News

Milford’s Long, Complicated History With OFCC

Posted on: August 30, 2019
Tags: Facilities, Financial information, Milford junior high band, Ofcc

This is part 1 of a 2-part series. The first part covers Milford’s history with OFCC, from the creation of the facilities master plan (FMP) to the latest meetings with OFCC officials. Part 2 will be published next week and will cover Milford’s options for state funding going forward.

The May 2019 bond issue to replace the junior high generated many questions in the community. There was one question, though, that was perhaps asked far more frequently than any other:

Why can’t the state pay for a new middle school?

The answer is complicated and is rooted in the rules and processes of a government organization called the Ohio Facilities Construction Commission (OFCC). OFCC was formerly known as the Ohio School Facilities Commission (OSFC). In 2012, that organization was merged with the Office of State Architect to form OFCC.

OFCC provides support, guidance and financial assistance to renovation and construction projects for state agencies, public universities, and K-12 public school systems. The agency also manages the grant process for cultural and educational facilities.

Milford first engaged with OFCC in the early-2000s through the development of a facilities master plan (FMP). The master plan identified the district’s facility needs and developed a strategy for improving facilities to meet educational objectives. 

Milford’s plan was developed in partnership with OFCC and with community input. While the master plan touched on many needs and objectives, the plan listed four major projects:

  1. Construction of four new neighborhood elementary schools.

  2. Replacement of two existing elementary schools (Charles L. Seipelt and Boyd E. Smith).

  3. Renovation of the high school.

  4. Replacement of the junior high.

The following information covers Milford’s relationship with OFCC and how the district has made use of state money to fund portions of the master plan. There have been questions raised about whether Milford has followed proper processes to obtain state funding, especially with regard to the replacement of the junior high. OFCC answered those questions definitively during a recent visit with the CAT group on August 15:

 

 

Milford and OFCC

Milford and OFCC

Expedited Local Partnership Program

Milford entered into a formal partnership with OFCC in 2002 through the Expedited Local Partnership Program (ELPP). ELPP is a common entry-point for affluent districts that want to start their projects quickly. The program allows the district to start on portions of the plan and then qualify for state funding for future projects.

Under ELPP, a district pays for projects with community funds, usually with the passage of a bond. Those community-funded projects create funding credits with OFCC. The district can then use those credits to fund other projects in the master plan.

Milford’s ELPP agreement was for a 73/27 funding split. That means that 73 percent of the cost of the plan would be funded by the community. That community funding would create a 27 percent credit that Milford could then use in the future.

The district started the plan by passing a bond to tackle the first item on the master plan list - the construction of four new elementary schools. At that time, the district was experiencing rapid population growth and had run out of elementary school space. 

That bond led to the construction of four new neighborhood elementary schools - McCormick, Mulberry, Meadowview, and Pattison. These schools, often referred to as the “4-pack,” opened in 2004. Since they were funded with community dollars, they created a funding credit in the ELPP program.

In 2008, Milford addressed another project in the master plan. The district refinanced existing bonds and passed renewal bonds to fund a partial renovation and an addition to the high school. This project resolved 40 percent of the renovation issues that OFCC identified in their original analysis of the building. The financing for the 2008 project didn’t create any new taxes for community members, but it did create additional credits for the district in ELPP. 

Classroom Facilities Assistance Program - Segment 1

By 2013, the district had earned $25 million in credits with OFCC. The district had the opportunity to use that money, but with two conditions:

  1. The money had to be used all at once. There was no option to use a portion at that time and save a portion for later.

  2. The money had to be used to complete a project. The district couldn’t use the money to simply start a project or partially complete it.

Given those requirements, the district’s only option was to use the funds to replace Charles L. Seipelt and Boyd E. Smith. While $25 million is a significant amount, it was not enough to build a new junior high. It was, however, sufficient to fund two replacement elementary schools. The OFCC credits covered all but $2 million of the construction costs. The remainder was paid from the school’s operating funds.

The use of this credit moved Milford out of ELPP and into another OFCC program called Classroom Facilities Assistance Program (CFAP). CFAP is significantly different from ELPP in that CFAP uses a ranking system to determine when a district receives money. Districts don’t earn credits in CFAP. Rather, they simply receive funding when it’s their turn.

CFAP - Segment 2

The construction of Seipelt and Boyd E. Smith completed Milford’s first segment in CFAP. The district then turned to segment 2 - the replacement of the junior high and the completion of high school renovations.

While ELPP offers funding based on earned credits, CFAP funding is based on a complex ranking system. To complicate matters, the rankings change frequently, so it’s difficult to pinpoint exactly when funds will be available.

How does OFCC determine when it is a district’s turn to receive money in CFAP? Below are some of the criteria OFCC considers as it determines eligibility:

Equity Rank

CFAP uses an equity system that assigns a rank to each school district. The lower a district’s rank, the higher their funding percentage. CFAP also gives funding priority to those schools with a lower equity rank.

Equity rank is based on assessed property valuation per student. Those districts with lower property values have lower equity ranks. Those districts with high property values have high equity ranks. The equity ranks change every year, which is one of the reasons why it is difficult to forecast exactly when OFCC can offer funds.

