Sunset review of the school facilities board

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              ARIZONA STATE SENATE
RESEARCH STAFF
Senator Robert Blendu, Cochair
Representative John Nelson, Cochair
DAWN NAZARY
LEGISLATIVE RESEARCH ANALYST
EDUCATION K- 12 COMMITTEE
DATE: November 1,2007 Telephone: ( 602) 926- 3 17 1
Facsimile: ( 602) 926- 3833
SUBJECT: Sunset Review of the School Facilities Board
Attached is the final report of the sunset review of the School Facilities Board, which was
conducted by the Senate Education K- 12 and House of Representatives Education ( IS- 1 2) Committee of
Reference.
Pursuant to Title 41, Chapter 27, Arizona Revised Statutes, the committee of Reference,
after conducting a sunset review on September 26,2007, recommends that the School Facilities
Board be continued for two years.
This report has been distributed to the following individuals and agencies:
Governor of the State of Arizona
The Honorable Janet Napolitano
President of the Senate Speaker of the, House of Re~ resentatives .
Senator Tim Bee Representative Jim Weiers
Senate Members House Members
Senator Karen Johnson, Cochair Representative Andrew Tobin, Cochair
Senator Ron Gould Representative Doug Clark
Senator Linda Gray Representative Sam Crump
Senator Leah Landrurn Taylor Representative David Lujan
Senator Victor Soltero Representative Jackie Thrasher
School Facilities Board
Arizona State Library, Archives & Public Records
Senate Republican Staff
Senate Democratic Staff
Senate Research Staff
House Majority Staff
House Democratic Staff
House Majority Research Staff
Senate Education K- 12 and
House Education ( K- 12) Committee of Reference
Committee of Reference Report
Background
Pursuant to 8 41- 2953, Arizona Revised Statutes, the Joint Legislative Audit Committee
( JLAC) assigned the sunset review of the School Facilities Board to the Arizona Auditor General.
In 1994, Arizona's system of school capital finance was declared unconstitutional by a Court
decision in Roosevelt v. Bishop because of a failure to conform to the state Constitution's " general and
uniform" clause. The Court opined that the system, which allowed school districts to rely heavily on
secondary property, which is driven by the property wealth, created an unequalized system and funding
disparities between school districts. On July 9, 1998, during a special session, legislation was passed
reforming the way traditional K- 12 public schools ( not including charter schools) are constructed in
Arizona. This legislation called Students Fair and Immediate Resources for Students Today, commonly
known as Students FIRST, established the School Facilities Board ( SFB) to administer the Building
Renewal, the Deficiencies Correction and the New School Facilities program to provide capital funding
for K- 12 schools.
Pursuant to A. R. S. § 15- 2001, the ten- member board consists of nine gubernatorial
appointments who serve four- year terms and the Superintendent of Public Instruction or a designee.
The nine appointed members include a school district governing board representative, a taxpayer
representative, a school construction representative, a public school facilities manager, an architect, an
engineer, a classroom teacher, a demographer and a private business representative. The Superintendent
of Public Instruction or the Superintendent's designee serves as an advisory nonvoting member.
Budget
According to the Joint Legislative Budget Committee's ( JLBC) FY 2007- 2008 Appropriations
Report, the SFBYFs Y 2007- 2008 appropriated staff consists of 20.0 full- time equivalent positions and
appropriated state General Fund budget level is set at $ 532,695,100, as detailed as follows:
Administration $ 1,944,400
New Construction $ 370,000,000
Debt Service $ 71,967,200
Building Renewal $ 86,283,500
Energy Pilot Program $ 2,500,000
Committee Sunset Review Procedures
The Committee of Reference held one public meeting on Wednesday, September 26,2007, to
review the audit report prepared by the Auditor General and the additional four sunset factors prepared
by the SFB, as required by A. R. S. 8 41- 2954, subsection E, and to receive public testimony. The
Committee of Reference received testimony from the Executive Director of the SFB.
Committee of Reference Recommendations
The Committee of Reference recommends that the School Facilities Board be continued for
two years.
Sunset Report Requirements Pursuant to A. R. S. 5 41- 2954
I. Identify the problem or the needs that the agency is intended to address.
In July 1994, the Arizona State Supreme Court held in Roosevelt v. Bishop that the state's statutory
scheme for financing public education violated the Arizona Constitution. Article XI, $ 1 of the
Arizona Constitution requires that the Legislature enact laws that provide for the establishment and
maintenance of a general and uniform public education.
On July 9, 1998, the four- year struggle to create a new capital finance system ended when the
Legislature passed and Governor Hull approved S. B. 1 101 ( Laws 1998, 5th Special Session, Ch. l),
commonly known as Students FIRST. Students FIRST responds directly to guidance provided by
the Supreme Court which recognized that the state's constitutional obligation is limited to funding a
public school system to a prescribed level of adequacy. " The concepts of statewide equalization and
local option to go above and beyond the standards are irreconcilable unless the legislature
establishes standards for adequate capital facilities." Students FIRST responds to the constitutional
requirement by setting adequacy standards for school buildings and by creating the SFB.
Once adequacy standards were established, the Legislature had to ensure that districts have
sufficient funding to meet the standards. The financing system had to provide funds to: 1) bring
existing facilities up to an adequate standard; 2) construct new and adequate facilities for growing
districts; and 3) maintain all capital facilities at the adequacy level. To accomplish this, Students
FIRST established a Deficiencies Correction Fund, New School Facilities Fund and Building
Renewal Fund.
11. State to the extent practicable, in quantitative and qualitative terms, the objectives of the
agency and its anticipated accomplishments.
In 1998, the SFB was given the responsibility of implementing the Students FIRST law. This was
viewed by some as a near impossible task, as the program incorporated deficiencies correction,
preventivelmajor maintenance and new school construction, for all public schools in the State of
Arizona. Students FIRST has not been without shortcomings, as it is a program that has never been
done elsewhere. In a way, the SFB built the first airplane while flying it, as the SFB had to create the
model while implementing the program. Given that challenge, there is a lot of which to be proud.
Deficiency Corrections
In the deficiencies correction project, the SFB first established the minimum school facility
guidelines, and then assessed all 1,300 of the state's public schools ( over 8,000 buildings) to
identify building systems and equipment that were deficient.
By June 30,2006, there were 9,002 deficiency projects corrected throughout the state at a cost of
$ 1.3 billion. The majority of these involved roofing, HVAC, electrical, fire alarms and replacement
space. All of the projects have made significant strides in improving our state's school facilities.
The program has had an especially great impact on the rural districts and the low wealth urban
districts that were unable to afford the costs associated with school repair on their own. In addition,
the deficiency program timing was ideal from a cost standpoint, as deficiency corrections work
employed thousands of our state citizens during a time when Arizona was in an economic downturn.
Competition and pricing also benefited significantly from the downturn, allowing the state to
receive maximum value for the dollars spent.
New School Facilities
As of June 7, 2007, the SFB has awarded 328 new school projects with a total value of
approximately $ 2.78 billion. Of the 328 projects, 235 have been completed, 29 are under
construction and 64 are board approved with some in design.
As of FY 2006- 2007, the SFB has purchased 2,006 acres of land valued at $ 155.2 million and has
received 1,765 acres in donations and paid a 20 percent donation factor of $ 38.1 million but the
appraised value of the donated land was approximately $ 1 90.4 million, saving the state $ 152.3
million in land acquisition costs.
Without Students' FIRST, Arizona would not have been able to produce the educational
infrastructure mandated by the growing population. The varying levels of property wealth and
district bonding limitations of the old system set artificial limits on the amount of infrastructure that
the system could provide.
Building Renewal
The SFB distributes building renewal based on the district's successful completion of building
renewal plans and prior year expenditures reports. The building renewal appropriated supports 1 10.6
million square feet, 10,336 buildings and 1,425 schools that have a replacement value of $ 1 1.8
billion. Each year the state adds about 3 million square feet to the school inventory. There is no
dedicated funding for preventative maintenance but districts are allowed to spend up to 8 percent of
their building renewal dollars on preventative maintenance. Districts maintain preventative
maintenance plans and currently complete approximately 40 percent of recommended preventative
maintenance.
Last year the SFB developed a web- enabled building renewal planning application that was
upgraded this year to include prior year building renewal expenditures and renovations reporting.
The automation will allow the SFB to provide better management data to decision makers about the
type of building renewal projects ( e. g. HVAC or plumbing), identify how districts are managing
their plans by comparing prior year plans with expenditures, identify the amount of funds sitting in'
district ending balances that are being saved for future projects, etc.
1II. Identify any other agencies having similar, conflicting or duplicative objectives, and an
explanation of the manner in which the agency avoids duplication or conflict with other such
agencies.
There are no other agencies that have conflicting or duplicative objectives but the Arizona
Department of Administration ( ADOA) General Services Division has some similar processes.
Building and Planning Services
Building inspections - Provide inspections of all buildings in the ADOA building system and state-funded
projects under construction.
Building renewal - Review annual building renewal project requests. Allocate annual appropriation
to agencies for specific projects and allocate funds for emergency requests throughout the year.
Capital Improvement - Prepare annual ADOA Building System Capital Improvement Plan, review
agency capital requests and submit recommendations to the Governor's Office of Strategic Planning
and Budgeting and the Joint Legislative Budget Committee.
Construction Review - Review and approve all state- funded construction documents, including
contracts, plans, specifications and payment applications.
Construction Services
Provides a full service project management team to coordinate things like the planning, designing,
construction and environmental services for public funded projects ( e. g., Department of Health
Services State Laboratory, Southern Arizona Veteran's Memorial Cemetery Administration
Building, Arizona State Prison Complex - Lewis).
