03.30.10: Developers Fight to Continue School Funding Cuts
By David Walrath
State grants for new construction and modernization were cut for 2010 projects based on a flawed cost index proposed by the Office of School Construction (OPSC) and supported by representatives from the California Building Industry Association (CBIA). Using the flawed index results in school funding being subject to a 6.74% cut for 2010 approved projects.
The proposed index included a mix of projects in eight California cities that were both prevailing wage jobs and non-prevailing wage jobs. Because all public school projects are all prevailing wage jobs their labor costs have not declined. The index, however, shows a decline in costs. During a recession it is reasonable to expect both labor and materials costs to decline for non-prevailing wage private projects’. It is not reasonable to expect the same decline for public prevailing wage jobs where labor contracts are negotiated on a multi-year basis.
The State Allocation Board (SAB) approved the reduction because they had not been advised that there was an alternative index used by OPSC that only includes labor costs based on prevailing wage. The SAB thought they had no choice.
Now that the SAB has been advised they have a choice, the CBIA is suggesting that the SAB would be at legal risk if it changed its action. The issue is that there are only certain legal reasons allowing a public board to reverse an action. One of the permissible reasons is the acquisition of new information. SSDA believes that a better index was available, but was not presented to the SAB, and is therefore new information that would allow the SAB to reverse its actions.
SSDA opposed the SAB’s original action and opposes CBIA’s attempts to keep school funding cuts caused by the flawed index.
Learn more about what is happening with school facilities funding and programs at the SSDA Annual Conference April 14- 16 in Sacramento. Please go to www.ssda.org for information on the schedule, agenda, workshops and how to register.
