SENATE BILL REPORT
SB 5590
This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent. |
As of February 21, 2019
Title: An act relating to establishing school district depreciation subfunds for the purposes of preventative maintenance.
Brief Description: Establishing school district depreciation subfunds for the purposes of preventative maintenance.
Sponsors: Senators Schoesler, Mullet, Becker, Short, Fortunato, O'Ban, Walsh, Hobbs, Warnick, Bailey, Honeyford, Hawkins, King, Van De Wege and Wilson, L..
Brief History:
Committee Activity: Early Learning & K-12 Education: 2/18/19.
Brief Summary of Bill |
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SENATE COMMITTEE ON EARLY LEARNING & K-12 EDUCATION |
Staff: Alex Fairfortune (786-7416)
Background: School district accounting requirements organize and operate on a fund basis. Under current law, school districts must establish:
a general fund for most financial operations of the schools district, including a subfund for local revenues;
a capital projects fund for major capital purposes;
a debt service fund for the retirement of bonds;
a refunded bond fund; and
an associated student body fund for all monies generated through the programs and activities of any associated student body organization.
Summary of Bill: School districts must establish a depreciation subfund within their general fund to reserve funds for future facility and equipment needs. Up to 2 percent of a school district's general fund may be deposited into the depreciation subfund each fiscal year for the purpose of preventative maintenance. No money from the depreciation subfund may be used for employee compensation.
Preventative maintenance must be necessary to realize the originally anticipated useful life of a building or facility, and includes:
exterior painting of facilities;
replacing or renovating roofing, exterior walls, windows, heating, air conditioning, ventilation systems, floor coverings, electrical systems, and plumbing systems; and
renovating playfields, athletic facilities, and other district real property.
Appropriation: None.
Fiscal Note: Available.
Creates Committee/Commission/Task Force that includes Legislative members: No.
Effective Date: Ninety days after adjournment of session in which bill is passed.
Staff Summary of Public Testimony: PRO: Some school construction projects are funded through bonds, but the life of the project does not last the life of the bond. Many repairs do not fit bonds, but also do not fit an operating budget each year. The language in this bill is permissive so that school districts may keep 2 percent back for these projects as they come along. If school districts do preventative maintenance they can avoid more costly replacement projects in the future. This would also provide protection from auditors who may determine that a school district is saving too much money. A possible amendment would be to allow for transfer of funds in the event of an urgent or unanticipated cost by the school district.
CON: As the bill is currently written school districts could not use funds to pay for the cost of maintenance staff, which would require that projects be completed through more costly contracts with third parties. School districts should be able to access funds for short term needs while a long term solution is found. A school can already use the capital fund.
Persons Testifying: PRO: Senator Mark Schoesler, Prime Sponsor; Gene Sementi, Superintendent, West Valley School District; Dan Steele, Washington Association of School Administrators and Washington Association of School Business Officials; Jessica Vavrus, Washington State School Directors' Association. CON: Lorrell Noahr, Washington Education Association.
Persons Signed In To Testify But Not Testifying: No one.