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Meeting of the Board of Regents | September 2009

Tuesday, September 1, 2009 - 8:30am

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State Aid Subcommittee


Johanna Duncan-Poitier


2010-11 Regents State Aid Proposal: Support for UPK; and Benefits of High Performance School Buildings



September 1, 2009



1,2,4, and 5






Issue for Discussion


              What can the Regents recommend to move toward universal access to quality prekindergarten programs (Attachment A)?   Is it time for green design, high performance school buildings (Attachment B)? 


Reason(s) for Consideration


                For information, discussion and policy deliberation.


Proposed Handling


State Aid Subcommittee


Procedural History


              The Regents have long recommended universal prekindergarten and support the four year phase-in to full access enacted in 2007.  The economic crisis has stalled this progress.  The Regents will deliberate critical next steps as outlined in Attachment A.

              The average age of schools in the State is 54 years and expenditures for school construction are growing well beyond the rate of inflation.  Research shows that green design, high performance school buildings are environmentally friendly, healthy for building occupants and will save 10 to 20 percent over the life of the facility.  In the past, the Regents have recommended that the State keep its commitment to funding expense-based aids such as Building Aid, since districts have already incurred costs.  Attachment B takes a new look at State support for school construction.             


Background Information


              The implementation of prekindergarten programs in the State is not universal at this time due primarily to funding restrictions. Further, the complexity of the funding formula, fluctuations in the allocations, and maintenance of effort requirements have negatively impacted the smooth and steady progress of implementation efforts across the State.  Additionally, the lack of Transportation Aid and difficulties ensuring that students with disabilities are able to be guaranteed a UPK slot contribute to the program being far from universal.


              With advances in energy efficiency and environmental design, there have been significant changes in the methods and materials available for building schools. While costs may be slightly higher initially, newer “high performance” buildings last longer and use less energy. Currently the facilities planning process does not require school districts to use green design, high performance construction despite the ten-fold return on the investment over the lifetime of the building. Revamping the approach to funding school design, construction and maintenance will result in improved, more energy efficient facilities and lowered costs.




Incorporate recommendations detailed in this report concerning universal prekindergarten and the strategies proposed for improving the State’s approach to funding and sustaining school facilities in the Regents State Aid proposal for 2010-11.


Timetable for Implementation


The Regents will consider aspects of their proposal over the coming months and will review a draft of the full conceptual proposal in November. In December the Regents will consider details on the amount and distribution of funds to recommend to the Governor and Legislature and will act to approve their State Aid proposal.   The Governor usually makes his budget recommendations to the Legislature in January for the State budget to be enacted by April 1, 2010 for implementation in school year 2010-11.







Support for Universal Prekindergarten 

Executive Summary


This paper provides a description of the New York State Universal Prekindergarten (UPK) program, including a history of the funding provided and implementation efforts since it commenced in 1998.  While UPK has grown significantly over the past decade, still only 66 percent of the school districts in the State participate. We have therefore not achieved the universal access for all four year olds as envisioned when the initial legislation was adopted in 1997.  The program has, however, established an earlier entry point into the public school system for over 100,000 children. It is estimated that there are about 240,000 four year olds in the State.  Early childhood programs, such as the UPK program, have been documented to result in positive learning gains which help to reduce the achievement gap among students in later years.


Funding issues related to UPK are a central theme of this proposal.  The formula used to calculate a school district’s grant award is complex and has been subjected to many changes. Many of the issues discussed relate specifically to the funding structure and suggest changes which would help to support more participation and greater access for all students, including students with disabilities. Students with disabilities, in particular, are underrepresented among the students served by the program.  Ensuring equity of access through the provision of Transportation Aid is also discussed. This paper addresses these and other concerns and includes recommendations to achieve the Regents UPK vision and goals.  It presents policy discussion questions for deliberation by the Board of Regents.











Support for Universal Prekindergarten  






              This paper reviews data on Universal Prekindergarten (UPK) implementation and funding to date, and raises issues for consideration to strengthen and expand the program. It also identifies policy questions for discussion by the Board of Regents.


              The UPK Program was first implemented in New York State in September of 1998 by State legislation adopted the prior year. UPK provides four year olds, who are residents of a school district and age eligible for kindergarten the following fall as defined in district policy, with a research based classroom curriculum that supports the achievement of essential learning milestones and helps students meet and exceed State learning standards in later grades.  The program has created an earlier entry point to public education, assisted in the coordination between day care settings and school districts, and helped young children be better prepared for school-based learning. Barnett, Schulman and other researchers have documented positive long-term gains for both disadvantaged and advantaged students who attend quality early childhood programs. Program goals focus on developing children’s language and communication skills; promoting early literacy skills and critical thinking; developing large and fine motor skills; fostering children’s social emotional development; and ensuring that the prekindergarten content is connected with the kindergarten and early elementary curricula. Classroom activities are planned around learning centers which include a balance of teacher-directed and child initiated learning opportunities. Monitoring children’s progress and assessing their acquisition of new information and skills is essential.


               The UPK statute stipulates a formula to be used to calculate a district’s grant award to serve students for a minimum of a two and one-half hour, five day a week, school year program. The formula has provided an annual minimum of $2,700 per child. When fully implemented, every district in the State will have the option to offer a UPK program to all four year olds. By statute, districts are required to contract a minimum of ten percent of their grant with early childhood programs in community-based organizations (CBO) for the provision of the instructional program. This collaboration requirement has fostered the development of a prekindergarten system that builds upon and complements the preexisting early care and education system within communities. Classes may be located at the public school or at the CBO site. The contracting requirement is waived when a district can document that it has made diligent efforts but cannot identify a CBO that meets the established criteria. Approximately 54 percent of classrooms are contracted with CBOs. 




