Public School Capital Outlay Council PUBLIC SCHOOL FACILITIES

Public School Capital Outlay Council PUBLIC SCHOOL FACILITIES AUTHORITY (PSFA) STANDARDS-BASED GRANT PROCESS & MASTER FACILITIES PLANS Presented by: Tim Berry, Deputy Director Bill Sprick, Facilities Master Planning Manager Tanya De. Lara, Facility Assessment Database Manager April 4, 2007 -- Spring Budget Workshop Hotel Albuquerque, Alvarado Ballroom “F” 1: 30 pm – 3: 00 pm

Presentation Outline q q q q Introduction Purpose of the PSCOC Membership of the PSCOC Recent Capital Outlay History PSFA Responsibilities Facilities Master Plans New Mexico Condition Index The Application Eligibility Requirements Timeline PSCOC/PSFA Grant Programs Goals and Options Discussion/Questions

Introduction q Public school capital outlay is financed by and the responsibility of school districts and the state. q Three pillars that support the new process: § Adequacy § Uniformity § Fairness q Adequacy -- Establish the minimum acceptable level for the physical condition and capacity of buildings, the educational suitability of facilities and the need for technological infrastructure. q Uniformity – Adequacy Standards applied statewide; every school district may apply for funds. Every school district or state-chartered charter school is required to have a 5 -year facility plan. q Fairness -- Utilize the New Mexico Condition Index (NMCI) database to help prioritize facilities needs throughout the state.

Purpose of the PSCOC q The Public School Capital Outlay Council is charged with carrying out the Public School Capital Outlay Act. q The purpose of the Public School Capital Outlay Act (22 -24 -2 NMSA) is “to ensure that, through a standards-based process for all school districts, the physical condition and capacity, educational suitability and technology infrastructure of all public school facilities in New Mexico meet an adequate level statewide and the design, construction and maintenance of school sites and facilities encourage, promote and maximize safe, functional and durable learning environments in order for the state to meet its educational responsibilities and for New Mexico’s students to have the opportunity to achieve success. ”

Membership of the PSCOC q q q q q Paula Tackett (LCS Director), Chair Catherine Smith (PEC Designee) Dr. Kurt Steinhaus (Governor Designee) Dr. Veronica Garcia (PED Secretary) David Abbey (LFC Director) Katherine Miller (DFA Secretary) Dr. Pauline Rindone (LESC Director) Vicki Smith (NMSBA President designee) Lisa Martinez (CID Director)

Recent Capital Outlay History q 1975 – 2003: districts qualified for capital outlay by reaching a threshold of bonded indebtedness and demonstrating need. q 1998: State undertakes study of public school facilities and statewide needs through voluntary task force. q 1998: Constitutionality of the state’s process for funding public school capital outlay challenged. Zuni files lawsuit against the state. q 1999: State ordered by the court to correct past inequities and to establish and implement a uniform system of funding for future school capital outlay. q 2000: Public School Capital Outlay Task Force established. q 2001 -2006: Task Force recommendations enacted into law: § Deficiencies Correction Unit (DCU) created § Permanent funding source for capital outlay provided § Public School Facilities Authority (PSFA) created § Increased funding for maintenance § Framework for new public school capital improvement process created: Standards-Based Capital Outlay & NM Facility Assessment Database. § Permanent Oversight Task Force Created

PSFA Responsibilities q q q q q Staff to the PSCOC Assist w/ standards-based grant applications Maintain the Facilities Assessment Database Administer the Deficiencies Correction Program (DCP) to correct life safety & health deficiencies in schools Create standardized contracts, documents and delivery processes Establish building standards Certification and training programs Assist districts in the development and implementation of five-year facility master plans Assist districts with the development and implementation of preventative maintenance programs

PSFA Responsibilities (continued) Assist in obtaining architectural and engineering services; q Project submittal/approvals § Master Plans / Maintenance Plans § Contracts (design professional & construction) § Plan review (Request for Approval of School Construction - RASC) q Construction management and oversight q Project close-out q

The Master Planning Process

Facility Master Plan Purpose q To prioritize a 5 -year course of action for all district capital improvements. q To stay the course through any change in School Board or Administration. q To be eligible for financial assistance from the PSCOC in the area of facility adequacy.

Facilities Master Plan Components q Goals q Existing Conditions and Projected Needs q Capital Improvement Plan q Master Plan Support Material

The Master Planning Process

Facility Goals q Policy Direction (Established by local school boards, and conforms to state policy) q Decision Making Criteria (How priorities will be determined? ) q Steering Committee (an advisory group to the administration)

Existing/Planned Conditions Factors to be considered in analysis to determine the gap between current facilities and the districts facility goals. § § § § Preventive Maintenance “Adequacy” Renewal Space Capacity Growth/Decline Municipal/County Utilization Addition § § § § New $ Capacity Cost/Benefit Board Policies Municipal/County Policies Land Use Begins to Set Priorities

The Master Planning Process

Capital Improvement Plan A capital strategy identifies the needed funds, the fund sources, and the timeline to meet goals.

