Public School Capital Construction Assistance Board Meeting Minutes Vision All students in Colorado will become educated and productive citizens capable of succeeding in a global society, in the workforce, and in life. Goals Every student, every step of the way Start strong Read by third grade Meet or exceed standards Graduate ready Date & Time: January 28 th, 2015 10:00 a.m. Location: 201 E. Colfax Ave., Rm 101 Denver, CO 80203 Lyndon Burnett Chair David Tadlock Vice Chair Cyndi Wright Capital Construction Assistance Board Members Tim Reed Denise Pearson Ken Haptonstall Matt Throop Karl Berg Kathy Gebhardt I. Call to Order 10:01 a.m. II. III. IV. Pledge of Allegiance Roll Call: Lyndon Burnett, David Tadlock, Karl Berg, Kathy Gebhardt, Ken Haptonstall, Denise Pearson, Tim Reed, Matt Throop, Cyndi Wright. CDE Staff Attendees: Scott Newell, Dustin Guerin, Cheryl Honigsberg, Jay Hoskinson, Kevin Huber, Paul Reynolds, Lola Underwood Approve Agenda The CCAB Chair called for a motion to approve the agenda o So moved by David Tadlock o Ken Haptonstall 2 nd the motion o Motion to approve the agenda carried unanimously. V. Approve Previous Minutes from October 22 nd and December 5 th, 2014 Meetings The CCAB Chair called for a motion to approve the previous minutes from the October 22 nd and December 5th, 2014 meetings o So moved by Tim Reed o Cyndi Wright 2 nd the motion o Discussion: The CCAB Chair informed the board that some minor grammatical errors had been fixed. Kathy Gebhardt asked that the October 22 nd, 2014 minutes be tabled until the February meeting to give the CCAB more time to review the document. o Tim Reed made a motion to approve the December 5 th, 2014 minutes o Motion to approve the December 5 th, 2014 minutes carried unanimously. VI. Board Report Matt Throop informed the CCAB he had a walk through of Ouray school district s new building with the district s superintendent.
The CCAB Chair informed the board he had visited the Ft. Lupton ribbon cutting ceremony on December 8 th, 2014, along with CDE staff member, Cheryl Honigsberg. The CCAB Chair expressed the community s excitement regarding the new school building addition and historic renovation. The CCAB Chair informed the board that he had seen the Colorado Lottery video of the Rocky Mountain Deaf School opening, featuring CCAB member Tim Reed, Executive Director of Facilities and Construction for Jefferson County Public Schools. Lola Underwood informed the CCAB that the Lottery video is available on the Division website homepage. The CCAB chair told the CCAB he had presented Resolution 14-2, which addresses the one-time, tax-free transfer language in marijuana excise tax statute, as a discussion item to the State Board of Education at their January meeting. Mr. Burnett clarified the resolution would be presented as an action item at their February meeting. Mr. Burnett explained one State Board member voiced he would not support the resolution as he felt an insufficient amount of money had been lost due to the tax-free transfer language to warrant pursuing a statutory change. Mr. Burnett informed the CCAB that Senator Steadman would be running a bill on Monday, February 2 nd to change the current language in statute regarding marijuana excise tax and one-time, tax-free transfers from medicinal to recreational facilities. The CCAB chair clarified that approximately $5 million of revenue had been lost due to the tax-free transfers. He expressed that the resolution had the support of most of the State Board. Tim Reed informed the CCAB he attended the Sheridan ES ribbon cutting ceremony on December 20 th, 2014. Mr. Reed commended Cyndi Wright and Cheryl Honigsberg for doing a great job, noting that the new building was an outstanding facility. Kathy Gebhardt informed the CCAB she attended the Northern Superintendent s meeting and spoke about the BEST program and the CCAB S legislative platform. Ms. Gebhardt told the board that she encountered a lot of support for the platform, especially the board s plans to raise the COP cap. The CCAB Chair reiterated Ms. Gebhardt s comments that there is a lot of support and discussion surrounding ways to raise the COP cap, particularly methods that would allow for a self-sustaining fund. The CCAB Chair voiced his concern that the additional money may end up funding public school finance rather than being used for school capital construction. The CCAB chair told the board that he is encouraged by the progress being made with the board s legislative agenda. Kathy Gebhardt stressed the importance of having the support of CASB, as the organization has a far-reaching influence throughout the educational environment. The CCAB Chair acknowledged he has experienced a positive response from all who have interacted with and been affected by the BEST program. VII. Director s Report Scott Newell informed the CCAB the BEST grant application opened on January 5 th, 2015, and 26 applications are in the system as of January 28 th, 2015, 10 of which are charter schools. Mr. Newell outlined the grant application process, explaining that the grant application closes at the end of February, at which point the application review process begins. Mr. Newell informed the board that he expected the number of applications in the system to steadily increase within the coming weeks. Scott Newell informed the CCAB the Division s annual report is due to the House and Senate Education and Finance committees on February 15 th, 2015. Mr. Newell informed the CCAB that all previous reports are available on the Division website. Mr. Newell clarified the report indicates how much the Division is recommending the JBC appropriate for BEST grants this year. Mr. Newell clarified the amount is approximately $50 million, based on five-year projections from the State Land Trust, Colorado Lottery, and marijuana excise tax revenues. Mr. Newell explained the State Land Board had provided updated figures indicating the program would receive approximately $89 million from the State Land Trust, an amount significantly lower than the projected $120 million. Mr. Newell went on to explain that the figures for next year are estimated at $72 million. Mr. Newell told the CCAB he had met with the Colorado Lottery commissioners to talk about the BEST program. Mr. Newell explained the Lottery s revenues are down, meaning the program is forecast to receive approximately $700,000 from the Colorado Lottery. Mr. Newell explained that marijuana excise tax revenue is trending up, resulting in
