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General Information
 
 
 
 
Introduction
 
When a school district undertakes a major construction project and seeks reimbursement from the Commonwealth, a process known as PlanCon is initiated. PlanCon, an acronym for Planning and Construction Workbook, is a set of forms and procedures used to apply for Commonwealth reimbursement. The PlanCon forms are designed to: (1) document a local school district's planning process; (2) provide justification for a project to the public; (3) ascertain compliance with state laws and regulations; and (4) establish the level of state participation in the cost of the project.
 
 
Description of PlanCon
 
Part A (PDF), Project Justification, provides the description of a proposed project and the justification of its need.
 
Part B (PDF), Schematic Design, is a technical review conference of the conceptual drawings, site plan and educational specifications. The architect and a district administrator who is knowledgeable about the project and the educational program must be present at the schematic design conference.
 
Part C (PDF), Site Acquisition, deals with the acquisition of land for school building projects or the purchase of a building for school or district administration office use. This part is completed only if land is acquired or a building is purchased as part of the scope of the project.
 
Part D (PDF), Project Accounting Based on Estimates, is concerned with estimated project costs. In this part, various "tests" of a district's financial ability to make payments are performed, as required by Section 21.51 of the State Board of Education Regulations. This part also addresses the requirements for public hearings on school building projects, as required by Sections 7-701.1 and 7-731 of the Public School Code of 1949, as amended. PlanCon Part D also provides an estimate of state reimbursement.
 
Part E (PDF), Design Development, is a conference to review the architectural aspects of a project when the design is fully developed. The architect and a district administrator must be present at this review conference.
 
Part F (PDF), Construction Documents, is a conference to review the bid specifications and drawings for the project and documentation that other state and local agency requirements have been met or will be met before entering into construction contracts. Departmental approval of PlanCon Part F authorizes a district to receive bids and enter into construction contracts. The architect and a district administrator must be present at this review conference.
 
Part G (PDF), Project Accounting Based on Bids, is concerned with actual construction bids. A project’s eligibility for reimbursement is ultimately determined at PlanCon Part G.
 
Part H (PDF), Project Financing, addresses the financing used for a project. Calculation of the temporary reimbursable percent for a project's financing occurs at PlanCon Part H. Once PlanCon Part H is approved, reimbursement on a project commences.
 
Part I (PDF), Interim Reporting, provides for the reporting of change orders and/or supplemental contracts during construction.
 
Part J (PDF), Project Accounting Based on Final Costs, is the final accounting for the project. The permanent reimbursable percent is calculated at PlanCon Part J.
 
Part K (PDF), Project Refinancing, is used if a reimbursable bond issue is refunded, refinanced or restructured.
 
 
 
  
 
Time Frame and Board Action Dates
 
The amount of time needed to complete the PlanCon process depends on the design and construction timeline established by the local school board. The processing of a PlanCon project may also be affected by the permitting and approval requirements of local, state and regional agencies. Typically, the time frame for a project to proceed from PlanCon Part A to PlanCon Part G is 9-12 months. All PlanCon parts must be approved by the local school board and submitted in sequential order for all second, third and fourth class districts unless indicated otherwise in the PlanCon General Instructions (PDF).
 
 
 
 
Laws, Regulations, Standards and Basic Education Circulars
 
The following is a list of laws, regulations, standards and Basic Education Circulars (BEC) which pertain to the PlanCon process:
 
1. Articles 7 and 25 of the Pennsylvania Public School Code of 1949;
 
2. Chapter 21, School Buildings, of the State Board of Education Regulations;
 
3. Chapter 349, School Building Standards, of the Department of Education Standards;
 
4. BEC 24 P.S. § 25-2574, "Reimbursements for School Construction Bond Issues," provides information on state reimbursement for bond issues funding school construction projects; and
 
