Lottery Funding for School Construction Kenneth Phelps Ph

Lottery Funding for School Construction Kenneth Phelps, Ph. D Architect / Lead School Planning Consultant

What counts as “Construction? ” Construction includes: • Land purchase • Additions • Renovations • New buildings – excluding furniture and furnishings, textbooks, and equipment unless built into the building • Design fees, etc. 2

Overview 1. Funding – Local, State, Federal 2. Focus on Education Lottery A. Availability B. Applications and Approval C. Usage 3

Local, state, and federal sources 96% 4

Local Funding- the major source • Determined by county commissioners. • Dependent on local economic and demographic conditions: o Tax base (the “wealth” of the county) o Tax rate (a “political” decision) o Allocation of funding among various competing needs. 5

Variations in local funding 6

Local Bonds- summary Since 1995: • 98 Bond Issues passed, with value of $11. 29 Billion. (84. 65% by value. ) • 21 Bond Issues were defeated, with value of $2. 05 Billion. (15. 35% by value. ) 7

State Funding- previous • School Facilities Finance Act- 1987 – Increased corporate income tax – Created the Pub Sch Bldg Cap Fund – Created the Critical School Facility Needs Fund • Public School Bond Act- 1996 ($1. 8 Billion) – Distributed $30 million to Small Counties – Distributed $1. 770 billion on basis of… • ADM: 40% • High Growth: 25% • Ability to Pay: 35% 8

State Funding- current The Public School Building Capital Fund • The “ADM Fund” (no new revenue) Allocated $1, 620, 595 in 2015 -16 • The Education Lottery (2006 – present) Allocated $105, 033, 891 in 2015 -16 Appropriated by lump sum, not per cent 9

Federal Programs 10

Education Lottery Funding in support of School Construction 11

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… of the 35% for Education… • Fifty percent (50%) to reduce class size in early grades • Forty percent (40%) for construction • Ten percent (10%) for scholarships Therefore, Construction was to be funded at 40% of 35% = 14% of total gross revenue. 13

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Reduction in Appropriation for Construction 15

I have a computer program which will calculate the difference in allocations for construction, for each individual LEA, over the last three fiscal years, if anyone is interested. 16

Applications for Funding • Form on School Planning website • Fill-in all blanks • Obtain signatures of chairpersons of – Local School Board – County Commissioners …indicating a ‘meeting of the minds” of both bodies. • Applications are reviewed at end of each month. 17

Review & Approval of Applications • Is funding requested for an approvable purpose? • Is sufficient funding available? • Is review of project drawings & specifications required? If so, has the review been completed satisfactorily? 18

Review of project drawings • Types of projects for which review is required. • Submittal of documents for review • Response to review • Certificate of Review 19

Disbursing of Funds, and Reporting • Generally, funds are transferred into the county Disbursing Account by 1 st or 2 nd working day of the following month. • County FO writes warrants to “Ultimate Payee” for approved purpose • County FO complies with reporting requirements of NC Treasurer • County or LEA submits project Final Report to DPI. 20

Usage of Lottery Funding: 2016 -17 21

New Legislation • Public School Construction Grants ($30 Million from Lottery in 2017 -18) ($75 Million from Lottery in 2018 -19) Intent to return to 40% by 2028 -29 Match $1 (local) : $3 State in Tier 1 Match $1 (local) : $1 State in Tier 2 [SB 257, Section 5. 3(c) – (h)] 22

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New Legislation (in com. ) • Public School Building Bond Act (HB 866) – State Bond for $1. 9 billion, to provide grants for public school facilities – Funding allocated on basis of… • • ADM: 40% Low Wealth: 30% ADM Growth: 15% Small County: 15% – Dollar-amount for each LEA is noted in Act 24

Informational Publication Handbook for Finance Officers Regarding Funding of School Capital Project 25

School Planning Website 26

Questions? 27

Thank you for the opportunity to present this topic… Kenneth Phelps School Planning Section, DPI 919 -807 -3561 ken. phelps@dpi. nc. gov Website: www. schoolclearinghouse. org 28