OFFICE OF FISCAL ANALYSIS
Legislative Office Building, Room 5200
Hartford, CT 06106 (860) 240-0200
http://www.cga.ct.gov/ofa
sSB-961
AN ACT CONCERNING CARBON -FREE SCHOOL REQUIREMENTS
FOR NEW SCHOOL CONSTRUCTION AND ESTABLISHING
OTHER SCHOOL CONSTRUCTION AND PUBLIC HEALTH
REQUIREMENTS FOR SCHOOL DISTRICTS.
Primary Analyst: DD 3/27/23
Contributing Analyst(s): RDP, DD, EMG, MT, CW
OFA Fiscal Note
State Impact:
Agency Affected Fund-Effect FY 24 $ FY 25 $
Treasurer, Debt Serv. GF - Cost Significant Significant
Department of Administrative
Services; CGB; Public Health,
Dept.
Various - Cost See Below See Below
Note: Various=Various; GF=General Fund
Municipal Impact:
Municipalities Effect FY 24 $ FY 25 $
Local and Regional School
Districts
STATE
MANDATE
1
- Cost
None Significant
Explanation
The bill results in significant costs to local and regional school
districts and to the state. The costs to local and regional school districts
are due to several new requirements relating to school building
construction and maintenance. The costs to the state include a
significant increase in debt service due to the expansion of the state’s
bond-funded school construction reimbursement program, the fund
1
State mandate is defined in Sec. 2-32b(2) of the Connecticut General Statutes, "state
mandate" means any state initiated constitutional, statutory or executive action that
requires a local government to establish, expand or modify its activities in such a way
as to necessitate additional expenditures from local revenues. 2023SB-00961-R000240-FN.DOCX Page 2 of 7
capitalization requirements specified in the bill, and administrative
costs associated with various programs established or expanded in the
bill. These costs are detailed below.
Local and Regional School Districts Impact
The bill results in significant costs to local and regional school
districts by establishing several new mandates relating to school
building construction and maintenance. The bill requires districts to do
the following:
• Ensure that new construction, replacement, or extension of a
school building after July 1, 2024 is net-zero energy. To the
extent that this requires such projects to use more expensive
materials, additional equipment, or more labor than otherwise
would have occurred, the bill increases the cost of these
projects. Some costs associated with these provisions may be
partially offset by increased School Construction
reimbursements. The bill also establishes a low-or-no-interest
loan program administered by the Connecticut Green Bank to
assist with these costs.
• Conduct a solar power feasibility study in FY 24 and an energy
efficiency study by FY 25 for each district building. The bill
requires districts to take additional steps, depending on the
results of the studies. It is anticipated that districts do not
currently have the resources to conduct such studies and will
have to hire consultants to complete them. Consultant costs
can be significant, over $100,000 per district. Subsequent steps
required based on the results of the studies will also result in
increased school construction and maintenance costs. The
costs of these required studies may be defrayed by financing
offered by the Connecticut Green Bank.
• Test each cooking and drinking water tap in each school for
lead and remediate any sources of lead contamination. The
impact of this will vary widely by district, the number of taps 2023SB-00961-R000240-FN.DOCX Page 3 of 7
tested, and the extent to which lead contamination is
discovered. The timing and magnitude of the costs will be
dependent on the regulations adopted by DPH. Larger
districts with older infrastructure will likely incur significant
costs.
• Sets temperature parameters for occupied classrooms in all
schools beginning January 1, 2025. To the extent that this
requires districts to install air conditioning systems or upgrade
existing HVAC systems, there are significant costs in FY 24
and FY 25. Additionally, there may be increased operating
costs beginning in FY 25.
• Include in any grant for new public school construction
submitted to the Department of Administrative Services
beginning January 1, 2024 (1) the installation of a school
kitchen with a dishwasher, and (2) indication of how solid
waste, including recycling and food scraps, will be sorted and
collected. To the extent that new public school construction
projects do not currently include these provisions, the bill
increases the costs of such projects.
• Establish project-labor agreements for projects that exceed $10
million and that are at least partially financed with loans from
the Connecticut Green Bank. The impact of this provision on
affected school construction projects will depend on the terms
of the project-labor agreements.
Costs in the bill to local and regional school districts are potentially,
partially offset by savings associated with reduced energy needs.
State Impact
Public Schools Solar and Energy Efficiency Fund Capitalization and
Implementation
The bill establishes the Public Schools Solar and Energy Efficiency
Fund within the Connecticut Green Bank. The bill stipulates that such 2023SB-00961-R000240-FN.DOCX Page 4 of 7
fund be "capitalized with four hundred million dollars from the
Connecticut Green Bank and one hundred million dollars from the
issuance of bonds of the state or capital funds." The $400 million figure
from the Connecticut Green Bank is well in excess of the net assets of the
Green Bank and would not be achievable without an identifiable
revenue source. Likewise, no bonds of the state are authorized for the
purpose specified in the bill, either under current law or within the bill
itself.
