SB 429 — AN ACT CONCERNING AUTHORIZATION OF STATE GRANT COMMITMENTS FOR SCHOOL BUILDING PROJECTS AND REVISIONS TO THE SCHOOL BUILDING PROJECTS STATUTES.

C/R616 FINThe FINfollowing JointFiscal FavorableImpact LCOStatement {\\PRDFS1\SCOUSERS\FORZANOF\WS\2022SB-00429-and 11Bill Analysis are prepared for the benefit of 11the R02-SB.docxmembers }of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.

In general, fiscal impacts are based upon a variety of informational sources, including the analyst’s professional knowledge.

Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note State Impact:

Agency Affected Fund-Effect FY 23 $ Out Years $ Treasurer, Debt Serv.

GF - Future Cost See Below 259 million Note:

GF=General Fund Municipal Impact:

Municipalities Effect FY 23 $ Out Years $ Various Municipalities Future See Below 184 million Revenue Gain Explanation The bill approves a net increase of $184 million in state grant commitments for school construction projects, which represents potential revenue gain for the specified municipalities.

The grants-in- aid will be financed through the issuance of General Obligation (GO) bonds in future fiscal years.

The bill does not authorize new GO bonds.

The projected debt service cost to the General Fund to issue $184 million of GO bonds at market rates is $259 million.

The bill changes statute regarding eligibility for school construction projects for interdistrict magnet schools.

To the extent additional projects are approved, there may be increased future costs through the school construction GO bonds.

The impact of additional projects on the school construction priority list will be reflected when such projects are considered by the legislature in the future.

The bill has the potential to increase reimbursement rates by 5 sSB429 / File No.

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616 percentage points or withhold 5 percent of reimbursement for school construction projects exceeding or missing certain contractor standards.

To the extent this changes future reimbursement rates, there would be a commensurate change in revenue gain to relevant municipalities and change in debt service for the State.

The Out Years The ongoing fiscal impact identified above will continue into the future subject to project completion, successful application for reimbursement, and the costs of borrowing.

sSB429 / File No.

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616 OLR Bill Analysis sSB 429 AN ACT CONCERNING AUTHORIZATION OF STATE GRANT COMMITMENTS FOR SCHOOL BUILDING PROJECTS AND REVISIONS TO THE SCHOOL BUILDING PROJECTS STATUTES.

TABLE OF CONTENTS:

§ 1 — SCHOOL CONSTRUCTION GRANT COMMITMENTS Authorizesnineschoolconstructionstate grant commitmentstotaling $135.69 million toward total project costs of $537.68 million;

reauthorizesonetechnical high school project with an additional state grant commitment of $48.67 million, which matches the additional estimated project cost §§ 2 & 3 — CLASSROOM WINDOW REQUIREMENT Requires certain school building projects on any list DAS submits to the General Assembly beginning July 1, 2023, include at least one window in each classroom that can be opened and used as a means of escape during an emergency;

specifies that the state’s school safety infrastructure criteria must address a similar requirement § 4 — MAGNET SCHOOLS AND SCHOOL CONSTRUCTION GRANTS Eliminates a provision limiting DAS’s approval of magnet school construction projects to ones found to reduce racial, ethnic, and economic isolation § 5 — CAPITOL REGION EDUCATION COUNCIL (CREC) LONG- RANGE CAPITAL IMPROVEMENT PLAN Requires CREC to adopt, every five years, a long-range plan of capital improvement and school building project priorities for magnet schools and a rolling three-year capital plan;

requires the plans be submitted to DAS, which in turn submits them to the legislature §§ 6 & 7 — PENALTY AND INCENTIVE FOR SCHOOL CONSTRUCTION PROJECTS USING MINORITY ENTERPRISE (MBE) SET-ASIDE GOALS Creates both a financial incentive and a penalty for school construction projects, depending upon whether they meet or fail to meet MBE set-aside goals sSB429 / File No.

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616 BACKGROUND § 1 — SCHOOL CONSTRUCTION GRANT COMMITMENTS Authorizes nine school construction state grant commitments totaling $135.69 million toward total project costs of $537.68 million;

reauthorizes one technical high school project with an additional state grant commitment of $48.67 million, which matches the additional estimated project cost Thisbillauthorizes nineschoolconstruction state grant commitments totaling $135.69 million toward total estimated project costs of $537.68 million.

It also reauthorizes one technical high school renovation project that has changed substantially in scope and cost with an additional state grant commitment of $48.67 million, which matches the additional estimated project cost.