approximately $16.5 million dollars in funding for the BEST program. Scott Newell informed the CCAB of Ft. Morgan s expected closure on February 5 th, 2015 due to the anticipated blizzard which closed the bond markets early. Mr. Newell explained how the bond markets closing early pushed Ft. Morgan s closing back to February 12 th, 2015. Mr. Newell clarified funds would be available for Ft. Morgan after February 12 th and that the district continues to make progress with their project. Scott Newell informed the CCAB that Deputy State Treasurer Brett Johnson left the State Treasurer s Office for a job at CDOT. Mr. Newell informed the board he had met with Mr. Johnson s replacement, Jonathan Forbes. Mr. Newell explained that Mr. Forbes is very focused on education and believes there are ways to potentially allow the BEST program to finance more without raising the COP cap. Mr. Newell informed the board that he and Mr. Forbes would continue to work together on that matter. Scott Newell informed the CCAB he spoken with Jennifer Mello, Legislative Liaison for the Colorado Department of Education, regarding the process for this legislative session. Mr. Newell informed the board that Ms. Mello would come to the CCAB s monthly meetings to provide a legislative update, as well as track any bills that may directly affect BEST, such as the current Wind for Schools bill. Scott Newell informed the CCAB he had spoken to Craig about the State Assessment, who had suggested a line item in the School Finance bill that would allow BEST to updated the assessment and bring on 6 FTE to update the data. Mr. Newell explained that the proposal was moving along. Mr. Newell outlined the main points of the proposed plan to update the assessment, including restructuring the Division s database with valuable data points that could be categorized and/or extracted from district s systems and databases, how to administer the assessment, and how to perform quality control on updates from school districts, as well as the RFP process. Mr. Newell clarified that a subcommittee of experts would probably be formed to devise and agree upon the final structure of the database. Mr. Newell further clarified that due to the size of the assessment project, the Division would eventually go through the involved process of state procurement. Denise Pearson joined the meeting at 10:25 a.m. Scott Newell provided the CCAB with an update regarding returning closed lease-purchase proceeds to districts, explaining they were making sure all pieces of the process fit together adequately and feasibly. Mr. Newell explained that he is hoping to have the process finalized within the coming weeks, at which point the application process for remaining Lease-Purchase proceeds could begin. Scott Newell clarified that the Wind for Schools bill - SB 15-063 aimed to modify and expand existing statutory language in order to expand the Wind for Schools program. Mr. Newell said he would provide the board with more information about the bill. The CCAB chair noted the proposed changes to the assessment seem to be well received and that the proposal is largely understood as a reasonable and financially feasible solution. Denise Pearson informed the CCAB she had had dinner with some superintendents, the lobbyist for the East Central BOCES, and Senators Hill, Merrifield, and Woods, to talk about the East Central BOCES legislative agenda. Ms. Pearson explained Senator Hill spoke about using the $40 million in marijuana excise tax revenues to boost general education funding since he knew of a $102 million school built approximately 20 years ago that sat empty. Ms. Pearson told the CCAB she informed Senator Hill that the BEST program was not involved with that school, and that she and Frank Reeves, superintendent of Genoa-Hugo school district, explained to Senator Hill the necessity of the BEST program, especially for small school districts. The CCAB chair noted he would try to make an appointment with Senator Hill to try remedy any reservations Senator Hill may have about the BEST program. Denise Pearson informed the CCAB she had talked to the East Central BOCES about one line in their
