Tag Archives: school finance

CASH Budget Update: Legislature Approves State Budget & Trailer Bills

June 15, 2017

Today, the Legislature passed AB 97, the budget bill for FY 2017-18, meeting the constitutional deadline to pass an on-time budget by June 15, 2017. The Legislature also passed a number of accompanying trailer bills to implement policy changes in the budget. The budget includes $125.1 billion in General Fund spending, including $9.9 billion in total reserves. This is the largest budget reserve in California’s history and is consistent with the Governor’s priority of preparing for the next economic downturn. The budget will now go to the Governor for his signature, or line item veto, if any.

School Finance Budget Trailer Bill – AB 99

School Facility Audit Language – This bill includes new school facility audit language (commencing with changes to Education Code Section 41024) that requires local auditors to include state funded facility projects in the annual school district audit. The audit language includes references to the new fund release grant agreement adopted at the June 5, 2017 State Allocation Board (SAB) meeting. The audit language also includes language on the use of project savings and the process for repaying state funds audit exceptions.

One-Time Discretionary Funding – This bill includes $876.6 million (one-time Proposition 98) for any purpose, including deferred maintenance and capital outlay. This is approximately $145 per average daily attendance.

Emergency Repair Program – This bill includes language that any unencumbered funds in the School Facilities Emergency Repair Account revert to the Proposition 98 Reversion Account. AB 99 extends this encumbrance.

Budget Trailer Bills AB 111 and SB 96 (Anticipate Approval at the Time of Posting)

Proposition 39 – The date for local encumbrance of these funds increases from June 30, 2018 to June 30, 2019.

DSA Filing Fee – The Legislature passed budget trailer bill AB 111, which increases Division of the State Architect (DSA) project filing fees for construction or alteration of school buildings. The fee will increase from 0.7% to 1.25% for the first $1 million in construction costs, and from 0.6% to 1.0% for costs in excess of $1 million. If the balance in the Public School Planning, Design, and Construction Review Revolving Fund exceeds six months of expenditures, the fee will automatically decrease.

Department of Industrial Relations – The Legislature passed budget trailer bill SB 96, which makes changes to the Department of Industrial Relations (DIR) prevailing wage monitoring program, including:

Raises the threshold for the program’s applicability from $1,000 to $25,000 for construction projects and $15,000 for maintenance projects.

  • Increases penalties for contractors and subcontractors who fail to register correctly.
  • Creates new penalties for awarding bodies, including school districts, which would be subject to a fine of up to $100 per day, up to $10,000.
  • An awarding body determined to be a “willful violator” with two program violations within 12 months could lose state facility funding for one year.
  • Increases the annual contractor registration fee from $300 to $400 and permits a contractor to register for multiple years at a time.

The budget also includes $805,000 in 2017-18 and $759,000 in 2018-19 for positions to educate awarding bodies about their requirements under the law.

Additional OPSC Staffing and Bond Sales – We thank Senator Bates for her comments on lack of Proposition 51 progress; however, the budget agreement does not include any additional staff for the Office of Public School Construction (OPSC) nor any proposed increase in the January budget proposal for Proposition 51 state school bond sales.

~ CASH Staff

SAB Takes Action on Upfront Agreement & Beyond Bond Authority Project List

On Monday, June 5, 2017, the State Allocation Board (SAB) took action on two key policy issues that are critical to the implementation of Proposition 51: a) Regulatory Amendments for Increased Program Accountability (template for Upfront Grant Agreement); and, b) School Facility Program (SFP) Applications Received Beyond Bond Authority List (how to proceed with projects on the Acknowledged List). These proposals were originally scheduled to be adopted at the SAB meeting on April 24, 2017, but the action was deferred to a later date due to concerns with the draft prepared by the Office of Public School Construction (OPSC).

Fourteen CASH members testified during the hearing including Chair Don Ulrich (Clovis USD), Vice Chair Julie Arthur (Palm Springs USD), Immediate Past Chair Jenny Hannah (Kern HSD), and board members Rob Pierce (Elk Grove USD) and Alan Reising (Long Beach USD). The following is a summary of the actions that the SAB took on these agenda items:

Upfront Grant Agreement
The SAB voted to approve the Upfront Grant Agreement and conforming regulatory amendments, approved the projects on Attachment #5 for placement on the Unfunded List (Lack of AB 55 Loans), and exempted these projects from the Grant Agreement requirement. CASH and the education community had advocated for changes to the Grant Agreement, which were incorporated in this approval. These changes include:

  • Changes to the eligible expenditures list to expand eligibility of freezers, refrigerators, and exercise equipment.
  • The option of project-specific guidance letters incorporated by reference into the Grant Agreement – allows districts to achieve certainty on unusual project expenditures, ensuring auditors will allow.
  • The Grant Agreement is required at fund release, not as a condition of apportionment.
  • Projects on the True Unfunded List are exempt; the grant agreement still applies to all projects on the Acknowledged List.

