By Adam Pagnucco.
MCPS Superintendent Thomas Taylor has released his first recommended capital budget and it contains this admission:
An “error” made by MCPS in applying for state aid could cost county taxpayers $21.6 million.
MCPS’s Capital Improvement Program (CIP), which contains new buildings, additions, renovations, upgrades, replacements, maintenance and other capital work, comprises nearly a third of the county government’s entire six-year capital budget. The superintendent is recommending $1.85 billion in capital funding over the six-year period of FY25-30. The funding sources for MCPS projects include state aid (27%), county general obligation bonds (26%), recordation taxes (20%), cash (10%), school impact taxes (9%) and recordation tax premiums (8%).
State aid comes with strings. One of those strings is the state’s prevailing wage law, which sets wages for construction workers employed on state capital projects. School projects are covered by this law if at least 25% of their cost is covered by state funding.
This requirement caused a problem in one of MCPS’s largest capital projects, the reopening of Charles W. Woodward High School in North Bethesda. The project is necessitated because of crowding in downcounty high schools along with Walter Johnson High School, which just passed 3,000 students for the first time. This is what Taylor wrote about this project, state aid and the state’s prevailing wage law.
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My recommended CIP approach also reallocates unexpended funds from previous projects in order to mitigate the impact of a reduction in State Aid that resulted from an error in the MCPS submission for aid in the Charles W. Woodward Project. MCPS has been informed that we will not be receiving $39.3 million in State Aid that was expected due to errors in calculating prevailing wage and bid award across the multiple phases of the project. While the initial State Aid shortfall is expected to be $39.3 million, we are working with the Interagency Commission and the Maryland Stadium Authority to determine whether a portion of that $39.3 million can be awarded. If any of the State Aid is recaptured, that amount will be reallocated to other eligible projects.
I recommend two steps to address this $39.3 million State Aid funding gap. As we strive to be good partners with our funding body, the County Council, I recommend that we transfer $17.7 million in unexpended appropriations from these projects:
- $7 million from the Building Modifications for Program Improvements Project
- $5 million from the William Tyler Page ES Addition project
- $3 .4 million from the Westbrook ES Addition project
- $1.3 million from the Takoma Park MS Addition project
- $1 million from the Parkland MS Addition project
By transferring the $17.7 million from these prior projects, we are able to reduce the funding gap from $39.3 million to $21.6 million. Together with the other CIP project reallocations previously identified, the Superintendent’s Recommended FY 2026 Capital Budget and Amendments to the FY 2025-2030 Capital Improvements Program requires only $21.6 million in local revenues to address the State Aid gap and keep major projects intact and on schedule.
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Let’s note that the current total cost estimate for Woodward is $224 million, so MCPS’s error impacted about one-sixth of the project’s funding.
What does the superintendent mean when he says “only $21.6 million in local revenues to address the State Aid gap and keep major projects intact and on schedule”? First, calling it a “State Aid gap” suggests that this is somehow the state’s responsibility. The responsibility belongs to the MCPS bureaucrat who made the “errors in calculating prevailing wage and bid award across the multiple phases of the project.” The state’s current prevailing wage law dates back to 1969 and has been tied to thresholds of state funds in covered projects since then, so its requirements should be well known to public procurement and construction officials.
Second, the term “local revenues” means exactly what you think: county money. Which means your money. The county government is not only responsible for funding school projects, it also has to fund transportation projects, parks, police stations, fire stations, technology, maintenance and all manner of other capital expenses. MCPS’s capital needs compete with all of these other needs.
Now, planned capital expenditures are estimates by nature. Lots of things can cause them to go up or down – change orders, commodity and energy costs, schedule changes and the like. It’s possible that savings can be found elsewhere and taxpayers won’t be on the hook for all $21.6 million in the unfunded “errors.” But if such money can be identified, it would have been available to fund other legitimate needs rather than offset bureaucratic mistakes.
The county council, which is the ultimate funding body of MCPS’s capital budget, is still smarting over recent revelations surrounding MCPS’s failed electric bus contract. This sort of news is the last thing MCPS needs on the eve of a busy and fateful budget season.