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June 2006

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This article is in the news archives --- for current news go to the Third Branch News.

 

What Follows a Moratorium? Cost-Containment Measures Replace Hold on Construction


Most federal courthouse construction came to a halt in 2004 when a moratorium imposed by the Judicial Conference stopped 35 of 42 planned courthouse projects across the country, as well as numerous other smaller projects. In the face of funding shortfalls, the two-year hiatus was intended to help slow the rate of growth in rental expenses in future years and give the Judiciary an opportunity to see how their space needs could be satisfied with reduced costs. For projects costing less than $2.6 million, the moratorium ended in March 2006, and will end for the remaining projects in September 2006, unless the Judicial Conference recommends an extension.

What happens now? Is the Judiciary due for a building boom?

"First of all, there is no money," said Judge Jane Roth (3rd Cir.), chair of the Conference Committee on Space and Facilities. "The White House did not include funding for courthouse construction projects in its Fiscal Year 2007 budget, although we are trying to get some funding from Congress. But realistically, the Judiciary cannot afford the rent bills for most of the courthouse projects on the Judiciary's Five-Year Courthouse Program Plan. So we’re attempting to balance the Judiciary’s space needs against cost-containment initiatives without adversely affecting court functionality."

In March 2006, the Judicial Conference adopted asset management planning as part of the Judiciary’s long-range facilities planning process. This methodology weighs functional space needs and the costs, risks, and benefits of new construction or renovation projects.

Put simply, the courts are acting much like a homeowner with a growing family who might consider an addition to the family home before making the move to a roomier, yet potentially more expensive house. By taking a second look at their needs and trying to maximize existing space, courts will see if an addition or renovation would be more cost-effective than a new courthouse. Can an extra courtroom or two be squeezed out of available space and will that satisfy future needs? Or will a potentially expensive renovation leave a court with a space shortage that might more easily be solved by a new courthouse? Asset management will be applied to all 35 of the projects that were subject to the moratorium and are without congressional appropriations or authorizations, as well as to future projects.

"By taking this action," said Roth, “there is a possibility that new courthouses might not be constructed at these 35 locations. Other alternatives, such as conducting major repairs and alterations to an existing building might be pursued instead."

Interim Budget Checks and Caps

When the moratorium went into effect in 2004, the Conference also endorsed an accompanying budget check process to be performed by the Administrative Office and circuit judicial council staff. With this process, all pending space requests before the councils must reflect consideration of alternative space, future rent implications, and affordability by the Judiciary. If funding is not available for the request, but the council determines the space is necessary, the council must then seek an exception from the Conference through the Committee on Space and Facilities in coordination with the Budget Committee. The lapse of the space moratorium leaves this process firmly in place. It will be replaced only when budget caps are established for the Judiciary’s space and facilities program.

In March 2006, the Conference approved, in concept, the establishment of an annual budget cap for space rental costs, which will be determined by the Budget Committee in consultation with the Space and Facilities Committee.

“Budget caps, in effect," said Roth, "will produce a rental cost avoidance by using a percentage increase to limit the annual amount of space rental funding available for prospectus and non-prospectus projects, in conjunction with inflationary adjustments."

The Committee on Space and Facilities now is considering what amount of new space the Judiciary can afford each year and how to allocate this amount equitably among the circuits. A preliminary budget cap for space and facilities cost is anticipated to become effective October 1, 2006.

"The benefit of a cap," said Roth, "is that circuit judicial councils will be able to balance and prioritize their space needs at a local level, based on the amount the Judiciary can afford nationally in new rental costs."

Design Guide Revised, Space Policy Made

While the moratorium was in place, the Conference took the additional step of endorsing a review of and subsequent revisions to the U.S. Courts Design Guide with an eye toward imposing tighter constraints on future space and facilities costs, including rent. Any construction projects that follow the moratorium expiration will be subject to the revisions identified and approved by the Judicial Conference.

The Judicial Conference, also looked at what defines a judicial space emergency for a court, revisited the Judiciary's process for determining whether to close facilities without a resident judge, endorsed recommenations on lease-construction, and adopted a policy for circuit judicial councils to use when approving new appellate chambers.

"These actions by the Judicial Conference since the imposition of the courthouse construction moratorium support cost-containment initiatives within the Judiciary," said Roth. "There is no question that the Conference recognizes the significant impact the building program is having on the Judiciary's budget and the need to control rental costs both now and in the future."