September 3, 2013
Chair – Today’s meeting was presided over by new chair Eraina Ortega, who was recently appointed as Chief Deputy Director of Policy for the Department of Finance.
The minutes from the June 26, 2013 and July 10, 2013 meeting were approved unanimously.
Executive Officer Statement
Lisa Silverman provided updates on the following items:
– Priority Funding Apportionment Fund Releases – At the May 22 meeting, the State Allocation Board (Board) approved priority funding apportionments for 230 projects for 92 school districts; fund release requests were due to OPSC by August 20, 2013 and an announcement will be forthcoming on participation. At the July 10 meeting, the Board approved priority funding apportionments for 17 projects for 14 school districts; fund release requests for these projects are due by Tuesday, October 8.
– Overcrowding Relief Grant – The 12th funding cycle is oversubscribed; OPSC received 14 applications requesting $88 million, and there is currently $39.2 million in bond authority. Applications will be funded based on the highest density of eligible schools that have submitted an Approved Application.
– Program Review Subcommittee Schedule – The subcommittee met on August 13 to discuss options related to the dwelling unit augmentation, supplemental grants, and funding for portable classrooms. Future meetings are scheduled for the following dates:
- Thursday, Sept. 5
- Tuesday, Oct. 1
- Wednesday, Oct. 23
- Tuesday, Nov. 12
- Monday, Nov. 25
- Tuesday, Jan. 7
The consent agenda was approved unanimously, with Kathleen Moore abstaining from items related to ElkGroveUnifiedSchool District.
Status of Funds
The following bond authority balances account for accumulated Unfunded Approvals.
|SFP Program||Prop 1D||Prop 55||Prop 47|
|New Construction||$6.4 million||$0.7 million||$1.1 million|
|Seismic Repair||$170.4 million||—|
|Overcrowding Relief||$39.2 million||—|
|Modernization||$38.4 million||$2.9 million||$1.5 million|
Coalinga-Huron Joint Unified/Fresno
Presents the District’s request for Facility Hardship Seismic Mitigation Program (SMP) replacement funding with the option to rehabilitate a school building. The District also requested High Performance Incentive (HPI) grant funding as part of the SMP project. OPSC determined that the request was ineligible for rehabilitation funding because the cost/benefit analysis showed that rehabilitation costs exceeded 50 percent of the replacement cost, thereby qualifying the District for replacement funding, not rehabilitation. The rehabilitation cost estimate is $2,164,415 and the replacement cost estimate is $3,739,034.
Regulations to allow Facility Hardship projects to access HPI funds were approved by the Board on May 22, 2013, and are currently under review by the Office of Administrative Law with a potential effective date of January 1, 2014. Chair Ortega expressed concern from the Department of Finance about the HPI request, stating that applications are subject to the regulations in effect on the date that they are received by OPSC.
Motion: To approve funding for the rehabilitation project without HPI grants. APPROVED UNANIMOUSLY.
Motion: To approve the HPI grant request, available once regulations are approved by OAL.
High Performance Incentive Grant
With bond authority exhausted for the primary SFP programs and authority remaining for the High Performance Incentive (HPI) grant, the Board discussed alternative options for providing the HPI grant. There is $38.4 million available in HPI bond authority, with a draw-down expected for the most recent ORG cycle, included $2.7 million in HPI requests. Additionally, there are $8.1 million in HPI requests on the Unfunded List (Lack of Authority), as well as requests on the SAB-Acknowledged List.
The Board discussed possible changes, including:
– Transfer of authority to another program within the SFP. This would require a 2/3 vote of the Legislature.
– Funding the HPI portion of an SFP project even if no authority remains for the accompanying funding application (i.e. a bifurcated approval process with a stand-alone HPI application). This would require regulatory amendments but generated significant concerns by Legal Counsel and Department of Finance about possible full and final issues. There were also concerns about establishing future state obligations by processing the full application for the entire project.
The Board members emphasized the importance of getting the HPI funds out the door and generally coalesced around the option of processing stand-alone HPI applications, while setting aside funds for projects already in line requesting HPI funds. Assembly Member Hagman suggested linking the HPI funds with Proposition 39 projects, to potentially fund components that would not be covered by Prop 39.
NO ACTION WAS TAKEN. The Board decided to create an informal working group on the issue. Assembly Member Hagman, in consultation with Senator Hancock and Cesar Diaz, will work on legislation to create a stand-alone HPI application process, with a connection to Proposition 39 projects.
Note: While the intent was to pursue legislation before the end of the 2013 session, C.A.S.H. has since learned that the effort has been put on hold for 2013, with possible legislation in 2014.
~ Rebekah Cearley