With regard to state reimbursement grants for local school construction projects, you asked (1) what costs are fully reimbursable, partly reimbursable, and not reimbursable; (2) how the percentage reimbursement is determined; (3) what the current reimbursement rate is for South Windsor and similar communities; and (4) when the reimbursement rate is set.

SUMMARY

In general, the state reimburses local school districts for 20% to 80% of their eligible school construction costs. The reimbursement rate is based on the school district's wealth. The following regional and interdistrict projects receive a 95% reimbursement: interdistrict magnet schools, regional vocational agriculture centers, and regional special education facilities. Some projects are eligible for bonus reimbursements of five or 10 percentage points above the district's regular reimbursement rate. Others, mainly administrative or athletic facilities, are reimbursed at half the regular rate.

To get a school construction grant for a school project, a school district must apply to the State Department of Education (SDE) and submit plans and data on the project to the department for its approval. Before applying, the district must have local approval for the local share of the project costs. Once approved, the SDE places the project on the annual school construction priority list, which it submits to the General Assembly for its approval. No grants can be paid unless the General Assembly has approved the project. The project must also comply with various bidding and contracting requirements in order to receive a grant.

The state recalculates reimbursement rates annually. For projects approved in FY 08, South Windsor's reimbursement rate is 45. 71%.

REIMBURSABLE COSTS

Eligible Costs

School construction grants are based on eligible project costs. Eligible costs include the reasonable cost of construction; site preparation and development; equipment and furnishings for the site or building; architectural, engineering, or construction management charges; and ordinary and reasonable legal fees. Conditions apply to some of these cost categories (see below). Any federal or other state grants received for constructing the building must be deducted from the total project costs before the grant is calculated.

For a new school, an extension of an existing school, or the major alteration of an existing building for use as a school, a district's grant is the lesser of either its reimbursement percentage multiplied by the eligible cost of the project, or its reimbursement multiplied by the product of (1) the highest projected enrollment for the facility during the eight years starting from the date the district notifies the SDE of the project, (2) a per-pupil square foot allowance determined by SDE, and (3) the project's gross cost per square foot.

Reibursement Bonuses

Some types of school projects are eligible for enhanced reimbursement. K-12 regional school districts and multi-town cooperative arrangements receive an extra 10-percentage-point reimbursement and high-school-only regional district projects receive an additional five percentage points.

A school district can also receive the following bonuses for the following types of space:

1. Space in a new or expanded elementary school for a school readiness program, provided the district maintains full-day preschool enrollment for a minimum of 10 years – five percentage points for any school district and 10 percentage points for a priority school district.

2. Space attributable to increasing the number of out-of-district students attending the school as part of the interdistrict Open Choice Program - up to 10 percentage points.

3. Space in a priority school district or priority school needed to offer full-day kindergarten or reduce K-3 class sizes, provided the district maintains the program for 10 years – 10 percentage points.

Grant Reductions

The state reimbursement rate for construction, extension, or major alteration of the following types of projects and space is 50% of the district's regular reimbursement rate:

1. outdoor athletic facilities,

2. tennis courts,

3. natatoriums,

4. spectator seating in a gymnasium,

5. auditorium seating (50% of the eligible percentage for the area that seats one-half of the enrollment projection for the project), and

6. public school administrative or service facilitities.

Eligible Cost Limits and Conditions

The law places conditions on certain types of costs.

Roof Replacement. The law requires a proportionate reduction in a grant for replacing a roof that is between 15 and 20 years old. A roof that is between 15 and 20 years old is eligible for a partial grant only if it is determined by a registered architect or engineer to be improperly designed or constructed and the district is prohibited from recovering damages or has no recourse in law. Replacement of a roof that is less than 15 years old is not eligible.

Renovations. A renovation project must totally refurbish an existing building into a school with the same useful life as a new school but that costs less. For these projects, the education commissioner can approve reimbursement for otherwise ineligible repairs and replacements on renovation projects if (1) the district's application for the project is filed after June 30, 1995 and (2) the district documents the need for the work and the savings to both the district and the state. Renovation projects are exempt from the SDE's standard space specifications. Starting July 1, 2007, the following additional conditions apply to such projects: (1) the same school cannot have been renovated with a state school construction grant within the 20 years before the new grant application date and (2) at least 75% of the building to be renovated must be at least 30 years old.

