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Pennsylvania House of Representatives
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House of Representatives
Session of 2015 - 2016 Regular Session

MEMORANDUM

Posted: January 15, 2015 12:49 PM
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 reintroduce legislation (former HB 2124) addressing the challenges which have developed in the commonwealth’s process of reimbursing school districts on their construction costs. These challenges have developed and escalated over a period of years. This legislation amends the Public School Code to provide a more modern, simplified and financially sustainable process of reimbursement. The changes in this legislation will address the backlog for school district’s current construction projects and future construction projects awaiting reimbursement from the commonwealth.

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 reimbursement.

The PlanCon process, which is not in statute, is overly cumbersome for school districts and requires 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.

As you may be aware, in the 2012-13 fiscal years, PDE was approximately $20 million short of being able to reimburse all approved projects; if the school districts were to file updated paperwork on those projects. Additionally, according to a report from PDE in 2013, of 354 projects moving through the process prior to reimbursement 166 projects should have been approved for reimbursement. Due to fiscal constraints, these projects were being deliberately bottlenecked in the process by PDE at the last stage before reimbursement payments from the commonwealth would begin. According to a second PDE report, by 2014 more than 200 projects were being deliberately bottlenecked prior to the reimbursement stage.

These challenges in the school construction reimbursement process have been escalating for years, beginning under the Rendell Administration. In response, the General Assembly imposed a moratorium preventing PDE from accepting any new applications for construction reimbursement for the 2012-13 and 2013-14 fiscal years. This action was meant as a temporary reprieve to allow PDE to begin catching up on reimbursements for the projects currently in the process, without additional projects continually being added to the backlog. Further action was taken by the General Assembly during the 2014-15 budget process when we led a successful effort to provide an additional $10 million to the line item, which funds PlanCon reimbursement. Furthermore, during the 2014-15 budget process, we included provisions in the Fiscal Code which were designed to empower PDE to distribute up to $70 million. PDE had been forced to set aside this money for years as multiple school districts had not submitted all required documentation necessary for reimbursement.

The efforts of the General Assembly in the 2014-15 budget, as well as PDE’s completion of reimbursement payments for older projects in the process, have had a positive impact on the beleaguered PlanCon process. According to information recently obtained from PDE, since early 2014 54 new projects have been approved for reimbursement and more than $38 million in payments have been distributed to school districts for these newly approved projects. PDE also expects to approve at least 5 more projects this fiscal year; with, potentially, an additional $38 million freed up so far using the Fiscal Code provision. Additionally, the number of projects in the process prior to reimbursement has declined from 354 to 290; although, numerous projects are still being deliberately held up in the process prior to the reimbursement stage due to financial constraints.

While the successes of the past year are encouraging, I believe the General Assembly must continue 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:
  • Create a public database on PDE’s website, which will provide information about school construction and reconstruction projects, building purchase and charter lease reimbursements.
  • Establishes a simplified 5 stage process for school districts to use when applying for construction reimbursement. This will 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 the microfilm requirement.
  • Allows school districts which began a construction project during the moratorium on new applications to be eligible to apply for reimbursement for those projects now that the moratorium has ended.
  • Allows immediate lump sum reimbursement in amounts no greater than 75% of the total eligible reimbursement, with agreement from the school district.

If you would like to join me in cosponsoring this legislation, please contact my legislative aide Jordan Grant via e-mail at jgrant@pahousegop.com or by phone at (717-767-3947).

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Introduced as HB210