The Cost of the Pipeline

Note: This is not a PennEast post. This is about the South Hunterdon School District referendum being voted on in November on whether or not to finance $26 million on school facilities.

Jim Gallagher recently posted on Facebook a series of answers to questions I have raised about the South Hunterdon School Referendum being proposed.  Some of it was solid information, and I thank him.  However, rather than just give straightforward answers Jim chose to modify some of the questions, omit some others, and some of his answers don’t actually address the question. Here I’ll do a tedious blow-by-blow to try to sort all this out.

Question:  What is the total yearly cost of running the new LPS and new WAS?

Jim’s Response: The district expects that cost to be somewhat lower than the cost of operating the schools currently. Putting all of the students in each grade together will enable the administration to more efficiently allocate our teaching staff, which should provide some personnel savings. In addition, the district expects to eliminate over $60,000 in annual maintenance expenses that it currently pays toward keeping the failing climate control systems and other systems at LPS and West Amwell working. They also expect to save money on utilities by installing more energy-efficient systems and lighting in the new buildings. All in all, the district expects that it could cost approximately $600,000 dollars less annually to operate the two schools.

Mike Commentary: Note that Jim didn’t answer the question, he just repeated what is in the various referendum presentations.  The question, again, is what will it cost to run the new LPS school and the new WAS?

The reason I asked this is simple – I wanted to compare this to the cost of creating a district wide Pre-K-6 school.  This is the option many West Amwell people are looking for.

Unfortunately, Jim chose to omit this question from my list.

So the community still can’t compare yearly operational budgets for the referendum plan vs. the option to run one single elementary school.

I will speculate that Jim doesn’t want to share this information because it would show that running a single school will save us millions of dollars compared to running two.   In fact, the Board recently cheered the fact that we saved a boatload of money by closing the Stockton school. But for some reason, the board wants to go with running two schools which will cost the district a fortune over the next 30 years (hint: the “some reason” is SaveLPS).

Question: What is the all-in cost of this project, including bond servicing fees, rental of the Jesus School, etc.

Jim’s response: It will be approximately $26.6 million—the amount the district is seeking to borrow through the referendum on November 2, less the $6.7 million the state has committed to kick in toward the plan.

Mike Commentary: Is this really true?  Honest question here.  The BoE has no idea what interest rate it will get for the bond.  They don’t know where they will build the new JV ball field.  The Jesus School has not quoted a rental price for the school back to the BoE as far as I know.  Tony has told me that the numbers are basically just estimating $400/sq feet of space for the new construction, and there is no mention anywhere that this is “all-in” with all this other stuff.  I can’t say Jim is wrong here but it seems to contradict what all the materials are saying.

In addition, a lot of the benefits mentioned in this plan talk about gains at the HS due to moving out the Middle School.  But won’t we have to spend even more for the HS improvements.

I am worried that this is the tip of the iceberg and we’re going to see more bills coming in to implement the full plan.

Question: Where is the engineering report on WAS being un-upgradeable?

Jim’s Response: Since 2015, experts engaged by the district have produced several detailed reports on the state of the LPS and WAES buildings. One of the more comprehensive ones was presented to the public at a special meeting on October 2, 2019, and discussed further at that month’s board meeting a few weeks later. Facebook won’t allow me to attach a PDF to this post, but if you email me at jgallagher@ottnpublishing.com, I’d be glad to send you the 63-page report created by the district’s architect and engineer.

No one has ever said that West Amwell CAN’T be upgraded. In fact, the board at one time considered options to expand and upgrade the building. However, the consensus of the administration and Board, based on the feedback we’ve received from professionals, is that it would not be cost-effective to renovate West Amwell due to the extent of the problems inherent with that 67-year-old facility as well as limitations on the lot that prohibit expansion. The Board chose to move forward with the current plan because it provided the greatest educational benefits at the best price.

Mike Commentary: Thanks for the response, I think a number of people would like to see that report.  

So what would the cost and options look like? This is information the public needs to evaluate the referendum.  We understand the board has made their decision, now we need the data to make our own decisions.

Question: Why is the new WAS 5-8 school 20,000 square feet larger than required by state standards?

Jim’s Response: It’s not. First, the district is building a school that will accommodate 295 students, not 225. It doesn’t make any sense to build a new building for the exact number of students predicted to be enrolled in 2024. What if after the district builds the school, it runs out of room due to an unforeseen increase in enrollment? That would be poor planning.

