August 14, 2008
BACKGROUNDER: STATE SCHOOL CONSTRUCTION GRANTS:
PROCESS, PROJECT REQUIREMENTS, AND ELIGIBLE COSTS
This report describes the state school construction grant process, project requirements and standards, reimbursable costs, and grant calculation method.
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 for the department's 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 grant 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.
School construction grants are based on eligible project costs, which are limited by state standards and criteria. Towns are reimbursed for from 20% to 80% of those costs, depending on town wealth. Regional school districts are reimbursed based on a weighted average of the wealth of their component towns. Certain interdistrict projects receive a 95% reimbursement. Grants are paid on a current basis during construction (“progress payments”). SDE withholds 5% pending the outcome of a final audit. The state recalculates reimbursement rates annually.
LOCAL PROJECT AUTHORIZATION AND GRANT APPLICATION
The first step in applying for a state school construction grant is for a town's legislative body to authorize the local board of education to apply to the education commissioner for a grant. The school district must secure approval for the local share of the project's funding before submitting its application to the state. The superintendent of schools applies on a form and in a manner the commissioner prescribes. To be eligible for inclusion on the commissioner's annual school construction priority list submitted to the General Assembly for approval each December 15, the SDE must receive applications by the preceding June 30. (Special application deadlines apply to certain magnet schools, see below.)
According to state regulations, applications must include (1) educational specifications for the project as approved by the local board of education and (2) a certified copy of the legislative resolution establishing a building committee for the project and authorizing at least the preparation of schematic drawings and outline specifications and the filing of the notice of the proposed school building project. The educational specifications that must be provided are (1) a description of the project's general nature and purpose, which may include the applicant's long-range plan and the project's relationship to the plan; (2) enrollment data and proposed project capacity; (3) the nature and organization of the educational program; (4) support facilities; (5) space needs; (6) accommodation for educational technology; (7) specialized equipment; (8) site needs; and (9) any other supporting documents the commissioner considers necessary.
The education commissioner reviews project applications on the basis of categories and standards established by the State Board of Education (SBE). Each project is assigned a category based on its primary purpose. The three project categories, in priority order, are those that:
1. provide for mandatory instructional programs, physical education facilities that bring a district into compliance with federal law requiring equal facilities for males and females, or code violation corrections;
2. enhance mandatory instructional programs or provide comparable facilities for students in the same grades; or
3. provide for support facilities, other than swimming pools, auditoriums, outdoor athletic facilities, tennis courts, elementary playgrounds, site improvements, garages, storage, parking, and general recreation areas.
The commissioner must notify the district, by October 1, of the project's category. The commissioner can place the project in another category based on additional information received or developed after that notice.
Part of the application process is an SDE-scheduled design conference. Appropriate department staff, the applicant's superintendent, one member of the applicant's building committee, one representative of the architectural firm that is to design the project, and any others the commissioner requires must attend the conference. The commissioner may waive the conference, hold it by telephone or in person, or otherwise determine its scope and nature.
Except for certain projects involving emergencies or code violation repairs, no grants may be authorized without the General Assembly's approval. The commissioner must submit a priority list of proposed school construction projects, by category, with the estimated project costs and grant amounts to the General Assembly by December 15 each year. Grant estimates for projects must be determined by multiplying the town's reimbursement percentage by the total estimated project costs the applicant submits to the department.
The school construction priority list must be referred to a special eight-person committee selected by legislative leaders. The committee may approve the list or modify it if the committee finds the commissioner acted arbitrarily or unreasonably in establishing it. The committee must submit the list to the governor and the full General Assembly for approval by February 1. Although the law generally bars the General Assembly from adding projects to the SDE priority list after that date, it commonly does so by adopting special “notwithstanding” language for specific projects.
GRANT COMMITMENT AND PROJECT FINANCING
The commissioner must notify each applicant whose project was on the list of the General Assembly's action within 30 days after it takes action. Once the General Assembly authorizes it, the SBE must enter into grant commitments for the listed projects. Then, the town must submit final project plans to SDE for approval, begin construction, and apply for funding. The commissioner may disapprove the funding application if the district does not begin construction within two years after the effective date of the General Assembly's authorization.
