State Allocation Board
Meeting of August 26, 2015
Members:
Eraina Ortega, Chief Deputy Director, Department of Finance
Esteban Almanza, Chief Deputy Director, Department of General Services
Nick Schweizer, Department of Education
Cesar Diaz, Governor's Appointee, CA Building Trades
Senator Sharon Runner
Senator Loni Hancock
Senator Carol Liu
Assembly Member Susan Bonilla
Assembly Member Rocky Chavez
Assembly Member Adrin Nazarian
Status of Funds1
The State Allocation Board (SAB) agenda identified the following the
remaining bonding authority as of August 26, 2015:
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New Construction –$8.5 million
Modernization – $5.1 million
High Performance - $0.5 million
Overcrowding Relief - $4.2 million
Seismic Repair - $94.6 million
Charter School – $6.8 million
Career Tech – $16.2 million
Critically Overcrowded – $0
Hardship - $02
Joint Use - $0
The complete Status of Funds pages from the SAB agenda are
attached.
1
2
Page 100, SAB agenda; Joint Use see page 93, SAB agenda
Hardship money was a separate pot of funding provided under Proposition 1A to fund financial
hardship request, facility hardship projects and specified additional allowances pursuant to Article 9
of the SAB regulations (Sections 1859.80 to 1859.83).
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August 26, 2015
OPSC Lists
OPSC is maintaining three basic lists (state share):
1) Unfunded List3 – $250.8 million - Approved applications as of
July 14, 2015, within the existing bonding authority. These
projects will be funded from future state bond sales. This list
includes New Construction, Modernization, Facility Hardship,
Overcrowding Relief Grant, Charter Schools and Career
Technology Education projects.
2) “True Unfunded List” – Projects Approved and Beyond
Existing Bond Authority4 - $374.7 million – Approved and
processed applications as of July 14, 2015. These projects can be
moved to the Unfunded List within bonding authority when
additional funding becomes available through rescissions or from
close-out audits.
3) Acknowledged List5 - $1.14 billion ($755.6 million New
Construction and $385.4 million Modernization) as of July 31, 2015
- Projects received and maintained by date order after November
1, 2012 and only checked for agency approvals.
The above information does not include projects on the OPSC workload list.
The current demand for state dollars is approximately $1.52 billion
beyond the State's bond authority. It is estimated that the combined
current and projected state funding need is $9.47 billion over the next
ten year period.
Executive Officer’s Statement
Close of 2014 Charter School Facilities Program Funding Round
In November 2014, the SAB approved funding for Preliminary Charter
School Projects and left the funding round open for an additional 8 month
period in the event more funding became available to fund additional
projects. $157 million in projects (9 schools with 13 projects) received a
preliminary apportionment. OPSC is working with the next project in line to
allocate the remaining balance of $0.5 million.
3
Page 144, SAB agenda
Pages 146-148, inclusive, SAB agenda
5
Pages 150-159, inclusive, SAB agenda
4
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August 26, 2015
Once these funds have been awarded, the applications that did not receive a
preliminary apportionment will be returned to the applicants. Any future
funds that are returned to the program will be set aside for additional
apportionments requests.
Status of Fund Releases for Priority Funding Apportionments
The SAB apportioned $113.6 million to 41 School Facilities Program (SFP)
projects representing 22 school districts (including 12 CTE projects) at the
April 15, 2015 meeting. These districts had a deadline of July 14, 2015 to
submit the required fund release request (SAB 50-05) and accompanying
support documents. All but two projects have received their fund release.
These two projects have been returned to the Unfunded List (Lack of AB55
Loans).
The 12 Career Tech Education Program projects have 12 months to convert
their projects from a preliminary apportionment to a full and final
apportionment. Their deadline is April 14, 2016.
Regulation Update
The regulations to address the general site development grant for Charter
School Program projects are still being reviewed by the Office of
Administrative Law. The anticipated effective date is October 1, 2015.
State Bond Sale
Last week the Treasurer’s office completed a sale of $1.93 billion in State
general obligation bonds. The sale included the issuance of $1.38
billion in refunding bonds to refinance about $1.54 billion of existing
debt, resulting in taxpayer savings of more than $270 million. The
amount of funds to be distributed to the School Facilities Program
should be determined by the end of the week. All projects on the
Unfunded List will be required to provide Priority in Funding
Certification (PIF). Depending on the amount of funding provided, not
all projects on the list may be funded. Eligible projects will be
apportioned at the September 8th SAB Consent-only Meeting.
Approved Consent Agenda
Apportioned Projects
Two Seismic Mitigation Program projects for approximately $434,000, one
Charter Program unfunded preliminary apportionment of $24.3 million, and
am unfunded approval of a Seismic Mitigation project of $3.1 million.
Charter School Facilities Program
The KIPP King Collegiate High School requested a one year extension for
converting its application to a full and final apportionment. This project is a
hybrid that includes new construction and rehabilitation work.
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Independent Study Facilities
Education Code 17289 authorizes a school district to house its independent
study program in non-conforming (Field Act) facilities if they received an
exemption from the State Allocation Board. The SAB approved this
exemption for three independent study facilities in the Fresno Unified School
District.
Emergency Repair Program (ERP)
As part of the Williams settlement, the State agreed to provide $800 million
to school districts to address repair or replace existing buildings systems that
are broken or not functioning properly and that pose a health and safety
threat to the students. As of January 25, 2015, the SAB has apportioned
$537.7 million. The 2015-16 Budget Act allocated $274.4 million to be
apportioned to projects on the unfunded list. There are currently $266.1
million in unfunded projects. Once the funds are apportioned, OPSC will
automatically process the fund releases.
