KRS 157.420: Restrictions governing expenditure of funds from public school fund -- Use

of historic settlement school facilities -- Use of capital outlay funds after mid -

year adjustment -- Evaluation of school buildings.

Public school funds made available t o the credit of each district during any year shall be

received, held, and expended by the district board, subject to the provisions of law and

administrative regulations of the Kentucky Board of Education. The following

restrictions shall govern the expenditure of funds from the public school fund:

(1) The salary paid any rank of teachers shall be at least equivalent to the amount set

forth in the biennial budget schedule for each rank and experience for a term of one

hundred eighty-five (185) days for full-time service during the regular school year.

(2) Beginning with the 2004 -2006 biennium, the Kentucky Board of Education shall

not approve any working budget or salary schedule for local boards of education for

any school year unless the one hundred eight y-five (185) day salary schedule for

certified staff has been adjusted over the previous year's salary schedule by a

percentage increase at least equal to the cost -of-living adjustment that is provided

state government workers under the biennial budget. Th e base funding level in the

program for support education excellence in Kentucky as defined in KRS 157.320

shall be increased by the statewide dollar value of the annual required cost-of-living

percentage adjustment that shall be estimated on the sum of th e previous year's

statewide teachers' salaries.

(3) A district that compensates its teachers or employees for unused sick leave at the

time of retirement, pursuant to KRS 161.155, may create an escrow account to

maintain the amount of funds necessary to pa y teachers or employees who qualify

for receipt of the benefit. The fund is limited to not more than fifty percent (50%) of

the maximum liability for the current year to be determined according to the

number of staff employed by the district on September 1 5. Interest generated by the

account shall be calculated as part of the total amount. The funds shall not be used

for any purpose other than compensation for unused sick leave at the time of

retirement and shall not be considered as part of the general fun d balance in

determining available local revenue for purposes of KRS 157.620.

(4) (a) The per pupil capital outlay allotment for each district from the public school

fund and from local sources shall be kept in a separate account and may be

used by the dis trict only for capital outlay projects approved by the

commissioner of education in accordance with requirements of law, and based

on a survey made in accordance with administrative regulations of the

Kentucky Board of Education. These funds shall be used for the following

capital outlay purposes:

1. For direct payment of construction costs;

2. For debt service on voted and funding bonds;

3. For payment or lease -rental agreements under which the board

eventually will acquire ownership of a school plant;

4. For the retirement of any deficit resulting from overexpenditure for

capital construction, if such deficit resulted from an emergency decla red

by the Kentucky Board of Education under KRS 160.550; and

5. As a reserve fund for the above -named purposes, to be carried forward

in ensuing budgets.

(b) A district may submit a request to the commissioner of education to use funds

from the per pupil capital outlay allotment to purchase land for a new school

or to modify an existing school if the project is included on the district facility

plan for completion within eight (8) years. The land shall not be included in

the calculation of the school distr ict's unmet need. The commissioner may

grant or deny the district's request at his or her discretion.

(c) A district which has experienced an increase in adjusted average daily

attendance, as defined by administrative regulation, of twenty percent (20%)

or more over a five (5) year period may submit a request to the commissioner

of education to use capital outlay funds for the operation of a new school for

the first two (2) years following its opening. The commissioner may grant or

deny the district's request at his or her discretion.

(d) A local school district may submit a request to the commissioner of education

to use capital outlay funds for maintenance expenditures or for the purchase of

property insurance without forfeiting the district's participatio n in the School

Facilities Construction Commission program. Maintenance requests may

include other priorities that are not considered major renovations, such as

repair, renovation, or system upgrades that are necessary to maintain the

integrity of an existing school facility.

(5) The district may contribute capital outlay funds for energy conservation measures

under guaranteed energy savings contracts pursuant to KRS 45A.345, 45A.352, and

45A.353. Use of these funds, provided in KRS 45A.353, 56.774, and 58. 600, shall

be based on the following:

(a) The energy conservation measures shall include facility alteration;

(b) The energy conservation measures shall be identified in the district's approved

facility plan;

(c) The current facility systems are consuming excess maintenance and operating

costs;

(d) The savings generated by the energy conservation measures are guaranteed;

(e) The capital outlay funds contributed to the energy conservation measures shall

be defined as capital cost avoidance as provided in KRS 45A.345(2) and shall

be subject to the restrictions on usage as specified in KRS 45A.352(9); and

(f) The equipment that is replaced shall have exceeded its useful life as

determined by a life-cycle cost analysis.