The state reimburses school districts for between 20% and 80% of the eligible costs of local school construction projects. The state reimbursement for eligible school construction costs is based on each town's 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 reimbursement closer to 20%; poor towns' reimbursements are at the high (80%) end of the range. Regional school districts, regional education service centers, cooperative arrangements, and endowed academies receive a reimbursement percentage based on the weighted average of the wealth of their component towns.
The SDE recalculates each school district's percentage reimbursement rate each year. The rate in effect in the year a district applies for a school project grant stays in effect throughout the duration of the project.
Certain types of interdistrict projects are reimbursed at a higher overall rate. Vocational agricultural centers, regional special education facilities, and interdistrict magnet schools are reimbursed for 95% of eligible construction costs.
Some types of school projects are eligible for reimbursement bonuses. 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.
Reduced Reimbursement Projects
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,
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 facilities.
REIMBURSABLE PROJECT COSTS
School construction grants reimburse 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; ordinary and reasonable legal fees; and reasonable lease costs required for the project. 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.
Eligible Cost Restrictions and Conditions
The law places conditions on eligibility for certain types of costs and projects.
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.
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 reduced 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. Costs for replacing a roof that is less than 15 years old are ineligible.
Renovation Projects. A renovation project is one that totally refurbishes an existing building into a school with the same useful life as a new school but that costs less than a new school. For these projects, the education commissioner can approve reimbursement for otherwise ineligible repairs and replacements if 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 school district may 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, 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.
Change Orders. Starting July 1, 2006, for school projects costing more than $10 million, state reimbursement for construction change orders and other change directives is limited. 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. In addition, school districts must submit change orders and other change directives issued on or after July 1, 2008 to the education commissioner within six months after issuance. Any change order not submitted within six months and in a manner the commissioner prescribes is excluded from eligible project costs.
All contracts for school construction projects, except those for architectural and construction management services (see below), are subject to competitive bidding unless the district decides to use a state Department of Administrative Services or Department of Public Works contract. State regulations require districts to file with the commissioner notice of the date the first construction contract was executed for the project. Districts must also file final project plans in a manner the commissioner prescribes including (1) a copy of final plans and bid specifications for the project or project phase, which specify the project site; (2) a professional cost estimate for the project or phase and of any site acquisition; and (3) certification that these documents have been approved by the district and the building committee. The commissioner must review the plans and specifications for compliance with state laws, regulations, and codes.
No phase of a project may go out to bid unless the commissioner notifies the district in writing that (1) he approves the final plans and bid specifications, (2) the plans and specifications comply with educational specifications for the project, and (3) he approves the project site. Projects must comply with standard space specifications and, if the district applies for a site acquisition grant, with state standards for site eligibility.
Construction must begin within two years after the effective date of the General Assembly's approval, unless the education commissioner extends the starting deadline.
ARCHITECT AND CONSTRUCTION MANAGER REQUIREMENTS
When a school building project is receiving a state school construction grant, no professional or consulting fee that is based on a percentage of the total project cost can be increased because of price increases for construction materials during the project.
Selection Process for Architects and Construction Managers
School districts must award contracts for architectural and construction management contracts to the most responsible qualified firm using a public selection process that contains certain prescribed steps.
To start the process, a district must issue a request for qualifications (RFQ). From the firms responding to its RFQ, the district must issue a request for proposals (RFP) from those firms that meet the RFQ criteria. The proposals must include the firms' fees. Districts must advertise the
proposed contracts in a newspaper circulating in the town where the project will take place, unless the district is using a state contract for the project.
After the RFP process, the district must evaluate the proposals to determine the most responsible qualified firms up to a maximum of four. To determine the finalists, the district must use criteria listed in the RFQ and RFP. In evaluating the finalists' bids, the district must give due consideration to:
1. each firm's price for the project;
2. its experience with work of similar size and scope as that required for the project;
3. its organization and team structure for the project;
4. past performance, including meeting project schedules and budgets, and the number of change orders for projects;
5. the work approach the project requires; and
6. documented contract oversight capabilities.
The evaluation can also include specific project criteria.
For final selection, a district is limited to the pool of no more than the four firms. In making the final selection, the district must consider all criteria included in the RFP.
Architect Contract Standards
Architectural services contracts for state-reimbursed school construction projects entered into on or after July 1, 2006 must meet statutory standards. School districts that fail to comply with the contract standards are penalized by a 10% reduction in their project grants, determined after SDE's audit of the completed projects.
