By Kimberly Beltran | SI&A Cabinet Report http://bit.ly/ShpyGP
Thursday, September 20, 2012 :: Last-minute appeals by school district representatives from up and down the state couldn’t sway California officials from changing the state’s longstanding policy for how construction funding projects will queue-up when new money becomes available.
In a major policy shift, State Allocation Board members signed off on a plan Wednesday to continue accepting – but not processing – project applications once bond authority expires in the state’s school construction program, expected within the coming year.
The new policy will also require districts to acknowledge as part of the application process that the funding may not be guaranteed.
In the absence of a new statewide facilities bond to replenish the program, which provides matching funds to local districts for their building projects, state officials are concerned about continuing to process applications not knowing when, if or how they will be able to meet the obligations inherent in the process.
“We’re running out of money. To pretend everything is going to go on as normal, and to let these districts think that as soon as a bond gets passed they’re going to get a big check so they can go ahead out there and spend it is wrong, and where it’s going to come off of is the general fund part of the budget and that is potentially devastating to districts,” said Assemblywoman and SAB member Joan Buchanan.
The proposed rule changes, crafted by staff at the Office of Public School Construction at the direction of a board subcommittee, create a new list to track applications that come in after bond authority is expired. Those applications will be checked for completeness but nothing more.
The new regulations also include a requirement that districts provide as part of the application a resolution passed by their local board acknowledging that they understand that state funding is not guaranteed and eligibility rules might change.
Officials and members of the state Legislature are pushing to have a statewide facilities bond in 2014 to replenish the program. Until then, the SAB is taking the time to review School Facility Program functions and regulations with the idea of streamlining rules and making changes beneficial to both districts and the state.
But school officials are concerned that the changes proposed Wednesday could confuse districts and local voters, and create a huge backlog of projects that will take years to sort through if and when a state bond is approved.
Several district facility personnel told the board that schools already understand that submitting a project application is not a guarantee of state funding. They argued that the OPSC should continue processing applications so that when the facility program’s coffers are replenished, districts can move forward with construction.
“Forty-four school districts have bonds on the ballot this November, including me, and assuming most of them pass, all bond proceeds used to design projects in the near future will have to be spent to meet the current state program, which as we’ve all acknowledged, may be very different than the program we see tomorrow,” said Cathy Allen, director of facilities for San Juan Unified School District and chair of the non-profit Coalition for Adequate School Housing.
Jenny Hanna, facilities representative for Kern County’s Superintendent of Schools, said that the more than 50 school districts she deals with feel that the shift in policy leaves them confused and feeling like “their hands are tied.”
“In your fear of commitment to districts, you are effectively disillusioning them and causing some local folks to forestall some projects that they could move forward on with local money,” she said.
But SAB members, who voted unanimously in favor of the new regulations, said it is better to be up front about where the state is in terms of construction funding.
Sen. Loni Hancock’s message to districts was a bit more pessimistic than that of her colleagues.
“You should be careful before one assumes there is an absolute given that there will ever be another school bond. The state treasurer may tell us we can’t do any more bonds because California’s bonding authority and our ability to pay the interest has run out,” Hancock said. “So I would really urge districts to look at whether or not the state is going to be able to stabilize its expenditures and at whether we’re going to be able to pull out of this recession. In the old days, school districts used to pay for it all themselves.”
The proposed new regulations, which also include definition updates and grammatical corrections, are to be adopted under emergency regulations so that they may be put into place faster.
As of Aug. 31, according to staff, the OPSC has received district applications exceeding available new construction authority by about $58.4 million as well as applications exceeding available modernization bond authority by approximately $116.2 million.
In April, the School Facility Program received a surprise infusion of $619 million when the state treasurer’s office sold $1.3 billion in general obligation bonds.
On Monday the treasurer’s office announced a Sept. 25 sale of about $1.6 billion in GO bonds but a spokesman said not until after the sale will it be decided where these funds go.