. Therefore the capital hasn't been committed or spent.

As if in a downward spiral, the situation worsens. The longer the system waits to convince investors (taxpayers) it makes sense to invest new capital, the greater the severity of the crisis grows.

We have a severe situation on our hands right now.

These are schoolhouses where our children are supposed to learn and grow, not sidestep broken glass, dodge falling paint and breathe in noxious fumes or mold spores.

The school system has offered many excuses. Officials say they can't keep up with regular maintenance because they have so many catastrophic situations demanding their time and talent. They can't do preventive maintenance because they keep replacing the same broken doors and windows, week after week.

They can't do this and they can't do that - all for very good reasons.

But, they might be able to do it all, if we are willing to give them a $1 billion.

Coincidentally, New Orleans Mayor C. Ray Nagin has offered to help the school system eliminate wasteful spending through procedures that have already saved the city about $50 million. With a comparable budget, the school might just get enough money to fund the interest payments on a bond sale that would give them enough money to do just about everything they say they need and want to do.

Letting the mayor prove he knows what he's talking about is a safe bet. Nothing ventured, nothing gained.

The next move is up to the school board.

In addition, make sure to read these articles:

Construction: Why Training Makes Sense
Interview with Matt Stevens, AllBusiness.com's Construction Advisor