School Facilities Funding & Policy Updates in the 2020 Session
House Bill 1 – The Built to Learn Act
House Bill 1 passed the House on February 14, 2020 and passed in the Senate on March 13, 2020. Unfortunately, the Senate Budget and Taxation Committee did not adopt amendments requested by MABE and PSSAM, including an amendment to increase from 20,000 to 30,000 the system-wide enrollment count that makes a school system eligible for additional state funding for the costs of architectural and engineering services in planning and preparing for a major school construction or renovation project. Other requested amendments which, were not adopted, would have addressed the appeals process for MSA control over design and project management (requesting that appeals could be made to the IAC), and a method for allocating the 11.5% of funding not allocated to any of the 7 jurisdictions allotted specific amounts of funding.
This bill authorizes the Maryland Stadium Authority (MSA) to issue up to $2.2 billion in revenue bonds, backed by annual payments from the Education Trust Fund (ETF) beginning in fiscal 2022 that phase up to $125 million annually by fiscal 2024, for public school construction projects in the State, including to support a possible public-private partnership (P3) agreement for Prince George’s County. It also increases or extends mandated State funding for supplemental public school construction programs and establishes a new special fund and mandate for the highest priority school facilities.
Sale of Revenue Bonds
The issuance of a bond under the bill is not directly, indirectly, or contingently a moral or other obligation of the State, MSA, or any other governmental unit to levy or pledge any tax or to make an appropriation to pay the bond. A bond issued by MSA to finance improvements, construction, or renovations to a public school facility.
Financing Fund - Monies in the financing fund are pledged to and used to pay (1) debt service on bonds issued by MSA; (2) debt service reserves under a trust agreement; (3) the annual payment to the Prince George’s County P3 fund; (4) all reasonable charges and expenses related to the issuance of bonds; and (5) all reasonable expenses related to MSA’s management of the fund and its project oversight responsibilities.
Facilities Fund - MSA may use the facilities fund as a revolving fund to pay (1) debt service on bonds; (2) design and construction costs relating to public school facilities; (3) to the extent authorized by federal law, any start-up costs, administration, overhead, and operations related to management of improvements to public school facilities; (4) all reasonable charges and expenses related to MSA’s oversight and project management responsibilities; and (5) all reasonable expenses related to its review of the Prince George’s County P3 agreement.
In general, MSA is responsible for the construction and improvements to local school facilities financed with the proceeds from the revenue bonds. However, except for Baltimore City, MSA may authorize a local school board to contract for, manage, and oversee public school facility projects under its jurisdiction. Before authorizing a local school board to manage its projects, MSA must consider the board’s (1) track record of managing public school facility projects and (2) expertise and capacity to manage the proposed projects. Projects managed by MSA and local school systems are subject to the same requirements and procedures that govern the PSCP.
Other Key Bill Provisions and Amendments
MOUs with MSA
For any MSA funded school project, the MSA, county government, and county board of education must enter into a project memorandum of understanding for a public school facility that shall be subject to approval by the Interagency Commission on School Construction (IAC).
The project memorandum of understanding shall:
- be subject to the applicable terms and conditions set forth in the program memorandum of understanding under subsection (e)(2) of this section;
- identify specific parameters regarding the 5 roles and responsibilities of each party with respect to budget review and approval, procurement, design, schedule, construction administration, and contract compliance and reporting;
- reserve the right of the authority to assume a project under certain circumstances;
- include a provision that the state and local cost–share for the county established in regulations shall apply to a county public school facility approved for funding from the supplemental public school construction financing fund or the supplemental public school construction facilities fund; and
- require the county and county board of education to give priority in funding projects to schools:
- that are the oldest buildings in the school system with significant facility deficiencies;
- with high concentrations of students 20 eligible for free or reduced price meals;
- with a high number of relocatable classrooms; or
- with a high utilization based on the school’s state rated capacity;
- with space needs for full–day prekindergarten or career and technical education programs; and
- INCLUDE A COMPREHENSIVE PLAN FOR LOCAL HIRING AND A PLAN TO MAXIMIZE THE UTILIZATION OF STATE–CERTIFIED LOCALLY BASED MINORITY AND WOMEN–OWNED BUSINESSES FOR PROJECTS APPROVED FOR FUNDING.
