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Pennsylvania House of Representatives
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House of Representatives
Session of 2013 - 2014 Regular Session

MEMORANDUM

Posted: March 18, 2014 07:59 AM
From: Representative Seth M. Grove
To: All House members
Subject: Overhaul of the School Construction Reimbursement (PlanCon) Program to Help our School Districts
 
In the near future I plan to introduce legislation that would address the challenges that have developed and escalated over a period of years in the process of Commonwealth reimbursement for public school construction. My legislation amends the Public School Code to provide for a more modern, simplified, and financially sustainable process of reimbursement, and would further call for the appropriation of additional State money to address the backlog of school district construction projects awaiting reimbursement.

When a school district undertakes a major construction project and seeks reimbursement from the Commonwealth, a process known as PlanCon is initiated. PlanCon, an acronym for Planning and Construction Workbook, is a set of forms and procedures used by school districts to apply for Commonwealth reimbursement.

The PlanCon process, which is not in statute, is overly cumbersome for school districts, requiring PA Department of Education (PDE) approval at 11 separate stages. The process is full of antiquated requirements, exemplified perfectly by a rule still on the books which mandates the submission of plans and bid specifications on microfilm.

Additionally, PDE is currently unable to meet its financial obligations to school districts under PlanCon. According to a May 2013 report by PDE, PDE would be approximately $20 million short of being able to reimburse all approved projects if school districts were to file updated paperwork on those projects. Further, of the 354 unapproved projects now working their way through PlanCon, 203 are being deliberately bottlenecked by PDE due to fiscal constraints. PDE has estimated it would need approximately $1.2 billion to completely reimburse all 354 projects.

These challenges in the school construction reimbursement process have been escalating for years, beginning under the Rendell Administration. In response, the Legislature imposed a moratorium preventing PDE from accepting any new applications for construction reimbursement for the 2012-13 and 2013-14 fiscal years. The Governor now proposes extending this moratorium for the 2014-15 fiscal year. A moratorium may avoid exacerbating the problem. However, it does nothing to resolve the Commonwealth’s unsustainable financial obligations under PlanCon -- especially when the associated line item has been level-funded for the past three years and the Governor has not proposed an increase. It is crucial to recognize that even the most radical reforms to our system of State reimbursement for school construction projects, or even the complete elimination of the current system, will not relieve the Commonwealth of its existing obligations to school districts for projects in the reimbursement process.

I believe the Legislature must begin working to resolve the Commonwealth’s school construction reimbursement challenges. To this end, my legislation would overhaul the reimbursement process. The highlights of my bill are as follows:Plan
  • Set a ceiling for an appropriation of an additional $100,000,000 for school construction reimbursement.
  • Provide for a public database on PDE’s website providing information about school construction and reconstruction projects, building purchases, and charter lease reimbursements.
  • Establish a simplified process for school districts to apply for construction reimbursement, to be known as the “Accountability and Reducing Costs in Construction Process”, or ArcCon. Among other reforms, ArcCon will:
    • Require reimbursements to be made in the order of PDE approval, unless the Secretary prioritizes a project of a financial recovery school district.
    • Provide reimbursement for a new building only if a cost-benefit analysis indicates the cost to construct does not exceed the cost to expand or renovate existing buildings, or if the district can demonstrate that a new building is necessary.
    • Require automation of the ArcCon Process.
    • Eliminate microfilm requirements.
  • Allow school districts that began a construction project during the moratorium on new applications to apply for reimbursement following the expiration of the moratorium.
  • Provide for interest payments to school districts on artificially-delayed reimbursements.
  • Allow lump sum reimbursement equal to 75% of the total eligible reimbursement, with school district agreement.

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Introduced as HB2124