The May Revision and State Budget Activities
The Governor released his May Revision budget update on Thursday, May 14, 2015, and the
Legislature is currently reviewing, reconciling, and finalizing budget actions in order to
meet the constitutional deadline to pass a budget by June 15. The Governor estimates an
additional $6.7 billion in revenues above the January proposal across three fiscal years
(2013-14, 2014-15, and 2015-16), $5.5 billion of which are proposed to go to K-12 and
community colleges under Proposition 98. The Legislative Analyst’s Office (LAO)
estimates revenues approximately $3 billion above the Governor, who is known for making
very conservative estimates in order to maintain a fiscally prudent approach and minimize
The Legislature is working to meet the constitutional deadline to pass a budget by June 15,
2015. Both houses have completed their versions of the budget and have established a
Conference Committee to reconcile different actions on some items between the two houses.
State School Bond & General Facilities Issues
The Governor did not include additional commentary or information on his policy
recommendations for facilities as outlined in the January budget proposal. The Governor
proposed, and both houses of the Legislature have approved, a decrease of 37 positions at
the Office of Public School Construction (OPSC). The Department of Finance has indicated
that some of those positions are vacant and some are currently filled. The Department of
General Services (DGS) has vacancies in other divisions that will be offered to employees
affected by the reductions. Some staff are already in the process of transferring out of
OPSC to other positions both within and outside of DGS. The Governor’s willingness to
reduce OPSC staff, and the Legislature’s willingness to approve the reduction, is a
significant statement on his position about a future school bond; it is unlikely that he will
change his mind and decide to support a state school bond bill in the Legislature.
Military Base Schools
The Governor indicated that the state should explore ways to help military base schools fund
the local match requirement for the Federal Department of Defense school facility program
for public military base schools, using a possible low-interest loan program.
Routine Restricted Maintenance
The requirement for school districts participating in the School Facility Program (SFP) to setaside 3% of their annual general fund budget for Routine Restricted Maintenance (RRM) is
scheduled to return in 2015-16, per the expiration of budget flexibility provisions adopted in
2008-09. In his January policy recommendations, the Governor proposed to expand the
allowable uses of RRM to allow districts to pool funds over multiple years to use for new
construction and modernization projects. This proposal was intended to be considered as
part of the larger conversation on the future of state school facilities funding, and it was not
discussed in the legislative budget subcommittees as a stand-alone item. However, on May
20 and May 21, the Senate and Assembly Budget Subcommittees on Education respectively
took action to phase-in the return of the 3% requirement. Specifically, both subcommittees
adopted a recommendation proposed by budget staff to allow for a phase-in of 2% by 2017-
18 and 3% by 2020-21, and to allow funds to be used for drought-related purposes. Budget
staff indicated that the phase-in rationale is linked to full restoration of the 3% RRM
requirement by the time the Local Control Funding Formula (LCFF) is fully implemented.
C.A.S.H. opposed the phase-in approach and supported the immediate return of the 3%
requirement, given the large amount of funds being restored to schools in this budget.
Technology and Internet Connectivity Funds
In January, the Governor proposed $100 million in one-time Proposition 98 funding to
support additional investments in internet connectivity and infrastructure. These funds were
intended to build upon the $26.7 million provided in the 2014 Budget Act for the K-12 High
Speed Network (HSN) to assist schools with securing required internet connectivity and
infrastructure to implement Common Core’s new computer adaptive tests.
The Budget Subcommittees have taken two different actions on this item. The Assembly
approved the Governor’s proposal. The Senate staff proposed, and the Senate Budget
Subcommittee approved, an alternative of $75 million, as follows:
- $25 million for the HSN to provide network connectivity grants pursuant to BIIG criteria.
- $5 million to the HSN to provide training and professional development to Local Education Agencies (LEAs) on technology, including network management, system evaluation, and access to subsidies.
- $45 million to the Superintendent of Public Instruction to provide grants to LEAs on a per ADA basis for technology needs.
Because two different actions have been taken on this item, it will be subject to
reconciliation between the two houses through the Conference Committee process.
