Prop. 39’s bounty: New dollars, a lot of them, head to schools

Gov. Jerry Brown wants to give California’s 1,032 school districts more than $2.6 billion over the next five years to help them lower their energy bills.

Districts say they don’t know where to apply, what they can spend the money on or how much of an overall need exists but they’ll gratefully accept the money – particularly after years of recession-fueled state funding cutbacks of at least $10 billion.

Cutting utility bills boosts classroom spending on kids, argue districts and the Democratic governor.

“Any way that school districts can save on their energy costs in the long-term is good,” said Cindy Marks, president of the California School Boards Association. “Cost savings from energy efficiency and renewable energy can be redirected to the classroom for greater student success.”

State support for smarter energy consumption and alternative energy sources isn’t new. During the past 15 years, the state has spent some $15 billion on such efforts.

This annual windfall for schools will be $450 million in the first year and $550 million thereafter until June 30, 2018 – a little over $64 per public school pupil next year.

The money comes thanks to voter approval in November of Proposition 39, which returns California to a less generous tax system for large businesses operating in multiple states.

Under the terms of the initiative, for the next five years, half of the more than $1 billion the state’s receives each year from reversion to its old tax methodology is earmarked for projects that “create jobs in California improving energy efficiency and expanding clean energy generation.”

Those projects can be in public schools, universities and colleges as well as other public buildings, the initiative says.

In his budget plan for the fiscal year beginning July 1, Brown proposes that K through 12, including charter schools, and community colleges get all five-years-worth of Proposition 39 energy efficiency funds.

“School districts and community colleges are well positioned to undertake projects that reduce their current utility requirements and expand the use of renewable energy resources,” Brown says on Page 24 of the Budget Summary.

“The reduction in utility costs will in turn assist schools and community colleges in recovering from budgetary reductions implemented over the past five years.”

Several lawmakers and supporters of Proposition 39 say greening schools is an excellent investment.

“It’s a category of buildings that’s 100 percent taxpayer supported,” said Assemblywoman Nancy Skinner, a Berkeley Democrat and author of a measure, AB 39, she hopes will govern how Proposition 39 funds are disbursed to schools.

“There’s a nexus between using taxpayer funds to improve prior taxpayer investments.”

Criticism of Brown’s Plan            

One complaint about Brown’s proposal is that it doesn’t include other “taxpayer supported” buildings.

In a February 21 report, the Legislative Analyst expressed “many serious concerns” with the Democratic governor’s proposal.  Among them are that large buildings, like public hospitals, are excluded and that handing out funds on a per-pupil basis, as the governor advocates, prevents consideration of the age, size, design and location of a school building all of which can affect current energy use and the amount of savings created by reducing that usage.

Backers of Proposition 39 agree with Brown’s spending choice of public schools but don’t like how he proposes giving out the money to individual districts.

“We feel strongly the money should be spent on schools. There’s an enormous need. But we also believe you have to prioritize,” said Kate Gordon, vice president for Energy and Climate at Next Generation, co-founded by billionaire investor Tom Steyer whose $29.6 million in contributions largely bankrolled the Proposition 39 “yes” campaign.

“Rather than spending on a per-pupil basis, though, we should maximize energy savings and look first at schools with the best potential to do that,” Gordon told Capitol Weekly. “That would be the oldest schools with the least amount of work done on them, located in parts of the state with the highest energy demands.”

But districts that have already invested in lowering their energy bill fear they’ll be short-changed by criteria like Gordon and others propose.

Despite the criticism, Brown thinks his proposal is fine as is.

“This proposal reflects the governor’s priority for education spending. The recession took its toll not only on classroom instructional dollars but funds for physical upkeep as well,” said H. D. Palmer, spokesman for Brown’s Department of Finance.

“Public schools serve 6.2 million students and by saving schools money through lowering their utility costs, this plan provides a statewide benefit.”

While the Brown administration can wax windy on the merits of their idea, it has no clue how energy inefficient schools are now or how much it will cost for them to create a brighter and greener future for themselves and the pupils they educate.

Like many districts, the state has no database showing how wasteful or antiquated well more than 10,000 school heating, ventilation and air conditioning units are or whether new double-paned windows, improved insulation, plumbing replacement, lighting change-outs or wind turbines and solar arrays are the best-bang-for-the buck solutions.

What information on school facilities is available suggests there’s plenty of need for Proposition 39’s $2.6 billion.

The state Office of Public School Construction, which would be the agency that disperses Proposition 39 dollars to schools under legislation by Sen. Kevin De Leon, has approved school construction and modernization projects totaling $1.2 billion through January. Bond funds available are $550 million.

A modernization project is defined as one including improvements to “air conditioning, plumbing, lighting, and electrical systems.”

Nearly 920,000 public school students matriculate in classrooms more than 25 years old, the state Department of Education estimates. Between now and 2016, more than 35,400 classrooms will need modernization at a cost of more than $5.8 billion. The state’s share is $3.5 billion.