Eligible Costs and Local Cost-Share
The bill makes two adjustments to the calculation of school construction costs that are eligible for State reimbursement that apply only to projects funded from proceeds of the MSA bonds. Eligible costs for these projects include architectural, engineering, consulting, and other planning costs. Also, for a county that receives the minimum State share (50%) of eligible school construction costs and that has advanced construction funding for projects in PSCP, the State share of eligible costs for MSA bond proceeds must include 150% of the applicable gross area baseline per student for each project.
For projects funded by PSCP (but not from the proceeds of MSA bonds), IAC must adopt regulations that include architectural, engineering, consulting, and other planning costs as eligible costs for a project that (1) is located in a county that has fewer than 20,000 full-time equivalent students enrolled and (2) has received local planning approval from IAC.
Healthy School Facility Fund
Healthy School Facility Fund - The bill extends the $30 million mandated appropriation for the Healthy School Facility Fund by one year, through fiscal 2022. It also specifies that funding priority must be given to resolve any severe issue that results in a school being closed, in addition to specified issues in current law. It also clarifies how applications for plumbing-related projects should be prioritized.
(j)(1) (I) In each of fiscal years 2020 [and 2021] THROUGH 2022, the Governor shall appropriate at least $30,000,000 to the Fund.
“(II) IN EACH OF FISCAL YEARS 2023 AND 2024, THE GOVERNOR SHALL APPROPRIATE AT LEAST $40,000,000 TO THE FUND.
(III) FOR EACH OF FISCAL YEARS 2021 THROUGH 2024, 50% OF THE FUNDS APPROPRIATED UNDER SUBPARAGRAPHS (I) AND (II) OF THIS PARAGRAPH SHALL BE AWARDED TO PUBLIC SCHOOLS IN BALTIMORE CITY.”
Public School Facilities Priority Fund and Aging Schools and School Safety Grant Programs
The bill creates the Public School Facilities Priority Fund, effective July 1, 2022, to provide State funds to address the facility needs of the highest priority schools identified by the statewide facilities assessment completed by IAC under current law, with highest priority given to schools with a severe facility issue that required the school to be closed. The bill further specifies how the funds are to be used if the statewide facility assessment is not completed. IAC administers the fund.
In fiscal 2025 and 2026 (As amended from FY 23 through FY 26), the Governor must appropriate at least $40.0 million to the fund in either the annual State operating or capital budget bill. Beginning in fiscal 2027, the mandated annual appropriation increases to at least $80.0 million. Money expended from the fund is supplemental to and is not intended to take the place of funding that otherwise would be appropriated for public schools in the State.
Capital Grant Program for Local School Systems with Significant Enrollment Growth or Relocatable Classrooms
(4) “Significant number of relocatable classrooms” means an average of more than  250 relocatable classrooms in a local school system over the past 5 years.
In addition to the annual amount otherwise provided in the capital improvement program of the Public School Construction Program, the Governor annually shall provide an additional amount as follows in the OPERATING BUDGET OR capital improvement program of the Public School Construction Program that may be used only to award grants under the Program:
(1) In fiscal year 2016, $20,000,000; [and]
(2) In EACH OF fiscal [year] YEARS 2017 [and each fiscal year thereafter,] THROUGH 2026, $40,000,000; AND
(3) IN FISCAL YEAR 2027 AND EACH FISCAL YEAR THEREAFTER, $80,000,000.
(4) For the first $40 million of grants (as amended in the Senate), develop a process to allocate grant awards under the Program that allocate funds based on each eligible county board’s proportionate share of the total full–time equivalent enrollment of the county boards that are eligible to participate in the Program; and
(5) AFTER THE ALLOCATION OF GRANTS UNDER ITEM (4) OF THIS SUBSECTION, FOR THE REMAINING GRANTS, DEVELOP A PROCESS TO ALLOCATE GRANT AWARDS UNDER THE PROGRAM THAT ALLOCATES FUNDS BASED ON EACH ELIGIBLE COUNTY BOARD’S PROPORTIONATE SHARE OF PERCENTAGE OF ENROLLMENT GROWTH ABOVE THE STATEWIDE AVERAGE PERCENTAGE”.
Workgroup on the Assessment and Funding of School Facilities
The bill requires the President of the Senate and the Speaker of the House (instead of the State Superintendent of Schools) to jointly appoint the chair of the workgroup. It also extends the deadline for the workgroup to report its findings and recommendations by two years, to December 1, 2021, and makes conforming changes to when IAC can begin using the results of a statewide facility assessment for school construction funding decisions. The bill also extends the date when assessment data may be used for funding allocations by two years to May 1, 2022, for fiscal 2023 funding.
