state aid & new york state public school districts …...2018/11/03 · state aid & new...

State Aid & New York State Public School Districts

Capital Project and Related Aid Issues“We can not solve our problems with the same level of thinking that created them”

― Albert Einstein

Session 3

© R. G. Timbs Advisory Group, Inc. 2018

November 2018

Dr. Rick Timbs

Executive Director

Statewide School Finance Consortium

[email protected]

@ricktimbs@SSFC_NYS

mailto:[email protected]

Capital Project Goals•Minimize any Tax Impact

•Balance Tax Cap Implications

•Maximize Aid

•Curtail Costs (Long and Short Term)

•Create Greater Efficiency and Economies of Scale

•Diminish Pressure on the Regular Budget

© R. G. Timbs, Inc. 2018

Capital Project First Steps•Hire a Financial Advisor

•Hire an Architect

•Hire a Construction Manger*

•Hire Bond Council

•Keep in touch with School Attorney

•Use the Building Condition Survey as a guide

•Make sure any cost estimates have escalations, contingencies and are accurate based on what you

EXACTLY want to accomplish.


Option 1 Option 2 Option 3

1Board of Ed.

Superintendent

- Establish proposed Capital Project Scope and Budget

- Establish Voter Referendum DateIn Process In Process In Process

2 Architect

- Prepare a detailed cost estimate for each building including a breakdown of additions vs.

alterations and construction/site work vs. incidental expenses

- If the project scope includes additions, discuss with SED project manager if new space will be

eligible for State Aid; additional Building Aid Units

- If the project will be phased, prepare a timeline of proposed scope by phase

(All items above to be distributed to District and Financial Advisor)

Done Done Done

3 Financial Advisor- Financial Advisor to begin work on Proposed Project Report upon receipt of items mentioned

above (steps 1&2)Done Done Done

4District

Financial Advisor

- Discuss and review Proposed Project Report as prepared by Financial AdvisorDone Done Done

5

Superintendent

Architect

Bond Counsel

SET UP AND EXECUTE SEQRA (State Environmental Quality Review Act) PROCESS –

Architect and Superintendent to set up timing and action details with School’s Bond Counsel. The

Architect will provide a written recommendation; including any forms or studies conducted, as to

the type of SEQRA process to be utilized by the Board of Education in its determination.

REMINDER: SEQRA MUST BE COMPLETED PRIOR TO THE ADOPTION OF THE

WORDING OF THE PROPOSITION by the Board of Ed.

Done Done Done

6Clerk/

Superintendent

- Forward certified copies of the SEQRA RESOLUTION to Bond Counsel and Financial

Advisor10/5/2017 10/19/2017 10/19/2017

7 Bond Counsel- Upon completion (or in anticipation) of step 5, Bond Counsel to prepare the Proceeding Calling

for a Special Election to Vote on a Capital Project10/5/2017 10/19/2017 10/19/2017

8Clerk/

Superintendent

- Distribute Board of Education Meeting agenda and Board Packets

(ALL BOARD PACKET INFORMATION to be provided to the District by Architect, Bond

Counsel and Financial Advisor prior to 10/5/2017, 10/19/17)

10/6/2017 10/20/2017 10/20/2017

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Board of Ed.

Clerk

Superintendent

At a BOARD MEETING:

- Adopt SEQRA Resolution (MUST BE COMPLETED PRIOR TO ADOPTION OF THE

WORDING OF THE PROPOSITION)

- Call for Special Election

- Adopt the wording of the proposition(s)

- Board Resolutions approving contracts for (if not completed):

- Architect

- Bond Counsel

- Financial Advisor

10/10/2017 10/24/2017 10/24/2017

PROPOSED CAPITAL PROJECT TIMETABLE

10 Clerk - Provide certified copies of above items (Step 9) to Bond Counsel and Financial Advisor 10/11/2017 10/25/2017 10/25/2017

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Clerk/

Superintendent

Financial Advisor

Submit the Legal Notice calling for a Special Election Voter Referendum to 2 (two) newspapers

with circulation within the District.

