By Art Stellar, Ph.D.

Many school districts have deteriorating school buildings. Most have unmet needs for major renovations and repairs. The reason these situations are left unaddressed is lack of funds. Regular operating budgets have little in preventive maintenance or repair accounts except for the gravest occurrences. Capital budgets pay off old bond issues or adhere to one significant issue at a time. States rarely provide funding for school buildings and then usually on a reimbursement basis. It can take two years to clearly articulate building needs and to generate sufficient local public support to pass a new bond referendum.

A good source of funds for school renovations is Qualified Zone Academy Bonds (QZAB). Yet, very few school administrators or officials know about QZAB. This includes school facility directors, business managers, bond attorneys, and school board members. This brief article provides an overview of QZAB and how QZAB can resolve lingering or anticipated school facility needs.

What is QZAB?                                                                                                                                                                    

QZAB is a zero interest, 25-year loan program US Congress has authorized since 1998 at $400 million per year for K-12 public schools. Early in 2016 there was a billion dollars available in the United States for eligible schools. The US Treasury Department determines the allocation of these funds to each state based upon a formula related to total population and income levels. To see your state’s allocations, visit www.qzab.org

Interested schools apply to their state departments of education who make decisions to allocate no interest QZAB funds to schools within their state. Usually the process is “first come, first served”, although some states have other procedures. Charter schools are generally eligible, if they meet the criteria.

The states issue approval letters, which can be used by the receiving school districts to sell bonds at the amounts specified. The school districts pay no interest on these bonds and, except for a couple of states, do not have to go to a public vote to “cash in” on the approval letters.

The sale of the bonds produces the actual QZAB funds for the school district. These funds have to be spent within three years of the issuance of the approval letter, although there are a few exceptions for less than three years depending on when the approval was conveyed.

The Federal Government offers tax credits to the institutions or individuals who purchase the QZAB bonds. The amount of the tax credit varies according to the overall bond market, but is typically worth between 4 to 5% of the bond and good for 25 years as a reduction of Federal taxes owed. These credits can be rolled over to future years and/or sold; hence, there is an important economic benefit to the buyer of the bonds.

Schools that gain approval of the QZAB bonds experience a real advantage of QZAB in their ability to issue no interest bonds. While schools pay different rates for bonds depending upon a variety of factors, most school districts are paying close to 5% interest on current bonds. Over the course of 25 years, a five percent interest charge can double the amount the school district pays. (Think of your 30-year home mortgage in which you pay 5 times the cost of your home by the time the mortgage is paid.) Also, due to inflation, the bonds are paid off with money that is worth less each year than the previous year. No interest bonds such as QZAB are like having “free money” since only the principal is paid.

Eligibility

A school must have 35% or more students on free/reduced meals or the reasonable expectation that there will be 35% to be eligible for QZAB funds. The “QZ” stands for Qualified Zone, which can also be a federally defined enterprise zone; however, the simplest means of determining eligibility is to identify those schools that meet the 35% or more free and reduced student criteria.

Use of Funds

The proceeds of the QZAB bonds can be used for these categories: facilities renovation, energy efficiency, curriculum, teacher training, technology, equipment, renewable energy, and/or academy expenses. QZAB funds cannot be used for buying land or for building new buildings. QZAB funds, however, can be used to cover interior and exterior costs, once the shell of a new building is paid for with other funds.

QZAB funds can be utilized to replace/repair roofs, windows, parking lots, physical education facilities, lighting systems, furnaces, plumbing, electrical work, air conditioning, etc. Security systems can be added. Technology can be purchased. Solar panels, wind generators, or geothermal units are all legitimate expenses. (For a complete list, contact me at artstellar@yahoo.com and ask for a planning guide).

A few states have peculiar biases or restrictions regarding the use of QZAB funds for certain kinds of technology, school buses, or what can be purchased for the academy. Contact someone with expertise and practical QZAB experience to confirm specific qualifications for the federal and state governments.

