NOTE: As provided in LFC policy, this report is
intended only for use by the standing finance committees of the
legislature. The Legislative Finance Committee does not assume
responsibility for the accuracy of the information in this report when used for
other purposes.
The most recent FIR
version (in HTML & Adobe PDF formats) is available on the Legislative
Website. The Adobe PDF version includes
all attachments, whereas the HTML version does not. Previously issued FIRs and attachments may be
obtained from the LFC in
SPONSOR: |
Nava |
DATE TYPED: |
|
HB |
|
||
SHORT TITLE: |
Public School Capital Outlay |
SB |
513/aSFC/aHEC |
||||
|
ANALYST: |
Kehoe |
|||||
APPROPRIATION
Appropriation
Contained |
Estimated
Additional Impact |
Recurring or
Non-Rec |
Fund Affected |
||
FY03 |
FY04 |
FY03 |
FY04 |
|
|
$1,250.0 |
$ |
|
|
Non-recurring |
PSCOF |
$2,600.0 |
*$2,549.3 |
|
See
Narrative |
Recurring |
PSCOF |
|
|
|
$700.0 |
Recurring |
PSCOF |
|
($15,000.0) |
|
|
Non-Recurring |
PSCOF |
(Parenthesis
( ) Indicate Expenditure Decreases)
*LFC recommendation for FY04. The $1.1 million appropriation for the core
administrative functions of the Deficiencies Correction Unit contained in this
SB 513/a SFC duplicates the LFC recommended appropriation in the General
Appropriation Act.
Duplicates House Bill 455
State Department of Education (SDE)
Deficiencies Correction Unit (DCU)
LFC Files
SUMMARY
Synopsis of HEC Amendments
The House Education Committee amendments to Senate Bill 513/a/SFC are as follows:
Item
1
strikes SFC amendment item 5. The
amendment removes a duplicate paragraph within the bill.
Item 2 is a technical
correction in the title.
Item 3 allows project
management fees of up to five percent of the average annual grant assistance,
approximately $200 million for the last three fiscal years, even if the
oversight of a project does not require being physically on the premises.
Item 4, new Section 4
requires that outstanding deficiencies be identified and that awards made for
this purpose be complete by
Items 5 and 6 are technical
corrections.
Item 7 earmarks $15 million
from critical capital outlay funding for fiscal year 2004 to allocate for
projects for schools eligible for additional program units, indebted at not
less than ninety percent of the total general obligation debt authorized by
law, and that have a net taxable value per MEM equal to less than fifty percent
of the average statewide net taxable value for MEM. More specifically, the allocations are for
new growth schools such as Hatch and Gadsen.
Item 8 is a technical
correction.
Item 9 and 10 excludes
direct legislative appropriations for reauthorizations of appropriations made
after
Item 11 is a technical correction.
Synopsis of SFC Amendments
The Senate Finance Committee amendments to Senate Bill 513 are as follows:
Item 1 clarifies that the proposed new Public School Facilities Authority will assist school districts with the “procurement of” architectural and engineering services.
Item 2 clarifies that the Authority will assist school districts with “management oversight and construction activities.
Synopsis
of Original Bill
Senate Bill 513 amends
the Public School Capital Outlay Act to create a Public School Facilities
Authority; provides for preventive maintenance plans; provides a method for
calculating amounts of school district participation in funding capital
projects; amends the Technology for Education Act for calculating the
percentage to be used in offsetting direct legislative appropriations to school
districts for technology; amends the Public School Code; increases the state
match for SB 9 funding; and appropriates $1,000,000 from the Public School
Capital Outlay Fund for an updated public school assessment. The bill contains an emergency clause for
certain sections.
Significant
Issues
Senate Bill 513, Section 1, creates a Public
Schools Facility Authority (PSFA) to support the Public School Capital Outlay
Council in implementing the Public School Capital Outlay Act, and to provide
oversight of school construction and renovations, and to ensure compliance with
the new standards-based capital outlay program to take effect
Under current law, both the SDE Capital Outlay
Unit and DCU support PSCOC. Both units
are housed in the same complex in order to collaborate and share
responsibilities to maximize the state dollars appropriated for critical
capital outlay and deficiency correction funding, and for oversight of public
school construction.
Section 2, amends the Public School Capital
Outlay Act to transfer school construction approval from the state
superintendent of schools to the director of the new Authority. However, the bill requires that all actions
taken by the Authority will be consistent with educational programs conducted
pursuant to the Public School Code. In
those instances where a potential or perceived conflict exists, the state
superintendent will be consulted. The
provision also requires that the director of the Authority forward a copy of
the approval application to the state superintendent and that SDE be notified
of both project approvals and disapprovals.
The state superintendent will certify that the construction will support
the educational program of the school district.
Section 3 authorizes PSCOC to disburse funds
from PSCOF to the school district prior to commencement. The bill authorizes PSCOC to disburse up to
ten percent of the portion of a project cost funded, or five percent of the
total project cost, or whichever is greater.
