BILL ANALYSIS Ó
SENATE COMMITTEE ON EDUCATION
Carol Liu, Chair
2013-2014 Regular Session
BILL NO: SB 1421
AUTHOR: Fuller
AMENDED: April 21, 2014
FISCAL COMM: Yes HEARING DATE: April 30, 2014
URGENCY: No CONSULTANT:Kathleen Chavira
SUBJECT : School facilities funding.
SUMMARY
This bill requires that school construction projects on
military installations that are eligible for specified federal
grants be given priority for funding under the State School
Facility program.
BACKGROUND
Current law establishes the School Facility Program (SFP)
under which the state provides general obligation bond funding
for various school construction projects. AB 127 (Nunez and
Perata), the Kindergarten-University Public Education
Facilities Bond Act of 2006, authorized Proposition 1D a
statewide general obligation bond proposal for $10.4 billion.
Proposition 1D, approved by the voters in November 2006,
provided $7.3 billion for K-12 education facilities and
allocated specified amounts from the sale of these bonds for
modernization, new construction, charter schools, Career
Technical Education Facilities, joint use projects, new
construction on severely overcrowded school sites, and high
performance incentive grants to promote energy efficient
design and materials. In addition, portions of the amounts
allocated for new construction and modernization were
authorized for purposes of funding smaller learning
communities and small high schools and for seismic retrofit
projects.
(Education Code § 17078.70-17078.72)
ANALYSIS
This bill :
SB 1421
Page 2
1) Establishes priority for funding under the School
Facility Program for construction projects that are:
a) On military installations.
b) Eligible for United State Department
of Defense Office of Economic Adjustment school
construction grants.
STAFF COMMENTS
1) Need for the bill . According to the author, California
has seven schools in five districts that potentially
qualify for an estimated $200 million in funds from the
federal government to address "serious condition or
capacity deficiencies." The intent of this bill is to
grant these schools priority for funding through the
State School Facility Program (SFP) in order to provide
the matching funds necessary for these schools to access
the federal funds.
2) Public Schools on Military Installations Program . In
2010, the Department of Defense (DOD) established an
education review to assess the physical condition of the
157 public schools on military installations in the
United States. Based on the findings of this assessment,
the DOD developed a priority list of public schools on
military installations with the most serious condition
and/or capacity deficiencies.
Congress appropriated $500 million with $250 million in
both the 2011 and 2012 fiscal years for the purpose of
addressing these construction needs. A 20 percent local
match is required to receive these funds, unless the
district can demonstrate circumstances that preclude a
local match. California was identified as having seven
schools in five districts that potentially qualify for an
estimated $165-175 million within the $500 million of the
first two funding cycles. It appears that another 17
California base schools could be a part of future federal
funding rounds. In California, all schools are owned and
operated by public school districts on property owned by
the federal government.
According to the DOD Office of Economic Adjustment (OEA),
SB 1421
Page 3
only local educational agencies (LEAs) that operate a
public school on a military installation, and receive a
written invitation from OEA, may request funds under this
program. OEA will initially request proposal submissions
from the LEAs with schools having the most serious
capacity or facility condition deficiencies as determined
by DOD. As decisions are made, additional LEAs on the
priority list may be notified until all funds are
exhausted.
The current status of these funds is unclear.
3) Related SAB activity . At its April 2012 meeting, the SAB
was briefed on the issues this bill proposes to address.
The SAB took action to establish the Department of
Defense Sub-Committee, convened in June 2012, to explore
alternatives for assisting districts with providing the
required 20 percent local match for projects on the
Department of Defense priority funding list.
Among other things, the subcommittee found that:
a) Program funding from the federal government is
based on a cost estimate of the actual work, whereas
the SFP provides funding in the form of per pupil
grants, with some supplemental grants.
b) Based on the method of calculation, the 20
percent required is based upon a higher amount than
the SFP calculations.