“For those districts using state dollars from the modernization program to fund energy efficiency efforts there would appear to be a need for Prop. 39 dollars given the dwindling funds available through existing bond programs,” said Ken Hunt, a spokesman for the Department of General Services within which the school construction office is housed.

More Need Then Money

The safe bet is there’s more than $2.6 billion worth of energy efficiency projects that could be conducted at California’s 10,152 schools over the next five years. And If energy efficiency improvements are like other school facilities demands in which need outstrips resources, what projects should get first call on the money?

Brown’s one-page proposal, largely without prejudice, hands the money out through the state Department of Education, cutting checks based on a district’s student population as measured by what’s called “average daily attendance.”

Los Angeles Unified, the second largest school district in the nation, has an average daily attendance of roughly 600,000 which would give it nearly $39 million of Proposition 39’s $450 in the next fiscal year. The district’s annual utility bill is currently $105 million.

The University of California and the state university system would be ineligible for aid under Brown’s plan. Community colleges would receive $49 million in the budget year beginning July 1. School districts, including charter schools, would split the remaining $401 million.

Brown is silent on whether there is a minimum grant amount since some districts have small numbers of students. The money those districts would get potentially couldn’t purchase new heating and air conditioning units, let alone an energy management system that controls power usage at a school site or structure.

“Each project should be cost effective with total benefits exceeding project cost over time,” the governor says in his proposed legislation. Expenditures would be reported to the state and subject to “annual audit.”

Skinner and De Leon, a Los Angeles Democrat, would distribute Proposition 39 funds differently.

Skinner would require the Energy Commission to create a program in which projects compete based on criteria including the age of the building, the energy savings that could be achieved with the project and whether the school is located in a lower income area.

Colleges and universities also could apply for funds.

De Leon has similar criteria and competitive grants in his bill, SB 39, but would have applications submitted to the Office of Public School construction, which says it needs no additional staff to handle the increased workload.      Similar to Skinner, priority would be given to “economically disadvantaged school communities” and projects that offer the “highest energy efficiency savings.”

An applicant district’s degree of economic disadvantage is measured by the percentage of students eligible for the federal free and subsidized lunch program. Skinner uses the same yardstick.

Retrofit projects that replace aging heating and air conditioning systems, coordinate energy use and switch to longer lasting lights tend to deliver the most savings for the investment. Such projects are also more labor intensive – a two-fer De Leon says his distribution plan promotes.

Projects in areas with unemployment levels above the statewide average would get preference under his plan as would those projects in which students “actively” participated in the planning and design, those in which employment opportunities were increased and those that worked with the California Conservation Corps.

Brown “encourages” districts to partner with the CCC or local entities similar to the CCC. He’s shown no sign of modifying his initial plan.

“If you look at the needs, focusing on our school children has numerous benefits and prioritizing the spending so disadvantaged kid are helped first is even better,” said Greg Hayes, De Leon’s press secretary.

What Districts Are Already Doing

California school districts already recognize the sizable impact conserving energy has on their operating costs. They use a variety of strategies to become greener, starting with behavioral change.

“It sounds like a no-brainer but we’re saving over $1 million a year just through behavior modifications like people turning off lights and computers when not needed,” said Rob Pierce, associate superintendent of facilities for the Elk Grove Unified School District.

The district has made a competition out of which school can save the most energy, allowing a percentage of the savings to remain at the school site to be spent as they wish.

Overall, the district has lowered its Sacramento Municipal Utility District bill, with the help of the utility, from $8 million three years ago to $6 million — while adding new school buildings.

Pierce estimates under Brown’s per-pupil proposal the district would receive upwards of $4 million annually. He fears other distribution methods would be less generous.

“Working with SMUD, we already have an assessment of the efficiency of our systems,” Pierce said. “So we can easily spend our Proposition 39 allocation quite quickly on much needed projects.”

Like Elk Grove, Los Angeles Unified already is committed to reducing its energy use.

“If not all our new school construction, then certainly most incorporate a lot of energy features like daylighting, maximizing location to best use natural light,” said Shawn Atlow, the district’s director of facilities legislation, grants and funding.

Atlow said the district has yet to prioritize its energy savings projects but “if the state can contribute, that’ll help us do more than we initially planned.”

San Francisco Unified has somewhat unique energy issues, given its climate. Very few school sites have air conditioning. Gas-fired high-efficiency boilers heat a majority of schools.

Like Elk Grove, San Francisco Unified operates a district-wide sustainability program in which schools that reduce energy costs by more than 5 percent keep half the savings.

“We don’t yet have a comprehensive monetary estimate on the projects we would like to do. While we’re already implementing a wide variety of energy reducing measure and systems there’s still much to be done,” said Gentle Blythe, the head of public outreach and communications.

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Ed’s Note: Greg Lucas, the editor of California’s Capitol, is a contributing editor of Capitol Weekly.