BILL ANALYSIS Ó
SB 1421
Page 1
Date of Hearing: June 25, 2014
ASSEMBLY COMMITTEE ON EDUCATION
Joan Buchanan, Chair
SB 1421 (Fuller) - As Amended: May 27, 2014
SENATE VOTE : 33-1
SUBJECT : School facilities: schoolsites on military bases
SUMMARY : Authorizes the State Allocation Board (SAB), if
requested by an applicant, to give priority on its "Applications
Received Beyond Bond Authority List" to applications submitted
before May 1, 2014, for funding under the School Facility
Program (SFP) for projects on military installations that are
eligible for United States Department of Defense (DoD) Office of
Economic Adjustment school construction grants. Specifies that
a school district that requests priority for an application
pursuant to this bill shall not apply for school facilities
state bond funds for the three years after the date the SAB
grants priority to the applicant.
EXISTING LAW :
1)Establishes the Leroy F. Greene School Facilities Act of 1998
(SB 50, Chapter 407, Statutes of 1998), also known as the SFP,
which governs the administration, allocation, and use of state
school facilities bond funds. (Chapter 12.5 of the Education
Code (EC))
2)Provides that a school district's ongoing eligibility for new
construction funding is determined by making calculations
related to certain factors, including, but not limited to,
enrollment projections by utilizing a cohort survival
enrollment projection system, the number of students that may
be adequately housed in the existing school building capacity
of the district, and increases or decreases in enrollment
resulting from receipt of funding from the Year-Round School
Grant Program.
3)Provides that a school district is eligible to receive an
apportionment for the modernization of a permanent school
building that is more than 25 years old or a portable
classroom that is at least 20 years old. A school district is
eligible to receive an additional apportionment for
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modernization of a permanent school building every 25 years
after the date of the previous apportionment or a portable
classroom every 20 years after the previous apportionment.
FISCAL EFFECT : According to the Senate Appropriations
Committee:
1)Regulations: Likely minor costs to the Office of Public School
Construction (OPSC) to develop regulations to determine how to
prioritize military base schools.
2)Priority funding: Prioritizing SFP bond funding for certain
military base school projects, could result in schools being
given priority for $5 million in bond funding for which they
would not otherwise be eligible, and which would otherwise
fund other schools' facilities projects.
COMMENTS : The construction and rehabilitation of public
kindergarten through grade 12 (K-12) facilities are funded by a
combination of state and local G.O. bonds, developer's fees and
local assessments, such as Mello Roos community facilities
districts. The SAB, comprised of ten members that include
appointments by the Governor, the Speaker of the Assembly and
the Senate President pro Tem, is the body that allocates state
bond funds and oversees the administration of the SFP staffed by
the OPSC, within the Department of General Services. The New
Construction program requires a 50% match from local educational
agencies (LEAs), unless the LEA qualifies for financial
hardship, which pays up to 100% of project costs. Modernization
funds are awarded at 60% with a 40% match. The last education
bond on the statewide ballot was Proposition 1D, which was
passed by voters on the November 2006 ballot. Proposition 1D
provided $10.416 billion for K-12 and higher education
facilities.
K-12 remaining bond authority . Due to the state's budget crisis
and poor credit ratings, the Pool Money Investment Board halted
the regular sale of all G.O. bonds in December 2008 and slowed
the disbursement of funds. The SAB has been making "unfunded
approvals" since 2009 to enable districts to continue their
facilities planning. The unfunded approvals are converted to
apportionments when bonds are sold and cash becomes available.
According to the OPSC, as of March 26, 2014, approximately $300
million remains in bond authority from the 2002, 2004, and 2006
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bonds. The majority of the $300 million is set aside for
seismic and charter school projects. Funds for the New
Construction and Modernization programs have been exhausted
since July and May, 2012, respectively.
