BILL ANALYSIS Ó
SENATE COMMITTEE ON EDUCATION
Senator Liu, Chair
2015 - 2016 Regular
Bill No: SB 121
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|Author: |Fuller |
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|Version: |January 15, 2015 |Hearing |March 11, 2015 |
| | |Date: | |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant: |Kathleen Chavira |
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Subject: School facilities: schoolsites on military bases
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)
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ANALYSIS
This bill:
1. Establishes priority for funding under the School Facility
Program for construction projects that are:
A. On or near military installations.
B. Eligible for United States Department
of Defense, Office of Economic Adjustment school
construction grants.
STAFF COMMENTS
1. Need for the bill. According to the author, California has
11 schools in six districts that are on a priority list for
funds from the federal government to address the "serious
condition or capacity deficiencies" of public schools on
military installations. These schools are eligible to
receive funds for this purpose through the Public Schools
on Military Installations Program (PSMI). The program
requires a 20 percent non-federal match in order to receive
federal funding.
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 participate in the federal grant program and
leverage approximately $240 million federal funds for the
renovation, repair, or reconstruction of these schools.
2. Public Schools on Military Installations Program (PSMI).
According to the Office of Economic Adjustment (OEA), in
2010 the Department of Defense (DOD) evaluated and reviewed
the physical condition of the 160 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
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most serious condition and/or capacity deficiencies. The
OEA was tasked with administering the PSMI program to
provide funds to these schools to address these
deficiencies.
Between 2011 and 2015, Congress has provided $945 million to the
OEA for the purposes of the PSMI. The last increase in funding
for the PSMI ($175 million) was provided in 2015 by House
Resolution 83 (H.R. 83 Section 8017). In addition to the
funding increase, H.R. 83 established the 20 percent match as a
congressionally mandated requirement and stipulated that the
non-federal match was the responsibility of the local education
authority (LEA) and the State. The DOD has interpreted the new
language to mean that the matching share must be provided by the
local education authority (LEA) and or the State in which the
school is located and that the OEA may skip eligible school
projects on the Priority List if the match is not provided.
According to the OEA, once a project on the list has been
skipped it will no longer be considered for funding.
According to the OEA, there is approximately $464 million
remaining in the PSMI. The OEA estimates that as many as 33
schools on the list could be assisted.
3. Which school districts? According to information provided
by the OEA, California has 11 schools in six districts that
are within the top 33 on the Priority List. These include:
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
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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.
H. Akers Elementary School at Naval Air Station
Lemoore, Central Union High School.
I. Hancock Elementary School at Naval Base San
Diego, San Diego Unified School District.
J. Desert Junior-Senior High School at Edwards
Air Force Base, Muroc Joint Unified School District.
AA. Irving L. Branch Elementary School at Edwards
Air Force Base, Muroc Joint Unified School District.
According to the Office of Public School Construction
(OPSC):
A. One of the 11 schools currently has an
application pending under the School Facility Program
(SFP) (Burroughs High School). That project is
currently on the Unfunded List (i.e. no bond authority
currently exists to fund the project).
B. Four of the schools currently have
modernization eligibility but have not submitted an
application for funding.
C. Between 2002 and 2006, six of the schools
previously applied for and received modernization
funding through the SFP.
1. Related State Allocation Board activity. After an April
2012 briefing on this topic, 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 (DOD)
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Priority List.
Among other things, the sub-committee 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 School Facility Program (SFP) calculations.
Options considered by the sub-committee included
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 was determined not to be viable.
In August 2012, the State Allocation Board (SAB) considered
the recommendations of the sub-committee. The SAB elected
to recommend to the 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.
2. Current status of the SFP. According to the OPSC, as of
February 2015, approximately $200.7 million remained in
bond authority in the SFP. The majority of this bond
authority exists for the Seismic Mitigation and Charter
School programs (about $171 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, 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
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of January 2015, the list indicated 116 new construction
applications totaling $571 million and 200 modernizations
applications of about $330 million.
If this bill is enacted, school construction projects on
military bases would be prioritized over other projects
currently awaiting funding.
3. Related Governor's budget activity. In his 2015-16 Budget
Summary, the Governor notes concerns about the complexity
and structure of the current School Facility Program and
the state's increasing debt service obligations. The
Governor has proposed significant changes to the way school
facilities are funded with the intent that districts be
better able to meet their facilities needs at the local
level. The Governor proposes to expand local revenue
generation tools by increasing caps on local bond
indebtedness, restructuring developer fees, and expanding
the allowable uses of Routine Restricted Maintenance
Funding. The Governor has also indicated interest in a
future state program focused on districts with the greatest
need, including communities with low property values and
few borrowing options, as well as overcrowded schools.
It is unclear whether the administration anticipates additional
state general obligation bonds as the funding source for the
future school facility program envisioned.
4. Priority funding. Currently, the School Facility Program
(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 State Allocation Board (SAB) also
prioritizes the processing and funding of facility hardship
projects, which are projects in which there is a health and
safety concern.
This bill would authorize certain projects to be
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prioritized for funding over all other projects on the
basis of their eligibility for federal funds. The committee
may wish to consider:
A. Should funding for these projects be prioritized
over facility hardship projects in which there is an
imminent threat to the health and safety of pupils?
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 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?
D. Should districts that have failed to submit an
application be allowed to move to the front of the
line?
E. Should districts that already received
modernization funding under the SFP be granted another
opportunity to access bond funds for the same project,
while other districts must wait 25 years for another
opportunity to access state modernization funds?
F. In light of the excessive demand for limited bond
funds, and the uncertainty regarding the future
availability of bond funds, is eligibility for federal
funding the basis upon which projects should be
prioritized?
5. Notwithstanding? As currently drafted this bill would
"notwithstand" specified statutes to accomplish its
objectives. Staff notes that these statutes specify that
title to property constructed or improved with bond funds
must be held by the district, that the district must comply
with state laws pertaining to the construction or
modernization of school buildings, and outline criteria to
be met if the construction activity is on property leased
from a governmental entity. It is unclear why these
projects should be exempted from these requirements.
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If it is the desire of the committee to advance this
legislation, staff recommends the bill be amended to strike
line 3 on page 1, and "and Section 17070.7"1 in line 4 page
1.
6. Related and prior legislation.
RELATED LEGISLATION
SB 111 (Fuller) also on the committee's agenda today,
appropriates $61 million from the General Fund to the California
Department of Education (CDE) for apportionment to school
districts to meet the matching share requirements of a specified
federal school construction grant program.
PRIOR LEGISLATION
This bill is almost identical to SB 1421 (Fuller, 2014)
which was heard and passed by this Committee in April 2014,
by a vote of 6-0. SB 1421 was subsequently amended in the
Senate Appropriations Committee to limit priority
eligibility to districts which have already applied for
School Facility Program (SFP) funding and that agree to
refrain from applying for funding for three subsequent
years. SB 1421 was ultimately held under submission in the
Assembly Appropriations Committee.
SUPPORT
Brigadier General, Marine Corps Base Camp Pendleton
Muroc Joint Unified School District
Sierra Sands Unified School District
Travis Unified School District
Numerous individual letters
OPPOSITION
None received.
-- END --
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