Supporting Quality Facilities at California's Community Colleges
Over the last two years, failure to fund all Board of Governors’ approved and vetted facility projects in the state budget has resulted in an extensive backlog of projects, a dismissal of strong voter support for Proposition 51, and a massive facilities need of $42 billion over the next 10 years. The backlog of approved projects has now risen to 60 statewide. Failing to fund these capital projects represents a missed opportunity to create jobs, preempt significant development cost increases, and to cultivate a skilled and educated workforce in communities throughout the state.
Suitable educational facilities play a vital role in supporting the mission of California’s colleges and the success of its students. Funding all approved projects in the 2019-20 Capital Outlay Plan is an essential element to meet statewide needs.
Honoring California's Voters, Third Edition highlights some of the 60 voter-approved, shovel-ready, community college projects across the state and the services and value they bring to California students and voters.
In 2016, California voters approved a facilities bond providing a $2 billion infrastructure investment in community colleges. However, the 2017-18 and 2018-19 Budget Acts only funded a fraction of the shovel-ready capital projects approved by the Board of Governors. Our California Community Colleges currently have an unmet need of $42 billion in infrastructure investments over the next 10 years, as identified in the current Capital Outlay Plan, to start and finish essential projects. Failure to fund approximately these capital projects is a missed opportunity to create jobs and to cultivate a skilled and educated workforce in communities throughout the state.
An Effective Plan To Meet Statewide Needs
The California Community Colleges form the largest public postsecondary educational system in the world. California's CCs serve 2.2 million students annually, 23 percent of the nation's community college students, and almost 75 percent of California's public postsecondary undergraduates. System assets include 5,667 buildings and 84.1 million gross square feet of space. Education Code §§ 67501 and 67503 require the Chancellor's Office to prepare a five-year capital outlay plan identifying the statewide needs and priorities of the California Community Colleges. The recent Capital Outlay Plan covers the period from 2018-19 through 2022-23 and includes $29.9 billion of capital facility needs for the California Community Colleges system.
The Right Economic Decision
Waiting to approve worthy projects will increase the costs of all projects. Funding these projects would only add an estimated $7.4 million in annual interest costs over the next 30 years. Further, funding all approved projects is only 25% of the total bond authority granted by Proposition 51.
Communities statewide voted to fund essential capital projects to provide access to critical academic services and workforce education programs. Now we ask California elected leaders to deliver on their end of the deal by funding the approved community college projects.
We respectfully urge the Governor and members of the California State Legislature to honor the will of California voters by including funding for all 60 community college capital outlay facilities in the 2019-20 Budget Act.
A NEW APPROACH TO QUALITY FACILITIES
Meeting Local Needs and Addressing Escalating Costs California has experienced steady cost escalation for construction since 2011. Since late 2017, escalation rates have risen to 2-3% per month. The costs of raw materials such as steel and wood are sharply rising and workforce costs are reflecting high market demand. While California Community Colleges have an effective facilities program which allocates resources based on a formula that identifies high need projects in modernization, expansion, and safety, the State has deviated from this effective approach by not releasing Proposition 51 funds and therefore creating a backlog of projects. As a result, these projects have been affected by cost escalation.
Escalating construction costs and the pending steel tariffs are affecting community college facilities projects across the state. Delays in the release of Proposition 51 resources have further complicated this issue. Community college districts are required to cover any differences in increased costs - forcing districts to use resources designated to serve students. Unfortunately, community college districts are also not allowed to reduce the scope of approved projects as an option to offset increased costs. Districts are required to build the facility exactly as approved. If districts do resubmit projects as a means to address cost escalation, these projects are then forced to begin the entire state approval process again - a lengthy process that further increases local costs. The State’s matching requirement within the bond program requires that colleges commit to funding 50 percent of a project. However, when costs increase for reasons outside a districts’ control, the State does not provide support to address those cost escalations.
Delaying the release of Proposition 51 bond dollars exacerbates cost escalation issues. As a result, a key challenge districts face is the expectation to bear the entire cost of escalation without the ability to redesign or make adjustment projects to reduce local costs.
It is critical for State leaders to recognize the severity in which cost escalation is affecting community college facilities projects. We propose two options to address this growing problem:
1. Release State bond resources in a timely manner to avoid project cost escalation.
2. Districts should be allowed to reduce the scope of approved projects as an option to offset increased costs
3. Resources should be provided to cover cost escalations that are outside of the control of community college districts.
Below is a list of voter-approved projects waiting for Proposition 51 funding in the California State Budget.