Summer 2001 Newsletter

LAUSD Government Affairs Director Ponders: Is Meaningful Reform Possible In This Legislative Session?

Fabian NunezWhile many in L.A. decry the LAUSD's handling of Belmont and the Ambassador Hotel sites, do they know what the staff must deal with both at the city and state-wide levels. NSBN was pleased to talk with Fabian Nunez, Government Affairs Director for LAUSD, who sheds light on the behind the scenes mechanations both here and in Sacramento, adding descriptions of pending legislation for urban school districts and lending some insight into what the real problems are not merely here in L.A. but in the system statewide.

What bills are you shepherding in the capitol on behalf of LAUSD that deal with the staggering facilities needs that the district has?

We've been working with 5 specific facilities bills during this year's legislative session. Unfortunately, one bill has recently become a two-year bill and was held in the Assembly Appropriations Committee suspense file. That bill proposed a set of incentives to build smaller schools, which house 400 or fewer pupils, by way of a supplemental per pupil allocation. While that bill remains on the back burner until the next legislative session, a number of other bills offer some very significant help in meeting our school construction needs.

Let me start with AB 1580, authored by Assemblyman Tony Cardenas. This bill proposes that school districts be allowed to apply for state school construction money upon certification from the Department of the State Architect (DSA) that final plans for a site have been submitted, rather then waiting for full approval of a project. It basically allows us to apply for funding concurrent with DSA's review process.

This bill is not aimed at subverting the review process. We will still need to receive the requisite environmental and DSA approvals. However, if approved, we will have streamlined the process so that school districts don't miss opportunities for state monies because of a backlog at the DSA. Given the recent Proposition 1A settlement and the approaching June 2002 funding deadline, this bill could mean that LAUSD would be able to submit over $250 million worth of applications on time to the State Allocation Board (SAB).

Another important bill is AB 1072, authored by Assemblyman Gil Cedillo. Much of the growth in L.A. has taken place in the inner city where we have a lack of developable space. This bill would allow districts with dense populations to elect to receive their state bond funding eligibility dollars in the form of lease assistance. Again, this bill is not trying to alter any part of the review process; the required compliance with the Field Act remains. This bill simply adds a level of flexibility and creativity to the school siting process, particularly for those schools located in areas where land in scarce and where acquisition can take many years.

The last bill I want to highlight is Assemblyman Tom Calderon's, AB 972. This bill attempts to put an end to undue delays in the environmental review process that were the inadvertent result of legislation passed last year, by allowing us to conduct two separate hearings, one for the California Environmental Quality Act (CEQA) review and the other for Department of Toxic Substance Control (DTSC) review, rather than one joint hearing for processes. Again, we are merely trying to streamline the process so that one review does not hold up the other. The public will actually be provided an additional hearing in which to participate.

Fabian, in a recent LAO report the current school construction need is quantified at approx. $30 billion. She goes on to say that the state will need to raise approx. $17 billion to cover its share of the matching grants. Her conclusion, simply stated, is that the current funding mechanism is flawed and to truly address this crisis changes must be made such as: 1) Creation of an ongoing revenue stream replacing the bond funding paradigm; 2) Redirection of funds away from specific projects to a dispersion aimed at helping all districts; and 3) A clarification of both state and district roles re: facilities. From the description of the major legislation you gave above it sounds as if that report has fallen on deaf ears. Can you comment?

The most engaging aspect of the LAO's recommendation is the idea that general fund monies should be utilized to help off-set our school construction problems. The suggestion that we have two complementary funding sources--a consistent bond allocation and $1 billion of general fund monies--is revolutionary and truly necessary if we hope to continue to fund school construction in this state. The report offers an interesting variation on the current process.

And despite reports to the contrary, the analysis has not fallen on deaf ears. The response is merely a factor of the timing of its publication. Currently, 90-percent of the focus in Sacramento is on the energy crisis, with the other 10-percent on the budget. So, yes it has been overlooked for the moment. One must also realize that the LAO's recommendation requires a huge amount of one time and ongoing money. Given the state's budget problems, the timing is less than propitious--however real the need.