The Governor also proposed an additional $2.4 billion in one-time Proposition 98 funds for
discretionary use by schools, for a total of more than $3.5 billion in discretionary funds.
The funds are intended to further implement the Common Core academic standards,
including for the purchase of instructional materials and technology. However, because
they are discretionary and intended for one-time purposes, the funds can also be used for
maintenance and deferred maintenance. The final dollar amount available for discretionary
purposes will be dependent upon other decisions made in the budget process.
Other Budget Issues
The budget subcommittees in both houses have also taken action to approve the following
- Proposition 39 – To decrease the amount of energy efficiency funds available to K-12 schools in 2015-16 by $6.7 million from the $320.1 million in the January proposed budget, to a total of $313.4 million. This decrease is credited to “reduced revenue estimates” generated by corporate tax revenues.
- Emergency Repair Program – To approve paying off the remaining balance of $273.4 million owed to the ERP as a result of the Williams settlement. The May Revision proposed $127.9 million from Proposition 98 savings and the remaining $145.5 million from one-time Proposition 98 funds, and this counts toward meeting settle-up obligations.
The Legislature just passed another significant deadline, which required them to pass all
bills with a potential fiscal impact out of the Appropriations Committee in the house of
origin (i.e. the house in which they were introduced) by May 29. On May 28, both houses
took action on the “suspense file,” which is a mechanism whereby each house collects and
prioritizes bills with state fiscal implications, acting upon them at one time. Bills that are
“held” in the Appropriations Committee at this point in time will likely not be moving
forward through the legislative process for the remainder of the year; they become “two year
bills” with the opportunity to move again at the beginning of 2016. Bills that pass out
of Appropriations Committee are then considered by the full Senate or Assembly and must
be passed by their house of origin by June 5.
State Bond Bills
Various actions were taken on the three major bond bills:
- SB 114 (Liu) was passed by the Senate Appropriations Committee with a 5:2 vote (Republicans voting no). The bill will require a 2/3 vote on the floor to pass out of the Senate. The bill would place a K-12 bond on the November 2016 ballot, and it is silent on the dollar amount. It does not appear that the Senate Appropriations Committee took amendments to specify a dollar amount, which is an unusual step given that the Committee typically needs to be able to characterize the fiscal implications.
- AB 148 (Holden) was held in the Assembly Appropriations Committee and will become a two-year bill. This bill would place a K-14 bond on an unspecified 2016 ballot, and no dollar amount is specified, though Assembly Member Holden has indicated that he is considering a “bridge” bond in the amount of $1.8 billion.
- AB 1088 (O’Donnell) was never scheduled to have its initial hearing in Assembly Appropriations Committee and therefore was not on the suspense file and will become a two-year bill. It would place a Kindergarten through University bond on an unspecified ballot, and the bill is silent on the dollar amount.
School Facilities Legislation
Additional actions on key pieces of legislation include:
- AB 677 (Dodd) – Safety Locks
This bill was held in Assembly Appropriations Committee, which is a significant win. This bill would require, by January 1, 2022, all classrooms and rooms with an occupancy of 5 or more to be equipped with locks that are lockable from the inside, also known as security or interior door locks. It would also require all School Facility Program modernization projects as of January 1, 2016, to include such security door locks. C.A.S.H. has an oppose unless amended position and has been working with the author’s office on our concerns, which are primarily related to costs, specifically with the requirement to retrofit all door locks by 2022. This action is a significant win.
- AB 715 (Daly) – Assessable Space
This bill is pending on the Assembly floor. AB 715 revises the definition of assessable space for purposes of calculating developer fees, specifying that the following are excluded from the definition: covered walkway, uncovered walkway, enclosed walkway, bike storage locker, and detached personal property storage. The bill is sponsored by the California Apartment Association, which argues that such spaces are not considered “livable space.” In Assembly Education Committee, the author characterized the bill as a technical fix that is seeking to clarify the law, not change it, an assertion with which C.A.S.H. does not agree. C.A.S.H. has adopted an oppose position because the bill would decrease the developer fee revenue available to school districts.