legislative platform that voices support for the BEST program. Ms. Pearson explained the East Central BOCES are willing to expand their platform to include the first two or three items in the CCAB legislative platform. VIII. Discussion Items a) Review and discuss the Genoa-Hugo C113 school district grant reserve request Scott Newell reminded the CCAB of the details surrounding the Genoa-Hugo abatement issue presented to the board at the December 2014 meeting. Mr. Newell informed the CCAB that he had spoken with Ninyo and Moore per the board s request. Mr. Newell clarified that there was a miscommunication between the parties involved, and that the project s owner s representative had misstated facts. Mr. Newell clarified that, initially, the grant reserve was not approved due to the Division s understanding that the issue could not be categorized as unknown and unforeseen. Contrary to the Division s initial understanding of the issue, Mr. Newell clarified Ninyo and Moore had performed their job as expected and in compliance with regulations. He explained that Ninyo and Moore found that abatement work did not need to be performed. He explained the Department of Health had visited the building site and requested that the work be done regardless. He explained that in this scenario, the issue does qualify as an unknown and unforeseen circumstance, thus allowing Genoa-Hugo to access their grant reserve through the BEST program. Mr. Newell clarified Genoa- Hugo had spent approximately $5,000 on legal fees that would be covered with the grant reserve. Mr. Newell clarified the district would be receiving funding from grant reserves to the amount of $280,000, thus covering the entire cost of the issue, rather than the $107,000 the district had initially requested. b) Discuss the board s legislative priorities The CCAB Chair reiterated the board s earlier discussion regarding their legislative priorities for Denise Pearson, namely updates regarding the assessment piece of the platform and the marijuana excise tax language changes. Kathy Gebhardt requested that the legislative subcommittee meet to discuss gaining support for an increase in the program s COP cap, and that the issue be added to the February meeting agenda as an action item. The CCAB Chair responded that he would prefer the assessment piece and School Finance bill be approved before the board took robust action elsewhere. With regard to pursuing an increase in the COP cap, the CCAB Chair stated his belief that having the assessment piece in place would give the board a stronger leg to stand on. He clarified that he did not wish for the board to wait too long before pursuing their objective to raise the COP cap. The CCAB Chair clarified that the legislative subcommittee could still meet, but that it would be preferable to wait to take action on another of the board s legislative objectives. He clarified that the CCAB could move forward with the assessment piece while still having a conversation about raising the COP cap. Kathy Gebhardt encouraged the CCAB to pay attention to the Long bill and how that may potentially affect the School Finance bill. The CCAB Chair clarified that the board would have a better idea of the success of the assessment piece by approximately late April. Kathy Gebhardt voiced her concerns about waiting to take action on raising the COP cap and stated the board should adopt a specific position on the matter. Ms. Gebhardt also explained that the assessment piece and raising the COP cap are legislative priorities reliant on two different revenue streams. The board clarified that the assessment would use general fund dollars. Mr. Newell clarified that the new Deputy State Treasurer Jonathan Forbes seemed in favor of the board s suggestion to support the assessment using a tiered approach utilizing marijuana dollars first, followed by State Land Trust money, which would then be backed by the general fund. Scott Newell suggested the CCAB invite Jonathan Forbes to the legislative subcommittee in February and/or the February 25 th CCAB meeting to discuss his thoughts on potential methods for raising the COP cap. c) Discuss the school district match percentage changes Kathy Gebhardt informed the CCAB she had attended the Northern Superintendents meeting where she was approached regarding increases in some school district s minimum match percentages. Scott Newell clarified that school districts were
informed of the amount of their match in early December as has been the case in previous years. Mr. Newell explained the Division s regional program managers explained to their districts that, with the statutory changes involved in this year s match calculations, they should anticipate a potential increase or decrease in their minimum match percentage. Mr. Newell clarified that a comparison of last year s and this year s matches illustrated more than half of the matches decreased this year s, while some increased substantially and others decreased substantially. Mr. Newell clarified that school districts were aware of the potential changes to their minimum match percentages well in advance of the final numbers being released. Mr. Newell clarified that the median match is still around 50%. Mr. Newell clarified the new calculations were weighted for all new applications, including those districts reapplying for a grant that was not awarded last year. Mr. Newell clarified that of the factors included in the match calculations, those that are better representations of a school district s financial capacity were weighted more heavily than other metrics, such as free and reduced lunch, PPAV, and median household income that don t directly relate to a school district s ability to provide matching funds. Scott Newell discussed revisions made to the waiver application, as well as to the instructions for applicants pursuing a waiver, that would help facilitate the statutory changes. Mr. Newell explained how the first three questions of the waiver application would allow the school district or charter school to describing how providing the required match would be detrimental to the school, or how receiving a waiver would relieve some of the school s financial obligations. Mr. Newell explained the application had been changed to encourage more thorough explanations of an applicant s reasons for not being able to meet their required match, as well as to give the applicant