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• An independent public Authority, created by Chapter 208 of the Acts of 2004, – composed of a 7 member board, chaired by State
Treasurer Tim Cahill, 4 professional educator/design-construction industry professionals appointed by Treasurer Cahill, ANF and ESE
• What we do: • Use our dedicated sales tax funds to pay down and
audit approximately $11 Billion for 1156 projects authorized under the former SBA program including financing the $5.5B, 423 project wait list;
• Effectively manage, plan and create a new financially sustainable school building construction and renovation grant program;
• Use the remaining resources, after paying down inherited debts from the former program, to equitably spread across the Commonwealth for school construction and renovation grants
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First 4 Years: Significant Progress Made
MSBA’s accomplishments to date:– Made over $6 Billion in payments to cities, towns, and regional school districts
• Under the former program, the state would have taken decades to make most of these payments
– Of the 428 projects on the Waiting List: • 407 Wait list projects have received a payment or have been completely paid off• 354 Wait list projects received a final Board Approved Audit• 53 Wait list projects are in various stages of audit• 9 Wait list projects still have not started• 12 Wait list projects were removed under the Grant Conversion Program
– Completed and Board Approved 727 audits of the 800 audit backlog inherited from the former program. The completed audits have:
• Saved the taxpayers of Massachusetts over $795 Million• Generated over $2.3 Billion in avoided local interest costs
– Completed first ever capital survey of 1,817 schools in the Commonwealth
– Completed most comprehensive revision of program regulations in 60 years
– Developed and implemented a “pay-as-you-build” Progress Payment System for projects. The new Progress Payment System:
• Provides municipalities with much needed cash flow as projects are built• Reduces the amount of debt a city, town or regional school district needs to issue
– Commenced the reformed grant program for school renovation and construction projects • In FY2008, the MSBA received and reviewed 423 Statements of Interest from 163 school districts and has
made over 400 visits to more than 140 school districts as part of the MSBA’s review and due diligence process
• In FY2009, the MSBA received 47 new Statements of Interest from 25 additional districts– Moved the first round of potential projects into the $2.5 Billion 5-year capital pipeline
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1. Identify the Problem• Local community identifies deficiencies in school facilities through the
Statement of Interest (SOI) process2. Validate the Problem
• MSBA and local community work together to validate deficiencies identified• Requires the MSBA and the city, town or regional school district to agree on
the problem3. Evaluation of potential solutions
• MSBA and local community work in collaboration to identify potential solutions
• Solution must fit within the MSBA’s available funding, long-term capital plan and will be prioritized based on the priorities established in G.L. c.70B § 8
4. Confirm the solution• MSBA and local community agree on solution and appropriate course of
action5. Implement the agreed upon solution
• MSBA and local community continue collaboration through design and construction
The New ProcessThe MSBA’s enabling statute places tremendous emphasis on planning, due diligence and prioritization of scarce Authority resources. The statute and MSBA regulations also require
collaboration between local districts and the MSBA during all phases of the process.
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MSBA Process Flow Chart
Statement of Interest (SOI)
Initial ComplianceCertificate
(ICC)
Pre-study Review Meeting
Enrollment ProjectionValidation
Project Scope & Budget
Conference
Project Scope & Budget
Agreement
MSBA Board
Approval
Sign Project
Funding Agreement
Local Vote within 120
Days
Phase IIdentify the
Problem
Phase IIVerify the Problem
Phase IIICollaborate on Solution
Phase IVAgree Upon
Solution
Phase VImplement
Agreed Upon Solution
Process to Select OPM
Solicit Feasibility Designer/Planner
Feasibility Study
Designer Selection
Panel
MSBA Approves
OPM
Design & Design Review
Bidding Construction
Progress Payment
and Audit
Process
Change Order
Review Process
Final Building
Cx
Project Closeout
Community Community & MSBA
MSBA
District selects a
Priority SOI
MSBA Review of
SOI
Senior Study on Priority
SOI
Preferred Schematic
Design
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Phase I – Identify the Problem
Statement of Interest (SOI)• Clear, concise statement of the problem based on MSBA statutory priorities• Preparation does not require hiring consultants – low-cost entry into MSBA system• The MSBA will perform due diligence based on problems identified in the SOI• Need sufficient data in SOI for MSBA to understand deficiencies and their impact on
the educational program – Data/documentation from 3rd party and professional reports
– Specific dates of events/ issues/impacts on facility and educational program
• Links to local policies and budgets
Conclusion
• The District has identified a problem that could fit one or more of MSBA’s statutory priorities
• The District has considered its educational and budget alternatives and is prepared to move forward in collaboration with the MSBA in finding an appropriate solution
• MSBA performance of a Senior Study may be appropriate
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Phase II Due Diligence: Senior Study
• Efficient, cost effective diagnostic tool used to evaluate SOI
• Each study team composed of an MSBA staff member and two senior architects with extensive knowledge of building systems and educational programs
• Studies examine both facility condition and programmatic issues – Identify goals and concerns of the school district– Evaluate physical condition of the facility, including major building systems
(building envelope, HVAC, electrical distribution, interior finishes)– Assess overcrowding or capacity issues– Determine ability of the facility to support the required educational program– Assess design factors such as availability of natural light which make a school’s
environment conducive to learning– Examine site considerations– Evaluate school district’s routine and capital maintenance programs
• Results summarized in concise report format permitting review and comparison of numerous SOI
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Senior Study Assessment Criteria
• Building Condition– Building exhibits signs of moderate to severe deficiencies in multiple building
systems such as: roofing system, façade, windows and doors, heating and ventilation systems, and electrical distribution system.
