Feb 25 2013

Superintendent Clarifies School District Modernization Program

How can $3 to $5 million in capital dollars be spent? 

On February 25, Piedmont Unified School District Superintendent Constance Hubbard responded to questions from PCA regarding available capital funds and their use through the District Modernization Program.  The PCA statements and questions are in black print and the responses by the Superintendent are in blue print.

“Various questions have arisen regarding the DISTRICT MODERNIZATION PROGRAM.

Please verify if the statements below are correct and provide explanations to the questions. 

1.   The “new” $3 million to 5 million funding from the State is a reimbursement for money previously expended to complete the PUSD Seismic Safety BondProgram.

Yes.  Just as the Seismic Safety Bond Program (SSBP) was getting underway, the State budget crisis slowed the payment of State seismic safety and school modernization funds to local school districts, including PUSD.  As a result, although PUSD was eligible to receive these State matching funds for SSBP projects, much of the SSBP work was completed before the State funding was received.   Please note that this money is not “new” — the State simply delayed payment of funds that were part of the SSBP. And note that the funds remain because the SSBP was completed on time and in budget so did not require the use of all of the Modernization funds from the State.  

2.  There is no requirement for additional/new debt obligation or expenditure of matching funds from the PUSD to accept the State funding in the amount of  $3 million to 5 million (i.e. the “new” money represents a simple “grant” with no repayment required now or in the future).

  • If repayment (or other obligation) is required, what are the terms?
  • If repayment is required, would Piedmont voter approval be needed?
Correct.  PUSD used revenue from the school seismic safety bond (approved by Piedmont voters in 2006) to qualify for this State matching funding.  No further local investment is needed to “match” this State funding.  As all the SSBP projects have been completed, there is no obligation to repay or return these funds to the State.  

3.  Projects, such as technology upgrades or improvements to the Allan Harvey Theater can be funded with the “new” funds.

  • What restrictions exist on expending the $3-5 million?
  • What if any funding sources beyond the $3-5 million have been identified?  If so, please list any amounts, restrictions, and repayment terms?  Would voter approval be required?
 Correct.  PUSD may use this money for life/safety, modernization and accessibility improvements to school facilities.   There are no other restrictions on use.  At this time, no additional funding sources have been identified, although there have been informal discussions about using privately-raised funds to augment modernization work at each of the school sites.  Because there are still “matching” funds eligibility for PHS, private funds used to improve Alan Harvey Theater may be leveraged for additional State funds in the future.  It would require that the State pass a new school facilities bond as part of a general election so is at least two years away. At this time, there is no discussion of another District school facilities bond or other measure that requires voter approval. 

4.  If the “new” money is spent on paying down PUSD bonded indebtedness, the reduction in debt would have a very small impact on taxpayers.

  • By what amount would existing taxpayer bond assessments be reduced (now or in the future) if the money were used to reduce PUSD bond debt?
  • What will the taxpayer bond assessments be in the future if no money is used to pay down debt?
  • Indicate the projected amount of all assessments (per $100,000 of value) each year for the life of all existing school bonds – e.g. through 2040.
Please refer to the materials  presented by Ruth Alahydoian, Vice President of Kelling, Northcross and Nobriga, at the January 23, 2013 Board of Education meeting concerning possible use of the remaining State funds to reduce local bond debt as part of the BAN replacements with bonds as required to be done by 2015.  These materials are on the PUSD website. Ruth addressed a variety of scenarios, each of which has its own variables and assumptions for BANS that includes debt reduction.

5.  PUSD has no intention or ability to increase bonded indebtedness at this time, as this would require voter approval.

Any additional bond indebtedness would require voter approval. As noted above, at this time, there is no discussion of another school facilities bond or other measure that requires voter approval.

6.  Allocation decisions on the “new” funds will follow public input, verified cost estimates, prioritization of projects, and funding availability.

  • What specific public input is envisioned?
Since October 2012, the Board of Education has heard several presentations about possible uses of the remaining SSBP money, including (but not limited to) reduction of bond debt, improvement of Alan Harvey Theatre, improvement of District-wide technology infrastructure, replacement of roofs and HVAC (heating, ventillation, air conditioning and cooling) equipment, and repair of flood damage.  Presentations on garden/playground projects are scheduled for March 13, 2013 and the preliminary design with cost estimates for Alan harvey Theater is scheduled for the Board meeting of March 27, 2013. All decisions about use of the money have been and will be made by the Board following public comment, and will be based on the process used throughout the SSBP of developing detailed budgets, time lines and cost estimates.”
The Piedmont Civic Association appreciates the prompt response by the the Superintendent.

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