If the referendum passes, the district will build a school for grades 5-8 that is about 50,000 square feet. About 39,000 square feet will be classroom spaces, which is in line with the state’s Facility Efficiency Standards (FES). The remainder includes spaces that aren’t required under the FES, but are nonetheless necessary for a modern school, including a full-size gymnasium (which could be used for community recreation as well as school activities), a secured vestibule, science labs, and a makerspace for STEM activities.

Mike Commentary: There is a bit of spin here.  First, part of my answer noted that the renovated LPS would barely meet state standards at around 35,000 square feet all in, while the new 5-8 is much, much larger than state standards.  It is disappointing to see Jim dropping parts of questions that would hurt his narrative.

The reason Jim doesn’t want the full set of questions on the record in this case is because it becomes clear that the “renovated” LPS will still be a poor educational facility for students, and that even though LPS is projected to have many more kids (294 vs. 225), LPS is tens of thousands of square feet smaller than the proposed new 5-8 building.

The unfortunate outcome of “Saving” LPS is locking the district into a poorly cited, undersized educational facility for every PreK-4 kid in the entire district.  

Lastly, the number of students projected to be at the 5-8 school is 225 students, as I indicated. Jim, you have mixed up LPS numbers with the 5-8 numbers. Remember, LPS will have 6 grades while the new WAS will have only 4. And still WAS is 15,000 square feet BIGGER than LPS.

Question: Why is the new WAS school two stories?

Jim’s Response: Because the administration and Board feel that’s the most efficient way to use the space. Please note that the entire building is not two stories. There is one wing of the building that would be two stories, so that fifth and sixth grade classrooms are separated from seventh and eighth grade classrooms.

Mike’s Commentary: Thanks, but this is a non-response response. “Because the board feels” is not giving voters information to make their own judgements on.  

Can you explain what is meant by “most efficient way to use the space”?  

Question: What would the total cost be to pursue the “warehouse church” on 518?

Jim’s Response: The purchase price for that property is nearly $2.5 million. The existing 29,000-square-foot building is not much larger than the current West Amwell Elementary, and would need extensive renovation as well as a large addition in order to be suitable. This option would be more expensive than the current plan.

There is another wrinkle, in that purchasing any property—whether it is what you call the “warehouse church,” or the former ESC school, or any other tract—would make this referendum both more expensive and more complicated. The state DOE construction office will not provide any funding for renovation unless the district owns the building first. This means in order to get state aid for this project to help offset the costs, the district would have to hold two referendums. The first one would raise funds to purchase the building, then hold a second public vote at some point after the district had closed on the property seeking funding to do the renovation work. This is a risky, non-optimal strategy: what if the first referendum passed, but the second one failed, and the district was stuck with a building/property that it can’t use?

Mike Commentary:  This doesn’t answer the question.  What was asked for was total projected cost of pursuing this option.  What we got was – the above.

Note that the BoE was very willing to buy Ely field to build a combined school there earlier this year.  That was a viable option then, despite the “complicated” process of buying a few acres of land.  It was only shot down because the site was a terrible one to build a school on, not because it involved land acquisition.

I would speculate that Jim doesn’t want to provide a number because it would be much lower to build a combined PreK-6 school on this site and running it for the next 30 years, combined to renovating LPS, building a massive 5-8 school serving a handful of kids, and then running those two buildings for the next 30 years. 

I will also note that the 518 building has been on the market for something like 2 years.  I suspect the district could get it for far less.

Another way to put this is “we are happy to spend $26 million, but $2.5 million scares the heck out of us!

Question: Why do we have a “podcasting” room in the plans?

Jim’s response: There is not a podcasting room in the plans for either the K-4 school in Lambertville or the 5-8 school in West Amwell. The district does have a relatively new podcasting class being offered at the high school, and there is a classroom set aside for that class in that building.

Mike Commentary: You’re right, my mistake on that one. 

Question:  Why are nearly all of the “educational benefits” listed actually not educational benefits at all (“Bring students together” is not an educational benefit!).

Jim’s Response:  There is a document on the SHRSD website under regionalization that lists numerous educational benefits of this plan. As I’ve noted elsewhere, by consolidating students in each grade the district will be able to add new positions and programs that our separate elementary schools have never been able to afford: a true gifted and talented program; expanded special education and English as a Second Language (ESL) courses; more robust Science-Technology-Engineering-Arts-Mathematics (STEAM) programs; and additional after-school clubs, sports, and activities, to name a few possibilities.

And by the way, I completely disagree with your comment about bringing students together—it is absolutely an educational benefit. Go visit a school like East Amwell (K-8) or a middle school like Timberlane or JP Case, and take a look at the facilities that they have and the programs they are able to offer. With numbers similar to what our combined numbers would be in K-8, East Amwell has an amazing makerspace where students can work at computer programming and 3D printing among other things; functional art and music rooms; and offers great programming and special education services. Our children deserve the same opportunities.

