January 12, 2018
CSFC Budget Update: Proposition 51 Implementation
and County Office of Education Issues
On January 10, 2018, Governor Brown released the 2018-19 budget proposal, his last as Governor of California. The budget includes $131.7 billion in General Fund spending, a $5.2 billion increase over 2017-18 expenditures. The Governor continued to urge fiscal restraint and preparation for the next recession, proposing to fully fund the Rainy Day Fund reserve to $13.5 billion.
The Proposition 98 minimum guarantee is expected to reach $78.3 billion in 2018-19, a new all-time high. The Governor proposes to fully fund the Local Control Funding Formula two years early with an additional investment of almost $3 billion. The budget estimates that K-12 average daily attendance (ADA) will drop by 17,163 from the 2017-18 level, to 5,944,090.
Below is an update on items that may impact K-12 school facilities and county offices of education.
K-12 School Facilities and Proposition 51 Implementation
The budget proposes approximately $640 million in bond authority for 2018-19 to fund new construction, modernization, career technical education, and charter facility projects based upon OPSC’s processing of project applications and the State Allocation Board’s approval of these projects.
It is important to note that the workload list of new construction and modernization projects currently on file with OPSC exceeds $3 billion, with millions more projects in process at the Division of the State Architect and California Department of Education.
LCAP and System of Support
- The budget proposes requiring local education agencies (LEAs) to show how their budget expenditures align with the strategies detailed in their Local Control and Accountability Plans (LCAPs) for serving students generating supplemental grants. Department of Finance officials indicate this may be done through an update to district budget documents, not a change to the LCAP template.
- The budget provides over $70 million in ongoing Proposition 98 General Fund to implement the state system of support, which provides targeted assistance by county offices of education or the California Collaborative for Educational Excellence (CCEE).
- $55.2 million Proposition 98 General Fund to help COEs facilitate improvement of school districts identified as being in need of differentiated assistance, plus $4 million for a competitive grant process to identify eight lead COEs that will provide training, resources, and support for other COEs.
- $11.3 million Proposition 98 General Fund for the CCEE.
Last year, the Governor proposed to engage stakeholders for feedback on the special education finance system. For 2018-19, the budget proposes:
- Requiring Special Education Local Plan Areas (SELPAs) to complete a SELPA local plan template that aligns with the goals identified in their member districts’ LCAPs.
- Requiring SELPAs to summarize how their planned expenditures and services align with improved student outcome strategies in the SELPA plan.
- Providing $10 million in Proposition 98 General Fund for SELPAs to work with COEs to provide technical assistance to LEAs to improve student outcomes as part of the statewide system of support.
- Providing $167 million to increase availability of inclusive early education and care for children ages 0 to 5.
- A decrease of $10.2 million Proposition 98 General Fund to reflect a projected decrease in special education ADA.
Additional Items with Possible Facilities Implications:
- One-Time Discretionary Funding – The Governor proposes an increase of $1.8 billion in one-time Proposition 98 General Fund for school districts, charter schools, and county offices of education to use at local discretion, for items such as academic content standards implementation, technology, professional development, deferred maintenance, and employee benefits. Funds provided will offset any applicable mandate reimbursement claims.
- Strong Workforce Program – The budget includes an increase of $212 million Proposition 98 General Fund for K-12 CTE programs administered through the community college Strong Workforce Program in consultation with CDE.
- Cost-of-Living Adjustment – The budget proposes an increase of $133.5 million Proposition 98 General Fund to support a 2.51 percent cost-of-living adjustment for categorical programs that remain outside of LCFF, including Special Education.
- County Offices of Education – The budget includes an increase of $6.2 million Proposition 98 General Fund for COEs to reflect a 2.51 percent COLA and ADA changes applicable to LCFF.
The Legislature will now begin reviewing the Governor’s proposal in-depth at hearings over the course of the next few months, as they work to meet a constitutional deadline of adopting the budget by June 15. CSFC will engage in this process and specifically in discussions about adequate bond sale amounts for the School Facility Program and the impact that delay has on COE projects.
CSFC Legislative Advocate
January 10, 2017
CSFC Budget Update:
School Facilities Proposals and Proposition 51 Implementation
Today, Governor Brown released his 2017-18 budget proposal, which includes $122.5 billion in General Fund spending, a slight decrease from current year expenditures of $122.7 billion. The budget proposal is consistent with the Governor’s philosophy of fiscal restraint and preparing the state to weather the next economic downturn. The Governor indicates that the “tide of revenues has begun to turn” and California is entering a period of slower growth combined with federal uncertainty. He estimates that, absent corrective action, the state would face a $1.6 billion deficit in 2017-18. Therefore, he proposes to pull back on one-time funding commitments made in the prior fiscal year, while avoiding spending increases, identifying $3.2 billion in budget solutions.
The Proposition 98 minimum guarantee is expected to reach $73.5 billion in 2017-18, however the Governor proposes downward adjustments to the two prior fiscal years for an overall reduction of $1.8 billion over three fiscal years. The Governor proposes an additional $744 million investment in the Local Control Funding Formula (LCFF) to provide a cost-of-living adjustment for the funding targets, maintaining formula implementation at the current-year level of 96 percent.
Below is an update on items that may impact K-12 school facilities and county offices of education.
K-12 School Facilities
The Governor’s budget includes comments regarding the implementation of Proposition 51. The Governor indicates that it is important to address “some of the shortcomings within the existing program that were recently documented in the audit findings issued by the Office of State Audits and Evaluations in a 2016 audit of Proposition 1D School Facilities Program expenditures.” The Governor indicates that once accountability and oversight measures are in place to verify that taxpayer dollars are appropriately used, the Administration will “support the expenditure of Proposition 51 funds.” Such measures include front-end accountability (basic terms, conditions, and accountability measures), as well as legislation to require facility bond expenditures to be included in the annual K-12 Audit Guide. Please see page 23 of the 2017-18 Governor's Budget Summary for more information.
Estimated General Fund debt service expenditures for all purposes will increase by $151 million over current-year expenditures, to a total of $5.5 billion in 2017-18. When asked about school bond debt service funding at the budget press conference, Director of Finance Michael Cohen indicated that there are some dollars in the 2017-18 budget for this purpose, but it is a greater issue for 2018-19 and beyond.
Proposition 39 Energy Efficiency Funding
The budget proposes $422.9 million in Proposition 39 energy efficiency funding for K-12 schools in 2017-18, an increase of $24.1 million over the 2016-17 funding level.
The Governor proposes to engage stakeholders for feedback on the special education finance system and recommendations proposed in two recent reports. The California Statewide Special Education Task Force issued recommendations to improve service delivery and outcomes for all students with disabilities, and the Public Policy Institute of California prepared a report recommending changes to the special education finance system. The Governor indicates that the principles of the Local Control Funding Formula should be central to the discussion.
Additional Items with Possible Facilities Implications:
- One-Time Discretionary Funds – The Governor proposes $287 million in one-time Proposition 98 General Fund for school districts, charter schools, and county offices of education to use at local discretion, for items such as content standards implementation, technology, professional development, and deferred maintenance. Funds provided will offset any applicable mandate reimbursement claims.
- County Office of Education Local Control Funding Formula – The budget includes an increase of $2.4 million Proposition 98 General Fund to support a cost-of-living adjustment and average daily attendance (ADA) changes for county offices of education.
- Special Education – The budget includes a decrease of $4.9 million Proposition 98 General Fund to reflect a projected decrease in special education ADA.
- Cost-of-Living Adjustment – The budget proposes an increase of $58.1 million Proposition 98 General Fund to support a 1.48% cost-of-living adjustment for categorical programs outside of LCFF, including Special Education.
- Career Technical Education – The budget provides $200 million for the Career Technical Education Incentive Grant Program, the final installment of funding for this three-year program. Commencing with 2018-19, schools will support the full cost of these programs within their Local Control Funding Formula.
- Cap and Trade – The Governor reconfirms his commitment to climate change, including a $2.2 billion Cap and Trade Expenditure Plan in the budget. The Plan will be allocated after enactment of legislation to confirm the Air Resources Board authority to administer the Cap and Trade Program beyond 2020, which requires a two-thirds vote. The Governor opines that uncertainty regarding this authority may be a factor that has contributed to revenue volatility of the program over the past year.
The Legislature will now begin reviewing the Governor’s proposal in-depth at hearings over the course of the next few months, as they work to meet a constitutional deadline of adopting the budget by June 15. CSFC will continue to engage in this process and specifically in discussions regarding the Proposition 51 implementation proposal.
CSFC Legislative Advocate
June 29, 2016
Governor Signs Budget;
New Threshold for DSA Submissions
On Monday, June 27, 2016, the Governor signed SB 826, the 2016-17 Budget Act, and a number of trailer bills to implement policy changes in the budget. For the first time since the 1980s, the Governor did not exercise his line-item veto authority to reduce or eliminate any of the budget appropriations passed by the Legislature.
The budget includes $122.5 billion in General Fund expenditures, $51.6 billion of which is slated for K-12 education programs. The budget prioritizes preparing for the next economic downturn, one of the Governor’s top priorities, by placing an extra $2 billion into the state’s Rainy Day Fund, bringing the total fund balance to $6.7 billion. The budget also addresses one of the Legislature’s top priorities by including $400 million for affordable housing, tied to future regulatory reform, and authorizing development of a $2 billion bond program to address homelessness for individuals with mental health needs. Details of this program are still being negotiated.
DSA Review Threshold
The Governor signed SB 836, the general government trailer bill, which includes a change to the Division of the State Architect (DSA) project review threshold. The bill increases the minimum project cost threshold for DSA review as follows:
- Structural projects – from $42,218 to $100,00
- Non-structural projects – from $168,187 to $225,000
Other Facilities Items
The budget includes the following items related to school facilities:
- Proposition 39 – Provides $398.8 million in Proposition 39 energy efficiency funding for K-12 schools. This is an increase of $85.4 million over FY 2015-16.
- Safe Drinking Water – Includes $9.5 million in one-time Proposition 98 funds for the State Water Resources Control Board, in consultation with the Department of Education, to administer a grant program for the purpose of improving access to, and the quality of, drinking water in public schools, consistent with the Legislature’s intent that school facilities be maintained in “good repair.” Grants will be provided for projects such as installation of water bottle filling stations, and installation or replacement of drinking water fountains and treatment devices.
- Discretionary Funds – Provides $1.28 billion in one-time discretionary funds, which also pays down the K-12 education mandates backlog.
