05-071-64 Me. Code R. § 4

Current through 2024-44, October 30, 2024

Section 071-64-4 - SCHOOL REVOLVING RENOVATION FUND

A.Purpose

The School Revolving Renovation Fund is established to make loans for school renovation projects that contribute to safe, healthy, efficient, and adequate school facilities in which an SAU can deliver its educational program.

B.Eligible Renovation Projects

All projects must receive Department of Education and BGS approval prior to construction in order to be eligible for funding consideration. Projects in the following categories shall be eligible for consideration for loans from the School Revolving Renovation Fund, provided that the application for funding a renovation project is submitted to the Department and is approved by the Department prior to the commencement of work on the renovation project.

1)Priority One

a) Repair or replacement of a roof on a school building;

b) Bringing a school building into compliance with the Federal Americans with Disabilities Act, 42 United States Code, Section 12101 et seq.;

c) Improving air quality in a school building;

d) Removing or abating hazardous materials in a school building;

NOTE: Pursuant to PL 2019 Chapter 158, Sec. 2"including, but not limited to, water lead abatement or mitigation pursuant to Title 22, section2604-B", and

e) Other health, safety and compliance repairs.

NOTE: Pursuant to PL 2018 Chapter 389, Sec 1 "including installations or improvements necessary to increase school facility security."

2)Priority Two

a) School building structures;

b) Windows and doors; and

c) Water and septic systems including waste disposal systems.

NOTE: Pursuant to PL 2019 Chapter 158, Sec 2 "other than water lead abatement or mitigation pursuant to Title 22, section 2604-B."

3)Priority Three

a) Building insulation;

b) Variable speed electric motors;

c) Efficient lighting systems and controls;

d) Alternative energy installations; and

e) Other energy and water conservation projects.

4)Priority Four

a) Upgrades of learning spaces in school buildings.

NOTE: Pursuant to PL 2019 Chapter 343, Sec. ZZZZ-1, "including renovations to retrofit learning spaces for public preschool programs."

5)Priority Five: Other projects approved by the Commissioner.

C.Priority of Funding

Approved projects must be funded based on the availability of funds and in priority order from Priority One to Priority Five. The Commissioner of Education may approve funding for renovation projects as an exception to the Priority One to Priority Five funding rule if category-specific funds become available from sources other than principal and interest received from the repayment of loans made from the fund, interest earned from the investment of fund balances and funds from school construction audit recoveries.

D.Application

1) A Department approved application form will be accepted on a schedule set by the Department.

2) A separate application must be submitted for each individual project

3) All applications submitted to the Department must provide supporting materials appropriate to the project. These materials may include but are not limited to the following:

a) Educational program and maintenance and capital improvement plans;

b) Engineering studies, including Renovation vs. New Construction analyses, to be conducted by licensed engineers, architects or firms licensed to provide such services;

c) Life-cycle studies for renovation, energy and water conservation projects;

d) A payback schedule for avoided costs in energy and water conservation projects; and

e) Any other materials requested by the Department.

E.Application Review

1) Applications will be reviewed by the Department and assigned priority status in accordance with the rating system contained in these rules. Funds will be distributed based on funding availability and a school administrative unit's readiness to proceed.

2)Rating System. Emergency projects will be funded before non-emergency projects.

3)Emergency. An emergency situation posing imminent danger to the health and safety of students and staff. Projects necessitated by an emergency will be dealt with on a case by case basis as determined by the Department in cooperation with the BGS.

4) The following criteria will be applied to rating of Priority One and Priority Two projects:

(i) Percentage of student population impacted;

(ii) Extent or severity of the problem;

(iii) Location within the facility;

(iv) Code violations; and

(v) Structural condition of the facility.

5) The following criteria will be applied to rating of Priority Three projects:

(i) Number of years of avoided costs necessary to pay for project;

(ii) Percentage of energy saved annually based on gallons of oil, cubic feet of natural gas, kWh of electricity, etc.;

(iii) Percentage of annual dollar savings for energy costs in the affected facility;

(iv) Life of the facility following the proposed project; and

(v) Other benefits gained.

6) Priority Four projects will be rated based on State of Maine Board of Education Rules Chapter 61, "Rules for Major Capital School Construction Projects".

7)Bureau of General Services review. All projects, as required by 5 M.R.S.A. §1742(7), will be reviewed by BGS and only those projects approved by BGS under rules developed by the Bureau pursuant to Chapter 787 will be eligible for submission by the Department to the Bank.

8) Any project with an estimated value of $100,000 or more shall be awarded by competitive bid unless the bidding provision is waived by the Department.

F.Forgiveness Rates

1) The Bank will forgive a portion of the principal payments of a loan for an eligible school administrative unit determined by the Department based on the school administrative unit's State share percentage as determined in 20-A M.R.S.A. §15672, subsection 31, for the most recent year of enacted General Purpose Aid. Notwithstanding these guidelines, the loan forgiveness shall be no more than 70% and not less than 30%.

2) The Department will provide the Bank with the eligible administrative unit's State share percentage.

3) Funds allocated to an eligible school administrative unit will not be included in that unit's debt service allocation under 20-A M.R.S.A. §15683-A.

G.Notification to the Bank. The Department will develop a list of priority projects approved for funding based on the Department's application review and BGS's approval and submit it to the Bank for funding. This list will be updated annually. Each eligible school administrative unit and the Bank shall receive an eligibility certificate which shall include the following:

1) name of school administrative unit that is eligible;

2) amount of the loan;

3) amount and percentage to be forgiven;

4) length of the loan; and

5) time limit for completion of the project.

H.Maximum Loan. The maximum total loans for repairs, renovations, and improvement projects (for Priority One, Two, Three, Four, and Five projects as described in Section 4(B)(5) of this rule) for a school building from the fund will be $8 million.

School administrative units may raise additional local funds to support the project. Local funds will not be subject to the forgiveness provisions and are not eligible for State participation.

The maximum loan amount from the fund to address each priority in a school building will be $2 million within any 5-year period.

I. All construction projects supported through the Revolving Renovation Loan Fund for construction of new facilities, additions to existing buildings, renovations or remodeling of existing buildings shall be designed and constructed with materials that provide long-term durability and meet energy efficiency standards as defined in 5 M.R.S.A. §§ 1762-1769. Prior approval of the Department is required before changes including changes which reduce the durability of materials may be made. Approval or disapproval by the Department shall be in response to recommendations from BGS.

J.Length of Loan. Loans from the fund are subject to the following time limits for repayment:

1) Loans of $500,000 or less = 5 years or less than 5 years if accelerated by mutual agreement of the parties; and

2) Loans of $500,001 or more = 10 years or less than 10 years if accelerated by mutual agreement of the parties.

K.Disbursement of loan proceeds. For projects approved by the Department and BGS for funding, the Bank shall make payment from that unit's Revolving Renovation Fund loan upon presentation of a requisition form with supporting invoices approved by the school administrative unit. With the final requisition form, certifications from the school administrative unit, designer and contractor confirming project completion are required.

05-071 C.M.R. ch. 64, § 4