“We have worked hard to live up to our commitment to build 21st Century schools in the safest and most cost effective manner possible,” Spencer said. “However, there were a number of factors not considered in the original legislation that have had an impact on our financial resources.”

Spencer said that land acquisition, remediation and relocation were not considered in the original legislation that set up the program, as well as pre-school facilities and temporary classroom units. While the school construction program has progressed, Spencer told legislators that a number of challenges have impacted the financial resources of the program, including a rise in the cost per square foot at school facilities, inflation and raw materials. For example, when the program was established, initial cost per square foot projections were set. Due to rising costs, the actual cost per square foot turned out to be much higher.

He told legislators that the program has worked hard to keep administrative costs low and provided an accounting for how the agency is spending the $8.6 billion originally allocated to support the program, including design, construction and administrative costs. He also highlighted a number of creative efforts underway at the SCC to save money, build schools more efficiently and environmentally responsible and reduce costs.

He also told legislators that by January of 2006, the SCC will no longer be able to commit funds toward any new school projects and that continued funding for the program would be necessary to keep it on track.

Spencer said that the SCC is also working to ensure that communities and businesses in the state are partners in the school construction program. The agency has a number of initiatives in place to support small, women and minority business enterprise (SBE) participation in SCC’s projects, including an SBE “carve-out” program, an owner controlled insurance program, a minority- and women-owned business contractor training program, a bonding and working capital program, and a new mentor/protégé program.

While the SCC has exceeded the state’s 25 percent goal for SBE participation, Spencer said that more work needs to be done to ensure that there is more diversity in the number of small businesses participating in the school construction program. (SBE participation in SCC projects across the State reached 33 percent from July 2003 to June 2004.) The agency is also supporting programs designed to provide workforce training in construction trades.

“The benefits of school construction are clear,” Spencer said. “We’re building better schools for the children of New Jersey. We’re building stronger communities. And we’re building a robust economy. The money originally allocated for this program was a strong start and put us on the right path. We’ve already seen tremendous success with this program, but there is still much work to be done to make the program an even greater success.”

The SCC was formed in July 2002 to streamline the building of much-needed quality schools throughout the State of New Jersey. The $8.6 billion program is the largest public construction program ever undertaken by New Jersey and represents one of the largest programs of its type ever undertaken in the nation.

SCC Progress Presentation