(6) If any district has a special levy for capital outlay or debt service that is equal to the

capital outlay allotment or a proportionate fraction thereof, and spends the proceeds

of that levy for the above -named purposes, the commissioner of education under

administrative regulations of the Kent ucky Board of Education, may authorize the

district to use all or a proportionate fraction of its capital outlay allotment for

current expenses. However, a district which uses capital outlay funds for current

expenses shall not be eligible to participate i n the School Facilities Construction

Commission funds, except when the current expenditures are approved by the

commissioner of education under subsection (4)(b) or (c) of this section.

(7) If a survey shows that a school district has no capital outlay nee ds as shown in

subsection (4)(a)1., 2., 3., and 4. of this section, upon approval of the commissioner

of education, these funds may be used for school plant maintenance, repair,

insurance on buildings, replacement of equipment, purchase of school buses, an d

the purchase of modern technological equipment, including telecommunications

hardware, televisions, computers, and other technological hardware to be utilized

for educational purposes only.

(8) In surveying the schools, the Department of Education shall designate each school

facility as a permanent, functional, or transitional center.

(a) "Permanent center" means a center which meets the program standards

approved by the Kentucky Board of Education, is located so that students are

not subjected to an excessive amount of time being transported to the site, and

has established an attendance area which will maintain enrollment at capacity

but will also avoid overcrowding.

(b) "Functional center" means a center which does not meet all the criteria

established for a permanent facility, but is adequate to meet accreditation

program standards to insure no substantial academic or building deficiency.

The facility plan shall include additions and renovations necessary to meet

current accreditation standards for whic h federal, state, and local funds may

be used.

(c) "Transitional center" means a center which the local board of education has

determined shall no longer be designated permanent or functional. The center

shall be destined to be closed and shall not be elig ible for new construction,

additions, or major renovation. However, the board of education shall

maintain any operating transitional center to provide a safe and healthy

environment for students.

(9) Beginning in fiscal year 2011 -2012, the Kentucky Departm ent of Education shall

standardize the process for evaluating the overall quality and condition of all school

buildings across the state. The evaluation process shall:

(a) Result in consistent categorization of buildings for local planning purposes

and for the distribution of state general fund moneys designated for capital

construction;

(b) Be based on measurable, objective criteria;

(c) Include numerical scoring with weights to recognize building components and

characteristics that address:

1. Life safety issues;

2. Compliance with state and federal codes;

3. Compliance with requirements under the Americans with Disabilities

Act;

4. Community spaces;

5. Instructional areas;

6. Mechanical, electrical, plumbing, and other technology systems;

7. Site and exterior building conditions;

8. Age of the buildings;

9. Feasibility of building additions or major renovations;

10. The districts' facility capacities;

11. Current use of temporary facilities; and

12. Projected enrollment growth; and

(d) Use of a third -party evaluator that utilizes an already established software -

based system to perform the first, base-line evaluation.

(10) The Kentucky Board of Education shall promulgate an admin istrative regulation

upon recommendation of the Kentucky Department of Education and the School

Facilities Construction Commission to implement subsection (9) of this section.

(11) If a local school board authorized elementary, middle, or secondary educati on

classes in a facility of a historical settlement school on January 1, 1994, the board

shall continue to use the facilities provided by the settlement school if the facilities

meet health and safety standards for education facilities as required by

administrative regulations. The local school board and the governing body of the

settlement school shall enter into a cooperative agreement that delineates the role,

responsibilities, and financial obligations for each party.

(12) Notwithstanding the provisions of subsections (4) and (6) of this section, a local

district that has requested a mid -year adjustment in the support education

excellence in Kentucky funding under KRS 157.360(16) may request permission

from the commissioner of education to use capital ou tlay funds for the purchase of

school buses or to use the capital outlay funds for increased operational expenses

for the first three (3) years following the increased growth in the district without

forfeiture of the district's participation in the School Facilities Construction

Commission Program. The commissioner may grant or deny the district's request.