Grant awards beyond the initial amount disbursed will be made on a cost
reimbursement basis, or may be paid directly to a contractor. Current law limits the amount of PSCOF
proceeds that can be used for project management expenses for correcting
deficiencies to three percent. Senate
Bill 513 changes the amount to five percent of the annual grant assistance
authorized from PSCOF. Within this
section, $1 million is appropriated from PSCOF to the PSCOC for the purpose of
updating and refining the statewide assessment study, and for training state
and local officials on the use of the database and other data
management-related issues identified by the council.
Section 4 adds a new section to the Public School
Capital Outlay Act requiring school districts to develop and implement
preventive maintenance plans. Beginning
Sections 5 and 7 amend the Public School Capital
Outlay Improvements Act (PSCIA) by increasing the imposition of a district’s
two mill levy from a maximum of four years to a maximum of six years with voter
approval. The bill allows school boards
to discontinue, by resolution, the tax levy at any time during its
authorization.
Section 6 provides the procedures for the
election.
Section 8 provides for the state distribution to
school districts imposing the tax under the PSCIA. Beginning in fiscal year 2004 and thereafter,
the bill provides for a minimum state distribution to all school districts that
have imposed a tax under the PSCIA. The
distribution is determined by multiplying the district’s forty-day total
program units by the number of mils approved by the voters for the levy by five
dollars. The amount is allocated
regardless of the program guarantee.
Section 8 further amends Section 22-24-5 NMSA 1978 to provide a series of calculations to be used to determine the percentage of participation by both the state and the school districts in capital school projects. According to SDE, the recommendation of the Public School Capital Outlay Task Force (PSCOTF), as presented by the Legislative Council Service, is based on the premise that the formula should:
The formula also takes into account all direct legislative appropriations made for capital school projects and offsets a portion of this amount based on the percentage of participation. Grant awards will be reduced by this amount. In those instances in which a school district has used all of its local resources, the PSCOC may fund up to the total amount of the projects. This section also specifies that grant awards will not be made until a school district has an approved preventive maintenance plan in place. The PSCOC is also responsible for regularly reviewing and updating the statewide adequacy standards.
Section 9 outlines the procedures and
eligibility criteria for school districts to receive public school capital
outlay funding. The provision provides
the calculations to determine eligibility.
Section 10 provides a series of calculations to
be used to determine the school district’s estimated adjusted entitlement to
distributions from the Educational Technology Fund. This calculation sets a base amount that all
districts will receive independent of membership. Those districts whose entitlement is at or
below this threshold will receive the base amount. The remaining districts will receive their
entitlement based on additional calculations.
The districts will receive 90 percent of their initial estimated
entitlement in July, with adjustments made to the final entitlement in January
using final funded membership. This
final allocation will not cause a reduction in the original adjusted amount.
Section 11 requires an annual report to be
filed, at a time specified by SDE. The
report shall include information regarding distributions received, direct
legislative appropriations for educational technology received, expenditures
made, and such other related information as may be required by SDE.
Section 12 contains temporary provisions to
ensure a smooth transition from the current structure to the PSFA, including
the reassignment of up to four FTEs from the PSCOU, the absorption of the
entire DCU, as well as the transfer of appropriations, money, records,
property, equipment and supplies to the PSFA on
Section 13 repeals Sections 22-20-3 and
22-24-4.2 NMSA 1978
Section 14 makes the effective date of Section
1, 2, 12 and 13 July 1, 2003.
Section 15 is the emergency clause for all other
sections.
FISCAL IMPLICATIONS
HEC amendments to SB
513/aSFC duplicate funding contained in the General Appropriation Act for the
core administrative functions of DCU.
During fiscal year
2003, approximately $1.5 million has been transferred from the general fund
portion of PSCOF to provide operational funding for 18 FTE for DCU’s field
management. The DCU administrative staff
(7) is supported with $1.1 million from PSCOF for FY03. For FY04, LFC recommends $2,549.3 from PSCOF
and the Executive is recommending $2,097.1 for the administrative functions and
field management costs from PSCOF. The
current year’s budget for SDE staff (7) is approximately $270,000 from the
general fund. HEC amendments to this
bill allow PSCOC to expend an additional $700.0 of balances of the PSCO fund
for the core administrative functions of the proposed new Authority.
The Legislature has
appropriated $200 million to the Public School Capital Outlay Fund for fiscal
years 2001-06 to correct deficiencies. A
total of $102.4 million has been allocated to school districts for correcting
the deficiencies.
Laws 2002, Chapter 65
provides that up to three percent of all funds appropriated for correcting
deficiencies may be used for field project management fees. The fees currently provide operational
funding for 18 FTE of DCU.
Current and projected
costs extracted from PSCOF intended for correcting deficiencies through FY04 is
approximately $9.2 million, including the proposed $1 million for updated
school assessments. It is unclear how
the new authority will be funded once deficiencies have been completed.
Continued funding for
29 FTE from PSCOF at the projected levels will impact the ability to correct
public school deficiencies. Of this 29
FTE, it is estimated that 22 are field staff and seven are administrative in
nature.
By law, the
Construction Industries Division has the responsibility to review all school
construction plans for compliance with building codes, including general
construction and
POSSIBLE QUESTIONS
LMK/njw:yr