Options considered by the subcommittee reservation of
bond authority, transfer of bond authority, loans for the
matching share, waiver of the local matching share
requirement, and facility hardship funding. Each of
these were determined to not be viable.
In August 2012, the SAB considered the recommendations of
the subcommittee. The SAB elected to recommend to the
State Legislature that funding be provided for military
base schools in California in the next bond proposal in
order to cover the total need for these types of
projects.
4) Which school districts ? According to information
provided to the SAB, California has 7 schools in five
SB 1421
Page 4
districts that potentially qualified for funding in the
initial application rounds.
a) Murray Middle School at China Lake Naval Air
Weapons Station, Sierra Sands Unified School
District.
b) Forbes Elementary (Currently Branch
Elementary) at Edwards Air Force Base, Muroc Joint
Unified School District.
c) Sherman E. Burroughs High School at China
Lake Naval Air Weapons Station, Sierra Sands Unified
School District.
d) Mary Fay Pendleton Elementary at Marine Corp
Base Camp Pendleton, Fallbrook Union Elementary
School District.
e) San Onofre Elementary School at Marine Corp
Base Camp Pendleton, Fallbrook Union Elementary
School District.
f) Miller Elementary School at Naval Base San
Diego, San Diego Unified School District.
g) Scandia Elementary at Travis Air Force Base,
Travis School District.
1) Current status of the SFP . According to the OPSC, as of
March 26, 2014, approximately $351.1 million remained in
bond authority in the SFP. At its March 2014 meeting, the
SAB took action to reserve $52.7 million of existing bond
authority for the ongoing administration of the program
over the next five years, reducing the remaining bond
authority to $298.4 million. The majority of this bond
authority exists for the Seismic Mitigation and Charter
School programs (about $259 million). Bond authority for
new construction and modernizations programs has
essentially been depleted, respectively, since July 2012
and May 2012.
Since 2009, the SAB has been making "unfunded approvals"
which represented approved projects waiting to convert to
funding apportionments when bonds are sold and cash
becomes available. In addition, since November 1, 2012,
SB 1421
Page 5
the SAB has maintained an "Applications Received Beyond
Bond Authority" list. This list is presented to SAB for
acknowledgement, but not approval. Because the
applications are not fully processed for final grant
determination, the project funding amounts on the list
are only estimates. As of March 31, 2014, the list
indicated new construction applications totaling $237
million and modernizations applications of $198 million.
If this bill is enacted, school construction projects on
military bases would be prioritized over other projects
currently awaiting funding.
2) Priority funding . Currently, the SFP operates on a
first-come, first-serve basis, considering projects for
funding in the order received. The SAB recently adopted
a new "priorities in funding" process which gives
priority for funding to construction-ready projects,
allowing these projects, in essence, to move to the front
of the line. Projects on the "lack of authority" and
"beyond authority" lists advance as bond funds become
available and projects on the unfunded approval list
elect non-participation in the priorities in funding
rounds. The SAB also prioritizes the processing and
funding of facility hardship projects, which are projects
in there is a health and safety concern.
This bill would authorize certain projects to be
prioritized for funding over all other projects on the
basis of their eligibility for federal funds. The
committee may wish to consider:
a) Should a federal determination of priority
facility condition or capacity needs, which may
differ from SFP determinations, be the basis for
prioritizing access to state school construction
funds?
b) Should projects be prioritized on the basis
that federal funds are available for state matching
requirements over projects in which locally
authorized bonds will be provided for the match?
c) Should funding for these projects be
prioritized over facility hardship projects in which
SB 1421
Page 6
there is an imminent threat to the health and safety
of pupils?
d) In light of the excessive demand for limited
bond funds, and the uncertainty regarding the future
availability of bond funds, is the potential for
federal funding the basis upon which projects should
be prioritized?
SUPPORT
None received.
OPPOSITION
Coalition for Adequate School Housing (CASH)