The Master Planning Process

PSCOC Master Plan Assistance PSCOC awarded $868. 6 thousand in November 2006 to 32 Districts

The Master Planning Process FMP + FAD=A+

The Master Planning Process

The Master Planning Process q A quality Facilities Master Plan will minimally take 12 weeks from start to board adoption (Typically 6 to 12 months depending on size of district). q Includes financial analysis, growth analysis, and space utilization study, all of which often requires a professional planner. q PSFA can offer guidance on development of the Facilities Master Plan, the hiring a planning consultant, or other planning topics.

Integrating Charter Schools q District Facilities Master Plans must include Capital needs of Charter Schools (locally chartered) to be eligible for Capital Outlay assistance. q Non-Life, Safety & Health Adequacy Standards currently varianced in Facility Assessment Database. Pilot assessment has been completed to assist PSCOC to develop policies and procedures to assess charters based on their individual educational programmatic needs ($4. 5 million made available and separate application process to be developed). q All facilities of Charter Schools approved on or before July 1, 2005 or renewed after July 1, 2005 shall meet educational occupancy standards. q After July 1, 2010, charter applications shall not be approved or renewed unless: § § § Housed in a public building; Housed in a private building leased through a lease/purchase arrangement that meets adequacy; or If public building not available - in a privately owned (or non-profit charter entity) leased facility that meets and maintains statewide adequacy standards. q Prior to occupancy of a public facility by a charter school must notify PSFA to assess for compliance with Adequacy Standards. q Pending – permit districts to lease facilities to Charters (lesser of the actual operating cost of the facility or amount received through lease assistance program).

How does the Public School Capital Outlay Council (PSCOC) Prioritize Funding for Schools? PSFA uses a tool called: The Facilities Assessment Database (FAD) FAD is a database that stores specific data about each school in New Mexico and incorporates: • Life cycle analysis • • New Mexico Adequacy Standards Associated Weight Factors This database scores each school with a unique Weighted NMCI Score (%). Schools are then ranked according to this score and considered for funding based on the highest priority; being the schools with the highest Weighted NMCI Score.

The Rank Report

What goes into calculating the Weighted NMCI Score? FCI (Facilities Condition Index) n The FCI formula is commonly used in determining how each building compares to others. FORMULA: Needed Repairs ($) = FCI Replacement Value ($)

Needed Repairs Defined Needed Repairs ($) = FCI Replacement Value ($) Needed Repairs = The Cost of Correcting Deficiencies ¨ Building Systems that are deficient (due to age or condition). Life-cycle Analysis. ¨ Areas where schools are inadequate measured against New Mexico Educational Adequacy Standards

Another Look at the Formula Needed Repairs ($) Building Systems that are deficient (due to age or condition) ¨ Areas where schools are inadequate measured against New Mexico Educational Adequacy Standards ¨ = NMCI Replacement Value ($) n n NMCI Expressed in % Format The higher the repair costs the higher the NMCI Score

NMCI vs. Weighted NMCI Needed Repairs ($) Building Systems that are deficient (due to age or condition) ¨ Areas where schools are inadequate measured against New Mexico Educational Adequacy Standards ¨ = NMCI Replacement Value ($) Needed Repairs ($), Categorized and Weighted =Weighted NMCI Replacement Value ($)

Building Systems

Category Type Data Category Weight Factor 1 Adequacy Life Safety, Health 3. 50 2 Potential Mission Impact / Degraded 3 Mitigate Additional Damage 4 Beyond Expected Life 5 Grandfathered or State/ District Recommended 0. 50 6 Adequacy – Facility 1. 00 7 Adequacy -Space 3. 00 8 Adequacy - Equipment 0. 50 9 Normal Above 200% Used 1. 50 2. 00 100 – 199% Used 0 -100% Used Replacement Value ($) 0. 25 1. 0 0. 25 =Weighted NMCI

