Superintendents Advisory Council September 21, 2022

School district building plans are being negatively impacted by rising construction costs, Kentucky Department of education staff told the Superintendents Advisory Council (SAC) during its Sept. 21 meeting.

Chay Ritter, director of the Division of District Support Services, said district construction costs can grow for various reasons, from supply chain shortages to inflation. Interest rates – which have continued to rise – have put even more financial pressure on districts, he said. If building costs and interest rates increase while a school district is awaiting approval for its capital projects, then those projects sometimes become too expensive to build, Ritter said.

“A lot of people put a lot of their weight into these [capital] projects and they really want these things to happen in a way that’s good for everybody and it’s a school you can be proud of,” Ritter said.

When Menifee County first gathered estimates for a new board office in August 2021, the initial estimates were $2 million to $2.5 million. The May 2022 estimate was $3.5 million. The district has now decided to remove the basement and storage construction from the project to save money.

Superintendent Tim Spencer said Menifee County would have a hard time generating funding for athletic field renovations after being “very blessed with the community passing two nickels” for the larger capital project. He now hopes to use the state equalization fund for smaller discretionary projects. State equalization adds further dollars to a district’s projects to ensure districts with different levels of taxable wealth can raise similar amounts of money.

When it comes to funding capital projects, Ritter said there are four options. The first is local taxes restricted for facilities, or “nickels.” Each district is required to have one nickel, which restricts local tax revenue for facilities construction or renovations, but some districts have additional nickels.

Additional funding sources include: state equalization, a formula-driven approach to state money; School Facilities Construction Commission (SFCC) offers of assistance; and SFCC special offers of assistance. All of these funding sources for school facilities are appropriated by the General Assembly in the biennial budget.

Ritter said some districts are putting in “a whole bunch of local effort” but are unable to reach facility-related goals.

Lawrence County Superintendent Robbie Fletcher said they don’t have a nickel tax, but still have a gap in funding for their local area vocational area technology center after receiving $9.28 million from the 2021 General Assembly, due to rising costs. 

“We are very thankful for the $9.28 million we received,” he said, “but it’s not going to … cover what we put into the grant originally.”

Kenton County Superintendent Henry Webb said despite already having a nickel tax, his district is having to make decisions about the scope of their projects.

“Through our Scott (High School) project, even though it wasn’t a new facility, we are spending $55 million on the project and it went up $15 million when we were trying to get it moving,” he said. “Even though we got some bonding potential here, we’re having to make decisions too on leaving schools, cutting scope out of the project because we don’t have enough bonding power to do everything we need to do.”

During the 2022 session of the Kentucky General Assembly, House Bill (HB) 678, sponsored by Rep. Ed Massey, speeds up several construction processes which can benefit districts. HB 678 establishes a permissive two-year pilot project for school districts that allows them to start construction projects, use capital outlay funds or enter into lease agreements without prior approval from KDE. 

“Time is everything to everybody and time is quite literally money in the construction business,” Ritter said.

Districts are still required to follow all applicable laws and regulations. Districts that opt in must continue to submit required forms for record-keeping and data purposes. More than 140 districts now operate under HB 678, said Ritter. The bill also requires KDE to approve or deny District Facility Plans and property requests within 30 days of submission.

Ritter recently presented to the Kentucky Capital Planning Advisory Board, compromised of members representing all three branches of government, and said the board was interested in districts’ concerns around the cost of trying to finish a facility and the decisions of local boards the were being pinched by increasing costs.

Certification of Teachers and Substitutes

KDE Associate Commissioner Byron Darnall of the Office of Educator Licensure and Effectiveness spoke to the council about the current number of fully certified teachers and the nine options for initial teacher certification.

From 2016 to 2021, Kentucky issued 8,463 licenses from all nine certification pathways combined. Most certifications are still issued under option 6, the university-based route.

“We have an obligation to explore all options and make sure that we are being innovative,” said Darnall.

When jobs are posted but there are not enough properly certified teachers to fill them, districts resort to using emergency certifications to help fill the gap, Darnall said. Since the 2015-2016 school year, Kentucky has been experiencing an increase in the number of emergency certifications issued.

During the 2022 legislative sessions, HB 277 authorized any person receiving emergency teaching certification during the 2021-2022 school year to be eligible to renew that certification during the 2022-2023 school year. KDE is looking into helping districts apply the same standards to substitute teachers that were hired in the 2021-2022 school year under emergency certifications. 

“At least for my district, which is a relatively small district, this really helps, and I appreciate the look there so we can get those people [back],” said Trigg County Superintendent Bill Thorpe.

Superintendents also were eager to learn about the Kentucky Education Professional Standards Board (EPSB)’s action on opening up specific certifications to cross more grade spans.

“We are all getting caught in that very specific role certification area, grade level,” said Owensboro Independent Superintendent Matthew Constant. “Where we have what looks like a very qualified person, but we are being constrained by their prep program and what they initially went into.”

Darnall said KDE has started this conversation with the EPSB and will present options soon. 

In other business, the council: