University of Florida Works to Maintain Its Numbers as PECO Funding Decreases

GAINESVILLE, Fla. — With an enrollment of just over 49,000, the University of Florida in Gainesville is packed with students taking up every available classroom, study hall and library space on its historic tree-lined campus.

“Our enrollment has actually plateaued over the last few years and we are holding it there on purpose,” remarks Ed Poppell, UF vice-president for business affairs.

One of the reasons the school has decided to maintain its student numbers has to do with the uncertainty of Florida’s Public Education Capital Outlay program, otherwise known as PECO, which is funded through a gross receipts tax on utilities that the state legislature then allocates for building construction and infrastructure on K-12 and college and university campuses throughout Florida.

“Whether it comes to maintaining, renovating, rehabilitating or building something new on our campus, PECO has been our primary source of funding,” continues Poppell. “It’s hard to imagine what we will do if that funding continues to dwindle.”

But the odds that that funding will indeed continue to dwindle now seem highly likely in the wake of a September PECO estimating conference of trust fund appropriations indicating that state funds for repairs and maintenance will be off by some $267.6 million in fiscal year 2012-2013.

“We’re looking at a disaster in the making,” bluntly remarks Chris Kinsley.

“PECO is the state systems’ main source for educational space,” continues Kinsley, who is the director of finance and facilities for the State University System.

“What these schools, with continuing infrastructure needs, are expected to do without those funds is anyone’s guess,” continues Kinsley.

The precipitous drop in PECO funding has hit every public school in Florida differently. “We actually got nothing from PECO at all this year, let alone what may happen next year,” reports Fred Matz, CFO for the Pinellas County public school system in the city of Largo.

That drop-off particularly stands out compared to last year when Pinellas received $6.2 million from the fund, money that was absorbed for maintaining existing structures, one of which dates back to the 1920s.

“Meanwhile, our maintenance guy here says we could easily use $200 million over just the next two years alone for maintenance needs, as well as construction and renovation projects,” adds Matz.

Even before the alarming PECO estimates were released, state-wide funding for the current school year had dropped from $254.2 million last year to $51.3 million for fiscal year 2011-2012. The state legislature responded by upping that figure to $77 million, before targeting $55 million of that amount to the state’s 350 charter schools.

The remaining $21.9 million was left for Florida colleges and universities — a 71 percent drop from the previous year.

The real and projected decline in PECO funding is partly due to a parallel decrease in revenue from the utilities tax. But Florida school facilities planning took an additional hit in September when the four-member cabinet of Governor Rick Scott (R) decided to put off a vote on a $15 million bond sale for new school construction.

Scott, who had earlier vetoed another $165 million in school-building bonds passed by the legislature, said he wanted to hold off on approving the $15 million bond sale until the schools themselves could more fully explain their capital needs.

According to Jackie Schultz, a spokesperson for Scott, “No date has yet been scheduled for the cabinet to take up this issue again.”

“It is pending while the Governor is reviewing information that was received regarding the various projects to be funded,” adds Schultz.

Matz in Pinellas County says he is bewildered by the Scott Administration’s demand for additional information: “Currently all of the districts are required to submit a facilities work program that identifies our five, ten and 20-year construction plans.”

“We don’t go into great detail, but we identify the construction, renovation and maintenance projects by school and name,” continues Matz, adding: “And that means that the facilities department of the state at any given point knows what our plans and hopes are.”

Even as the PECO funding has dwindled away, construction and repair needs for the state’s colleges and universities have continued to grow. The State University System’s Board of Governors earlier this fall requested $144 million for such needs, a figure that Kinsley now says is no longer attainable.

“Since that request was submitted, the estimates have dropped further,” says Kinsley, “and even that $144 million was thought to be not enough to begin with.”

The prospect of even less money has school officials reeling: “Basically it means that we’re never going to catch up with our backlog,” says Rebecca Rogers, the director of planning and construction with Santa Fe College, which has campuses in north central Florida and some buildings dating to the mid-1970s. “All we can do is prioritize the repairs and replacements that we can get done on the amount of money that we do get. That increases our operating costs because we’re left with maintaining older equipment, repairing roofs that are at the end of their useful lives and using less energy-efficient equipment as well,” she said.

Rogers notes that even before the current PECO crunch, what Santa Fe College needed and what it got from the fund were two different things. “If we got everything we asked for in terms of just general renovation and remodels, infrastructure and site improvements, it would come to $3.8 million,” says Rogers.

Instead, PECO funded less than $700,000 in projects for Santa Fe College the last go-around.
Much now depends on the results of an additional PECO estimating conference which is not yet officially scheduled but will take place before the end of the year. A final estimate will then be sent to state lawmakers to help them develop next year’s budget.

If the decline in funding remains static or gets worse, says Kinsley, Florida’s schools will be forced to implement short-term solutions to long-term infrastructure needs.

“Maybe instead of a school replacing a roof that is past its estimated life, they will have to patch it one more time,” he says.

But Kinsley also notes that the possibility of buildings becoming dangerous without proper maintenance will grow with time.

“At some point something dramatic could happen,” Kinsley adds. “For now, it’s a quiet crisis.”

PECO Figures

According to Florida’s Public Education Capital Outlay Estimating Conference statistics compiled in September, the amount of money available in the PECO trust fund for the next five fiscal years has decreased dramatically from estimates released earlier this year, making the pitch for the funding of new school construction, renovation and rehabilitation projects a particularly tough sale.

FISCAL YEAR 2012-2013

Earlier 2011 Estimate: $380.8 million
September 2011 Estimate: $113.2 million
Total Estimate Decrease: 267.6 million

FISCAL YEAR 2013-2014

Earlier 2011 Estimate: $903.6 million
September 2011 Estimate: $493.9 million
Total Estimate Decrease: $409.7 million

FISCAL YEAR 2014-2015

Earlier 2011 Estimate: $904.8 million
September 2011 Estimate: $698.2 million
Total Estimate Decrease: $206.6 million

FISCAL YEAR 2015-2016

Earlier 2011 Estimate: $827.1 million
September 2011 Estimate: $722.4 million
Total Estimate Decrease: $107.4 million

FISCAL YEAR 2016-2017

Earlier 2011 Estimate: $818.2 million
September 2011 Estimate: $738.0 million
Total Estimate Decrease: $35.2 million