February 25, 2010
SAB begins apportioning unfunded projects
For the first time in more than a year, the State Allocation Board made apportionments to 41 projects on the states unfunded approval list at this weeks hearing. The move represents the first round of funds available for about 400 projects that completed processing through the Office of Public School Construction in 2009 but until now have not received allocations due to the states fiscal crisis.The total balance of all remaining bonding authority for the School Facility Program is $3.45 billion, divided throughout Propositions 1D, 55, and 47. The funds are earmarked into specific accounts for new construction, modernization, and special programs. At Wednesdays hearing, a representative from the State Treasurers office reported that the state hopes to sell $4 billion to $7 billion general obligation bonds in the first six months of 2010, and up to $7 billion in bonds in the second half of the year. Californias ability to bring bonds to market is directly linked to the stability of the state and national economy. Estimates are that voter-approved bonds for the School Facility Program will run out as soon as July. In another move related to apportioning unfunded projects, Assemblywoman Julia Brownley, D-Santa Monica, raised issue with a board decision made last month to lower funding by 6.74 percent for school construction projects approved in 2010. Since the board neglected to have a December 2009 meeting, and because budget considerations last year forced an internal slowdown of project processing at the OPSC, some projects that would have been approved last year are being unfairly subjected to the new lowered Class B Construction Cost Index (CCI), argued Brownley. Im questioning the fact that a lot of these projects that I see on this list took a really long time to get through the system and now are being potentially penalized because of our decision at the last meeting on the CCI, she said. The board made no decisions on exempting certain projects, but agreed to take up the item at the March meeting. In a lengthy and productive meeting, the board exempted financial hardship projects on the unfunded list from a requirement that says they must undergo a second financial review after 180 days. The decision protects projects from a re-adjustment that could have changed their funding amount. A district qualifies for financial hardship if it can prove that it cannot fund part or all of its local share of construction costs. Normally, the state provides 50 percent in matching funds for new construction projects and 60 percent for modernization projects. The board also voted to uphold the funding formula for school accessibility upgrades for the disabled. When renovating buildings to accommodate for people with disabilities, districts have historically received an excessive cost hardship grant that is 3 percent of the modernization base grant. A 2006 survey from the State Architect found that the 3 percent grant provided adequate funding for projects in some cases, but insufficient dollars in others. That year, the SAB gave districts the option of switching to an alternate grant that was 60 percent of the costs associated with meeting the accessibility requirements. Recent data on collected on code compliance upgrades led SAB staff to recommend removing the 3 percent/60 percent option at Wednesdays hearing. But the board voted to take no action on the item, meaning they retained the current funding options. At a forthcoming meeting, the board will review the 3 percent allowance and discuss imposing additional fees on select projects. In other action, the board decided to continue the regular frequency of monthly SAB meetings. The issue of the SAB meeting schedule was raised following complaints from OPSC that state-mandated furloughs limit the departments ability to adequately prepare policy items for the board.But members decided that the various policy items were too urgent to be pushed over to a bi-monthly schedule.