Local Capacity Studies
By July 1, 2022, each local school board must conduct a capacity study identifying the current capacity of each school and the demographics of students in the school compared to the overall student demographics for the school system. A capacity study completed within three years of the due date satisfies the requirement. The capacity study must be submitted to IAC and the General Assembly by December 1, 2022.
The Maryland State Department of Education (MSDE), IAC, and MSA must collaborate with local school systems and community colleges to develop a CTE apprenticeship pathway in school building maintenance that leads to an industry recognized certificate or credential.
Other Senate Amendments
Life Cycle Cost Evaluations of All School Buildings
THE INTERAGENCY COMMISSION OR, IF REQUIRED UNDER SUBSECTION (B) OF THIS SECTION, THE MARYLAND STADIUM AUTHORITY SHALL EVALUATE THE LIFE CYCLE COSTS OF PUBLIC SCHOOL BUILDINGS OVER A 50–YEAR PERIOD, INCLUDING:
(1) AN EVALUATION, BASED ON A 50–YEAR PERIOD, OF THE COST AND EFFICIENCY OF USING ALTERNATIVE ENERGY SYSTEMS, INCLUDING GEOTHERMAL, SOLAR, WIND, AND ENERGY STORAGE COMPARED TO A TRADITIONAL ENERGY SYSTEM;
(2) AN ENERGY CONSUMPTION AND SYSTEMS REPLACEMENT ANALYSIS, BASED ON A 50–YEAR PERIOD, OF EACH MAJOR PIECE OF EQUIPMENT IN ANY OF THE FOLLOWING SYSTEMS SERVING THE PUBLIC SCHOOL BUILDING:
(I) THE COOLING SYSTEM;
(II) THE HEATING SYSTEM;
(III) THE HOT WATER SYSTEM;
(IV) THE LIGHTING SYSTEM;
(V) THE VENTILATION SYSTEM; OR
(VI) ANY OTHER MAJOR SYSTEM THAT USES ENERGY; AND
(3) THE IMPACT OF INNOVATIVE BUILDING DESIGN AND MATERIALS ON ENERGY CONSUMPTION, INCLUDING WHITE ROOFS AND GREEN ROOFS.
(B) THE INTERAGENCY COMMISSION OR THE MARYLAND STADIUM AUTHORITY, AS APPLICABLE, MAY CONTRACT WITH A THIRD PARTY TO CONDUCT THE EVALUATION UNDER SUBSECTION (A) OF THIS SECTION.
(C) (1) THE EVALUATION REQUIRED UNDER SUBSECTION (A) OF THIS SECTION SHALL BE CONDUCTED AND SUBMITTED TO THE GENERAL ASSEMBLY IN ACCORDANCE WITH § 2–1257 OF THE STATE GOVERNMENT ARTICLE ON OR BEFORE OCTOBER 1, 2023.
(2) ON OR BEFORE OCTOBER 1, 2020, AND EACH OCTOBER 1 THROUGH 2022, THE INTERAGENCY COMMISSION OR THE MARYLAND STADIUM AUTHORITY SHALL PROVIDE ANNUAL UPDATES ON THE PROGRESS OF THE EVALUATION TO THE GENERAL ASSEMBLY, IN ACCORDANCE WITH § 2–1257 OF THE STATE GOVERNMENT ARTICLE.”.
Sales Tax Exemption for School Construction Materials
(B) THE SALES AND USE TAX DOES NOT APPLY TO A SALE OF CONSTRUCTION MATERIAL IF:
(1) THE CONSTRUCTION MATERIAL IS PURCHASED BY A PERSON SOLELY FOR USE IN FURTHERANCE OF THE PROVISIONS OF TITLE 10, SUBTITLE 6 OF THE ECONOMIC DEVELOPMENT ARTICLE FOR THE CONSTRUCTION OR REDEVELOPMENT OF A PUBLIC SCHOOL FACILITY;
(2) THE SALE IS MADE ON OR AFTER JUNE 1, 2020; AND
(3) THE BUYER PROVIDES THE VENDOR WITH EVIDENCE OF ELIGIBILITY FOR THE EXEMPTION ISSUED BY THE COMPTROLLER.
(C) THE COMPTROLLER SHALL ADOPT REGULATIONS TO IMPLEMENT THIS SECTION.”.
FY 2021 Capital Budget Highlights
SB 191 – Capital Budget Bill for FY 2021
IAC Section on p. 9 of 115
- Aging Schools Program - $6.1 Million
- Public School Construction Program - $280 million
- Supplemental Capital Grant Program for Local School Systems - $75 million
What did NOT pass in 2020
HB 7 - Environment - Public and Nonpublic Schools - Inspections for Mold Hazards and Mold or Moisture Problems
This bill would have required the Maryland Department of the Environment (MDE), in consultation with the Maryland State Department of Education (MSDE), the Department of General Services (DGS), and Maryland Occupational Safety and Health (MOSH), to adopt regulations to require periodic inspections of occupied schools in the State for the presence of a “mold hazard” or a “mold or moisture problem,” as specified. The bill outlines steps that must be taken if mold issues are identified.
SB 992/HB 1475 - School Buildings - Drinking Water Outlets - Elevated Level of Lead (Safe School Drinking Water Act)
This bill would have (1) redefined “elevated level of lead” to mean a lead concentration in drinking water that exceeds five parts per billion (ppb) for the purposes of required lead water testing and remedial measures in public and nonpublic schools and (2) makes conforming changes to existing notice and remediation requirements. If a water test sample for a drinking water outlet was analyzed on or before June 1, 2020, and the analysis indicated a concentration of lead that was more than 5 ppb but less than 20 ppb, a school must take appropriate remedial measures by August 1, 2021.
SB 592/HB 1370 - State-Funded Construction and Major Renovation Projects - Solar Panels - Requirement
This bill would have required specified construction and major renovation projects which are proposed after December 31, 2020, receive State funding, and are carried out by the State or local governments to be designed, engineered, and constructed in a manner that allows the roof to withstand the weight of solar panels. Such projects must include the placement of the maximum number of solar panels for which the project was designed. The Maryland Green Building Council (MGBC) must recommend design considerations consistent with the bill’s intent.
HB 665 - Public School Construction and State Buildings - Use of Geothermal Energy
This bill would have required that geothermal energy systems be installed in newly constructed public schools and in newly constructed State buildings, including any buildings for which more than 50% of the construction cost is paid using State funds. It also requires that life-cycle analyses of projected construction projects required under current law be based on a 50-year period and incorporate the use of geothermal energy systems.
SB 926/HB 1425 - Climate Solutions Act of 2020 – Greenhouse Gas Emissions Reduction Act
The bill would have increased the statewide greenhouse gas (GHG) emissions reduction requirement (from 40% from 2006 levels by 2030 to 60% from 2006 levels by 2030) and requires the State to achieve net-zero statewide GHG emissions by 2045. An amendment proposed and considered would have required each LEA to build a net-zero school (one among their next 5 new schools).
School Facilities Funding & Policy Updates in the 2019 Interim
Workgroup on the Assessment and Funding of School Facilities (ongoing)
- Link to Workgroup webpage: Members & Objectives
- Draft Final Report (Oct. 28, 2019)
- MABE Comments on the Workgroup's Draft Final Report (Nov. 13, 2019)
- Preliminary Report (with red-line amendments) (Nov. 19, 2019)
Workgroup on Educational Development Specifications (concluded)
- Link to Workgroup webpage: Members & Objectives
- Final Report "The Findings and Recommendations of Maryland’s ED Specs Workgroup
established under the 21st Century School Facilities Act (HB 1783)"
Capital Budget & Legislative Actions in the 2019 Session
HB 101 (Ch. 14) - Creation of a State Debt - Maryland Consolidated Capital Bond Loan of 2019 - This bill includes funding for the Public School Construction Program funds to construct public school buildings and public school capital improvements. Major programs (including operating budget amounts) include: IAC Public School Construction Program, $251.8 million; Supplemental Grant Program, $68.2 million; Healthy School Facility Fund, $30 million; School Safety Grants, $10 million; and Aging Schools Program, $6.1 million. An additional $127 million may be provided per the Governor’s discretion; $90 million from the Revenue Stabilization Account (Rainy Day Fund), and $37 million from the Dedicated Purpose Account (designated in the budget as introduced for retirement reinvestment contributions).
MABE’s adopted legislative priority was to advocate for an FY 2020 school construction budget of at least $400 million to support local boards in providing safe and sustainable optimal learning environments to prepare our students to be college and career ready. The legislature pursued a goal of $500 million, and adopted an operating State Budget bill and Capital Budget bill that, depending on the Governor’s actions, should largely achieve that goal.
|Budgeted Public School Construction Funding for FY 2020
|Public School Construction Program||$251.8 million|
|Supplemental Grant Program||$68.2 million|
|Healthy School Facility Fund||$30 million|
|Public School Safety Improvement Grants||$10 million|
|Aging Schools Program||$6.1 million|
|Public School Construction Program – Revenue Stabilization Account (Rainy Day Fund)*|
|Public School Construction Program – Dedicated Purpose Account*||$
* The $90 million and $37 million was funding identified by the General Assembly as available, but not released by the Governor at his discretion.