The required written agreement between a school district and a school project architect must include the architect's promise to work as an independent contractor and give good and workmanlike service. An architect must also agree to follow:
1. the school district's instructions, guidance, and directives;
2. the service agreement's terms and conditions;
3. the highest applicable professional or industry standards;
4. sound architectural practices; and
5. all applicable laws, regulations, permits, and codes of federal, state, or local agencies and court orders.
No agreement may limit the architect's liability for errors and omissions in the performance of architectural services.
Architects must keep confidential any information they obtain from a school district as a result of their contracts for school projects. They cannot sell or otherwise publish the information or use it for their own or another's benefit without the district's prior written consent. The district and the SDE own any reports and documents the architect prepares as part of the contract and the architect cannot use these documents for anything other than what the service agreement allows, unless the district gives prior written consent.
Any school district applying for a state school construction grant for a new school or a major alteration, extension, renovation, or replacement of a school that involves a school entrance, must include in the project plans security infrastructure for the entrances. The new requirement covers school projects to be included on priority lists submitted to the General Assembly for approval on or after July 1, 2008 and applies to the following types of school building projects:
1. new construction,
2. extension (an addition to an existing school),
3. major alteration (a capital improvement in an existing school building costing more than $10,000),
4. renovation (totally refurbishing a school to make it the equivalent of a new school), and
5. replacement (a new school built on the same or another school site to replace an existing school).
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 less than 36 months. The commissioner must grant the waiver if the board shows that it (1) held a public hearing on the effects the required acoustical standards might have on a student's ability to learn and (2) gave notice of 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%.
Indoor Air Requirements
SDE is barred from approving a school building project plan or site if:
1. the site is in an area of moderate or high radon potential, as indicated in the Department of Environmental Protection's Radon Potential Map, except where the plan incorporates construction techniques to mitigate radon levels in the facility's air;
2. the plans incorporate new roof construction or total replacement of an existing roof and do not provide (A) for a minimum roof pitch (see below); (B) for a minimum 20-year unlimited manufacturer's guarantee for water tightness covering the entire roofing system's material and workmanship; (C) for vapor retarders, insulation, bitumen, felts, membranes, flashings, metals, decks, or any other feature the roof design requires; and (D) that all manufacturer's material to be used meet the latest American Society for Testing and Materials (ASTM) standards for individual roofing system components;
3. for major alterations, renovations, or extensions of a building to be used for public school purposes, the plans do not incorporate the Sheet Metal and Air Conditioning Contractors National Association's publication entitled “Indoor Air Quality Guidelines for Occupied Buildings Under Construction” or similar subsequent publications; and
4. for new building construction, extensions, renovations, or replacements, the plans do not include a strategy for training building maintenance staff responsible for the facility in the appropriate areas of plant operations, including HVAC systems, with specific indoor air quality training.
Minimum Roof Pitch
A school building project plan that incorporates new roof construction or total replacement of an existing roof must generally provide for a minimum roof pitch of one-half inch per foot. But the education commissioner can approve a project for total replacement of an existing roof with a pitch of one-quarter inch per foot if a local or regional board of education provides written certification from a licensed architect or engineer that all of the following conditions have been met:
1. the flatter roof is no more likely than the steeper one to impede drainage or cause pooling of water that may leak into the building;
2. it would cost substantially more and take substantially longer to replace the roof with the steeper pitch; and
3. substantial rebuilding of the existing building would be required to support the roof with the steeper pitch.
Before approving the architectural plans for school construction projects for new buildings, building extensions, or building replacements, a school board and building committee must provide for a Phase I environmental site assessment in accordance with ASTM Standard #1527, Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process. The cost of performing the assessment is eligible for reimbursement as part of the school construction project.
Applicants for state grants for new school construction or school renovations must affirm in their proposals that they considered how to maximize natural light in the school.
Interdistrict Magnet Schools
Certain special requirements apply to interdistrict magnet school construction projects. The commissioner may only approve applications for interdistrict magnet school projects if he finds the school will reduce racial, ethnic, and economic isolation. Such schools must meet all the requirements of the school construction law unless the education commissioner waives any requirement for good cause. In addition, magnet school applicants must submit, and the education commissioner must approve, a plan for operating the school that includes at least the following:
1. a description of the proposed educational programs;
2. project completion date;
3. estimated operating budget;
4. written commitments from participating districts; and
5. an analysis of the program's effect on reducing racial, ethnic, and economic isolation.
