State Allocation Board Meeting Notes – January 22, 2014

January 23, 2014

Minutes

The minutes from the November 25, 2013 meeting were approved unanimously.

 

Executive Officer Statement

Lisa Silverman provided updates on the following items:

-          Fund Releases: Districts that received an apportionment on October 14, 2013 were required to submit a Fund Release Authorization form by January 13, 2014.  OPSC did not receive requests for two projects, worth $19.7 million.

-          Priority Funding Filing Round: The sixth round began on November 13, 2013 and closed on December 12, 2013, and OPSC received valid requests for 107 projects totaling $375.4 million.  Requests are valid for apportionments from January 1, 2014 through June 30, 2014.

-          Non-Participation in the Priority Funding Process – Second Occurrence: 21 projects received their second occurrence for non-participation in the sixth filing round.  These projects have been rescinded, and five new construction projects worth a total $30.1 million have been administratively converted from the Unfunded List (Lack of Authority) to the Unfunded List (Lack of AB 55 Loans).

 

Consent Agenda

The consent agenda was approved unanimously.  Items included, but were not limited to, the following.

 

Index Adjustment on the Assessment for Development

Every two years, the maximum assessment for development is adjusted by the change in the Class B construction cost index.  The Board increased the 2014 maximum Level I assessment for development in the amount of 4.93 percent, using the Marshall & Swift Eight California Cities Index, to $3.36 per square foot for residential and $.54 per square foot for commercial/industrial.  This change is effective immediately

 

Annual Adjustment to School Facility Program Grants

The Board adopted an increase of 1.74 percent for the 2014 School Facility Program (SFP) grants, based on the Marshall & Swift Eight California Cities Index.

 

Unfunded Approvals (Lack of AB 55 Loans)

The Board approved 5 new construction projects totaling $30,121,162 within existing bond authority.

 

Financial Reports

Status of Funds

The following bond authority balances account for Unfunded Approvals made at the January 22, 2014 meeting:

SFP Program Prop. 1D Prop. 55 Prop. 47
New Construction $1.2 million $7.4 million $2.4 million
Seismic Repair $159.3 million
Overcrowding Relief $18.9 million
Modernization $7.3 million $5.2 million $1.6 million
Career Technical $3.5 million
High Performance $35.2 million

 

Appeal Items

Glenn County Office Education/Glenn

Presented the Glenn County Office of Education’s request to allow Financial Hardship project savings to be used for the installation of two communication towers.

 

Representatives from Glenn COE explained that the county has a significant need to improve its high speed internet connectivity, specifically for districts to administer Smarter Balanced assessments as required by the State.  Program regulations indicate that Financial Hardship savings must be used to reduce an apportionment for a future Financial Hardship project within three years or returned; because the communication towers are not part of a qualifying SFP project, the majority of Board members agreed that the savings may not be used for that purpose.  Kathleen Moore made a motion to approve the appeal, for equity purposes, but the motion did not receive a second.

NO ACTION WAS TAKEN.  Glenn COE’s appeal was not approved and OPSC’s administrative action stands.

 

Merced County Office of Education/Merced

This item was withdrawn.

 

Action Items

Consideration of Additional Programs Required to Participate in the Priority Funding Process

This item presented options for the Board’s consideration for including the following programs in the Priority Funding process: Overcrowding Relief Grant, Career Technical Education Facilities Program, Charter School Facilities Program.  By doing so, projects in these programs would also be subject to the non-participation regulations.  These programs were originally omitted from the Priority Funding regulations due to their unique timelines and allocation methodologies.  Board members were generally concerned that such projects could remain on the Unfunded List and tie up bond authority that could otherwise be used for construction-ready projects, as participating in the Priority Funding process is voluntary for these programs.

 

During public comment, representatives from the GlendaleUnifiedSchool District described how mandatory participation in the Priority Funding process would adversely affect their ten Overcrowding Relief Grant projects, which were approved by the Board in 2013.  They urged the Board not to change the regulations that were in place at the time their projects were approved.

 

While the majority of Board members agreed that the issue needs to be addressed, some believed that school districts and stakeholders should be given more notice that significant policy changes are under consideration, and some requested additional information about the specific impacts to projects in the three programs.  Assembly Member Hagman advanced the following motion, which did not pass.

Motion: Approve a policy change to require all three programs (Overcrowding Relief Grant, Career Technical Education Facilities Program, Charter School Facilities Program) to participate in the Priority Funding process, per Regulation Section 1859.90.3. FAILED 3:0

 

Chair Eraina Ortega directed OPSC staff to provide additional information at the February SAB meeting about the potential effects of requiring these three programs to participate in the Priority Funding process.

 

Reports, Discussion and Information Items

State Allocation Program Review Subcommittee Report

Assembly Member Buchanan presented the Subcommittee’s report to the Board, giving a brief overview of the consensus recommendations and emphasizing that there is a need for a new bond.  Board members were very complimentary of the efforts of Subcommittee members, OPSC staff, and stakeholders.  Jenny Hannah, Vice Chair of C.A.S.H., spoke about the importance of the state program and highlighted the need for more discussion about the modernization program.

 

The Board accepted the report; no formal action was taken.

 

2013 State Allocation Board Annual Report

OPSC staff presented a report summarizing the School Facility Program activity in 2013.  The report includes information regarding the funding process, appeals, and policy-related activity.

 

Quarterly School Facility Joint-Use Program Fund Release Report

OPSC staff presented an update on the status of fund release requests for recent SFP Joint-Use apportionments; four projects received apportionments in 2012, and three of these have submitted fund release requests.

 

The next SAB meeting is scheduled for February 26, 2014.

 

~ Rebekah Cearley