SCHOOL CONSTRUCTION FUNDING
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1 1 SCHOOL CONSTRUCTION FUNDING SCHOOL CONSTRUCTION TECHNICAL WORK & OSPI TECHNICAL ADVISORY COMMITTEE June 17, 2016
2 Goal & Agenda 2 Goal A dialog about school facilities funding to assist School Construction Technical Work as it identifies ways to improve state assistance to school districts to design, build & maintain facilities Agenda School District Perspective State Perspective
3 District Perspective Challenge & Need Context Current Strategy Funding Overview Recommendations
4 Challenge & Need
5 Identifying & Understanding 5 Identifying the need What are the capital construction needs of school districts? Understanding the challenge Competing interests Unfunded mandates Codes/regulations Determining priorities Difficult hurdles Market conditions The timing of money
6 Context Overview History Strategy
7 District Overview 7 3,500 employees -- over 1,700 teachers 3.7 Million Square feet of buildings classrooms $300 Million GF Budget over 21% from local community support
8 District Overview 76square miles 52schools 3 cities: Kirkland, Redmond, Sammamish, plus parts of unincorporated King County and a small part of Bellevue 4 th largest district in Washington State
9 Capital Bond & Levy History
10 Funding History 10 $1.15B in major capital project spending from 1998 to 2014 Bonds and Capital Levies Successful bond & levy programs 1996, 2004, 2006, 2016 Lost 3 bond measures (2010 & 2 in 2014) $58.1M in SCAP funding from 1998 to 2014 Additional $398M in funding from 2016 bond
11 Funding Sources 11 Bond/Levy Measure Bond/Levy Amounts SCAP Impact Fees Totals 1998 Bond $160 m $25.1 m - $185.1 m 2006 Bond $436 m $33 m - $469 m 2011 Levy $65.4 m $0 - $65.4 m 2016 Bond $398 m $21 m est. $10m est. $429 m, 92% $79,100,000, $10,000,000 $ b $1,059,400,000 Bond/Levy Amounts, State Construction Funding, 7% Impact Fees, 1%
12 Current Strategy
13 Current Strategy Long-term strategy through Intentional planning Creative options Efficient use of space Well-built, cost effective designs Continued community involvement Recommended backup plans
14 Current Strategy
15 Current Strategy
16 Funding Overview
17 Funding Sources 17 School construction projects are funded primarily through a combination of local and state sources To receive state funding, the school district must be eligible and be able to provide local funding, usually through voter approval of a bond or levy measure State funding contributes a relatively small share
18 Local Funding Sources 18 Bonds Levies Impact Fees Grants Private Donors Sale of District Property
19 Bonds 19 2 types Unlimited General Obligation Bonds May be used to finance capital needs including new schools, remodels, upgrades Must be approved by 60% of voters Must meet validation requirement 40% of most recent state general election Subject to total debt limitation of 5% Total Assessed Valuation Limited General Obligation Bonds May be used to finance modernization or additions to existing schools, not fund new schools Does not require a voter approval of bonds but must have a dedicated revenue source to pay off bonds Subject to debt limitation of 3/8 of 1% of AV District current Non-Voted Debt equals 5/100 of 1% of AV
20 Levies 20 May be used to fund capital needs Requires 50% voter approval May be from 1 to 6 years in length Money is received incrementally each year of the levy & not available all at one time
21 Impact Fees 21 Paid by new residential development projects to partially recover the costs of the impact of new development on school districts May be used to help fund construction that addresses capacity needs Cannot be used to fund system deficiencies Collected through interlocal agreements with cities & counties Timing of collection not aligned to when facilities are needed Must be used within 10 years of collection LWSD collects impact fees in Kirkland, Redmond, Sammamish & King County Single family home impact fee for 2016 = $9,623 per unit 2017 s fee will = $ Multi-family home impact fee for 2016 = $745 per unit
22 Other Sources 22 Grants Generally limited funding available only for specific components or purposes & they are not consistently available Private Donors Typically used to support specialized schools or one targeted at a specific industry need or interest Sale of Property If available Unused properties may provide for long term needs if Urban Growth Boundary is moved in future