– These deficiencies adversely impact the school facility’s ability to support the delivery of the educational program.
• Building Capacity– Building exhibits signs of moderate to severe overcrowding including excessive
class sizes, inadequate number of classrooms, high number of cafeteria seatings, and conversion of non-educational space to educational uses.
– These conditions adversely impact the school facility’s ability to support the delivery of the educational program.
• Educational Program– The ability to support the required educational program is adversely impacted by
building condition and/or capacity, including use of inadequate spaces for the delivery of educational programs.
• Structural Deficiency– Building has clearly documented structural deficiencies that pose an immediate
risk to health and safety of building occupants.
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• The MSBA has developed an Enrollment Forecasting tool that is available on-line and can be accessed via the MSBA website (www.MassSchoolBuildings.org).
• The Enrollment Forecasting tool is intended to standardize the compilation of enrollment projection data by using the same approach for projecting enrollment for all districts based on a professionally developed modified cohort survival methodology.
– Basic premise of the cohort survival method: the past is a reasonable predictor of the future– Year-to-year cohort survival ratios account for the net effects of factors such as in/out
migration, student retention rates, new home construction, etc.– Model allows districts to provide data on significant local changes that would impact historical
cohort survival ratios such as major employer moving in/out, opening/closing of private/charter schools, open space being developed, major changes in transportation infrastructure, etc.
• This system can be used by districts to generate draft enrollment projections at no cost.
• Districts will need to complete an Enrollment Questionnaire which asks for some very basic and limited data on current year enrollments, housing permits, and birth data.
• If a district intends to submit a Statement of Interest (SOI) and cite enrollment related priorities 2, 4 or 6, then the district must transmit their enrollment data to the MSBA via the Enrollment Forecasting tool.
On-line Enrollment Forecasting Tool
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Enrollment:Every Square Foot Costs Money to
Build • How large or small does the building need to
be? = Enrollment
• Enrollments are dropping across the state for a majority of districts
• New construction costs $70,000 to $115,000 per student• When projected enrollments do not materialize, that’s another
district’s roof, classroom addition, science lab not done
– Projected Enrollments need to be realistic– Some recently built schools are half empty, districts requesting to
close– Some districts cannot afford the cost of maintaining recently built
larger schools• MSBA will not authorize a project for further development until
enrollment is agreed upon with the District• MSBA had a task force of superintendents to develop our online
enrollment model, available for every district• MSBA will work with districts to accommodate local enrollment
idiosyncrasies….• …but will not engage in wishful thinking.
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Phase III: Collaborate on Solution Invitation to Conduct a Feasibility Study• Requires Board Approval
• District will need to hire OPM and Designer
• District must execute MSBA’s Standard Feasibility Study Agreement (“FSA”)
• FSA defines Scope, Budget and Schedule for the Study
• Goal of Study Phase:– to study a variety of potential solutions– agree upon a preferred solution that is educationally sound and
cost effective for District and the MSBA– generate schematic design, agreed upon scope, cost estimate,
and schedule
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Owner’s Project Manager (OPM)• OPM mandated for projects estimated to be > $1.5m
• MSBA may require OPM for projects estimated to be less than or equal to $1.5M
• By statute, OPM may be an Existing Employee of the District. MSBA expects existing employee to provide all of the services required by the standard contract.
• Locally conducted procurement process (open and competitive)
• Qualifications-based selection pursuant to MGL c. 149, s. 44A½
• District must use the MSBA’s Model RFS and the MSBA’s Standard Contract for procuring and contracting with the OPM.