Additionally, the Legislature rejected the Governor’s May Revision proposal to establish a $100 million Emergency Repair Revolving Loan Program, so this program was not included in the final budget. The program was intended to provide temporary funding to schools with insufficient resources to quickly address imminent health and safety issues that would cause students to be displaced.
~ Rebekah Cearley
CSFC Legislative Advocate
May 13, 2016
2016-17 May Revision:
Governor Proposes New Emergency Repair Revolving Loan Program
Today, May 13, the Governor released his May Revision update to the January 2016-17 budget proposal, based on updated revenue figures. Citing a tax revenue forecast reduced by $1.9 billion from January estimates, the Governor proposed a slight reduction in General Fund spending, from $122.6 billion to $122.1 billion. The Governor emphasized the need for fiscal prudence and planning for the next recession. He cautioned against funding new programs and warned that historically balanced budgets have been quickly followed by high deficits.
The reduced revenue forecasts have only minor adjustments to the Proposition 98 minimum guarantee and K-12 education allocations. One major surprise is that the new estimated cost-of-living adjustment for the remaining categorical programs and Local Control Funding Formula target has been lowered from 0.47% to 0.00%. Proposition 98 funding obligations increased over the January proposal by a total of $626 million over the three-year period of 2014-15 to 2016-17. The 2016-17 Proposition 98 guarantee is proposed at $71.9 billion. The May Revision proposes an increase in funding for the Local Control Funding Formula by providing an additional $154 million over the $2.8 billion proposed in the January budget, bringing the formula to 95.7% of full implementation.
At the May Revision press conference, when asked about the school bond initiative already qualified for the November ballot, the Governor indicated that he was not ready to take a position. When asked about Proposition 30, he indicated that he will let the people of California decide its fate, but if it does not pass, cuts to programs would eventually be necessary.
Emergency Repair Revolving Loan Program – The May Revision proposes $100 million in one-time Proposition 98 General Fund dollars to establish a bridge loan program to provide temporary funding to schools with insufficient resources to expeditiously address imminent health and safety issues that would cause students to be displaced. The funds would address “emergency facilities needs” and loan funds “could be released in a matter of days.” The program would establish conditions for participation, including independent verification that the school site has been deemed unsafe for occupation, and self-certification that that no alternative facilities are available. Schools would have the option of repaying the loans in full within one year of disbursement without interest, or by structuring a long-term low-interest repayment plan not to exceed 20 years.
Proposition 39 – The May Revision proposes $398.8 million in Proposition 39 energy efficiency funding for K-12 schools, an increase of $33.3 million from the January proposal.
Discretionary Funds – In January, the Governor proposed almost $1.3 billion in discretionary one-time Proposition 98 funds for school districts, charter schools, and county offices of education. The May Revision proposes an additional $134.8 million, for a total of over $1.4 billion to further the implementation of the state‑adopted academic standards, make necessary investments in professional development, provide teacher induction to beginning teachers, address infrastructure and deferred maintenance needs, purchase instructional materials and technology to prepare both students and teachers for success, and more.
Special Education Property Tax Adjustment – The May Revision proposes an increase of up to $28.5 million Proposition 98 General Fund in 2015‑16, provided on a contingency basis, for an anticipated shortfall in redevelopment agency property taxes for special education local plan areas. Related language provides a mechanism to distribute up to $28.5 million based on a determination of property taxes reported for special education local plan areas as of the second principal apportionment certification in early June.
Average Daily Attendance (ADA) – An increase of $11.2 million in 2015‑16 and a decrease of $2 million in 2016‑17 for school districts, charter schools, and county offices of education under the Local Control Funding Formula as a result of an increase in ADA in 2014‑15 which drives projections for 2015‑16, and a decrease in ADA for 2016‑17.
Drought Response & Water Issues
- Improved Monitoring and Reporting of Drinking Water – The May Revision includes an increase of $480,000 for the Safe Drinking Water Account and two positions for the State Water Resources Control Board to prepare guidance documents and engage in outreach to schools to assist local efforts for water quality testing, and to support public water systems in improving compliance with Federal reporting requirements.
- Emergency Drought Response – The Governor’s January budget proposed $323.1 million to continue the state’s drought response, and the May Revision proposes an additional $11.4 million, for a total of $334.5 million. These funds are proposed for programs across various agencies and state departments to protect water supplies, conserve water, and provide emergency response. On May 9, 2016, the Governor issued an executive order directing the State Water Resources Control Board to adjust its emergency water restrictions to account for this winter’s snow and rain. The May Revision provides an increase of $4.5 million General Fund for a coordinated effort by the Department of Water Resources and the Water Board to review and update local water shortage contingency plans, develop recommendations for new water use efficiency targets, and establish a permanent urban water use efficiency data tracking system, consistent with directives of the most recent executive order.
The Legislature will consider the Governor’s May Revision proposals and continue to review his January proposals, working toward the constitutional deadline to pass a budget by June 15.
~ Rebekah Cearley
CSFC Legislative Advocate
February 18, 2016
Juan Mireles Appointed Director of CDE’s School Facilities and Transportation Services Division
State Superintendent of Public Instruction Tom Torlakson announced yesterday, February 17, that he has appointed Juan Mireles as Director of the California Department of Education’s School Facilities and Transportation Services Division. Juan replaces Kathleen Moore, who retired in 2015. Juan Mireles previously served as Deputy Executive Officer at the Office of Public School Construction and most recently as a Principal Program and Budget Analyst at the Department of Finance.
CSFC looks forward to working with Juan in this new capacity, and we will continue to represent the unique needs of county offices of education.
The full press release is below and can be found on CDE’s website by clicking here.
Release: #16-14 Contact: Robert Oakes
February 17, 2016 E-mail: email@example.com
State Schools Chief Tom Torlakson Appoints Division Directors for Government Affairs and School Facilities and Transportation
SACRAMENTO — State Superintendent of Public Instruction Tom Torlakson announced today that he has appointed new Directors for the California Department of Education's (CDE) Government Affairs Division and School Facilities and Transportation Services Division.
Debra Brown, a veteran in education legislation and policy, will lead the Government Affairs Division and serve as the CDE's liaison with local, state, and federal elected officials and government agencies.
Juan Mireles, an expert in school facilities funding, will direct the School Facilities and Transportation Services Division.
"These are two top experts in their fields, and I look forward to the great work they will do for the CDE team," Torlakson said. "These Divisions provide outstanding service to the public, elected officials, and California schools."
Brown recently served as Director of Education Policy at Children Now, a non-partisan national, state, and local research, policy development, and advocacy organization.
She helped implement Children Now's education policy agenda, including the organization's work on school finance reform, Common Core, assessment and accountability issues, and early childhood readiness. She also worked as a senior legislative advocate at the California School Boards Association (CSBA) and served as their lead advocate on funding and finance.
As CDE's Division Director for Government Affairs, Brown will be responsible for the administration of all departmental activities relating to state and federal legislation. Brown replaces former Division Director Monique Ramos, who is now a lobbyist.
Mireles was a Principal Program and Budget Analyst at the State Department of Finance, where he supervised analysts responsible for budgets on school facilities, charter schools, and teacher credentialing.
He has worked in school facilities since he began his state career at the Office of Public School Construction (OPSC) in 1998. The OPSC is under the authority of the state's Department of General Services. As staff to the State Allocation Board, OPSC implements and administers a $35 billion voter-approved school facilities construction program. Mireles later served as OPSC's Deputy Executive Officer.
The CDE School Facilities and Transportation Services Division assists school districts and their communities in creating well-planned, K-12 learning environments in safe, clean, and up-to-date schools. Transportation services assist school districts, school bus contractors, transit agencies, and farm labor vehicle operators in providing the safest and most efficient transportation services.
Mireles replaces former Division Director Kathleen Moore, who retired.
# # # #
Tom Torlakson — State Superintendent of Public Instruction
Communications Division, Room 5206, 916-319-0818, Fax 916-319-0100
January 7, 2016
Governor Proposes Ongoing Dialogue for State Facilities Funding
Today, January 7, Governor Brown released his 2016-17 budget proposal, which includes $122.6 billion in General Fund spending, a 5.6% increase over the current year. While revenues are up and the economic condition is positive, the Governor emphasized the need to plan for the next inevitable downturn by avoiding new permanent spending, favoring one-time uses for additional revenues. For example, he proposes an extra $2 billion payment to the Rainy Day Fund, for a total of $3.7 billion. The budget includes an additional $5.4 billion for K-14 education, including an additional $2.8 billion investment in the Local Control Funding Formula, an increase of 5.4%.
School Bond and the State’s Role in Funding School Facilities
The Governor did not propose a school bond or specific school facilities funding program in this year’s budget. Instead, he referred back to comments made in prior budget proposals regarding concerns with the current K-12 School Facility Program. He does not appear to have changed his position regarding a school bond; when asked directly at the press conference about whether he would oppose the $9 billion Californians for Quality Schools bond already qualified for the ballot, Governor Brown indicated that he believes that he and the Legislature can craft a better solution, stopping short of stating opposition. In the 2016-17 proposal, he states that:
“California needs a new program that corrects the deficiencies of the existing program. A proposed $9 billion school bond for the November 2016 ballot makes no changes to the existing program and it would add an additional $500 million a year in General Fund debt service. The Administration will continue a dialogue with the Legislature and education stakeholders to shape a future state program focused on districts with the greatest need, while providing substantial new flexibility for districts to raise the necessary resources for their facilities needs.”
In the 2016 Five-Year Infrastructure Plan, issued in conjunction with the 2016-17 budget proposal, the Governor referred back to his prior criticisms regarding the complexity and funding mechanics of the current School Facility Program. A new criticism in today’s Infrastructure Plan is that the current program “does not consider recent changes to the school facilities landscape that includes a 10-year decline in projected enrollment of approximately a half percent.” The Governor reiterated his recommendations identified in the 2015-16 budget proposal, which proposed to increase tools for local control and target state funding to districts most in need. The Governor did not provide any comments specific to county offices of education and their future participation in the state funding program.
Proposition 39 Energy Efficiency Funding
The budget proposes $365.4 million in Proposition 39 energy efficiency funding for K-12, an increase of $52 million over the 2015-16 funding level.
Additional Items with Possible Facilities Implications
- One-Time Discretionary Funds – The Governor proposes an increase of more than $1.2 billion in one-time Proposition 98 General Fund for school districts, charter schools, and county offices of education to use at local discretion, for items such as technology, professional development, deferred maintenance, etc.