Finally, grouping all the students at each grade level together ensures that all students are getting the same educational experience. It also ensures all students have access to the same services, which can sometimes be difficult when you have two separate elementary schools and share staffing as the district currently does. There is only so much time in the school day with staff traveling between our two existing buildings.

Mike Commentary:  Thanks for the response.  Some of that makes sense, but what parents care about is standardized test scores and kids getting into good colleges.  

I disagree that bringing kids together is an educational benefit.  What you are actually listing are efficiency arguments.  East Amwell having a full K-8 school means they are getting a bit of economies of scale by having all the kids in one building.  

That is what I am advocating for as well – a single K-6 building, district wide, and get rid of our outdated LPS and WAS buildings.  Combining LPS and WAS is a terrific idea.  Keeping two elementary schools – not so much.

Question: Why are building such large buildings when the demographic study indicates our student population will be shrinking over time?

Jim’s Response: This is answered above, but I’ll repeat that building to an exact number of students would be poor planning. If a new development or affordable housing comes into play, the district would be in trouble. The lack of space at the existing LPS and West Amwell is one of the major reasons that the district needs to upgrade its facilities. How is it productive to have three special education classes sharing the same classroom, separated by shelves or cabinets? This plan provides flexibility—the district intends for these buildings to serve our children for the next 50 to 60 years, just as the current buildings have.

Mike Commentary: Jim, your answer makes no sense here.  So we did a demographic study to…ignore it?  Come on man.  The reality is plain and simple: the BoE is being fiscally irresponsible here, and is building schools that are way bigger than we need as student population is falling off a cliff.

I will add in another point.  The “new” LPS will be at capacity at day one, because the site is too small.  If someone builds a new development in the district the PreK-4 LPS will be overcrowded.  You basically just “proved” that this referendum is not future proof and we are dooming future generations to the mistakes made in the 60s when LPS was built. 

Question: Why do the LPS plans include the city-owned parking lot (which cannot be paved over per DEP rules in flood hazard zone)

Jim’s Response: The district recognizes that all the lots adjacent to Lambertville Public School need to be re-paved—even the one owned by the city. Our staff and parents use the city lot every day. The city lot requires pervious paving. This has already been factored into the budget, and the district intends to work with the D&R Canal Commission and NJDEP to make sure it is done the correct way.

Mike Commentary: OK, that makes sense.  But you omitted the second half of this question – why are West Amwell and Stockton paying to fix Lambertville City property?  This is not BoE property, so you should not be spending BoE money to benefit only one town in the district.

This is just wrong.

Question: Where is the traffic study on bussing so many students into LPS? Where is the traffic study on West Amwell parents attending school functions after hours?

Jim’s Response: Here is a link to the traffic study, which was conducted earlier this year. 

https://drive.google.com/…/1yGB7aBzaQLtFLrzOYiXu2F…/view

Something to keep in mind is that the number of afterschool activities for PreK-4 is fairly minimal. When the district hosts events like back-to-school night, which would draw a lot of parents at one time, it could have staff park elsewhere and shuttle them to LPS. This would leave the parking lots adjacent to the school open for parents. They have done this in the past.

Mike Commentary: Why was this traffic study not included in the Referendum materials?

And perhaps I misunderstood, but this does not appear to be a traffic study of how this will impact traffic in the area, but instead seems to just talk about traffic on the school and city properties.   It is also confusing that it doesn’t speak at all to how many students will be bussed in with the new plan vs what happens today at LPS.  How many busses will be coming into town?  What will the impact be during school events that have families attending?

Question: Why were the survey results not publicized (aware they are available on the web site though)?

Jim’s Response: The survey results were publicized. They were discussed at a public meeting, have been referenced in many of the community presentations on the referendum, and (as you note Mr. Spille) posted on our website. Additionally, it’s important to understand that the primary purpose of the survey was to identify for the Board and administration what questions community members still had in reference to the proposed plan; it was not intended to find new or alternative options.

Mike Commentary: I haven’t seen any reference or discussion anywhere of the survey results, nor do I see it mentioned in any meeting minutes.  You can provide a link where this was referenced?

I’ll also note that the survey question was biased towards getting the district to a “Yes” on the referendum vote, as is the 28 (28!) referendum meetings the Superintendent has setup to try to persuade voters to a “Yes”.

I’ll also note for the record That there were dozens of detailed objections to the referendum, and very few comments in favor of it.