Special requirements apply to interdistrict magnet schools intended to help the state meet the desegregation requirements of the Connecticut Supreme Court's Sheff v. O'Neill ruling and settlement.
In addition to local and regional boards of education, the following entities may apply for a school construction grant for a Sheff magnet:
1. two or more boards of education operating under a cooperative arrangement;
2. the community-technical colleges board of trustees on behalf of any community college;
3. the UConn, Connecticut State University, or any independent college's board of trustees on behalf of their respective institutions; and
4. any other nonprofit corporation the education commissioner approves.
Sheff project applicants have an additional two months to submit construction grant applications. Their application deadline is September 1 rather than June 30. And, instead of requiring the local funding authorization to be included in the application as is required for other school construction projects, Sheff project applicants have until December 1 of the application year to secure and report all required state and local approvals needed to complete the grant application. Finally, unlike other projects, Sheff projects can be added to the school construction project priority list after the SDE submits the list to the legislature's school construction committee for approval.
Regional Vocational-Technical Schools
After review by the Department of Public Works, the education commissioner must include any needed construction projects for the state-run regional vocational-technical (V-T) schools on the school construction priority list he submits to the General Assembly. The state is responsible for full cost of a vocational-technical school project after the General Assembly approves it as part of the priority list and the Bond Commission authorizes issuance of state bonds for school construction projects.
V-T projects are exempt from the law limiting to two the number of legislative reauthorizations for a school construction project. It thus allows the General Assembly to authorize three or more changes in cost or scope that exceed 10% for a vocational-technical school project.
The education commissioner, on or after July 1, 2007, within available grant authorizations and without separate legislative authorization, may approve the same types of emergency and code violation projects for V-T schools as he can for other schools.
Endowed Academy Projects
Gilbert School, Norwich Free Academy, and Woodstock Academy, which are the three private schools that serve as public high schools, may apply for state school construction grants. To be eligible, (1) they must provide school facilities to the towns that designate them as their high schools for at least 10 years after the last grant payment and (2) at least half of the members of the school's governing board, other than its chairman, must represent the school boards of the designating towns. The membership requirement applies to whatever board exercises final educational, financial, and legal responsibility for the school.
The reimbursement rate for these projects is determined by weighting the designating towns' reimbursement rates by their respective populations, adding 5%, and rounding to the next higher whole number. The towns must designate the school as their high school for at least five years in order to be included in the calculation.
Very Small Districts
Certain very small school districts are exempt from standard per-pupil space limitations for reimbursable costs. To be exempt, a district must have a total enrollment of fewer than 150 students in grades K-8.
For school building projects the General Assembly authorizes after January 1, 2004, the maximum per-pupil square footage limit on eligible cost must be increased by up to 1% if needed to accommodate an HVAC system.
SDE must approve 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.
School-Based Health Clinics
Any school-based health clinic constructed on or after October 1, 2007 that is located in, or attached to, a school building must have an entrance separate from that of the school.
Central Kitchen Facilities
A school district may receive a regular school construction reimbursement grant for designing and building a central kitchen to provide public school food service. The project may also include the cost of altering, expanding, or creating kitchens in individual schools to facilitate centralized food preparation. Such projects are exempt from standard space limits as long as the education commissioner finds the project's size and scope to be reasonable.
Buildings Constructed Before 1950
Buildings built before 1950 qualify for a 25% increase in the maximum square-footage-per-pupil limit for computing school construction grants.
CHANGE IN USE OF STATE-FUNDED PROJECT
Regular School Projects
For projects authorized on or after July 1, 1996, the SDE must amortize the state grant principal on a straight-line basis over 20 years for projects costing $2 million or more and over 10 years for less expensive projects, starting from the date the district accepted the project as complete. If a district takes the school building out of service or converts it to a nonschool use during the amortization period, it must refund the unamortized balance of the grant to the state.
Districts may ask the state to forgive repayment if the school building was redirected to another public use. The SDE must add any such request to the school construction priority list submitted to the General Assembly every year. The General Assembly's approval of the priority list also constitutes approval of the forgiveness requests.
95% Funded Projects
If the state grant for a school project reimbursed 95% or more of its eligible cost, the building must be used for the grant purpose for at least 20 years from the date the General Assembly approved the grant. If the building's use is changed within the 20-year period, title reverts to the state unless the education commissioner, for good cause, decides otherwise.