30 th Board of Representatives City of Stamford President MATTHEW QUINONES Majority Leader RODNEY PRATT Clerk of the Board SUSAN NABEL Minority Leader MARY L. FEDELI February 5, 2020 The Honorable David R. Martin Stamford Government Center 888 Washington Boulevard 10th Floor Stamford, CT 06901 Dear Mayor Martin: As you are aware, we recently held Item F30.274, which supports RFQ No. 791 "Project Management Services for SAMG Public-Private-Partnership" ("RFQ 791"). In doing so, we would like to explain our concerns and our hopes for next steps. We are deeply concerned about the public-private partnership ("P3") program contemplated by said RFQ. While RFQ 791 only formally calls for retaining a consultant to obtain cost estimates for a P3 program, at present, it is also the only course of action under investigation to address school facility infrastructure in Stamford Public Schools ("SPS"). We agree entirely that the infrastructure problems in SPS are untenable. Yet if we walk down only one road looking for a solution, we will arrive at only one destination. We cannot agree such a process is sufficient for such a critical issue. As you noted in your State of the City Address, the future of our city is intrinsically linked to the future of our schools. Many of us have argued precisely the same point for years, and indeed, some of us entered the political arena to address exactly this issue. This is a core issue for us. We want only what's best for SPS and Stamford as a whole. To level-set on the scope of the challenge, we agree with the assessment of the Stamford Asset Management Group ("SAMG") that (i) certain schools are past their useful operational lives, thus it would be better to simply replace them than continue renovating, (ii) our maintenance costs are higher than average and need to be reduced, and (iii) SPS does not have an adequate mechanism for planning and budgeting long-term capital maintenance. The P3 program is fundamentally premised on the idea that we are incapable of managing our school facilities. We do not dispute the fact that years of failure on multiple levels, from the elected and appointed boards to the various mayors, led us to this moment. However, we fundamentally reject the premise that such past failures predict the future. Our neighbors in Fairfield County demonstrably have more success in maintaining their schools. Therefore, the issue is not that government cannot maintain schools, but rather, that our government has struggled to do so. Further, wealth alone cannot explain this success, as Government Center, 888 Washington Blvd. P.O. Box 10152, Stamford, CT 06904 Tel: (203) 977-4024 • Fax: (203) 977-5503 • E-Mail: bdreps@stamfordct.GOV Stamford spends more than our neighbors on school construction and maintenance. It stands to reason that we can copy the best practices of our neighbors to solve the problems facing SPS. We believe that retaining public control over public assets is preferable for three reasons. First, at best, the P3 program only addresses one-third of our school space. We must address the same challenges in the other two-thirds of our space. Therefore, in seeking the most efficient improvements, it seems that we ought to approach the problem holistically. Second, public control will always be more nimble than any contract we negotiate with a private entity. We need only look at the recent example of ABM to see why – we were able to terminate ABM swiftly when needed, and public control through the SAMG has led to markedly superior results. Third, P3 programs necessarily seek to replace complex public functions in controlling public assets, which has historically led to mixed results. Many P3 programs have resulted in significant cost overruns which could have been avoided by simply retaining public control over such assets. Before exposing Stamford to such risks, it seems only prudent to fully investigate all possible options. In holding this item, we hope that you will return next month with a plan that incorporates outside experts and procedures for the following: 1) In addition to a P3 program, explore at least one option that retains public ownership of SPS facilities. To develop such an option, we would like to review the following factors: a. An estimate of costs for (i) constructing new school space, (ii) ongoing maintenance costs, and (iii) long-term capital maintenance plan for all SPS facilities that accounts for the best practices of our neighbors. i. With respect to long-term capital maintenance, it seems that SPS should have a facilities master plan that outlines the needs of each school. We would like such a plan to be incorporated into this analysis (or created, as needed) so that we can understand the "all-in" costs going forward to properly maintain SPS. b. Among other items, we would like such a study to review the following questions: i. Which of our neighbors achieve the most cost effective results? ii. What operational processes help achieve such results? Is there a marked difference in relevant procurement processes, governing ordinances, or administration policy? Are those processes supported by additional employees or management, and if so, how are those employees organized? iii. What procedural factors support such results? Do our neighbors conduct budgeting differently, and if so, how can our budgeting process be improved? Government Center, 888 Washington Blvd. P.O. Box 10152, Stamford, CT 06904 Tel: (203) 977-4024 • Fax: (203) 977-5503 • E-Mail: bdreps@ci.stamford.ct.us iv. As one course of action (either as its own alternative or a sub-part of the above), we would like an assessment of the costs of constructing schools with prefabrication construction techniques, with (i) estimates of costs per square foot and (ii) estimated time of construction. c. We are certainly open to additional courses of action that experts might identify. 2) A review the long-term deal risks of a P3 program a. We would like an independent report on the long-term risks of a P3 program. In the short-term, every failed P3 program has started with competitive estimates. The issue has been long-term outcomes, in which deals have broken down resulting in significant cost overruns and unexpected issues. We’d like to better understand the factors led to such failures and how to avoid them, as well as any case studies outlining factors leading to the success of a P3 program. 3) Analysis of debt issues and recommendations a. Managing debt and preserving Stamford's AAA credit rating is vital, both to keep our current debt costs under control and to maximize our options for the future. To understand this issue and best balance our options, it is important to review the factors that ratings agencies will analyze, both respect to any traditional debt and any P3 program debt, and how to mitigate those issues. 4) Involvement by the elected and appointed boards in the process of evaluating courses of action a. Involvement by the elected and appointed boards in the evaluation process, rather than simply reviewing the final product, can help create a more successful outcome. b. We would propose creating a bipartisan working group consisting of select members from the relevant boards, appointed by their respective leadership, to supervise these reviews, coordinate with SAMG to ask questions and provide guidance to the consultants, assist with communicating with the public, and provide a recommendation to the relevant boards. 5) A presentation of options before the various boards when appropriate so that all relevant courses of action can be fully evaluated Government Center, 888 Washington Blvd. P.O. Box 10152, Stamford, CT 06904 Tel: (203) 977-4024 • Fax: (203) 977-5503 • E-Mail: bdreps@ci.stamford.ct.us Stamford is the leading city in Connecticut, and the decisions regarding our schools will shape our future for generations to come. We hope to make the best decision possible and look forward to working with your administration. Sincerely yours, Terry Adams Lindsey Miller Marc Aquila Mavina Moore Elise Coleman Eric Morson Megan Cottrell Dennis Patterson Jeff Curtis Tom Pendell Virgil de la Cruz Rodney Pratt Monica Di Costanzo Matt Quinones Anabel Figueroa Robert Roqueta Philip Giordano Ines Saftic Anzelmo Graziosi Nina Sherwood Benjamin Lee Jeff Stella Alice Liebson Lila Wallace Bob Lion John Zelinsky Diane Lutz Raven Matherne Marion McGarry Government Center, 888 Washington Blvd. P.O. Box 10152, Stamford, CT 06904 Tel: (203) 977-4024 • Fax: (203) 977-5503 • E-Mail: bdreps@ci.stamford.ct.us