Buildability reviews Coordinating parties and information Monitoring performance Assisting School District with decisions and procedures Alerting MSBA to possible schedule, cost, scope, or value changes Indemnification of Owner and MSBA Liability coverage requirements Compliance with Project Funding Agreement OPM’s services to continue through MSBA’s final audit
Phase III - Collaborate on Solution
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Phase III: Collaborate on Solution
Procurement of a Designer for the Feasibility Study• Procurement shall be open, competitive, qualifications-based • MSBA Designer Selection Panel (DSP) if project $5M or more• Selection by local process in accordance with Chapter 7 if project less than $5M• Scope, budget, and schedule as agreed to by District and MSBA • School District to be the primary source on all educational questions • Planner/architect likely core skill set, but other areas of expertise (depending on
type of project) may be: Environmental and Energy Cost estimating Technology Traffic Permitting Green Buildings
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Once the MSBA and the District agree upon the most cost effective and educationally sound option
identified in the Feasibility Study, the MSBA Board will vote to authorize the District to proceed with
developing the Preferred Schematic Design Option which shall include, but not be limited to:
• A detailed scope of the Proposed Project;• Architectural and site drawings;• A description of the major building
construction systems which are proposed for the Proposed Project;• A detailed budget cost estimate;• A projected cash-flow;• Permitting requirements;• A proposed project design and construction
schedule including consideration of phasing of the Proposed Project; and
• Sustainable design goals including minimization of environmental and transportation impacts and ways the Proposed Project can meet those goals and elements of construction or demolition waste that would be recyclable.
Preferred Schematic
Design
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Phase IV - Agree Upon Solution Project Scope and Budget Agreement Details Scope , Schedule & Budget:
• Detailed scope
• Project Schedule
• Preliminary schematic design
• Detailed budget for construction, engineering and support costs
• Timeline for project and for cash flow
• Memorializing understandings reached at Scope and Budget Conference
• Establish range of reimbursement percentage (contingent on incentive points)
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PROJECT SCOPE: Focus on Attractive, Utilitarian Design
• Variegated Rooflines that leak● Grand atria in the front entrances• Copper clad facades…
These elements cost money and do not educate children.
• Model School Program has provided us with examples of attractive design that have low change orders and still work years later
• MSBA wants lasting construction, but many cities and towns and MSBA are still paying for costly projects that didn’t last
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Phase IV - Agree Upon SolutionReimbursement Formula (40% – 80%)
Base Points• Base Rate 31%• Income Factor (per capita income, from DOR data)• EQV (Property Valuation per capita, from DOR data)• Poverty (% on free/reduced lunch, from DOE data)
– Incentive Points• Maintenance Points Policy (poor, average, excellent) 0 – 2 %• “School Facility Maintenance Trust” 1%• Alternatives to Construction 4%
» Of the 4%, can receive 1% for CM @ risk» Of the 4%, can receive up to 3% for newly formed Regional District
• Major Reconstruction, Renovation 0 - 5%• Energy Efficiency (Green School) 0 - 2%• Non-state fund raising
» For every 1% of project costs raised, may receive 0.5% • Model School Incentive up to 5% • Overlaying zoning district (40R, 40S) 1%• 40R with >100 units 2, 3 family, or 50% 2, 3 family ½ %• Innovative Community Use 3%
» Of the 3%, can receive up to 3% for newly formed Regional District
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Phase IV - Conclusion
Project Funding Agreement
• MSBA Board Approves proposed Scope and Budget Agreement
• Local vote within 120 days of MSBA Board Action
• MSBA and School District sign Project Funding Agreement (PFA) agreeing upon the project’s scope, budget, and schedule
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Phase V - Implement Agreed Upon Solution
Project Funding Agreement: MSBA Grant terms and Grant total fixed by • Scope• Budget• Schedule
Progress Payments• Monthly requests for reimbursement• Reports and supporting invoices• Prompt audit• Quick determination of ineligible costs• Identify and quickly resolve disagreements
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Phase V – Implement Agreed Upon Solution
Key Objectives
• Coordination of design and rigorous constructability and value engineering review
• Construction contractor’s performance conforms to the contract plans and specifications through resident inspection
• Early identification and resolution of issues during design and
construction will control costs and limit schedule delays
• Provide central point of coordination among project participants
• Provide school districts and MSBA with timely information necessary to insure adequate oversight of major investment in public schools
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MSBA Board Actions 2007/2008 SOI Process
Based on the MSBA diagnostic analysis and input from the Facilities Assessment Subcommittee, the Board has taken the following actions since November, 2007:
– Feasibility Invitation 41– Preferred Schematic Option 11– Repair Assessment 19– Model School 2– Project Scope Invitation 20– Planning 14– Regionalization Assessment 9– Regional Vocational/Technical HS 8– Hold 36
Total 160
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FY2009 Statement of Interest - Summary
The window for filing/refreshing a Statement of Interest (SOI) closed on December 19, 2008. The MSBA is reviewing all submissions for compliance with requirements and completeness.The numbers in the following chart may change as the MSBA continues its review process.