The Grant Agreement as adopted includes a significant policy change by making educational technology, including computers and printers, an ineligible expenditure.

Beyond Bond Authority List
After extensive discussion and testimony from CASH board members and members of the education community, the SAB voted to approve “Option 1” which requires new construction projects on the Acknowledged List to re-justify their eligibility for the enrollment year in which the application was processed by OPSC, without losing their place in line. The biggest policy debate of the evening was whether schools should be required to update eligibility, or if projects would be processed with eligibility at the time of submittal. Projects that would no longer be eligible under updated eligibility have the right to submit an appeal to the SAB.

CASH would like to thank our members for their dedication and commitment to qualifying, approving, and now working to implement Proposition 51.

~ CASH Staff

CASH Alert: Encouragement to Attend the June 5, 2017 SAB Meeting

May 26, 2017

On Monday, June 5, 2017, the State Allocation Board (SAB) will meet at 4:00 pm in Room 437 of the State Capitol to consider recommendations on the proposed Grant Agreement, True Unfunded List, and Acknowledged List. Click here to see the CASH letter addressing these proposals.

We encourage you to attend the SAB meeting and speak to your specific concerns about the proposals and how they will affect your school district or client district.

More information will be provided during the CASH Monthly Update Meeting also scheduled for Monday, June 5, 2017, at 11:00 am in the Lower Level Conference Room A at 1130 K Street, Sacramento, CA 95814.

We additionally would like to further encourage you to communicate your concerns directly to your State Senators and Assembly Members. The district draft letter found here, may be a resource in doing so.

~ Tom Duffy

CASH Urgent Action Alert: Letters Needed from School District Members

May 24, 2017

Dear CASH School District Member:

We are writing to request your help in communicating with your representatives in the State Senate and the State Assembly to ask for their direct action to assist us in:

  1. Focusing legislative pressure on the Department of Finance (DOF) to increase school bond sales for matching funds through Proposition 51 in years 2018 and in 2019; and
  2. Communicating to the State Allocation Board (SAB) concerns as to how the Office of Public School Construction (OPSC) and DOF are proposing to treat districts projects negatively that are on the “Acknowledged List.”

Unfortunately, in the May Revision the DOF did not change the state’s plan to sell only $600 million in Proposition 51 bonds between now and June 30, 2018. That rate of bond sales will not even cover the new applications being filed, much less the current $2.4 billion waiting list.

In communicating with your legislative representatives we ask that you cite specific information about your District’s projects waiting for state bond funding, including estimated state bond funding amounts. We request that you speak to the need to increase state bond sale amounts for purposes of funding your projects and the $2.4 billion in the pipeline waiting for funding.

It is important to note here that it has been proposed by OPSC that the SAB consider sending projects on the “Acknowledged List” back to the applicant school districts, thus denying funding to those projects.

To date, there are $2 billion on the “Acknowledged List.” This is a combination of new construction and modernization projects. If your District has projects on the “Acknowledged List” we advise that you specifically identify those projects to your representative and detail the negative impact that the proposed action to deny funding to the “Acknowledged List” will have on your District.

We suggest also that you communicate your concern regarding the proposed OPSC/DOF “grant agreement” that is intended to be applied retroactively to all projects waiting for funding, notwithstanding the fact that contracts have been signed or that projects have been completed and occupied.

The Legislature needs to hear directly from you about the specific harm that the proposed OPSC and DOF actions will have on your district.

Again those proposed actions are:

  1. Limit bond sales;
  2. Reject projects waiting for funding on the “Acknowledged List;” and
  3. Require that a grant agreement is signed for each project retroactively.

Please review the draft letter that you may use to write your own request that the state sells more bonds faster.

Please send your letter to your State Assembly Member and State Senator.

Thank you in advance for your assistance on this matter of importance.

