SCA chief says budget cuts will limit construction

Real Estate Weekly, May 4, 1994

Over 200 building contractors and design professionals participating in a conference on doing business with the School Construction Authority heard SCA President Barry E. Light report that proposed city budget cuts will shrink job opportunities available to them from his agency.

The unexpectedly large turnout bore witness to Building Congress Vice Chairman John Cavanagh's observation during the conference opening session that SCA work has been a major support for industry members during the recession.

The half-day conference, conducted by SCA officials, was sponsored by the Building Congress and other builder groups, and was designed to inform construction industry members of the agency's bidding processes and job opportunities. Cavanagh, president of Morse Diesel International, noted that those who were participating in the conference would be in a better position to bid on whatever SCA work is forthcoming. Before the meeting ended, a list of upcoming SCA bidding opportunities was distributed.

The conference was held a few weeks before Mayor Giuliani was scheduled to release his budget, and Cavanagh said that if the capital budget was cut even 25 percent "our industry could be in trouble." Subsequently, the SCA's Light indicated that the school capital plan cuts could be heavier than 25 percent. He pointed out that Schools Chancellor Cortines has proposed a five-year budget totalling $7.5 billion starting this year. It includes $3.5 billion of capital improvements and $3.2 billion for some 200 line projects. Then Light, who is a member of the Building Congress board of directors, explained that "there is a great gulf between what the Chancellor recommends and the $3.3 billion for this purpose that the Mayor has proposed."

If the Mayor does cut the budget to the extent he has announced, Light judged that no new schools would be built and that SCA's mission would consist entirely of major capital improvements.

Meanwhile, Light explained that nearly $200 million of construction that will get underway in the second 1994 quarter. These jobs will be financed by the last dollars of the SCA's first five-year program, which was valued at a total of $4.6 billion. In the next three months, Light said, $72 million of capital improvement projects and $124 million in line projects will get underway.

There are limits, the SCA officer suggested, on how far the city's school capital budget can be cut, because the school population is growing by 100,000 students while the SCA only is building facilities involving 42,000 seats. Board of Education and city projections foresee an increase of 117,000 seats in the next five years, Light said.

The conference included four panel discussions, with Building Congress Vice Chairman Edward J. Malloy, President of the Building and Construction Trades Council of Greater New York, moderating a panel on "Labor Law 220 Enforcement and the 'Project Pathways' Program." In addition, Byron Colemen, a Building Congress member and President of BECOM REAL, participated as a panelist in the discussion on "M/WBE Requirements and Opportunities in the $50 Million Mentor Program."

Other panel discussions covered the SCA's "Contracting Process from Prequalification to Contract Award," and "A Guide to the SCA's Change Order and Claims Processes."

In addition to the Building Congress and the SCA, the conference sponsors were the Building Contractors Association and the NYS Laborers' Employees Cooperation and Education Trust Fund.