- County Offices of Education Local Control Funding Formula – The budget includes an increase of $1.7 million to support a cost-of-living adjustment and ADA changes for COEs.
- Special Education – The budget includes a decrease of $15.5 million Proposition 98 General Fund, reflecting a projected decrease in Special Education ADA.
Energy and Water Issues
The Governor proposes a $3.1 billion Cap and Trade Expenditure Plan that will “reduce GHG emissions through programs that support clean transportation, reduce short-lived climate pollutants, protect natural ecosystems, and benefit disadvantaged communities.” The Plan funds programs across various state agencies in categories such as “50 Percent Reduction in Petroleum Use” and “Energy Efficiency/Renewable Energy.” Addressing climate change will continue to be one of the Governor’s priorities.
The Governor also proposes an additional $323.1 million ($212.1 million General Fund) in one-time funds to continue immediate response to the drought. These funds are proposed for programs across various agencies and departments.
The Legislature will now begin reviewing the Governor’s proposal in-depth at hearings over the course of the next few months, as they work to meet a constitutional deadline of adopting the budget by June 15. CSFC will continue to engage in this process and specifically in discussions regarding the future of state facilities funding, representing the unique perspective and needs of county offices of education.
The Governor’s full budget proposal summary and infrastructure plan can be found on the Department of Finance website:
October 13, 2015
Legislative Update: Governor's Actions on Facilities Bills
The Legislature completed its business and went into interim recess on September 11, and the Governor had until midnight on Sunday, October 11 to sign or veto bills on his desk.
Legislators will return to Sacramento on January 4, 2016, to kick off the second year of the 2015-16 legislative session, at which time bill introductions will begin again in earnest.
Below is a list of facilities-related bills that made it to the Governor’s desk in 2015. Bills that were not passed by the Legislature became two-year bills and will have a second opportunity to continue moving through the legislative process in January; such bills are not listed below.
The Governor signed the following bills into law:
Skilled Workforce Bills
Three bills aimed at ensuring a skilled workforce on school construction projects were signed by the Governor this year, all of which implement similar workforce provisions:
AB 566 (O’Donnell) – Lease-Leaseback Projects
CSFC Position: Watch
This bill enacts significant changes that will ultimately make the lease-leaseback delivery method more difficult to use. AB 566 creates more stringent requirements for projects using lease-leaseback by requiring the use of a skilled and trained workforce, defined as a workforce where all workers are either skilled journeypersons or apprentices registered in an apprentice program approved by the Chief of the Division of Apprenticeship Standards of the Department of Industrial Relations. Additionally, the bill expands prequalification requirements for lease-leaseback, requiring prequalification regardless of contract size or funding source.
AB 1358 (Dababneh) – Design-Build Projects
CSFC Position: Watch
This bill recasts the existing design-build authorization, extending the sunset on this authority until 2025 and lowering the threshold for use from $2.5 million to $1 million. The bill also requires the use of a skilled and trained workforce (apprentices and journeypersons) for all workers on a design-build project, similar to the requirements in AB 566.
AB 1185 (Ridley-Thomas) – LAUSD Best Value Pilot Program
CSFC Position: Watch
This bill authorizes Los Angeles Unified School District to create a pilot program for the use of a best value procurement method for public projects that exceed $1 million. It includes similar skilled workforce requirements.
This approach to ensuring a skilled workforce has been described by key legislators, staffers, and others as the wave of the future. Concerns exist about the availability of appropriate apprentices and journeypersons to complete school construction jobs across the state.
AB 219 (Daly) – Concrete Delivery
CSFC Position: Watch
This bill expands the definition of “public works” to include the hauling and delivery of ready-mix concrete. Prevailing wage law, including the Department of Industrial Relations monitoring program created by SB 854 (2014) would apply. The bill was co-sponsored by a number of organized labor groups. Opponents were concerned about the potential slippery slope that could expand this policy to delivery of other materials, and they argued that ready-mix concrete is delivered by drivers, not construction workers.
AB 552 (O’Donnell) – Consequential Damages
CSFC Position: Watch
This bill provides that a clause in a public works construction project requiring the contractor to be responsible for delay damages is not enforceable unless the delay damages have been liquidated to a set amount and identified in the contract. The author was concerned that some public agencies have begun utilizing contract provisions for delays that call for both liquidated damages and unlimited consequential damages, making it difficult for insurers to provide surety bonds for projects.
AB 715 (Daly) – Assessable Space
CSFC Position: Watch
This bill revises the definition of assessable space for developer fee calculations, adding “covered” or “uncovered” to describe walkways. The bill was sponsored by the California Apartment Association and originally sought to exclude from the calculation additional spaces they believed did not represent livable space, such as bike storage lockers and detached personal property storage.
SB 111 (Fuller) – Military Base Schools
CSFC Position: Watch
This bill expresses the Legislature’s intent to provide assistance to school districts to help fund the local match requirements of the federal Department of Defense school facility grant program for military base schools. It requires the Department of Finance to explore funding options for this purpose, including possible low-interest loans through the California Infrastructure and Economic Development Bank.
SB 222 (Block) – Statutory Liens
CSFC Position: Watch
This bill requires an automatic lien on all tax revenues received from local bond issuances; revenues received from the levy and collection of the tax would be immediately subject to the lien. The bill was sponsored by the San Diego Unified School District and is intended to help improve rating agency treatment of school general obligation bonds, possibly leading to lower borrowing costs.
SB 350 (De Leon) – Climate Change
CSFC Position: Watch
This bill sets forth new goals for California’s greenhouse gas emission reductions. It establishes a statewide 50 percent Renewable Portfolio Standard (RPS) by 2030, and it requires a doubling of building energy efficiency by 2030. Details will now be worked out by various state agencies and departments. Effects on schools are not specified and will ultimately be determined as the bill moves through the implementation phase; the author has indicated that he intends for a robust stakeholder input process. This bill initially required a 50 percent reduction in petroleum use in cars by 2030 as well, but that provision was not included in the final adopted language.
The Governor vetoed the following bills:
AB 1347 (Chiu) – Claims Process
CSFC Position: Oppose (Now Neutral)
This bill establishes a new claims and dispute resolution process, seeking to achieve timely payment for undisputed claims amounts. It was sponsored by United Contractors and a number of other labor groups. Specifically, the bill requires a public owner to respond to a claim within 45 days to identify disputed and undisputed amounts; non-response means that the claim is rejected in its entirety. The owner would then have 60 days to pay undisputed amounts, and contractors could request a meet and confer process for disputed amounts. The bill allows a contractor to submit a claim on behalf of a subcontractor without standing. CSFC worked closely with a coalition of public works entities to negotiate a reasonable compromise with the proponents, and we were ultimately able to remove opposition. The Governor vetoed the bill, questioning whether the new procedures were an improvement over current law. In his veto message, he directed his departments to “immediately work with industry partners and the proponents of this bill on ways of improving our prompt payment policies.”
SB 334 (Leyva) – Drinking Water
CSFC Position: Watch
This bill specifies that drinking water at schools must meet United States Environmental Protection Agency (EPA) standards for lead. Schools with lead-containing plumbing components must flush drinking water sources at the beginning of each day. The Governor vetoed the bill, concerned about the creation of a state mandate with potentially large costs. He directed the State Water Resources Control Board to work with school districts and local public water systems to incorporate water quality testing in schools as part of their lead and copper rule.
~ Rebekah Cearley
CSFC Legislative Advocate
September 18, 2015
State School Bond Qualifies for November 2016 Ballot
Good news, in advance of our Annual Summit next week!
The state school bond initiative sponsored by the Coalition for Adequate School Housing (C.A.S.H.) and the California Building Industry Association (CBIA) has been certified eligible (i.e. qualified) for the November 7, 2016 general election ballot. The official title of the ballot measure is the “Kindergarten Through Community College Public Education Facilities Bond Act of 2016.” Voters will have the opportunity to consider approving a $9 billion state school bond, including $7 billion for K-12 facility projects and $2 billion for community colleges.
The next step for the effort is to build a coalition of supporters. One way that you can show support for this effort is by asking your Board of Education to pass a resolution in support of the ballot measure. Click here for a resolution template for your use, and please provide a copy to Jessica Contreras at firstname.lastname@example.org upon approval.
We’ll discuss the initiative measure, other state school bond efforts, and related issues in more detail at the CSFC Annual Summit next week.
~ Rebekah Cearley
CSFC Legislative Advocate
June 15, 2015
Legislature Passes Budget - Implications for School Facilities
Today the Legislature passed the FY 2015-16 Budget Act and a handful of accompanying trailer bills in order to meet the June 15 constitutional deadline. Negotiations continue between the Governor and the Legislature to finalize a deal on the budget. Today, the Legislature voted to approve the main budget bill, AB 93, as well as four trailer bills to implement various provisions of the budget. Further action will be required for the Legislature to approve additional budget legislation, including the education trailer bill.
AB 93 recognizes revenue assumptions that are $3.1 billion higher than the Governor’s May Revision estimate and it includes $117.5 billion in General Fund spending for 2015-16. The Legislature’s proposed additional spending would fund programs such as child care, health care, and higher education. AB 93 and the four accompanying trailer bills passed today will now go to the Governor for his consideration. The Governor has the authority to blue pencil (i.e. line-item veto) dollar amounts in the budget, and we expect he will use that authority on some of the spending authorizations approved by the Legislature.
Below is a selection of some of the key education and school facilities issues included in the budget as adopted by the Legislature. We await additional information that will become available with the passage of trailer bills to implement the policy changes included in AB 93.
Proposition 39 – Provides $313.4 million for K-12 grants, to be allocated on a per-ADA basis.
Emergency Repair Program – Provides $273.4 million in one-time Proposition 98 General Fund resources to retire the state’s facilities funding obligation under the terms of the Williams settlement.
Office of Public School Construction Staffing – Decreases Office of Public School Construction staff by 37 positions, some of which are currently filled. The reductions equate to a savings of $4.47 million. This is being done to “align administrative resources with the expected workload” for the School Facility Program.
One-Time Funds – Provides $3.3 billion in one-time and settle-up Proposition 98 funds to pay off the K-12 mandates backlog. Funding will be allocated on a per-ADA basis and is available for discretionary purposes such as implementation of Common Core standards (professional development, teacher training, purchase of instructional materials and technology infrastructure) or for other one-time purposes, such as maintenance and deferred maintenance.
