By Bryce Chastain, Senior Associate
Pleasanton Office
and Hugh Lee, Partner
Cerritos Office
The Office of Public School Construction ("OPSC") recently announced that the State successfully sold bonds on October 19th yielding "approximately $1 billion for School Facility Program projects." OPSC expects the State Allocation Board ("SAB") to include disbursement of the available funds "to projects on the unfunded list with valid priority funding certifications" on its December 2011 agenda. As OPSC noted, 187 school district certifications for 504 projects (306 modernization projects, 136 new construction projects and 62 projects from additional programs) are on the unfunded list. These 504 projects comprise a total of $1.34 billion. Accordingly, it appears that with about $1 billion in revenue becoming available, and $1.34 billion worth of projects on the unfunded list, there will be projects with valid priority funding certifications on the current unfunded list that still will not have money available.
Back in May 2010, faced with a similar situation of bond money becoming available for projects, but more projects on the unfunded list than could be funded, SAB adopted a "one-time alternative method" to prioritize the unfunded list for the bond funds then available for disbursement. At that time, SAB commented on desires to stimulate the economy and create jobs as factors in the approach taken, and we see nothing fundamentally different in the current economic circumstances. That "one-time alternative" method differed from the previously followed methodology where apportionments were based on the date the grant application had been approved by SAB, otherwise known as the "first in first out" method. For more information, please read our Alert here.
We will be providing updates here on EdLawConnect as SAB deliberates on a disbursement method for these funds and as this issue continues to develop.
