AGENCY DESCRIPTION
The Montgomery County Board of Education (BOE or Board) consists of seven publicly elected members for a four-year term; one student member elected by secondary school students for a one-year term; and the Superintendent of Schools, who is appointed by the Board of Education and is responsible for the administration of the school system. The vote of the Superintendent is not counted for capital and operating budget appropriations. Montgomery County Public Schools (MCPS) operates and maintains a Countywide system of public schools for students from pre-kindergarten through high school (including special education, interagency, and alternative programs) and also provides adult education services. At the start of the 2023-2024 school year, 160,223 students were attending 210 separate public educational facilities. (See table at the end for MCPS historical and projected enrollment data by school type).
PROGRAM DESCRIPTION AND OBJECTIVES
The Board's FY25-30 Capital Improvements Program request consists of 9 new and 38 ongoing projects including sub-projects with expenditures in the six-year period. Included within the ongoing projects are two master projects with 15 sub-projects: Major Capital Projects - Elementary, and Major Capital Projects - Secondary.
Three additional projects are included for technical reasons, the State Aid Reconciliation project includes State aid funding assumptions not yet allocated to specific projects, as well as bond funding reductions assumed from this State Aid. Similarly, the MCPS Funding Reconciliation project includes School Impact Tax, Recordation Tax, and Recordation Tax Premium funding assumptions not yet allocated to specific projects, as well as bond funding reductions assumed from these funding sources. The MCPS Affordability Reconciliation project adjusts total expenditures and funding to conform to the Executive's recommended MCPS funding levels which are affordable within the CIP.
The section following this narrative only shows the project description forms (PDFs) for which the Executive recommends changes to the BOE's request. The complete BOE request can be found on the MCPS web site at:
Capital Improvements Program/Master Plan - Montgomery County Public Schools, Rockville, MD | Montgomery County Public Schools | Rockville, MD (montgomeryschoolsmd.org)
PROGRAM CONTACTS
Contact Adrienne Karamihas of the Montgomery County Public Schools at 240.740.7744 or Veronica Jaua of the Office of Management and Budget at 240.777.2782 for more information about this agency's capital budget.
CAPITAL PROGRAM REVIEW
Board of Education Request
The Board's FY25-30 capital program request for MCPS totals $1,999.4 million, a $91.8 million or 4.8 percent increase, over the Approved Amended FY23-28 CIP of $1,907.6 million. The Board's request continues to display a pattern in which it is consistently large in the first few years of the CIP and underfunded in the outyears. This leads to overprogramming of other projects which are then repeatedly delayed once more traditional MCPS funding levels are requested in those years.
The Board's request reflects increases of $96.8 million, $140.4 million, $147.5 million, and $131.2 million in FY25, FY26, FY27, and FY28, respectively. MCPS has started to include placeholder cost for construction in several of their new projects. This is a step towards a much more transparent CIP budget development process. However, the request continues to reflect a pattern of understating the likely true cost for some level of effort projects, such as the Building Modifications and Program Improvements, the Emergency Replacement of Major Building Components, the Improved (Safe) Access to schools, the Relocatable Classrooms, and the Sustainability Initiatives projects, by not requesting funds after FY26 or FY27.
County Executive Recommendations
Despite significant reductions in key County construction funding sources such as Recordation Tax, and Recordation Tax Premium in the first four years of the CIP (FY25-FY28), flattened levels in General Obligation Bonds, reversions to traditional State aid funding ($50 million - $56 million a year), and cost increases across all categories and subcategories in the CIP, the County Executive recommends $1,907.6 million over the six-year CIP. This amount equals to 100 percent of the last approved MCPS CIP funding and equals 95.4 percent of the Board's request.
The Recommended FY25-30 MCPS CIP increases FY25-FY28 funding by $169.1 million. This is the largest recommended CIP ever and it maintains the record high funding as approved in the last amended CIP.
In the Recommended FY25-30 CIP, PAYGO funding is assumed to be $26.4 million above the 10 percent policy target. In comparison to last approved estimates, in the first four years of the CIP (FY25-FY28), Schools Impact Tax has increased by $6.1 million (6.3 percent) and the Recordation Tax and Recordation Tax Premium (MCPS) estimates have decreased by $40.8. million (10.5 percent).