IV. Assess the consequences of eliminating the agency or of consolidating it with another agency.
Given the nature of the Supreme Court decision, the functions of the agency would need to be
carried out either by the agency in its current form or be consolidated with another agency to carry
out the existing mission. The elimination of the agency or its functions would take the state back to
where it was prior to the Supreme Court decision with disparities in school facilities given the vast
differences in property wealth across the state and the impacts on local taxpayers.
Attachments:
1. Committee Agenda Notice
2. Committee of Reference Meeting Minutes
3. Auditor General Presentation Handouts
4. Chairman's Letter requesting additional sunset factors
5. SFB Response ( additional sunset factors)
COMMITTEE OF
REFERENCE
AGENDA NOTICE
REVISED REVISED REVISED
Interim agendas can be obtained via the Internet at http: lhmrvw. azleg. state. az. usllnterimCommittees. asp
ARIZONA STATE LEGISLATURE
INTERIM MEETING NOTICE
OPEN TO THE PUBLIC
SENATE K- 12 EDUCATION COMMITTEE AND HOUSE K- 12 EDUCATION COMMITTEE
COMMITTEE OF REFERENCE
Date: Wednesday, September 26,2007
Time: 9 A. M.
Place: SHR 1
AGENDA
1. Call to Order
2. School District Performance Audits of Amphitheater Unified School District, Bisbee Unified School District
and Alpine Elementary School District
a. Presentation by Auditor General
b. Response by the School District
c. Public Testimony
d. Recommendations by the Committee of Reference
3. School Facilities Board Sunset Audit
a. Presentation by Auditor General
b. Response by the School Facilities Board
c. Public Testimony
d. Recommendations by the Committee of Reference ,, 4. School District Performance Audits of Litchfield Elementary School District, Avondale Elementary School
District, Deer Valley Unified School District and Union Elementary School District
a. Presentation by Auditor General
b. Response by the School District
c. Public Testimony
d. Recommendations by the Committee of Reference
5. Adjourn
Members:
Senator Karen Johnson, Co- Chair Representative Andrew Tobin, Co- Chair
Senator Ron Gould Representative Doug Clark
Senator Linda Gray Representative Sam Crump
Senator Leah Landrum Taylor Representative David Lujan
Senator Victor Soitero Representative Jackie Thrasher
Persons with a disability may request a reasonable accommodation such as'a sign language interpreter, by contacting the
Senate Secretary's Office: ( 602) 926- 4231 ( voice). Requests should be made as early as possible to allow time to arrange the accommodation.
Page 1 of 1
COMMITTEE OF
REFERENCE
MEETING MINUTES
ARIZONA STATE LEGISLATURE
SENATE K- 12 EDUCATION COMMITTEE
AND HOUSE K- 12 EDUCATION COMMITTEE
COMMITTEE OF REFERENCE
Minutes of the Meeting
Wednesday, September 26,2007
9: 00 a. m., Senate Hearing Room 1
Members Present:
Senator Karen Johnson, Co- Chair
Senator Ron Gould
Senator Linda Gray
Senator Victor Soltero
Representative Andrew Tobin, Co- Chair
Representative Doug Clark
Representative Sam Crump
Representative David Lujan
Representative Jackie Thrasher
Members Excused:
Senator Leah Landrum Taylor
Staff:
Dawn Nazary, Senate Education Committee Analyst
Brian Lockery, House of Representatives Education Committee Analyst
Ingrid Garvey, House of Representatives Education Committee Assistant Analyst
Co- Chairman Tobin called the meeting to order at 9: 03 a. m. and attendance was taken.
PRESENTATIONS
The Auditor General's Office on School District Performance Audits
Sharron Walker, Director, Division of School Audits, Auditor General's office,
distributed the following handouts:
Amphitheater Unified School District Performance Audit ( Attachment A)
Bisbee Unified School District Performance Audit ( Attachment B)
Alpine Elementary School District Performance Audit ( Attachment C)
Litchfield Elementary School District Performance Audit ( Attachment D)
Avondale Elementary School District Performance Audit ( Attachment E)
Deer Valley Unified School District Performance Audit ( Attachment F)
Union Elementary School District Performance Audit ( Attachment G) /
Copy of Powerpoint presentation K- 12 Education Committee of Reference
September 26,2007 School District Performance Audits ( Attachment H)
Ms. Walker gave a brief overview of the audit process. In November 2000, voters
approved Proposition 301, which increases state sales tax by 6110th~ of 1% for 20
years to fund educational programs. The school districts can only use this money for
specified uses and the proposition requires the Auditor General's Office to monitor the
dollars spent in the classroom and conduct performance audits on randomly selected
school districts. Also, in the 2006 Legislative Session House Bill 2064 added various
audits of the state's English Language Learner ( ELL) Program. She explained that the
most recent fiscal year data is compared to the National average, the State average and
a pool of similar school districts. The performance audits focus primarily on four
operational areas: plant operations, administration, food service, transportation. Ms.
Walker distributed a handout " Implementation Status of DSA Reports" ( Attachment I)
and stated that there is a statutory requirement to follow up on the school districts
implementation of the audit recommendations.
Ann Orrico, Manager, Division of School Audits, Auditor General's Ofice,
explained the findings and recommendations of the Amphitheater Unified School District
audit as shown in the Powerpoint presentation Attachment H.
Vicki Balentine, Superintendent, Amphitheater Unified School District, explained
the progress, as outlined in the handout " Amphitheater Public Schools" ( Attachment J),
that the district is making on the recommendations from the performance audit.
Senator Linda Gray questioned literacy levels of ELL students graduating from the
Amphitheater Schools.
Ms. Balentine explained that not all ELL students and Special Ed students reach
Adequate Yearly Progress ( AYP) ( National Assessment of Education).
Representative Thrasher asked for more information about the intergovernmental
agreement with Pima County.
Ms. Balentine explained that the intergovernmental agreement is in reference to security
and will save approximately $ 20,000. The staffing levels will continue to be monitored
but not at the sacrifice of school safety. She stated that parts of the district are in high
crime areas and rural areas.
Scott Little, Chief Financial Officer, Amphitheater Unified School District, further
' explained the agreement with the Pima County Sheriffs Office. He also explained that a
portion of plant costs is due to the age of many of the buildings in the District.
Senator Soltero stated that student's and parents' sense of safety concerning schools
has a large impact on how that student succeeds in that school.
Senator Gray asked how many state supplied resourcelprobation officers the District
has.
SENATE K- 12 EDUCATION COMMITTEE AND
HOUSE K- 12 EDUCATION COMMlrrEE
COMMtTTEE OF REFERENCE
September 26,2007
Page 2
Ms. Balentine stated that there is a grant through Oro Valley for two resource officers
that are shared between two high schools. She said the City of Tucson has reallocated
their resource officer staff this year to focus at the elementary and middle school levels
only. She stated that the District has had to hire off- duty police officers to provide that
service.
Ross Ehrick, Manager, Division of School Audits, Auditor General's Office,
explained the findings and recommendations of the Bisbee Unif~ dS chool District audit
as shown in the Powerpoint presentation Attachment H.
Paul McDonald, Superintendent, Bisbee Unified School District, explained what
progress has been made in implementing the Auditor General's recommendations. He
explained that the taxpayers in this district are willing to support the district as long as
no schools are closed. An override is expected this year. He explained that schools
sharing administration have shown to lower performance levels in both schools. The
community is firm that all four facilities stay open due to the fact that the school facilities
are the only facilities in the area.
Senator Gray questioned the teachers being paid less in this school district and how the
district is able to keep teachers. She also asked about enrollment fluctuations.
Mr. McDonald stated that it must be the weather and that the district has been able to
keep all positions filled with teachers from all across the country without the salary
coming into question. He explained that the enrollment stays in the area of 1,000
students.
Senator Soltero asked what percent of teachers have been employed a while and what
percent are new.
Mr. McDonald stated that approximately 75% of the teachers grew up in the area and
came back. He said that about 25% are transplants. He stated that specialists are not
on staff and are paid under support staff which adds to administrative costs.
Representative Tobin asked about storage of Bisbee museum antiques.
Mr. McDonald stated that the storage of various town items was just allowed and that
the Auditor General's recommendations authorized all of the items be evicted. He
stated that some of the storage space is now being rented out to various groups for
activities or storage.
Representative Crump questioned meals per student dollars being higher than
comparable districts.
Mr. McDonald stated that since the audit, the district is better able to accurately
calculate cost per student. He also stated that suppliers charge a fuel surcharge for the
distance to deliver to the district.
SENATE K- 12 EDUCATION COMMITTEE AND
HOUSE K- 12 EDUCATION COMMITTEE
COMMITTEE OF REFERENCE
September 26,2007
Page 3
Representative Tobin asked if distance learning technology has been considered.
Mr. McDonald stated that nothing in that field has been considered to this point.
Ann Orrico, Manager, Division of School Audits, Auditor General's Office,
explained the findings and recommendations of the Alpine Elementary School District
audit as shown in the Powerpoint presentation Attachment H.
Representative Tobin questioned reimbursing parents for two round trips to take their
children to school.
Ms. Orrico stated that monthly payments were approximately $ 200 to $ 300 per month
per student for transportation. She stated that comparable districts do not pay parents
to transport their children.
Senator Gray questioned the district filing any 1099 forms for the payments to parents.
Ms. Orrico stated that question was not asked in the audit.