Bills Passed in 2019
SB 653 (Ch. 528) - County Boards of Education - Establishing Innovative Regional Schools - Authority (Cross-County Attendance to Achieve Efficiency Act of 2019) - This bill authorizes local boards of education to establish innovative regional schools, that (1) offer special courses or curricula for an innovative education program and (2) admit students from one or more local school systems that are party to a binding memorandum of understanding (MOU) outlining each local board’s responsibilities. The parties to the MOU must identify one local board to govern the innovative regional school. The MOU may establish required payments of each county served by the school. This bill takes effect October 1, 2019. (MABE Position: No Position)
SB 433/HB 680 (Chs. 686/687) - State Procurement - State Funded Construction Projects - Payment of Employee Health Care Expenses - This bill requires the Board of Public Works to adopt regulations that require all bidders, contractors, and subcontractors on State-funded construction projects to pay employee health care expenses. The bill does not apply to minority business enterprises (MBEs) or businesses with 30 or fewer employees. The Departments of General Services and Transportation must establish procedures to certify payment of health care expenses. The bill takes effect July 1, 2019. (MABE Position: No Position)
SB 300 (Ch. 9) - Prevailing Wage Rates - Public Work Contracts - Suits by Employees - authorizes an employee under a public work contract who is paid less than the appropriate prevailing wage to sue to recover the difference in wages paid without first filing a complaint with the Commissioner of Labor and Industry. A determination by the commissioner that a contractor is required to make restitution does not preclude the employee from a private cause of action. A contractor and subcontractor are jointly and severally liable for any violation of the subcontractor’s obligations. (MABE Position: No Position)
SB 1011 (Ch. 387) - Prince George’s County - Public School Construction - Prince George’s County Public - Private Partnership Fund - This bill establishes the Prince George’s County Public-Private Partnership Fund (fund) to pay a public or private entity for the availability payment due under a public-private partnership (P3) agreement authorized by the bill. Prince George’s County, the Prince George’s County Public Schools (PGCPS), and the Interagency Commission on School Construction (IAC) may enter into a memorandum of understanding (MOU) that, among other provisions, identifies a dedicated source of State funding and specifies any amounts to be contributed to the fund by the county and the school board for availability payments. The bill takes effect July 1, 2019.
Major legislation which did NOT pass - The Build to Learn Act
HB 727/SB 731 - Public School Construction - Maryland Stadium Authority - Supplemental Funds - This bill would have authorized the Maryland Stadium Authority (MSA) to issue up to $2.2 billion in revenue bonds, backed by annual payments of $125 million from the Education Trust Fund (ETF) beginning in fiscal 2021, for public school construction projects in the State. The bill allocates proceeds from the revenue bonds among local schools systems, including to support a possible public-private partnership (P3) agreement for Prince George’s County. (MABE Position: Support with Amendments) Status: HB 727 passed in the House, but only received a hearing on 3/30 in the Senate Budget & Taxation Committee.
MABE believed that House Bill 727, with amendments, could successfully advance the State’s goal of ensuring high quality learning environments for more students across the state through an innovative and expedited funding initiative. Before passing in the House, the bill was amended to make architectural and engineering costs eligible for state funding for smaller jurisdictions; and to remove the restriction on local control over design and construction of school facilities, regardless of the funding source. However, MABE raised the concern that the Education Trust Fund should remain the dedicated source of revenue to fund the Kirwan Commission’s recommendations.
As amended in the House, the bill would have included the following provisions:
• Authorize $2.2B in MSA revenue bonds (30 year bonds). Paid for by $125m ETF beginning FY 2021. Allocates $2.2B in the bill as percentages to counties.
• In order to participate, school systems and counties must have MOU with MSA approved by lAC.
• LEAs choose whether to have MSA manage the project. If opt to use MSA, must be part of MOU. (Baltimore City must use MSA.)
• School construction projects subject to same lAC rules, procedures and approvals as any other project, or as agreed in MOU if MSA managing projects.
• Revenue bond proceeds represent State share of eligible costs for the projects; counties must provide local share and any ineligible costs (except as described below for small systems).
