BILL ANALYSIS
SENATE COMMITTEE ON EDUCATION
Gloria Romero, Chair
2009-2010 Regular Session
BILL NO: AB 346
AUTHOR: Torlakson
AMENDED: June 1, 2009
FISCAL COMM: Yes HEARING DATE: July 15, 2009
URGENCY: No CONSULTANT: Kathleen Chavira
SUBJECT : Joint-use School Facilities
SUMMARY
This bill expands the type of projects, and local
contributions that are allowed in order to be eligible for
School Facility Joint-Use Program funding, establishes a
statutory maximum grant amount per project, and makes these
provisions contingent upon the approval of a statewide
general obligation bond act for educational facilities on
or after January 1, 2010.
BACKGROUND
Under the School Facility Program (SFP), a school district
may receive a grant to fund a joint-use project if the
district complies with specified requirements. These
include the following:
1) The district must enter into a joint-use agreement
with a governmental agency, public community college,
public college or public university or a nonprofit
organization to construct a joint-use facility on a
school site.
2) Funds must be used to reconfigure or construct school
buildings to provide a multipurpose room, gymnasium,
library, childcare facility, or teacher education
facility.
3) A joint-use school facility agreement must specify the
amount of the contribution to be made by the school
district and the joint-use partner toward the 50
percent local share of eligible project costs.
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4) The joint-use partner contribution must be no less
than 25 percent of eligible project costs, unless the
school district has passed a local bond which
specifies that such funds are to be used for the joint
use project, in which case the school district may opt
to provide up to the full 50 percent local share of
eligible costs.
Per State Allocation Board adopted regulations, the state's
50 percent contribution toward the project may not exceed
the maximum contribution of $1 million for an elementary
school, $1.5 million for a middle school, and $2 million
for a high school.
ANALYSIS
This bill makes a number of changes to the School Facility
Joint-Use Program, contingent upon the approval of a
statewide general obligation bond act for educational
facilities on or after January 1, 2010. Specifically it:
1) Authorizes the provision of a grant to fund
construction of a joint use project on property
adjacent to a schoolsite and owned by a governmental
agency, as defined, and requires that the agreement
provide that the land be leased to the school district
for a time period that reflects the useful life of the
facility constructed.
2) Expands the types of joint-use projects which may
be funded under the School Facility Program to include
a:
a) Child health and wellness clinic.
b) Career technical building or shop.
c) Science and technology laboratory.
d) Science center with exhibits or educational
programs that meet current state content standards.
e) Historical or cultural center with exhibits
that meet current state content standards.
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f) Performing arts center.
g) Physical education & outdoor recreation site
development.
h) Parking facility.
3) Expands eligibility for joint-use project funding
to include any combination of the existing entities
authorized as joint-use partners.
4) Authorizes the inclusion of the value of land or
real property as part of the local contribution by a
joint-use project if either:
a) The land is district property, which was not
previously paid for or acquired with state funds.
b) The real property upon which the project would
be built is owned by others and would be gifted to
the district.
5) Expands the allowable contribution by a joint-use
partner to include equipment with an average useful
life expectancy of at least 10 years, if the
contribution:
a) Does not exceed 10 percent of eligible project
costs.
b) Is included as part of a career technical education
joint-use project.
6) Requires the joint-use agreement to ensure that the
school district maintains priority for use of the
facilities constructed.
7) Requires that the facility created by a joint-use
agreement be a public facility with public access for
public use guaranteed.
8) Establishes the following maximum grant amounts:
a) Elementary schoolsite - $1.25 million per project.
b) Middle schoolsite - $1.875 million per project.
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c) High schoolsite - $2.5 million per project.
STAFF COMMENTS
1) School Facility Program (SFP) Joint-Use funding .