Michael Cox, Administrator, Alpine Elementary School District, distributed a letter
to Michelle Corse ( Attachment K) which shows that Alpine School District was following
a formula received from Arizona Department of Education ( ADE). The Auditor
General's Office and ADE are conferring to decide on the correct formula and Alpine
School District will follow the formula it is instructed to use. Mr. Cox distributed a
handout " Alpine Elementary School District 6- Month Follow- Up Report To Performance
Audit Report Issued October 2006" ( Attachment L) and explained what progress has
been made in implementing the Auditor General's recommendations.
Senator Johnson questioned how parent transportation is organized and reimbursed.
She asked why Alpine Elementary School District reimburses transportation costs when
other schools do not.
Mr. Cox stated that some parents carpool and now only those who would qualify for free
and reduced lunches are being reimbursed. Alpine Elementary School District was told
that it is legal.
Senator Gray stated, in 2005 the Alpine Elementary District was given $ 355,000 in
transportation money, but spent less than $ 64,000. She asked where the rest of the
money was spent. She asked if the $ 125,000 that was charged over was paid back.
Linda Fite, Office Manager, Alpine Elementary School District, explained that the
monies were spent on the new building, grounds, furniture, and equipment.
Senator Gray questioned how transportation monies could be used to build a facility.
Ms. Fite explained that during budgeting when you find your revenue control limit you
can spread it between M& O and Outlay.
SENATE K- 12 EDUCATION COMMITTEE AND
HOUSE K- 12 EDUCATION COMMITTEE
COMMITTEE OF REFERENCE
September 26,20031
Page 4
Senator Gray stated that she feels there is a flaw in the law in which it is said " may
provide transportationn. She said she sees this as a scheme to be able to get additional
revenue to put in other areas. She asked if reimbursement to parents for transportation
is considered income for those parents and if the district filed 1099 forms. She also
asked what the highest amount was paid to a parent to drive their children to and from
school.
Ms. Fite stated that no the District did not file any 1099 forms. She said that the largest
payment she believes was approximately $ 5,000 for the year.
Senator Gould asked if the children bring their lunch to school.
Mr. Cox stated that was correct.
Senator Gray questioned whether the $ 125,000 in excess revenue the Alpine
Elementary District received was paid back.
Ms. Fite stated that the District did not pay that money back because they were working
under the guidance of ADE and did not see the money as excess. Ms. Fite stated that
the District is willing to do whatever is necessary to come into compliance.
Representative Tobin asked if the Auditor General had any comments about Senator
Gray's concerns.
Ms. Orrico stated that AD€ instructed Alpine School District to report transportation
costs in the way they did and has not asked for reimbursement. She stated that the
Auditor General's Office and ADE are working together to clarify the situation. Ms.
Orrico explained that the transportation excess monies can be spread to other areas.
She said that because ADE has not agreed with the Auditor General's O f f ~ eon proper
reporting they have not asked for the money to be returned.
Senator Gray asked what the Governing Board has decided to do on the subject.
Mr. Cox stated that the Governing Board has decided to continue as it has been doing.
Senator Gray questioned what the excess money would be spent on in the future.
Ms. Fite stated that since the audit, the number of reimbursements paid out has
decreased and that the money is now being put back into the classroom. She explained
that the number of teachers has also been increased to a ratio of one teacher to nine
students.
Representative Clark made a statement about being proud and wanting to commend
the product coming out of the Alpine Elementary District, however, the District needs to
follow the letter of the rules and not the spirit of the rules. He stated that the system
needs to be above reproach.
SENATE K- 12 EDUCATION COMMITTEE AND
HOUSE K- 12 EDUCATION COMMITTEE
COMMITTEE OF REFERENCE
September 26,2007
Page 5
Co- Chairman Tobin recessed the Committee at 1051 a. m. for a short break.
Co- Chairman Tobin reconvened the Committee at 1057 a. m.
The Auditor General's Performance Audit of the School Facilities Board
Shan Hays, Performance Audit Manager, Auditor General's Office, explained some
background, the findings and recommendations of the School Facilities Board audit as
shown in a copy of the power point presentation " School Facilities Board Performance
Audit August 2007" ( Attachment M).
Representative Lujan questioned the recommendation for the Legislature to change the
building renewal formula to make the funding more predictable.
Ms. Hays explained that the Legislature has not funded according to the formula except
for one year. The districts have suggested it would be easier if there was a way to
insure how much money would be received.
John Arnold, Executive Director, School Facilities Board ( SFB), explained that one
of the most important things done by the Board is to raise awareness of facilities. He
explained that the formula for inflation is retroactive, which means it works for facilities
being built now but not appropriate for facility grants for future projects.
Senator Johnson questioned the stabilization of inflation costs.
Mr. Arnold said that yes costs have stabilized for the metro area, but in rural areas a
premium is still being paid due to travel costs. He explained that districts were losing up
to 30% of their buying power between the date the project was awarded and the date
they started construction. He said that the Board established the Minimum Existing
Standard and then recognized the need to cap certain areas of construction.
Representative Tobin questioned the Board's statutory authority to alter the formula.
Mr. Arnold said that the statute is not entirely clear on this issue. The statute dictates
that the School Facilities Board establish a standard. The Board has discussed this
issue with the Attorney General's Office, the Joint Legislative Budget Committee and
the Auditor General's Office. The Attorney General's informal decision is that it is within
the Board's statutory authority.
Senator Gray questioned how many gyms a school can have.
Mr. Arnold stated that the districts can outlay their money however they see fit. The
Board said that it will only fund one gym floor, if they build more than one gym they
need to get the funding locally.
SENATE K- 12 EDUCATION COMMITTEE AND
HOUSE K- 12 EDUCATION COMMITTEE
COMMITTEE OF REFERENCE
September 26,2007
Page 6
Representative Lujan stated that for the first four years he was the Assistant Attorney
General for the School Facilities Board. He said that he agrees the Board is
responsible to provide any extra monies needed to build a school to the minimum
standard.
Mr. Arnold stated that the School Facilities Board clarified minimum guidelines. He said
that programs have been put in to effect to improve oversight and reporting. He stated
that in some places statutes are vague enough that interpretations will have to be made
and agreed upon.
Senator Gray questioned an audit regarding doors, where the SFB is criticizing the
district but the SFB would have had to approve the building. She asked if the industry
standards for energy saving were guidelines or standards that must be met.
Mr. Arnold stated that state law requires that school districts meet the current IECC
( International Energy Conservation Code) standards and that the SFB enforces those
standards on all schools. He said the statute gives the districts full design authority.
Senator Gray questioned the audit done on the Union School District that lists the doors
opening directly outside is an energy wasting design.
Mr. Arnold stated that there has been much discussion about the subject, but that
design is allowed under the state law.
Senator Johnson questioned building a school with a capacity of 100 when only 40
children attend that school.
Mr. Arnold stated that particular school building was approved to replace a building that
had exceeded its usefulness. He stated that the school has asked for more space
because they think they are going to grow.
Senator Soltero questioned using two doors then a space and two doors like in
restaurants.
Mr. Arnold stated that the design is a local decision but that most do not do that
because it costs space.
Senator Johnson questioned a final decision on the Auditor General's finding
playground equipment, landscaping, public address systems and such being
inappropriate expenditures.
Mr. Arnold stated that the statute says that the SFB will review the findings and report to
the Department of Education, but the SF6 does not yet have a system to review the
issues. He takes full responsibility for not getting that set up. He said the Auditor
General's Office is helping to set up standards for this purpose.
SENATE K- 12 EDUCATION COMMITTEE AND
HOUSE K- I2 EDUCATION COMMITTEE
COMMITTEE OF REFERENCE
September 26,2007
Page 7
Representative Tobin questioned controls not being applied, relying too much on
outside consultants and the state ownership of a database.
Mr. Arnold stated that the SFB has 15 employees and is the gth largest expender in the
state, spending almost $ 500 million a year. He said that they do not have dedicated
technology staff. He said that the Auditor General has a concern that any information or
technology would not be owned by the State. He explained that this would be corrected
when the new contract comes due. He said that the SFB needs to formalize and
improve their controls.
Senator Johnson questioned Mr. Arnold's opinion on prototype schools and the
opportunity to save money with them.
Mr. Arnold stated that he is a supporter of using prototype schools, but again that
authority rests with the school districts. He said that he does not think they will
completely eliminate design fees.
Senator Gould stated that as a contractor a standard floor plan would save money and
increase the bidding process.
RECOMMENDATIONS BY THE COMMITTEE OF REFERENCE
Senator Johnson moved that the Senate K- 12 Education and the
House K- I2 Education Committee of Reference recommend that the
School Facilities Board be continued for three years until June 30,
201 1.
Senator Gould made a substitute motion that the Senate K- 12
Education and the House K- 12 Education Committee of Reference
recommend that the School Facilities Board be continued for two
years until June 30,2010.
Senator Gray asked if the Auditor General would do another audit in two years.
Debbie Davenport, Auditor General, stated that it is the Joint Legislative Audit
Committee who determines whether the Auditor General's Office or a Committee of
Reference would hear the next sunset.
Senator Soltero stated that he supports continuing the Board for three or more years.
Senator Gould stated that the logic behind his substitute motion is that the Legislators
all serve two- year terms. He said that due to the amount of money, it deserves the
Legislature's attention and continuous review.
SENATE K- I2 EDUCATION COMMITTEE AND
HOUSE K- 12 EDUCATION COMMITTEE
COMMITTEE OF REFERENCE
September 26,2007
Page 8
Representative Tobin requested Dawn Nazary to restate the
substitute motion. The motion PASSED by roll call vote of 5- 4- 1
( Attachment 1).
