If your school District is looking for funding to build or update its facilities, the Financial Hardship Program may be a good option.
The Financial Hardship Program is run by the Office of Public School Construction (OPSC). Financial hardship assistance is available for those school districts that cannot provide all or part of their funding share of a School Facility Program (SFP) or a Full-Day Kindergarten Facilities Grant Program (FDKFGP) project. Under this program, the State will provide funding to cover part or all of the District’s matching share for an SFP or FDKFGP project.
“The Financial Hardship program is incredibly important to districts that have little to no local funding for their projects.” Says April Thompson, King Consulting’s Senior Funding Associate. “OPSC looks at the District’s available local funds and essentially picks up the difference. This could apply to a new construction project to add essential classroom space or a modernization project to replace roofing.”
To qualify for this program, you have to meet certain requirements, including one involving Developer Fees.
Developer fees are fees that are paid by property owners and developers to school districts to mitigate the impact on school facilities created by new development within a school district’s boundaries.
Before moving forward with a Financial Hardship application, you’ll have to provide OPSC with a current Developer Fee Justification Study. This study can demonstrate a few things that can be used to move ahead for Financial Hardship:
- Your District is justified to collect Developer Fees at the maximum rate authorized by law;
- Your District is not justified to collect the maximum rate but is still justified to collect Developer Fees at a lower rate;
- Your district is not justified to collect Developer Fees.
A Developer Fee Justification Study justifies the applicable fee through detailed calculations that prove the nexus between the anticipated residential and commercial/industrial development within the District and the increased cost for school facilities to the District.
Every two years, in even-numbered years, the State Allocation Board (SAB) adopts an inflationary increase to the “Level 1” school impact fee, effectively setting the maximum amount that can be charged with a Developer Fee Justification Study. It is important for school districts pursuing Financial Hardship funding to keep up with these fee increases and have an appropriate Developer Fee Justification Study prepared.
If this sounds confusing, don’t worry. We’re here to help! Just contact us and we’ll answer all your questions and guide you through the process!