              UPK was designed to be phased in over a four year period, beginning in 1998–99, with an increasing number of districts becoming eligible each year until the program was fully implemented in 2001-2002. In the first year of the program 62 districts (of the 126 eligible to apply for funding) served 18,200 four-year olds at a cost of $57.1 million.  In spite of steady growth during the initial years, the UPK formula used during the phase in process was suspended in 2001-2002.  A very late State budget approval in August 2001 resulted in UPK being included in the general supports of that budget, instead of  having a separate line item in the budget.  Consequently, the number of eligible districts allowed to apply for funding was reduced to 224 (from a maximum of 419) and the State allocation was frozen at $204.7 million.  The funding freeze lasted through June of 2006 and significantly restricted implementation efforts during that  period.


              The map in Figure 1 demonstrates the number of districts in each county implementing UPK (out of the total number of districts located, primarily, in each county).  Not all districts implementing UPK are serving the maximum number of four year olds they are funded to serve, while some are serving more.






              In 2006-07 a new funding formula allocated up to $50 million for a supplemental UPK grant, increasing the State allocation to $254.7 million with 284 districts eligible for participation. However, the total number of districts participating in UPK remained at fewer than half of the total districts (677) in New York State.  Based on a new formula in 2007-08, virtually all school districts became eligible to apply for UPK funding.  Figure 2 shows a steady increase in the number of districts implementing UPK from 1998-99 to 2009-10 and the total number which were eligible to apply each year.



              In an effort to encourage and support the participation of eligible districts, a provision in of the Laws of 2008 allowed districts to apply for grant funding to either plan a UPK program to be implemented the following year or expand their current program.  However, when subsequently the State’s enacted a funding freeze at the prior year level, the availability of UPK funds was restricted to the 452 districts already operating a program. Thus the 14 districts that had received planning grants were unable to apply for funding to implement their programs. 


              Figure 3 shows the maximum number of pupils who could be funded by the State UPK grant and the number of students actually enrolled in the program. The total number of students served includes those supported with State funds as well as those served with additional, other, sources of funding if districts opt to serve more students than their grant supports.  Alternately, some State funded slots (a slot is used to refer to the per child allocation) go unfilled if districts do not participate in UPK. Some of the reasons that districts chose not to apply for their maximum allocation include: too few children funded to launch a program; the per child amount is insufficient to cover the cost of a program without additional funds, especially with local funding constraints; and uncertainty about the UPK’s future stability.  There was a hiatus between 2001-02 and 2005-06 during which the formula was suspended and there was no requirement that the maximum number of children be served in order for a district to receive its maximum allocation. The dotted line in the chart below incorporates this time period.




              Funding for UPK was launched in 1998 with a State allocation of $67.4 million, of which participating districts expended $57.1 million.  Initially funding was ramped up quickly, as the legislation intended, but after the first three years the funding formula was suspended and the program was essentially flat funded for several years.  In 2006-07 the formula was restored and many new districts became eligible to apply. UPK reached a maximum allocation of $451.2 million in 2008-09 with 672 districts eligible to apply.  Fifty-five new districts began implementation, resulting in 452 districts participating and 100,208 students served.  However, a change to the funding formula occurred and aid was calculated based on final grant expenditures in the 2006-07 year.  This change caused 101 districts to receive less funding than they had applied for through the grant process.  Figure 4 shows the growth in the maximum statewide allocation for each year since the program’s inception, contrasted with the actual expenditures for each year by all participating districts.


              . Chart





Need for Stable Funding


              Since its inception in 1998, UPK has had many starts, stops, and slow downs on the way to becoming fully implemented. It is currently far from being “universal.”  Due to the difficult fiscal climate, UPK funds have been frozen, consistent with some other State initiatives, and the statewide maximum for UPK has been reduced to $414.1 million. The UPK program is available only to the 452 districts that implemented UPK prior to and during 2008-09.  Approximately 220 districts have yet to implement UPK, and because of the issues of flat funding, will be unable to do so in 2009-10.  In addition, the UPK formula is complex and based on data that can change during a single funding year. A financial mechanism that supports stable funding for UPK, in addition to full-day kindergarten is essential if prekindergarten is to be an integral part of the P-16 educational system. 


Maintenance of Effort


              Before 2007, State law required districts to maintain their prior year expenditures for UPK as a condition for receiving the same allocation of State funds. If they didn’t, State funding was reduced by the amount that the district reduced their local UPK expenditures. Legislative revisions adopted in 2007 altered the Maintenance of Effort (MOE) requirement. The revised requirement stipulated that a district could not reduce the number of students served in the prior year or their UPK grant would be reduced accordingly, as calculated on a per child basis.  In other words, the requirement became the maintenance of students served, not funds expended. This was, and continues to be, a disincentive for expanding UPK because districts may be serving more students than those funded through their State UPK grant, specifically through the use of federal or local dollars.  During these fiscally stressed times, the supplemental funds which districts used to serve more students than their UPK grant permitted, may not be available. The MOE requirement penalizes districts by reducing State Aid if they serve fewer students in a subsequent year.  As districts cut back on their local (or federal) support for UPK, State funds are reduced by the same amount.


              An example of the MOE problem follows.  In 2008-09, District A received a UPK grant for $85,188 to serve 31 students.  Using local taxpayer dollars they served an additional 20 students for a total enrollment of 51 students. In the 2009-10 school year, the district has elected not to maintain its local effort and proposed serving only the 31 students funded by their UPK grant. However, because they had served 51 students during the prior year, their MOE requirement is for 51 students. Therefore, by serving 20 fewer students, their UPK grant will be reduced by that number and they will only receive funding for 11 students, or $30,227.  This is a disincentive for districts to serve additional students, when economically possible, and may result in districts discontinuing their UPK programs altogether.