The Executive's Recommended CIP supports funding as well as the needed acceleration of appropriation to allow MCPS to enter into a prevailing wage construction contract for the Northwood High School Addition and Facility Upgrade project. This will have the benefit of maximizing State Aid participation in this project to 40.2 percent of total costs.
The chart below summarizes the average annual and six-year CIP for the last 17 years:
Local funding, consisting of General Obligation Bonds, Current Revenue, Recordation Taxes, Recordation Tax Premium, and School Impact Taxes, represents $1,327.3 million or 69.6 percent of the recommended budget. The recommended CIP also assumes $580.3 million in State Aid or 30.4 percent. This includes traditional State Aid from the Interagency Commission on School Construction (IAC) Capital Improvement Program (CIP), State grant funds for local school systems with significant enrollment growth or relocatable classrooms (EGRC) program, and funding from the Built To Learn (BTL) Act of 2020. Since the BTL funding has been mostly allocated into projects, the State Aid assumed in the recommended CIP reflects reversions to traditional State funding levels ($50 million - $56 million a year).
The table below reflects a comparison between the Board of Education's (BOE) request, the County Executive's (CE) Recommended CIP, and the County Council's (CC) approved CIP in the last 11 years to highlight how in most years the BOE's request exceeds the ability of the executive and the legislative branches to fully fund this budget. Years when the County Executive and County Council have been able to meet or exceed the BOE's request have usually been years when increases in G.O. Bonds, impact or recordation taxes, or State Aid revenues have been assumed.
Highlights of County Executive Recommendations
• Allocate $1,907.6 million to support school construction - the County Executive's highest priority. This is the largest MCPS CIP ever recommended, and it maintains MCPS funding as approved in the last CIP despite significant MCPS revenue shortfalls. MCPS represents the largest category of the CIP budget with 32.7 percent of all spending.
• The MCPS CIP recommendation assumes over $580.3 million in State Aid for school construction which includes approximately $396.9 million in traditional State Aid and EGRC, and over $183.4 million from the Built To Learn Act program.
• The recommended CIP supports funding as well as the needed acceleration of appropriation to allow MCPS to enter into a prevailing wage construction contract for the Northwood High School Addition and Facility Upgrade project. This will have the benefit of maximizing State Aid participation to 40 percent of total costs.
• Despite construction cost increases, significant revenue reductions in the first four years of the CIP (FY25-FY28), and reversions to traditional State Aid funding ($50 million - $56 million a year), the recommended MCPS CIP increases FY25-FY28 funding by $169.1 million.
• Supports the Blueprint for the Maryland's Future to expand full-day Pre-K education. If funded, MCPS' request would create a standalone early childhood center in Whetstone Elementary School and rehabilitate Parkside Elementary School and the current Burtonsville Elementary School to become early childhood centers to provide children additional time to acquire skills for success in schools and later in life.
• Supports funding for MCPS' Countywide infrastructure and systemic projects such as Heating, Ventilation and Air Conditioning (HVAC), Roof Replacement, Planned Lifecycle Asset Replacement (PLAR), ADA Compliance, Emergency Replacement of Major Building Components, as well as others.
• Supports funding for Sustainability Initiatives as it is in alignment with the County's Climate Action Plan and it will contribute to the reduction of greenhouse emissions, resiliency, and building energy and utility efficiency.
• Supports a study related to a distributed bus parking model for MCPS' bus fleet since no one location can address this need.
• Other County and agency CIP projects which benefit MCPS' programs include: Pedestrian Safety Program, Transportation Improvements For Schools, Fibernet, Ballfields Initiatives, Kennedy Shriver Aquatic Center Building Envelope Improvement, Child Care Renovations, now 3 different projects: Facility Replacement, ADA Remediations, and Playgrounds, High School Wellness Centers, School Based Health & Linkages to Learning Centers, and the MCPS Bus Depot and Maintenance Relocation.
PROGRAM EXPENDITURES
The County Executive reaffirms his commitment to preparing children to live and learn.