• In using the bond proceeds under the program, LEAs must give priority schools that are the oldest buildings in the system with significant facility deficiencies, schools with high concentrations of students eligible for free and reduced price meals, and schools with high number of relocatable classrooms.
• In addition, the bill would have included provisions for the use of public private partnerships in Prince George's County and an expanded definition of eligible costs for small school systems. This provision was included in separate local legislation which did pass. See SB 1011 described above.
For more information, see the one-page outline of the bill as amended.
Also, see below for much more information on the status and MABE's positions on state regulations and background on the landmark 21st Century School Facilities Act of 2018.
School Facilities Funding & Policy Issues
IAC Proposed Regulations
On October 11, 2018 MABE hosted a meeting of school facility planners to provide a forum for their discussion on the proposed draft regulations, originally distributed on Sept. 5, 2018, governing the Public School Construction Program and to implement the 21st Century School Facilities Act of 2018. The outcome of the meeting was the agreement to develop a set of comments on the proposed regulations, but also to identify several major concerns relating more broadly to communication and the policy-making process. MABE greatly appreciates that this is a time of momentous change as the State shifts from a decades-old process of IAC and Board of Public Works governance, to the newly restructured IAC. The following comments were submitted on Oct. 30, 2018. The regulations were scheduled for action on Nov. 15, but consideration was postponed.
Knott Commission Bill - The 21st Century School Facilities Act of 2018
House Bill 1783 was passed through a gubernatorial veto override on March 5th, 2018.
House Bill 1783 was introduced on March 1 and heard in the House Appropriations Committee on March 7. See the bill’s Fiscal and Policy Note for more detailed information. This bill is aligned with the recommendations adopted by the Knott 21st Century School Facilities Commission and its Final Report.
House Bill 1783 was amended to address major concerns raised by MABE and others, including amendments to clarify that no action will be taken on developing a school facility index or ranking system to override local priorities; and the removal of the section of the bill calling for a study of no longer providing state funding for systemic renovation projects (roofs, HVAC, etc.).
A major amendment was adopted to remove from the Board of Public Works any final decision-making authority on school construction projects. Instead, all final decisions on 100% of state funding for school construction projects will be made by an expanded and restructured Interagency Commission on School Construction.
The Committee also adopted an amendment to create a $10 million annual school facility safety fund.
Knott Commission Final Report
- First, responsibility for the design, construction, and maintenance of public school facilities is best left primarily to local school systems.
- Second, the State has a critical and appropriate role in overseeing the construction of public school facilities in the State but should, within reasonable boundaries, minimize the burden on local school systems and offer flexibility to accommodate local priorities.
- Third, the State must focus its limited resources on critical areas of need, especially in low-wealth jurisdictions including those with a higher proportion of students living in poverty and those experiencing excessive enrollment growth;
- Fourth, resource limitations at both the State and local levels mean that more needs to be done to encourage innovative strategies that either reduce capital and/or facility operating costs or use public funds to leverage private resources; and
- Finally, the entire process of designing, funding, building, and maintaining public school facilities must be fully transparent.
MABE extends much thanks to Warner Sumpter, MABE’s former president and Somerset County board member, for his years of dedicated service as MABE’s representative on the Knott Commission. MABE encourages board members and all those interested to read the brief but recommendation-packed Final Report of the Knott Commission. MABE anticipates and will be reporting on legislation to implement the Knott Commission recommendations.
Senate President Thomas V. Mike Miller, Jr. and House Speaker Michael E. Busch announced in December of 2015 the formation of a commission to review the State’s school construction policies and make recommendations for more efficient and effective school construction practices into the future. The 21st Century School Commission is chaired by Martin Knott, President of Knott Mechanical, a mechanical services company. The Commission is comprised of private sector representatives from the construction services and development industry; local government and educational members; as well as State officials. A press release issued on April 19th announced the Commission roster and provided additional background information. MABE has been represented on the Commission by past president Warner Sumpter.
On January 22, 2018, the Knott Commission presented its Findings and Recommendations to the House Appropriations Committee.
On December 14, 2017, the Knott Commission adopted final recommendations. The Commission considered and approved, with only minor changes, all of the recommendations developed by the Subcommittee on Funding and the Subcommittee on Process, Procedures, and Educational Specifications. In addition, the Commission adopted several alternative recommendations.
The Department of Legislative Services maintains a 21st Century School Facilities Commission webpage.
Knott Commission Final Recommendations
On December 14, 2017 the Knott Commission adopted more than 30 recommendations, including several significant changes in state law and practice concerning school construction funding and procedures.