First publication of four Legal Notices of Special Election must be no more than 49 nor less than

45 days prior to the Referendum date .

THE CLERK SHOULD DOUBLE CHECK EACH NEWSPAPER FOR EACH

PUBLICATION.

Newspapers: Utica Observer Dispatch and Rome Sentinel

-1st publication date: October 19, 2017, October 27, 2017, November 2, 2017

-2nd publication date: October 26, 2017, November 3, 2017, November 9, 2017

-3rd publication date: November 9, 2017, November 17, 2017, November 22, 2017

-4th publication date: November 21, 2017, November 28, 2017, December 5, 2017

Publication should be 2 weeks prior to vote date to allow any republication, if necessary

10/17/2017 10/25/2017 10/31/2017

12 District- If District choses to do so, begin distribution of the Proposed Capital Project Newsletter to the

District ResidentsNovember 2017 November 2017 November 2017

13

Board of Ed.

Superintendent

Financial Advisor

Public Information Meeting (Optional)

Location:____________________

Time: ___________________

November 2017 November 2017 November 2017

14 Clerk- Provide copies of the newspapers’ Affidavits of Publication calling for the voter referendum to

Bond Counsel (certified copies) and Financial Advisor11/28/2017 12/5/2017 12/12/2017

15 VOTER REFERENDUM 12/5/2017 12/12/2017 12/19/2017

16 Clerk- Upon a positive vote, coordinate returning Voter Referendum documentation to Bond Counsel

(certified copies) Financial Advisor12/6/2017 12/13/2017 12/20/2017

17 Bond Counsel

- Prepare and transmit Bond Resolution and Notice of Estoppel to School District for inclusion in

Board packets

(TO BE PROVIDED TO DISTRICT PRIOR TO (01/4/18, 1/18/18, 1/18/18)

1/4/2018 1/18/2018 1/18/2018

18 Board of Ed.

- Adopt Bond Resolution (MUST BE ADOPTED BY AT LEAST 2/3 OF THE VOTING

STRENGTH OF THE FINANCE BOARD except 1) where a Bond Resolution is subject to

mandatory referendum before it becomes effective or 2) where a Bond Resolution provides that it

shall be submitted to a referendum - a 3/5ths vote is sufficient LFL § 33)

1/9/2018 1/23/2018 1/23/2018

19 Clerk- Submit Notice of Estoppel to official newspaper(s)

- Provide certified copy of Bond Resolution to Bond Counsel and Financial Advisor1/10/2018 1/24/2018 1/24/2018

20Clerk

Newspaper

- Publish “Notice of Estoppel” in official newspaper(s)

CLERK TO VERIFY PUBLICATION

- Once published, provide Affidavit of Publication to Bond Counsel

1/12/2018 1/26/2018 1/26/2018

21Notice of Estoppel publication period expires

(21st DAY AFTER DATE OF PUBLICATION)2/2/2018 2/16/2018 2/16/2018

Long Range Planning: What can you control?


8

Addition Reconstruction/Alteration

Construction Costs Construction Costs

Incidental Costs Incidental Costs


9© R. G. Timbs, Inc. 2018

13© R. G. Timbs, Inc. 2018

PROJECT COST BREAKDOWN BY INCIDENTAL COST ESTIMATES

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15© R. G. Timbs Advisory Group, Inc. 2018


Loss of Aid?

18© R. G. Timbs, Inc. 2018

19© R. G. Timbs, Inc. 2018

20© R. G. Timbs, Inc. 2018

Based on previous page data: Other examples:

22© R. G. Timbs, Inc. 2018

ALL IN

Maximum Cost Allowance

Total

Renovation Addition Renovation Addition Renovation

CONSTRUCTION & RELATED EXPENSES $4,054,000 Capital Project - Phase 2 - 10/28/14 $ 363,729 $ - $ - $ - $ - $ 363,729

Capital Outlay - 0001-014 - 04/27/16 85,058 - 85,058

Capital Outlay - 0001-015 - 05/17/16 80,000 - 80,000

Proposed Capital Project 1,050,500 4,250,000 22,000 715,000 115,500 6,153,000

Max. NYSED 5 YEAR Cost Allowance CONSTRUCTION $ 11,048,723 $ - $ 8,491,728 $ 715,000 $ 115,500

