SUPTS. MEMO. NO. 3
May 8, 1998
|FROM:||Paul D. Stapleton
Superintendent of Public Instruction
|SUBJECT:||Results of the 1998 Special Session of the General Assembly|
School Construction On Friday, April 24, 1998, the General Assembly passed legislation (Senate Bill 4005) which included a formula for distributing the school construction funds that were approved by the General Assembly during the regular 1998 Legislative Session. This bill has been enrolled and communicated to the Governor. The formula adopted by the General Assembly is the same as that proposed by Governor Gilmore and included in Executive Order Number Six which was sent to you in Informational Superintendent's Memo 58 on April 17, 1998. The one significant change from Governor Gilmore's proposal is that the General Assembly added a required local match based on each locality's composite index. In summary, the formula distributes $55 million in each year of the 1998-2000 biennium. The methodology first distributes $200,000 to each school division in each fiscal year as a floor. The balance of each year's appropriation is then distributed on the basis of the composite index and Average Daily Membership of each school division. As stated earlier, a local match is required to receive these state funds. The amount of the match will be based on the composite index and calculated by multiplying each locality's index by its grant amount. School divisions may use these funds for, "school construction, additions, infrastructure, site acquisition for public school buildings, and renovations, including the costs of retrofitting or enlarging public school buildings; further, if a school division has completed any such projects during the previous ten years, the grants may be used for debt service payments or a portion thereof." The required match also must be used for these purposes. The legislation further states that, "The amount of each grant awarded to a qualifying school division in any fiscal year shall not exceed 100 percent of the school division's aggregate annual expenditures..." for the purposes stated in the previous paragraph. This means that if a school division does not have annual expenditures equal to the grant amount plus the required match, the grant amount must be reduced to meet the intent of this language. Please be aware that this formula including the match is only a temporary formula that will be in place for fiscal year 1999 and fiscal year 2000. The legislation passed by the General Assembly specifically states that, "All funds appropriated for financial assistance for the purposes of this chapter for subsequent fiscal years shall be apportioned and distributed among the school divisions of the Commonwealth in accordance with eligibility and needs criteria to be established by the 2000 Session of the General Assembly. In developing such eligibility and needs criteria, the 2000 Session of the General Assembly shall consider the recommendations of the Commission on State Funding of Public School Construction." The legislation passed by the General Assembly requires the Board of Education to issue guidelines for administration of the program. These guidelines will include the procedures for distribution of the grants in accordance with this legislation, including the process that school divisions will have to follow to qualify for receiving these grant funds. These guidelines will be distributed to you after they have been adopted by the Board of Education. Finally, Senate Bill 4005 also created the Commission on State Funding of Public School Construction to study the issues and criteria that should be considered in establishing a permanent funding methodology for school construction. The Commission's findings and recommendations must be submitted to the 2000 Session of the General Assembly. Attachment A includes the language creating the Commission. Other Budgetary Action The General Assembly also amended the budget passed in March for the 1998-2000 biennium. Inflation factors were updated to reflect the first quarter of 1998 projections which reduced the Basic Aid and Salary Supplement per pupil amounts that were provided to you in Regulatory Superintendent's Memo 1, dated March 19, 1998. The changes to Basic Aid also impact your entitlements for At-Risk Payments and Enrollment Loss since the funding for these programs is derived from the Basic Aid per pupil amount. Attachment B provides a spreadsheet that shows only the changes resulting from the actions taken during the Special Session. This information includes the amount of your construction grant for each year as well as your required local match. Attachment C contains your revised entitlement sheet showing all accounts including the revisions described above. If you have any questions, please contact Daniel S. Timberlake, Assistant Superintendent for Finance, at (804) 225-2025 or June Eanes, Budget Director, at (804) 225-2060. PDS/dst Attachment: A hard copy of this memo and its attachment will be sent to the superintendent's office Attachment A Commission on State Funding of Public School Construction 1. That the Commission on State Funding of Public School Construction is hereby established. The Commission shall be composed of 12 members, which shall include 7 legislative members and 5 nonlegislative citizen members as follows: the Co-Chairmen of the House Committee on Appropriations, or their respective designees, the Co-Chairmen of the House Committee on Finance, or their respective designees; the Co-Chairs of the Senate Committee on Finance, or their respective designees, one additional member of the Senate to be appointed by the Senate Committee on Privileges and Elections; and five citizen members, who may or may not be employees of the Commonwealth, to be appointed by the Governor. 2. The Commission shall recommend to the General Assembly (i) a statewide method for assessing and quantifying the public school construction and renovation needs of local governments and (ii) specific eligibility and needs criteria to govern the disbursement and apportionment of funds to local school divisions under the Virginia Public School Construction Grants Program. The eligibility and needs criteria shall include, but need not be limited to, provisions which address the following: (i) factors to be applied to all localities to measure actual need; (ii) factors to be applied to all localities to measure local effort to meet actual need; (iii) factors to be applied to all localities to measure local ability to pay for actual need; (iv) factors to be applied to all localities to recognize local innovations and activities to improve the quality of and options for education, including, but not limited to, efforts to reduce class sizes; (v) appropriate combinations of funding resources for the eligible projects, including grant funds, local funds, Literary Fund loans, and bonds or other funding through the Virginia Public School Authority, and moneys obtained from any other public or private funding sources; (vi) restrictions on the use of grant funds, if any; (vii) requirements for the availability and pledge of local matching funds; and (viii) procedures for determining priority for awarding grants to qualifying school divisions. 3. The Senate Committee on Finance, the House Committee on Appropriations, and the Division of Legislative Services shall provide staff support for the Commission. All agencies of the Commonwealth shall provide assistance to the Commission, upon request. 4. The Commission shall complete its work in time to submit its findings and recommendations to the Governor and the 2000 Session of the General Assembly.