Major funding recommendations include:
- Conduct a statewide facility assessment using a uniform integrated data system; and continually update the assessment.
- The State’s short-term funding goal should be at least $345 million; increased to $400 million after FY 2019; and determined by the results of the facility needs assessment, which may result in a higher goal.
- Explore creating a school construction authority to accelerate school construction funding.
- Consider increasing the share of state funding for projects with costs materially below the regional average cost.
- Consider allowing school systems to enter into lease agreements that allow entities other than the school system to own the building.
Major process recommendations include:
- Final project proposals should be subject to review and approval by IAC.
- Eliminate the required DGS review and IAC approval of design and construction documents for those school systems that complete a voluntary certification process.
- Repeal the requirement that all schools undergoing renovation qualify as emergency management shelters.
- Require local school systems to report annually on their preventive maintenance schedules and the preventive maintenance measures they have carried out on all major functional systems in each of their school buildings.
Knott Commission Background & Highlights
The Commission's charge included:
- Reviewing existing educational specifications for school construction projects and determining whether the existing specifications are appropriate for the needs of 21st century schools
- Identifying best practices from the construction industry to determine whether there are efficiencies that can be made in the construction of public schools and charter schools
- Identifying a long-term plan for jurisdictions with growing enrollment, as well as maintaining facilities in jurisdictions with flat and declining enrollment
- Identifying areas where innovative financing mechanisms including public-private partnerships, as well as alternatives to traditional general obligation debt can be used for construction and ongoing maintenance
- Determining areas for efficiencies and cost-saving measures for construction and maintenance
- Evaluating the appropriate role for State agencies including the Maryland Department of Planning, Department of General Services, Board of Public Works, as well as the appropriate statutory structure for the Interagency Committee for Public School Construction
- Reviewing the relationship between State agencies and local governments on school construction projects
- Reviewing the Kopp Commission findings and progress toward implementation
In January of 2017, the 21st Century School Facilities Commission submitted a brief progress report of the work accomplished during 2016. Link to Knott Commission Interim Report
"The commission’s charge from the Senate President and Speaker of the House focuses on a critical set of issues related to improving school construction in Maryland. As the commission started delving into the issues outlined in the charge, there was a quick awareness that more time would be needed to sufficiently examine all of them and to develop concrete recommendations. This progress report highlights four major themes that emerged from the eight meetings held in 2016 as a result of the expert presentations and information discussed at the meetings and the input of the commissioners themselves with the varied backgrounds and expertise that they brought to the deliberations. Other themes, in addition to the four major themes, are also identified for further examination in 2017. While consensus was reached on these themes, the commission would like additional time to make specific recommendations."
The interim report outlined the major themes to pursue following the 2017 legislative session regarding flexibility, cost efficiency, and the role of the Interagency on School Construction (IAC). Findings included:
- State/IAC review of LEAs should be differentiated based on LEA’s previous experience in construction and maintaining schools and capacity of the LEA (i.e., ed specs, schematic design, design development, construction documents, project contract, change orders);
- Shorter/limited review of projects for LEAs that have good track record in school construction and maintenance will allow the IAC to focus more resources on LEAs that need additional technical assistance;
- Schools should be built to allow flexibility in spaces and uses in the future;
- School construction review process should be streamlined wherever possible – too cumbersome, time consuming, bureaucratic, and ultimately expensive – while maintaining accountability for State investments;
- Reduce the duplication of effort at the State and local levels (i.e., ed specs, schematic design, design development, construction documents, contracts, change orders etc.);
- Encourage LEAs to take advantage of what is already allowed under State law and regulations by providing monetary or procedural incentive/pilot programs: Alternative construction methods and materials, Alternative project delivery, Innovative design, Alternative Financing, Use of Prototypes/Repeat School Design (Limit State review to changes from previously reviewed prototype);
- State/IAC should be clearinghouse for research-based best practices in all areas of school design and construction;
- State/IAC should research and provide technical assistance for innovative design/construction materials/project delivery/energy conservation etc. and then partner with LEAs to pilot promising practices.