Applications that were submitted after bond authority ran out
were initially placed on the "Unfunded Approval - Lack of
Authority" list. These applications, totaling 195 with a cost
of $390 million, are reviewed and processed by OPSC. They may
be eligible for funding if funds are returned to the program as
a result of project rescissions or savings. Beginning November
2012, the SAB established a "Received Beyond Existing Authority"
list. The applications on this list are not reviewed, but are
simply acknowledged that the applications were received. As of
April 30, 2014, there are 65 projects with an estimated $256
million in requests for New Construction and 127 Modernization
projects with an estimated $205 million requested on the
"Received Beyond Existing Authority" list. There is no
guarantee that projects on either the "Unfunded Approval - Lack
of Authority" or "Received Beyond Existing Authority" list will
receive funding.
This bill authorizes the SAB to give priority to an application
received before May 1, 2014 on the "Received Beyond Existing
Authority" list, for a project that is eligible for DoD school
construction grants. The bill prohibits a school district that
receives priority for funding pursuant to this bill from
applying for state bond funds for three years after the date the
SAB grants priority for state bond funds.
DoD Public Schools on Military Installations Grant Program .
Congress allocated a total of $770 million - $250 million in
2011, $250 million in 2012, and $270 million in 2013 - for the
construction, renovation, repair or expansion of public schools
on military installations. In 2010, the DoD conducted an
assessment of the almost 160 schools on military installations
and established a priority list based on schools with the
greatest need. California has 10 schools located in six school
districts in the top 33 of the "Public Schools on Military
Installations Priority" list, eligible for a total of $242.2
million in federal funds. The schools are required to provide a
20% match. The match can come from local funds or state funds.
According to the California Department of Education, the DoD has
not been willing to waive the match requirement. If the match
is not produced, California schools will not be able to take
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advantage of these federal funds. Thus far, it appears that
only one project has local matching funds from local bonds.
Four projects have eligibility for state bond funds, but only
one project has enough eligibility to cover most of its match.
California's state bond program, however, has run out of New
Construction and Modernization funds. Even if funds are
available, the SFP does not authorize funding for this purpose.
The LEA may incorporate the projects in a New Construction or
Modernization application if it has eligibility for those
programs.
-------------------------------------------------------------------
|INSTALLATION|DISTRICT |NAME OF |TOTAL |FEDERAL |LOCAL |
| | |SCHOOL |PROJECT |ELIGIBILITY|MATCH |
| | | |COST | | |
|------------+-----------+---------+----------+-----------+---------|
|Naval Air |Sierra |Murray |$39.5 |$31.6 |$7.9 |
|Weapons |Sands |Middle |million |million |million |
|Station |Unified | | | | |
|China Lake | | | | | |
|------------+-----------+---------+----------+-----------+---------|
|Edwards Air |Muroc |Branch |$27.3 |$21.8 |$5.5 |
|Force Base |Joint |Elementar|million |million |million |
| |Unified |y | | | |
|------------+-----------+---------+----------+-----------+---------|
|Naval Air |Sierra |Burroughs|$31.9 |$25.5 |$6.4 |
|Weapons |Sands | High |million |million |million |
|Station |Unified | | | | |
|China Lake | | | | | |
|------------+-----------+---------+----------+-----------+---------|
|Camp |Fallbrook |Mary |$47 |$37.6 |$9.4 |
|Pendleton |Union |Faye |million |million |million |
| | |Pendleton| | | |
| | | | | | |
|------------+-----------+---------+----------+-----------+---------|
|Camp |Fallbrook |San |$43 |$34.5 |$8.6 |
|Pendleton |Union |Onofre |million |million |million |
|------------+-----------+---------+----------+-----------+---------|
|Naval Base |San Diego |Miller |$20 |$16 |$4 |
|San Diego |Unified |Elementar|million |million |million |
| | |y | | | |
|------------+-----------+---------+----------+-----------+---------|
|Travis Air |Travis |Scandia |$13.6 |$10.9 |$2.7 |
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|Force Base |Unified |Elementar|million |million |million |
| |School |y | | | |
| |District | | | | |
|------------+-----------+---------+----------+-----------+---------|
|Naval Air |Central |Akers |$21 |$16.9 |$4.2 |
|Station |Union | |million |million |million |
|Lemoore | | | | | |
|------------+-----------+---------+----------+-----------+---------|
|Naval Base |San Diego |Hancock |$24 |$19.2 |$4.8 |
|San Diego |Unified |Elementar|million |million |million |
| | |y | | | |
|------------+-----------+---------+----------+-----------+---------|
|Edwards Air |Muroc |Desert |$35.2 |$28.2 |$7 |
|Force Base |Joint |Junior-Se|million |million |million |
| |Unified |nior | | | |
| | |High | | | |
|------------+-----------+---------+----------+-----------+---------|
|Total | | |$302.5 |$242.2 |$60.5 |
| | | |million |million |million |
-------------------------------------------------------------------
This bill does not create a new program for these 10 schools.