Co- Chairman Tobin recessed the meeting for one- half an hour at 12: 05 p. m.
Co- Chairman Tobin reconvened the meeting at 12: 44 p. m.
The Auditor General's Office on School District Performance Audits
Ann Orrico, Manager, Division of School Audits, Auditor General's Office,
distributed a copy of her Powerpoint presentation " Education Committee of Reference
September 26, 2007 School District Performance Auditsn ( Attachment N) and explained
the findings and recommendations of the Union Elementary School District audit.
Representative Tobin questioned increases in administration costs despite previous
overspending.
Ms. Orrico stated that salary and benefit costs were going to be increasing in fiscal year
2007 due to pay increases for administrators.
Representative Clark questioned if they are contracts that are already in place or new
contracts that have been written.
Ms. Orrico stated that the pay increases are contracts put in place at the end of fiscal
year 2006.
Peter Davis, Receiver for Union Elementary School District, stated that as a
receiver he has to file a 120 day report on the financial situation and a plan for
restructuring the district. He said that he just took over in June and the report is not yet
finished, but should be out in approximately three weeks.
Bill Christensen, Superintendent, Tolleson Elementary School District, explained
that through an inter- governmental agreement ( IGA) he has been retained as a
Superintendent for Union Elementary School District as well as providing business
services, transportation and various other services. He said that with the audit they are
better able to quickly address the main problems. He stated that progress is being
made but there is still a great deal of work to be done. He stated that for transportation
they have consolidated bus routes to reduce cost. He said that the administrative costs
have been reduced by three administrators that have resigned. He stated that plant
operations and maintenance has been addressed, in that there is no longer overtime
and the employees are now fiscal year employees instead of 12- month.
Representative Tobin asked how a receivership works.
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Mr. Davis explained that there are no preset models for a receivership, but it is a work in
progress involving many agencies. He explained that while the 120 day report is being
put together action is being taken to eliminate costs. He said that the receiver takes
control of the Governing Board and gets advice from neighboring districts.
Representative Tobin questioned the district failing academically and asked what goals
are being set to get the school on track academically.
Mr. Christensen explained that an improvement plan has been designed. He explained
that each school in the district operated very independently of each other. They had
different texts, different evaluations, different curriculums and different models. The
curriculums were blended together, a staff development calendar was put in place and
teacher committees were brought together to concentrate on making academic
improvement. He stated that the academic side is of more concern than the financial
side.
Representative Tobin asked where the parents are in this situation.
Mr. Christensen explained that they are split down the middle. Many are very
supportive, but a lot of parents are not supportive due to lack of information regarding
the situation.
Representative Tobin asked Mr. Christensen for his opinion on how the state should
track superintendents. He asked what can be done to Superintendents that put districts
in poor financial and academic positions.
Mr. Christensen stressed that early intervention is necessary.
Senator Gray questioned what should be done to superintendents that create these
situations.
Mr. Christensen said he would support removing the superintendents and possibly
sanctions to prevent them from doing this again.
Mr. Davis said one option that has been reviewed are breaches of fiduciary duty by
Governing Board members, Superintendents, and other fiduciaries of the districts and
holding them accountable. He said he had looked into the receiver bringing a lawsuit or
otherwise against those individuals for their gross negligence and for their breaches of
the confidences of the taxpayers of that district.
Senator Gray questioned the custodian that was paid over $ 44,000 being a relative of
either a Board member or administrator.
Mr. Davis stated that situation is currently being investigated along with several others.
He said that across the board every position in the district is grossly over paid. Many of
the administrators gave themselves massive raises after a year that they over spent the
SENATE K- 12 EDUCATION COMMITTEE AND
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budget by $ 1 million and during a year that they were overspending the budget by $ 1.2
million which was approximately 20% of their budget.
Senator Gray asked if this fraud is at the level that charges could be brought against
individuals at the school district.
Mr. Davis stated that he has contacted the Attorney General about some of the things
that have been found. He said the intent is to submit his report to the Attorney General
so that further investigation can be done.
Senator Gray asked about unification with another school district.
Mr. Christensen stated that there are many areas with problems with unification or
consolidation. One problem is tax rates and the financial impact on the people of the
district. He stated that consolidation is basically what is happening currently.
Senator Johnson questioned if there is enough evidence at this point to bring charges.
Mr. Davis stated that is the job of the Attorney General's office. He said that the
receivership is involved civilly with this but not criminally. He said the school does not
have the resources to perform a criminal investigation.
Mr. Christensen stressed the sustainability of the school in the future.
Representative Crump questioned special needs transportation being so high and the
ethics and reliability in the program.
Mr. Davis stated that is the top problem discussed with the Attorney General's office.
Mr. Christensen stated that student transportation is an area of great alarm. He stated
that the contract was terminated in July. He said that there was no oversight of the
transportation program. That all transportation employees were put through training
and health screenings and a few employees were eliminated through that process.
Now the district is down to a core group of employees that are fully compliant with
standards.
Representative Crump asked staff to provide the general standards for a school bus.
Mike Quinlan, Manager, Division of School Audits, Auditor General's Office,
explained the findings and recommendations of the Avondale Elementary School
District audit as shown in the Powerpoint presentation Attachment N.
Dr. Catherine Stafford, Superintendent, Avondale Elementary School District,
explained that they had a wonderful audit. She stated that half of the recommendations
from the Auditor General's office have been implemented and the other half are king
implemented currently.
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Ross Ehrick, Manager, Division of School Audits, Auditor General's Office,
explained the findings and recommendations of the Deer Valley Unified School District
audit as shown in the PowerPoint presentation Attachment N. ,
Representative Crump questioned monies the Auditor said were supplanted, but the
District said they were not.
Mr. Ehrick stated that the records are incomplete so a definitive answer is unavailable.
He said the Auditor General's office has talked to the district about putting money back
into the 301 fund.
Jim Migliorino, Executive Director of Fiscal Services, Deer Valley Unified School
District, explained that four of the 12 recommendations from the audit have been
implemented, seven are in the process of being implemented and the district disagrees
with the Auditor General's recommendation about the supplanted money.
Representative Tobin questioned the issue of supplanting money.
Mr. Migliorino stated that part of the problem is the ability to account for the funds. He
said that they added teachers from the class reduction funds.
Mr. Ehrick stated that the district budgeted for eight additional staff, but they added 22
staff.
Mr. Migliorino stated that the district grew enough throughout the year so additional
teachers were needed.
Senator Gray questioned the satellite transportation facility.
Mr. Migliorino stated that the issue- is being studied and savings calculated.
Mike Quinlan, Manager, Division of School Audits, Auditor General's Office,
explained the findings, recommendations and follow- up of the Litchfield Elementary
School District audit as shown in the PowerPoint presentation Attachment N.
Senator Gray questioned the administrator who received $ 50,000 bonus money.
Mr. Quinlan stated that the district has now worked the bonuses into contracts and have
set up goals to earn the bonuses.
Dr. Julianne Lein, Superintendent, Litchfield Elementary School District, stated
that the district concurs with the audit findings and has implemented all of the
recommendations.
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,
There being no further business, the meeting was adjourned at 152 p. m.
Respectfully submitted,
Shelley once
Committee Secretary
( Tapes and attachments on file in the Secretary of the Senate's OfficelResource Center, Room 115.)
SENATE K- 12 EDUCATION COMMlrrEE AND
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SENATE K- 12 EDUCATION COMMITTEE AND HOUSE
K- 12 EDUCATION COMMITTEE COMMITTEE OF
REFERENCE
ARIZONA STATE LEGISLATURE
FORTY- EIGHTH LEGISLATURE - ROLL CALL VOTE
Recommendation: Substitute motion: The Senate K- 12 Education and
the House K- I2 Education Committee of Reference recommend that the
School Facilities Board be continued for two years until June 30, 2010
Senator Ron Gould
Senator Linda Gray
Senator Leah Landrum Taylor
Senator Victor Soltero
Representative Doug Clark
Representative David Lujan
I Representative Sam Crump
>(
l g I I I I
X
I I I I I
committee Secretary ,% I d!!~~ Date 9/ 26/ 07
Attachment 1
X
Representative Jackie Thrasher
Representative Andrew Tobin, Co-
Chair
Senator Karen Johnson, Co- Chair
September 2007
Y
x
1
X
K
X
x
AUDITOR GENERAL
PRESENTATION
HANDOUT
School Facilities Board
Performance Audit
August 2007
Overview
Background
5 Findings
- New school construction impacts on
General Fund
- Building renewal formula
- Improvements:
build~ ngr enewal overs~ ght
controls over payments
database controls
/
Background
Students FIRST Act established Board
Board duties: I - Set minimum adequacy guidelines for school
facilities
Guidelines cover 9 statutov areas
I - Administer 4 funds
Board duties: four funds
Deficiency Corrections
New School Facilities
Building Renewal
Emergency Deficiencies Correction
General Fund appropriations
F~ scayl ears 1999- 2007 ( millions)
Deficlencles Operations
correction $ 176 0
K~ ndergarten
projects $ 8 0
Bu~ ld~ ng
renewal
$ 606 8
School New school
construction construction
lease payments $ 1,247 8
$ 189 5

Description

Rating
TITLE	Sunset review of the school facilities board
CREATOR	Arizona. Legislature. Joint Legislative Audit Committee.
SUBJECT	School Buildings--Arizona--Report; Sunset reviews of government programs--Arizona;
Browse Topic	Government and politics
DESCRIPTION	43 pages (PDF version). File size: 2039.989 KB.
