THE SCAFFOLD LAW

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IS THE SCAFFOLD LAW PREVENTING
MORE SCHOOLS FROM BEING BUILT?

Many advocates of reform now are using the NYC School Construction Authority (Authority or SCA) as the best illustration of the problems with the Scaffold Law. Indeed, the Authority's premiums are said to have increased by 250 percent in 2014. Beyond this year, reform advocates say, the SCA will need to be entirely self-insured. Consequently, the money the Authority needs to put aside for premiums and damage claims is cutting into its capital program, translating into fewer schools and fewer school seats. Mr. Elmendorf said that last year the SCA built two to three fewer schools due to rising insurance costs and that this year's insurance costs will double, translating into "one thousand pre-K seats [the SCA is] not able to build" or "ten schools not built."

The SCA's predicament also threatens its successful minority contractor mentor program, through which the Authority holds liability insurance for the small MWBE firms working on its projects. Without that coverage, many of these contractors would be unable to afford insurance and, ultimately, may be unable to continue operating.

Supporters of the Law question the basis for these assertions, arguing that they have seen no released data supporting the contention that the SCA's premiums have increased by 250 percent.