100 – …% Used 0 – 100% Used Type 9 Type 1 Type 2 Type 3 Type 4 Type 5 Type 6 Type 7 Type 8 wt 3. 5 wt 1. 5 wt 2 wt 0. 25 wt 0. 5 wt 1 wt 3 wt 0. 5 wt 1. 0 $0 $853, 719 $0 $631, 398 $100, 719 $27, 407 $609, 825 $0 $0 Needed Repair Cost = $4, 588, 365 (Weighted) According to Old Logic Over 200% Used 100 – 200% Used 0 – 100% Used Type 1 Type 2 Type 3 Type 4 Type 5 Type 6 Type 7 Type 8 Type 9 Including Degradation wt 3. 5 wt 1. 5 wt 2 wt 0. 25 wt 0. 5 wt 1 wt 3 wt 0. 5 wt 0. 25 $0 $1, 253, 719 $0 $231, 398 $100, 719 $27, 407 $609, 825 $0 $3, 153, 729 Needed Repair Cost = $5, 845, 670 (Weighted) According to New Logic

Percent Used Category Type 9 Deficiencies Years Old

Estimate by Type

The Standards-Based Application http: //www. nmschoolbuildings. org

The Standards-Based Application

Standards-Based Capital Outlay Grants q All districts are eligible regardless of bonded indebtedness. q Standards-based grant application needs based upon Adequacy Standards adopted August 2002. q Priority consideration to the greatest standards-based facility needs, compared school-by-school throughout the state.

Standards-Based Capital Outlay Grants q q q q The district has used its resources in a prudent manner. Award phasing commitments to each whole project – multiyear funding scenarios. Districts shall be responsible for a matching share that will vary from 0 -90% as determined by formula in statute. District matching funds required to be in place within two bond cycles before reversion back to the capital outlay fund for reallocation. Reduction of local match considered if insufficient bonding capacity within four years (must meet additional criteria). State share of awards are reduced by Legislative appropriations to districts (2003 -present). Educational Technology Appropriations began offsetting against 2005 -2006 capital outlay awards.

Standards-Based Capital Outlay Grants Pending – q q q Offsets to be reduced by 50% for projects in current or previous year top 150 of statewide ranking. Direct appropriation to state-chartered charter school will offset against charter. Acquisition of facility by District or Charter through lease/purchase option eligible for grant assistance. Acquisition of privately owned school facility that was constructed to adequacy when it reaches 75% of design capacity and surrounding schools maintained at 85% or greater. Supplemental funds to exceed adequacy by up to 25% if meet certain eligibility requirements. The opportunity fund – would provide revenue source to allow supplemental funding through general fund agency reversions (10% of unrestricted) and 3% surcharge on all direct legislative appropriations to schools.

Other Eligibility Requirements q q q The school district has submitted a "five year" facilities master plan that includes each school (including charters) in the district, each school's facilities utilization and enrollment projections, and all capital projects prioritized and that consider NMCI ranking a need exists based upon Public School Adequacy Standards and is included in the district's five-year facilities plan among it's top priorities The school district has submitted a preventive maintenance plan for PSCOC approval. The preventive maintenance plan must include each public school facility in the district The application includes the capital needs of any charter school(s) located in the school district, or the school district has shown that the capital needs of the charter schools are not as great as the capital needs requested in the application The application includes the capital needs to maintain a full day kindergarten program if not already fully implemented The school district has provided insurance for buildings of the school district in accordance with the provisions of Section 13 -5 -3 NMSA

Capital Outlay Grants New for 2007 -2008 - $26. 5 M plus districts share § Potential awards $100 M (school districts add local match that on average doubles capital into projects, so $200 M) § High priority (growth) & Other Adequacy Issues appropriation $18 M. § Energy efficiency, high performance schools appropriation of $4 M for additional costs for improvements and LEED/ Green Building. § Charter School Facilities funding appropriation of $4. 5 M. § Standards Based Project Pre-Apps – 47 from 25 districts totaling $398. 6 M (state share) Potential Funding Pool to be established § Demolition of Abandoned Buildings – 15 from 14 districts totaling $2. 3 M (state requests) local payback through insurance premium savings may be required.

Capital Award Timeline 10/31, 11/13 & Facility Assessment Database (FAD) Training (Various & 11/16 Locations) 12/1 District corrections to FAD data due to PSFA 1/5 PSCOC Meeting - Revised NMCI rankings 2/1 2007 -2008 Standards-Based & Demolition of Abandoned Buildings Pre-Application Release (web-based) 2/7, 2/9, 2/12 & 2007 -2008 Standards-Based & Demolition of Abandoned 2/15 Buildings - Application Training 3/2 2007 -2008 Standards-Based & Demolition of Abandoned Buildings Pre-Applications Due 3/2 District appeals of rankings due to PSFA 4/12 PSCOC Meeting – Appeals Hearing 4/13 2007 -2008 Standards-Based & Demolition of Abandoned Buildings Full Applications Due

