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Update on School Construction & Planning Issues. July 24-25, 2008 Financial & Business Services Summer Conference. Greg Flynn, Architect, School Planning, NCDPI. Legislative Exciting Times!. 2007 Bills H1016 Medicaid Swap – into H1473 Budget Bill Dead: H1740 LEAs to levy tax

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Update on School Construction & Planning Issues

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Update on School Construction & Planning Issues

July 24-25, 2008

Financial & Business Services Summer Conference

Greg Flynn, Architect, School Planning, NCDPI


Legislative Exciting Times!

  • 2007 Bills

    • H1016 Medicaid Swap – into H1473 Budget Bill Dead: H1740 LEAs to levy tax

    • S1245 changes retainage

    • H73 raises threshold to 500K for formal bids

    • H735 raise to 20K sf for DOI OFSM review

  • 2008 Bills

    • H2436 Budget Bill Plant Operations Funded

    • H1284 Breach of Construction Contract Date

    • H2438 Tech Cor. Budget Lottery App. Excess

    • S845 Tech Cor. Env Pervious >1acre 20% or bioretention

    • H2137 Sales Tax Exemption did not pass.

School Planning, NCDPI, 2008


2008 Legislative Action

  • 2008 Short Session no Major Action

  • 2007 House Select Committee on School Construction proposals/bills

    • New ½ cent local option sales tax

    • Extend earmarking of existing two ½ local sales taxes another ten years

    • Exclude Public/Private school projects from local property tax (done)

    • Streamline DOT/DOI reviews (H73) (done)

    • Reinstate sales tax refunds for LEAs (Can still work thru county to get refund) (Still an issue)

    • 2B Statewide School Bond – 4 Bills introduced (07)

    • Rejected Impact/Transfer Fees & APFOs

School Planning, NCDPI, 2008


More legislation/Other Stuff

  • Education: NC Forum/Education Everybody’s Business pushing 2B Bond 2007. No taxes 2008

  • Lottery – Now meeting predictions/ Bills to convert to straight ADM / other distribution

  • IAQ – check schools w/out fresh air – may need to add/reopen (Last year CO2 notice, FEMA trailers)

  • Other Rumblings/Bills

    • Fiscal Modernization/ 21st Century Transportation

    • Transfer fees, Impact fees, APFOs, raise Charter limit, Lottery funds to Charters, Fund only one LEA per County??

    • 2009 Building code (just getting used to 2006)

School Planning, NCDPI, 2008


Public School Capital Building Fund (PSCBF)

  • Procedures for $$ on website

  • Corp. Tax 07/08 Revenue: 87M

    • 86M projected (79M last year projection)

    • Previous years 109M, 98M, 78M

    • Unallocated county balances on our website along with application forms, etc.

    • Bill to lower Corporate Tax rate not enacted

    • Medicaid swap impacted ADM funding

    • 60% retainage (30% reduction) 45M

    • 41M + 19M HH = 60M

School Planning, NCDPI, 2008


Lottery Subfund of PSBCF

  • Distribution will change yearly based upon county tax rates (65% ADM 35% Tax Rate)

  • 139 Million for last year (140M was projected)

    • (prior year 40M less than projected 170M)

  • Use application forms similar to PSBCF/ADM fund

  • No Local Match required

  • Cannot be used for Technology

  • Can be used to retire debt incurred on or after January 1, 2003

  • 154.2M in State Budget Bill for 08/09

  • >140M+ distributed to non-bonus counties

School Planning, NCDPI, 2008


Other State construction funding Sources

  • Portions of Two ½ cent sales taxes

    • Earmark for school construction will begin to sunset in three years (2011)

    • Earmark switched to Medicaid savings - ambiguous

    • Bill to remove/extend sunset not yet enacted

    • Medicaid trade-off threatened these funds.

  • Literary Loan Fund

    • $356,471 Current Balance

    • 400K loan in 1998

    • 300K loans in 1994 & 2004

    • Above loan repayment ~45K / year, now ~90K

  • School Planning, NCDPI, 2008


    Federal/Other Funding Sources

    • Qualified Zone Academy Bonds (QZAB)

      • 11.4M for each of 2006 and 2007

      • Total 22.8M awarded last year to 14 LEAs

      • No in-state banks: CO, NM

      • North by Northwest Capital 1-1.5% fee 0% int

      • 2.7M issued

      • 3.5M +2M pending

      • 6.7M abandoned 04-05 (Dec 07)

      • H.R.6049 Renewable Energy and Job Creation Act of 2008 now in US Senate

    School Planning, NCDPI, 2008


    Other Funding Sources

    • Public Private Partnerships

      • Allows LEAs to pursue “capital lease purchase”

      • Development Corp. seeks funding on Wall Street or lending Institution

      • Voter approval not required

      • Bill exempted from property tax

      • Possibility of Federal Tax Exempt Bonds (Qualified Public Education Facilities (QPEF) Bonds)

      • Low interest rates affecting project viability

    School Planning, NCDPI, 2008


    Other Stuff

    • High Performance/Green Construction

      • Numerous projects built, more states mandates

    • Recap: Survey requested by Legislature: Design/Const Mgmt costs for New Schools over the past 10 yrs

      • Schools with Const. Mgmt. cost 8% more than average (w/CM fee included)

      • Avg. Design Fee New Schools 5.15%

      • Avg. CM Fee New Schools 4.68%(Not “at risk”)

    • Energy Efficiency Legislation 30%

    School Planning, NCDPI, 2008


    Construction Costs

    • Pressure to Reduce Costs

      • Usually means cuts in quality/longevity too!

      • Too small classrooms are a permanent problem!

    • $48 /sf increase between ’03 and ’05

    • $11 /sf increase between ’05 and ’07

    • $13 /sf decrease between ’07 and ’08

    • $ 5 /sf decrease between ’06 and ’08

    • Leveling now.

    • These are plain vanilla schools – NOT Taj Mahals

    School Planning, NCDPI, 2008


    Construction Cost Average

    School Planning, NCDPI, 2008


    Construction Cost Spread

    School Planning, NCDPI, 2008


    Prototype ClearinghouseWebsite(www.schoolclearinghouse.org)

    • Many prototype designs for all types of schools

    • Has evolved into an extensive information repository

    • New items

      • Lottery proceeds distribution

      • New Publications: Selected Laws, Science Safety, Design & Construction Procedures, CM @ Risk, Pre-engineered Buildings, Design for Violent Attack,CPSC Playground Safety, Water Conservation, Facility Guidelinesupdate in the works

      • Individual Project data

      • School Sanitation Rules changes coming: Grade Card

    School Planning, NCDPI, 2008


    School Planning Services

    • Website www.schoolclearinghouse.org

    • Specialized Space Profiles and Cost workups

    • Publications on Facility Planning Issues

    • Construction Cost Tracking

    • PSBCF Forms and reports

    • Plan Review and Comment

    • Technical Assistance on Facility Issues

    • Prototype Plans

    School Planning, NCDPI, 2008


    Plan Review Issues

    • Required by Statute to Review and Comment on ALL plans for construction:

      • New schools, additions and renovations

      • Small projects such as dugouts, concession stands, storage buildings, etc

      • Pre-engineered Buildings

      • Technology Installations

      • Re-roofing

      • Modular installations (trailers) require Approval

      • Booster Club Building Projects

    School Planning, NCDPI, 2008


    Questions????

    School Planning, N.C, Dept of Public Instruction

    http://www.schoolclearinghouse.org

    School Planning, NCDPI, 2008


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