Technology Infrastructure – Includes $50 million in one-time Proposition 98 funds to support internet connectivity and infrastructure for schools. The funds will be allocated through the Broadband Infrastructure Improvement Grant (BIIG) program administered by the K-12 High Speed Network. Any remaining funds available after all reasonable solutions have been funded through the BIIG program may be used to fund under-connected sites upon approval of the Department of Finance.
Charter School Facility Grant Program – Increases funding by $20 million to reflect the estimated cost of meeting a lower enrollment threshold to qualify.
Career Technical Education Incentive Grant Program – Provides one-time Proposition 98 funding in the amounts of $400 million (2015-16), $300 million (2016-17), and $200 million (2017-18) through competitive grants in three sizes based on ADA. The program includes higher weighting of applicants who do not have a CTE program, serve low-income, English-learner, or foster youth students, have a high drop-out rate, or are located in areas with high unemployment rates.
Additional Action Needed
The following items were contemplated during budget negotiations but have not yet been acted upon by the full Legislature:
Routine Restricted Maintenance Account – Both houses of the Legislature approved a conceptual phase-in return of the 3% required set-aside for Routine Restricted Maintenance (RRM), which was originally scheduled to return in FY 2015-16. The phase-in requires districts participating in the School Facility Program (SFP) to set aside 2% of their annual General Fund budget for RRM by 2017-18 and 3% by 2020-21. The language permits RRM funds to be used for drought-related purposes. We anticipate this change to be reflected in trailer bill language that will be considered by the Legislature at a future date; more information to come.
Military Base Schools – In his May Revision, the Governor proposed to explore ways to help military base schools fund the local match requirement for the Federal Department of Defense school facility grant program for public military base schools, using a possible low-interest loan program. At this time it does not appear that the budget includes any provisions to address this issue, but we will continue to review trailer bill language as it becomes available.
Water and Climate Change – We are awaiting further information the actions of the Legislature regarding funds for drought response, water conservation, and climate change.
May 14, 2015
Governor Releases May Revsion Budget: Facilities, Special Education, and More
Today the Governor released the May Revision budget update. His budget estimates an additional $6.7 billion in revenues above the January proposal, $5.5 billion of which will go to K-12 and community colleges under Proposition 98. This increases the Proposition 98 minimum guarantee by $241 million in 2013-14, $3.1 billion in 2014-15, and $2.7 billion in 2015-16, for revised minimum guarantee levels of $58.9 billion, $66.3 billion, and $68.4 billion respectively. The Proposition 98 maintenance factor is reduced to $722 million.
The Governor continues to prioritize fiscal restraint and addressing long-term debts, while looking forward to preparing the state for the next economic downturn by funding the state’s reserve. The May Revision does not include any additional information on the Governor’s policy recommendations for facilities as outlined in the January budget proposal, and it does not include a new state school bond or another mechanism to fund a state program.
The May Revision does not include any modifications or additional comments on the following school facilities proposals made in the January budget:
- Provide $273.4 million in one-time Proposition 98 General Fund resources for the Emergency Repair Program (ERP). This would retire the state’s facilities funding obligation under the terms of the Williams settlement.
- Provide $100 million in one-time Proposition 98 funding to support additional investments in internet connectivity and infrastructure.
The May Revision increases discretionary one-time Proposition 98 funds to schools by $2.4 billion, for a total of more than $3.5 billion in total discretionary funds. The funds are intended to further implement the state-adopted Common Core academic standards, for use in funding professional development, teacher training, and purchase of instructional materials and technology. However because they are discretionary and intended for one-time purposes, the funds can also be used for maintenance and deferred maintenance.
The May Revision decreases the amount of energy efficiency funds available to K-12 schools in 2015-16 by $6.7 million, for a total of $313.4 million. The proposal states that this is a reflection of “reduced revenue estimates” generated by corporate tax revenues.
Public Schools on Military Installations
The Governor is proposing to explore ways to help military base schools fund the local match requirement for the Federal Department of Defense school facility grant program for public military base schools, using a possible low-interest loan program:
The U.S. Secretary of Defense established a program to construct, renovate, repair, or expand elementary and secondary public schools on military installations to address capacity or facility condition deficiencies. The program is 80 percent federal funded, with a 20‑percent local match requirement for a school district to receive funding under the program.
In 2010, the Department of Defense assessed the condition of 160 public schools on military installations in the United States and created a priority list of schools with the most serious condition and/or capacity deficiencies. California has 11 schools located in six school districts that are within the top 33 of the priority list. The majority of schools on this list have expressed concerns about raising the required 20‑percent local match. In an effort to assist participating districts, the Administration is exploring several funding options to help the eligible schools establish their local match, including the provision of low‑interest state loans through existing programs.
The May Revision proposes $60.1 million in Proposition 98 General Fund ($50.1 million ongoing and $10 million one-time) in 2015-16 to implement selected changes recommended by the Statewide Special Education Taskforce. The Taskforce released its report and recommendations in March 2015. The report did include some facilities-specific recommendations, but the May Revision does not include any proposals to address them. The Governor is proposing to target funds to services for infants, toddlers, and state preschool students, as well as provide resources for dispute resolution, aligning systems of learning and behavioral supports, and implementing the federally required State Systemic Improvement Plan for students with disabilities.
The May Revision indicates that, since the Governor first declared a state of emergency in January 2014, the State has provided approximately $1.9 billion to assist drought-impacted communities and provide additional resources for water infrastructure projects. Additionally, on April 1, 2015, the Governor issued Executive Order B-29-15 to order statewide mandatory water reductions, directing the Water Board to reduce potable urban water use by 25 percent statewide. The May Revision includes $2.2 billion in one-time resources for 2015-16 to continue immediate response to drought impacts and to fund existing Water Board programs, to address issues such as groundwater contamination, water recycling, safe drinking water, wastewater treatment projects, stormwater management, conservation, and more. Additionally, the updated Cap and Trade expenditure plan includes $128 million for programs that will reduce greenhouse gas emissions by saving energy through water conservation. None of these funds are proposed specifically for schools.
The Legislature will consider the Governor’s May Revision proposals and continue to review his January proposals, working toward the constitutional deadline to pass a budget by June 15.
The full May Revision document is available here.
January 16, 2015
Efforts for a November 2016 school bond are heating up, and there are a lot of moving parts.
Bond Bills Introduced in the Legislature
Two legislators have introduced bond bill legislation. Senator Carol Liu, Chair of the Senate Education Committee, has introduced her own 2016 bond bill vehicle, SB 114. The full text of the bill can be found by clicking here. The bill is currently silent on the dollar amount and it includes a number of other policy changes; K-12, community colleges, and universities are all included.
Assembly Member Chris Holden has introduced AB 148, which expresses the intent of the Legislature to enact a 2016 school bond measure. The full text of the bill can be found here. Assembly Member Holden is the Majority Floor Leader in the Assembly, a key leadership position, and represents AD 41 (Pasadena area).
These bills will serve as a vehicle for bond discussions in the legislature. It is possible that other legislators may also introduce school bond legislation. Legislators have until February 27 to introduce bills.
C.A.S.H. School Bond Initiative Efforts
We notified you previously that the Coalition for Adequate School Housing (C.A.S.H.) has created the Californians for Quality Schools (CQS) group, which submitted a $9 billion K-14 school bond initiative to the Attorney General's office on Monday, January 12. The bond includes the following dollar amounts:
-New Construction: $3 billion
-Modernization: $3 billion
-Career Tech: $500 million
-Charter School Facilities: $500 million
-Community Colleges: $2 billion
There are two ways for a school bond to get on the ballot. One is for the Legislature to pass and the Governor to sign a bond bill, which is the approach that has historically been taken. The second way is for members of the public to submit an initiative to the Attorney General and gather signatures to qualify it for the ballot. The CQS initiative takes the second path, bypassing the Legislature and Governor and going straight to voters.
There are two important dates on the path to qualification. The first is that the Attorney General has 60 days from the time of receipt to prepare the Title and Summary for circulation. After the Title and Summary is finalized, proponents then have 180 days to gather enough signatures to qualify. The current threshold is 365,880 valid signatures.
January 9, 2015
Today the Governor released his 2015-16 budget proposal, which includes $113.3 billion in spending, with an additional $7.8 billion for K-12 education. A $4 billion investment is made in the Local Control Funding Formula (LCFF), an increase that will bring funding levels up to 32% more of closure to the LCFF target. Despite significant increases in revenues, the Governor continues to focus on fiscal restraint, proposing an approach primarily intended to ensure successful implementation of ongoing initiatives rather than creating significant new spending programs.
State Facilities Program Funding
The most significant issue for CSFC is the Governor's statements about K-12 school facilities. The Governor reiterates his concerns about the complexity and funding mechanics of the current School Facility Program, indicating that he will continue to work with the Legislature and stakeholders in the coming months to create a new needs-based facilities funding program with a significantly reduced state role and greater local flexibility.
The budget includes the following recommendations, summarized from the Governor's proposal, for the design of a new program:
- Increase tools for local control:
- Expand local funding capacity - Raise assessed valuation caps for specific bond measures and total caps on bonded indebtedness by at minimum the rate of inflation since 2000.
- Restructure developer fees - Establish one developer fee level for all school districts and cap the amount of fees that can be levied between existing Level II and III fees (50 to 100 percent of project costs).
- Expand allowable uses of Routine Restricted Maintenance funding - Allow districts the ability to pool already inadequate Routine Restricted Maintenance Account funds over multiple years to use for modernization and new construction projects, in addition to routine maintenance.
- Target state funding for districts most in need, in a way that:
- Limits eligibility to districts with low per-student assessed value.
- Prioritizes funding for health and safety and severe overcrowding projects.
- Establishes a sliding scale to determine the state share of project costs based on local capacity to finance projects (i.e. ability to pay).
- Augment the Charter School Facility Grant Program by easing eligibility requirements.
Click here to see the full K-12 proposal for additional detail.
The budget proposes a total of $368 million for energy efficiency funds in 2015-16, including:
- $320.1 million for K-12 schools, an increase of $41.1 million over 2014-15 funding levels.
- $5.3 million to the California Conservation Corps for continued technical assistance to K-12 school districts.
- $3 million to the Workforce Investment Board for continued implementation of the job-training program.
Emergency Repair Program
The budget proposes $273.4 million in one-time Proposition 98 General Fund resources for the Emergency Repair Program (ERP). These funds will retire the state's facilities funding obligation under the terms of the Williams settlement.