Individual Schools and Countywide Projects
As affordable, the County Executive supports capacity related projects when redistricting is not a viable option to manage overcrowding. The Board's requested capacity-related projects include seven elementary schools, one middle school, and five high schools including one high school reopening. The Board of Education request includes the creation of three new capacity projects at Mill Creek Towne Elementary School, James Huber Blake High School, and Paint Branch High School. In addition, the Board's request includes: 1) the creation of a standalone Early Childhood Center at the Whetstone Elementary School with the new Major Capital Project in the same school; 2) the rehabilitation of the Parkside and Burtonsville Elementary Schools to become Early Childhood Center; 3) creation of the Healthy Schools project to leverage additional State Aid while addressing environmental health and safety needs in school facilities; and 4) the CESC Modification projects to create a welcome center.
For the FY25-30 CIP, MCPS continues to use a new model to increase planning and funding flexibility that incorporates Board and community input, and the Key Facility Indicators (KFI) to re-priori tize large-scale facility renovations and identify schools for possible major capital projects. The Board's FY25-30 request for the Major Capital Projects - Elementary project is for $135.8 million to address major capital work in eight elementary schools, including four new sub-projects at Cold Spring Elementary School, Damascus Elementary School, Twinbrook Elementary School, and Whetstone Elementary School. The request for the Major Capital Projects - Secondary project is for $518.3 million to address major capital work in two middle school and four high schools.
The Board's FY25-30 CIP request includes funding for twenty Countywide level of effort and compliance projects totaling $691.6 million, including Fire Safety Code Upgrades; Heating, Ventilation, and Air Conditioning (HVAC); Improved (Safe) Access to Schools; Planned Life-Cycle Asset Replacement (PLAR); Restrooms Renovations; Roof Replacements; Relocatable Classrooms; School Security Systems; ADA Compliance; Asbestos Abatement; Building Modifications and Program Improvements; Outdoor Play Space Maintenance; Stormwater Discharge & Water Quality Management; Design and Construction Management; Facility Planning; Technology Modernization; Emergency Replacement of Major Building Components; Sustainability Initiatives; Early Childhood Center; Healthy Schools, and CESC Modifications. The County Executive continues to view maintaining the current MCPS infrastructure as a priority in order to extend the life of existing facilities.
The Board's FY25-30 CIP request includes $4,748,000 and $3,996,000 additional funding for FY25 and FY26 respectively for Technology Modernization. These costs must be cash funded and as such, must be considered in the context of the FY25 Operating Budget.
PROGRAM FUNDING
The recommended MCPS capital program is funded using $462.6 million in County General Obligation bonds and $864.7 million of other local resources including Current Revenue, Recordation Tax, Recordation Tax Premium, and Schools Impact Tax. The CIP also assumes $580.3 million of State Aid.
County General Obligation Bonds
The Board's request includes large increases in General Obligation Bond expenditures throughout the six-year program. The County Executive recommends bond funding of $462.6 million over six years, which reflects the resources available within the CIP. In FY25, the recommended bond funding for MCPS is $139.9 million, the largest allocation for a category for a single fiscal year. The large amount of General Obligation Bond funding is due, in part, to the County Executive's recommendation to increase Pay-as-you-go (PAYGO) funding in FY24 and FY25 to backfill for recordation tax and recordation tax premium shortfalls. This increase in PAYGO is funded with the one-time use of surplus reserves.
Other County Resources
Within the six-year CIP, the County Executive recommends $142.6 million in Current Revenue, $391.3 million in Recordation Tax, $160.6 million in Recordation Tax Premium, and $170.1 million in School Impact Tax revenue.
State Support for Schools
The development of the State Aid assumption for the MCPS CIP recommendation was very complex. Once the Built to Learn State Aid is fully allocated, new State Aid under the traditional and the EGRC funding programs is assumed to revert to $50 million - $56 million per year.
The MCPS CIP recommendation assumes over $580.3 million in State Aid for school construction which includes approximately $396.9 million in traditional State Aid and EGRC, as well as over $183.4 million from the Built To Learn (BTL) program which is the last tranche for the BTL funding.