In spite of this, I believe that school construction will be the next issue that the Governor and the Legislature turn their attention to. So, while the immediate response to the report was not overwhelming, I think it did make an impression. I believe that the elements it addresses are now in the minds of many who work in both the executive and legislative branches and that they will most likely try to incorporate some of the major components of the report into pending and/or future legislation.

Let's delve deeper into the crisis. Stephan Castellanos, the State Architect, in response to a question re: what the State Architect can do in the school facilities arena to improve a rather meager and non-performing metropolitan new school construction program in California said, "Our flexibility and performance depends on effectively managing partnerships both internally and externally. And right now we are neither flexible nor efficient. It has become painfully obvious that we are not providing service and support at an adequate level." Fabian, looking at what you are being asked to do by LAUSD, it looks as if it's merely a patchwork, or Band-Aid approach to making the state system fit with the local needs. Could you comment?

In some respects, what we're doing can be seen as patchwork. In the sense that we aren't trying to solve all problems at once, you're correct. However, we are trying to get at the major obstacles to our construction of schools. But, because of the enormity of the problem, people want to find scapegoats rather than solutions. And average person in L.A.--and most likely up and down the state--blame local school districts for all the problems that exist. Very few, however, are willing to make the difficult choices that building schools in their communities require. I don't consider ours a patchwork approach. It's part of a larger effort to impact the next bond, work more closely with the state agencies that oversee school construction, advocate for more resources for these agencies, and educate the community and elected officials about the difficulties faced by urban school districts in constructing new schools.

Stephan's point is correct, but I would take it one step further. We need to assist these agencies in getting the necessary resources and we must maintain an ongoing dialogue with them. From what I've seen, these agencies take their roles seriously and are making every effort to work with us to get the job done. There is, however, always room for improvement.

Let me add a quote from one of the largest developers in this nation Richard Baron, who has been doing school/housing projects in St. Louis and recently returned to California. He stated, "School districts are notorious for using rigid formulas that they claim are required by state law and regulation. Often times it is all just smoke and mirrors because the technical staff in the Board of Education doesn't like to deviate from their standard rules. We all know the mantra, we've got to have 8 acres, we've got to have so many parking space, we've got to have this, that and the other." Don't the state rules and the processes that we have in California lead to this kind of school construction?

Richard makes it sound more rigid than it actually is. There is some underlying sense to this madness, but clearly a lot needs to be done to make the program work better for schools. The biggest hole in the process is--going back to what Stephan made mention of--that there needs to be greater synergy between the Dept. of Education, DSA, DTSC, the SAB, the Office of Public School Construction and the school districts. I think we are making progress there, too. We constantly work with these agencies to streamline the process and solve potential hurdles. There is some flexibility in the system. I do agree, however, that there are some cases in which the rules are too rigid and the process of revising them is too slow.

The biggest problem with the system is not that it is archaic and rigid, it's the lack of synergy and prioritization. But the only way that is going to happen is with leadership from the very, very top. In other words, until and unless the Governor of California says that he wants to bring this enormous crisis under control, I don't think we're going to see very many changes.

As more districts get projects into the agencies, the demand on these agencies will grow. What this boils down to school districts fighting over attention. And if that's what everybody else is doing, then so does LAUSD. We're going to go out there and talk to our members to make sure that pressure is placed on agencies so that our projects get the attention that they deserve. But, we're also going to advocate to our delegation and the administration about increasing the resources for these agencies so that they can do their job in a timely and responsible manner. So changes definitely need to be made to the system, but I wouldn't say that the system is falling apart.

The NSBN philosophy calls for a construction paradigm much like that of former U.S. Sec. of Education Richard Riley's with smaller school sites being shared by community and government agencies. The NSBN model also calls for a high degree of community involvement in school site location, design and construction. Would it be fair to say that under the current state rules, it's almost impossible for school districts to really be local in their orientation. Can partnerships be formed with non-profits and community organizations for joint-use and site selection be encouraged when you have to go through so many state agencies just to get funding?

There's an element of truth to that. And there's no reason why the state government should be pushing school districts to build large schools, it's a huge injustice to communities who want to build smaller schools.

But under the current allocation formula, the larger the school, the higher your matching fund percentage is. So if you build a school below 400 students you lose money. It's that simple. On the issue of sharing sites, although sharing a site with community and government agencies may be beneficial--we must remember that our priority is to build schools to educate children.

Now what about joint-use with other governmental entities. Is that a victim of this process as well?

Last year Governor Davis signed a bill that LAUSD sponsored allowing for joint-use agreements between schools and other non-profit and state agencies. So now, under state law, we have the option to enter into joint-use projects. What we did not have as of Jan. 1, was the right to get a state matching fund for the lease payment under that joint-use agreement. We hope the Cedillo bill, mentioned earlier, will close that loop so that we can adequately address joint-use.

But just because you have the right to do joint-use doesn't mean it is incentivized. Is it worth a district's energy to negotiate with the Community College District if it means you are going to lose time in pursuing the state allocation?

That's exactly the point. Last year's bill got us halfway towards incentivizing joint-use. This year, AB 1072 will allow us to add a funding component. That bill creates the incentive structure that you're talking about.

In San Diego the school district, the city and Price Charities are pursuing an innovative project to renovate one of the oldest and most blighted neighborhoods in San Diego, City Heights, through housing, school development and open space revitalization. Are projects like this currently incentivized through the current state funding process? And is it this project something that you can see happening with LAUSD?

I don't know if our projects will be as comprehensive as the City Heights project, but there's an effort--currently in its infancy--to build a few schools in conjunction with the MTA, City Planning and the CRA.

Since I've been at the district, I've always said that the best approach to school construction is to involve all pertinent agencies--local, state and federal. Each must have a seat at the table. This is not just a school district problem; it's a community problem. We need to get everyone involved in the process of helping to build schools. The San Diego effort is precisely the thing that we should be doing in L.A.

The L.A. Mayor-elect, James Hahn, articulated during the course of the campaign that he thought a joint-powers arrangement was the way to go in Los Angeles for the siting and building of new schools in the future. I wonder if that has come up in your meetings with LAUSD people and has it translated into any initiatives in the capitol?

It has not translated into any initiatives in the capitol. There was an effort last year to try and create a statewide joint-powers authority, but it did not succeed. I think folks should give the new administration at the district the opportunity to prove themselves and fulfill our obligation to build schools. We've got 78 projects in design and planning and significant work is being done at the district to attempt to meet this enormous challenge head-on.

However, if it comes to a point in 3-4 years where we've only built a handful of middle schools, perhaps a joint-powers authority would have more traction in Sacramento. I think that currently legislators want to see school districts succeed.

So you think there would be resistance from the school district if the next state bond measure, maybe it's AB 16 modified, allocated the money not only to school districts, but to a school district and/or joint-power arrangement between cities, counties and school districts.

The next school bond will most likely be on the March 2002 ballot, which means that we would have to flesh out a vision for the joint-powers language before the end of August. I don't see the kinds of in-depth discussions necessary to implement something of that magnitude between now and then.

Last question Fabian, how much money to you anticipate by June 2002, LAUSD getting in the way of new facilities monies. And do you think there is public support in Los Angeles and LAUSD's constituencies for voting for a new state school bond given the reputation of the school district to date?

We expect to receive in excess of $450 million, perhaps even hit the $500 million mark. And I think there is support for a new state bond statewide. Assembly Speaker Bob Hertzberg recently commissioned a study which found that there is already solid support for a new statewide school construction bond. The support is in the high 60's. That is a very positive message for those of us trying to build schools in the state of California.