New SOI 47*FY2008 Refreshed SOI 183Pending Submissions 12Total FY2009 Submissions 242
* 6 Projects moved into Repair Category at 1/09 Board
FY2008 SOI NOT refreshed 101
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Standard Contracts and Procedures
Standard contracts and procedures assist Districts by:
• Expediting consultant selection by providing standard Requests for Services (RFS) • Avoiding costly litigation• Providing a Model RFS and a contract which meets MSBA expectations and statute requirements
The standard contract provides:
• Standard expectations of responsibilities for a school project• Definition of roles and responsibilities of the project participants - OPM, Designer, Contractor,
Commissioning Consultant, Owner• Provides contract provisions addressing Owner's concerns and liabilities• Uniformity and predictability for the design and owner's project manager community• Properly define interface with MSBA and its procedures
Standard contracts available:• Owner’s Project Manager (OPM) Request for Services (RFS)• Owner’s Project Manager (OPM) Contract• Designer Request for Services (RFS)• Designer Contract
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STANDARD DESIGN CONTRACT• FORCES designer to “DESIGN TO BUDGET”• Reinforces the importance of updated cost estimates and project controls
- Standard expectation on deliverables in accordance with MSBA guidelines
OWNER’S PROJECT MANAGER CONTRACT● Clearly defines the key role as expected by the MSBA and the Owner for
communication, project controls and the substantive role required to properly administer the contract
● Defines communication role and responsibilities for both the Owner and the MSBA
● Includes independent cost estimates
BENEFITS: Save Time & Money - MSBA standard contracts facilitate
negotiation and contract execution MSBA Standard Contracts protect the best interest of the
DISTRICT, unlike industry contracts which protect the interest of the vendors
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Regional School IssuesMSBA required to work with Eligible Applicant
– For Regional School Districts, Eligible Applicant is the Regional District School Committee
Why does MSBA work with Eligible Applicants?– Regional School District establishes district-wide:
– Educational Program– Budget– Coordination of services
– Potential Solutions may not involve town-owned buildings– Potential Solutions to facility issues require a coordinated approach– MSBA required to seek most educationally sound and cost effective
solutions, some of which may be a no-build solutions, re-use of existing facilities, grade reorganization, optimization of current educational spaces, all of which require a district-wide approach
– Regional Educational Program should be driving factor for SOI/school improvements
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Proposed Federal Stimulus
• Pressure to spend on “shovel ready” within next 6 months• Governor given wide flexibility on use/allocations of Federal Stimulus Funds• School Projects could be accelerated under “Model/Accelerated Design” methods
or bulk repair program • Letter from Treasurer Cahill to Governor Patrick, Speaker DeLeo, Senate President
Murray urging 2 things:• Use of federal stimulus funds to support local share of projects in pipeline • Use of federal stimulus funds for a Vocational Ed “New Deal” for
improvements to these buildings
Several New Types of Bonds – awaiting US Treasury rules/regulations – Build America Taxable Bonds– Build America Tax Credit Bonds– Qualified School Construction Bonds– Recovery Zone Economic Development Bonds– Recovery Zone Private Activity Bonds– Clean Renewable Energy Bonds– Qualified Energy Conservation Bonds
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MSBA has a finite budget
1 Cent of Sales Tax
Prior Grants
$5.1B
Waiting List
$5.5B
New Program
$500M per year???
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Historical Commonwealth Sales Tax GrowthTrend Analysis
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Fiscal Year
% In
cre
as
e/D
ec
rea
se
fro
m P
rev
iou
s F
isc
al Y
ea
r
Historic growth trend (avg. 6%-7%)
Recent growth trend (avg. less than 2%)
Recent Sales Tax Growth Trend
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Total MSBA Budget Capacity is Reliant on Sales Tax Growth
Sales Tax Growth
Assumption
Estimated Total Amount of Grants Funded in the next 30
years
0% 5,600,000,000
1% 8,100,000,000
2% 10,500,000,000
3% 13,800,000,000
4% 21,200,000,000
The former SBA program committed $20B over the last 20 years to school construction.This slide shows that at 0% sales tax growth only $5.6B will be available for new projects until 2025….