Language	English
Contributor	Arizona Senate Education K-12 and House of Representatives Education (K-12) Committee of Reference; Arizona School Facilities Board;
Publisher	Arizona. Legislature. Joint Legislative Audit Committee.
TYPE	Text
Material Collection	State Documents House Received Reports
Acquisition Note	Publication or link to publication sent to reports@lib.az.us
RIGHTS MANAGEMENT	Copyright to this resource is held by the creating agency and is provided here for educational purposes only. It may not be downloaded, reproduced or distributed in any format without written permission of the creating agency. Any attempt to circumvent the access controls placed on this file is a violation of United States and international copyright laws, and is subject to criminal prosecution.
DATE ORIGINAL	2007-11-01
Time Period	2000s (2000-2009)
ORIGINAL FORMAT	Paper
Source Identifier	LG 9.2:S 24
Location	269782813
DIGITAL IDENTIFIER	ASSRS_SFB_NOV_1_2007.pdf
DIGITAL FORMAT	PDF (Portable Document Format)
DIGITIZATION SPECIFICATIONS	Digitized into PDF form through scanning at the Records Management Division, Arizona State Library.
REPOSITORY	Arizona State Library. Archives and Public Records--Law and Research Library.
File Size	2039.989 KB
Full Text	ARIZONA STATE SENATE RESEARCH STAFF Senator Robert Blendu, Cochair Representative John Nelson, Cochair DAWN NAZARY LEGISLATIVE RESEARCH ANALYST EDUCATION K- 12 COMMITTEE DATE: November 1,2007 Telephone: ( 602) 926- 3 17 1 Facsimile: ( 602) 926- 3833 SUBJECT: Sunset Review of the School Facilities Board Attached is the final report of the sunset review of the School Facilities Board, which was conducted by the Senate Education K- 12 and House of Representatives Education ( IS- 1 2) Committee of Reference. Pursuant to Title 41, Chapter 27, Arizona Revised Statutes, the committee of Reference, after conducting a sunset review on September 26,2007, recommends that the School Facilities Board be continued for two years. This report has been distributed to the following individuals and agencies: Governor of the State of Arizona The Honorable Janet Napolitano President of the Senate Speaker of the, House of Re~ resentatives . Senator Tim Bee Representative Jim Weiers Senate Members House Members Senator Karen Johnson, Cochair Representative Andrew Tobin, Cochair Senator Ron Gould Representative Doug Clark Senator Linda Gray Representative Sam Crump Senator Leah Landrurn Taylor Representative David Lujan Senator Victor Soltero Representative Jackie Thrasher School Facilities Board Arizona State Library, Archives & Public Records Senate Republican Staff Senate Democratic Staff Senate Research Staff House Majority Staff House Democratic Staff House Majority Research Staff Senate Education K- 12 and House Education ( K- 12) Committee of Reference Committee of Reference Report Background Pursuant to 8 41- 2953, Arizona Revised Statutes, the Joint Legislative Audit Committee ( JLAC) assigned the sunset review of the School Facilities Board to the Arizona Auditor General. In 1994, Arizona's system of school capital finance was declared unconstitutional by a Court decision in Roosevelt v. Bishop because of a failure to conform to the state Constitution's " general and uniform" clause. The Court opined that the system, which allowed school districts to rely heavily on secondary property, which is driven by the property wealth, created an unequalized system and funding disparities between school districts. On July 9, 1998, during a special session, legislation was passed reforming the way traditional K- 12 public schools ( not including charter schools) are constructed in Arizona. This legislation called Students Fair and Immediate Resources for Students Today, commonly known as Students FIRST, established the School Facilities Board ( SFB) to administer the Building Renewal, the Deficiencies Correction and the New School Facilities program to provide capital funding for K- 12 schools. Pursuant to A. R. S. § 15- 2001, the ten- member board consists of nine gubernatorial appointments who serve four- year terms and the Superintendent of Public Instruction or a designee. The nine appointed members include a school district governing board representative, a taxpayer representative, a school construction representative, a public school facilities manager, an architect, an engineer, a classroom teacher, a demographer and a private business representative. The Superintendent of Public Instruction or the Superintendent's designee serves as an advisory nonvoting member. Budget According to the Joint Legislative Budget Committee's ( JLBC) FY 2007- 2008 Appropriations Report, the SFBYFs Y 2007- 2008 appropriated staff consists of 20.0 full- time equivalent positions and appropriated state General Fund budget level is set at $ 532,695,100, as detailed as follows: Administration $ 1,944,400 New Construction $ 370,000,000 Debt Service $ 71,967,200 Building Renewal $ 86,283,500 Energy Pilot Program $ 2,500,000 Committee Sunset Review Procedures The Committee of Reference held one public meeting on Wednesday, September 26,2007, to review the audit report prepared by the Auditor General and the additional four sunset factors prepared by the SFB, as required by A. R. S. 8 41- 2954, subsection E, and to receive public testimony. The Committee of Reference received testimony from the Executive Director of the SFB. Committee of Reference Recommendations The Committee of Reference recommends that the School Facilities Board be continued for two years. Sunset Report Requirements Pursuant to A. R. S. 5 41- 2954 I. Identify the problem or the needs that the agency is intended to address. In July 1994, the Arizona State Supreme Court held in Roosevelt v. Bishop that the state's statutory scheme for financing public education violated the Arizona Constitution. Article XI, $ 1 of the Arizona Constitution requires that the Legislature enact laws that provide for the establishment and maintenance of a general and uniform public education. On July 9, 1998, the four- year struggle to create a new capital finance system ended when the Legislature passed and Governor Hull approved S. B. 1 101 ( Laws 1998, 5th Special Session, Ch. l), commonly known as Students FIRST. Students FIRST responds directly to guidance provided by the Supreme Court which recognized that the state's constitutional obligation is limited to funding a public school system to a prescribed level of adequacy. " The concepts of statewide equalization and local option to go above and beyond the standards are irreconcilable unless the legislature establishes standards for adequate capital facilities." Students FIRST responds to the constitutional requirement by setting adequacy standards for school buildings and by creating the SFB. Once adequacy standards were established, the Legislature had to ensure that districts have sufficient funding to meet the standards. The financing system had to provide funds to: 1) bring existing facilities up to an adequate standard; 2) construct new and adequate facilities for growing districts; and 3) maintain all capital facilities at the adequacy level. To accomplish this, Students FIRST established a Deficiencies Correction Fund, New School Facilities Fund and Building Renewal Fund. 11. State to the extent practicable, in quantitative and qualitative terms, the objectives of the agency and its anticipated accomplishments. In 1998, the SFB was given the responsibility of implementing the Students FIRST law. This was viewed by some as a near impossible task, as the program incorporated deficiencies correction, preventivelmajor maintenance and new school construction, for all public schools in the State of Arizona. Students FIRST has not been without shortcomings, as it is a program that has never been done elsewhere. In a way, the SFB built the first airplane while flying it, as the SFB had to create the model while implementing the program. Given that challenge, there is a lot of which to be proud. Deficiency Corrections In the deficiencies correction project, the SFB first established the minimum school facility guidelines, and then assessed all 1,300 of the state's public schools ( over 8,000 buildings) to identify building systems and equipment that were deficient. By June 30,2006, there were 9,002 deficiency projects corrected throughout the state at a cost of $ 1.3 billion. The majority of these involved roofing, HVAC, electrical, fire alarms and replacement space. All of the projects have made significant strides in improving our state's school facilities. The program has had an especially great impact on the rural districts and the low wealth urban districts that were unable to afford the costs associated with school repair on their own. In addition, the deficiency program timing was ideal from a cost standpoint, as deficiency corrections work employed thousands of our state citizens during a time when Arizona was in an economic downturn. Competition and pricing also benefited significantly from the downturn, allowing the state to receive maximum value for the dollars spent. New School Facilities As of June 7, 2007, the SFB has awarded 328 new school projects with a total value of approximately $ 2.78 billion. Of the 328 projects, 235 have been completed, 29 are under construction and 64 are board approved with some in design. As of FY 2006- 2007, the SFB has purchased 2,006 acres of land valued at $ 155.2 million and has received 1,765 acres in donations and paid a 20 percent donation factor of $ 38.1 million but the appraised value of the donated land was approximately $ 1 90.4 million, saving the state $ 152.3 million in land acquisition costs. Without Students' FIRST, Arizona would not have been able to produce the educational infrastructure mandated by the growing population. The varying levels of property wealth and district bonding limitations of the old system set artificial limits on the amount of infrastructure that the system could provide. Building Renewal The SFB distributes building renewal based on the district's successful completion of building renewal plans and prior year expenditures reports. The building renewal appropriated supports 1 10.6 million square feet, 10,336 buildings and 1,425 schools that have a replacement value of $ 1 1.8 billion. Each year the state adds about 3 million square feet to the school inventory. There is no dedicated funding for preventative maintenance but districts are allowed to spend up to 8 percent of their building renewal dollars on preventative maintenance. Districts maintain preventative maintenance plans and currently complete approximately 40 percent of recommended preventative maintenance. Last year the SFB developed a web- enabled building renewal planning application that was upgraded this year to include prior year building renewal expenditures and renovations reporting. The automation will allow the SFB to provide better management data to decision makers about the type of building renewal projects ( e. g. HVAC or plumbing), identify how districts are managing their plans by comparing prior year plans with expenditures, identify the amount of funds sitting in' district ending balances that are being saved for future projects, etc. 1II. Identify any other agencies having similar, conflicting or duplicative objectives, and an explanation of the manner in which the agency avoids duplication or conflict with other such agencies. There are no other agencies that have conflicting or duplicative objectives but the Arizona Department of Administration ( ADOA) General Services Division has some similar