23 Federal Funding 23 Lake Washington receives no direct federal funding to construct new schools or renovate/replace existing aging schools Federal government supports construction of school & municipal infrastructure through the ability to issues tax free bonds which provides lower cost of borrowing
24 State Funding (SCAP) 24 The State School Construction Assistance Program (SCAP) provides funding assistance to eligible K-12 school construction projects SCAP operates as a partnership between local school districts and the state OSPI s School Facilities & Organization administers the program, oversees funding, and provides technical assistance
25 SCAP Purpose & Requirements 25 SCAP is designed to: Address lack of classroom capacity for districts experiencing growth (unhoused students) for new schools Renovate or replace aging existing schools (Modernization or New in Lieu of Modernization) To receive state funding The school district must be eligible based on state criteria & compliance with project process requirements (known as the D-process ) Must provide local funding, usually through voter approval of a bond or levy measure
26 State Funding for School Construction 26 Determining eligibility for new school funding: The district s projected enrollment from OSPI is based on the OSPI six-year straight line projection Multiplied by the funded Student Space Allocation If the result > than current instructional space inventory = eligible If the result < than current instructional space inventory = not eligible Space inventory factors need to be modified
27 State Funding for School Construction 27 Student Space Allocation (SSA) levels are not a state standard for square footage that districts should build to SSC levels are not a recommended square footage that districts should build to Per OSPI SCAP 101 presentation State Square Foot Allocation (SSA) levels are used to determine funding allocation levels & may not reflect what is adequate to meet district s educational program requirements
28 28 Actual vs. SCAP Eligible Costs Lynndale Elementary School Replacement, Edmonds School District
29 SCAP & Aging Schools 29 Eligibility for new schools to address aging facilities is based on: Age of school A facility must be more than 20 years old and has not been modernized in the last 20 years, if built prior to January 1, 1993 A facility must be more than 30 years old if built after January 1, Limitations may exist to the amount of square footage eligible to modernize or new-in-lieu Must have maintained expected Building Condition Score to receive the full portion of construction funding assistance Compliance with all State requirements (a.k.a. the D-process ) through the life of the project
30 30 Lynndale Elementary School (ES)
31 31 Lynndale ES
32 32 Lynndale ES SCAP Eligible vs. Actual
33 Funding Overview 33 SCAP for New Schools Eligibility for new schools to address lack of classroom capacity is based on the State s Student Space Allocation (SSA) or Square Feet per Student which is funded at or below 1979 levels Grade Span 1979 Level Current Funded Level OSPI Budget Request Kindergarten Grade * Grades Grades Students with Disabilities *Meets space needs for K 3 17:1 Ratio and Full Day Kindergarten
34 Funding Overview 34 SCAP Provides Limited Funding
35 Funding Overview 35 Impact Fees Provide Limited Funding May be used to fund capital improvements needed to serve new residential developments Collected through interlocal agreements with cities and counties Timing of collection not aligned to when facilities are needed. As a result most impact fees have been used for temporary facilities Must be used within 10 years of collection Must be used to address capacity issues and cannot be used to fund system deficiencies Lake Washington currently collects impact fees in Kirkland, Redmond, Sammamish and King County Single Family Home Impact Fee - $9,623 per unit Multi-Family Home Impact Fee - $745 per unit
36 Funding Overview 36 Current Capital Program Funding Funding Sources: Amount % Bond Measure-Local Tax Payers $398,000,000 93% School Construction Funding Assistance $21,000,000 5% School Impact Fees $10,000,000 2% Estimated Total Project Costs $429,000,000
37 Recommendations
38 Recommendations 38 Create common vocabulary & messaging Avoid public confusion when reporting data Change eligibility limitations Increase the Student Square Foot Allocation Simplify SCAP funding rules Determine the % Pass the bond Receive funding Report results Eliminate Sales Tax on Schools Simple majority for bond elections
39 QUESTIONS?
40 THANK YOU!
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