The budget proposes $100 million in one-time Proposition 98 funding to support additional investments in internet connectivity and infrastructure. These funds build upon the $26.7 million provided in the 2014 Budget Act for the K-12 High Speed Network to assist schools with securing required internet connectivity and infrastructure to implement Common Core's new computer-adaptive tests.
Climate Change Initiative
The Governor proposes working with the Legislature and stakeholders to develop a greenhouse gas reduction target for 2030. His recommendations for the plan include, but are not limited to, improving the energy efficiency of existing buildings and increasing the use of cleaner fuels for water and space heating in buildings, as well as increasing the state's share of renewable energy and reducing the use of petroleum-based transportation fuels and the number of vehicle miles traveled statewide.
Other Issues Not Specific to Facilities
The following items, while not specific to facilities, will impact the larger education sector:
Deferral Repayment - The budget provides an increase of almost $900 million in one-time Proposition 98 General Fund in 2014-15 to eliminate all outstanding deferral debt for K-12.
Career Technical Education - The budget proposes $250 million in one-time Proposition 98 funding in each of the next three years for a transitional CTE Incentive Grant Program, to replace the current Career Pathways Trust Program. The new program will require a dollar-for-dollar match, and priority for state funds will be given to LEAs applying in partnership with other LEAs to offer regional programs.
Adult Education Block Grant - The budget proposes $500 million for an adult education block grant program.
Redevelopment Dissolution - The Administration plans to introduce legislation in the budget process to gradually transition the state away from its current detailed role in the Redevelopment Agency (RDA) dissolution process.
The Legislature will now begin an in-depth review process of all proposed policy changes, working toward the constitutional deadline to pass a budget by June 15. Discussions regarding facilities and other budget issues will heat up in the coming months, as members of the Legislature develop and pursue their own funding priorities. CSFC will continue to engage in these discussions and represent the unique perspective and needs of county offices of education.
The Governor's full budget proposal summary can be found at the following link:
September 12, 2014
The State Water Resources Control Board (State Water Board), Division of Financial Assistance is now accepting applications for the Drought Response Outreach Program for Schools (DROPS). The DROPS program will award grants to projects that reduce stormwater pollution and provide multiple benefits including water conservation, water supply augmentation, energy savings, increased awareness of water resource sustainability, and reduced dry weather runoff.
The application period began Thursday, September 11, 2014. Applications will be accepted through January 15, 2015. Approximately $25.5 million is available in this application period.
Click here for more information on the program and application requirements.
January 9, 2014
Last night, the Governor's 2014-15 Budget Proposal was leaked two days ahead of schedule. The Governor includes a detailed discussion of his concerns about the current School Facility Program and his policy considerations for a future program, and this statement serves as the basis of discussion for further negotiations. The Governor continues to prioritize paying down the wall of debt and taking a pragmatic approach to spending.
Below is the Governor's proposal for school facilities:
K-12 School Facilities
Since 1998, voters have approved approximately $35 billion in statewide general obligation bonds to construct or renovate public school classrooms used by the state's roughly six million K-12 students. These bonds cost the General Fund approximately $2.4 billion in debt service annually. In addition to general obligation bonds, school districts may use developer fees, local bonds, certificates of participation, and Mello-Roos bonds to construct additional classrooms or renovate existing classrooms. There is currently no bond authority remaining in the core school facilities new construction and modernization programs.
As part of the 2014 Five-Year Infrastructure Plan, the Administration proposes to continue a dialogue on the future of school facilities funding, including consideration of what role, if any, the state should play in the future of school facilities funding. This infrastructure discussion should also include the growing debt service costs associated with the state's increased reliance on debt financing.
The Administration proposes that any future program be easy to understand and provide school districts appropriate local control and fiscal incentives. The following problems are inherent in the current program and must be addressed:
- The current program is overly complex and reflects an evolution of assigning over ten different specialized state agencies fragmented oversight responsibility. The result is a structure that is cumbersome and costly for the state and local school districts.
- The current program does not compel districts to consider facilities funding within the context of other educational costs and priorities. For example, districts can generate and retain state facility program eligibility based on outdated or inconsistent enrollment projections. This often results in financial incentives for districts to build new schools to accommodate what is actually modest and absorbable enrollment growth. These incentives are exacerbated by the fact that general obligation bond debt is funded outside of Proposition 98.
- The current program allocates funding on a first-come, first-served basis resulting in a substantial competitive advantage for large school districts with dedicated personnel to manage facilities programs.
- The current program does not provide adequate local control for districts designing school facilities plans. Program eligibility is largely based on standardized facility definitions and classroom loading standards. As a result, districts are discouraged from utilizing modern educational delivery methods.
Any future program should be designed to provide districts with the tools and resources to address their core facility gaps, but should also avoid an unsustainable reliance on state debt issuance that characterizes the current school facilities program.
While the state examines the future of its role in school facilities, the Budget also includes the following proposals totaling an investment in school facilities of nearly $400 million:
- Transfer $211 million of remaining School Facility Program bond authority from the specialized programs to the core new construction ($105.5 million) and modernization ($105.5 million) programs to continue construction of new classrooms and modernization of existing classrooms for districts that have been awaiting funding. Approximately $163 million, $3 million, $35 million, and $10 million of general obligation bond authority currently remains in the Seismic Mitigation, Career Technical Education, High Performance Incentive Grant, and Overcrowding Relief Grant programs, respectively.
- Dedicate $188.1 million of one-time Proposition 98 General Fund to the Emergency Repair Program to provide grants or reimbursement to local educational agencies for the cost of repairing or replacing building systems that pose a health and safety threat to students and staff at eligible school sites. Schools previously identified by the California Department of Education as ranked in deciles one, two, or three based on the 2006 Academic Performance Index are eligible for funding.
Energy Efficiency Investments
Proposition 39, The California Clean Energy Jobs Act, was approved in 2012 and increases state corporate tax revenues. For 2013-14 through 2017-18, the measure requires half of the increased revenues, up to $550 million per year, to be used to support energy efficiency.
The Budget proposes to allocate the $363 million of energy efficiency funds available in
2014-15 as follows:
- $316 million and $39 million to K-12 school and community college districts, respectively, for energy efficiency project grants.
- $5 million to the California Conservation Corps for continued technical assistance to K-12 school districts.
- $3 million to the Workforce Investment Board for continued implementation of the Job-training program.
While the Budget does not propose funding for additional revolving loans under the Energy Conservation Assistance Act (which was provided $28 million in 2013-14), this program will continue to be considered for future funding.
Department of Industrial Relations
Public Works/Prevailing Wage Consolidation - The Budget includes multiple adjustments to consolidate all public works and prevailing wage enforcement activities within a single unit supported by a new registration fee on contractors who choose to work on public works projects. The fee will support an $11.4 million program with 83 positions. The new fee will eliminate the program's reliance on the General Fund and bond funds tied to public works projects, which have resulted in funding challenges in the past. These funding changes, along with programmatic efficiencies realized through the consolidation, will provide the program with a stable funding source to support prevailing wage determinations, monitoring, and enforcement throughout the state. This represents an increase of more than 20 positions compared to prior enforcement levels.
October 29, 2013
Thursday, October 24, 2013, the SAB Program Review Subcommittee met to discuss
County Offices of Education (COEs) and Financial Hardship. CSFC was
well-represented by Chair Jeff Becker (Fresno COE) and Immediate Past Chair
Jenny Hannah (Kern County Superintendent of Schools), whose testimony gave an
insightful view into the unique facilities challenges that COEs face. Jeff
highlighted a number of issues described in the CSFC SFP White Paper, and
Jenny elaborated on special education siting issues, urging that all facilities
should be adaptable to accommodate SDC students.
hearing was a success, with important gains on behalf of COEs! The Subcommittee
members acknowledged that COEs are distinct from their district counterparts,
and they should continue to be funded through the School Facility Program, with
the option for Financial Hardship participation. Additionally, the Subcommittee
agreed that more work will be done to review the issues identified in the CSFC
white paper, such as revising alternative education loading standards and
addressing special education siting issues. Leading up to the hearing, CSFC
leadership had important conversations with key policymakers and staff at OPSC,
which ultimately influenced the course of the conversation.
Click here for a summary of the
Subcommittee meeting, which addressed the following issues:
- County Offices of Education
Items to Finalize/Continued Discussion
- Confirmation of Subcommittee Positions
you to the Executive Committee and those who helped us prepare for this
important meeting! We especially appreciate the alternative education loading
standards and SDC enrollment/facilities data that we received from our members.
Subcommittee will continue to meet through November and December, and they
anticipate presenting their recommendations for a future program to the full SAB
September 4, 2013
LEGISLATIVE UPDATE: SB 594 and AB 327 have recently been gutted and amended, and major amendments have been taken to AB 182.
Below for your information are details on a number of bills that were discussed at Wednesday's CSFC Executive Committee meeting, per our legislative report.
AB 327 (Perea) - Net Energy Metering
This bill would restructure the rate design for residential electric customers, create a new net energy metering (NEM) program, and specify that California Public Utilities Commission (CPUC) may require the procurement of eligible renewable energy resources in amounts greater than what is required in statute. Specifically, the NEM provisions could affect schools that have made renewable investments by changing the tariff for existing customers at a future date. Amendments were taken today in Assembly Appropriations Committee but they are not yet available for review.
Bill Text (does not reflect amendments taken on 8/30 in Assembly Appropriations Committee) and Analysis
SB 594 (Hill) - Use of Public Resources for Campaign Activities
This bill prohibits nonprofit organizations from spending public resources received from any local public agency-including resources received in exchange for services or goods provided by the nonprofit-for "campaign activity", i.e. communications advocating for or against the qualification of a ballot measure, the approval or rejection of a ballot measure, the election or defeat of a candidate, or a campaign contribution. Schools will now be excluded from the bill, per amendments taken today in Assembly Appropriations Committee. Previously, schools were included in the definition of a public agency, prompting concerns about possible chilling effects on campaign activities, such as local bond ballot advocacy, from non-profits such as booster clubs and parent organizations.
Bill Text (does not reflect amendments taken on 8/30 in Assembly Appropriations Committee) and Analysis
AB 182 (Buchanan) - Capital Appreciation Bonds
Amendments are in print today that maintain the authority to issue Current Interest Bonds (CIBs) with a 40-year maximum term. AB 182 still includes restrictions on Capital Appreciation Bonds (CABs), including a maximum term of 25 years and a debt service ratio limit of 4:1 for each series. Previously, the bill would have sunset existing authority to issue 40-year maximum term CIBs on January 1, 2019, at which time CIBs would be limited to a maximum term of 30 years; that provision has now been removed.
