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Potential Funding for Food Service Facilities

This Management Bulletin (MB) updates and replaces Information Alert NSD-CNP-05-2007 (June 2007), and provides information for potential funding opportunities for school food service facilities.

State Superintendent of Public Instruction Jack O’Connell has made improving student nutrition one of his top educational priorities. In Superintendent O’Connell’s 2005 State of Education Address, he issued a call to action and launched the “Healthy Children Ready to Learn Initiative.” One facet of the initiative is to create a school environment that supports the health of students and provides an environment that supports good nutrition.

The California Department of Education (CDE) understands that a critical component of improving school nutrition relies on the school food service operation’s ability to adequately prepare and provide meals to students, and provide suitable eating areas for students. As student enrollment has significantly increased over the last decade, many districts have not had the resources available for expansion and improvement of school food service facilities. The result is that many school districts are serving meals to students in outdated, cramped facilities.

As we join together to tackle the epidemic of childhood obesity and look toward promoting the consumption of the freshest, most nutritious foods available, we must look at the total school environment. Superintendent O’Connell is asking school districts to consider upgrading and improving school food service facilities through various funding options that are currently available.

Below you will find an outline of potential funding sources available to upgrade and improve school food service facilities. We highly recommend that you start conversations with facilities directors, and that schools apply for this funding.

The Williams Settlement

In August 2004, the State of California agreed to settle Williams v. California, a landmark civil rights case that requires the State to ensure quality learning conditions for millions of low-income students of color.

The Williams settlement pointed out that many school buildings and facilities are overcrowded, in bad condition, and are dangerous and unhealthy for students. The Williams Settlement created new standards for measuring whether schools have the basic conditions students need to learn such as textbooks, well-trained teachers, and clean and safe school facilities. The settlement gives school districts $800 million to fix the poor conditions existing in school facilities. The money from the settlement established the Emergency Repair Program. Funding is available to schools identified by the CDE as ranked in deciles one, two, or three in the 2006 Academic Performance Index. Please note, no local matching funds are required with the Williams settlement monies. The list of schools meeting the criteria for this funding can be found at the CDE Web site:

http://www.cde.ca.gov/eo/ce/wc/wmsschools.asp

The Emergency Repair Program of the Williams settlement provides grant funding as well as funding to reimburse local educational agencies (LEA) for the entire cost of repairing or replacing existing building systems, structural components, or equipment that are broken or not functioning properly and that pose a health and safety threat to students and staff. Please visit the following Department of General Services (DGS), Office of Public School Construction (OPSC) Web site for additional information, and to find an application for funding, located in the “How to Apply for the ERP” section:

http://www.opsc.dgs.ca.gov/Programs/SABPrograms/ERP.htm

Proposition 1D

Proposition 1D, officially known as the Kindergarten-University Public Education Facilities Bond Act of 2006, was passed in November 2006. Proposition 1D provides $10.4 billion in general obligation funds for educational facilities, of which $7.3 billion is earmarked for kindergarten-twelfth grade projects. In order to receive funding from Proposition 1D monies, LEAs are required to share in the project’s costs with the State, matching funds to support at least half of the project’s costs. The matching money from the school district can be generated from the general funds, donations, and/or cafeteria funds (under limited circumstances) or a combination of these funds.

For additional information regarding all Proposition 1D funding, please visit the following Web sites:

The DGS Web site provides information regarding new funding opportunities and more specifically Proposition 1D monies. Full descriptions of the programs are also available at this DGS site.

http://www.documents.dgs.ca.gov/OPSC/Publications/Other/New_Funding.pdf (PDF)

The following OPSC/DGS Web site provides information regarding the amount of monies authorized under Proposition 1D and the amount of monies awarded.

http://www.bondaccountability.opsc.dgs.ca.gov/bondac/proposition/proposition1D.asp

An application for Proposition 1D funding can be found at the following DGS Web site:

http://www.documents.dgs.ca.gov/opsc/Forms/SAB_50-04_.pdf (Note, the preceding Web address is nolonger valid)

Listed below are areas of Proposition 1D funding that districts may use for school food service facilities. There is also a section on the use of cafeteria funds.

• New Construction Program
  The New Construction Program provides State funds on a 50/50 State and local sharing basis for public school capital facility projects. The New Construction grant is intended to fund the design, construction, testing, inspection, furniture, equipment, and other costs closely related to the actual construction of school buildings, including kitchens and eating areas. As of April 24, 2008, all $1.9 billion in authorized funding was still available.
• Overcrowded Relief Program
  The Overcrowded Relief Program provides State funds on a 50/50 State and local sharing basis in order to alleviate overcrowding. (The intent is to reduce portable classrooms and replace them with permanent ones.) This funding is available to districts with qualifying schools regardless of a district’s eligibility for new construction funding. This feature may be particularly attractive to districts with declining enrollments. Specifically, to be eligible for these funds, a site must have a population density of at least 175 percent of the CDE’s recommended acreage, (i.e. elementary schools have 100 or more students per acre, and middle/high schools have 75 or more students per acre.) Funds may be spent on new construction and equipment which can include kitchens, equipment, and eating areas. As of April 24, 2008, $1 billion in authorized funding was still available.
• Modernization Program
  The Modernization Program provides state funds on a 60/40 State and local sharing basis for improvements in order to educationally enhance school facilities. To be eligible a school site must have facilities that are at least 25 years old (20 years old for portable buildings). Projects eligible for funding include but are not limited to air conditioning, plumbing, lighting, and electrical systems. School districts may consider the following updates to school food service facilities as part of the modernization program; kitchen equipment, tables and chairs for inside and outside the cafeteria, flooring, signage, and installing a computerized point of sale system. Site acquisition may not be included in modernization applications. As of April 24, 2008, $2.6 billion of the $3.3 billion in authorized funding was still available.
• Charter School Facilities Program
  All available funds for this program have been exhausted (reserved for eligible Charter school projects). However, many of these projects are still in the design phase where school food service components could be included.

Use of Cafeteria Funds

According to federal regulations, cafeteria funds cannot be used for the construction of new buildings or to make modifications and/or improvements that materially change the value and/or useful life of the building. Accordingly, cafeteria funds cannot be used as any part of the local match for these purposes. It is the responsibility of the school district to provide the school sites with adequate facilities. However, cafeteria funds may be used to cover a part of the local match for appropriate modernization or construction projects when the matching monies are allocated for the purchase of equipment related to the preparation, service, and storage of meals/food served in the Child Nutrition Program. The Office of Management and Budget (OMB) has information regarding allowable and unallowable expenditures.

Please refer to OMB circular A-87: Cost Principles for State, Local, and Indian Tribal Governments at:

http://www.whitehouse.gov/omb/circulars_a087_2004

Additional Assistance

The CDE School Facilities Planning Division has consultants in regional offices throughout the state that can assist you with questions regarding potential funding sources. For a comprehensive list of Facilities Division field staff in your region, please visit the CDE Web site:

http://www.cde.ca.gov/ls/fa/sf/fieldstaff.asp

Please share this information with your district’s management and business personnel, as appropriate.

If you have any questions regarding school facilities funding, please contact Fred Yeager, Assistant Director, School Facilities Planning Division, at 916-327-7148 or by e-mail at fyeager@cde.ca.gov.