5. BEC 24 P.S. § 7-733, "School Construction Reimbursement Criteria," contains the following requirements for reimbursable school construction projects:
 
a. CURRENT STANDARDS - A condition of reimbursement is to bring the entire building up to prevailing educational and reasonably current construction standards;
 
b. DISTRICT-WIDE FACILITY STUDY - A district-wide facility study for all district facilities must have been completed prior to the submission of PlanCon Part A and within two years of that date. Refer to Attachment C in the PlanCon Part A instructions for additional information on district-wide facility study requirements;
 
c. WOOD CONSTRUCTION - For any project involving the renovation of a multi-storied building with a Department of Labor and Industry classification of wood frame or ordinary construction (i.e., interior framing is partially or wholly of wood), a district must describe the plans and methods designed to address the health and safety issues related to this type of construction;
 
d. 20-YEAR RULE - Buildings may only qualify for school construction reimbursement every twenty years at a minimum unless a variance is requested and approved. To determine the applicability of the "20-year" rule on a project building, calculate the number of years from the bid opening date of the previous reimbursable project to the bid opening date of the planned project; and
 
e. 20% RULE FOR ALTERATION COSTS - An alteration project may not be eligible for reimbursement where the costs for alterations are less than 20% of the project building's replacement value unless a variance is requested and approved. This rule does not apply to area vocational-technical schools (AVTSs) or to leased buildings.
 
A request for a variance from the departmental policies in BEC 24 P.S. § 7-733, except for the "20% Rule for Alteration Costs", must be submitted in the form of a resolution of the board of school directors. A request for a variance from the "20% Rule for Alteration Costs" may be submitted on the applicable PlanCon forms in PlanCon Parts A, D and G. Any request for variance must document the reasons why the variance should be granted.
 
 
 
 
Act 34 of 1973
 
Act 34 of 1973 requires that a public hearing be held on all new construction and substantial additions for second, third and fourth class school districts. A building addition is considered substantial when the new architectural area divided by the existing structure's architectural area is greater than 20 percent.
 
Act 34 applies only to costs for new construction. The legal requirements do not address the costs for alterations to existing structures. A second Act 34 hearing is required if specified costs based on bids exceed by eight percent or greater those costs based on estimates. An Act 34 referendum must be held if and only if certain costs exceed a project building's calculated referendum limit.
 
APPROVAL OF CONSTRUCTION DOCUMENTS AND REIMBURSEMENT DETERMINATION
 
Section 731 of the Public School Code of 1949 states that no public school building shall be contracted for, constructed, or reconstructed in any school district of the second, third, or fourth class until plans and specifications have been approved by the Department of Education. Departmental approval of final plans and specifications only occurs upon the issuance of written approval of PlanCon Part F, Construction Documents. For the Philadelphia City School District (First Class) and Pittsburgh School District (First Class A), PlanCon Part F must also be approved by the Department prior to entering into contracts for a school construction project to qualify for state reimbursement.  Failure to comply with the applicable statutory or Departmental requirement will result in denial of reimbursement for a project.
 
Departmental approval of PlanCon Part F for a project does not guarantee reimbursement for that project. A project is deemed eligible for reimbursement only upon written Departmental approval of PlanCon Part G, Project Accounting Based on Bids.
 
 
 
 
Calculation of Reimbursement for School Construction Projects
 
In general, reimbursement for school construction projects is based on the capacity of a building which can be justified by present or projected student enrollment. Classroom capacity is normally calculated on the basis of 25 students per regular classroom. (Other values are assigned to laboratories, gymnasiums, art rooms, music rooms, etc.) For example, if a district has a 20 classroom elementary building, we would normally consider the building to have a full-time equivalent capacity of 500 (20 x 25).
 
The capacity in this example would have to be supported by current or projected enrollment. This capacity is then converted to rated pupil capacity. The term "rated pupil capacity" has no significance other than it is a method for calculating reimbursement. An elementary building with a full-time equivalent capacity of 500 is deemed to have a "rated pupil capacity" of 700. (Refer to PlanCon Part A instructions for conversion charts.)
 