On June 29th, 2021, the Supreme Court finally ruled on the case PENNEAST PIPELINE CO., LLC v. NEW JERSEY ET AL. This was the case centering around eminent domain authority, and the State of New Jersey’s challenge to PennEast about being sued in federal eminent domain court. For background, NJ had appealed a ruling in condemnation court, and the the 3rd Circuit Court of Appeals had ruled in New Jersey’s favor, effectively saying that PennEast suing New Jersey in Federal eminent domain court violated the 11th amendment. The legal theory here was that under the 11th amendment the State of New Jersey is a sovereign entity that cannot be sued in Federal courts by citizens of other states. In this case, PennEast is considered a citizen of Delaware. As of that decision, PennEast was blocked from going forward with it’s project completely.

Unfortunately, the Supreme Court ruled against New Jersey, and reversed the 3rd circuit opinion. The opinion is available here. But this isn’t the loss that many people think it is.

What the Supreme Court decision did was unstick a bunch of things that were stuck for PennEast, but it does not solve any of its fundamental problems. Given, a win at SCOTUS would have been an instant death knell for PennEast. But we didn’t get that, and by now I don’t think anyone has any expectations of quick wins on this topic. We’ve been at this for 7 long years.

So with the SCOTUS opinion behind us, here is what PennEast has left….

• D.C. Court of Appeals cases against the FERC Certificate. A number of cases against the FERC decision from years ago were blocked by the Supreme Court appeal. Those cases can now go forward. Normally, this would be pro forma as it has been very hard to win against FERC in this venue. Except….
• The Spire case. Earlier this month the D.C. Circuit Court of Appeals ruled that FERC’s determination of Public Convenience and Necessity of the Spire pipeline was a crock. Specifically, the D.C. Circuit held that FERC used boilerplate language in approving Spire, and completely ignored its own internal policies for weighing public benefits of a given pipeline against its impacts. Specifically, FERC noted that Spire had a precedent agreement, and rubber stamped the project based on that and that alone. The D.C. Circuit is telling FERC they have to stop rubber stamping that way. And by the way, the fact that the Spire precedent agreement was with an affiliate was also a big problem for the Court. Such agreements are not arms length and have to be scrutinized very closely. Which means….
• PennEast’s 2-phase application that has been in limbo due to the stuck D.C. Court of Appeals cases is in trouble too. PennEast’s amended application’s only proof of need is based only on precedent agreements with 3 PennEast Companies – New Jersey Resources, South Jersey Industries, and UGI Corp. PennEast’s application has just hit the shoals of the Spire precedent. With a New Democratic FERC commissioner who has demonstrated the agency needs to change, PennEast application is likely sinking fast. Meanwhile….
• PennEast’s application to the Delaware River Basin Commission has been languishing for over a year with no movement. DRBC has been urged by thousands of people and government leaders to close PennEast’s application because it is so deeply flawed in so many ways, and due to the extensive impact the project would have in the Delaware River watershed. And if that isn’t enough…
• NJDEP has denied PennEast’s Clean Water Act application twice so far. And there is no indication that the third time is going to the charm for PennEast. And finally….
• Two of the PennEast owning companies have already cried “Uncle!”. NJR declared that they are no longer tracking the project in their future financials, and UGI has given up on it as well. Two of the other companies have never particularly cared about PennEast, as they inherited it via acquisitions, and that leaves just SJI teetering on the brink.

So PennEast “Won” at the Supreme Court, but while they won that battle they are on the brink of losing the war. The owners are exhausted and still stinging from having spent half a billion dollars so far with zero returns, and PennEast still fights vicious battles at the DRBC and NJDEP that it has historically lost. This “win” may be the final event that causes them to throw in the towel and stop throwing good money after bad.

A final note – while this was hailed by the fossil fuel industry as a huge “win” for them, in fact this was very close. Many commentators have noted that Justice Barrett was likely chosen to write the original majority opinion, and her opinion was in favor of the State of New Jersey. This case went right down to the end of the calendar year for the court, and ultimately Chief Justice Roberts took the case himself and eked out a 5-4 majority in favor of PennEast, likely by horse trading with one or two of the justices to get them to side with him. An unfortunate truth at the Supreme Court is that for close cases, they are often as not decided by persuasion and political power more than on legal theories. And Roberts in particular is known to decide what he thinks a good outcome is first, and then make up legal theory to get him there (see also the Obama care string of rulings). Reading the majority opinion is a bit painful as Roberts invents some colorful ideas to get where he wants to go. Meanwhile, Barrett and Gorscuch each wrote dissents that were breathtakingly straightforward and fully supported by precedent and history.