Capital Award Timeline (cont. ) 4/23 – 5/14 PSFA Site Visits & Assistance 5/1 PED Calculate State/Local Match % 5/25 2007 -2008 Standards-Based & Demolition of Abandoned Buildings Final Revised Application & Appeal of Ranking Adjustments Deadline 5/31 PSCOC Meeting – final ranking and appeals 6/8 & 6/12 PSCOC Presentation Meetings (sites TBA) 7/25 PSCOC 2006 -2007 Grant Awards Meeting

Standards-Based Capital Outlay Grants In 2006, state capital outlay for public school construction totaled $259. 2 million, the second highest annual award level ever. Funds allocated to projects from previous years—out of cycle awards relating to cost overruns and other cost increases—totaled $57. 9 million. The PSCOC and PSFA are working closely with districts to speed project delivery in order to minimize the portion of project budgets that is lost to construction inflation.

PSCOC/PSFA Grant Programs Funding Sources SSTB: $ 1, 230. 5 million STB: $ 100. 0 million GF: $ 141. 1 million GOB: $ 4. 6 million Since 1999, the state has allocated just under $1. 5 billion to a wide range of public school facilities funding programs.

Financial Results — Reduction in FCI A declining Facility Condition Index (FCI) indicates improvement in the statewide condition of school district physical plant, net of the $143 million annual investment necessary to maintain baseline condition (break even). FCI as it has been reported in past years is indicated in BLUE. The adjusted FCI, indicated in PURPLE, more comprehensively reflects the cost of school deficiencies over systems lifecycles. The adjusted FCI will be used in forthcoming years. For historical comparability, the adjusted FCI was calculated for previous years.

Deficiencies Correction Program Snap-shot in time! q q q Existing deficiencies identified by districts in 2001 Validated by Deficiencies Correction Unit in March 2002 Funding limited to existing life/safety/health deficiencies Priority deficiencies corrected uniformly across state where conditions exist Allocations to date by the Council: $273 M. Total projects to date: 374 (including (42) 2 -E roofs). All projects were required to be identified & funded by June 30, 2005 and completed by June 30, 2007 (pending – PSCOC may extend to 6/30/08 due to extenuating circumstances); 2 -E roofs by September 30, 2005 and complete by September 30, 2007 (pending extension to 9/30/08). Transition to Standards-Based process…

PSCOC Lease Payment Assistance q Up to $7. 5 M annually (FY 2005 -2010) (pending approval to extend to 2020) may be awarded for lease payments for classroom facilities (and direct admin. ) including facilities leased by charter schools. q 2006 -2007 Awards: $5. 22 M to 63 schools (60 charter) q Amount of grants may be up to the lesser of the total annual lease cost or $600 ($700) per MEM. May be adjusted to lower per MEM is funds insufficient. q Also available for first year charter schools based on projected 40 th day enrollment; adjusted after 80 th day. q After July 1, 2010, All charter schools to be in public buildings (if available) and meet statewide adequacy standards. 2007 -2008 Timeline: § April 16 Application to be mailed to districts/charters § June 15 Applications due to PSFA § July 25 Awards

Goals & Options q Improve the built learning environment as quickly as possible with available resources. q Encourage solid capital planning so that district funding is aligned with Adequacy Standard priorities and projects begin shortly after awards. q Reduce all project durations by excellent planning. q Direct payment or reimbursement. q Direct/Indirect project management by PSFA § District preferences & financial capabilities § Certification Training (procurement, contracts) § PSFA Staffing

PSFA’s key priorities for 2007 q Speed delivery of school projects. § Advocate pre-design of projects. q Continue development of standardized facility components. § Such as standard roof specifications Construction Manager At-Risk (pending) q Pre-qualify bidders of school work. q § Contractors pre-qualified in regions q Complete roll-out of the FIMS, including equipment inventory.

PSFA Assistance q Training: Julia Small jsmall@nmpsfa. org 505 -843 -6272 or training@nmpsfa. org q Facility Assessment Database: Tanya De. Lara tdelara@nmpsfa. org 505 -843 -6272 or fad_support@nmpsfa. org q Application questions: Selena Padilla spadilla@nmpsfa. org 505 -843 -6272 or systems_support@nmpsfa. org q Adequacy Standards questions: q Martica Santistevan msantistevan@psfa. k 12. nm. us 505 -843 -6272 Master Planning questions: Bill Sprick bsprick@psfa. k 12. nm. us 505 -843 -6272 q Maintenance questions: q Bob Bittner bob. bittner@psfa. k 12. nm. us 505 -843 -6272 or fims_support@psfa. k 12. nm. us Lease Payment questions: Gerald Pertner gpertner@nmpsfa. org 505 -988 -5989

QUESTIONS & COMMENTS PUBLIC SCHOOL FACILITIES AUTHORITY http: //www. nmschoolbuildings. org