The School Facilities Board (Board) was established by Laws 1998, 5th Special Session, Chapter 1. Statutory authority for the Board can be found at A.R.S. §§15-2001 et seq.
The purpose of the Board is to evaluate the school capital needs of K-12 school districts, distribute monies to school districts in order to address existing deficiencies, and to provide funds for building renewal and new school construction (Laws 2008, Chapter 287). The Board is charged with overseeing school facilities and equipment in Arizona, as well as distributing grant funding related to school facilities and equipment. To this end, the board maintains a database of school facilities; inspects school facilities to ensure safety and maintenance compliance; certifies and drafts school facility plans; creates documentation for the grant application process; and submits funding projections to the Joint Committee on Capital Review (see A.R.S. §15-2002 for a detailed list of powers and duties).
The Board is empowered to contract for private services, construction project management services, assessments of school buildings to determine if they have outlived their useful life, and services related to land acquisition and development of a school site.
The Board is made up of nine members appointed by the Governor according to the following criteria: 1) an elected member of a school district board with finance experience, 2) a private citizen who represents an organization of taxpayers, 3) a person with knowledge and experience in school construction, 4) a professional architect with knowledge and experience in school architecture, 5) a person with experience managing school facilities in a public school system, 6) a person with knowledge and experience in demographics, 7) a teacher currently providing classroom instruction, 8) a registered engineer with knowledge and experience in school engineering, 9) an owner or officer of a private business. The Superintendent of Public Instruction (or the SPI’s designee) serves as a non-voting advisory member.
An executive director is appointed by the Governor and is required to have expertise in school finance, facilities design, or facilities management. The director oversees the implementation of the grant application review process, assists the Board with a variety of tasks, assists school districts with facilities related issues, and reviews or audits the spending of grant monies (see A.R.S. §15-2002(C) for a detailed list).
The Board is also authorized to enter into or approve a school district board entering into a lease-to-own for school facilities, up to a maximum of $200 million in a single fiscal year (see A.R.S. §§15-2004 and 15-2005 for specifics).
The Board administers several funds including the Capital Reserve Fund, the Emergency Deficiencies Correction Fund, Building Renewal Grant Fund, and the New School Facilities Fund.
The Capital Reserve Fund consists of monies from the New School Facilities Fund. This fund can only be legislatively appropriated to the Deficiencies Correction Fund or the New School Facilities Fund. These monies can be invested by the State Treasurer at the Board’s request. Earnings are credited to the fund.
The Emergency Deficiencies Correction Fund is established by monies from the New School Facilities Fund and provides monies to correct defects in school facilities that pose health or safety concerns (A.R.S. §15-2022).
The Building Renewal Grant Fund is funded by appropriations from the Legislature and allows school districts to apply for grants to cover the cost of renovations, repairs, upgrades and infrastructure.
The New School Facilities Fund consists of appropriations from the Legislature and the lease or sale of state trust lands. Monies are used to construct new schools, based on enrollment projections and additional square footage needed to maintain school standards.
The Board also has the right to issue negotiable revenue bonds if authorized by the Legislature; these include bonds for both state school facilities revenue (A.R.S. §§15-2051 et seq.) and school improvement revenue (A.R.S. §§15-2081 et seq.). Both the school facilities revenue bonds and the school improvement bonds can fund any reserves or sinking accounts established by the bond resolution; otherwise the monies generated by these bonds go into the new school facilities fund or the building renewal grant fund, respectively.
The School Facilities Board was created by Laws 1998, 5th Special Session, Chapter 1 as the result of a series of legislative enactments, litigation and court decisions regarding the state’s system for school capital funding.
The 1998 legislation is commonly referred to as Students FIRST (Fair and Immediate Resources for Students Today). In Roosevelt v. Bishop (179 Ariz. 233) the Arizona Supreme Court held the existing school capital funding system to be unconstitutional. Subsequent legislation, enacted in 1996, 1997 and 1998 was also found by the courts to be unconstitutional. Finally, the Legislature enacted a centralized capital funding system for K-12 school districts that all litigants agreed in July, 1998 satisfied constitutional requirements.
The bill created a nine-member board, outlined board powers and responsibilities, created school facility adequacy requirements, established several different funds, and authorized the issuance of revenue bonds. The Board was initially exempt from the legislative appropriation process, receiving its funding based on direct transfers from the State Treasurer. However, subsequent legislation required all future funding to be appropriated by the Legislature.
Laws 2001, Chapter 11 allowed the Board to contract for construction services and materials to correct existing deficiencies in school district facilities. The Emergency Deficiencies Correction Fund was created in the same year by Chapter 297, allowing schools to apply for funds to correct emergency deficiencies in school facilities. All deficiencies were to be corrected by June 30, 2006.
Laws 2002, Chapter 330 required schools to develop routine preventative maintenance guidelines and required the Board to ensure compliance with those guidelines as part of their facilities inspection process. The same legislation also allowed the Board to enter into lease-to-own agreements with one or more school districts, established a lease-to-own fund and outlined requirements related to the agreements.
Laws 2005, Chapter 182 required the Board to conduct an environmental site assessment as part of the approval process to construct a school building. The Board was also required to enforce certain indoor air quality standards and ensure HVAC systems function adequately.
Laws 2005, Chapter 287 repealed the deficiencies correction fund, leaving only the emergency deficiencies correction fund in place.
Laws 2006, Chapter 353 eliminated the Board’s ability to enter into lease-to-own transactions, requiring funding of new school construction on a pay as you go basis. Note: The Legislature reauthorized lease-to-own purchasing in subsequent fiscal years (see 2016 Master List of State Programs, School Facilities Board).
Laws 2008, Chapter 287 created the Building Renewal Fund Grant Fund, and outlined its distribution and uses.
Laws 2013, 1st Special Session, Chapter 3 repealed the Building Renewal Fund.
- Arizona Revised Statutes
- Session Laws
- Laws 1998, 5th Special Session, Chapter 1
- Laws 2001, Chapter 11
- Laws 2001, Chapter 297
- Laws 2002, Chapter 330
- Laws 2005, Chapter 182
- Laws 2005, Chapter 287
- Laws 2006, Chapter 353
- Laws 2008, Chapter 287
- Laws 2013, 1st Special Session, Chapter 3
- Master List of State Programs: www.ospb.state.az.us
- Joint Legislative Budget Committee FY 2015 Baseline Report: www.azleg.gov/jlbc/15baseline/sfb
- School Facilities Board Five Year Strategic Plan: www.azsfb.gov/sfb
- Arizona State Senate Education Committee Program Presentation: School Facilities Board. February 10, 2009. www.azsenate.gov
- Arizona Supreme Court website: www.azcourts.gov