ABC New Hampshire & Vermont News


Plan for State Aid for School Construction Approved

As many contractors are aware, there has been a moratorium on state aid to local school districts for school construction projects. The moratorium has been in place while state lawmakers determine a new formula for funding school construction projects. On Thursday the NH House and Senate agreed on final language for passage of legislation (HB533). The changes, targeted at controlling the out of control rate of increase in the building aid budget, are significant. Ed Murdough, Administrator, Bureau of School Approval & Facilities Management at the NH Department of Education (DOE) has provided ABC with a summary of the key points:
 
The new program will begin in FY 14 which starts on July 1, 2013.
 
The moratorium for voting on new projects remains in effect until June 30, 2013.  Districts cannot vote before that date and be eligible for building aid.
Project applications will be prioritized by the DOE based on the following criteria:
a.      Unsafe conditions
 
b.    ADA violations, obsolete, inefficient, or unsuitable facilities
 
c.     Overcrowding
 
d.    Enrollment projections
 
e.     Reasonable attempts at maintenance of existing buildings
 
f.     District’s fiscal capacity
 
g.    Other criteria identified by the State Board of Education
 
School Building Aid will be paid up front in two payments.  The first payment will be 80% of the estimated eligible amount upon approval and the balance upon completion of the project. It is anticipate that approval for funding will require:  making the cut on the priority list, successful vote, approval of plans and specifications by the DOE, signed construction contract.
The basic formula for aid based on multi-town arrangements is gone.  The amount of aid will be based on median family income and equalized valuation per pupil.  The amounts range from 30% to 60%. 
Charter schools are eligible for 30%.  They will have to make the cut like everyone else.
SAU offices and portable classrooms are no longer eligible. 
The 25% of the cost for CTE centers not covered by the CTE aid is no longer eligible for regular building aid.
Any future aid for leases will be through an appropriation separate from building aid.
The additional 3% incentive for high performance school buildings is gone.  There will be an effort to try to reinstate this in the next legislative session.
In any given year, the department will first pay eligible amounts for projects constructed prior to July 1, 2013.  The remaining amount in the state appropriation will be available for new projects which will receive their full eligible amount in priority order until the appropriation is exhausted.
The bill initially caps the total amount at $50 million per year, but allows the state budget writers to increase that amount.  If the budget is $50 million per year, there will only be about $8 million to $10 million available for new projects in the first few years.  It is estimated that the state needs at least $30 million to make headway. There will be an effort to make the case for more funding through the budget process next year.  It will take about 10-12 years for the state to pay down the tail of old projects in order to have a reasonable amount of money available for new projects, unless the budget is significantly increased above $50 million per year
 
One thing that is very clear is that the local process for planning and design will have to happen sooner and more thoroughly than in the past.  Applications will be due September 1st each year.  The state will no longer be able to accept incomplete or late applications.  That means that local decisions on what to build will need to be made 4-6 months earlier than they are now.  Applications will need to include complete and accurate cost estimates.  The new law will require districts to consider more than one alternative and to conduct a life cycle economic analysis of the alternatives.
 
 
For the remaining districts that have not taken advantage of the kindergarten construction program, one more year remains to vote on construction of new kindergarten classrooms before that program goes away.



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