The SAB apportioned $266.1 million in ERP applications on three separate
lists:
A. Applications which previously received a prorated apportionment and
are funded for the remaining amount
B. Applications on the unfunded list funded in order
C. Applications which incurred additional project costs as reported in
their expenditure report.
Waiver of the Substantial Enrollment Requirement
The School Facilities Program provides that the capacity of a school district
to serve students shall be increased by six percent to represent the ability to
house students on a Multi-Track Year Round Education (MTYRE) basis.
This increase may be waived if the district actually operates a MTYRE
program where either the unified school district has 30 percent of its K-6
students on MTYRE, the elementary school district has 30 percent of its K-6
students on MTYRE or the high school district has 40 percent of its students
on MTYRE. In addition, this adjustment can be waived if the district's
enrollment is small enough that it would be a financial or educational
hardship to operation on a MTYRE basis.
The Burrel Union Elementary School District requested and received
approval for a recertification of its waiver from operating on an MTYRE basis.
Appeal Items
Alpaugh Unified School District
The Alpaugh Unified School District is a financial hardship district. The
ASUD requested approval to change the scope of their Facility Hardship
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project in order to construct the project within the funding provided by the
SAB. The project was originally designed to be a two-story structure
requested the change to a single story structure to reduce costs.
Recommendation
OPSC recommended approval of the district's request with the following
conditions:
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The district must provide a set of DSA approved plans and
specifications for review to OPSC
The district must provide progress updates every six months until they
submit the DSA plans for review
An item will be presented at a future SAB meeting to reduce the
project apportionment by $446,986, the additional amount provided
for the construction of a multi-story structure
This approval does not extend the deadlines such as the substantial
progress, expenditure reports and project completion
SAB Action
The SAB approved the change in scope with the conditions noted above.
Riverside Unified School District
The Riverside Unified School District was granted a Facility Hardship
conceptual approval to abandon and replace the Hawthorne Elementary
School that required selling of the abandoned school site. The replacement
school was occupied in 2008. The district’s request was to remit to the SAB
$542,500, an amount that represents 50 percent of the appraised value, in
lieu of selling the property. This would permit the district to exchange the
original Hawthorne Elementary School property for another property to be
used for a future school site.
Recommendation
At a former SAB meeting the board heard a similar appeal from the FairfieldSuisun Unified School District. OPSC recommended a board action
consistent with the conditions placed on Fairfield-Suisun Unified School
District, which included:
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The exchange of the property must occur within 12 months of this
approval
The appraised value for the property must be prepared or updated
within six months of this approval
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August 26, 2015
If the value of the newly acquired property is less than the value of the
property being abandoned, the district must remit 50 percent of the
monetary value received in the exchange for the Hawthorne
Elementary School site. The district indicated that the property being
acquired was more expensive than the Hawthorne Elementary School
site
The district must remit $542,500 within 90 days of the property
exchange
If the exchange is not completed within 12 months, the district must
immediately sell the property and remit 50 percent of the proceeds
Progress updates must be provided every 6 months until the district
remits the funds
The district's board must provide a resolution acknowledging these
conditions
Discussion
Assembly Member Nazarian suggested the SAB’s legal team should be
involved in the land swap process. The board's legal counsel expressed that
once the district remits the 50 percent value of the Hawthorne Elementary
School site to the SAB, the state no longer has a vested interest in the
property, and thus, could expose the board to liability.
SAB Action
The district approved the district's appeal which include the conditions noted
above.
Action Items
Sausalito Marin City School District
The Sausalito Marin City School District received an apportionment for a
facility hardship project, but the district did not comply with the prevailing
wage monitoring requirement for receiving a fund release. The district
notified the Department of Industrial Relations (DIR) of the project 13 days
after the award for the demolition contract, and notified DIR of the
construction contract two years and two months after awarding the contract.
The requirement for DIR notification is within 5 days of the contract award.
There was no district representative present to address the Board.
SAB Action
Cesar Diaz made the motion to approve the release of funds after a five
percent reduction in the state apportionment (consistent with similar previous
actions of the SAB). The motion passed unanimously.
Information Items
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Seismic Mitigation Program: Single Agency Project Review
The SAB requested OPSC to bring forward a report discussing the feasibility
of having a single agency involved in the Seismic Mitigation Program
application approval process. OPSC described the different roles of DSA
and OPSC, noting these are separate offices with separate functions within
the Department of General Services.
DGS Office
DSA
Compliance
Function
Field Act & CA
Building Code
Compliance
Duties
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OPSC
Funding
statutes &
Regulations
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Staff Type
Building Code
Requirement
Construction
Oversight
Field Act
Compliance
Statutory and
Regulatory
Plan Review for
Eligible Funding
Funding
Requirements
Bond
Accountability
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Structural
Engineers
Architects
Fire and Life
Safety Officers
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Analysts
Accountants
Auditors
DSA and OPSC have been and will continue to work collaboratively in
expediting the processing of Seismic Mitigation projects.
Next SAB Meeting
The next meeting of the SAB is scheduled for September 8, 2015 and will
only include consent items to apportion funds from the August 26, 2015 bond
sale. The meeting scheduled for September 23, 2015 has been cancelled.
By: Susan Stuart and Richard Gonzalez