State School Bond Passes Promising New Facilities Funding

November 2016

On November 8, 2016, California voters approved Proposition 51, authorizing the issuance of $9 billion in bonds for school facility funding.  The measure, which passed with approximately 54 percent of the statewide vote, went into effect on November 9, 2016.    

Proposition 51 introduces new funding for repairs, construction and new school facilities across the state, as any remaining funding for such projects was dwindling.  Under Proposition 51, school districts, charter schools and community college districts can apply through the existing School Facilities Program (“SFP”) on a “first-come, first-served” basis for a state match against local district funding for eligible projects. 

Proposition 51 bond funds target the following areas: 

  • $3 billion for the construction of new school facilities;
  • $500 million for providing school facilities for charter schools;
  • $3 billion for the modernization of K-12 public school facilities;
  • $500 million for providing facilities for career technical education and vocation programs; and
  • $2 billion for acquiring, constructing, renovating and furnishing community college facilities.

Also of significance, Proposition 51 prevents any amendments to existing law authorizing school districts to levy developer fees until either: (1) the new construction funds are spent; or (2) December 31, 2020, whichever is earlier.  Moreover, with its influx of state bond funds, Proposition 51 makes it unlikely that school districts will be able to charge Level III Developer Fees for some time.  Proposition 51 also blocks any changes to the existing State Allocation Board (“SAB”) process through which local education agencies apply for and receive school facilities funding.   

Since funds will be awarded for eligible projects on a “first-come, first-served” basis, it is essential that districts act quickly to review facility needs and apply for their eligible share of funding as soon as possible.  Proposition 51 monies will also go towards backlogged school projects that were already on SFP “approved” lists but are awaiting new funding. 

School districts should also note that the majority of Proposition 51 funds will require a match of local money.  For example, property purchases and new construction projects will require a local contribution of 50 percent of the project costs, while modernization projects will require a 40 percent local match.  As an exception—and under certain circumstances—schools districts that are able to demonstrate a lack of adequate local contributions can apply for an additional state grant to fund up to 100 percent of the project costs. 

Given the complexity and logistical issues involved with Proposition 51, F3 is standing by to help answer any questions and/or assist your district in applying for, obtaining and implementing these new facility funds. 

If you have any questions regarding Proposition 51 or any related matter, please call one of our six offices.

F3 NewsFlash prepared by Paul G. Thompson, James R. Traber, Kelley A. Owens, Travis A. Brooks and John W. Norlin.
Paul and Jim are Partners in the F3 Sacramento office.
Kelley is a Senior Associate in the F3 Carlsbad office.
Travis is an Associate in the F3 Sacramento office.
John is Special Counsel in the F3 San Diego office.

This F3 NewsFlash is a summary only and not legal advice.  We recommend that you consult with legal counsel to determine how this legal development may apply to your specific facts and circumstances.  Information on a free NewsFlash subscription can be found at www.f3law.com.

Keep up to the minute on the latest updates, NewsFlashes, and legal news by following F3 on Twitter:@F3Law.

 

© 2016 Fagen Friedman & Fulfrost LLP

All rights reserved, except that the Managing Partner of Fagen Friedman & Fulfrost LLP hereby grants permission to any client of Fagen Friedman & Fulfrost LLP to use, reproduce and distribute this NewsFlash intact and solely for the internal, noncommercial purposes of such client.

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