Required Federal Mandates (2 main requirements)

Some school districts do not pursue QZAB funds because they do not know how to meet the requirements. A vendor, who may attempt to sell a district bonds without mentioning requirements or deemphasizing them, has misinformed some districts. A few districts ignore or forget about federal mandates. State department personnel may overlook them due to being unaware or lack of attention to detail. There are federal legal requirements, however, which can get a district in trouble with the IRS when that agency audits a district’s spent QZAB funds.

It is not difficult to comply with the mandates, especially if a district uses a QZAB experienced nonprofit like the nonprofit National Education Foundation.

1) 10% Match Donation from a business or nonprofit of the total QZAB requested/approved. There are a variety of ways to meet this requirement, but the district has to document that the match is real and worthy of meeting at least ten percent of the total QZAB amount approved. The easiest method is to have a cash donation(s) or a donation from an organization that has already completed the research, like the nonprofit National Education Foundation, to justify to the IRS the value of the match donation.

2) Develop a NEW QZAB Academy for students designed and/or implemented in cooperation with the designated match partner to “better prepare students for college and workforce.” The “A” in QZAB stands for Academy which makes it hard to understand how some QZAB applications omit this key component or others involved in the process fail to notice when there is no academy. The IRS will hold the district responsible for this mandate.

The academy has to be NEW and not something the district has already been doing. An existing educational program will not be considered an academy just because it has been labeled an academy.

The term academy was not definitively defined when Congress originally approved QZAB. There does have to be an academy plan in place for any school site where QZAB funds are to be spent. The overall academy plan must be consistent with local, state, and Federal standards and curriculum. More states are including statements in their QZAB applications that make the academy a concrete educational program. A QZAB academy must be an observable and reasonable learning venture that meets the mission embedded in the QZAB legislation. Without an academy at a school site, QZAB funds cannot be spent there.

If a district is interested, it would be beneficial to research and make official inquiries as to the regulations as QZAB is often a funding source that is overlooked. Please visit the QZAB website to learn more. www.qzab.org

Summary

The QZAB or Qualified Zone Academy Bond program is a source hidden or unknown by most school officials. Fortunately, it is not as complex as it first may appear. QZAB is an excellent source of funds to address needed building renovations. At the same time a savvy school district can apply QZAB funds—matching and/or the bond proceeds directly—to establish a productive educational academy to raise student achievement. The key is to either intensively study QZAB or collaborate with a knowledgeable and experienced partner.

Dr. Art Stellar is Vice-President of the nonprofit National Education Foundation where he has assisted school administrators across the country in acquiring QZAB approval for over $120 million with at least that much currently in the pipeline. He served as a widely recognized superintendent for 25 years, as well as working for Renaissance Learning and leading the High/Scope Educational Research Foundation as president/CEO. He has served as president of ASCD, The Horace Mann League, and the North American Chapter of the World Council of Curriculum and Instruction; vice-president of the New York state PTA; and Chairman of the Board of Directors for the National Dropout Prevention Network and Center.

by Angel Ford, Ed.D.

In previous blogs, I have frequently discussed the inequities of school building conditions across America. This blog will also talk about those inequities in light of the Every Student Succeeds Act (ESSA). Let’s start by examining what ESSA states about educational facilities.

A search of the ESSA bill reveals very few mentions of school facilities. Charter school facilities are mentioned a number of times as well as the school facilities for students residing on Native American reservations. There is a mention of facility management in the context of community schools, and we also learn from the bill how federal dollars will be allocated for technology upgrades in schools, but these funds cannot be used to retrofit the built environment to accommodate improved technology. Beyond these considerations, there is no comprehensive plan to address school facilities.

While ESSA does not directly address the inequities of school building conditions, U.S. Secretary of Education John King repeatedly makes a clarion call for equity in education. Mr. King has emphasized that ESSA can be used to achieve equitable outcomes. However, there is little clarity from reading the actual bill to indicate how ESSA will approach facility conditions for all students. School facilities are a key element of this country’s educational infrastructure, and yet, the condition of school buildings and classrooms are very inequitable. Over half of the school buildings are in need of repair to even be considered in satisfactory condition (NCES, 2014).

