Baltimore schools have returned millions in state funds for heating repairs

Baltimore schools have had to return millions in state funding for building repairs after projects to fix failing heating systems and roofs grew too expensive or took too long.

Since 2009, city schools have lost out on roughly $66 million in state funding for much-needed repairs after approved projects ran afoul of state regulations meant to prevent waste, records show. The money could have funded dozens of new heating systems at schools where the heat is now failing.

David Lever, former director of the state’s Public School Construction Program, said his agency raised concerns in late 2015 about the large amount of rescinded funds coming back to the state from Baltimore.

In a report to the General Assembly, he wrote that too often city schools were scrambling to award maintenance construction contracts just before a state deadline or canceling the state-approved projects altogether. Failure to comply with the rules meant the city either had to pay for projects itself, forgo doing them or delay repairs while applying again for state funds.

“The net effect was both delay in improving the schools and an exceptionally high level of reverted funds (as much as $28 million at one point in 2015),” his agency wrote in the December 2015 report.

“Projects were funded because they were legitimate and needed,” Lever said Thursday. “But then either the project would be so delayed it would meet up against a rule that said that funds have to be encumbered within two years, or the school system would discover they hadn’t asked for enough money. This was particularly true of HVAC [heating and air conditioning] projects.”

The lack of maintenance at Baltimore schools is coming under intense scrutiny this week as heating systems have failed in some schools during the current cold spell. The school system says it has received complaints about lack of heat at 60 schools. The Baltimore Teachers Union has urged the city to shut down all schools until officials can get a handle on heating problems that left children shivering. Politicians have sparred on Twitter over who was to blame for the conditions.

The school system announced Thursday night that schools would be closed again Friday to allow for continued repairs to broken pipes and potential water main breaks.

Meanwhile, a 22-year-old Coppin State senior launched a GoFundMe page with the goal of raising $20,000 to bring heaters, coats, hats and gloves into the city’s schools. As of Thursday at 5 p.m., the fundraiser had collected more than $28,000.

Mayor Catherine Pugh called on the school system Thursday to “assess and account for how appropriated maintenance funds are being spent.”

“I am also urging an expedited process to deal with these issues, get these conditions fixed and get our students back to school,” she said in a statement.

Pugh said she was concerned about the high amount of returned funds for school construction and wanted to add someone to the school board who is an expert in fiscal management.

“We shouldn’t be closing schools because the heat doesn’t work,” Pugh said. “If we are getting money from the state we should be using it. We need every penny we can get.”

Last year, city schools returned nearly $30 million in state funding for construction projects, including four projects involving heating systems at schools. They included: Samuel Coleridge-Taylor Elementary, Garrett Heights Elementary, Roland Park Elementary/Middle School and William S. Baer School.

In state documents, city officials said the need to return the funds was due to “changing market conditions and challenges with lag time between the developed cost estimates and the final allocation of funds.”

City officials were “continuing to work” on the issue and “are hoping fewer projects will be rescinded in upcoming years,” according to minutes of a June meeting of a state school construction panel.

State officials then approved a motion for the city to submit to them a plan to “improve project management processes” to avoid returning funds.

“Most of the jurisdictions will see some money reverted from time to time, but Baltimore’s was exceptionally high,” Lever said Thursday. “The amount you're seeing in Baltimore city is really an exception. That was a great concern for us for a number of reasons. When the money is rescinded, that money is not at work. Building occupants are going to be in substandard environments.”

Lever said he believed Baltimore’s problem with returned funds is due to a combination of old buildings and lack of staff dedicated to school maintenance. Most school systems have a building engineer for each school, he said. Baltimore has one building engineer for every eight schools.

“I think it has to do with understaffing. If you don’t have adequate staffing, you can’t put together accurate scopes and carry out the projects in a timely way. Baltimore city has been understaffed for years,” he said.

“Baltimore city has the oldest facilities in the state. It’s like an old car. It takes a lot of work to keep them going.”

The problem has been exacerbated by Baltimore’s move to close schools as student population declines. Officials have been reluctant to use limited funds to pay for expensive repairs at buildings about to close.

Alison Perkins-Cohen, chief of staff for the school system, said officials have received complaints about a lack of heating at about 60 of the system’s 160 buildings this week.

A recent state survey of city school buildings determined only 17 percent were in good condition — by far the lowest percentage of any district in Maryland.

“Our buildings are not in great shape,” Perkins-Cohen said. “They really can’t handle two weeks of sustained cold. We’re in boiler whack-a-mole. You think you fixed one and another pops up. You fix one and then a coil breaks. Our windows are terrible. Our operations staff is working around the clock.”

Perkins-Cohen acknowledged Baltimore schools have substantially higher amounts of revoked funds than other school systems. But she said that was a function of the system’s poverty.

Other school systems — such as Baltimore County and Montgomery County, which are better funded by their county governments — have money up front to fund repairs to their buildings. They then ask the state for reimbursement. Baltimore City, whose local government contributes much less for repairs, is forced to estimate the future cost of projects. That leads to mistakes and rescinded funds, she said.

“We get hit twice for being poor,” she said. “We can’t forward fund the projects, and then projects end up being delayed and not funded. $66 million over eight years — that’s a lot of HVAC systems that didn’t get funded.”

City school officials have called on the state to change the funding process to account for Baltimore’s situation. They are asking for rescinded funds to be transferred to different projects in the same fiscal year, rather than forcing a system to wait until the next fiscal year to try again to fund it.

The current system “exacerbates rather than reduces the gap between affluent and less affluent” school systems, Baltimore school officials wrote.

State Sen. Bill Ferguson, a Baltimore Democrat and former teacher, called the rescinded funding a “known problem.”

“The scope of need is enormous,” Ferguson said. “Are there things the city schools could be doing better? Yes. They could be managing projects better. But they are trying to manage a portfolio of 50 and 60 buildings on a shoestring budget. During the [former CEO Andres] Alonso years, cuts came in the facilities budget to keep the money in the classrooms. The chickens have come home to roost right now with this heating problem.”

Ferguson said state and city officials failed for decades to properly fund school maintenance, leaving the current buildings in terrible condition.

“There’s decades of under-investment in school facilities to blame,” he said. “There’s not one person or entity or place where things went wrong. It is years and years of under-investment in capital infrastructure that we are seeing explode before our eyes literally.”

Baltimore Sun reporter Talia Richman contributed to this article.

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