Montgomery County Public Schools has requested $246.3 million of State funding in FY25 that includes the balance for one construction projects from FY24 that could not be fully funded by the State in FY24, two planning and construction projects, eight system renovation projects, and five construction projects under the BTL program.
The State's Interagency Commission on School Construction (IAC) made a preliminary recommendation on December 14, 2023, to the State Board of Public Works (BPW) of State Aid related to Montgomery County's request for FY25. The table below shows details by project for the IAC Staff 75% Recommendation. The BPW will make final allocations in the spring of 2024 after the end of the Maryland General Assembly session.
The following table compares the annual amount of State Aid requested by MCPS to the amount finally approved by the Interagency Commission on School Construction (IAC) under three programs: the Capital Improvement Program (CIP), the Enrollment Growth or Relocatable Classrooms (EGRC) grant program, and the Built to Learn (BTL) program.
Growth and Infrastructure Policy
The Growth and Infrastructure Policy (formerly known as the Subdivision Staging Policy) developed by the Planning Department and approved by the County Council is the mechanism used by the County to ensure public facilities, such as schools and transportation, keep up with development. This policy is updated every four years and requires an annual infrastructure test for adequacy.
The Utilization Premium Payment (UPP) was introduced with the newly adopted Growth and Infrastructure Policy of 2020, and it requires developers to make a surcharge payment if the results of the school adequacy test indicate that projected school utilization in the fourth fiscal year will exceed certain thresholds.
The annual school test of facility adequacy is based on the latest enrollment forecast produced by MCPS and the latest Capital Improvement Program approved by the County Council. The test is divided in three tiers and evaluates every public-school facility that serves students living in a specific area. For the purpose of the test, Planning paired some elementary schools where students attend grades K-2 at one location and grades 3-5 at another location and considered them as one service area.
The annual school test measures capacity utilization in two ways: by the utilization rate and by seat surplus or deficit. The utilization rate is calculated by dividing the enrollment projection at the fourth fiscal year by the capacity of the school; and the seat surplus or deficit is calculated by subtracting the enrollment projection at the fourth fiscal year from the capacity of the school. Results of the test determine the adequacy standard of a school or the UPP Tier in which the school falls.
The UPP are fees paid by developers in areas where schools exceed the adequacy levels established by the Montgomery County Planning Board as a condition of preliminary plan approval. The fee is calculated by applying the appropriate UPP factor to the impact tax rate applicable to a residential unit.
The tables that appear at the end of this chapter present the utilization rate and seat deficit standards used to determine which tier schools fall into. Schools with larger capacity deficits must pay a larger UPP fee (calculated a percent of the School Impact Tax rate) to move forward.
Operating budget impact
Operating budget impacts measure resources needed to maintain or operate new or modernized facilities. They include such elements as salaries for administrators, new teachers for new school construction, building service workers, and the cost of energy. MCPS CIP operating budget impacts on Montgomery County Government include the debt service generated by the issuance of government bond funding required for MCPS' capital projects.
According to MCPS standards and using FY24 dollars, each new 740 student elementary school will require approximately $3.0 million in additional annual operating costs. These costs include salaries and employee benefits for 20.70 workyears of non-classroom positions. Each new 1,200 student middle school will require approximately $4.9 million in additional annual operating costs. These costs include salaries and employee benefits for 36.25 workyears of non-classroom positions. A new 2,000 student high school is estimated to require approximately $9.1 million in additional annual operating costs. These costs include salaries and employee benefits for 67.8 workyears of non-classroom positions. The new school cost represents base funding only and does not include special programs or additional resources for highly impacted schools.
STATUTORY AUTHORITY
Titles 3, 4, and 5 of the Education Article, Annotated Code of Maryland, govern the establishment of county boards of education, local school administration, and financing. Each county board is to maintain throughout its county a reasonably uniform system of public schools that is designed to provide quality education and equal educational opportunities for all children. Subtitle 3 of Title 5, State Aid for School Construction, provides for payment of certain public school construction and capital improvement costs by the State through its Public School Construction Program. The CIP review process for the public schools is governed by laws and regulations of the State of Maryland, the Montgomery County Charter, and the Board of Education's Policy on Long-Range Educational Facilities Planning.
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