Remaining Allowance CONSTRUCTION $ 9,469,436 $ (4,250,000) $ 8,469,728 $ - $ -

SITE WORK & INCIDENTAL EXPENSES$4,054,000 Capital Project - Phase 2 - 10/28/14 $ 125,074 $ - $ - $ - $ - $ 125,074

Capital Outlay - 0001-014 - 04/27/16 14,942 14,942

Capital Outlay - 0001-015 - 05/17/16 20,000 20,000

Proposed Capital Project 3,376,000 850,000 4,000 130,000 21,000 4,381,000

Max. NYSED 5 YEAR Cost Allowance INCIDENTALS $ 2,641,914 $ - $ 1,698,346 $ 130,000 $ 21,000

Remaining Allowance INCIDENTALS $ (894,102) $ (850,000) $ 1,694,346 $ - $ - $ -

TOTAL PROJECT COSTS $ 4,426,500 $ 5,100,000 $ 26,000 $ 845,000 $ 136,500 10,534,000

Total Non-Aidable Project Costs $ (1,744,102)

Percent Non aid eleigible 16.6%

Percent Aid Eligible 83.4%

Building Aid Ratio 87.3%

Portion of Total Project 72.8%

Jr./Sr. High

School Elementary School Bus Garage

23

The general rule change is “Building aid will commence the later of 18 months after SED approval or when the final cost report and final certificate of substantial completion have been received by SED. The FCR and CSC filings replace the SA-139 filing as the trigger to when aid may commence. Provisions of the anticipated budget for 2012-13 include a process for obtaining a waiver to allow aid to begin prior to the filing of the FCR and CSC. Waivers will be issued on a case by case basis when “the district is unable to submit a final certificate of substantial completion for the project and/or complete the final cost report because of circumstances beyond the control of the district.”

PROPOSED NET LOCAL SHARE OF DEBT SERVICE

PROPOSED $4,605,000 MATURITY SCHEDULE

FISCAL

YEAR

ENDING

CAPITAL

RESERVE

PRINCIPAL

BALANCE

OUTSTANDING

ESTIMATED

PRINCIPAL

PAYMENT

ESTIMATED

INTEREST

PAYMENT

TOTAL DEBT

SERVICE

ESTIMATED

STATE BUILDING

AID

GROSS LOCAL

SHARE

LESS DEBT

SERVICE

OFFSETS

NET LOCAL

SHARE

6/15

3,705,000$

2019 900,000$ 3,705,000 -$ -$ -$ -$ -$ -$ -$

2020 - 3,705,000 - 148,200 148,200 - 148,200 148,200 -

2021 - 3,535,000 170,000 185,250 355,250 357,425 (2,175) (2,175)

2022 - 3,355,000 180,000 176,750 356,750 357,425 (675) - (675)

2023 - 3,165,000 190,000 167,750 357,750 357,425 325 - 325

2024 - 2,965,000 200,000 158,250 358,250 357,425 825 - 825

2025 - 2,755,000 210,000 148,250 358,250 357,425 825 - 825

2026 - 2,535,000 220,000 137,750 357,750 357,425 325 - 325

2027 - 2,305,000 230,000 126,750 356,750 357,425 (675) - (675)

2028 - 2,065,000 240,000 115,250 355,250 357,425 (2,175) - (2,175)

2029 - 1,815,000 250,000 103,250 353,250 357,425 (4,175) - (4,175)

2030 - 1,550,000 265,000 90,750 355,750 357,425 (1,675) - (1,675)

2031 - 1,270,000 280,000 77,500 357,500 357,425 75 - 75

2032 - 975,000 295,000 63,500 358,500 357,425 1,075 - 1,075

2033 - 665,000 310,000 48,750 358,750 357,425 1,325 - 1,325

2034 - 340,000 325,000 33,250 358,250 357,425 825 - 825

2035 - - 340,000 17,000 357,000 357,425 (425) - (425)

