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State Allocation Board's Implementation Committee Limits Some Funding Rules On Thursday, the State Allocation Board’s Implementation Committee met to discuss two major issues in the School Facilities Program (SFP) regulations: 1) The 60% commensurate rule in conjunction with the 150% rule, and 2) The accessibility and fire code allowances. When submitting an application for funding under the SFP, a district must certify that the cost estimate for the construction of the project is at least 60% of the total grant amount, including both State and local share. When SB 50 was passed in 1998, the regulations that were developed did not address a minimum amount for construction. The program was intended to be “grant and go,” giving the applicant a dollar amount for each eligible student and allowing districts to use the grants as needed. This was intended as a less complicated process than the earlier Lease Purchase Program. Any cost that was not used for the specific project was considered cost savings and, as an incentive to cost effectiveness, the districts were allowed to keep those savings. SB 50 specifically states that cost savings could be used for other “high priority capital facilities projects.” Later, in response to modernization applications that had very little scope included, the Office of Public School Construction (OPSC) felt it necessary to require a minimum amount of construction work in each project. The 60 percent threshold was set arbitrarily, based on a ratio of 60% hard costs and 40% soft costs. When applied to New Construction projects, the 60% rule could limit a district’s options for their projects. The program and this rule work well for new schools on new sites. The grants are intended to include amounts for the construction of teaching stations as well as support and core facilities such as administration, library, multipurpose, toilets and custodial spaces. If these facilities are all built at one time, it is not difficult to meet the 60% commensurate rule. If, on the other hand, a district builds a school in phases, the first phase may include all the core facilities but only a portion of the classrooms. Under that scenario, the grants may be insufficient to fund all the core facilities without all the classrooms. The district ends up paying a greater share of the project for this phase of the school. However, when classrooms are added to an existing site, there may be more student grants than are needed for just the classrooms. The State will then limit grants because there is not 60% construction cost in the application. The bottom line is that a district will get less total dollars if the project is done in phases than if it were completed in one project. The regulations established in response to AB 695 in 2000 compound this problem. This bill states that teaching stations funded entirely with local funds will be charged to the district’s baseline; the district will lose the eligibility for these students with no State funds. OPSC, once again arbitrarily, set a limit on the number of additional teaching stations a district could add to an SFP project with local funds without being penalized. The regulations state that, if an application includes more than 150% of the teaching stations justified by the students in the application, and local funds greater than the 50% requirement are used, the teaching stations in excess of the 150% are charged against the district’s baseline eligibility. As in the previous example, if a project is built in phases, the latter phases suffer. To meet the 60% minimum construction cost, a district may choose to use fewer grants when an addition includes only classrooms. However, if the applications are reduced to the point that the project will house 150% of the grants in the application, the district will be charged for the additional grants without receiving any State funds. As indicated in this example, if you are planning a new school project or an addition to an existing site, plan carefully to avoid being charged for additional eligibility. If possible on phased projects, the core facilities should be phased along with the teaching stations. Classrooms can be used temporarily as multipurpose facilities or libraries to allow for the later construction of permanent facility replacements. Accessibility and Fire Code Allowances In 2004, the SFP regulations were modified to provide a three percent increase to the Modernization grants for the additional requirements of the California Building Code for accessibility and fire code. At that time, the adjustment was automatic, no estimate of cost was required. In 2006, the Division of State Architect (DSA) presented a study to the State Allocation Board (SAB) stating that this allowance was, in some cases, too small, and in other cases, too much. The SAB proposed the option of allowing districts to accept the three percent without detail or to submit the actual cost of the required work and receive an increased based on that estimate. The SAB requested that staff return in one year with an analysis of how these options were working. In August, 2008, staff returned with an analysis indicating that 75% of the projects used the actual cost option and only 25% of projects used the three percent. Staff recommended that the three percent option be eliminated. The SAB directed staff to take the regulations to the Implementation Committee. In a review of this item, members of the Committee and the attendees generally agreed that the three percent option should remain. Specifically, small school districts may benefit from this option. Staff indicated that the direction from the Board was to bring back regulations that would eliminate the three percent option. Members of the committee asked that the opinions of the Committee members be presented to the Board along with the staff’s recommendation. Editor's Note: Dennis L. Dunston, AIA, REFP, LEED AP, is Director of Facilities Planning and Program Management with the educational consulting firm Total School Solutions. For more information on this or other facilities related issues, you can reach Dennis by emailing to ddunston@totalschoolsolutions.net. |
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