- AB 1347 (Chiu) – Claims Process
This bill was passed with a unanimous vote and amendments that reflect ongoing negotiations between the author’s office and representatives of the public works sector, including C.A.S.H. We still need to review the amendments when they are in print, but we hope to be able to remove our opposition to reflect the compromise negotiated by United Contractors, the sponsor, and the public works community. The bill establishes a new claims process that is attempting to achieve timely payment for undisputed claims.
- SB 47 (Hill) – Artificial Turf
This bill was held in Senate Appropriations Committee, which reflects the hard work done by C.A.S.H. and other education stakeholders to oppose certain provisions of the bill. As introduced, SB 47 proposed to prohibit the installation of new artificial turf fields and playground surfaces containing waste tires (aka crumb rubber infill) for two years beginning January 1, 2016, while the state conducted a comprehensive study of the potential health impacts of crumb rubber infill. The author amended the bill in an attempt to meet some of the concerns of opponents; these amendments removed the prohibition on the installation of such artificial turf fields and play surfaces but created additional bid requirements that would make it more difficult to move forward with such projects, and C.A.S.H. continues to oppose the bill.
Water Conservation – Implementing the Governor’s Executive Order
In response to the Governor’s Executive Order B-29-15 requiring a 25% reduction in statewide water use, C.A.S.H. has focused on how this will impact schools. The following is a summary of C.A.S.H.’s advocacy and information:
Building Standards Commission Approves Initial Water Efficiency Code Changes
On Friday, May 29, the Building Standards Commission (BSC) approved emergency regulations proposed by the Division of the State Architect (DSA) to update the Cal Green Code (Title 24) and create new water efficiency requirements for public schools and community college irrigated landscape areas. The changes require a reduction in outdoor potable water use through irrigation regulation, separate water meters, and automatic controllers that adapt to changes in weather and soil moisture. This action is being taken in conjunction with the Governor’s recent Executive Order B-29-15 issued April 1, 2015 regarding water restrictions and conservation efforts. The regulations pertain only to use of water outside of a school building and do not apply to graywater.
On July 21, the BSC will take further action to amend the code with more detail regarding the requirements, such as establishing triggers for required work, location of work, enforcement mechanisms, and more. The action from May 29 is essentially a placeholder to allow time for the DSA and stakeholders to further develop the new requirements. Additionally, while that action appears to apply to new construction as well as modernization projects, we have been told that the modernization requirements will likely be more limited in the final version of the code.
The new code adopts the Model Water Efficient Landscape Ordinance (MWELO), housed in Title 23, for schools. This regulation establishes a structure for planning, designing, installing, maintaining, and managing water efficient landscapes. Under the new code, outdoor potable water use in landscape areas 2,500 square feet or greater must abide by the MWELO and meet an evapotranspiration adjustment factor (ETAF) of 0.65. Special landscape areas (SLAs) such as playfields, vegetable gardens, and other outdoor educational spaces are exempted from that calculation and would receive an additional water allowance of 0.35. The ETAF refers to the composition of a softscape, exempting SLAs, and reflects irrigation efficiency and types of vegetation. For projects with landscape areas between 1,000 and 2,500 square feet with outdoor irrigation, the code establishes requirements regarding controllers, sensors, and outdoor water use meters.
This represents new territory for DSA, which has historically not reviewed landscape work. DSA is intending for the final code changes to align with the work currently being done by the Department of Water Resources and other agencies, which may make modifications to the existing MWELO in July. Such modifications would then likely be incorporated into the DSA code.
C.A.S.H. staff and school district representatives have been working with the State Architect to provide feedback on the proposals, and we will continue to engage in this process as they work to finalize the regulations.
In May, C.A.S.H. and the School Energy Coalition (SEC) put on a successful joint Water Management and Conservation Planning Workshop, which included presentations from the Division of the State Architect (DSA), State Water Resources Control Board (SWRCB), and local water districts, all focused on implementing the Governor’s Executive Order. The workshop also included multiple school district case studies of how they are effectively approaching water restrictions. The Sacramento workshop took place on May 19, and the Ontario workshop took place on May 28. C.A.S.H. will schedule further workshops as more information becomes available.
For the latest updates on important matters affecting school facilities, be sure to check
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~ C.A.S.H. Staff