processes. Building and Planning Services Building inspections - Provide inspections of all buildings in the ADOA building system and state-funded projects under construction. Building renewal - Review annual building renewal project requests. Allocate annual appropriation to agencies for specific projects and allocate funds for emergency requests throughout the year. Capital Improvement - Prepare annual ADOA Building System Capital Improvement Plan, review agency capital requests and submit recommendations to the Governor's Office of Strategic Planning and Budgeting and the Joint Legislative Budget Committee. Construction Review - Review and approve all state- funded construction documents, including contracts, plans, specifications and payment applications. Construction Services Provides a full service project management team to coordinate things like the planning, designing, construction and environmental services for public funded projects ( e. g., Department of Health Services State Laboratory, Southern Arizona Veteran's Memorial Cemetery Administration Building, Arizona State Prison Complex - Lewis). IV. Assess the consequences of eliminating the agency or of consolidating it with another agency. Given the nature of the Supreme Court decision, the functions of the agency would need to be carried out either by the agency in its current form or be consolidated with another agency to carry out the existing mission. The elimination of the agency or its functions would take the state back to where it was prior to the Supreme Court decision with disparities in school facilities given the vast differences in property wealth across the state and the impacts on local taxpayers. Attachments: 1. Committee Agenda Notice 2. Committee of Reference Meeting Minutes 3. Auditor General Presentation Handouts 4. Chairman's Letter requesting additional sunset factors 5. SFB Response ( additional sunset factors) COMMITTEE OF REFERENCE AGENDA NOTICE REVISED REVISED REVISED Interim agendas can be obtained via the Internet at http: lhmrvw. azleg. state. az. usllnterimCommittees. asp ARIZONA STATE LEGISLATURE INTERIM MEETING NOTICE OPEN TO THE PUBLIC SENATE K- 12 EDUCATION COMMITTEE AND HOUSE K- 12 EDUCATION COMMITTEE COMMITTEE OF REFERENCE Date: Wednesday, September 26,2007 Time: 9 A. M. Place: SHR 1 AGENDA 1. Call to Order 2. School District Performance Audits of Amphitheater Unified School District, Bisbee Unified School District and Alpine Elementary School District a. Presentation by Auditor General b. Response by the School District c. Public Testimony d. Recommendations by the Committee of Reference 3. School Facilities Board Sunset Audit a. Presentation by Auditor General b. Response by the School Facilities Board c. Public Testimony d. Recommendations by the Committee of Reference ,, 4. School District Performance Audits of Litchfield Elementary School District, Avondale Elementary School District, Deer Valley Unified School District and Union Elementary School District a. Presentation by Auditor General b. Response by the School District c. Public Testimony d. Recommendations by the Committee of Reference 5. Adjourn Members: Senator Karen Johnson, Co- Chair Representative Andrew Tobin, Co- Chair Senator Ron Gould Representative Doug Clark Senator Linda Gray Representative Sam Crump Senator Leah Landrum Taylor Representative David Lujan Senator Victor Soitero Representative Jackie Thrasher Persons with a disability may request a reasonable accommodation such as'a sign language interpreter, by contacting the Senate Secretary's Office: ( 602) 926- 4231 ( voice). Requests should be made as early as possible to allow time to arrange the accommodation. Page 1 of 1 COMMITTEE OF REFERENCE MEETING MINUTES ARIZONA STATE LEGISLATURE SENATE K- 12 EDUCATION COMMITTEE AND HOUSE K- 12 EDUCATION COMMITTEE COMMITTEE OF REFERENCE Minutes of the Meeting Wednesday, September 26,2007 9: 00 a. m., Senate Hearing Room 1 Members Present: Senator Karen Johnson, Co- Chair Senator Ron Gould Senator Linda Gray Senator Victor Soltero Representative Andrew Tobin, Co- Chair Representative Doug Clark Representative Sam Crump Representative David Lujan Representative Jackie Thrasher Members Excused: Senator Leah Landrum Taylor Staff: Dawn Nazary, Senate Education Committee Analyst Brian Lockery, House of Representatives Education Committee Analyst Ingrid Garvey, House of Representatives Education Committee Assistant Analyst Co- Chairman Tobin called the meeting to order at 9: 03 a. m. and attendance was taken. PRESENTATIONS The Auditor General's Office on School District Performance Audits Sharron Walker, Director, Division of School Audits, Auditor General's office, distributed the following handouts: Amphitheater Unified School District Performance Audit ( Attachment A) Bisbee Unified School District Performance Audit ( Attachment B) Alpine Elementary School District Performance Audit ( Attachment C) Litchfield Elementary School District Performance Audit ( Attachment D) Avondale Elementary School District Performance Audit ( Attachment E) Deer Valley Unified School District Performance Audit ( Attachment F) Union Elementary School District Performance Audit ( Attachment G) / Copy of Powerpoint presentation K- 12 Education Committee of Reference September 26,2007 School District Performance Audits ( Attachment H) Ms. Walker gave a brief overview of the audit process. In November 2000, voters approved Proposition 301, which increases state sales tax by 6110th~ of 1% for 20 years to fund educational programs. The school districts can only use this money for specified uses and the proposition requires the Auditor General's Office to monitor the dollars spent in the classroom and conduct performance audits on randomly selected school districts. Also, in the 2006 Legislative Session House Bill 2064 added various audits of the state's English Language Learner ( ELL) Program. She explained that the most recent fiscal year data is compared to the National average, the State average and a pool of similar school districts. The performance audits focus primarily on four operational areas: plant operations, administration, food service, transportation. Ms. Walker distributed a handout " Implementation Status of DSA Reports" ( Attachment I) and stated that there is a statutory requirement to follow up on the school districts implementation of the audit recommendations. Ann Orrico, Manager, Division of School Audits, Auditor General's Ofice, explained the findings and recommendations of the Amphitheater Unified School District audit as shown in the Powerpoint presentation Attachment H. Vicki Balentine, Superintendent, Amphitheater Unified School District, explained the progress, as outlined in the handout " Amphitheater Public Schools" ( Attachment J), that the district is making on the recommendations from the performance audit. Senator Linda Gray questioned literacy levels of ELL students graduating from the Amphitheater Schools. Ms. Balentine explained that not all ELL students and Special Ed students reach Adequate Yearly Progress ( AYP) ( National Assessment of Education). Representative Thrasher asked for more information about the intergovernmental agreement with Pima County. Ms. Balentine explained that the intergovernmental agreement is in reference to security and will save approximately $ 20,000. The staffing levels will continue to be monitored but not at the sacrifice of school safety. She stated that parts of the district are in high crime areas and rural areas. Scott Little, Chief Financial Officer, Amphitheater Unified School District, further ' explained the agreement with the Pima County Sheriffs Office. He also explained that a portion of plant costs is due to the age of many of the buildings in the District. Senator Soltero stated that student's and parents' sense of safety concerning schools has a large impact on how that student succeeds in that school. Senator Gray asked how many state supplied resourcelprobation officers the District has. SENATE K- 12 EDUCATION COMMITTEE AND HOUSE K- 12 EDUCATION COMMlrrEE COMMtTTEE OF REFERENCE September 26,2007 Page 2 Ms. Balentine stated that there is a grant through Oro Valley for two resource officers that are shared between two high schools. She said the City of Tucson has reallocated their resource officer staff this year to focus at the elementary and middle school levels only. She stated that the District has had to hire off- duty police officers to provide that service. Ross Ehrick, Manager, Division of School Audits, Auditor General's Office, explained the findings and recommendations of the Bisbee Unif~ dS chool District audit as shown in the Powerpoint presentation Attachment H. Paul McDonald, Superintendent, Bisbee Unified School District, explained what progress has been made in implementing the Auditor General's recommendations. He explained that the taxpayers in this district are willing to support the district as long as no schools are closed. An override is expected this year. He explained that schools sharing administration have shown to lower performance levels in both schools. The community is firm that all four facilities stay open due to the fact that the school facilities are the only facilities in the area. Senator Gray questioned the teachers being paid less in this school district and how the district is able to keep teachers. She also asked about enrollment fluctuations. Mr. McDonald stated that it must be the weather and that the district has been able to keep all positions filled with teachers from all across the country without the salary coming into question. He explained that the enrollment stays in the area of 1,000 students. Senator Soltero asked what percent of teachers have been employed a while and what percent are new. Mr. McDonald stated that approximately 75% of the teachers grew up in the area and came back. He said that about 25% are transplants. He stated that specialists are not on staff and are paid under support staff which adds to administrative costs. Representative Tobin asked about storage of Bisbee museum antiques. Mr. McDonald stated that the storage of various town items was just allowed and that the Auditor General's recommendations authorized all of the items be evicted. He stated that some of the storage space is now being rented out to various groups for activities or storage. Representative Crump questioned meals per student dollars being higher than comparable districts. Mr. McDonald stated that since the audit, the district is better able to accurately calculate cost per student. He also stated that suppliers charge a fuel surcharge for the distance to deliver to the district. SENATE K- 12 EDUCATION COMMITTEE AND HOUSE K- 12 EDUCATION COMMITTEE COMMITTEE OF REFERENCE September 26,2007 Page 3 Representative Tobin asked if distance learning technology has been considered. Mr. McDonald stated that nothing in that field has been considered to this point. Ann Orrico, Manager, Division of School Audits, Auditor General's Office, explained the findings and recommendations of the Alpine Elementary School District audit as shown in the Powerpoint presentation Attachment H. Representative Tobin questioned reimbursing parents for two round trips to take their children to school. Ms. Orrico stated that monthly payments were approximately $ 200 to $ 300 per month per student for transportation. She stated that comparable districts do not pay parents to transport their children. Senator Gray questioned the district filing any 1099 forms for the payments to parents. Ms. Orrico stated that