February 1, 2016
The minutes from the August 26, 2015 and September 8, 2015 meetings were approved unanimously.
Executive Officer Statement
Lisa Silverman provided updates on the following:
- Current Priority Filing Round – The current priority funding filing round opened on November 11, 2015 and closed on December 10, 2015. School districts were required to submit priority funding requests to Office of Public School Construction (OPSC) before the close of business on December 10, 2015. Currently, there are 15 projects for ten school districts on the Unfunded List (Lack of AB 55 loans) totaling $87.4 million that could submit a request for participation in this filing round.
- Status of Fund Releases for Priority Funding Apportionments – The State Allocation Board (SAB) approved $190.9 million in priority funding apportionments for 53 projects representing 26 school districts on September 8, 2015. OPSC has received 19 Forms SAB 50-05 totaling $100.3 million as of November 20, 2015.
- Cost of August Bond Sale – At the August 2015 SAB meeting, the SAB inquired whether the State would incur increased costs for the General Obligation Bond sale that was held on August 26, 2015, from which the School Facility Program (SFP) received bond funds. The Treasurer’s office indicated that general market interest rates were slightly higher in August 2015 compared to March and April sales. In addition, the Treasurer’s office provided OPSC a link to the report that provides information for the State’s bonds and provides details on factors that affect the market, etc. The report can be found at: http://treasurer.ca.gov/publications/dar/2015.pdf.
- Regulation Update – SFP regulatory amendments were approved by the Office of Administrative Law on November 3, 2015, and are in effect as of January 1, 2016. These amendments implement SB 854, (Chapter 28, Statutes of 2014), which remove the additional prevailing wage monitoring grant for projects with a public works contract awarded on or after June 20, 2014.
The consent agenda was approved unanimously.
The Board approved one project worth $31,429,231.40 within existing bond authority.
The following is the bond authority balances account for Unfunded Approvals made at the June 30, 2015 meeting (As of January 27, 2016).
SFP Program Prop. 1D Prop. 55 Prop. 47
New Construction $7.4 million $5.5 million $1 million
Modernization $2.4 million ————— $0.1 million
Seismic Repair $91.4 million ————— —————
OC Relief $7 million ————— —————
CTE $17.9 million ————— —————
High Performance $0.5 million ————— —————
Charter School $30.4 million $2.5 million $3.4 million
Palm Springs Unified/Riverside County
The District submitted a request for replacement funding for rehabilitation work on the auditorium at Palm Springs HS under the Seismic Mitigation Program (SMP). The District has argued that the historical nature of the building makes rehabilitation preferable to replacement, and has submitted an appeal to request replacement funding for rehabilitation work. OPSC argued that this project shows that the cost of rehabilitating the building exceeds the threshold set in the SFP regulations of 50 percent of the replacement cost, which qualifies the District for replacement funding. As a result, OPSC states that they are unable to administratively approve the project for the requested funding type, and presented three alternative resolutions.
Action: The Board approved “Option 3”, which provides replacement funding and allows the District to use the funds to rehabilitate the building.
Annual Adjustment to School Facility Program Grants
This item proposes to adopt the annual adjustment in the SFP grants based on the change in construction costs pursuant to the Education Code (EC) and SFP Regulations and to adopt a new Class B Construction Cost Index (CCI) on a permanent basis. In April 2015 OPSC staff presented three indices for the Board’s consideration, including RS Means, Sierra West Current Construction Costs Index, and Engineering News-Record (ENR). Staff recommended the Class B CCI from RS Means, arguing that it best represents conditions in California. The RS Means results in the smallest increase among the three indexes considered (0.27% versus 2.27% for Sierra West and 0.54% for ENR).
Action: The Board adopted the RS Means CCI on a permanent basis for all future annual SFP grant adjustments.
Index Adjustment on the Assessment for Development
This item reports the index adjustment on the assessment for development, which may be levied pursuant to Education Code Section 17620, and OPSC staff recommended increasing the maximum Level 1 assessment for development in the amount of 1.05 percent using the RS Means Index to be immediately effective. OPSC staff initially reported that the RS Means Index maximum Level 1 assessment per square foot to be $3.53 for 2016, but their final report indicated the lower amount of $3.39 per square foot. No explanation was given for this reduction. After staff presented this item, Larry Ferchaw (The Dolinka Group) and Joe Dixon (Dixon SmartSchoolHouse LLC) representing C.A.S.H. testified that labor and materials costs far exceeded 1 percent over the past year, and questioned why the amount was reduced from $3.53 to $3.39. They recommended that this item be deferred to a future SAB meeting to allow OPSC staff to research actual costs.
Action: The Board approved the RS Means Index Maximum Level 1 assessment per square foot at $3.39.
Reports, Discussion, and Information Items
Representatives of the Dublin USD addressed the Board about the immediate need to levy Level 3 developer fees. District representatives stated that they have experienced the fastest growth in the state, and that they have done everything they can do locally since state funds are not available. They also recommended that this item be placed on the agenda for the next SAB meeting scheduled for March 9, 2016. Richard Lyon (California Building Industry Association) testified that taking this action would be inappropriate and premature, and that if the Californians for Quality Schools (CQS) initiative is approved in November 2016, triggering Level 3 would be unnecessary. The Board agreed to address this item at a future meeting, but did not commit to the March 9 meeting.
The next State Allocation Board meeting is scheduled for March 9, 2016.
~ C.A.S.H. Staff