November 14, 2013
Following is the summary write-up of the 11/12/13 SAB Program Review Subcommittee
November 11, 2013
Present: Assembly Member Joan Buchanan (Chair), Assembly Member Curt Hagman, Esteban Almanza (DGS), Kathleen Moore (CDE), Cesar Diaz, Assembly Member Adrin Nazarian (not a Subcommittee member)
The SAB Program Review Subcommittee met on November 11, 2013 to discuss methodologies for quantifying the funding needed for future school facilities. They heard a report from OPSC staff and a presentation by Bill Savidge, Assistant Executive Officer. The item to discuss additional recommendations to the SAB was pulled from the agenda.
Michael Watanabe (OPSC) presented historical information on the use of school facility bonds under the SFP and provided an overview of eligibility currently on file. Annually since 1998, the Board has approved an average of $2 billion total for New Construction and Modernization, for the following total bond amounts:
– New Construction: $17.6 billion
– Modernization: $11.2 billion
– Other programs: $4.6 billion (Charter, Joint-Use, CTE, ORG, COS)
The total potential value for remaining per-pupil eligibility currently on file is:
– New Construction: $12.6 billion; 673,513 pupil grants
– Modernization: $4.4 billion; 805,582 pupil grants
The OPSC report identified eligibility by grade level, multiplied by the per-pupil grant amount with inflators to account for project-specific characteristics such as site acquisition and supplemental grants, based on historical averages. OPSC acknowledged that this methodology relies on out-of-date eligibility, and it only reflects the needs of districts that currently have eligibility on file; New Construction may be overstated due to declines after the housing boom, and Modernization may be understated as facilities continue to age.
Bill Savidge outlined a selection of different methodologies for calculating the State’s share of future facilities needs:
Remaining Eligibility – $12.6 billion
This approach is similar to OPSC’s methodology and concurred with OPSC’s estimate; used remaining eligibility on file and multiplied by an average State per pupil apportionment calculated using a sample of 33 projects.
New Schools Required – $6.6 billion
This methodology is based on Department of Finance (DOF) enrollment projections from 2012 through 2021. Using cost and school size data from the Project Information Worksheet, it identified the number of schools needed to house the projected increase in the student population for the 36 counties with positive growth; associated costs are estimated at $13.2 billion, with a State share of $6.6 billion.
Average State Apportionment – $5.9 billion
This approach used the same DOF enrollment projection data, multiplying the number of unhoused students by the average State apportionment (this methodology only accounts for State apportionments, differing from the New Schools approach, which incorporates total local costs). The State share to house the projected increase in student population is $5.9 billion.
Regarding Modernization, Mr. Savidge used a similar methodology to OPSC, using the remaining eligibility on file, multiplied by an average State per pupil apportionment calculated using a sample of 33 projects. This estimate reflects a State share of Modernization need at $4.7 billion.
Subcommittee members all agreed that there is a need for better school facilities data, which could be achieved through development of an inventory system. Kathleen Moore questioned the methodology for modernization, which is based upon the provisions of the current program; she suggested considering if the State should cover more “deep” projects, rather than the “wide” approach of the current program. She also encouraged reviewing options for facilities replacement. Subcommittee members asked about quantifying need for other programs, including Career Technical Education (CTE), Joint-Use, and the Charter School Facilities Program. Assembly Member Buchanan questioned if CTE should be funded by the State program or if it is a component that should be planned for in every high school, an issue of the definition of a “complete school”; Kathleen Moore encouraged including CTE in the State program. Assembly Member Hagman asked if there has been an assessment of the facilities impacts for Common Core implementation, but there was no definitive estimate.
Based on the estimates prepared by OPSC and Bill Savidge, Assembly Member Buchanan established that the likely State share of need over the next decade is approximately $12 billion ($6 billion for New Construction, $5 billion for Modernization), but she acknowledged that the size of the bond is subject to political negotiations. Esteban Almanza indicated that the Administration does not have a position on how this need will be met or what the State’s obligation is. Kathleen Moore stated that CDE would probably recognize a higher dollar amount of need, and she emphasized that local dollars can only go so far and are expended based on local priorities.
The next meeting is scheduled for Monday, November 25, at which time the Subcommittee will review the draft report in anticipation of its presentation to the SAB in January. The Subcommittee will also have the opportunity to discuss any outstanding topics.