M E M O R A N D U M

							January 11, 2011

To:		Members of the Board of Trustees

From:		Nancy L. Zimpher, Chancellor

Subject:	2011 Legislative Proposal (Community College Capital Costs Reserve Accounts)

	
Action Requested

	The proposed resolution approves a legislative proposal that authorizes the establishment by each community college of a capital costs reserve account.  The community college may transfer excess operating moneys to the account in order to offset the local sponsor�s share of capital costs for community college facilities.

Resolution 

	I recommend that the Board of Trustees adopt the following resolution:

Resolved that the legislative proposal relating to the establishment of community college capital costs reserve accounts (copy attached) be, and hereby is, approved for submission to the 2011 Legislature.

Background

	The resolution approves the attached legislative proposal for submission to the 2011 Legislature. 

	The legislative proposal authorizes each of the thirty community colleges under the program of the State University to establish a capital costs reserve account into which the community college may transfer excess operating moneys.  Moneys in a capital costs reserve account shall be used to offset the local sponsor�s share of capital costs for community college facilities.
	The inability of the community colleges to secure the required 50% local sponsor share of capital costs is the single largest impediment to the State-local sponsor community college capital financing program.  At this time, the need for capital investment in this program is growing.  A 2009 Capital Reinvestment Study identified a significant backlog of $411 million in deferred maintenance that is expected to grow to $807 million by 2014 and to $1.3 billion by 2019.  Growth in community college enrollment is compounding the capital facilities dilemma as more students will be using increasingly deteriorating facilities.

	The legislative proposal authorizes a means to use excess operating revenues to offset the local sponsor�s 50% share of capital costs and spur the development of new, and improvement of existing, capital facilities.  The proposal is supported by the New York Community College Association of Presidents.



































	AN ACT to amend the education law in relation to capital costs of community colleges
      The People of the State of New York, represented in Senate and Assembly, do enact as follows:
      �1.  Paragraph c of subdivision 1 of section 6304 of the education law is amended to read as follows:
c.  (i) The local sponsor or sponsors shall provide one-half of the amount
  of the capital costs, or so much as may be necessary, and one-third  or,
  in the case of a college implementing a program of full opportunity for
  local residents, four-fifteenths of the operating costs, or so  much  as
  may be necessary, by appropriations from general revenues or from funds
  derived from special tax levies earmarked in  part  or  whole  for  such
  purposes, by the use of gifts of money or, with the consent of the state
  university trustees, by the use of property, gifts of property or by the
  furnishing of services or, where a community college region is the local
  sponsor, in the  manner provided by section sixty-three hundred ten of
  this chapter.  Where the local sponsor or sponsors  provide  all  or  a
  portion  of  its or their share of capital or operating costs in real or
  personal property or in services, the valuation  of  such  property  and
  services for the purpose of determining the amount of state aid shall be
  made  by the state university trustees with the approval of the director
  of the budget. Local sponsors and, in the  case  of  community  college
  regions, any county, city or school district which has appointed members
  to  a  community  college  regional  board of trustees may authorize the
  issuance of bonds or notes pursuant  to  the  provisions  of  the  local
  finance law to provide any portion or all of its requisite share of such
  costs  for which a period of probable usefulness has been established in
  the local finance law. Where a county or city is the local sponsor of  a
  community  college,  or appoints members to a community college regional
  board of trustees, the expenditures  of  the  county  or  city  for  the
  college,  or  community college region, shall be a purpose of the county
  or  city  provided, however, that taxes to pay the local sponsor's share
  of operating costs, or the operating shares  of  the  community  college
  region  charged  to  the  county,  may be charged back to the cities and
  towns in the county in proportion to the number  of  students  attending
  the  community college each term who were residents of each such city or
  town at the beginning of such term.
    Notwithstanding any provision of law to the contrary, in the  case  of
  community  college  regions,  a  community  college  regional  board  of
  trustees as finance board of the region may authorize  the  issuance  of
  bonds,  notes or other evidence of indebtedness or the effectuation of a
  financing transaction by the community college region with the dormitory
  authority pursuant to the provisions of article eight of title  four  of
  the  public  authorities law to provide all or any portion of such costs
  for which a period of possible usefulness has been  established  in  the
  local  finance  law.  Notwithstanding  any  other  provision of law, the
  community college region shall itself have the power to borrow money for
  specific objects or purposes  or  a  class  or  classes  of  objects  or
  purposes  described  in  section  11.00  of  the  local  finance  law by
  adoption, by two-thirds of the voting strength of the regional board  of
  trustees  thereof, of a bond resolution as described in section 32.00 of
  the local finance law and shall  include  the  recitation  described  in
  section  80.00  of  the  local  finance  law. Said bond resolution shall
  include  the  power  to  enter  into  financing  transactions  with  the
  dormitory  authority  in accordance with the provisions of article eight
  of title four of the public authorities law. Upon adoption  and  receipt
  of  the  approvals  described  in subdivision ten of section sixty-three
  hundred ten of this article, the community college region shall  publish
  a  legal  notice  of estoppel as described in section 81.00 of the local
  finance law, which shall  be  applicable  to  said  bond  resolution.  A
  community college region is hereby authorized to pledge any revenues or
  other monies to the payment of any obligations issued, or any  financing
  agreement entered into with the dormitory authority.
  (ii)  Subject to guidelines and procedures established by the state university trustees, each community college may establish a capital costs reserve account and transfer excess operating moneys to such account.  Moneys in the capital costs reserve account shall be used to offset the local sponsor�s share of capital costs.
�2.  This act shall take effect immediately.












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Board Resolution		January 11, 2011