The bill allows an application on the "Received Beyond Existing
Authority" list to be given priority for funding. Of the 10
projects, one project, from Burroughs High School, in Sierra
Sands Unified School District in Kern county, has submitted an
application for $5 million under the "Unfunded Approval - Lack
of Authority" list. The application is based on eligibility the
district currently has and is not provided for the purpose of
providing a match for the federal funds. Since the bill is
intended to expedite the funding of this project, staff
recommends correcting the citation of the list.
The application is currently 14th on the list, with projects
totaling $31.6 million ahead of this application. The effect of
this bill is to enable this project to be funded ahead of other
projects. It is unclear whether the SAB is authorized to fund
this project ahead of other projects on the regular "Unfunded
Approvals" list, which are approved projects waiting for cash,
or simply ahead of the other projects on the "Unfunded Approval
- Lack of Authority" list. Staff recommends clarifying that the
priority is within the "Unfunded Approval - Lack of Authority"
list with the exception of Facility Hardship applications
addressing health and safety problems. The Committee may wish
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to consider whether the ability to leverage $25.5 million in
federal funds is worthy of funding this project ahead of others
should funds become available. Funds may become available
through the transfer of funds from the High Performance or
Career Technical Education programs pursuant to action taken in
the fiscal year 2014-15 Budget. AB 1473 (Committee on Budget)
and SB 869 (Committee on Budget), both budget trailer bills,
require any funds remaining after January 1, 2015 in those two
programs to be transferred to the New Construction and
Modernization programs. There is currently approximately $37
million in bond authority remaining in those programs.
The bill specifies that the SAB may grant priority for funding
even if the district does not hold title to the property or if
the property is not leased from another governmental property,
as specified. Staff recommends striking this provision as these
conditions are not applicable to this project.
Arguments in support . The author states, "This bill aims at
providing matching funding for those schools located on military
bases that have been approved for the Department of Defense
Office of Economic Assessment School Construction Grant.
Currently California has 10 schools districts that the DOD has
determined as having the most serious condition and or capacity
deficiencies in the entire country. Due to the fiscal
challenges of being in remote, small communities, these schools
need assistance with the 20% match requirement before they may
begin their construction needs. The bases these schools are
located on do not generate property tax revenue for the local
school district -- a district that serves a highly transient
population of children with significant stresses."
Arguments in opposition . The Coalition for Adequate School
Housing opposes the bill and states, "The SFP is built upon the
tenet of first-come, first serve, and there are very limited
state bond dollar resources available to fund applications that
have already been approved by the SAB. We are concerned that
this bill would give military base school projects precedence
over other projects that are already in line for funding,
thereby displacing some projects that are currently slated to
receive state bond dollars."
REGISTERED SUPPORT / OPPOSITION :
Support
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California Teachers Association
Commanding Officer, Naval Air Station Lemoore, CA, Captain Monty
Ashliman
Mayor of Ridgecrest, Daniel Clark
Opposition
Coalition for Adequate School Housing
Analysis Prepared by : Sophia Kwong Kim / ED. / (916) 319-2087