Bill Text and Analysis
CSFC has not taken a formal position on any of these bills.
July 24, 2013
BUDGET UPDATE: Routine Restricted Maintenance Contribution Requirements Continue Under LCFF
We reported to you previously that, as part of the enacted 2013-14 Budget, Routine Restricted Maintenance contributions and the Deferred Maintenance Program matching requirement local set-aside were eliminated. However, upon further analysis of the LCFF and its implications, it has come to our attention that the minimum requirements for Routine Restricted Maintenance Account contributions still remain in the law.
Specifically, the legislation implementing LCFF did not make any change to the School Facility Program (SFP) requirements stipulated in Education Code Section 17070.75, et seq., regarding maintenance of facilities. LEAs that receive funds under the SFP are required to annually deposit a minimum of 3% of total general fund expenditures into a Routine Restricted Maintenance Account. This requirement persists for 20 years after receipt of SFP funds.
Through prior budget flexibility provisions (Education Code Section 17070.766), the Routine Restricted Maintenance contribution requirement was reduced to 1% or waived if facilities are maintained in good repair, per Williams. This flexibility expires at the end of FY 2014-15, and the 3% Routine Restricted Maintenance contribution requirement returns in FY 2015-16.
We are very pleased that, amidst the move toward local flexibility, the importance and challenges of committing funds to facilities maintenance has been recognized. During budget negotiations, CSFC worked hard to advocate that minimum maintenance contributions should continue, in order to ensure that school facilities are clean, safe, and functional. We’d like to thank School Services of California, Inc. for first reporting this information.
~ Rebekah Cearley
June 20, 2013
SAB Program Review Subcommittee to Discuss COE Issues August 13th
We have received word that the State Allocation Board Program Review Subcommittee is planning to discuss COE facilities issues at their next meeting, tentatively set for Tuesday, August 13, 2013 (time and location TBD). Unresolved issues that may be discussed include:
- How to fund COE facilities in a new program
- What are the facilities responsibilities of COEs?
- Financial Hardship program issues, including program parameters and COE applicability
Mark your calendars and plan to join us on August 13 to provide the subcommittee with information about the unique facilities needs of COEs.
It is important for the subcommittee to hear directly from our members about the key role that COEs play in meeting the needs of special student populations.
We have invited Bill Savidge, Assistant Executive Officer - State Allocation Board, to provide an update on the Program Review Subcommittee activities at our next Executive Committee Meeting on Wednesday, June 26.
May 14, 2013
Governor Issues May Revision Budget Proposal: No Update for a School Bond or State Maintenance Funding
This morning the Governor issued his May Revision budget proposal, without making any changes to most of the major school facilities items that were included in the January budget. He made no reference to a future statewide school facilities bond, and maintenance funding remains at risk. We will follow up with a separate update on the implementation of Proposition 39 energy project dollars.
As part of the Local Control Funding Formula (LCFF), the Governor continues to propose eliminating the required local contribution to Routine Maintenance and the Deferred Maintenance Program match set-aside. His January proposal consolidated state Deferred Maintenance funds into the LCFF, making budget flexibility permanent.
As expected, the Governor scored the influx of additional revenues as a one-time increase. He estimates that revenues are up by $2.8 billion in the current year, and down $1.8 billion in FY 2013-14. Schools would receive an additional $2.9 billion in Proposition 98 funds for FY 2012-13, but face a decrease of $941.4 million in FY 2013-14.
The Governor continues his support for the charter and surplus property proposals in the January budget, including extending for five years the requirement that schools must first offer to sell surplus property to charter schools before selling to other entities.
The Governor provided an update on the Proposition 98 General Fund savings associated with the dissolution of redevelopment agencies: for 2012-13, savings are scored at $2.1 billion (the same as estimated in January), and for 2013-14, savings are estimated at $1.5 billion, which is $400 million above the January estimate. He does not make any change to the proposed dissolution of successor agencies once all enforceable obligations have been paid, which would also result in the early termination of pass-through payments.
~ Rebekah Cearley
February 7, 2013
TO: ALL SCHOOL DISTRICTS AND COUNTY SUPERINTENDENTS OF SCHOOLS
Subject: State Allocation Board Meeting Update
The State Allocation Board (SAB) meeting originally scheduled for February 27, 2013 has been cancelled. However, the SAB will call a Special Meeting on March 6, 2013 at 9:00 a.m., location To Be Determined. Upon adjournment of the Special Meeting, the SAB Program Review Sub-Committee hearing will commence.
We have provided the SAB Program Review Subcommittee COE data from six counties on facilities projects at their meeting on February 5th.
It did make a difference!
Forms and Information.
January 21, 2013
CSFC Executive Committee members, along with Legislative Advocate Anna Ferrera, will be meeting with Assembly Member Buchanan tomorrow to discuss important topics regarding County Offices of Education such as their role in a potential new school facilities program
Financial Hardship, the potential of a new bond and other important topics. We'll keep you updated on the outcome.
December 12, 2012
The Executive Committee met in Sacramento and discussed several issues. One item was the location and date of the next Annual Summit. The CSFC staff will be sending out a survey to members to determine what location may bring the most attendees. Meeting at a local County Office of Education was discussed as a possibility to save on costs.
If you have any ideas or suggestions for the next Annual Summit in September, please send an email to email@example.com.
October 5th, 2012
CSFC has learned that $222 million will be made available to K-12 schools out of the General Obligation Bond sale held on September 26, 2012. The sale provided $1 billion in cash for a variety of public works projects and $750 million to refund existing debt. In April, the School Facilities Program received $619 million from the state’s sale of $1.3 billion in General Obligation bonds.
We also received information that it is anticipated that an item will be presented at the December 2012 SAB meeting to allocate the funds from the bond sale to projects on the unfunded list with valid priority funding certifications (available here).
June 29, 2012
2012 Annual Summit
Click here for information on the CSFC 2012 Annual Summit, September 24-25, at the Embassy Suites Sacramento Riverfront Hotel.
We had one of the most proactive agendas yet, as we discuss the future of facility funding for county offices with key state officials and include a special local financing session as part of our day and a half of meetings.
Committed to the CSFC 2012 Annual Summit were:
- William Savidge, Assistant Executive Officer to the State Allocation Board
- Kathleen Moore, Director of Facilities and Transportation Services at the California Department of Education
- Cesar Diaz, Member, State Allocation Board, Building Trades
The Governor signed the budget bill which was approved by the Legislature on June 15. Brown will act on the individual trailer bills that have been approved by the Legislature over the next few days.
In signing the bill, Governor Brown said that the budget was balanced and would cut $8 billion from government, would close a $15.7 billion deficit, and start building a state reserve of nearly $1 billion. The Proposition 98 spending level remains at about $53.6 billion. The budget establishes a zero percent COLA (Cost of Living Adjustment) for 2012-13.
Once the budget and its trailer components are complete, attention will turn to the Governor’s statewide ballot proposition, or the “Schools and Local Safety Protection Act” which would enact temporary tax increases on high-income earners, raising income taxes by up to three percent on the wealthiest Californians for seven years. It would also increase the state sales tax by one-quarter of one cent for four years.
Anti-tax groups have recently announced their intention to oppose the Governor’s ballot measure. And since recent polls have indicated that the Governor’s ballot measure currently holds a 52 percent majority among California voters, opponents would only need three or four percentage points to create a scenario in which the Governor’s ballot measure might fail. There will also be a dozen statewide ballot propositions on the California ballot. So the maneuvering and uncertainty about funding for K-12 schools in California will continue for months to come.
If the Governor’s ballot proposition is unsuccessful at the ballot box, $6 billion in additional “trigger cuts” will ensue - $5.4 billion of those cuts directed toward education. According to budget analysts, this would work out to a reduction of about $457 per student in Average Daily Attendance (ADA) funding for most school districts.
There is a provision in the signed state budget that would allow school districts to shorten the school year if the Governor’s ballot proposition fails and the “trigger cuts” kick in. School districts would have to negotiate this reduction with their local bargaining units.
The new state budget assumes voter approval of the “Schools and Local Public Safety Protection Act”, “Ultimately, it will be up to the voters,” said Senate President Pro Tem Darrell Steinberg (D-Sacramento). “I trust the voters. I think they've seen what has occurred in this state with these cut-only budgets over the last number of years.”
Stay tuned, for future notifications regarding state actions that will impact California’s schools, and most especially school facility issues related to county offices of education.
February 10, 2012
Assembly Member Buchanan to Attend Membership Meeting on February 22
Assembly Member and State Allocation Board Member Joan Buchanan will be addressing the CSFC membership on February 22 during our annual membership meeting. Please join us and hear her news on State facility related issues.
Also on the agenda, we have presenters from the State Water Resources Control Board to discuss recent Stormwater issues and also a presentation on Redevelopment Agencies. For the complete agenda and list of presentations, please use the link below.
Membership Meeting Agenda and Information
January 11, 2012
DOF Clarifies Governor's Budget Proposal: Pupil Transportation Permanently eliminated
TRANSPORTATION PERMANENTLY ELIMINATED
On January 10 the Department of Finance (DOF) clarified that pupil transportation (Home-to-School, Special Education, and small school district bus replacement) would be eliminated now and for all subsequent years. See the attached chart for the impact by school district and county office.
See the table below that illustrates the inequitable impact on schools.
Table 1 - The Impact of the AB 121 Trigger
Transportation Cuts on Disadvantage Children
2011-12 Mid-Year Cuts and the 2012-13 Elimination
Regular and Special Education
% of Children Eligible
for the Federal Free and
Reduced Program by School District
Trigger Cut and Elimination
Cut per ADA
50% to 100%
0% to 49%
If you live in a district where more than 50% of the students qualify for the federal free and reduced lunch program you will be cut 40% more than the child in a school district where less than 49% of the students qualify for the program.
We are working with a coalition to respond in opposition to this proposal.
Transitional Kindergarten also would be eliminated.
All categorical programs, except special education, child nutrition, preschool, Proposition 49 and Quality Education Investment Act, would be consolidated into a single flexibility item.
Each district would lose 20% per year of their 2010-11 (excluding pupil transportation) categorical funding until the flexible item is at zero. The money would be redirected to a weighted pupil allocation based on percentage of poverty students defined as eligible for free and reduced priced meals, and the percentage of English learners. The funding would also be weighted to increase for high concentrations of such pupils.