Pupil Transportation


              Transportation is another issue of concern. While districts have the legal authority to transport UPK students, and transportation costs are an allowable grant expense, districts are not able to receive Transportation Aid if they opt to transport students.  While districts are allowed to put students on existing bus runs if there are available seats, no aid is generated for these students. Districts which do provide transportation typically absorb the costs at the local level.  Those which do not provide transportation can only serve students whose parents or guardians are able to provide transportation. This means that children in districts with fewer local resources available to support the cost of transportation, or those with parents or guardians who are unable to transport them, will be less likely to attend UPK programs. These may be the same children expected to benefit the most. In these difficult times, where transportation costs are high, especially in rural districts serving large geographic areas, it is becoming increasingly difficult for districts to afford to transport UPK students. 


              Additional challenges associated with transporting UPK students include:


  • Given that a large number of UPK students attend their instructional program at locations that are not housed at the public school, there needs to be clarity that districts have the legal authority under Education Law 3635 to transport students to sites other than public or non-public schools, licensed day care centers or after school child care programs. CBO settings include nursery schools, group family child care centers, and other early childhood programs not specifically listed in the law.


  • Regardless of whether UPK transportation becomes an eligible expense under Transportation Aid, bus monitors are not aidable. If districts and parents believe that four year old children require a bus monitor, that expense would be a local cost.


  • If students are three years of age when they begin UPK (turning four later in the fall) they must sit in car seats. The cost of car seats would be a district expense and space would be limited to two students per seat.


  • While very few districts engage in this practice, it is allowable for districts to contract with CBOs located outside district boundaries.  Districts have no legal authority to transport enrolled public school students to school settings outside of their own geographic boundaries, unless the setting is a BOCES program.







Inclusion of Students with Disabilities in UPK


              A universal system of prekindergarten education would provide access to the program for all four year old children, with and without disabilities. Currently UPK and preschool special education are two separate systems. Although approximately five percent of students served in UPK have identified disabilities, we would expect the incidence to be closer to 12 percent (which is the average incidence of students with disabilities in the total school population) if the UPK system were comparably serving all preschool special education four year olds.  While this level of participation may not be possible until UPK is fully phased in, this paper explores the current system requirements that affect participation by students with disabilities, and options for moving in a direction that allows for increased access.


              As defined in Regulations of the Commissioner, all students who are district residents and meet age eligibility criteria, as defined by the district, must have an equal chance of being selected if there are fewer funded slots than applicants (except for homeless students who must have the option for enrollment by federal law). Therefore, the inclusion of students with disabilities is difficult to guarantee as random selection disallows slots to be reserved for any child regardless of their circumstances.  Until UPK is fully implemented and there is sufficient funding to guarantee a funded slot for every applicant, the inclusion of students with disabilities will undoubtedly remain at about the same level as it has since the program began, i.e., approximately five percent,  unless changes are made.  It is important to make the necessary modifications to ensure that all funds for young children are used cost effectively and children with and without disabilities have access to UPK programs, including any special services needed.






              Although this fiscal period is very challenging for districts, it does provide an opportunity to step back from the current funding structure and allocation process and retool components of the formula that need correction. It also presents an opportunity for the Department to advocate for a process that will provide the State with a fiscally stable UPK program.  It is recommended that program goals be re-established and that a revised fiscal structure support the vision of full implementation of UPK across the State.





  • Commitment and funding for the full implementation of UPK so that all school districts and charter schools are eligible to serve interested four year olds. Ensure that the P in P-16 provides universal access.


  • Funding structure that provides a streamlined approach and ensures predictability and stability, especially during the phase-in period.


  • Ensure transportation for all children using the Transportation Aid formula. Legal obstacles will need to be resolved.


  • Provide funding sufficient for a full-day program if districts elect to offer full day UPK.


  • Maintain community-based organizations as an integral part of the service delivery system.


  • A larger percentage of students with disabilities will be guaranteed a slot in the UPK program if that setting is determined to be an appropriate general education placement.   This supports the full inclusion of four year olds with disabilities who can benefit from placement in a UPK program and could reduce costs over the long-term as students are provided opportunities for integration with non-disabled peers. 




Regents Policy Discussion



  • Will the Regents recommend an increase in funding for UPK in 2010-11?  Will they recommend that every district be allowed to implement UPK in 2011-12?


Establish a more stable UPK funding formula with less fluctuations and more predictability.


  • Would the Regents advocate for a legislative change to eliminate the penalty if districts reduce their local effort?


State Aid for UPK should continue to be provided and school districts should be held accountable for use of these funds. However, school districts should not be penalized if, in a prior year, they used additional other funds to serve more UPK students than were supported with State dollars.  Currently if they reduce their local or federal support for UPK students their State grant is reduced.  Support a legislative change to eliminate the Maintenance of Effort (MOE) penalty for school districts. 


  • Would the Regents advocate for State funding for districts that had received a UPK planning grant but were subsequently not funded to implement?



Give the 14 districts that received planning grants in 2008-09 the opportunity to implement a 2010-11 UPK program, for the number of students that they planned to serve in 2009-10.


  • Are the Regents supportive of districts receiving Transportation Aid for transporting pupils to UPK programs?


Districts should receive reimbursement, as Transportation Aid, if they opt to provide transportation and there are no legal obstacles.



  • Should the Regents advocate for legislative changes to reserve slots for students with disabilities in UPK?


Increase the access for students with disabilities by reserving slots in UPK for those who only need a special class for half the day and could be in UPK for the other half or for those students who only need itinerant services while in UPK.


  • Would the Regents support a legislative change in the funding formula to enable full day programming for UPK students enrolled in a Special Class in an Integrated Setting?


