From NPR

Let's begin with a choice.

Say there's a check in the mail. It's meant to help you run your household. You can use it to keep the lights on, the water running and food on the table. Would you rather that check be for $9,794 or $28,639?

It's not a trick question. It's the story of America's schools in two numbers.

That $9,794 is how much money the Chicago Ridge School District in Illinois spent per child in 2013 (the number has been adjusted by Education Week to account for regional cost differences). It's well below that year's national average of $11,841.

Ridge's two elementary campuses and one middle school sit along Chicago's southern edge. Roughly two-thirds of its students come from low-income families, and a third are learning English as a second language.

Here, one nurse commutes between three schools, and the two elementary schools share an art teacher and a music teacher. They spend the first half of the year at different schools, then, come January, box up their supplies and swap classrooms.

View report

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.

EPA, 2016. Numerous sources of funding are available to create and support healthy, productive school environments for students and staff. The links on this page describe how to find a variety of funding sources, including grants, tax credits, loans and others.

View webpage.

By Angel Ford

School facility conditions are tied to student attitudes, behaviors, and success, therefore little argument can be raised that school facility upkeep and construction should be a consideration in educational planning and funding decisions. Students in buildings in poor condition perform lower than students in buildings in adequate or exceptional condition. Fortunate or privileged students often attend beautiful, clean, well resourced schools and unfortunate or underprivileged students often attend unattractive, dirty, and even unsafe schools.

In the book Closing the Opportunity Gap: What America Must Do to Give Every Child an Even Chance, Carter and Welner (2013) discuss how closing the opportunity gap would lead to closing the achievement gap. The achievement gap appears in standardized testing, dropout rates, college readiness, and general academic achievement.

Carter and Welner (2013) compile essays from a number of authors tackling the issues of inequity in educational opportunities and link these inequities directly to the achievement gap. The authors of the essays discuss concerns about housing disparities, preschool enrollment disparities, teacher quality disparities, resource disparities, and others. Along this vein, I would like to suggest that the condition of educational facilities be considered as part of the resource disparities and, thus, a part of the opportunity gap.

Over half of the schools in our nation are in need of repairs to be considered in satisfactory condition (NCES, 2014). The American Society of Civil Engineers (ASCE, 2013) grade American educational facilities with a “D”. This means that a high percentage of students are attending classes in buildings that are subpar and even, in some cases, considered unsafe. Twenty-nine percent of school buildings have safety features in need of repair (NCES, 2014).

Unfortunately, school buildings that are in need of repair are often in the poorest districts, where students already contend with variables predicting lower academic success. Students in poor districts are often those that are lower on the socioeconomic scale, students who are English language learners, students with disabilities, students who are minorities, students who are homeless, or students in foster care (NEA, 2015). The condition of the school buildings they attend appear to be one more challenge against their achievement.

Could improving the places where these less fortunate students learn and equalizing the opportunities that each student has, improve their academic success? I am not saying that improving school buildings would automatically solve the academic achievement gap. Of course, this is an over-simplified solution and many variables need to be considered, but this is one aspect of education in our nation that we know is not equitable and that we know has an impact. We know this from both qualitative and quantitative research, from both a breakdown of isolated variables and a holistic picture. The condition of school facilities should not be ignored when looking at the achievement gap.

Angel Ford is a research associate with Education Facilities Clearinghouse.  Dr. Ford actively participates in research and content management of the EFC website.  

References
American Society of Civil Engineers (ASCE). (2013). 2013 Report Card for America’s Infrastructure. Reston, VA: American Society of Civil Engineers. Retrieved from http://www.infrastructurereportcard.org/a/#p/schools/overview

Carter, P. L., & Welner, K. G. (2013). Closing the opportunity gap: What America must do to give every child an even chance. Oxford University Press.

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

Discussion Points at Presentation at Academy for Educational Studies conference in San Antonio, TX, March 7-9, 2016

Inequality in school facilities

Unsatisfactory school buildings affect learning

Inequality of facilities and resources contribute to the achievement gap

Equalize facilities and resources and equalize achievement

Inequality Presentation Slides

Lawrence, B., 2003

Deferring maintenance in small rural schools creates poor conditions that can affect the health and safety of everyone who uses the facility, damage the morale of students and teachers, impair their ability to teach and learn, and threaten the facility itself. Numerous recommendations for policy changes that affect maintenance are presented. A percentage of the replacement cost of the facility should be spent on maintenance. This should be required at the state and district level. Energy conservation and the use of safe materials should be promoted. State policies that require a minimum number of students per building, disqualify renovation projects based on arbitrary formulae of cost ratio to new construction, and promote sprawl should be eliminated. State and local building codes and regulations should be updated to reflect local needs and modern construction practices. Ongoing education for custodians and maintenance workers should be implemented along with a data bank of relevant information. School board members, educators, architects, contractors, andother decision makers should receive education in school maintenance. Regular inspections of school facilities should be required. Students and community members should be encouraged to participate in maintenance and repair projects. Renovation and conversion of existing facilities should be promoted, and feasibility studies of the cost of new construction, renovation, and lease or purchase of existing facilities should be required and discussed in open community forums. State and the federal government should be required to fund maintenance, particularly in poor districts.

View Report

Office of Program Policy Analysis & Government Accountability, Florida, 2006

The state’s current processes to select and fund higher education facility construction projects include multiple levels of review and ensure that institutional requests for new construction are coordinated with the state’s higher education goals, local strategic plans, and community development plans.

