The Impacts of Unprecedented Bond Funding on K-12 Construction

In November 2024, fifteen school districts passed bond initiatives totaling $5,745,240,000 – exceeding 2020’s previous record by more than 400%. In addition to new funding from 2024’s bonds, funding available for K-12 education in 2022 and 2023 is unprecedented. Outside of K-12 bonds, there’s an additional $1.5B+ of real projects, comprised of developments, affordable housing, mountain resorts, municipal, higher education, healthcare, and data centers. There’s certainly no shortage of design and construction opportunities in Colorado.

So what does this mean for school districts looking to complete K-12 school construction projects?

First, any information district leadership is willing to communicate proactively is helpful as teams evaluate resource availability. There’s a balance between what districts are comfortable with and what the architect/engineer/contractor community wants to achieve, but generally, the more the district is able to disclose, the better industry partners can plan proactively.

Resource availability is a critical aspect to consider when selecting the project team. Opportunities are contingent on qualified teams to manage, design, and build each project, and those resources are not unlimited. Owner’s representatives, design teams and their consultants, general contractors, and subcontractors are all impacted by the influx of funding and project opportunities. Many school districts were able to initiate procurement ahead of time – they solicited proposals for their largest (often new-build) projects for Owner’s representatives, design teams, and/or construction services early, with the plan to move forward with selected teams if their bonds passed. And then, most of them did!

Lots of districts are initiating a “second wave” of opportunities now – mid-size projects, or packages of projects, organized by scope or area, often constituting the bulk of their bond funding. According to a survey by the National Center for Education Statistics, the average age of a main instructional school building in the United States is 49 years, and nearly one-third of public schools utilize at least one non-permanent building on campus. Modern learning standards demand secure facilities that are designed and built to contribute positively to the educational experience. Functional heating and air conditioning are imperative, and security upgrades are necessary in many aging facilities. A key component in the Denver Public Schools bond funding is the promise to install air conditioning in 29 remaining schools across the district. Maintenance costs continue to rise, so districts must determine how to balance sustainability and efficiency with available funding.

Clearly defined expectations for each project are crucial in procurement efforts. Important questions that districts should seek answers to include:

• What makes this project unique? A new build will likely require a different team than a complex, phased renovation.
• Which teams are working proactively to help solve problems?
• Which individuals do you want to work with most?
• Who will give the district the best value? Constituents will watch to see that money is spent responsibly.
• Who will promise (and prove) they have the resources and capacity to provide what the district is paying for?

There’s a direct correlation between large projects awarded and less team capacity to offer, so remain vigilant in evaluating remaining available resources. There are several qualified construction companies in the Denver market, and every project has unique components that make some companies a better fit than others.

This is also true for Subcontractor teams, as the pool of qualified Subcontractors is a limited resource,. The market is becoming more and more saturated with opportunities, and the laws of supply and demand dictate that without strategic intervention. It’s likely that costs will increase and quality will decrease. so it’s up to hired General Contractors to implement strategies to lock in Subcontractor pricing, evaluate resources, enforce quality standards, maintain schedules, and drive safety expectations.

Another key factor is anticipating state resources. The Colorado Division of Fire Prevention & Control, Department of Public Safety mandates that all work done on public schools, institute charter schools, and charter schools not considered maintenance or service requires a permit granted by Fire and Life Safety. CDFP estimates about 10-12 weeks for their first review, which isn’t much different from the typical expected duration. CDPS recommends submitting for foundation permits to get projects started and prioritizes these packages as much as possible. It’s likely that the first review durations will start to extend somewhat as CDPS has more and more projects in the queue.

Generally, the sooner districts can start construction, the better. Considerations, including the impact of escalation and potential tariffs, are likely why many districts have elected to get started on their biggest projects as soon as possible. Many districts are turning to CM/GC or design/build delivery to maximize value and reduce the cost of changes during construction while expediting an effective and collaborative design process. Districts should consider their appetite for taking on risk, expectations related to timelines in the context of established school schedules, and available budget to decide which delivery method is best for each project.

The good news? Colorado has many qualified construction companies that are excited to pursue, design, and build school facilities. This is an incredible opportunity to contribute to Colorado’s educational landscape and the next generation’s growth and development. Students will continue to benefit from learning environments designed and built to support their education, and that’s an incredible legacy to be a part of.

-Lara Vincent, Director of Client Relations