In 2019, among local school districts, North College Hill City School District has the lowest equity rank at 28. Indian Hill has the highest equity rank at 607. Milford’s equity rank is 371.

The equity rank is the tiebreaker when OFCC has insufficient funding for all districts in the CFAP program. From the OFCC Priority Order Policy:

If, at any time when the Commission offers funding, the number of projects which have applied and are ready to be approved exceeds the Commission’s available funding, the  projects to be conditionally approved will be determined by the assigned number, with the lower numbers receiving priority over the higher ones. 

Lapsed Districts

Another important factor is whether or not a district has lapsed on a previous conditional funding offer. When a district is offered funding through CFAP, they have 13 months to pass a bond or otherwise generate their portion of the funding. If they fail to generate funding, they “lapse” on their OFCC offer.

However, a lapse doesn’t mean they lose funding forever. The district could still pursue a bond or some other funding option. If they pass a bond, they reclaim their spot in line. In fact, according to OFCC rules, a lapsed district that passes a bond is prioritized over non-lapsed districts:

Districts whose funding has lapsed will be prioritized by conditional approval date (where earlier approval is higher priority) and then by equity list rank at the time of conditional approval (where lower equity list rank is higher priority). 

There are also other factors besides lapsing or equity value that could push a district ahead of Milford on the priority list. Those include:

  • Exceptional increase in enrollment

  • Cooperative use agreements

  • Extreme environment and exceptional needs

  • A STEM school that is not governed by a school district board of education

It’s difficult to say exactly when Milford will be in line for CFAP funding from OFCC. There is no constant, consistent “list.” Equity rankings are updated annually, which changes the priority list. If a lapsed district passes a bond, they move up the list ahead of other schools. Most counties have several election days throughout the year. That means it’s possible for the funding list to change several times in any year.

Multiple factors play into why a district gets funding at a certain time. However, the district’s lapse status and equity rank are two of the most important. For example, OFCC offered funding to nine districts in July 2019. Eight of those districts are either lapsed or have a lower equity rank than Milford. 

Milford’s history with OFCC during CFAP Segment 2 illustrates just how fluid this process is. After the completion of Segment 1, Milford began meeting with OFCC officials quarterly to estimate a funding date for Segment 2. Below are some of the highlights from those meetings:

January 15, 2015. OFCC officials visit Milford and inform the administration that the district is likely to receive a conditional offer of funding in 2016. The district develops a bond plan under the assumption that OFCC will fund 27 percent of the construction costs. 

Over the next 12 months, an unexpectedly high number of lapsed districts pass bonds. Because of the priority status of lapsed districts, they move ahead of Milford on the list and Milford does not receive an offer of conditional funding.

November 22, 2016. OFCC tells Milford the district could receive a conditional funding offer in July 2017, depending on how many lapsed districts pass bonds in the May 2017 elections.

September 19, 2017. After not receiving a conditional funding offer in July 2017, Milford is told that the district could receive a funding offer in July 2018, but again, the offer depends on the outcome of elections in November 2017 and May 2018.

April 10, 2018. OFCC tells Milford that the earliest the district could expect funding is July 2019 or possibly July 2020 due to an unprecedented number of lapsed districts passing bonds.

August 27, 2018. OFCC tells Milford that the earliest funding date is either July 2020 or July 2021. Milford moves ahead with a bond issue that does not include OFCC funding. That bond failed in May 2019.

June 26, 2019. OFCC tells Milford that funding is possible in 2021, but it depends on the passage of the state budget and the number of lapsed districts that pass bonds and whether or not the state governor includes funds in the 2021 capital budget.

 

Milford History With OFCC

Milford History With OFCC

Why not wait?

Based on OFCC’s current estimate, it’s possible that Milford could receive a conditional funding offer in 2021. If so, that offer would cover approximately 27 percent of the cost of Milford’s outstanding facility projects, primarily a new middle school and high school renovations.

However, it’s also possible that funding won’t be available in 2021. Other districts could move ahead of Milford between now and then, pushing the district further down the list. It’s also possible that the state may not provide enough funding in future budgets. There are multiple variables that could affect Milford’s funding status.

Assume, though, that the district did receive a funding offer in 2021. The district would be required to follow OFCC’s construction timeline, which would be as follows in the best-case scenario:

2021 - Receive funding offer and begin the process to pass a bond.

2022 - Pass a bond and begin OFCC’s design process, which takes 18-24 months.

2024 - Break ground on new middle school.

2025-2026 - Potentially open doors on new middle school.

That’s seven more years of maintaining the current junior high. It’s possible that maintenance costs and construction inflation costs over that period would nearly offset any benefit received from OFCC funding.

Again, this is the best-case scenario. It’s also possible that a funding offer could be delayed until 2022, 2023, or beyond, in which case it could be 2030 before a new middle school opens. At that point, the current junior high would be nearly 70 years old, and 30 years past the point at which it was originally designated for replacement.

In a perfect world, the state and even the federal government would provide assistance on all school facilities. Unfortunately, the reality is more complicated. Milford Schools is exploring all options to complete its master plan. We appreciate the time and energy of our Community Advisory Team (CAT) members as they help us evaluate possible solutions.