In his address to the Senate Health, Education, Labor and Pensions Committee, Secretary King (2016a) stated that many students still have “less access to the resources necessary to thrive.” Although, at the time, he did not discuss directly the built environment, evidence suggests that adequate school building conditions and design are a crucial resource for all students. Secretary King (2016b) has also said, “persistent opportunity gaps undermine equality.” I couldn’t agree more! I would like to challenge education stakeholders to think about the unequal condition of our school buildings as a contributing factor that causes opportunity gaps.

Tanner (2015) conducted a meta-analysis of dissertations related to the effects of educational facilities. This study examined how school facilities correlate with student outcomes. He found that many factors of the built learning environment have statistically significantly relationships with student outcomes. These building factors include, but are not limited to, the quality and availability of natural light; design aspects such as quiet spaces, display spaces, green spaces, and storage spaces; climate control; and the overall condition of the school building.

Under ESSA, each state’s department of education will determine its implementation of the law, and every state will need to examine whether or not they are meeting the call for greater equity in education. Those of us concerned with the state of school facilities should make a strong effort to increase awareness that the conditions of physical learning environments are a sign of equitable treatment of students. Whereas ESSA doesn’t discuss facility conditions directly, the legislation does promote equity, and we know that school building conditions are not equitable currently. Now the remedy for this situation is at the state level, and we should let our local state representatives know that facility improvements are an educational priority.

Resources

National Center for Education Statistics. (2014). Condition of America’s public school facilities. Retrieved from http://nces.ed.gov/pubs2014/2014022.pdf

Tanner, C. K. (2015). Effects of school architectural designs on students’ accomplishments: An meta-‐analysis.  Education Facilities Clearinghouse.

King, J. (2016a). Remarks Before the Senate Health, Education, Labor and Pensions Committee on the Nomination of Dr. John B. King Jr., to serve as Education Secretary. Retrieved from http://www.ed.gov/news/speeches

King, J. (2016b). What we ought to be: Educational opportunity, civil rights and the Every Student Succeeds Act. Retrieved from http://www.ed.gov/news/speeches

Dr. Angel Ford is a research associate with Education Facilities Clearinghouse (EFC).  Dr. Ford has previous experience working as a middle/high school administrator and actively participates in research and content management of the EFC website.

In 2004, the Oregon Transportation and Growth Management Program contracted with the Community Planning Workshop (CPW) at the University of Oregon to conduct a year-long evaluation of Oregon’s school siting process. The purpose of the evaluation was twofold: (1) to develop a better understanding
of the challenges and opportunities school districts and local governments experience when making school siting decisions; (2) to empower school districts and local governments to make more informed decisions about future school siting. This handbook is the culmination of that research and synthesizes many of the lessons learned.

As part of the study, CPW performed the following tasks:

Literature Review: Conducted an extensive review of literature about school siting issues.

Case Studies: Investigated the school siting practices of eight school districts around the state through site visits and interviews with school superintendents, school facility planners, local government planners, architects, and neighborhood groups. Administered a school transportation survey and conducted focus groups at four middle schools to learn more about how children get to and from school.

School Superintendent Survey: Created a survey, disseminated to school district superintendents, focusing on district needs and siting issues.

Oregon School Siting Forum: Held a statewide conference encouraging dialogue about school siting issues by a wide range of people, including school district personnel, architects, planners, health advocates, and neighborhood organizers.

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FEMA developed the Best Available Refuge Area (BARA) Checklist for the first edition of FEMA P-361 to use in assessing a building’s susceptibility to damage from extreme-wind events such as tornadoes and hurricanes. The checklist evaluation process guides registered design professionals (architects and engineers) in identifying potential refuge areas at a site with one or more buildings. The term “best available refuge area” (or “BARA”) refers to an area in an existing building that has been deemed by a registered design professional as likely to protect building occupants during an extreme-wind event better than other areas in the building when a safe room is not available.

