In November 2006, voters approved Proposition 1D, a school facilities bond. During the legislative discussions prior to placing the bond on the ballot, the issue of facility grant amounts was debated at great length.

ACSA, along with others in the education community, wrote letters and testified to the fact that the per-pupil grant amounts are too low. While the state requires a 50:50 match for new construction, the low grant amounts actually result in districts paying a much larger share.

As a result, language was added to Proposition 1D to require an independent study be conducted to determine whether or not funding allocations for new construction – state funds plus local district matching funds – provided to school districts are adequate to build complete schools in California. The resulting “Macias Report,” conducted by Macias Consulting Group Inc., was presented to the State Allocation Board at its Jan. 30 meeting, where the findings were discussed at length.

The report states that Macias used multiple analytical methods to assess the adequacy of funding for new construction projects under the School Facilities Plan. Prior to its release, it had been anticipated that the report would lead the State Allocation Board to approve up to a 6 percent increase in the grant amount. However, unfortunately for schools, the Macias report claims to have found the following:

• For 366 schools built between 1999 and 2007, using two data sets from the Office of Public School Construction and McGraw-Hill Construction Analytic Database, funding allocations that included both state and local contributions covered from 139 to 170 percent of construction costs and SFP grants – excluding local matching share – covered from 72 to 93 percent of construction costs for each type of school, elementary, middle and high school. In dollars, their findings concluded that the average funding allocations of $24.5 million exceeded the average construction costs of $16.2 million every year.
• According to the report, for 46 schools built between 2001 and 2007 identified by CDE as having the essential components of a complete school – although none had all CDE components of a complete school – funding allocations covered from 124 to 185 percent of construction costs, and SFP grants covered from 55 to 84 percent of the cost of construction for each type of school, elementary, middle and high school. Once again, in actual dollars, funding allocations were $42.3 million annually while average construction costs were $25.7 million, the report said.
• Using self-reported data for 86 schools, funding allocations did not exceed average funding costs and covered from 65 to 89 percent of construction costs, and SFP grants covered from 50 to 54 percent of costs for each type of school, elementary, middle and high school. The dollar amount in the report from school districts was $22 million, financed through funding allocations, and average construction costs were $28.5 million.

“The issue on matching amounts has been troubling all of us in the education community for some time,” said ACSA Legislative Advocate Laura Preston. “The state amounts were already too low, and now this report comes along and makes it seem as if we’re getting more funding than needed. I don’t know how they came to that conclusion, but it’s certainly not the reality of the situation.”

Prior to the report being presented, the State Allocation Board approved a motion that grant increases be adopted pursuant to the Education Code section that gives the board authority to increase or decrease the new construction grant on projects approved on or after Jan. 30.

The Macias consultants reported to the SAB that school districts receive $400 per square foot for new construction while districts only spend $235 per square foot.

Sen. Jack Scott, D-Pasadena, was the first SAB member to express his dismay at the findings and concluded publicly there must be a major flaw in the study. Scott suggested the McGraw-Hill data used by Macias must not have included complete construction costs and thus resulted in a series of inaccurate conclusions. SAB Public Member Rosario Girard asked why the Macias Report used the McGraw-Hill construction database rather than data from real school construction projects. The consultants believed the data from real school construction projects was too biased.

Assemblywoman Jean Fuller, R-Bakersfield, stated she wanted to see the mode data so she could determine how many of the schools were built in each year covered in the study, 1999-07. Fuller also suggested that OPSC look at allowable costs and unallowable costs to see what might account for the discrepancy in the data.

Sen. Joseph Simitian, D-Palo Alto, stated that now that the report has been finalized, he wanted to ensure school districts had an opportunity to review and critique its conclusions. Assemblyman Gene Mullin, D-So. San Francisco, went even further by suggesting the SAB not accept the report, and instead ask the Legislative Analyst’s Office and Macias to collaborate in reviewing the underlying data.

Kathleen Moore, representative of Superintendent of Public Instruction Jack O’Connell, suggested the SAB formally reject the report because the conclusions were erroneous and could negatively impact future state and local bond efforts.

The SAB took no formal action on the Macias Report at the January meeting. Instead, the board directed staff to bring together a group of interested parties, including the California Department of Education, school district representatives, architects and project managers that participated in the Macias Report, to review the study and report back to the SAB with recommendations on how to proceed. No timeline was set for the return of the item to the board for further review and action on the school construction grants. However, O’Connell has written a letter expressing his concern over the report.

This report does not bode well for upcoming budget discussions surrounding the proposed change to the new construction grant match. The governor is proposing once again to change the match from 50:50 to 60:40. The education community is prepared to fight this change but the results of the report will make this even more difficult.

The Coalition for Adequate School Housing, CASH, is also concluding its report on new construction grant amounts, which is sure to have different results from the Macias Report. ACSA will be working closely with other education groups with an interest in school facilities and will keep members informed as this important issue proceeds in the next few weeks.