Copyright © 1998 New Jersey School Board Association. All rights reserved.
Educational Facilities Construction and Financing Act
On July 18 the Educational Facilities Construction and Financing Act, S-200 was into law, thereby initiating the largest, most comprehensive school construction program in the nation. Senators William Gormley (R-Atlantic) and John Lynch (D-Middlesex),Assembly Speaker Jack Collins (R-Salem) and Assemblyman Joseph Malone, III (R-Burlington), sponsored the bill.
Major provisions of the new school construction law include:
- Building renovation necessary for compliance with the Uniform Construction Code, health and safety, and/or educational adequacy as determined by facilities efficiency standards. The district is entitled to state aid on the estimated actual costs of the renovation project.
- New construction to accommodate increased enrollment. The law provides a cost allowance of $138 per square foot. This figure covers construction and "soft costs," such as site acquisition and site development; services of design professionals, including architects, engineers and construction managers; legal fees; and the costs associated with financing the project.
- Building space necessary to comply with state or federal law concerning students with disabilities.
- Additional spaces the commissioner of education determines are necessary to meet the educational needs of the district.
Preschool-grade 5 125 sq. ft. Grades 6-8 134 sq. ft. Grades 9-12 151 sq. ft.
How the Process Works
Step 1 Long-Range Facilities Plan
All school districts must prepare and submit a long-range facilities plan to the commissioner of education by December 15, 2000. The document must detail the district's school facilities needs and how it will address those needs over the next five years. Computer software for the long-range facilities plan will be piloted in selected school districts during the month of August. The Department of Education will provide regional training on software use in September.
Long-range plan necessary for facilities funding-Prior to submitting an application for a school facilities project, a district must have its long-range facilities plan approved by the commissioner. The plan must comply with the "facilities efficiency standards." These standards will be published in the "New Jersey Register" shortly, and will become effective after a 30-day public comment period. Immediately upon their publication, NJSBA will make the standards available on its Web site at www.njsba.org.
Exceptions-Prior to October 1, 2000, the commissioner may approve a facilities application without the district having filed a long-range plan if (a) the project is necessary to protect health and safety of the school's occupants; (b) it is related to early childhood education programs; (c) the school facility is overcrowded; or (d) the district has received bids on the project and further delay will negatively affect the project's cost.
Time-lines-The commissioner has 90 days from receipt of a district's long-range facilities plan to determine whether it is complete. If the plan is complete, the commissioner has 60 days from the date the district is notified to determine whether to approve the plan.
Step 2 Project Approval
Any district seeking to initiate a school facilities project must submit a project application to the commissioner. The commissioner will review a district's proposed project to determine whether it complies with the facilities efficiency standards and the district's long-range plan. The commissioner must also approve additional space that exceeds the state standards, if the district demonstrates the additional space is necessary for required programs.
Time-lines-The commissioner must make a decision on a district's application within 90 days from the date on which he determines the application is complete. If the commissioner cannot make a decision within the 90-day period, he must notify the district in writing explaining the reason for the delay. Within 60 days of the expiration of the original 90-day period, the commissioner must make a decision on the application or it will be deemed automatically approved.
Approved projects-If the commissioner approves a district's school facilities project, he will calculate eligible costs of the project on which the district will be entitled to receive state aid.
Disapproved projects-If the commissioner does not approve additional space beyond that provided in the facilities efficiency standards, the district may either modify its plan or pay for the excess costs.
Step 3 Eligible Costs
New construction-Eligible costs for construction of new facilities and additions to existing facilities are calculated by determining the amount of allowable square footage (as per the facilities efficiency standards) and multiplying that square footage by $138 (the per square foot cost allowance).
As an example, a school district must build an addition to house 50 additional elementary students. The facilities efficiency standards provide for 125 square feet per elementary student. The total allowable square footage for the project would equal 6,250 (50 students x 125 square feet).
To determine the district's state aid, the square footage (6,250) is multiplied by the square foot cost allowance of $138 ($138 x 6,250 square feet = $862,500 in eligible project costs). Assuming the school district qualifies for the minimum 40 percent state aid, it would be entitled to an up-front cash grant of up to $345,000 ($862,500 x .40 = $345,000).
Renovation-Eligible costs for renovation projects equal the estimated actual costs. The estimated costs of a renovation project may contain only those costs necessary for compliance with the Uniform Construction Code, for health and safety, and/or for educational adequacy as determined by the facilities efficiency standards.
Step 4 Financing and Construction
With the exception of the Abbott districts, school boards must obtain voter or board of school estimate approval for the local share of the construction project. State funding for the project is available once the district secures financing for the local share of the project.
Referendum language-The referendum must identify the final eligible costs of the project, as determined by the commissioner, as well as those amounts that are in addition to eligible costs.
School districts with a state aid percentage of less than 55 percent-A school district with a state funding percentage of less than 55 percent can opt to receive state aid for the project as debt service aid or as an up-front cash grant. It also has the option of constructing the project on its own or using the New Jersey Economic Development Authority (EDA).
Abbott districts, school districts with a state aid percentage of 55 percent or greater, and Level II districts-Abbott districts are required to use the EDA for construction and will have 100 percent of approved costs paid by the state through EDA financing. Districts in Level II monitoring and districts that have a state aid eligibility of 55 percent or greater must also use the EDA for construction of their projects. However, when the eligible costs of a school facilities project are $500,000 or less, the EDA may authorize the district to undertake the project on its own and enter into a grant agreement with the district for the state's share of the financing.
Copyright © 1998 New Jersey School Board Association. All rights reserved.