This reallocation also would apply to charter schools.
The weighted pupil funding would be revenue limit increases and would effectively mean that basic aid school districts would lose the amount of categorical funds equal to the amount of property tax above current revenue limit received by the school district. In essence, basic aid property tax will offset state categorical funding dollar for dollar except for districts with more property tax than categorical funds. The offset excludes the five categoricals exempted from the flexibility item.
DOF attorneys have determined that the realignment funds owed to schools ($2 billion in each of current and budget years); would not have to be paid now or at any time in the future.
Schools in essence would receive no new program money under the budget even if the tax initiative is approved; they would be subject to $4.8 billion in cuts (of which $2.4 billion is the proposed buy-out of some of the deferrals. This is not a new cut compared to the 2011-12 base) with a remaining cut of $2.4 billion (approximately $400 per pupil) if the tax initiative is not approved.
This $400 per pupil is in addition to the pupil transportation loss and the loss of funding from ADA lost due to the kindergarten enrollment date change, plus all the other Proposition 98 rebenching proposed in the budget.
Effectively, the Governor is proposing to suspend Proposition 98 without having to have a suspension vote.
January 11, 2012
More information on Redevelopment Agencies (RDAs)
Chris Cox from San Bernardino COE shared the following information regarding the RDA:
With the dissolution of RDAs, ABX1 26 requires a successor agency be formed to administer the tax revenues.
Another requirement of this legislation is the formation of an oversight agency to watch the successor agency. One of the members of the oversight board is the county superintendent of schools (or an appointee determined by county board of ed if superintendent is appointed).
This is all happening very fast so COEs may want to ensure they are up-to-speed on the requirements.
Chapter 4. Oversight Boards
34179. (a) Each successor agency shall have an oversight board
composed of seven members. The members shall elect one of their members
as the chairperson and shall report the name of the chairperson and other
members to the Department of Finance on or before January 1, 2012.
Members shall be selected as follows:
(1) One member appointed by the county board of supervisors.
(2) One member appointed by the mayor for the city that formed the
(3) One member appointed by the largest special district, by property tax
share, with territory in the territorial jurisdiction of the former redevelopment
agency, which is of the type of special district that is eligible to receive
property tax revenues pursuant to Section 34188.
(4) One member appointed by the county superintendent of education to
represent schools if the superintendent is elected. If the county superintendent
of education is appointed, then the appointment made pursuant to this
paragraph shall be made by the county board of education.
(5) One member appointed by the Chancellor of the California
Community Colleges to represent community college districts in the county.
(6) One member of the public appointed by the county board of
(7) One member representing the employees of the former redevelopment
agency appointed by the mayor or chair of the board of supervisors, as the
case may be, from the recognized employee organization representing the
largest number of former redevelopment agency employees employed by
the successor agency at that time.
(8) If the county or a joint powers agency formed the redevelopment
agency, then the largest city by acreage in the territorial jurisdiction of the
former redevelopment agency may select one member. If there are no cities
with territory in a project area of the redevelopment agency, the county
superintendent of education may appoint an additional member to represent
(9) If there are no special districts of the type that are eligible to receive
property tax pursuant to Section 34188, within the territorial jurisdiction of
the former redevelopment agency, then the county may appoint one member
to represent the public.
(10) Where a redevelopment agency was formed by an entity that is both
a charter city and a county, the oversight board shall be composed of seven
members selected as follows: three members appointed by the mayor of the
city, where such appointment is subject to confirmation by the county board
of supervisors, one member appointed by the largest special district, by
property tax share, with territory in the territorial jurisdiction of the former
redevelopment agency, which is the type of special district that is eligible
to receive property tax revenues pursuant to Section 34188, one member
appointed by the county superintendent of education to represent schools,
one member appointed by the Chancellor of the California Community
Colleges to represent community college districts, and one member
representing employees of the former redevelopment agency appointed by
the mayor of the city where such an appointment is subject to confirmation
by the county board of supervisors, to represent the largest number of former
redevelopment agency employees employed by the successor agency at that
(b) The Governor may appoint individuals to fill any oversight board
member position described in subdivision (a) that has not been filled by
January 15, 2012, or any member position that remains vacant for more
than 60 days.
December 23, 2011
CDE Green Ribbon Schools Award
that the California Department of Education has announced its pilot year for
Green Ribbon Schools Award in coordination with the federal U.S. Department of
Education. The CDE application is posted on line at the following
Ribbon School award will go to a school that has taken a holistic or
comprehensive approach toward a green school that takes into account curriculum,
environmental and health impacts of the facility with its students and the
community it serves. The award criteria are intended to focus on measurable
outcomes wherever possible.
reviews will be based on the applicant's demonstrated progress towards reaching
the goals of each of the three ED-GRS Pillars, which are:
Environmental Impact and Energy Efficiency
Healthy School Environments
Environmental and Sustainability Education
believe your project meets this criteria we encourage you to apply for this
If you have
any questions regarding the application, please contact Kathleen Seabourne at: firstname.lastname@example.org
December 14, 2011
STATEMENT FROM LAUSD SUPERINTENDENT JOHN DEASY ON TRIGGER CUTS
LAUSD to File Lawsuit Wednesday Opposing California Trigger Cuts to School Bus Transportation
Due to the enormous budget cuts that have plagued K-12 education funding over past three years, LAUSD, its students, parents, teachers, and administrators have already made numerous hard sacrifices. LAUSD cannot withstand further budget cuts without adversely impacting the educational benefits offered to its students.
We stand with our students to say enough is enough.
The Director of Finance is expected to initiate mid-year reductions on or after January 1, 2012, including a catastrophic $38 million cut to the District’s current transportation services budget. A cut of this magnitude is devastating as it would deplete half of the District’s transportation budget after it has provided half a year of transportation services.
Unlike other districts, LAUSD cannot simply terminate its transportation services due to the impending decimation of its transportation budget. This is because the vast majority of those services are Constitutional mandated and required by a 1981 court order from Crawford v. Board of Education of the City of Los Angeles.
The Crawford court order mandated LAUSD to implement desegregation programs, including the Magnet School Program and Permits with Transportation Program. The Crawford order remains effective today and requires transportation services be provided to approximately 35,000 students.
The District also provides transportation services to another 13,000 students with special needs because both federal and State law requires transportation to students with disabilities if necessary for them to enjoy the same educational benefits as other students.
Due to the combined mandates, the trigger cuts force the District to choose between two illegal and unconstitutional outcomes. It must either terminate its transportation services in direct violation the Crawford court order (and federal and State law), or divert precious classroom dollars from its general fund to pay for the required transportation services.
Choosing to divert funds that are needed in the classrooms, which the Crawford order requires, violates the California Constitution because further budget cuts would adversely impact the educational benefits offered to its students. Therefore, LAUSD's students would receive a disproportionately lower share of funding and educational opportunities as compared to students in school districts without those mandatory costs.
Under the California Constitution, the State bears the ultimate responsibility for ensuring public school students receive equal educational opportunities and free adequate education services. Calif. Const. art. I, § 7, subds. (a), (b); art. IV, § 16, subd. (a).
The California Supreme Court has consistently recognized that the equal protection guarantees are so important that they require State intervention to ensure that fiscal problems do not deprive a local district’s students of basic educational equality. Butt v. State of California, (1992) 4 Cal.4th 668, 679.
Unless the State is enjoined from implementing the mid-year budget cuts, the District and its students will suffer irreparable harm in violation of the California Constitution. Therefore, LAUSD will file a lawsuit tomorrow that supports our students in schools and acts aggressively to halt these devastating cuts associated with the budget triggers.
December 13, 2011
Governor pulls $1 billion trigger, School Transportation funds eliminated
Today the Governor went ahead with pulling the first section of the trigger cuts by pulling the $1 billion that the Legislative Analyst’s Office (LAO) predicted last month, but holding back on the $2.5 billion that would have impacted K-12 schools. That should avert massive reductions in the school calendar or other drastic measures for most districts.
K-12 school districts were at risk of losing as much $1.5 billion - the equivalent of seven instructional days - under the budget Brown and lawmakers enacted earlier this year.
But sources said they will face a smaller $79.6 million reduction, or about $11 per student.
County Offices and Districts will still face a $248 million automatic elimination of school bus funding beginning January 2012 through June 2012, unless the Legislature acts. The County Offices that provide this service to special education students and others will have to make up that difference.
Brown's forecast is better than the LAO's in part because the Governor's Department of Finance had another month of data to review.
State Controller John Chiang reported last week that California beat its November revenue forecast by $497.7 million, or 8.9 percent, mostly due to a boost in personal income tax dollars for the month.
More information to come as we are able to further analyze the impact of this action.
State Schools Chief Tom Torlakson Comments on Mid-Year Cuts
SACRAMENTO—State Superintendent of Public Instruction Tom Torlakson issued
the following statement regarding mid-year spending cuts announced today:
"It's a sad day for California. Taking hundreds of millions of dollars from
our schools—on top of the $18 billion in cuts they have already suffered—will
only make life harder for students in California's chronically underfunded
"Mothballing school bus fleets across the state will mean many rural,
disabled, and low-income students literally will have no safe way to get to
school. Children will lose child care, students will lose the opportunity for a
college education, and our overcrowded classrooms will continue to be jammed
with 35 to 40 students.
"That's not the kind of education or state we want. This is not the
California our children deserve."
View press release on the CDE website.
December 8, 2011
School Project List Released by OPSC
Yesterday, the Office of Public School Construction released the list of 377 school construction projects expected to receive state matching funds at the State Allocation Board meeting next week.
These are the funds from the state’s sale of $1.8 billion in general obligation bonds in October.
The project list can be viewed here.
Once funded, construction on the projects must begin within 90 days, per the priority in funding rules. The project list, up for review and approval, is valued at $924.2 million.
The State Allocation Board meets Wednesday, December 14 at 2 p.m. in the State Capitol, Room 126.
State Auditor Releases Report Critical of DSA
Two days after Gov. Jerry Brown announced appointing a new state architect, Chester "Chet" Widom, a Los Angeles architect and former president of the American Institute of Architects (AIA), Elaine Howell, the State Auditor released a report saying that State oversight of seismic and structural safety standards on school construction projects throughout California has been ineffective and incomplete.
See full report here.
December 2, 2011
Implementation Committee Meets to Discuss Labor Compliance Legislation
Ian Padilla attended the State Allocation Board’s Implementation Committee meeting on November 17 and wrote the following summary that I am pleased to share with you.