an avenue through which to explain how the statutory changes to the match calculation do not appropriately represent the school s financial capacity. Scott Newell clarified that the match subcommittee made the decision to weight the factors. Kathy Gebhardt voiced her concerns regarding how well heavily weighting bond capacity works for cash grants versus Lease Purchase grants. Scott Newell requested that any changes the CCAB wishes to make to the match calculation be performed in the summer rather than mid-grant cycle. Mr. Newell used Ken Haptonstall s school district as an example for smaller districts being able to bond for larger projects and use some of that money as part of a match for smaller BEST projects. Mr. Newell explained that, in that example, Dr. Haptonstall s district did have bonding capacity which they were able to use, which demonstrates how a district s bonding capacity should affect its minimum match. Tim Reed stated that the new minimum match percentages came out as intended, with most small districts experiencing a reduction in the minimum match and most large districts experiencing an increase. Scott Newell clarified that a school district can explain their inability to bond using the waiver process, and that the waiver application gives schools the opportunity to thoroughly explain the reason(s) for their waiver request. Tim Reed stated the matching spreadsheet should look for the most objective method while the waiver process allows for subjectivity. The CCAB Chair explained the revisions to the waiver application specifically address the audit comments. Kathy Gebhardt stated her concern that potential changes in the match were not well-enough communicated to school districts prior to the official minimum match percentages being released. Scott Newell clarified that the board could add an action item to the February meeting to review and approve revisions made to the waiver application, but that while the instructions for the waiver process have changed, the content has not. Mr. Newell explained the waiver applications and instructions for completing it are already posted on the Division website. Mr. Newell reassured the CCAB that the Division continues to communicate often with school districts and charter schools regarding all aspects of the grant application. The CCAB Chair requested that Scott Newell provide an update regarding the waiver at the February meeting.
The CCAB Chair called for a short recess at 11:15 a.m. The meeting reconvened at 11:20 a.m. d) Review and discuss proposed changes to the grant application evaluation tool Scott Newell explained to the CCAB changes had been made to the grant application evaluation tool based on feedback from both the board and grant applicants. Mr. Newell explained he wanted to ensure the changes to the evaluation tool were addressed early to ensure grant applicants could review the tool as soon as possible. Mr. Newell explained an action item to approve the updated grant application evaluation tool would be included on the February agenda. Mr. Newell clarified the majority of revisions made to the evaluation tool were syntactical in order to elicit more thorough, informative responses. Mr. Newell clarified some questions were deleted while new questions were added. Mr. Newell clarified the evaluation tool included Division comments in lieu of a supplemental book. Mr. Newell walked through the redline document of the revised evaluation tool with the CCAB so they could see where the changes occurred. He explained the changes to the tool allowed for more consistent prioritization of projects i.e. looking at the project s scope rather than it s assumed worth. He explained that the FCI and CFI were combined into one question as both factors dealt with the same evaluation, while a question regarding due diligence was added to that section. Mr. Newell explained potential approaches to projects without assessments, clarifying that some universal score needed to be agreed upon so as not to penalize those projects. Mr. Newell clarified the Division had discussed potentially giving projects without assessments a score equal to the average score for that question, or to give such projects a neutral score of five. Scott Newell explained to the board that most changes had been made to the evaluation tool section addressing financial capacity, and that it was, admittedly, a difficult section to evaluate, especially when evaluated alongside a match calculation that presumably paints a clear picture of a school district s or charter school s financial ability. Mr. Newell explained the questions addressing financial capacity are intended to look at an applicant s financial ability regarding their proposed project through evaluating their financial resources rather than their calculated matching fund. Mr. Newell asked the CCAB if they would be agreeable to changing the matching fund language in the Financial Capacity section to resources. The CCAB agreed to a change in the language. Regarding the question about an applicant s contributions to a capital reserve type fund versus their general fund expenditures, Scott Newell explained the possibility of the Division calculating a range to determine what counts as a suitable contribution. Ken Haptonstall discussed school auditors warning against keeping or contributing to a capital reserve fund due to statutory changes against it. Scott Newell explained that schools who had a capital reserve type fund but who were no longer contributing to said fund and had a remaining balance at the time statute changed would still have their reserve balance taken into account. Mr. Newell explained the Division would be discussing