For a new building, reimbursement is calculated on the lesser of (1) the product of the rated pupil capacity multiplied by a legislated per pupil dollar amount (24 P.S. Section 25-2574), or (2) structure costs plus architect's fee (six percent maximum) and essential movable fixtures and equipment. To the lesser of (1) or (2) above, additional funding for certain types of projects and specified eligible ancillary costs is added. Additional information about recent legislative changes affecting school construction reimbursement follows this section.
 
For a building addition or additions/alterations, reimbursement is determined similar to that for a new building. The rated pupil capacity for the total building is multiplied by the legislated per pupil dollar amount to arrive at a total reimbursable amount. The gross area of the addition is divided by the gross area of the completed facility to arrive at the proration of the addition to the total building. The same method is used to determine the proration of the existing building to the completed building. These values are then compared to the actual bid costs of the addition and renovation work. To the lesser of the maximum reimbursable formula amount or actual bid costs, additional funding for certain types of projects and specified eligible ancillary costs is added. Additional information about recent legislative changes affecting school construction reimbursement follows this section.
 
For alterations to existing structures, reimbursement for roof replacement and asbestos abatement (if applicable) are each limited to twenty percent (20%) of the remaining assignable alteration costs. Reimbursement for site development is limited to ten percent (10%) of adjusted structure costs for new construction; site development for existing structures is non-reimbursable. For all non-vocational projects, reimbursement for movable fixtures and equipment is limited to five percent (5%) of adjusted structure costs; for all vocational projects, reimbursement for movable fixtures and equipment is limited to twenty percent (20%) of adjusted structure costs. Both estimated and actual costs for movable fixtures and equipment, and architect's fee thereon, are not considered for reimbursement until PlanCon Part J, Project Accounting Based on Final Costs, is processed by the Division of School Facilities.
 
For new construction as well as alterations to existing buildings, the reimbursable project amount is then divided by the total project costs to determine a reimbursable percent. A five tenths of one percent (0.5%) reduction in the reimbursable percent is made until final project accounting.
 
For projects financed by the issuance of debt, the reimbursable percent is multiplied by the school district's bond issue (principal and interest payments) to determine the level of Commonwealth participation in the cost of the project. The Commonwealth's share is then multiplied by a measure of a district's wealth, i.e., the greater of Market Value Aid Ratio (MVAR), Capital Account Reimbursement Fraction (CARF) or Density Factor, to determine the net state subsidy. An application for state subsidy must be submitted for each scheduled payment on the approved payment schedule after the district has actually made each payment.
 
For projects financed by cash, i.e. without the issuance of debt, the reimbursable percentage is multiplied by the total project costs for the school construction project to determine the level of Commonwealth participation in the cost of the project. The Commonwealth's share is then multiplied by a measure of a district's wealth, i.e., the greater of Market Value Aid Ratio (MVAR), Capital Account Reimbursement Fraction (CARF) or Density Factor, to determine the net state subsidy.
 
If a project is financed by cash, i.e., without the issuance of debt, no reimbursement will be paid until PlanCon Part J, Project Accounting Based on Final Costs, is submitted and approved by the Department unless otherwise approved by this office. At PlanCon Part J, a certification must be provided indicating that, in accordance with Section 2575.1 of the Public School Code of 1949, the school district/AVTS is providing full payment on account of the approved building construction cost without incurring debt or without incurring a lease. For purposes of calculating reimbursement, bond proceeds that are transferred to the general fund and then used for a reimbursable construction project are still considered bond proceeds.
 
The above explanation is intended to be a general introduction to the reimbursement calculations used for school construction projects. Click here to see Reimbursement Examples.
 