Encourage the inclusion of four year old students with disabilities in UPK and maximize the educational program experience by allowing grant funds to be used for a full-day program (at twice the per child allocation intended for a half-day program) for students served in district-operated Special Class in an Integrated Setting. Special Class in an Integrated Setting is an approved preschool special education program that includes both three and four year old students with disabilities and their non-disabled peers in the same classroom.  At the preschool level, a Special Class in an Integrated Setting can have just one special education teacher compared with a school age program where an integrated co-teaching model requires one general education and one special education teacher.  In the proposed instance, the non-disabled students in the class would be funded through UPK dollars and there would be a tuition rate set for the students with disabilities that would be funded by the county and State.




Barnett, W.S.  (1995). Long-Term Effects of Early Childhood Programs on Cognitive and School Outcomes, The Future of Children: Long-Term Outcomes of Early Childhood Programs, Behrman, Richard E., editor, 5 (3), 25-50.


Committee on Integrating the Science of Early Childhood Development. (2000). From Neurons to Neighborhoods: The Science of Early Childhood Development.  Washington D.C.: National Academy Press.


Schulman, K., and Barnett, W.S. (2005). The Benefits of Prekindergarten for Middle-Income Children. National Institute for Early Education Research Policy Brief, New Brunswick, NJ: Rutgers University Graduate School of Education.



Executive Summary


              The Board of Regents have discussed the balance between Foundation Aid and expense-based aids.  New York State is using Foundation Aid to phase in adequate funding for all students to meet State learning standards but has frozen the planned phase in for the next two years.  Expense-based aids help districts with expenses for school construction, pupil transportation, BOCES shared services and special education and are based on costs that districts have already incurred, usually during the prior year.  Aid for capital expenses such as school construction or school buses is amortized over the useful life of the building or bus.   This paper explores one significant expense-based aid, State Building Aid,  which the State uses to help school districts with the cost of school construction.    At $2.1 billion for school year 2008-09, Building Aid represents about 10 percent of all State Aid and is the second largest category of aid after Foundation Aid.  Environmental concerns, concerns about the impact of school buildings on students and teacher performance, and concerns about maximizing school district resources motivate this discussion.


              Department staff believe that there is sufficient evidence for the Regents to consider requiring public school capital projects to be designed in accordance with high performance standards. A recognized high performance standard requires projects to be designed in a cost effective and environmentally conscious manner which will reduce future costs for the State and local taxpayers.  Improvements in design strategy, combined with improved products that are durable, easy to maintain, inhibit mold growth, and are less expensive over their useful life, must be considered in order to develop high performance educational facilities that have been shown to contribute to higher levels of academic achievement.  High performance facilities have been linked to lower maintenance and operating costs, decreased energy usage, less impact on the environment, reduced absenteeism, greater productivity, and higher achievement.  High performance facilities are an important component of the ability to deliver a rigorous educational program.  The most comprehensive study to date, The Costs and Financial Benefits of Green Buildings; A Report to California’s Sustainable Building Task Force, indicates that high performance schools can be implemented for a two percent or less premium cost while saving 10 to 20 times that amount over the life of the facility. 


              Additionally, the New York State formulas do not provide an incentive for the proper maintenance and upkeep of school facilities.  State Building Aid is available for capital improvements but not maintenance.  Foundation Aid is available to help districts support the operation and maintenance of schools, but maintenance is not separately identified or required.  This often encourages districts to allow conditions to deteriorate until they become capital replacements eligible for State assistance.  The result is that as conditions deteriorate, the cost of the replacement becomes significantly higher than it would otherwise have been if properly addressed as a small maintenance issue.  When the former Minor Maintenance and Repair funding stream was combined into the Flex Aid category and then later combined into Foundation Aid, school maintenance spending declined.  Over time, this will increase both State and local costs for school repair and modernization.  Policy options include either advocating for some level of aid for maintenance or for a minimum maintenance effort based on the replacement value of the facility.  Evidence suggests that adequate maintenance funding will produce as much as a four fold benefit in future capital costs.  In other words, adequate maintenance spending will allow one dollar in maintenance to avoid four dollars in future capital costs.


              Finally, staff recommend that the Regents consider adopting a foundation formula for Building Aid.  It has long been recognized by various parties that the existing Building Aid formula is outdated, overly complex, and difficult to understand in relation to the funding for a particular project.  A School Construction Foundation Formula can be instituted that produces a simple, easy to calculate and understand, transparent model for providing Building Aid to school districts for capital projects.  This will help the public understand and support school modernization needs of districts.



Green School Design


Policy Question


               Should the Regents support high performance “green” school design as a    mandatory requirement in order to obtain a building permit and State              Building Aid?


What is a high performance school?  A high performance school has three main attributes:  it is designed to create a healthy and comfortable learning and working environment; it is less costly to operate than a conventional school over the life of the building; and it is constructed to conserve important resources such as energy and water.  High performance design is also called green design, sustainable design, or environmentally friendly design.  It involves taking a comprehensive view of the process for the construction and renovation of buildings, early in the planning process.


The Office of Facilities Planning worked extensively with the New York State Energy Research and Development Authority (NYSERDA) and a panel of school and industry experts to develop the New York Collaborative for High Performance Schools (NY-CHPS).  With permission of the authors, the document relies on publications from the United States Green Building Council’s (USGBC) Leadership in Energy and Environmental Design (LEED), the original California Collaborative for High Performance schools (CHPS), and the modified Massachusetts program. The original publications were evaluated by a panel of experts and specifically modified for application in New York’s schools with particular emphasis on compliance with New York law and Regulations of the Commissioner.


Benefits and Needs


              NY-CHPS is designed and intended to help school districts and their communities develop and maintain outstanding learning environments that contribute to improved academic achievement while reducing operating costs, protecting and conserving our natural resources, and reducing the negative impact on the world around us. 