question was not asked in the audit. Michael Cox, Administrator, Alpine Elementary School District, distributed a letter to Michelle Corse ( Attachment K) which shows that Alpine School District was following a formula received from Arizona Department of Education ( ADE). The Auditor General's Office and ADE are conferring to decide on the correct formula and Alpine School District will follow the formula it is instructed to use. Mr. Cox distributed a handout " Alpine Elementary School District 6- Month Follow- Up Report To Performance Audit Report Issued October 2006" ( Attachment L) and explained what progress has been made in implementing the Auditor General's recommendations. Senator Johnson questioned how parent transportation is organized and reimbursed. She asked why Alpine Elementary School District reimburses transportation costs when other schools do not. Mr. Cox stated that some parents carpool and now only those who would qualify for free and reduced lunches are being reimbursed. Alpine Elementary School District was told that it is legal. Senator Gray stated, in 2005 the Alpine Elementary District was given $ 355,000 in transportation money, but spent less than $ 64,000. She asked where the rest of the money was spent. She asked if the $ 125,000 that was charged over was paid back. Linda Fite, Office Manager, Alpine Elementary School District, explained that the monies were spent on the new building, grounds, furniture, and equipment. Senator Gray questioned how transportation monies could be used to build a facility. Ms. Fite explained that during budgeting when you find your revenue control limit you can spread it between M& O and Outlay. SENATE K- 12 EDUCATION COMMITTEE AND HOUSE K- 12 EDUCATION COMMITTEE COMMITTEE OF REFERENCE September 26,20031 Page 4 Senator Gray stated that she feels there is a flaw in the law in which it is said " may provide transportationn. She said she sees this as a scheme to be able to get additional revenue to put in other areas. She asked if reimbursement to parents for transportation is considered income for those parents and if the district filed 1099 forms. She also asked what the highest amount was paid to a parent to drive their children to and from school. Ms. Fite stated that no the District did not file any 1099 forms. She said that the largest payment she believes was approximately $ 5,000 for the year. Senator Gould asked if the children bring their lunch to school. Mr. Cox stated that was correct. Senator Gray questioned whether the $ 125,000 in excess revenue the Alpine Elementary District received was paid back. Ms. Fite stated that the District did not pay that money back because they were working under the guidance of ADE and did not see the money as excess. Ms. Fite stated that the District is willing to do whatever is necessary to come into compliance. Representative Tobin asked if the Auditor General had any comments about Senator Gray's concerns. Ms. Orrico stated that AD€ instructed Alpine School District to report transportation costs in the way they did and has not asked for reimbursement. She stated that the Auditor General's Office and ADE are working together to clarify the situation. Ms. Orrico explained that the transportation excess monies can be spread to other areas. She said that because ADE has not agreed with the Auditor General's O f f ~ eon proper reporting they have not asked for the money to be returned. Senator Gray asked what the Governing Board has decided to do on the subject. Mr. Cox stated that the Governing Board has decided to continue as it has been doing. Senator Gray questioned what the excess money would be spent on in the future. Ms. Fite stated that since the audit, the number of reimbursements paid out has decreased and that the money is now being put back into the classroom. She explained that the number of teachers has also been increased to a ratio of one teacher to nine students. Representative Clark made a statement about being proud and wanting to commend the product coming out of the Alpine Elementary District, however, the District needs to follow the letter of the rules and not the spirit of the rules. He stated that the system needs to be above reproach. SENATE K- 12 EDUCATION COMMITTEE AND HOUSE K- 12 EDUCATION COMMITTEE COMMITTEE OF REFERENCE September 26,2007 Page 5 Co- Chairman Tobin recessed the Committee at 1051 a. m. for a short break. Co- Chairman Tobin reconvened the Committee at 1057 a. m. The Auditor General's Performance Audit of the School Facilities Board Shan Hays, Performance Audit Manager, Auditor General's Office, explained some background, the findings and recommendations of the School Facilities Board audit as shown in a copy of the power point presentation " School Facilities Board Performance Audit August 2007" ( Attachment M). Representative Lujan questioned the recommendation for the Legislature to change the building renewal formula to make the funding more predictable. Ms. Hays explained that the Legislature has not funded according to the formula except for one year. The districts have suggested it would be easier if there was a way to insure how much money would be received. John Arnold, Executive Director, School Facilities Board ( SFB), explained that one of the most important things done by the Board is to raise awareness of facilities. He explained that the formula for inflation is retroactive, which means it works for facilities being built now but not appropriate for facility grants for future projects. Senator Johnson questioned the stabilization of inflation costs. Mr. Arnold said that yes costs have stabilized for the metro area, but in rural areas a premium is still being paid due to travel costs. He explained that districts were losing up to 30% of their buying power between the date the project was awarded and the date they started construction. He said that the Board established the Minimum Existing Standard and then recognized the need to cap certain areas of construction. Representative Tobin questioned the Board's statutory authority to alter the formula. Mr. Arnold said that the statute is not entirely clear on this issue. The statute dictates that the School Facilities Board establish a standard. The Board has discussed this issue with the Attorney General's Office, the Joint Legislative Budget Committee and the Auditor General's Office. The Attorney General's informal decision is that it is within the Board's statutory authority. Senator Gray questioned how many gyms a school can have. Mr. Arnold stated that the districts can outlay their money however they see fit. The Board said that it will only fund one gym floor, if they build more than one gym they need to get the funding locally. SENATE K- 12 EDUCATION COMMITTEE AND HOUSE K- 12 EDUCATION COMMITTEE COMMITTEE OF REFERENCE September 26,2007 Page 6 Representative Lujan stated that for the first four years he was the Assistant Attorney General for the School Facilities Board. He said that he agrees the Board is responsible to provide any extra monies needed to build a school to the minimum standard. Mr. Arnold stated that the School Facilities Board clarified minimum guidelines. He said that programs have been put in to effect to improve oversight and reporting. He stated that in some places statutes are vague enough that interpretations will have to be made and agreed upon. Senator Gray questioned an audit regarding doors, where the SFB is criticizing the district but the SFB would have had to approve the building. She asked if the industry standards for energy saving were guidelines or standards that must be met. Mr. Arnold stated that state law requires that school districts meet the current IECC ( International Energy Conservation Code) standards and that the SFB enforces those standards on all schools. He said the statute gives the districts full design authority. Senator Gray questioned the audit done on the Union School District that lists the doors opening directly outside is an energy wasting design. Mr. Arnold stated that there has been much discussion about the subject, but that design is allowed under the state law. Senator Johnson questioned building a school with a capacity of 100 when only 40 children attend that school. Mr. Arnold stated that particular school building was approved to replace a building that had exceeded its usefulness. He stated that the school has asked for more space because they think they are going to grow. Senator Soltero questioned using two doors then a space and two doors like in restaurants. Mr. Arnold stated that the design is a local decision but that most do not do that because it costs space. Senator Johnson questioned a final decision on the Auditor General's finding playground equipment, landscaping, public address systems and such being inappropriate expenditures. Mr. Arnold stated that the statute says that the SFB will review the findings and report to the Department of Education, but the SF6 does not yet have a system to review the issues. He takes full responsibility for not getting that set up. He said the Auditor General's Office is helping to set up standards for this purpose. SENATE K- 12 EDUCATION COMMITTEE AND HOUSE K- I2 EDUCATION COMMITTEE COMMITTEE OF REFERENCE September 26,2007 Page 7 Representative Tobin questioned controls not being applied, relying too much on outside consultants and the state ownership of a database. Mr. Arnold stated that the SFB has 15 employees and is the gth largest expender in the state, spending almost $ 500 million a year. He said that they do not have dedicated technology staff. He said that the Auditor General has a concern that any information or technology would not be owned by the State. He explained that this would be corrected when the new contract comes due. He said that the SFB needs to formalize and improve their controls. Senator Johnson questioned Mr. Arnold's opinion on prototype schools and the opportunity to save money with them. Mr. Arnold stated that he is a supporter of using prototype schools, but again that authority rests with the school districts. He said that he does not think they will completely eliminate design fees. Senator Gould stated that as a contractor a standard floor plan would save money and increase the bidding process. RECOMMENDATIONS BY THE COMMITTEE OF REFERENCE Senator Johnson moved that the Senate K- 12 Education and the House K- I2 Education Committee of Reference recommend that the School Facilities Board be continued for three years until June 30, 201 1. Senator Gould made a substitute motion that the Senate K- 12 Education and the House K- 12 Education Committee of Reference recommend that the School Facilities Board be continued for two years until June 30,2010. Senator Gray asked if the Auditor General would do another audit in two years. Debbie Davenport, Auditor General, stated that it is the Joint Legislative Audit Committee who determines whether the Auditor General's Office or a Committee of Reference would hear the next sunset. Senator Soltero stated that he supports continuing the Board for three or more years. Senator Gould stated that the logic behind his substitute motion is that the Legislators all serve two- year terms. He said that due to the amount of money, it deserves the Legislature's attention and continuous review. SENATE K- I2 EDUCATION COMMITTEE AND HOUSE K- 12 EDUCATION COMMITTEE COMMITTEE OF REFERENCE September 26,2007 Page 8 Representative Tobin requested Dawn Nazary to restate the substitute motion. The motion PASSED by roll call vote of 5- 4- 1 ( Attachment 1). Co- Chairman Tobin