Under the state school construction grant program, the state reimburses towns and local districts for a percentage of eligible school construction costs through state GO bonds (with less wealthy municipalities receiving a higher reimbursement).

The municipalities pay the remaining costs.

For the state-operated Connecticut Technical Education and Career System, also known as the technical high schools, the state pays 100% of the project costs.

For each project authorized by the bill, the table below shows the district, school, project type, estimates for total cost and state grant commitment, and state reimbursement rate.

School Construction Grant Commitments District School Project Estimated Estimated Reimbursement Type Project Costs Grant Rate Farmington Farmington New $131,666,047 $24,924,383 18.93% High School Stamford Westhill High New 257,938,824 51,587,765 20% School Stamford Early Stamford Childhood New 51,740,423 10,348,085 20% Center sSB429 / File No.

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616 Granby Granby Memorial High Alteration 3,486,378 1,319,943 37.86% School Extension/ Hamden Hamden Middle alteration;

17,100,000 13,680,000 80% School diversity school Keeney Manchester Elementary Renovation 23,800,000 15,810,340 66.43% School Pumpkin Milford Delight Extension/ 15,060,750 5,593,563 37.14% Elementary alteration School Simsbury Latimer Lane Renovation 36,792,406 12,351,211 33.57% School Regional School District Regional No.

7, Vo-ag 100,000 80,000 80% District 7 Agricultural equipment Education Center Totals $537,684,828 $135,695,290 Reauthorized Project The bill also reauthorizes, with a change in cost and scope, the proposal for Bullard-Havens Technical High School located in Bridgeport.

The reauthorization changes it from an extension and alteration project with an estimated total project cost of $139,447,195 to a new construction project with an estimated cost of $188,122,766.

This is a $48.67 million increase that the state pays in full.

The Bullard-Havens proposal was originally authorized by PA 05-6, June Special Session (JSS), as an extension and alteration project with an estimated total project cost of $27,331,000.

Then, PA 15-3, JSS, reauthorized the project with a new estimated cost of $60,383,000.

Last year Bullard-Havens was reauthorized again by PA 21-111, § 113, with a new estimated cost of $139,447,195.

EFFECTIVE DATE:

Upon passage sSB429 / File No.

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616 §§ 2 & 3 — CLASSROOM WINDOW REQUIREMENT Requires certain school building projects on any list DAS submits to the General Assembly beginning July 1, 2023, include at least one window in each classroom that can be opened and used as a means of escape during an emergency;

specifies that the state’s school safety infrastructure criteria must address a similar requirement The bill adds a requirement that windows with opening capability be included in all school building projects for new construction, extension, major alteration, renovation, or replacement on any Department of Administrative Services (DAS) project list submitted to the General Assembly beginning July 1, 2023.

It does so by prohibiting DAS from approving any school building project plan that does not provide for at least one window in each classroom that can be opened and used as a means of escape during an emergency, in accordance with the school safety infrastructure criteria required under law.

By law, all school building projects seeking state assistance must first have their plans and sites approved by DAS, among others.

Under existing law, the School Safety Infrastructure Council (SSIC) must develop school safety infrastructure criteria for the state’s school building projects program and school security infrastructure competitive grant program.

The criteria must conform to industry standards for school building safety infrastructure and address certain specified areas such as closed-circuit television monitoring use and penetration-resistant vestibules.

The bill specifies that the criteria must also address, by July 1, 2022, a requirement that all classrooms have at least one window that can be opened and used as a means of escape during anemergency.

(It isnot clear howthe SSIC criteriacanberevised by July 1, 2022 when that is the effective date of this new requirement.) EFFECTIVE DATE:

July 1, 2022 § 4 — MAGNET SCHOOLS AND SCHOOL CONSTRUCTION GRANTS Eliminates a provision limiting DAS’s approval of magnet school construction projects to ones found to reduce racial, ethnic, and economic isolation The bill eliminates a provision requiring the DAS commissioner to only approve school construction grant applications for interdistrict magnet school projects if the State Department of Education (SDE) sSB429 / File No.

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616 commissioner finds the school will reduce racial, ethnic, and economic isolation.

Under existing law, unchanged by the bill, SDE only approves magnet school funding if the school will reduce racial, ethnic, and economic isolation (CGS § 10-264l).

The bill also makes conforming and technical changes, including deleting an obsolete moratorium provision on grant applications for the construction of new magnet schools.