 
 
 
Recent Legislative Changes Affecting School Construction Reimbursement
 
Act 46 of 2005 increased the reimbursement rates for eligible projects, revised the vocational reimbursement formula and provided additional funding for certain projects. The changes apply to projects for which the general construction contract is awarded subsequent to January 1, 2005, and for approved school building projects for which the general construction contract was awarded but for which a lease or general obligation bond resolution was not approved by the Department of Education prior to January 1, 2005. Department approval of a project's financing occurs at PlanCon Part H, Project Financing.
 
For eligible projects, the applicable per pupil reimbursement amounts are $4,700 for elementary capacity, $6,200 for secondary capacity, and $7,600 for vocational capacity. The base reimbursement formula for eligible vocational-technical projects now does not include bond interest in determining the approved building construction cost.
 
In addition, additional funding is provided for: (1) projects constructed and based on an approved school facility design published on the Department’s School Design Clearinghouse (currently under development); (2) projects where the general construction contract alters or adds to an existing building; and (3) school buildings receiving a silver, gold or platinum certification from the United States Green Building Council’s Leadership in Energy and Environmental Design Green Building Rating System (LEED-NC™) certification or two, three or four Green Globes™ certification on or after January 1, 2005. Information on the School Design Clearinghouse, and LEED and Green Globes certification follow this section.
 
To receive the additional funding for a project constructed and based on an approved facility design on the clearinghouse, the architect will need to certify at PlanCon Part J, Project Accounting Based on Final Costs, that the project actually was constructed and based on a clearinghouse design. To ensure design conformance with an approved school design published on the clearinghouse, the Department may inspect a project building before any additional funding for a project is included in the calculation of the permanent reimbursable percent(s). If a project fails to conform to an approved clearinghouse design, reimbursement will be calculated without the additional funding.
 
To receive the additional funding for a school building receiving a silver, gold or platinum certification from the United States Green Building Council’s Leadership in Energy and Environmental Design Green Building Rating System (LEED-NC™), a copy of the certification must be provided with the PlanCon Part J submission. To receive the additional funding for a school building receiving two, three or four Green Globes™ certification, a copy of the third party verification of points claimed in the official certification documentation must be provided with the PlanCon Part J submission. Failure to obtain LEED-NC™ or Green Globe certification within one year of building acceptance will result in the calculation of reimbursement without this additional funding.
 
As per 24 P.S. Section 25-2574 (c.5), reimbursement for an approved school construction project can not exceed total project costs. For School Design Clearinghouse and LEED projects, the sum of $470 multiplied by the elementary rated pupil capacity and $620 multiplied by the secondary and vocational rated pupil capacities is added to the approved building construction cost. To calculate the additional funding for additions and/or alterations to an existing building, the appraisal value of the existing building is subtracted from the sum of $470 times the elementary rated pupil capacity and $620 for the secondary and vocational rated pupil capacities (minimum value equals zero).
 
For reimbursement purposes only, the appraisal value of an existing building is calculated as follows:
 
   1) Multiply the rated pupil capacity for the entire building by the applicable per
       pupil reimbursement rates to determine the reimbursable formula amount for
       the total building;
   2) Divide the architectural area of the additions by the architectural area of the
       total building, and then multiply this fraction by the reimbursable formula
       amount for the total building calculated in Step 1 to determine the formula
       amount for the additions; and
   3) Subtract the reimbursable formula amount for the additions and the adjusted
       alteration costs from the reimbursable formula amount for the entire building.
       The result equals the appraisal value of the existing building; minimum equals
       zero.
 
Refer to the PlanCon Part D forms for the line-by-line calculations.
 
By law, three appraisers must be appointed for projects involving additions and/or alterations to an existing building. For reimbursement purposes only, this office will assume, unless advised otherwise, that the district/AVTS representative is the appraiser for the district/AVTS, the appraiser for the Department is the chief of the Division of School Facilities, and the appraiser appointed jointly by the Department and the district/AVTS is the project architect.
 