              There is growing evidence that specific health and educational benefits may be achieved by constructing and maintaining high performance schools.  The Heschong Mahone Group performed a study wherein students in three cities were found to perform up to 20 percent better in classrooms that have the greatest amount of natural daylight as opposed to those with little natural daylight.  In another study by Judith Heerwagen, a seven percent worker increase in productivity was identified following a move to a green facility with appropriate daylight.  Further, a Lawrence Berkeley National Laboratory study found U.S. businesses could save $58 billion in lost sick time and an additional $200 billion in worker performance if improvements were made to indoor air quality. 


              In a test regarding the adequacy of New York’s school funding formula, the New York State Court of Appeals found in the Campaign for Fiscal Equity case that an adequate facility is a critical component and necessary input for creating an educational environment which is conducive to learning.  The court argued that appropriate facilities are part of the constitutional guarantee to a sound basic education.


              High performance schools positively impact on student and teacher health through improved indoor air quality and reduce absenteeism resulting from poor health.  Many New York public schools have struggled with poor indoor air quality as a result of many different factors.  These factors contribute to increased absenteeism and health conditions such as asthma.  The Office of Facilities Planning has worked with the New York State Department of Health to identify systems from the Building Condition Survey required by Regulations of the Commissioner that could contribute to the development of asthma as a result of water penetration, poor indoor air quality, faulty ventilation, mold, etc.  These conditions will most certainly impact students’ ability to learn and fully engage the educational curriculum.  The Department uses these data to encourage the prioritization of capital funding to provide safe and healthy facilities for delivering the instructional program.


The Education Department launched NY-CHPS at a press conference with former Commissioner Mills, then President Tonko of NYSERDA, and Commissioner Grannis of the Department of Environmental Conservation.  In the joint cover letter included in CHPS, the Commissioner and President Tonko identified the CHPS process as a compilation of best practices for state of the art sustainable design and construction practices from around the country, specifically adapted to New York.  They pointed out that the CHPS process will contribute to a better learning environment, which may reduce student and teacher absenteeism and promote better staff retention.


Schools should use the opportunities presented in CHPS to not only benefit the students, teachers and community who use the school, but also for the opportunity to teach the next generation how to weigh and balance the needs of society through the efficient use of our natural resources. 


The CHPS framework uses a rating system to assign points in seven major areas to help districts and design teams build sustainable school buildings that enhance the educational environment and facilitate learning.  The seven areas are: site; water; energy; materials; indoor environmental quality; operations and maintenance; and extra credit.  High performance schools optimize resources over the life of the facility, are less expensive to operate than standard buildings, and help ensure healthy, safe and high quality learning environments for all occupants.  Within each of the seven areas, there are prerequisites and optional points for greater compliance, resulting in a higher performing facility.


The following guidelines should be considered in supporting high performance school design:


  • School facilities must provide a quality learning environment.


        This is accomplished by ensuring that classrooms are comfortable        environments that do not have visual glare, audio background noise,       thermal or other indoor environmental quality conditions that could inhibit          learning.


  • School facilities must be durable. 


        New school buildings and renovations must be completed with               technologies and materials that far outlast the bonds needed to pay for              them.  Selecting materials that offer the best performance over the life     cycle cost of ownership will reduce overall costs as opposed to selecting     materials based on their initial cost. Selection of proper materials will    decrease future capital costs.


  • School facilities must be easy to maintain.


        Schools must be properly maintained over their useful life in order to be            energy efficient and healthy.  Maintenance expenses must be considered      during the design of a facility to ensure they do not place a long term       burden on taxpayers. High performance school buildings are designed to            be less costly to maintain.


  • Buildings should be designed to use and preserve natural resources. 


        School buildings should be designed, with special attention to their        orientation on the site, to capture natural lighting, passive solar heating               during the winter months, and natural cooling effects during the warm    months.  Sites should also be selected to preserve natural resources and         to minimize adverse impacts on the environment.


  • Renovation projects represent an opportunity for high performance design. 


        In 2009, the average school building in New York State is over 54 years            old.  Many buildings will undergo significant renovation in the coming      years.  The renovation of school buildings provides districts with an         opportunity to increase energy efficiency and indoor environmental quality        while maintaining and promoting building durability. Healthy and         environmentally friendly schools can substantially contribute to the          achievement of educational goals.  High performance renovation can help     New York’s older school buildings to continue to cost effectively serve             school districts for many years to come. Requiring a life cycle cost               analysis for major system replacements will create high performance     facilities at lower long term costs.


  • School facilities must provide long term benefits to students, teachers, and taxpayers. 


        High performance schools provide direct and indirect benefits to teachers        and students by improving the educational environment through:           optimal indoor lighting, good acoustics and good indoor air quality.  School               districts that build high performance schools derive savings through       reduced energy, maintenance, and replacement costs.  High performance        schools take steps to be the next              generation of schools that provide    lasting benefits to the community.


How much more will it cost? 


              One of the most comprehensive studies to date on the “performance” of high performance buildings is a study by Greg Kats entitled, The Costs and Financial Benefits of Green Buildings.  It is a study of 33 individual LEED certified projects including 25 office buildings and eight school buildings (LEED certified is the lowest of the LEED ratings).   The 33 buildings were chosen because solid cost data were available for both the actual high performance design, and the conventional design.  It is necessary to have these data available because comparisons of separate buildings of similar size and function in different localities are extremely difficult.


              The study included buildings that were from all LEED rated categories: certified, Silver, Gold, and Platinum.  It concluded that the 33 buildings had an estimated average cost premium of two percent over a conventional design, while achieving savings averaging ten times that or 20 percent over the useful life of the facility.  An initial investment of $100,000 on a $5 million project would result in at least $1 million in savings over the life of the facility, conservatively estimated at 20 years.  Since the average New York State school building is 54 years old, project savings would significantly increase over the length of time the improvements would be in use, potentially as high as 35 percent or a return on investment of 17.5 times the initial investment for an average school.  Buildings in the study had construction costs only .66 percent greater in order to reach the certified level.