Litigation Expenses. For projects authorized on or after July 1, 2007, a new law allows a school district to be reimbursed for project-related litigation expenses only if it wins the lawsuit.

Site Remediation and Improvement Costs. For projects authorized, and sites for school use selected, on or after July 1, 2007, state reimbursement for school construction site remediation and improvements is limited to no more than 25% of the site's appraised value with improvements. The limit does not apply if the site's purchase price is reduced so the price plus remediation cost is no greater than 125% of the appraised value of the site and the improvements.

Acoustical Standards. School building projects for classrooms or libraries must comply with the American National Standard for acoustical performance criteria, design requirements, and guidelines for schools unless adequate acoustical modifications cannot be made without compromising health and safety or the educational purpose or function of the space. Local or regional boards of education may ask the education commissioner to waive these requirements for relocatable classrooms that will be used by the same school for under 36 months. The commissioner must grant the waiver if the board shows that it held a public hearing on the effects the required acoustical standards might have on a student's ability to learn and provided notice about the hearing to parents, students, and teachers.

Green Building Standards. New school construction projects authorized by the legislature on or after January 1, 2009 that cost $ 5 million or more, and school renovation projects authorized by the legislature on or after that date costing at least $ 2 million must meet green building standards, unless the Office of Policy and Management secretary determines the cost of compliance significantly outweighs the benefits. The standards are a silver rating under the Leadership in Energy and Environmental Design (LEED) program or its equivalent. Such facilities must also exceed the current building code energy efficiency standards (the 2004 edition of ASHRAE Standard 90. 1) by at least 20%.

“Turn-Key Projects. ” SDE must approve the final plans for all construction work on any “turn-key” school project. In a “turn-key project,” a school district buys a building after another party builds or renovates it according to an agreement with the district. These projects may be exempt from standard space rules and districts can be reimbursed for otherwise ineligible repairs to a turn-key building, if the district documents that (1) the work is needed, (2) buying the turn-key facility will cost less than building the project in a different way, and (3) the facility will have a useful life comparable to a new building.

Reimbursement for Change Orders. For school projects costing more than $ 10 million, if change orders total more than 5% of the project's authorized cost, the reimbursement for any amount exceeding 5% is reduced to half of the otherwise eligible amount. A “change order” is an amendment to a school construction project that does not have to be publicly bid but must be approved in advance by SDE.

Significant Changes in Project Cost or Scope. SDE must submit for legislative reauthorization any project whose cost or scope has increased by at least 10% since its previous authorization. By law, (1) SDE can submit a project for legislative reauthorization only twice and (2) no school project not previously authorized as an interdistrict magnet school can receive a higher percentage reimbursement through a legislative reauthorization.

DETERMINATION OF PERCENTAGE REIMBURSEMENT

The state reimburses school districts for a percentage of eligible school construction costs ranging from 20% to 80%, based on wealth. The measure of wealth is each town's adjusted equalized net grand list per capita (AENGLC), which measures both property wealth and income.

The basis of the AENGLC is each town's net grand list for three years before the grant year. The Office of Policy and Management calculates an equalized net grand list (ENGL) for each town annually by (1) dividing the assessed value of all the real property on the town's net grand list by a standard ratio of assessed to fair market value and (2) adding to it the assessed value of all the personal property on the town's net grand list divided by the town's current personal property assessment ratio. The result is then divided by the town's population to yield a per capita ENGL (ENGLC). Finally, the ENGLC is adjusted for income by multiplying it by the ratio of the town's per capita income to that of the town with the highest per capita income. The income figures are taken from the Census figures available on January 1 of the fiscal year two years before the grant year.

To determine the reimbursement percentage, towns are ranked by AENGLC. Wealthier towns receive reimbursements closer to the 20% end of the reimbursement range; poor towns' reimbursements are closer to 80%. Regional school districts, regional education service centers, and cooperative arrangements receive a reimbursement percentage based on the weighted average of the wealth of their component towns.

CURRENT REIMBURSEMENT RATES

Project reimbursement rates are set in the fiscal year the General Assembly approves a grant commitment for the project. Reimbursement rates for all towns are recalculated every year. For FY 08, South Windsor's reimbursement rate is 45. 71%. A listing of the reimbursement rates for all school districts for FY 08 appears below.

Table 1: School Construction Grant Wealth Rankings and Reimbursement Percentages FY 2008