An Implementation Committee meeting was held today to follow-up on this November 17 meeting and we are summarizing that for you and will be sending out soon.
The State Allocation Board’s (SAB) Implementation Committee met on Thursday November 17, 2011 for the first time in nine months to discuss proposed regulations to implement AB 436 (Solario) relating to mandatory labor compliance programs on public works projects. Members of the committee included new Assistant Executive Officer (AEO) Bill Savidge, Juan Mirales (OPSC), Masha Lutsuk (DSA), Fred Yeager (CDE), Chris Ferguson (DOF), Chris Cox (San Bernardino Co. Supt. of Schools/County Superintendants), Cathy Allen (San Juan USD/C.A.S.H.), Gary Gibbs (CBIA), Rob Pierce (Elk Grove USD/Suburban schools), Debbie Pearson (Small Schools), Dennis Dunston (Total School Solutions/CEFPI), Leigh Coop (Vacaville USD/CASBO), Cesar Diaz (Building Trades), Mary Morris (HMC Architects/AIA) and Lyle Smoot (Los Angeles USD/Urban schools).
Mr. Savidge began the meeting by stating that the Implementation Committee would resume its monthly meeting schedule on the second Friday of each month in 2012, and stated that a review of SB 128 (Lowenthal) relating to the inclusion of high performance systems and materials that support Career Technical Education in the design of schools has been agendized for the January 2012 meeting. In addition, Mr. Savidge stated that the committee would accept written requests for items to be included on future agendas. Finally, Mr. Savidge stated that the SAB plans to provide a report on the status of the Project Information Worksheet (PIW), in response to Tom Duffy’s (C.A.S.H.) request during the opening Public Comment period for the committee to agendize this item.
Concerning the substance of the agenda, Mr. Savidge stated that AB 436 is important legislation, and that its timely implementation will go far to clear up much of the current confusion surrounding implementation of LCPs and will result in a uniform LCP policy for school districts. In his opening comments, Mr. Diaz stated that the intent of AB 436 was to address issues raised by the Attorney General relative to SB 2X9, and that his primary concern is “robust enforcement” of prevailing wage laws. The AB 436 regulations were submitted to the Office of Administrative Law (OAL) on October 31, 2011, and if approved in their current form, would go into effect on January 2, 2012.
As the primary agencies responsible for administering the revised LCP program, next on the agenda were presentations by representatives of the Department of Industrial Relations (DIR) (primarily John Cummins) and the Office of Public School Construction (primarily Juan Mirales) to provide an overview of their individual and coordinated plans to implement the regulations once approved by OAL. Throughout both presentations, members of the committee asked both conceptual and technical questions concerning how the revised process will actually work from a school district perspective.
The committee is in the process of compiling a list of these questions and comments for further discussion at their next committee meeting, but common questions and comments included the following:
- What should a school district with multiple projects (some state-funded, some non state-funded) do?
- Is site acquisition included for the purposes of calculating fees?
- What is the definition of “all projects”?
- Who will keep track of what the fee cap is (school district, DIR, OPSC)?
- How does the concept of a “whole project” work with multi-prime contracts?
These and other questions and issues will be addressed at the next meeting of the Implementation Committee, which is scheduled for Friday December 2, 2011 from 9:30 – 3:30.
October 28, 2011
DIR Announcement on Changes Under AB 436 (Solorio)
Please see the following announcement from the Department of Industrial Relations (DIR) with regard to revisions submitted per the passage of AB 436 (Solorio) to the Office of Administrative Law (OAL) related to Labor Compliance Agreements and reimbursements to DIR for its compliance monitoring and enforcement work carried out by the Compliance Monitoring Unit (CMU).
AB 436 made changes regarding how DIR will be compensated for compliance monitoring and enforcement. There is no longer a flat fee as originally proposed. Instead DIR will be reimbursed for its actual compliance monitoring and enforcement work on a specific project – DIR is still in the process of developing a rate schedule for this work which must be approved by the Department of Finance. This must be completed before January 1, 2012 in order for the new program to go into effect.
DIR will conduct seminars for interested parties to provide information concerning the CMU and the new electronic certified payroll record reporting system. Department staff will be contacting various groups to help schedule these sessions throughout the state in order to reach as many interested persons as possible.
See announcement below. We will provide you with more information on these seminars as information becomes available.
Announcement from DIR:
DIR has completed the process of revising the SBX2-9/CMU regulations to conform with the statutory changes in AB 436. The final regulatory proposals and rulemaking record were filed with the Office of Administrative Law (OAL) this morning, and the OAL has until December 14, 2011, to complete its review. The Acting Director has set January 1, 2012, as the effective date of the new regulations, if they are approved for filing as submitted.
Attached to this e-mail are the final regulatory text, the Updated Informative Digest, and the Final Statement of Reasons. The text is the same as was circulated at the end of September except for the deletion of some effective date phrasing in section 16450(a). The Final Statement of Reasons includes summaries of the comments received during the public comment periods and the Acting Director’s responses to those comments.
The Acting Director and DIR staff who worked on these proposals greatly appreciate the input we received during this process as well as your patience over the past year while the statutes and regulations were revised to address legal concerns over the proper use of bond funds. There are a couple of points we’d like to highlight –
- Emergency Repeal of Prior Regulations – the filing of these regulatory amendments with the OAL has the effect of extending the emergency repeal of the prior regulations until the new amendments are approved or rejected. If the new amendments are approved, then the new language of sections 16423, 16433, and 16450 through 16455 will replace the old versions of those sections. The regulations that we temporarily repealed but did not amend – sections 16460 through 16464 – will become effective once again in their original form.
- Changes required by AB 436: AB 436 made some changes in the language and substantive requirements of SBX2-9 that are reflected in these regulatory amendments. Probably the most significant change is in how DIR will be compensated for compliance monitoring and enforcement. There is no longer a flat fee as originally proposed. Instead DIR will be reimbursed for its actual compliance monitoring and enforcement work on a specific project – DIR is still in the process of developing a rate schedule for this work which must be approved by the Department of Finance. This is something else that must be completed before January 1, 2012 in order for the new program to go into effect on the first of the year. In any event, DIR will only bill for the actual cost of actual work. The percentage figures in the statute and regulations (¼ of 1% of state bond proceeds for state bond-funded projects or ¼ of 1% of total project costs for non-bond funded projects) are the maximums that can be charged for a project, but in all cases the amounts charged will be for actual compliance monitoring and enforcement on a project up to the applicable maximum.
- CMU Exceptions: There are two new exceptions that were not in SBX2-9. First, any project with a project labor agreement (see statute and regulations for exact definition) will not require either the CMU or an LCP. Second, any project receiving Proposition 84 funding will be subject to the LCP requirement in Public Resources Code 75075 and will not be subject to CMU monitoring even if it receives other state bond funds. There is no longer an option to use the CMU in lieu of having an LCP for a Prop 84 project, and there also is no project labor agreement exception for these projects.
- Other Developments:
- As noted above, DIR is still in the process of developing the rates that will be charged for its compliance monitoring and enforcement work. These rates will reflect actual costs that are directly related to compliance monitoring and enforcement on a project, subject to the maximum charges of ¼ of 1% of state bond proceeds or ¼ of 1% of total project costs. These rates are not being set through the regulatory process, but they must be approved by the Department of Finance for use on state bond-funded projects.
- DIR has developed both an electronic certified payroll reporting system for the CMU and a new public works project notice form known as the PWC 100, which replaces the old DAS-13 and may be used to comply with the notice requirements of either Labor Code section 1773.3 [projects subject to apprenticeship requirements], 8 CCR 16451(a) [projects subject to SBX2-9/AB 436 requirements], or both.
The Department will conduct seminars for awarding bodies, construction contractors, and other interested persons to provide information concerning the Compliance Monitoring Unit and the new electronic certified payroll record reporting system. Department staff will be contacting various groups to help schedule these sessions throughout the state in order to reach as many interested persons as possible.
SAB Announces New Construction Subcommittee Meeting
The State Allocation Board has announced it will hold a New Construction Subcommittee Meeting at 2:00 p.m. on November 7. Topics will include presentation and discussion of data relating to the School Facility Program bonding authority. Public comment will be welcomed at the meeting. For more information, please see the meeting notice here.
October 20, 2011
UPDATE to Bond Sale:
DGS and OPSC have announced that the bond sale yesterday yielded approximately $1 billion for school facility projects!
According to the announcement, existing funding for K-12 school construction will be fully expended by December 2011.
The additional $1 billion provided in the fall 2011 bond sale will fund the start of approximately 450 new projects, which is anticipated to consist of approximately 250 modernization projects, 130 new construction projects and 70 other projects.
Exact projects will be identified by the State Allocation Board.
School Bonds Included in Bond Sale
The State Treasurer’s Office has confirmed this morning that school bonds were included in yesterdays’ bond sale.
The exact dollar amount is being worked out and we will inform you as to the amount as soon as it is announced.
While we wait, we would encourage you to take a moment to draft a letter thanking both Governor Brown and the Director of the Department of Finance Ana Matosantos at the addresses below.
The letter can be just a simple thank you such as:
On behalf of the [insert COE here], we would like to thank you for including K-12 school facilities in the recent bond sale. These bond dollars will mean that local school projects that are ready and waiting will now have the ability to move forward. These projects will provide many more students with safe and up-to-date classrooms in which to learn while providing needed construction jobs in communities throughout the state.
We, along with our students, parents, and employees, appreciate your action in this regard.
Please send your letters to the following addressees:
The Honorable Edmund G. Brown, Jr.
Governor, State of California
Sacramento, CA 95814
Ms. Ana Matosantos, Director
Department of Finance
State Capitol, Room 1145
Sacramento, CA 95814
October 5, 2011
CSFC Board Member Nominations Needed
September 26, 2011
Tom Torlakson, California’s Superintendent of Public Instruction, released his report on the recommendations that were forwarded from the Subcommittees under the School of the Future Working Group. The SPI wanted to get the best thoughts from stakeholders on school facility construction, finance and governance.
You may now download a pdf of the Schools of the Future report here:
August 26, 2011
Request for Comments on Draft Small Municipal Separate Storm Sewer Systems (Small MS4) Storm Water General Permit
August 22, 2011
Certification Filing Period Deadline is Thursday, August 25
State Treasurer Sets Date for Bond Sale
June 2, 2011:
CDE Non-Integrated Special Education Projects Presentation