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How will MSBA Succeed in meeting pipeline needs?
• Never promise what we can’t afford to pay for• Work with cities, towns and regional school districts to create educationally sound
and fiscally responsible school facilities • Think creatively for solutions. Past examples of innovations that have generated
savings, created efficiencies and have helped the MSBA and cities, towns and regional school districts reach goals on school facilities.
• ProPay system - gets reimbursement cash to cities and towns within 15 days of audit review• Audit program – has generated approximately $800M in savings• Low Interest Loan Program – will provide approximately $150M in 2% loans to Waiting List
communities to get projects completed and has the added benefit of saving local communities over $90M in avoided interest costs
• Grant Conversion Program – will provide approximately $125M in relief to Waiting List communities to get projects completed
• Model Schools Program - Innovative new program that is educationally sound, cost effective, saves time in design development and gets shovel in the ground sooner which saves both the local district and the MSBA money
– Saved approximately $26M in Norwood. – Use of Model School Program ideals has saved approximately $50M in Wellesley
• Regulations Revisions to focus on Core Academic Spaces – remove focus on “grand” spaces, spectator amenities and other spaces that do not have direct relation to educating students or are not in regular use throughout the school day by a majority of the student population.
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30
25
Abington
20 AuburnAdams-
Cheshire
BostonAshburnham- Westminster
Chelsea (R) Attleboro (R) Andover
Florida (R) Douglas Carver
Gardner Dracut Danvers
15 Holbrook Fairhaven Dedham
Hopedale (R) Granby Easthampton Acton (R)
HudsonHamilton-
Wenham (R)Fitchburg (R) Bedford
Medway (R) Hopkinton Grafton Blue Hills (R)
NarragansettLeominster
(R)
Hampden-Wilbraham
(MS)
Berlin-Boylston
Concord
10 Needham (R) Longmeadow Methuen BillericaEast
Longmeadow
North AdamsMarblehead
GloverNashoba Brookline Lakeville (R)
Oxford (R) Maynard Natick Burlington Leiciester (R)
Randolph (R) Peabody (R) Norfolk Carlisle Medford (R)
Rockport (R) Quincy PlymouthEssex Agri
TechMilford (R)
5 Sandwich (R) Sharon RochesterFoxborough
(R)Avon (R) North Reading
UxbridgeSouth Shore
(R)Shrewsbury Littleton (R) Belmont Duxbury (R) Beverly
Northborough (R)
Whittier Reg. VoTech (R)
Southbridge SturbridgeMarshfield
(R)Braintree (R) Hanover Hingham Sherborn (R)
WinchesterSouthwick-
TollandTewksbury
(MS)Rockland Hadley (R)
Norwood (MS)
Manchester Essex
Tyngsborough (R)
Chelmsford
Winthrop (R) Sutton Woburn Wayland Middleton WellesleyMarblehead
VS (R)West
Bridgewater (R)Shawsheen
(R)
21 20 18 11 4 5 4 14 2Status of Project
Capital Pipeline Status at Previous Board Meetings
99
Local Clearance OPM Selection Designer Selection
Feasbility Study -
Schematic
Nu
mb
er
of
Pro
jec
ts a
t e
ac
h P
oin
t in
th
e P
roc
es
s
Total Projects
CompleteProject Scope & Budget
Design Development
Construction Audit
Capital Pipeline Status
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• Maintenance
• Science Labs
• Technology
• Vocational Technical High Schools
• Regionalization
• Owner’s Project Managers
• Construction Contract Documents
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Goal: to advise the MSBA on:• identifying barriers to regionalization and potential
solutions to those barriers• identifying cost savings and other efficiencies that occur
when districts regionalize• Identifying incentives that would encourage the
formation of regional school districts
Regionalization Task Force
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Accomplishments to date:• The MSBA has provided a forum for all stakeholders and
the discussions have generated many ideas• The Task Force identified barriers to formation• The MSBA adopted generous incentive to Regionalize
– Up to 6 reimbursement points for districts that form new regional school districts
• The MSBA has been providing technical assistance to districts in the Regional Assessment category
Regionalization Task Force
40 Broad Street , Suite 500 Boston , MA 02109
Phone: 617-720-4466Fax: 617-720-5260
Questions?
Brian [email protected]
http://www.massschoolbuildings.org
Timothy P. Cahill Katherine P. CravenChairman, State Treasurer Executive Director