To the extent the fund is capitalized, the bill specifies various
eligibility requirements and uses, which would partially determine,
along with local district participation, the recipients of such loans and
grants. It also specifies that any "unspent balance" of the Public Schools
Solar and Energy Efficiency fund, presumably including any repayment
of loans, "shall revert to the General Fund" in FY 53 (thirty years after
bill passage). This represents a potential revenue gain to the General
Fund in FY 53.
Administration of the fund and associated programs is expected to
require at least 10 employees at a total cost of salary plus fringe of at
least $2 million from the resources of the Green Bank annually, as the
bill does not specify that administrative costs of the program could be
paid from the resources of the fund. It is not anticipated these costs
would be incurred until and unless capitalization funds are provided.
School Construction Program
The school construction program is funded using General Obligation
(GO) bonds, in two large tracts: priority list projects (i.e., larger projects
approved in legislation) and non-priority list projects. Non-priority list
projects currently include emergency items, such as fire or catastrophe
damage, leaking roofs, and code violations, as well as installation of
photovoltaic panels and wind generation systems.
Non-priority list projects are generally allowed at the discretion of
the Commissioner of Administrative Services within available resources
of the program. The bill states that specified project applications must 2023SB-00961-R000240-FN.DOCX Page 5 of 7
be challenged by the Department of Administrative Services (DAS)
within 30 days of receipt or be deemed approved. The bill requires
school districts to pursue solar panel installations, which is expected to
lead to a significant expansion in the number and amount of local
district photovoltaic panel projects seeking reimbursement through the
non-priority list portion of the school construction program.
The increase in school building project application processing will
increase the administrative costs of the school construction program, as
a result of DAS needing to hire at least 5 employees, at a total cost of at
least $ 725,000 annually for salary plus fringe from the General Fund.
Priority list projects must be approved through legislation prior to
state reimbursement. The bill requires that school building projects
classified as new construction, replacement and extensions must be net-
zero energy beginning in FY 25, regardless of whether those projects are
part of the school construction reimbursement program. It also requires
demonstration of efforts to be net-zero in applications received for the
school construction reimbursement program beginning in FY 24. To the
extent the net-zero requirements increase eligible construction costs for
school building projects, there will be an increase in state
reimbursements under the school building projects program.
The bill also includes several requirements regarding specified types
of school construction projects, including use of project labor
agreements, prevailing wage mandates, participation in workforce
development programs, hiring of municipality-specific labor, and
development of a solid waste management plan and presence of a
kitchen and dishwasher. To the extent any of these requirements
increase project cost, there would be a commensurate increase in state
reimbursements and state debt service costs.
Specific costs for eligible projects, including the marginal increase
from the requirements of the bill, can only be determined as project
expenses are incurred by municipalities and state reimbursements are
sought and offered. The costs of future priority list projects will be
shown when projects are considered in future legislation. 2023SB-00961-R000240-FN.DOCX Page 6 of 7
As of March 1, 2023, the unallocated bond balance available under
the school construction authorization is $836 million. The bill is
expected to result in an increase in the use of GO bond funds for both
non-priority list and priority list reimbursable expenses, which would
expedite anticipated debt service from existing bond authorizations.
The bill does not change GO bond authorizations relevant to the
school construction program. However, those funds are necessary to
support both priority list and non-priority list projects. The most recent
estimate by the DAS indicated approximately $2.5 billion worth of
outstanding long-term liability for current grant commitments, to be
paid over the next several years.
2
The expanded use of current
authorizations through the non-priority list program will necessitate
increased bond authorizations for the program in the future, which will
increase long-term debt service costs. Likewise, expected cost increases
for new construction, replacement, and extension projects are expected
to lead to greater reimbursement levels, which will be paid through
increased bond authorizations resulting in an increase in long-term debt
service costs to the state and increased revenue to participating
municipalities.
Other Impacts
The bill requires the Department of Public Health (DPH) to adopt
certain regulations and publish water test results from each public
school on a website, results in a one-time consultant cost of up to $75,000
in FY 24 to draft regulations, develop procedures for test result
reporting by schools, and establish procedures to track test result data.
The bill also requires DPH to develop an informational poster on the
health impacts of emissions from idling vehicles which does not result
in fiscal impact to the agency.
The Out Years
The annualized ongoing fiscal impact identified above would
2
Source: 2022 Series F General Obligation Bonds Official Statement 2023SB-00961-R000240-FN.DOCX Page 7 of 7
continue into the future subject to inflation.