the matter with applicants prior to the grant evaluation meeting in order to create constructive comments for the CCAB on the evaluation sheet, unless the board had other recommendations of how to address that question. The CCAB Chair explained that capital reserve funds were originally intended to prolong the life of a school building by addressing small problems are they arose yet the recent economic environment has made it increasingly difficult to maintain such a fund. The CCAB chair suggested leaving the question as it is currently stated and simply remaining aware of the potential circumstances or issues regarding capital reserve type funds for schools. Scott Newell suggested changing the question entirely to include language pertaining to capital expenditures or capital expenditures planning. Denise Pearson suggested requesting applicants explain how they maintain their buildings. Ms. Pearson also discussed whether fiscal warnings were an appropriate measure for charters. Scott Newell explained there would still be an evaluation of the financial structure for charter schools. Mr. Newell explained that evaluation of a charter school s financial structure was not presented in the evaluation criteria in the evaluation tool as the evaluation tool must be uniform for every applicant. Mr. Newell explained the information would be presented as a data point on the application instead. Mr. Newell explained for charter schools, the Division collected additional data points including who owns the building and criteria pertaining to the lease structure of a charter school building. Mr. Newell explained the Division added an additional data point for charter schools this year regarding funding received by
charter schools from alternative sources. Tim Reed reiterated and supported Denise Pearson s suggestion that applicants be asked to explain what they are doing to take care of their buildings. Scott Newell explained an applicant s expenditures/expenditure planning needs to be an evaluation criterion, and to facilitate Denise Pearson s suggestion, the Division would compile a range through which the CCAB could rank the pool of applicants and determine whether or not the school was providing a suitable amount. Paul Reynolds clarified that the questions asked and the information sought after through the Financial Capacity section of the evaluation tool could be continually revisited and revised based on what was useful and was not. Matthew Throop recommended rewording the question regarding an applicant s contributions to a capital reserve type fund to read The applicant is contributing a suitable amount for capital needs. The CCAB and Scott Newell agreed the suggested language allowed for evaluation. Scott Newell explained the section regarding whether or not a project was recommended had changed and would require an explanation why a project had not been recommended. Scott Newell explained it was difficult to determine what is considered the standard square footage cost on a typical project as it varies from region to school type. Mr. Newell explained the Division has the relevant data but is trying to avoid using that data as an evaluation point. Mr. Newell clarified the Division staff will make notes regarding whether or not a project s square footage cost is appropriate. Mr. Newell clarified there are safeguards in place to ensure a fair application process. Scott Newell clarified that although school districts are not required to adhere to the construction guidelines, statute dictates that compliance with the construction guidelines will be considered when applying for a BEST grant. Mr. Newell clarified that a district does not have to adhere to the construction guidelines in order to be considered for a BEST grant, but they must explain how they comply with the construction guidelines or why they do not comply the constructions guidelines. Mr. Newell explained to the CCAB that the League of Charter Schools is seeking to change language in the statute regarding the construction guidelines they feel currently penalizes grant applicants from charter schools. Mr. Newell informed the CCAB he thinks creating a separate competitive grant solely for charter schools may be a better solution. Scott Newell clarified that a project still needs a majority vote in order to be recommended to the State Board of Education for award. e) Discuss venues for the May 19-20 BEST Grant application evaluation meetings Scott Newell asked the CCAB if they would be happy to use the Adams 12 Conference Center again for the grant evaluation meetings or if they would prefer an alternative venue. The CCAB Chair expressed his satisfaction with the Adams 12 facility, explaining the facility works well for the grant meetings and giving his support for using the venue again. Kathy Gebhardt agreed with the CCAB Chair s assessment of the Adams 12 facility. Kathy Gebhardt left the meeting at 12:00 p.m. IX. Future Meetings February 25, 2015-1:00 p.m. Location: 201 E. Colfax Avenue, Room 101, Denver, CO 80203 March 25, 2015-1:00 p.m. Location: 201 E. Colfax Avenue, Room 101, Denver, CO 80203 April 22, 2015-2:00 p.m. Location: 201 E Colfax Avenue, Room 101, Denver, CO 80203 Scott Newell informed the CCAB that scheduling conflict with the State Board of Education necessitated that the February, March, and April CCAB meetings be held from 10:00 a.m. to 1:00 p.m. in lieu of their usual running time of 1:00 p.m. to 3:30 p.m. X. Public Comment
There was no public comment. XI. Adjournment The CCAB Chair called for a motion to adjourn o So moved by David Tadlock o Ken Haptonstall 2 nd the motion o Motion to adjourn carried unanimously; Meeting adjourned 12:08 p.m.