View Report

By:  Dr. G. Victor Hellman, Jr.

In November 2015, Berkley’s Jeffrey Vincent and Liz Jain released the study, Going it Alone: Can California’s K-12 School Districts Adequately and Equitably Fund School Facilities?  In their research they conducted an analysis of spending on K-12 public school facilities within the state of California utilizing metrics that compare to industry standards.  Overall, they find substantial rates of underinvestment. While these findings have important implications for California policy, I also believe the authors have provided a practical framework for analysis that can be used by other states to examine the equity and adequacy of their facility financing.  In this blog, we will first establish some operational definitions, and then review Vincent and Jain’s analytic framework.  Finally we will examine their findings and review their policy recommendations.

Two concepts that are essential to Vincent and Jain’s analysis are equitable and adequateAdequate funding implies that the funding is sufficient to meet the needs or bring about the desired results for that which is funded.  For example, adequate funds must be budgeted to meet the school division’s operational and capital needs.  Now let’s examine the concept of equitable.  On a simplistic level, it is tempting to think of equitable and equal as synonymous.  This is not the case.  Equality implies that all parties are treated equally.  Using per pupil funding under the concept of equality would imply each school division within a state or each school within a division receives the same dollar amount per student.  While this method achieves equality of funding, it is not necessarily an equitable process.  Simply put, the concept of equity implies funding at a different level depending upon the needs.  At the core of equity is the fact that needs differ and spending must too.  A community with a high percentage of low socioeconomic students may need to spend more per pupil to level the playing field.  Some communities have higher real estate assessments (AV) on a per capita basis than others.  These communities are able to generate revenue easier than their lower socio-economic neighbors.  Only by funding equitably can equality be achieved.

In their analysis, Vincent and Jain identify some best practices for Maintenance and Operations (M&O) spending for school facilities.  For facility operations they utilize 1% of the current replacement value (CRV) on an annual basis as a minimum investment.  For routine maintenance they utilize 1.5 to 2% CRV as a minimum annual investment.  The division’s operating budget typically funds these expenditures.  Capital renewal or modernizations are typically funded by a division’s capital budget.  Projects that fall into this category deal with major repair, alterations and replacement of building systems (e.g. HVAC, roofs, windows).  Best practice annual investment is identified at 1.5 to 2% of CRV.  The authors postulate that by spending 3% CRV for M&O (from the operating budget) and 2% for capital renewal (from the capital budget), school facilities will be clean, safe and functional.  This assumption is noted as accurate provided there is no deferred maintenance for the facility.

For the analysis, Vincent and Jain first looked at the characteristics of California school districts spending above and below the 3% CRV for annual combined M&O.  Their findings show that only 38% of the districts spend at the best practice level of 3% of CRV or more while 62% of the districts spend less than the 3%.  From an equity perspective, the 38% of the districts spending 3% or more have an average assessed value of real property (AV) per student of $3,032,912 while the AV per student of the 62% of the divisions that do not meet the 3% spending is $1,030,594 or roughly 66% less than those districts that meet best practice.  When performing a similar analysis on capital renewal they find that 43% of the districts meet or exceed the 2% of CRV and 57% do not.  As in the previous analysis, the average AV per student for those districts that meet the best practice is $2,610,402 and for those districts that do not meet the benchmark, their average AV per student is $1,153,000 or more than 50% less.  AV is important to these comparisons inasmuch as it is a proxy for the districts’ ability to generate revenue.  Vincent and Jain found 38% of the districts failed to meet either benchmark.  The average AV per student of these districts was $878,202 compared to $2,346,441 AV for the 62% of the districts that met at least one of the two benchmarks.

From their analysis, Vincent and Jain put forth three findings:

  • The majority of school districts in California do not spend adequately on school facilities. Nearly 80% of the districts fail to meet minimum industry standard benchmark spending for M&O, capital renewal or both.
  • Districts that have more wealth spend more on their facilities, especially on capital renewal.
  • Districts that serve low income students spend proportionally more on M&O from their operating budgets thereby reducing available funds for instructional spending.

Vincent and Jain make four policy recommendations for the state of California based on their findings:

  • Establish stable, dedicated state funds for K-12 school facilities.
  • Distribute K-12 school facility funds equitably, adjusting for local wealth.
  • Improve standards for school facility planning and budgeting.
  • Establish a California School Facility Database to guide spending.

While the results of Vincent and Jain’s analysis should not shock or surprise anyone involved in school finance or facilities, the analysis does document and validate there are inequitable spending patterns on public K-12 facilities within the state of California.  More importantly, their analysis provides a conceptual framework that can be utilized by other states to examine their spending patterns on educational facilities.

A copy of the complete study can be found at http://www.efc.gwu.edu//library/reports/going-it-alone-can-californias-k-12-school-districts-adequately-and-equitably-fund-school-facilities/

Dr. G. Victor Hellman, Jr., serves as the Research Project Director for the Education Facilities Clearinghouse (EFC). Victor has more than 31 years of work experience in public schools in Virginia. Prior to joining the EFC, he served as Deputy Superintendent of Operations and Support for a mid-urban school district. In that role, he was responsible for finance, facilities, transportation, student services, and food services.

centerforcityschools

The Center for Cities + Schools (CC+S) at the University of California, Berkeley harnesses the potential of urban planning to close the opportunity gap and improve education.

Web: http://citiesandschools.berkeley.edu