Long Term Rentals - Building Leases Eligible for State Reimbursement
Under Section 703.1 of the Public School Code of 1949, as amended, school districts have the authority to lease for five or more years existing buildings or buildings constructed or renovated for school use. By law, Department approval of the lease agreement is required before the building lease is executed. Section 2574.2 provides reimbursement for buildings leased under Section 703.1.
As defined in Section 2574.2, reimbursement for approved leases of buildings constructed for school use is based on the lesser of (1) the annual rental multiplied by the ratio of the scheduled area to architectural area or (2) the rated pupil capacity multiplied by $160 for elementary schools, $220 for secondary schools, and $270 for area vocational technical schools. Reimbursement for approved leases of existing buildings altered for school use is based on the lesser of (1) the annual rental multiplied by the ratio of the scheduled area to architectural area or (2) the rated pupil capacity multiplied by $112 for elementary schools, $154 for secondary schools, and $189 for area vocational technical schools.
For leases authorized by Section 703.1 to qualify for state reimbursement, the following must be submitted: (1) PlanCon Part A "Project Justification," except page A21; (2) a draft lease agreement; (3) the number of rooms to be leased; (4) a scheduled area floor plan drawing of the building showing door swings and identifying scheduled spaces with the calculated area noted therein and perimeter clearly marked; (5) a Department of Labor and Industry Certificate of Occupancy. During the term of the building lease, updated information must be submitted on an annual basis if the lease provisions permit the lease amount, the number of rooms or square footage to change. Amendments affecting lease costs or room use must also be submitted for our review and approval.
As per Basic Education Circular 24 P.S. 7-733, a school district-wide facility study must be completed prior to and within two years of the date of the PlanCon Part A submission.