recessed the meeting for one- half an hour at 12: 05 p. m. Co- Chairman Tobin reconvened the meeting at 12: 44 p. m. The Auditor General's Office on School District Performance Audits Ann Orrico, Manager, Division of School Audits, Auditor General's Office, distributed a copy of her Powerpoint presentation " Education Committee of Reference September 26, 2007 School District Performance Auditsn ( Attachment N) and explained the findings and recommendations of the Union Elementary School District audit. Representative Tobin questioned increases in administration costs despite previous overspending. Ms. Orrico stated that salary and benefit costs were going to be increasing in fiscal year 2007 due to pay increases for administrators. Representative Clark questioned if they are contracts that are already in place or new contracts that have been written. Ms. Orrico stated that the pay increases are contracts put in place at the end of fiscal year 2006. Peter Davis, Receiver for Union Elementary School District, stated that as a receiver he has to file a 120 day report on the financial situation and a plan for restructuring the district. He said that he just took over in June and the report is not yet finished, but should be out in approximately three weeks. Bill Christensen, Superintendent, Tolleson Elementary School District, explained that through an inter- governmental agreement ( IGA) he has been retained as a Superintendent for Union Elementary School District as well as providing business services, transportation and various other services. He said that with the audit they are better able to quickly address the main problems. He stated that progress is being made but there is still a great deal of work to be done. He stated that for transportation they have consolidated bus routes to reduce cost. He said that the administrative costs have been reduced by three administrators that have resigned. He stated that plant operations and maintenance has been addressed, in that there is no longer overtime and the employees are now fiscal year employees instead of 12- month. Representative Tobin asked how a receivership works. SENATE K- 12 EDUCATION COMMITTEE AND HOUSE K- 12 EDUCATION COMMlrrEE COMMITTEE OF REFERENCE September 26,2007 Page 9 Mr. Davis explained that there are no preset models for a receivership, but it is a work in progress involving many agencies. He explained that while the 120 day report is being put together action is being taken to eliminate costs. He said that the receiver takes control of the Governing Board and gets advice from neighboring districts. Representative Tobin questioned the district failing academically and asked what goals are being set to get the school on track academically. Mr. Christensen explained that an improvement plan has been designed. He explained that each school in the district operated very independently of each other. They had different texts, different evaluations, different curriculums and different models. The curriculums were blended together, a staff development calendar was put in place and teacher committees were brought together to concentrate on making academic improvement. He stated that the academic side is of more concern than the financial side. Representative Tobin asked where the parents are in this situation. Mr. Christensen explained that they are split down the middle. Many are very supportive, but a lot of parents are not supportive due to lack of information regarding the situation. Representative Tobin asked Mr. Christensen for his opinion on how the state should track superintendents. He asked what can be done to Superintendents that put districts in poor financial and academic positions. Mr. Christensen stressed that early intervention is necessary. Senator Gray questioned what should be done to superintendents that create these situations. Mr. Christensen said he would support removing the superintendents and possibly sanctions to prevent them from doing this again. Mr. Davis said one option that has been reviewed are breaches of fiduciary duty by Governing Board members, Superintendents, and other fiduciaries of the districts and holding them accountable. He said he had looked into the receiver bringing a lawsuit or otherwise against those individuals for their gross negligence and for their breaches of the confidences of the taxpayers of that district. Senator Gray questioned the custodian that was paid over $ 44,000 being a relative of either a Board member or administrator. Mr. Davis stated that situation is currently being investigated along with several others. He said that across the board every position in the district is grossly over paid. Many of the administrators gave themselves massive raises after a year that they over spent the SENATE K- 12 EDUCATION COMMITTEE AND HOUSE K- 12 EDUCATION COMMITTEE COMMITTEE OF REFERENCE September 26,2007 Page 10 budget by $ 1 million and during a year that they were overspending the budget by $ 1.2 million which was approximately 20% of their budget. Senator Gray asked if this fraud is at the level that charges could be brought against individuals at the school district. Mr. Davis stated that he has contacted the Attorney General about some of the things that have been found. He said the intent is to submit his report to the Attorney General so that further investigation can be done. Senator Gray asked about unification with another school district. Mr. Christensen stated that there are many areas with problems with unification or consolidation. One problem is tax rates and the financial impact on the people of the district. He stated that consolidation is basically what is happening currently. Senator Johnson questioned if there is enough evidence at this point to bring charges. Mr. Davis stated that is the job of the Attorney General's office. He said that the receivership is involved civilly with this but not criminally. He said the school does not have the resources to perform a criminal investigation. Mr. Christensen stressed the sustainability of the school in the future. Representative Crump questioned special needs transportation being so high and the ethics and reliability in the program. Mr. Davis stated that is the top problem discussed with the Attorney General's office. Mr. Christensen stated that student transportation is an area of great alarm. He stated that the contract was terminated in July. He said that there was no oversight of the transportation program. That all transportation employees were put through training and health screenings and a few employees were eliminated through that process. Now the district is down to a core group of employees that are fully compliant with standards. Representative Crump asked staff to provide the general standards for a school bus. Mike Quinlan, Manager, Division of School Audits, Auditor General's Office, explained the findings and recommendations of the Avondale Elementary School District audit as shown in the Powerpoint presentation Attachment N. Dr. Catherine Stafford, Superintendent, Avondale Elementary School District, explained that they had a wonderful audit. She stated that half of the recommendations from the Auditor General's office have been implemented and the other half are king implemented currently. SENATE K- 12 EDUCATION COMMITTEE AND HOUSE K- 12 EDUCATION COMMITTEE COMMITTEE OF REFERENCE September 26,2007 Page 11 Ross Ehrick, Manager, Division of School Audits, Auditor General's Office, explained the findings and recommendations of the Deer Valley Unified School District audit as shown in the PowerPoint presentation Attachment N. , Representative Crump questioned monies the Auditor said were supplanted, but the District said they were not. Mr. Ehrick stated that the records are incomplete so a definitive answer is unavailable. He said the Auditor General's office has talked to the district about putting money back into the 301 fund. Jim Migliorino, Executive Director of Fiscal Services, Deer Valley Unified School District, explained that four of the 12 recommendations from the audit have been implemented, seven are in the process of being implemented and the district disagrees with the Auditor General's recommendation about the supplanted money. Representative Tobin questioned the issue of supplanting money. Mr. Migliorino stated that part of the problem is the ability to account for the funds. He said that they added teachers from the class reduction funds. Mr. Ehrick stated that the district budgeted for eight additional staff, but they added 22 staff. Mr. Migliorino stated that the district grew enough throughout the year so additional teachers were needed. Senator Gray questioned the satellite transportation facility. Mr. Migliorino stated that the issue- is being studied and savings calculated. Mike Quinlan, Manager, Division of School Audits, Auditor General's Office, explained the findings, recommendations and follow- up of the Litchfield Elementary School District audit as shown in the PowerPoint presentation Attachment N. Senator Gray questioned the administrator who received $ 50,000 bonus money. Mr. Quinlan stated that the district has now worked the bonuses into contracts and have set up goals to earn the bonuses. Dr. Julianne Lein, Superintendent, Litchfield Elementary School District, stated that the district concurs with the audit findings and has implemented all of the recommendations. SENATE K- 12 EDUCATION COMMITTEE AND HOUSE K- 12 EDUCATION COMMITTEE COMMITTEE OF REFERENCE September 26,2007 Page 12 , There being no further business, the meeting was adjourned at 152 p. m. Respectfully submitted, Shelley once Committee Secretary ( Tapes and attachments on file in the Secretary of the Senate's OfficelResource Center, Room 115.) SENATE K- 12 EDUCATION COMMlrrEE AND HOUSE K- 12 EDUCATION COMMITTEE COMMITTEE OF REFERENCE September 26,2007 Page 13 SENATE K- 12 EDUCATION COMMITTEE AND HOUSE K- 12 EDUCATION COMMITTEE COMMITTEE OF REFERENCE ARIZONA STATE LEGISLATURE FORTY- EIGHTH LEGISLATURE - ROLL CALL VOTE Recommendation: Substitute motion: The Senate K- 12 Education and the House K- I2 Education Committee of Reference recommend that the School Facilities Board be continued for two years until June 30, 2010 Senator Ron Gould Senator Linda Gray Senator Leah Landrum Taylor Senator Victor Soltero Representative Doug Clark Representative David Lujan I Representative Sam Crump >( l g I I I I X I I I I I committee Secretary ,% I d!!~~ Date 9/ 26/ 07 Attachment 1 X Representative Jackie Thrasher Representative Andrew Tobin, Co- Chair Senator Karen Johnson, Co- Chair September 2007 Y x 1 X K X x AUDITOR GENERAL PRESENTATION HANDOUT School Facilities Board Performance Audit August 2007 Overview Background 5 Findings - New school construction impacts on General Fund - Building renewal formula - Improvements: build~ ngr enewal overs~ ght controls over payments database controls / Background Students FIRST Act established Board Board duties: I - Set minimum adequacy guidelines for school facilities Guidelines cover 9 statutov areas I - Administer 4 funds Board duties: four funds Deficiency Corrections New School Facilities Building Renewal Emergency Deficiencies Correction General Fund appropriations F~ scayl ears 1999- 2007 ( millions) Deficlencles Operations correction $ 176 0 K~ ndergarten projects $ 8 0 Bu~ ld~ ng renewal $ 606 8 School New school construction construction lease payments $ 1,247 8 $ 189 5

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Sunset review of the school facilities board

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