~ Tom Duffy

OPSC Holds Second Stakeholder Meeting on the Front-End Grant Agreement

May 8, 2017

Today, the Office of Public School Construction (OPSC) hosted a stakeholder input session to receive additional feedback on the proposed front-end grant agreement for School Facility Program projects. The grant agreement was initially presented to the State Allocation Board (SAB) for discussion on April 24, 2017. At that time, the SAB did not have enough votes to pass the grant agreement as drafted, and they deferred action until the May SAB meeting.

OPSC staff began today’s stakeholder meeting by stating that concerns related to the audit trailer bill language should be brought to Department of Finance. OPSC staff then outlined items that they have identified for possible amendment prior to the next SAB meeting. Topics included, but were not limited to:

  • Which documents applicants are required to attach
  • Inclusion of a “site description”
  • Whether the definitions section should be limited to items that are unique to the grant agreement
  • Timing of when grant agreements should be executed
  • Laws and regulations with which applicants must comply
  • Impacts to the Priority Funding process
  • Expenditure report due dates and substantial progress
  • Hold harmless/indemnity provision
  • Eligible and ineligible expenditures

The issue of outlining a list of eligible and ineligible expenditures generated the most stakeholder feedback and discussion. Numerous stakeholders were concerned that expenditures on items not explicitly listed on the eligible expenditures list would not be accepted by local auditors. There were concerns that the proposed agreement would reduce the flexibility that districts have under the current grant program structure. There were also concerns voiced on behalf of Financial Hardship districts and county offices of education, which would have difficulty identifying local dollars to fund “ineligible” items such as computers.

OPSC’s goal is to bring an amended agreement to the next SAB meeting on May 24, 2017. They anticipate that the updated draft grant agreement will be available approximately one week prior to the hearing date and that the SAB agenda item will identify stakeholder feedback similar to the April agenda. OPSC anticipates that a larger regulations package will need to be brought to the SAB after the Legislature approves, and the Governor signs, the audit trailer bill language.

If you have feedback that you would like to provide, OPSC is still accepting comments on the grant agreement and requested that comments be submitted within the next few days. The current version of the grant agreement under discussion may be found here.

~ Rebekah Cearley

May Facility Planners Update

May 1, 2017

The CASH Facility Planners Meeting Update for May 2017 is now available and includes information regarding:

  • State Allocation Board Defers Action on School Facility Program Upfront Grant Agreement
  • Legislative Update
  • CASH Welcomes New Members
  • Upcoming Networking Mixers

Click here to download the Update.

~ CASH Staff

OPSC Stakeholder Meeting on Grant Agreements for the SFP

March 20, 2017

The Office of Public School Construction (OPSC) has scheduled a stakeholder meeting for Thursday, March 30, 2017, at the Department of General Services, Ziggurat building in West Sacramento. The meeting is scheduled for purposes of discussing and receiving feedback on the draft grant agreements for the School Facility Program. The notice has been posted to the OPSC website under Meeting Information and on the State Allocation Board webpage. This meeting will also be webcast.

~ CASH Staff

Office of Public School Construction Stakeholder Meetings – Grant Agreements

February 15, 2017

The Office of Public School Construction (OPSC) stakeholder meeting scheduled for Wednesday, Feb. 22, 2017, at the Hyatt Regency in downtown Sacramento, has been canceled. The meeting has been rescheduled to Monday, March 6, 2017, for purposes of discussing and receiving feedback on the draft grant agreements for the School Facility Program. The NOTICE (PDF) has been posted to the OPSC website under Meeting Information and on the State Allocation Board web page. This meeting will also be webcast.

~ CASH Staff

Office of Public School Construction Stakeholder Meeting on Grant Agreements

February 10, 2017

The Office of Public School Construction (OPSC) has scheduled a stakeholder’s meeting to discuss and receive feedback on the draft grant agreements for the School Facility Program.  The notice( has been posted to the OPSC website under Meeting Information and on the State Allocation Board webpage. This meeting will also be webcast.

~ CASH Staff

SAB Senate Member Appointments & February 22 Meeting Canceled

February 3, 2017

The February 22, 2017, State Allocation Board meeting has been canceled.  The next State Allocation Board meeting is scheduled for Wednesday, March 22, 2017, at 4:00 p.m.  Location will be determined.

The following three Senate members have been appointed to the State Allocation Board:

  • Senator Benjamin Allen
  • Senator Janet Nguyen, and
  • Senator Richard Pan

These three appointments make a full complement of the State Allocation Board.

~ CASH Staff