In the early 2000’s the Colorado Department of Education collected some information on the condition of K-12 school facilities across the state. The data painted a dire picture of old buildings that were far beyond their useful life. At the same time, advocacy groups and lawmakers realized a dilemma. Smaller communities could no longer fund major construction projects for local school systems. The cost of construction had outpaced the revenue that could be generated by a smaller tax base. In an attempt to find a solution, several creative minds came together and devised a grant program that they titled BEST: Building Excellent Schools Today.
The BEST grant program has existed since 2008 and as of the 2018/2019 fiscal year, more than $880 million in revenue has been generated. About 70 percent of that revenue came from State Land proceeds, 21 percent was from marijuana excise tax, about 5 percent was from Colorado Lottery spillover funds, and the rest was from interest earnings. Requests for BEST funding have roughly averaged $240 million per year and of that amount, BEST has awarded about $100 million per year. It is a highly competitive grant and several grant applications are denied each year.
BEST grants applications fall into one of two categories: cash grants which typically fund smaller projects like roof replacements or fire alarm systems and lease-purchase grants which typically fund larger projects like major additions or new schools. In both categories, schools are required to provide a match in funding. A match is a certain percent of the entire cost of the project. A school district’s match is determined by a formula which can be found on the Colorado Department of Education website. The required match for Rocky Ford School District is 38 percent. However, the required match cannot exceed the maximum amount that a school district can generate through a bond process. In Rocky Ford, the maximum bond amount is approximately $7.5 million. Therefore, Rocky Ford School District’s required match would be $7.5 million for any project that costs $19.73 million or greater.
Although cash grants can involve a loan of some kind, it is more likely that a school district has saved up enough money to pay their match and the state provides “cash” to fund the remainder of the project. A lease-purchase grant involves a loan of sorts for both the school district and the state. The amounts involved are too large for either the local district or the state to cover with savings. To use Rocky Ford School District’s 2020 grant application as an example, the total cost of the project would have been about $48 million. The state would have taken out a “loan” to cover the entire cost of the project. After passing a bond election, Rocky Ford Schools would have paid for $7.5 million of the project plus interest and the state would have paid for $40.5 million plus interest. Because of the structure of the “loan” and how both parties would be paying off the same loan, the interest rate would be the same for both the school district and the state. Therefore, when considering both the principal amount and the interest on the loan, Rocky Ford would have paid for just over 15 percent of the project and the state would have paid for about 85 percent of the project.
About 141 school districts in the state of Colorado have received a BEST grant award of some kind. Several of those school districts benefited from a lease-purchase grant that resulted in a major renovation or a new school. Some of the school districts Rocky Ford residents might be most familiar with include Kim, Holly, Lamar, Alamosa, and many more. Manzanola is in the construction phase with their BEST lease-purchase grant and Springfield is in the design phase getting ready for the construction phase.
Rocky Ford School District will be submitting a BEST grant application for a lease-purchase project for the 2021 funding cycle. The application is due the first week of February and grant awards are generally announced in May or June. Information will continue to be shared on the Rocky Ford School District website. Future news articles will include example BEST projects from around the state and the status of the Rocky Ford school facilities. Additional questions or requests for details can be directed to the school district’s Central Office.