November 14, 2017

FCMAT’s Fiscal Health Risk Analysis and Key Indicators for Facilities

Did you know that school facilities are so critical that FCMAT includes facilities in its recommended fiscal health analysis factors?

FCMAT’s Fiscal Health Risk Analysis–  EH&A is asked to assist Districts with their facility challenges.  Having worked as staff for school districts, we understand how difficult it can be for districts to allocate funding for maintenance and operations, facility planning and real property assets.  The Fiscal Crisis Management Assistance Team (FCMAT) publishes Fiscal Health Risk Analysis and outlines Key Fiscal Indicators for K-12 School Districts.  This document is considered a guiding tool to assist Districts to achieve and maintain their fiscal solvency.

 

Introduction by President Eric Hall:  We invited FCMAT’s Deborah Deal, CFE, Intervention Specialist and a former CBO and to write an article for us highlighting the facility component of the health assessment.  We hope this article and the FCMAT assessment will be a useful tool for you to articulate the importance facilities as you advocate for the high priority of facilities and for the allocation of resources for our real property assets. FCMAT has developed the Fiscal Health Risk Analysis to help K-12 school districts evaluate 20 key fiscal indicators that measure a district’s risk of insolvency in the current and two subsequent fiscal years. Included in this list is an indicator for facilities.

 

FCMAT Includes Facilities in Its Recommended Fiscal Health Analysis

By Deborah Deal, FCMAT Intervention Specialist

As with any analysis, the Fiscal Health Risk Analysis should be viewed as a snapshot in time. Answers may change with changes in the budget, in state and federal assumptions, and in enrollment trends that are the foundation for determining facility needs.

Any evaluation has inherent limitations because calculations are based on certain economic assumptions and criteria. For facilities, these includes enrollment trends; economic conditions at the state and federal level; the willingness of local communities to support general obligation bonds; the availability of statewide bond initiatives and state and federal funding; and changes within the district, including key leadership positions.

The facilities section of the Fiscal Health Risk Analysis includes a broad range of facility-related questions that each district should ask itself when assessing the strength of its facilities program:

Facilities                  

  • Has the district passed a general obligation bond?
  • Has the district met the audit and reporting requirements of Proposition 39?
  • Is the district participating in the state’s School Facilities Program?
  • Does the district have sufficient personnel to properly track and account for facility-related projects?
  • Has the district met the reporting requirements of the Williams Act?
  • Is the district properly accounting for the Routine Repair and Maintenance Account requirement at the time of budget adoption?
  • Does the district prioritize facility issues when adopting a budget?
  • If needed, does the district have surplus property that may be sold or used for lease revenues?
  • If needed, are there other potential statutory options?
    • Joint Use: Can the district enter into a joint use agreement with some entities without declaring the property surplus and without bidding?
    • Joint Occupancy: The Education Code provides for a joint venture that can authorize private development of district property that will result in some educational use.
  • Does the district have a long-range facilities master plan that was completed or updated in the last two years?

Planning is essential for managing school facilities and estimating facility needs based on future enrollment growth. A district should use internal and external expertise to develop a long-range facilities master plan, demographic analysis, school site capacity and asset allocation.