By law, reimbursable rental or sinking fund charges on indebtedness is limited to costs for building construction, site acquisition, rough grading and sanitary sewage disposal, and the interest on such costs. Since fees charged for bond underwriting, financial and legal consultation, and other related financing costs are not included in the aforementioned costs nor are they interest, these costs are not eligible for reimbursement. Accordingly, underwriter’s fee, original issue discount and original issue premium will not be included in the calculation of the reimbursable percent on any bond issues or leases financing a project affected by the recent school construction reimbursement changes. Also, due to these recent changes, original issue discount and original issue premium must be reported under revenue sources.
 
 
 
 
School Design Clearinghouse
 
To assist school districts in meeting their facility needs, the Department is in the process of creating the School Design Clearinghouse (SDC), which, once operational, will be accessed via the Department’s website (www.education.state.pa.us), to showcase new elementary and secondary school building designs that meet minimum design standards established by the Department. The information posted on the SDC website will provide school districts and design professionals with information that may lead to cost and time savings on future projects by increasing access to design and cost information on recently completed PlanCon projects.
 
Districts are encouraged to submit information on new school buildings approved for state funding thru the PlanCon process. In order for a school building design to be published on the SDC website, the building must be fully occupied, preferably for at least one school year following the end of construction. PlanCon projects still in design and/or under construction are not eligible for consideration.
 
To be published on the School Design Clearinghouse, a project must meet design standards, established by the Department, which focus on cost-effectiveness, academics, and health and safety. As stated previously, projects constructed and based on an approved school facility design published on the SDC website will be eligible for additional state funding. Detailed information on the School Design Clearinghouse will be available in the fall of 2005.
 
 
  
 
High Performance Green Schools
 
High performance buildings provide a healthier environment for their occupants and enhance their performance while significantly reducing annual operating costs. Moreover, the cost of building a high performance school is not inherently higher than that of a conventional school. However, the integrated design process for delivering a high performance building differs significantly from the conventional linear design process. Using an integrated design process requires collaborative participation from the outset by all the stakeholders including the building owner and the design professionals from each discipline to develop the building as a single integrated system.
 
Until design professionals become more experienced in delivering high performance schools, the cost is likely to be slightly higher than for a conventional school. To help accommodate this reality and to accelerate the learning process for delivering high performance green buildings, schools that achieve LEED ratings at the silver level or above OR two, three or four Green Globes certification are eligible for additional reimbursement as an incentive to building facilities which provide an enhanced learning environment while minimizing operating costs borne by taxpayers.
 
Information on LEED and Green Globes certification follows this section. In selecting the LEED and Green Globes points to be pursued, it is strongly recommended that the design team aim for points which have multiple impacts and which maximize return on investment. Areas of best value include reducing energy and water usage, daylighting, and improving indoor air quality. Implementing proper daylighting strategies, for instance, will improve student performance while reducing energy usage and cost.
 
Information and resources on high performance schools can be found at www.gggc.state.pa.us on the Governor’s Green Government Council’s website by clicking on both “Schools” and “Buildings.” The site includes links to the United States Green Building Council’s LEED web page and the U.S. Environmental Protection Agency’s Energy Star for K-12 School Districts program, as well as an award-winning online video on high performance green schools, called “Better Places to Learn.”
 
 
 
 
Leed Certification 
 
The United States Green Building Council’s LEED (Leadership in Energy and Environmental Design) rating system is a voluntary consensus-based national standard for developing high-performance, sustainable buildings. Buildings rated under the LEED system achieve certification at one of four levels – certified, silver, gold or platinum – depending on the number of points gained for performance in six categories: sustainable sites, water efficiency, energy and atmosphere, materials and resource, indoor environmental efficiency, and innovation and design process. For eligible projects to receive the additional funding, a copy of the LEED certification must be provided at PlanCon Part J, Project Accounting Based on Final Costs. Information and resources on the LEED rating system can be found at www.usgbc.org on the United States Green Building Council website.
 