              Additionally, there is documentation demonstrating that the earlier “green attributes” are incorporated into a design, the lower the cost.  For example, the State of Pennsylvania and the cities of Portland, Oregon, and Seattle, Washington have been able to construct LEED Silver facilities at the same cost as conventional facilities.  Therefore it is possible to incorporate high performance technologies and materials into school construction at no additional cost. 


              Many of the costs are associated with the higher level of architectural and engineering service required to efficiently integrate all project components into a seamless design.  The market is maturing for high performance products that are now available at the same or lower cost than traditional alternatives, reinforcing the fact that green design is a mainstream activity that is no longer a cutting edge trend.  Material prices have dropped accordingly.


The Problem


              A focus on short-term costs discourages districts from investing in high performance school buildings despite guaranteed long-term savings. The Department uses an existing formula to calculate a maximum cost allowance for each capital project proposed by school districts.  Project costs within the cost allowance are eligible for State aid, while costs above the cost allowance are supported 100 percent by local taxpayers.  Because projects often exceed the maximum cost allowance, districts are faced with a potential two percent cost premium in local costs to develop a high performance project.  If this premium is not taken into account in the total voter authorized amount early in the planning stages, it reduces the amount of first cost dollars available for actual construction.  District administrators do not feel that the additional local dollars are available despite the identified return on investment the improvements will generate. 


              This is a traditional problem in public sector financing.  Construction budgets are set by the voting public in the case of a typical school  project, but issues that increase first cost are often rejected because they will decrease the actual amount of construction that can be completed within the given budget.  Therefore decisions are made and materials are selected to maximize the amount of construction, only to significantly increase district maintenance and operational costs over the long term.  These increased long term costs will quickly outweigh the initial construction cost premium necessary for high performance facilities.  They are not given proper consideration in conventional design with separate and distinct budgets for construction versus maintenance.   High performance design seeks to change this by requiring life cycle analysis for major components with the lowest life cycle product chosen for the given need. 


              There are several possible remedies to fund this potential incremental premium:


  • Do nothing.


        Some districts are recognizing the benefits of high performance design            and adopting policies to self-require high performance construction.            Higher wealth districts with the sophistication to recognize the long term           benefits to the community and the ability to fund additional local share are                           currently building high performance facilities while lower wealth         communities whose higher Building Aid percentage might cover a greater        portion of the additional costs are not.  State funding formulas are         designed to be advantageous to districts if accessed regularly.  Higher    wealth communities tend to access State funding more often and are         better able to maintain facilities in a state of good repair thereby         undertaking projects that do not exceed the cost allowance.  Lower wealth        districts access State funding less frequently and therefore have facilities       that need significant amounts of work that will always exceed the cost               allowance.  This can dramatically increase a low wealth district’s local         share, forcing them to reduce the scope of the project and accept facilities               that have been renovated to a lesser degree.


  • Mandate high performance design as a requirement for Building Aid without financial assistance.


        This option might be reasonable from the perspective that it can be done          at no additional cost if properly planned.  It will be difficult for districts to          accept as it will be seen as an unfunded mandate despite the fact that             compliance with high performance standards has been shown to pay a         significant return on investment thereby decreasing the district’s long term         expenditures for the facility.  It will increase the district’s initial local share          for those that are at or exceeding the cost allowance.



  • Mandate high performance design with a two percent incentive to compensate for increased costs. 


        This would in effect increase the maximum cost allowance by two percent         and hold districts harmless for the potential increased costs of compliance       with high performance standards.  This will increase State Building Aid,              but it should be noted that the State will receive significant benefit as well.       Districts with high performance facilities will not require renovation as    often, because materials will be more durable, longer lasting, and the life               cycle costs of materials will be lower thereby reducing the State share of          construction costs over time as well.  The State’s return on investment will              be smaller than the districts’ because we will not directly benefit from            reduced operating costs such as energy efficiency.  This will help districts         control increasing operational costs when Foundation Aid is flat.  It will              also help the State contribute to the Governor’s stated goal of reducing      energy consumption by 15 percent by 2015.


  • Shift a portion of available Building Aid for high performance school projects.


        Facilities Planning staff have noted trends in district construction practices       that can be changed by changing access to funding, and redirecting the              funding to high performance goals.  One example is eliminating indoor         heated bus storage for district fleets.  Discussions with private vendors          and professionals in the transportation industry find no convincing         argument for 100 percent indoor storage.  In most cases, these facilities           are being constructed by very high aid ratio districts (90 percent and     above) simply because the funding is available.  We see no reason why          bus yards with security fencing, lights and block heaters are not               acceptable. 


        A second example is energy performance contracts (EPC’s).  EPC’s are         required by statute to require the, energy performance contractor to        guarantee recovery of contract costs from energy savings realized by the     school district during the term of the energy performance contract which       shall not exceed 18 years.   In other words, EPC’s are free to districts and         taxpayers because all costs are recovered by the district within 18 years           or less through energy savings guaranteed by the contractor.  If the     savings fall short, the contractor must reimburse the district.  Because the       project does not cost taxpayers any money, the district is allowed to               perform a project without voter authorization.  Despite all this, the State             still pays Building Aid to districts at their aid ratios in significant annual              amounts on projects that are essentially free to districts.  Further, although         EPC’s do not require voter approval, if a district chooses to get voter         authorization on an EPC, the State will also pay the 10 percent incentive     on EPC’s.  In total, this represents $9 million dollars annually that could be        used to fund high performance schools without impacting districts in any       way.


        A third example is synthetic turf sports fields.  These are becoming        commonplace around New York State school districts and come at a             significant cost of approximately $1 million per field.  While they may be        appropriate in certain urban areas where open space is either not         available or prohibitively expensive, they are becoming common across           the State, in many cases simply because the State is extremely generous          in its Building Aid and a loophole exists in our funding formula.  Further,    the useful life of synthetic fields is generally a maximum of 10 years, five         years less than the      minimum amortization period to pay for them.  There        are studies that demonstrate certain health impacts may need to be       considered as well as disposal costs.  They do require maintenance, and         the annual life cycle cost to replacement is approximately $75,000 per          field.  It may be inappropriate for the State to incur significant ongoing      costs for projects that are primarily devoted to extracurricular activities              such as varsity, junior varsity, and intramural sports.  Regents              requirements for graduation include physical education which is generally     accomplished through the      myriad combination of gymnasiums, swimming               pools, grass fields, tennis      courts, tracks, etc. that are currently funded.       Synthetic turf is a luxury that goes well beyond the provision of a sound              basic education.  School districts and communities that place such a         heavy emphasis on these         extracurricular sports activities should stand           ready to pay for the luxury at no cost to the State.  The State funds     currently expended for synthetic turf sports fields can be used to fund         other needs such as high performance schools or much needed building          maintenance.




School Maintenance


Policy Question


Should the Regents provide greater support for maintenance costs as well as high performance schools?  Should a minimum maintenance effort be required?


              The State has approved over $50 billion in school construction over the last decade, including $25 billion for NYC and $25 billion for the rest of the State.  We must ensure adequate maintenance to prevent these investments from reverting to their unsatisfactory state prior to the end of their useful life.  At a recent school facility summit meeting, former Commissioner Mills encouraged school facilities directors to advocate to their boards of education to provide adequate facility funding.  The Department must do its part to protect this investment on behalf of all taxpayers as well.


              Studies have shown that proper maintenance funding can reduce future capital needs by as much as $4 for every dollar spent on maintenance. The previously enacted Minor Maintenance and Repair Aid program was intended to be a four year program to provide districts with funding for projects too large to carry out under a typical operations budget, but not significant enough for a capital project.  It provided $50 million for three years and planned to provide $80 million for the fourth year. During the program, there was an effort at consolidation of numerous aid categories for simplification and the program was rolled into a new program, Flex Aid.  When that happened, school facility managers across the State reported that none of the funding flowed for maintenance projects as districts now had the “flexibility” to use the funding for other budget needs.   Funding a portion of district’s maintenance needs would reduce the future State share of construction projects.


              Private industry may spend as much as three percent of a facility’s replacement value on annual maintenance.  This would tend to keep the facility on a 33 year useful life rotation.  Industry has greater need for upgraded facilities to stay competitive in the market and develop and manufacture new products.  A public school facility should receive a minimum of two percent annual spending of replacement value for maintenance activities and capital renewal.  This would tend to continuously refresh the facility on a 50 year cycle, slightly below the current average age of school facilities in New York State.  Staff will engage in discussions with the NYS Office of Real Property Services to determine if the data currently exist to determine replacement value.


              An unpublished research project undertaken by Pacific Partners Consulting Group, headed by Frederick Biedenweg, Ph.D., a former associate provost at Stanford University, and Ms. Lynda Swanson, retired Director of Facilities for the Oregon University Systems Office, demonstrates that adequate maintenance spending on facilities, based on a percentage of the current replacement value of the facility (CRV) will result in a 4:1 benefit in reduced future capital needs.  This happens for two reasons.  First, the lack of day to day maintenance shortens the life cycle of building systems causing them to fail earlier, and second, because when building systems fail early and unexpectedly, emergency repairs are always more expensive than planned maintenance.   


              State Aid formulas encourage districts to ignore maintenance issues until they deteriorate to the point where they become capital problems which then become eligible for Building Aid.  This contributes to poor facility conditions existing for a greater length of time, and causes future capital projects to be greater cost due to deteriorated building components. 


Where will funding come from?


               There are several potential sources: 


  • Advocate for a set aside in Foundation Aid for school maintenance.


  • Use Building Aid savings to fund maintenance projects by no longer aiding infrastructure projects that are not required to provide an adequate education such as energy performance contracts, synthetic turf, and excessive bus storage facilities.


  • Consider eliminating the 10 percent incentive enacted in 1998 for capital projects and transferring this dollar value to a dedicated maintenance program appropriately allocated to each district in the State.  A discussion with numerous district facility directors has revealed that they would be willing to forgo the additional Building Aid incentive if the funding were specifically made available for maintenance activities necessary to keep the facilities in good repair as required by the 1998 RESCUE regulations which implemented the Minor Maintenance and Repair Aid program.  This would direct approximately $237 million annually, when fully phased in, into additional support for school maintenance projects.


  • Require that districts fund facilities maintenance at a minimum annual percentage of Current Replacement Value. This would generally prevent decreased annual maintenance spending from prior year levels.  Maintenance and operating budgets are the first items targeted for budget reduction in difficult economic times to prevent the reduction in teachers and educational programs. However, this process produces a backlog of deferred maintenance which the State then funds as (future) capital projects, significantly increasing State costs.  At the same time the overall educational program suffers as it is conducted in facilities that are a detriment to the educational process.



              It is recommended that the Regents consider proposing the shifting of currently available resources away from EPC’s, wide-scale bus storage, and all synthetic turf requests, and utilizing this funding to increase maintenance funding for districts.  Additionally, a minimum for maintenance spending should be considered as it would prevent existing conditions from further deteriorating while districts waited for maintenance items to become capital needs.  It is also recommended that a school maintenance set aside be applied to Foundation Aid. The State previously recognized the need for higher maintenance spending by implementing the Minor Maintenance and Repair Aid.   Since it was rolled into Foundation Aid, evidence demonstrates that it rarely flows to maintenance activities as districts struggle with budget issues.



