5-25-05 - by Ron Bird - The Bird’s Eye View
In baseball it’s three strikes and you’re out. In the attempt to build a much-needed permanent high school for our district, it’s three bond failures and then try for a state hardship grant. What are the Hardship Qualifications? Here is what the State Allocation Board says is required:
Levy maximum developer fee allowed
Demonstrate local effort to raise revenues Evidence of at least one of the following
Debt level at 60 percent of bonding capacity
Total district bonding capacity less than $5 million.
The district had a successful registered voter bond election for at least the maximum allowed under Proposition 39 within the previous 2 years.
Other evidence which demonstrates that all reasonable local efforts have been made as approved by the SAB
It looks like any AAD District request will be in this nebulous "other" category.
How Much Will Purchasing the 15 State Emergency Lease Portables Hurt Our Hardship Appeal? Our district is currently leasing 15 portables from the state at $4,000 each per year that are old enough to qualify for outright purchase. The state’s published terms for purchase of each of these old units is $4,000 and the payments can be spread out over two years ($2,500 first year, $1,500 second year). Districts have made offers to purchase portables under this program for much less than the published $4,000 rate.
If we purchase these portables, our district will realize savings even with this published rate: a savings of $22,500 the first year, $37,500 the second year and $60,000 in each year thereafter. The reason our district has not thus far embarked on this purchase is the concern that their purchase will hurt our chances for a successful hardship appeal for a new high school. Hardship appeals are decided by the SAB (State Allocation Board). The SAB does not have any hard and fast rules for determining hardship other than the rules stated above. The formula for determining how many unhoused students a district has is published. Two options exist for this formula with option 2 being the option our district would choose. Option 2 makes no distinction between emergency leased portables and district owned portables.
What Are Our Chances of a Successful Hardship Appeal? Realistically, even if all of our classrooms were leased classrooms at Vasquez (we already own eight of them), our chances probably are very slim. The 60% bonding rule, which we do not meet, seems to be a very important in hardship success. I spent several hours last weekend looking at successful hardship grants and the waiting list for funding for hardship approvals. I looked at over two-dozen successful hardship cases, which the SAB has approved over the last two years.
The district that I ran into in the entire state that most closely matched our case is Fillmore. Fillmore is getting full state funding to build a 22-classroom annex building for $6.3 million. Fillmore is a rural district like ours and is about twice our size. Fillmore tried twice in 2000 to pass a $7.5 million bond, but failed. They did have successful bonds in 1987 and 1997 to the tune of $17 million total. Fillmore has a very high minority population and is very poor compared to our district (mainly due to the large amount of produce grown in the district – there’s not a lot of profit in farming). Looking at their board minutes, it appears that this grant is due to their existing buildings requiring replacement due to termite damage. Their Assemblyman also happens to be a member of the SAB.
Should We Apply for Hardship? Sure, it’s worth a shot. I’m just not sure that we shouldn’t be buying those emergency portables now while we wait for this appeal. Our district is predominately middle class, has over 1 billion dollars worth of property tax base and has never passed a bond, parcel-tax or Mello-Roos. If building a high school were as simple as not passing a bond, then SaveOurHomes (an anti-property tax group) would be advocating this strategy. I do think that we need to do further research on this and make it a formal agenda item. I’m not sure what our deadline is to decided when we must buy these 15 portables, but many other state deadlines are June 30th. Now is the time to look into this.