Facility bond money could be flowing by year’s end

Facility bond money could be flowing by year’s end

(Calif.) Some of the $7 billion in borrowing approved by voters last fall for school construction could be flowing to districts before the end of this year, assuming final budget details get worked out in the coming week.

School facility managers have struggled since the recession to string together enough money for even small remodeling projects as state matching funds all but dried up in 2012 and the last statewide bond measure was approved in 2006.

Gov. Jerry Brown, famously conservative when it comes to taking on new state debt, conditioned release of the new bond money earlier this year with the adoption of new accountability measures on how districts use the funding.

With just a week to go before the June 15 budget deadline, legislative leaders appear to have largely agreed to Brown’s demand that the responsibility over auditing the use the money be shifted from the state to local, independent examiners.

If so, Brown has said he would supporting issuing $655 million in school bonds in 2017-18, with about half going to market sometime in the fall and the other half in the spring.

School officials say they are gratified that some state matching funds will finally be available, but they also point out that there is more than $2.2 billion in pending projects.

“We are very pleased that the Prop 51 funds are finally going to start meeting the needs of our students,” said Nancy Chaires Espinoza, a legislative advocate for the California School Boards Association. “But we are also concerned about the slow pace of the proposed bond sales and the fact that there’s no plan to prepare the Office of Public School Construction to process that large backlog of projects.”

She added that the issue isn't related to the number of bond sales proposed but rather with the "low dollar amount of the proposed bond sales."

Capital insiders also said this week that the final details about the new auditing requirements are also likely close to being worked out, including the question of how districts will be required to reimburse the state if they are found to have used bond money improperly.

Meanwhile, the State Allocation Board—which oversees OPSC and includes a mix of both lawmakers and representatives of the governor—agreed earlier this week on a grant application document that districts will use to access the new funding.

The board also authorized the director of the OPSC to move ahead on emergency regulations governing the new process that could be finished within a few weeks.

Although the state’s role as a partner with local districts on school construction was established decades ago, Brown has been critical of the arrangement and has hinted in the past about trying to restructure the program.

In the meantime, the state pool of money supporting school facilities got close enough to empty that last spring the SAB for the first time gave school board authority to impose new fees on new housing developers. Those fees were largely put on hold after a coalition of school groups and home builders qualified the $7 billion bond for the November 2017 ballot.