Both Proposition 47 (2002) and Proposition 55 (2004)
provided $50 million for joint-use projects, all of
which has been apportioned. Proposition 1D,
authorized by AB 127 (Nunez, Chapter 35, Statutes of
2006) and passed by voters in November, 2006, provided
$29 million for this purpose and authorized the
transfer of $21 million from unused Leased Purchase
Program funds for joint-use projects. AB 127 also
authorized the transfer of any remaining funds derived
from the sale of bonds issued on or before January 1,
2006 to any SFP line item. The State Allocation Board
(SAB) increased the Joint-Use program by a total of
$23 million through this authorization. As of April
30, 2009, a total of $8.5 million remains for
joint-use projects.
2) Increased bond pressure . This bill proposes the
expansion of this program, thereby creating increased
demand for school facilities bonds. In an effort to
preserve the State of California's cash resources
during the current economic crisis, the Pooled Money
Investment Board (PMIB) voted on December 17, 2008, to
freeze all disbursements from PMIB loans. At its
March 18, 2009, meeting, the PMIB voted to spend up to
$500 million on bond-funded infrastructure projects,
and only a portion of this was available for school
facilities construction bonds. In light of the
state's fiscal condition, is it prudent to commit
future bond funds at this time? Assuming a limited
funding pool, is expansion of the joint-use program
the Legislature's highest education facilities
priority? Will increased funding for joint-use come
at the expense of other SFP programs such as Seismic
Mitigation, or a general increase in new construction
or modernization grant amounts?
3) Unintended consequences ? This bill increases the
current grant amounts authorized by the SAB by 25
percent and establishes these funding caps in statute.
Although, it is clearly the intent of the author to
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provide an increase in the grant amount in response to
the failure of the SAB to act in this regard, staff
notes that the bill may have the unintended
consequence of making it more difficult to increase
the grant amount in the future. Statutorily
established grant amounts limit the flexibility of the
SAB to change them in any way, including the provision
of any additional increases.
4) If it isn't broken?. Currently, the funding caps
for joint-use projects are established by the State
Allocation Board (SAB) via regulations. Established
in 2003, these grant amounts have never been adjusted.
At the July 2008 SAB meeting, the Board requested
Office of Public School Construction (OPSC) staff to
analyze the joint-use programs caps to determine
whether they should be modified. According to OPSC
staff's analysis, although the cap on the grant
amounts has remained unchanged, the amount of the
grant received per square foot base grant allowance
had increased by about 33 percent. It was determined
that, given that almost all joint use funds had been
exhausted, any increase in the cap should be
considered if/when funds for joint-use were made
available through enactment of a new bond initiative.
Given that the existing process did result in a review
and decision regarding funding caps, and in order to
ensure the flexibility of the SAB to modify grant
amounts as necessary, staff recommends the bill be
amended to delete the statutorily established grant
amounts in the bill.
5) Parking facilities ? This bill expands the projects
eligible for joint-use funds to include parking
facilities. It is unclear why parking facilities
could not be funded by revenue, or lease revenue
bonds, rather than general obligation bonds. Every
other joint-use project being added by this bill
results in a facility which serves students and meets
some educational purpose. Absent justification for
using already heavily subscribed joint-use funds for
parking lots, staff recommends they be eliminated from
the list of eligible projects.
6) Prior legislation .
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SB 35 (Torlakson, 2007), was substantively similar to
this bill. Although SB 35 was passed by the
Legislature, it was subsequently vetoed by the
Governor whose message read, in pertinent part:
"? the Program's intent to fund joint-use ventures
with equal local and State contributions could be
undermined if joint-use partners were able to
contribute something other than fiscal resources, such
as equipment with a 10-year useful life, where as the
State share of the project is being funded with
30-year General Obligation Bonds.
Finally, any changes to the Program should be debated
within the context of a future bond measure, to assure
that these projects are not funded at the expense of
other educational facility priorities.
AB 1677 (Torlakson, 2006) was also similar to this
bill but proposed more expansive changes to the
joint-use program requirements. AB 1677 was also
vetoed by Governor.
SUPPORT
Antioch Unified School District
Association of California Construction Managers
California School Boards Association
Coalition for Adequate School Housing
Los Angeles County Office of Education
Los Angeles Unified School District
The Advancement Project
OPPOSITION
None received.