MABE Priorities & Positions
For MABE and Maryland’s 24 local school boards, the mission to provide all of Maryland’s students with high performing school facilities conducive to learning is a top priority. The Maryland Constitution requires that the State provide a “thorough and efficient” system of public education. MABE believes that this includes the duty to equitably provide safe, high quality school facilities in which all students can learn. Key areas of concern for local boards include rising costs of construction, unmet demands for new construction and renovations to upgrade aging schools and increase capacity, and escalating costs of deferred maintenance. Other cost drivers include Maryland’s prevailing wage requirements and Leadership in Energy and Environmental Design (LEED) standards. MABE supports optimizing local flexibility to achieve cost savings and efficiencies through alternative methods of project delivery, alternative financing, and cooperative purchasing. Importantly, today it is widely recognized that $350 million per year better reflects the base amount of the state share of the costs of construction to meet school facility needs than the $250 million amount recommended by the Kopp Commission more than a decade ago.
MABE Leaders Testify
On July 21, 2016 MABE leaders testified before the Commission, including President-elect Donna Brightman, Legislative Committee Chair Joy Schaefer, and Legislative Committee Vice-Chair Stacy Korbelak.
Ms. Brightman requested the Commission's best efforts to develop recommendations to improve Maryland’s public school construction program. Specifically, she requested the Commission's pursuit of changes in law, regulations or procedures to facilitate the availability of alternative financing methods for school facilities projects. She emphasized that MABE has adopted a legislative position which “supports the pursuit of innovative funding policies and strategies to maximize the capacity of state and local bonding authority in support of school facility project funding.”
Alternative financing refers to financing a project completely or partially using approaches other than traditional revenue bond financing or pay-as-you-go (PAYGO) financing. Alternative financing methods include sale-leaseback arrangements, lease-leaseback arrangements, public-private partnership agreements, performance-based contracting, and design-build arrangements. MABE supported the School Facilities Act of 2004, which enhanced efforts to address Maryland’s public school facility needs by providing clear statutory authority for local boards and governments to utilize alternative financing methods.
Ms. Brightman highlighted several examples of successfully completed school projects which were financed through the sale-leaseback or other alternative financing approach. She observed that the merits of alternative financing are often very case-specific, but these methods can also generate much needed revenue when traditional financing methods are lacking. (read more)
Ms. Schaefer requested the Commission’s recognition of local discretion in the use of repeat or standardized school designs; and changes in the law to lessen or mitigate the impact of prevailing wage rates on school construction project costs. She emphasized that local boards are accountable to our local communities to design, build and maintain outstanding school facilities for student learning. Local school systems not only develop capital improvement plans (CIPs) and construct and maintain school facilities in accordance with adopted procurement and construction laws and regulations, but also strive to reflect our community preferences and priorities. Therefore, MABE believes that local school systems should remain able to prioritize project requests according to locally established criteria, and opposes any state mandated standard school designs or school sizes for elementary, middle or high schools.
Ms. Schaefer highlighted that, in light of the cost savings that can be achieved, MABE does encourage local school systems to consider the use of repeat school designs, and knows that many systems have benefitted from doing so. She shared that the Frederick County Public School System (FCPS) has been utilizing standardized school designs, or prototypes, at every level (elementary, middle and high) for decades. Benefits include: cost savings and cost avoidance through decreased costs in architectural and engineering fees (10-20% per project), more efficient and accurate bid process, the opportunity to refine design with each iteration resulting in further cost reduction through value engineering or design improvements, and the provision of equitable facilities across the system. FCPS notes the following challenges in using standardized, prototype designs: limitations as a result of unique, unpredictable school sites, the need to update or change designs in response to changes to construction requirements or new/additional programmatic demands. Lastly, Ms. Schaefer reiterated that in the interest of cost containment, MABE supports repealing or limiting the scope of prevailing wage requirements as they apply to school construction projects. (read more)
Ms. Korbelak requested a $100 million annual increase in the minimum state investment in school construction, for a total of $350 million. She informed the Commission that adequate funding for school maintenance is essential to allowing school systems to preserve aging school facilities while at the same time moving forward on major renovation and school construction projects. Although school construction costs continue to escalate and existing facilities continue to age, local boards are tasked with providing school buildings in each of our communities that are able to address the needs of ALL learners. For MABE and Maryland’s 24 local school boards, the mission to provide equitable school facilities to all of Maryland’s students is a top priority.
She noted that adequately maintaining school facilities requires significant investments from both state and local governments, in part because the General Assembly has enacted significant mandates affecting school construction procedures and project costs, including strict environmental design standards and minority business enterprise contracting participation standards; and the recently expanded scope of prevailing wage rates. Under the current $250 million approach, we’re finding that project costs that dramatically exceed projected cost estimates means the anticipated state and local appropriations for pending projects just aren’t enough. (read more)
For more information, contact John R. Woolums, Esq., MABE's Director of Governmental Relations, at email@example.com or 410-841-5414.