P. O. BOX 2120
June 13, 1997


TO: Division Superintendents
FROM: Richard T. La Pointe
Superintendent of Public Instruction
SUBJECT: Use of VPSA School Equipment Financing Notes Educational Technology

  Chapter 924, 1997 Virginia Acts of Assembly (the 1996-98
  Appropriation Act) authorizes the Virginia Public School
  Authority to conduct an education technology grant program
  in the spring of 1998.  The full text of this language was
  provided to you in Supts. Memo. No. 1 (Regulatory), dated
  March 12, 1996.  Since that time, we have had numerous calls
  requesting information about the program.  

  Many calls, as well as some discussion with local
  superintendents, have related to the ability to pay for
  software, training, lease-purchases, and independent
  consultants with the proceeds of the equipment notes, and
  the ability to reimburse local divisions for purchases made
  prior to the sale of the equipment notes.


  It is important to remember that the primary purpose of this
  educational technology program is to provide for  (1)
  networking,  retrofitting, and upgrade of existing school
  buildings, (2) network-ready multimedia microcomputers for
  classrooms, and (3) network-ready microcomputers for student
  use.  It is important that we make substantial progress
  toward meeting these priorities in order to continue to
  receive this level of support from the Administration and
  General Assembly.

  Since the funding mechanism for this program is five-year
  equipment notes, the proceeds of the notes must be used for
  capital purchases.   Further, it is necessary that on a
  divisionwide basis, a balance be maintained between the
  equipment and related software purchased in order to ensure
  that the useful life of all purchases exceeds the life of 
  the equipment notes.  For example, software may have a
  useful life of one year, while a multimedia computer may
  have a useful life of 7 years.  Given those factors, it will
  be necessary for a division to spend $13 for hardware for
  every $1 of software purchased.

  In addition, software can be purchased only if it meets all
  of the following criteria:

    a)  It must be an integral part of the equipment which is
        being purchased with the proceeds.  (That is, it must be
        necessary in order for the equipment to be utilized for
        the intended purpose.  For instance, if equipment is
        being purchased for networking purposes, some software is
        necessary in order for the network to be utilized as
        planned.  That software may be purchased with these
        proceeds.  In addition, if the equipment is to be used in
        the classroom for instructional purposes, some
        instructional software will be required in order for the
        equipment to be used effectively.  Again, software of
        that type may be purchased); and,

    b)  The software being purchased must have a useful life
        of more than 1 year; and,

    c)  The software must be included in the approved local
        technology plan.

  Invoices submitted for training, lease-purchase payments, or
  independent consultants will not be reimbursed. 


  Local school divisions may make purchases prior to the sale
  of the equipment notes and use the proceeds to reimburse
  themselves.  However, it is important that prior to paying
  for those purchases, the local school board state its
  intention to use the proceeds of the equipment notes to
  reimburse that payment.  This must be done through a
  resolution adopted by the local school board.  A sample
  resolution is provided as an attachment to this memorandum.

  I trust you will find this information helpful.  If you have
  questions relating to the financing, please call Mrs. June
  Eanes, Budget Director, at (804) 225-2060.  Questions
  relating to the educational technology program should be
  directed to Dr. Ida J. Hill, Division Chief, Technology, at
  (804) 225-2757.