Simplified Cost Allowance


Policy Question


              Should the Regents support a move to a School Construction Cost       Allowance for Building Aid that promotes ease of understanding,        transparency and more targeted use of State Aid?


              It has been long understood at all levels of State and local government that the formulas used to calculate Building Aid are overly complex and difficult to understand.  They were developed approximately 50 years ago and do not represent current practice with respect to the construction and renovation of school facilities.  An industry of financial experts has evolved for the sole purpose of servicing New York State’s K-12 market with respect to Building Aid.  There is no transparency between projects and the amount of State Aid a project receives.


              It is recommended that the calculation of Building Aid be transformed into an easy to understand, easy to calculate, and transparent system by going to a School Construction Foundation Formula.  Currently, the Department reviews enrollment projections created, through several methods, to determine the projected enrollment that will be served by the facility.  The number and types of educational spaces that are eligible for aid are tallied and multiplied by various factors to arrive at a number of Building Aid units.  These units are then multiplied by a cost index and a regional cost factor to arrive at an estimate for State aid on a project.  The types of spaces eligible for aid are controlled through regulatory guidance that does not reflect current educational practice. 


              A School Construction Foundation Formula could be simple.  It will require broad agreement on what a “sound basic facility” would consist of at the elementary, middle, and secondary levels, as well as agreement on an appropriate amount of space per child at each level, and an estimate of the cost per square foot for that amount of space.  The Department has the data to make necessary calculations from the extensive data available to us from the tens of thousands of construction projects completed in New York State schools to date. 


              Aid would simply be determined by multiplying the projected enrollment (enr) by the square foot per child at the appropriate grade level, multiplied by the cost per square foot for the sound basic facility, and finally multiplied by the regional cost factor (RCF) that currently exists.  The cost per square foot can be adjusted monthly with Labor Department statistics as is done with the current formula.  This produces a transparent calculation that eliminates the complexities of the old formula, and also eliminates the need to manipulate a desired educational program for the sole purpose of generating additional aid as the current system does.   In summary, the simplified formula is:


Aid=Enr x SqFt/Child x cost/sq ft x RCF


How will it be paid for?  


              This system can be designed to cost no more than the current system of Building Aid while allowing greater flexibility for local districts to implement projects necessary to support education in alignment with local goals.  The various factors can be adjusted to initially provide the same levels of funding as the current method does, but using an easy to understand, simple to calculate, transparent process.


              Staff recommends that the State enact a School Construction Foundation Formula for Building Aid to eliminate an antiquated, complex funding system that does not support current educational philosophies.





              In conclusion, staff recommendations for the three main policy goals related to school facilities and funding are:

  • Should the State mandate high performance “green” school design?

It is recommended that a High Performance Green Schools Initiative be required for access to State Building Aid.  Evidence demonstrates that significant returns on investments can be made financially by being less costly to operate and maintain, while at the same time creating facilities that are healthier, cleaner indoor environments that contribute to lower absenteeism and higher achievement.  Additionally the potential incremental cost of two percent can be funded by not funding lower priority building improvements and capital projects.  It is recommended that the State:


  • Provide aid for system replacements only when they have reached their estimated useful life;
  • Modify cost allowances to provide aid for converting space from one purpose to another only when the conversions are programmatically necessary;


  • Modify the cost allowance formula to make the incidental cost allowance proportional to to actual construction costs; and


  • Eliminate aid for excessive bus storage facilities.



  • Should the State provide greater support for maintenance costs or a minimum local maintenance effort?

It is recommended that a minimum annual maintenance effort be required based on the current replacement value of the facility, and that the State provide greater support for maintenance.  It is critically important to protect the multi-billion dollar investments that are made annually to our public K-12 infrastructure.  Our funding formulas actually encourage poor maintenance practices.  We must create mechanisms where future state funding is used appropriately for capital improvements and not used to replace building components that were not properly maintained.  Evidence demonstrates that appropriate maintenance spending will reduce both future state and local capital needs.  It is recommended that a minimum annual maintenance effort be established by requiring a set aside from Foundation Aid to properly fund maintenance of facilities.  This will provide greater State support for maintenance to protect the State’s substantial investment in public school facilities.

  • Should the State enact a School Construction Foundation Formula that promotes ease of understanding, transparency and more targeted use of State Aid?

It is recommended that the current Building Aid formula be simplified, transparent, and made easy to understand through a School Construction Foundation Formula.  The existing formula is extremely complex, antiquated, and forces districts to compromise educational curricula to obtain the greatest amount of State reimbursement.  The new formula can be initially created to cost no more than existing State Aid system, but would allow greater local flexibility in designing spaces appropriate for individual districts.  The new Formula would allow the public to understand the relationship between a specific project and its associated state and local funding and should promote a broader understanding for the need for appropriate capital improvement. 








Frederick Biedenweg, Ph.D., Lynda Swanson, Unpublished research  regarding maintenance vs. capital costs in the Oregon University System.  Email and telephone conversations with Mr. Frederick Biedenweg, August 19, 2009.


*Note:  Dr. Beidenweg has also consulted with the SUNY and CUNY systems and has stated that New York’s public university systems face a similar physical maintenance need as the Oregon facilities included in the research. 


William Fisk, “The Role of Emerging Energy Efficient Technology in Promoting Workplace Productivity and Health: Final Report,” Lawrence Berkeley National Laboratory, February 13, 2002.


Judith Heerwagen, “Do Green Buildings Enhance the Well Being of Workers?”,

Environmental Design and Construction Magazine, July/August, 2000.


Greg Kats, “The Costs and Financial benefits of Green Buildings” A report to California’s Sustainable Building Task Force, 2003.


Heshong Mahone Group, “Daylighting in Schools:  An Investigation into the

Relationship between Daylight and Human Performance”, 1999.