The BARA should be regarded as an interim measure only until a safe room can be available to building occupants. A safe room is a hardened structure specifically designed and constructed to the guidelines specified in FEMA P-320, Taking Shelter from the Storm: Building a Safe Room for Your Home or Small Business and FEMA P-361, Safe Rooms for Tornadoes and Hurricanes: Guidance for Community and Residential Safe Rooms.

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Earthman and Cash, 2016

Many school systems in the United States face the prospect of renovating existing buildings rather than constructing new facilities because of budgetary limitations and constraints. The least disruption to the educational process when a building is scheduled for renovation is to move the student body to a vacant building. This option is not available to the vast majority of school systems and the student body must remain in the building while the renovation takes place. Students are moved from space to space in the building as renovation takes place. Obviously the renovation process is a disruption to the educational process. Some research substantiates this assertion (Maxwell, 1996). She found that the student achievement scores dropped during the period of renovation in both the third and sixth grade mathematics and reading scores. The student scores increased when the students returned to newly renovated buildings. There is some recent research, however, that indicates student performance during the renovation process is not as disrupted as previously thought. Mayo (2010), Norman (2014), and Thompson (2014) investigated the influence a renovation had upon student achievement while enrolled in a building during a renovation. They compared student scores during three time periods – pre-renovation, during the renovation and post renovation. All of the researchers found there was no significant difference in student scores during all three phases of the renovation process. Additional research (Wheeler, 2014) suggests that teachers may be doing something to keep student performance at a high level during a disruption of the educational program. In Wheeler’s study of teacher reaction to such a disruption, teachers suggested that close collaboration, focusing upon the necessary elements of the curriculum, increased use of technology, and collaboration of faculty to provide resources for alternative activities in the classroom might help keep students on task and perform better. Such activates on the part of the faculty might ease the disruption of a renovation and maintain student progress.

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Published by the International Code Council (ICC), ICC/NSSA Standard for the Design and Construction of Storm Shelters (ICC 500), is a referenced standard in the International Codes (ICodes). The ICC, in partnership with the National Storm Shelter Association (NSSA), formed a national committee in 2003 that developed and released a consensus standard to codify the design and construction requirements of tornado and hurricane storm shelters. The ICC 500 was first published in the summer of 2008 and updated in 2014. ICC 500 provides the minimum requirements to safeguard public health, safety, and general welfare relative to the design, construction, and installation of storm shelters constructed for protection from high winds associated with tornadoes and hurricanes. This standard is intended for adoption by government agencies and organizations for use in conjunction with model codes to achieve uniformity in the technical design and construction of storm shelters.

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School Planning and Management, 2016

Once the budget has been established for your school construction project, staying within it does not have to be a constant process of sacrifice and compromise. Clearly identifying and documenting the scope of work for each aspect of the project in the early stages is vital. This will have a significant impact on keeping your design and construction professionals on the trajectory of being on time and under budget. Follow these 10 steps throughout the project process to ensure that your project soars — but its costs don’t!

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School Planning and Management, 2014

When evaluating responses to bid requests, facility managers often select the lowest qualified bid. It makes perfect sense. Why would anyone pay more — in taxpayer dollars — than necessary?

In fact, some school facility managers are discovering the utterly anti-intuitive concept that paying more to build a school can reduce its overall total cost of ownership (TCO).

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School Planning and Management, 2015

There is no question that the construction industry is once again growing— In one year’s time – July 2014 to July 2015 — we saw a 12.7 percent increase in non-residential construction. The change in educational facility construction was not nearly as dramatic, but more money is definitely being spent. In the education segment, we saw a 3.6 percent increase in the value of total construction being put in place (a 7.6 percent increase in private construction and a 2.6 percent increase in public construction). The increase in construction activity is good news. The bad news is that now we are facing a shortage of skilled workers to do the job.

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