EFFECTIVE DATE:

July 1, 2022 § 5 — CAPITOL REGION EDUCATION COUNCIL (CREC) LONG- RANGE CAPITAL IMPROVEMENT PLAN Requires CREC to adopt, every five years, a long-range plan of capital improvement and school building project priorities for magnet schools and a rolling three-year capital plan;

requires the plans be submitted to DAS, which in turn submits them to the legislature Long-Range Plan The bill requires CREC to adopt, by January 1, 2023, and every five years after, a long-range plan of capital improvement and school building project priorities and goals for magnet school facilities that will help the state address its obligations under the Sheff court decision and related stipulations and orders.

The plan must include a summary of activities related to school building projects, capital improvements, and capital equipment included in a rolling three-year school building plan that is required by the bill.

Upon adoption of the long-range plan, CREC must submit it to DAS, and the department must file it directly with the Appropriations, Education, and Finance, Revenue and Bonding committees.

Rolling Three-Year Plan The bill requires CREC to maintain a rolling three-year school building project, capital improvement, and equipment plan that identifies the (1) expected school building projects, capital improvements, and capital equipment for each CREC magnet school facility and their anticipated cost and (2) specific equipment each magnet school is expected to need and the estimated cost, based on the sSB429 / File No.

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616 useful life of existing equipment and changing technology projections.

It also requires CREC to annually submit the plan to DAS, and the department must file it directly with the Appropriations, Education, and Finance, Revenue, and Bonding committees.

EFFECTIVE DATE:

July 1, 2022 §§ 6 & 7 — PENALTY AND INCENTIVE FOR SCHOOL CONSTRUCTION PROJECTS USING MINORITY ENTERPRISE (MBE) SET-ASIDE GOALS Creates both a financial incentive and a penalty for school construction projects, depending upon whether they meet or fail to meet MBE set-aside goals Penalty (§ 7) Under the state set-aside program, state agencies (municipal projects are addressed through the contractors, see below) must set aside at least 25% of the total value of all contracts they let for construction, goods, and services each fiscal year for exclusive bidding by certified small contractors.

The agencies must further reserve at least 25% of the set- aside value (i.e., at least 6.25% of the total) for exclusive bidding by certified MBEs.

Contractors awarded municipal public works contracts must comply with these requirements if the (1) contract includes state financial assistance and (2) total contract value exceeds $50,000.

By law, a “small contractor” is a business that (1) maintains its principal place of business in Connecticut, (2) had gross revenues of $20 million or less during its most recent fiscal year, and (3) is independent.

MBEs are small contractors owned by women, minorities, or people with disabilities.

The owner must have managerial and technical competence and experience directly related to his or her principal business activities.

In addition to set-aside requirements, the existing law requires nondiscrimination and affirmative action provisions be included in municipal public works contracts (as well as state contracts) (CGS §4a-60g).

The bill requires, starting with projects authorized on or after July 1, 2024, DAS to withhold 5%ofa schoolconstruction reimbursement grant sSB429 / File No.

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616 if the DAS commissioner determines that the applicant has failed to comply with the provisions of state set-aside law for MBEs.

(The bill places the burden to meet the MBE requirement on the town applying for school construction funds, but existing law places the MBE requirement on the project contractor, not the town.) Incentive (§ 6) The bill creates an increased school construction reimbursement grant of five additional percentage points for projects where the project contractor hasreserved(1)at least12.5%ofthetotalvalueofthecontract or (2) the portion set aside required by state MBE set-aside law (i.e, 6.25% of the state’s assistance for the project) for awards to MBE subcontractors.

This incentive begins for board of education-sponsored school building projects authorized on or after July 1, 2024.

Under state law governing school construction reimbursement grants, a town is assigned a state reimbursement percentage based on town property wealth (CGS § 10-285a).

For example, if a town has a 50% reimbursement rate and qualified under this incentive, it’s reimbursement rate would increase from 50% to 55%.

EFFECTIVE DATE:

July 1, 2022 BACKGROUND Related Bills sSB 428, favorably reported by the Education Committee, eliminates the SSIC and generally reassigns its duties to the School Building Projects Advisory Council (see §§ 6 & 7).

SB 485, favorably reported by the Finance, Revenue and Bonding Committee, similarly requires CREC to develop capital plans.

COMMITTEE ACTION Education Committee Joint Favorable Substitute Change of Reference - FIN Yea 39 Nay 0 (03/25/2022) sSB429 / File No.

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616 Finance, Revenue and Bonding Committee Joint Favorable Yea 51 Nay 0 (04/06/2022) sSB429 / File No.

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