Totals 900,000$ 3,705,000$ 1,798,200$ 5,503,200$ 5,361,370$ 141,825$ 148,200$ (6,375)$

- Vote: November 2017 87.3%

- SED Approval: January 2019 95.0%

- First Borrowing: June 2019 $150,000

- Final Cost Report: December 2020 $900,000

- 2017-18 Est Aid Ratio:

- Bond Percentage:

- Capitalized Interest:

- Capital Reserve:

24

Debt Service Schedule Samples


There are Tax Cap Calculation Implications

*Exclusions for Local Share of Debt Service

(Don’t forget to consider Buses

–Cash or borrowed funds)

25

Building Projects: Predictability & Consistency No Marginal Increase


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Data to SED Office of Facilities Planning

33© R. G. Timbs, Inc. 2018

1. Secure your aid commitments early before public comment and certainly

before the vote:

a) Aid eligible vs. non-aid eligible- based on age or purpose

b) With Maximum Cost Allowance

c) SHPO= State Historic Preservation Office

d) SEQRA= State Environmental Quality Review Act

2. Facilities Needs Assessment

3. ISR= Instructional Space Review

4. Enrollment Study Elementary(5/5) Middle (5/7) High (5/10)

5. Do you need to meet with SED Office of Facilities Planning?

6. FP-F Facilities Planning Final ( Submission of Plans and specifications for

SED review)

7. SA 25 = Denial of Aid

8. SA 139 = submission of costs based on bid awards

9. FCR = Final Cost Reports

10. Documentation of Decisions and communications from SED, Architect,

Construction Manager

11. Financial Advisors

Phasing Issues

When will state aid begin to arrive at the district?

1. Dependent on a combination of the following:

A. -Date of Commissioner Approval - At least 18 months after

1. -If Commissioner approves before for June 30 full year aid; after June 30

half year of aid.

B. -Submission of SA 139

1. -If before/about October 1- on November runs and on schedule for

payment

2. -After/about October 1, not on November Runs and deferred to next

fiscal year.

C. -Submission Of Certificate of Substantial Completion and Final Cost Report

1. -If submitted within 18 months of Commissioner’s approval -18 after

Commissioner’s Approval (see Commissioner’s approval notes)

2. -If submitted after 18 after commissioner’s approval – immediately

following acceptance by SED (see also Submission of SA 139 notes)

2. -Date of §155.23 Multi-year cost allowance – SED Approval

3. -Separate Project Numbers for the Same Building vs. Phases

4. -Multiple Bids, Same or Different Contractors

5. - Authorizations and Project Costs

6. -Proposition Wording and Bond Resolution Wording34


How to mess up the project…1. Have a resolution that is too narrow to accomplish goals

2. Try to fit too much into authorization

3. Have inaccurate estimates of the project costs

4. Fail to have someone who represents the district and knows what they are doing clerk the project

5. Exceed Authorization

6. Don’t consider aid ceilings

7. Don’t stay on schedule if trying to match debt fall offs

8. Ignore non-aid eligible items in the scope

9. Forget to consider Bond Percent

10. Be overly specific/ but incomplete with scope forms

11. Exceed the project scope in work or change orders

12. Fail to consider impact of FP-Fs

13. Fail to link FP-Fs with SA 139s

14. Fails to link Schedules of Values (SOVs) with SA 139s

15. Wait until the end of the timeline to address incomplete items in the project or punch list items

16. Fail to keep track of Allowances and Change Orders

17. Break the Bid Law

18. Fail to provide detail for items for which aid is granted only under certain circumstances

19. Fail to secure aid for additions prior to the vote

20. Fail to understand the required submissions and tests for aid to additions (determination of aid ceiling)

21. Failure to understand what is not aid eligible

22. Complete repairs and maintenance items

23. Fail to make sure SED has entered change orders (accepted and approved are two different terms)

24. Fail to communicate with your project manager at SED

25. Fail to accurately submit required forms and documentation as needed 35© R. G. Timbs, Inc. 2018

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