Green Globes Certification 
 
The Green Building Initiative’s Green Globes rating system is an interactive design guidance, environmental assessment and rating tool addressing sustainability issues on buildings during design and construction. The Green Globes system provides a building rating of one, two, three or four globes based on the percentage of total points achieved in seven areas of the building and design process – project management, site, energy, water, resources, emissions, effluents and other impacts, and indoor environment. To achieve a Green Globes rating, the building project must be third party verified by a Green Building Initiative authorized verifier. For eligible projects to receive the additional funding, a copy of the official certification documentation from the awarding body, based on third party verification of points claimed, must be provided at PlanCon Part J, Project Accounting Based on Final Costs. Information and resources on the Green Globes rating system can be found at www.thegbi.org on the Green Building Initiative website.
 
 
 
Acquisition of Land and Buildings Eligible for Reimbursement
 
Reimbursement for a site is available under two circumstances: the proposed site is being acquired five or more years in advance of its projected need (called "an advance site acquisition"); or the site is being purchased for a current PlanCon project. Reimbursement for advance site acquisitions is contingent on the district's receipt of all requisite approvals for the site.
 
Land acquired solely to expand parking lots, athletic fields or community recreational areas does not qualify for state reimbursement. Such acquisitions, however, may be reimbursable if they are part of a PlanCon project for alterations, additions or new construction. State funding is limited to the costs associated with the acquisition of land and improvements thereon; there is no state funding available for rights-of-way or easements.
 
When a local board of education decides to acquire land, the primary role of the Pennsylvania Department of Education is to determine the state reimbursement for site acquisition. The ultimate decision to acquire property rests with the school board. If a school district decides to seek reimbursement for site costs, PlanCon Part C must be completed. Written PDE approval must be obtained prior to the date of settlement or the filing date of the Declaration of Taking if reimbursement is being sought.
 
PDE-Reimbursable Acres are calculated as follows for each school building located on the site: 1 acre for every 100 full-time equivalent (FTE) plus 10 acres for an elementary school, 20 acres for a middle school or 35 acres for a secondary or comprehensive vocational building or 15 acres for a part-time vocational building. Acreage contiguous to the property to be acquired that is already owned by the district is subtracted from this calculated allowance.  No acreage or FTE allowance is provided for District Administration Offices.
 
 
 
Building Leases Eligible for State Reimbursement 
 
Under Section 703.1 of the Public School Code of 1949, as amended, school districts have the authority to lease for five or more years existing buildings or buildings constructed or renovated for school use. Section 2574.2 provides reimbursement for buildings leased under Section 703.1.
 
As defined in Section 2574.2, reimbursement for approved leases of buildings constructed for school use is based on the lesser of (1) the annual rental multiplied by the ratio of the scheduled area to architectural area or (2) the rated pupil capacity multiplied by $160 for elementary schools, $220 for secondary schools, and $270 for area vocational technical schools. Reimbursement for approved leases of existing buildings altered for school use is based on the lesser of (1) the annual rental multiplied by the ratio of the scheduled area to architectural area or (2) the rated pupil capacity multiplied by $112 for elementary schools, $154 for secondary schools, and $189 for area vocational technical schools.
 
For leases authorized by Section 703.1 to qualify for state reimbursement, the following must be submitted: (1) PlanCon Part A, Project Justification, except page A21; (2) a draft lease agreement; (3) the number of rooms to be leased; (4) a floor plan of the building; and (5) a Department of Labor and Industry Certificate of Occupancy. During the term of the building lease, updated information must be submitted on an annual basis if the lease provisions permit the lease amount, the number of rooms or square footage to change. Amendments affecting lease costs or room use must also be submitted for our review and approval. Written PDE approval must be obtained prior to the district entering into a building lease if reimbursement is being sought.
 
As per Basic Education Circular 24 P.S. 7-733, a district-wide facility study must be completed prior to, and within two years of the date of the PlanCon Part A submission