G School Construction Alert January 2002 The Public School Construction Program: What Is It and How Does It Affect You? By Steven E. Brawer, Esq. and Adrienne L. Isacoff, Esq. n July 18, 2000, then-Governor Whitman should be considered by participants, and those O signed into law the Educational Facilities seeking to participate, in a public school Construction and Financing Act i , (“EFCFA” or the construction project. “Act”), which established an unprecedented $12 billion Public School Construction Program -- the Overview of the Program largest of such programs in the nation. Part of the The EFCFA establishes a comprehensive costs of the Act -- up to $100 million annually -- program for financing, design, renovation, repair will be funded by moneys made available to the and new construction of primary and secondary State from its share of settlement proceeds in the schools throughout New Jersey. Some $12 billion recently concluded multi-state tobacco litigation. is expected to be spent on a myriad of school All prospective participants in the Program -- construction projects over the next decade. Of school districts, design professionals and that amount, approximately $8.6 billion will be contractors -- should familiarize themselves with raised by State contracted debt issued by the New the comprehensive rules and policies which govern Jersey Economic Development Authority (“EDA”), the construction and renovation of public schools and it is hoped that the balance will be raised throughout the State. These policies reflect an through local school district voter approval. The integrated scheme which affects every aspect of this Act was adopted in response to over 25 years of massive public school construction initiative, litigation culminating in the New Jersey Supreme Court’s decision in Raymond Abbott v. Fred G. including such areas as financing, taxpayer approval, project design, bid solicitation and project Burke , 153 N.J. 480 (1998), which required the award, affirmative action efforts, environmental State to provide certain educational infrastructure and energy concerns, and implementation of the improvements to needier urban schools in the so- construction process itself. called “Abbott Districts” (as defined in N.J.S.A. This article is designed to give an overview of 18A:7F-3). Currently, there are thirty Abbott the Program and aspects of the Act that are of Districts throughout New Jersey, but the EFCFA particular concern to the three main groups applies to all of the State’s public schools, not just engaged in the construction process -- school those in the Abbott Districts. boards/ administrators, design professionals and Under the law, the State is authorized to contractors. Other articles will be forthcoming to borrow $6 billion for projects in the Abbott provide greater detail about specific issues that Districts, $2.5 billion for non-Abbott District This document is published by Lowenstein Sandler PC to keep clients and friends informed about current issues. It is intended to provide general information only. Roseland, New Jersey Telephone 973.597.2500 L 65 Livingston Avenue www.lowenstein.com 07068-1791 Fax 973.597.2400
G • The EDA is responsible for financing, designing projects and $100 million for county vocational and constructing all of the school facilities in the schools. The Act provides for 100% State funding Abbott Districts, in districts which receive 55% of eligible school construction costs in the Abbott or more in State funding for education and in Districts, while projects in non-Abbot Districts certain districts which are subject to enhanced will be funded at each district’s State aid State monitoring. In addition, the EDA is percentage multiplied by 1.15, or a minimum of charged with providing grants to fund the State 40%, whichever is greater. If the application is share of school facilities projects approved by the approved, the Commissioner of the Department DOE in districts with a district aid percentage of of Education (“DOE”) would seek legislative less than 55%. Those districts may elect to have approval. The EDA will administer the financing the EDA undertake the financing and/ or for all school districts and supervise construction construction of their school facilities projects. in the Abbott Districts and in all districts • The Office of the Attorney General develops and receiving at least 55% State aid. All other districts have the option of using EDA’s services. reviews all the contracts, agreements and regulations associated with implementation of State Entities Responsible for Carrying Out the the Program. The Unit of Fiscal Integrity was Program established within the Office of the Attorney General pursuant to N.J.S.A. 18A:7G-43 and the As might be expected in an initiative of this duties, powers and responsibilities of that Unit magnitude and scope, a wide variety of State have been assigned by the Attorney General to agencies and departments are charged with the Office of the Inspector General (“OIG”). The responsibility over different aspects of the mission of the OIG is to protect the integrity of Program. These include the following: the New Jersey School Construction Program by reducing waste, fraud and corruption in its • The DOE is responsible for reviewing and administration. approving each school district construction project to ensure that the plans are in • The Department of Community Affairs, Division compliance with State building standards, of Local Government Services (“DCA”) is referred to as “facility efficiency standards.” responsible for ensuring that contracts awarded These standards, developed pursuant to N.J.S.A. in connection with the Program comply with the 18A:7G-4(h), will be used to determine the Public School Contracts Law ii (“PSCL”) and other extent to which a district’s construction project applicable statutes. DCA has developed a process qualifies for State aid. They represent the for school districts to certify that all bidding and instructional and administrative spaces that contract awards conform to the PSCL and that have been determined by DOE to be all contracts are completed in accordance with educationally adequate to support the approved plans and specifications. achievement of the Core Curriculum Content Standards established pursuant to the provisions • The Department of Labor (“DOL”) will monitor of N.J.S.A. 18A:7F-4. the payment of prevailing wages on all school construction projects in accordance with the
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