 Knowles Introduces Statewide School Improvement Bill $212 Million in GO Bonds for School Construction and Major Maintenance Needs News Release
"To afford all Alaska students the opportunity to learn in an environment that enhances their chances for success, I am transmitting a bill that tackles one third of the $641 million backlog of needed school construction and major maintenance projects across our state," Knowles said. "I propose this as the first of three installments to complete the entire existing statewide Department of Education and Early Development priority lists within six years." This legislation specifically authorizes a vote in the 2002 general election on $212 million in general obligation (GO) bonds for schools. An accompanying bill appropriates $210 million for the first eight school construction and 81 major maintenance projects on the statewide priority list. This would make available approximately $101 million for fiscal year 2003 and approximately $109 million starting in 2004. The remaining $2 million would pay the costs of bond sale and issuance. The debt service for these bonds will be paid from general funds starting in fiscal year 2004 - $10.1 million that year and $21 million annually after both rounds of bonds are sold. The current school construction list has 57 projects with a state-funded share of $490 million. The major maintenance list has 115 projects with a state share of $151 million. This year, all districts with eligible projects participated in the project ranking process. The plan emphasizes major maintenance by funding the first 60 priority projects in year one and priorities 61-81 in the second year. $35 million of these are in Anchorage, $11 million in the Fairbanks/North Pole area, $25.8 million in Southeast and the rest in other small communities and rural school districts. Eight rural construction projects are funded over the two years. Six are phased with design in year one and construction in year two. "Experience has shown that funding the priority lists at a rate of about $100 million per year is optimum," Knowles said. "Too little annual funding results in higher costs as backlogs grow and local plans that become outdated. Too much money going out in a single year can result in higher bids and more out-of-state contractors. Working off both priority lists utilizes a combination of larger scale building construction firms for new construction and smaller businesses such as roofing and plumbing contractors for deferred maintenance." A steady flow of funds into school construction and maintenance provides certainty for districts and inspires confidence in the DEED priority list process, Knowles said. Under this proposal, the current priority lists would be frozen for 2 years to ensure that all selected projects get completely funded and are not bumped from their place on the list. Districts would submit their projects for ranking again in 2003 to be funded by GO bonds in the following general election year and so on. The grant funding approach proposed in this legislation improves the fiscal picture for communities because they only have to come up with their local share of the project cost--typically about 30 percent. By contrast, school debt reimbursement programs require them to bond for the full project amount, using more of their local debt capacity than is actually needed for their local share. Debt reimbursement is also more expensive than using GO bonds backed by the full faith and credit of the State of Alaska because the state has a better credit rating than municipalities and can issue debt at lower cost. "The Governor's proposal is a right step forward to ensure our children learn in a safe environment and our infrastructure is intact," said Rep. Gretchen Guess (D-Anchorage). "To ensure we are fiscally responsible, it is imperative we work down our state priority list, applying scarce resources to the most needed situations." "Because of the Department
of Education priority list, rural and bush communities can now
plan ahead for the future of their schools," said Sen. Georgianna
Lincoln (D-Rampart). "Hopefully, we've learned from the
courts that not addressing the needs of rural and bush schools
is unconstitutional." "We have a responsibility to provide Alaska's children with both the academic programs and the educational facilities they need to be successful," Knowles said. "We are making significant progress improving the quality of education and I urge your prompt and favorable action on this measure to make similar progress on our statewide elementary and secondary school facilities." Ketchikan and several other school districts in Southeast Alaska have projects that are included on the major maintenance and school construction projects' list. Related:
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