most of our time and attention but the first two do matter so let's briefly talk about uh at a high level and then Katrina will talk about it the detail the macroeconomic analysis LA USD I would say is ex is running into significant headwinds at the
macroeconomic analysis if you in no particular order I could just start naming a few tariffs uh it's almost this every day a new one comes out uh conspiring or at least colliding against LAUSD tariffs trade policy or lack of a trade policy inflation especially in
commodities and materials the fires that uh chairperson just referenced and the decrease in housing stock that contributes to the already exasperated labor shortage uh the the shortage of contractors and we'll see uh specifically in a few trades where
that's even exasperated even uh big highlevel projects that are happening in the region such as FIFA World Cup in 2026 and the Olympics in 2028 all of these events are conspiring against or at least colliding against LAUSD to
constrain costs these are factors out of your control but they do merit attention to help uh moderate to and mitigate to the best of our ability second is the peer entity review and think of that as a comparison analysis we have gathered data from other entities school districts uh in the region as well as
some national benchmarks that help understand and inform some of the decisions that we can make around the recommendations there are some limitations around analysis of of peer or comparable entities the best thing we can do is that third level where we we
we understand where our peers are in certain instances but uh chairperson has used the term outlier and and reference that in some instances LD is not an outlier i suggest in other instances LUSD is an outlier just by your own nature the size the scope the scale
there's no other school district in California outside of California like LA USD there's you're you're an outlier in many ways and that comparison analysis to peers is difficult because of that the real value is comparing yourself to your own standards and expectations and benchmarking in that way it's
informative to get our peers and we want to do that and we have at both the local and national level but also very very helpful to compare against ourselves and our own standards and then the third most important where you can control and where a lot of our report is focused is a sample of 10 projects construction
projects different scale different scope different size uh different part of the district and what are the results of those the the sample size that we took 10 projects analyzed a couple of data points at the summary level and then we'll we'll go into a little bit deeper
but comparing the original budget of those 10 projects to the actual costs incurred eight of those 10 exceeded the budget I would say by a significant amount from a moderate amount to a very significant amount um from $260,000 overrun compared to budget to a $45
million overrun compared to budget two we're under uh between $100,000 and three million range and then one of the drivers which will focus on why uh for those overruns change orders and modifications and there's a lot of recommendations to be made and
improvement the opportunities for improvement there change orders ranged on those 10 projects from three to 299 on a single project with an average of 88 and every one of those change orders represents a change in budget scope size uh and internal uh whether or project
management internal or contracted and so there's an indirect cost associated with that as well so those are the three levels we're going to focus on in greater detail on before I wrap up and hand it over we'll have over 25 probably close to 30 recommendations by the time
the report is finalized four that we want to bring and call to your attention one most important is what we call a strategic plan for program management program management is different than project management project management falls in the second recommendation it's the day-to-day of operating projects efficiently and effectively really
strong oversight program management is the holistic approach to all of the processes and practices that roll into construction management any issue related to uh program management and construction facilities procurement can fall into one of three categories or a
combination of those processes people and technology the program management strategic plan will set metrics and KPIs key performance indicators to measure and monitor against again related to your own standards and expectations the second is internal controls mostly
around thresholds if you look at that number of change orders I think it's eye openening in many ways what are the thresholds for that what is the approval process for that how can we enhance and streamline that not just slow it down but actually speed it up with uh uh better oversight and proper oversight
and accountability subcontractor participation we'll see in here in a moment some of those trades are very limited and uh we were just talking before we started there was a major project over $und00 million with only two bids on it how do we increase the participation pool within economic theory we'll drive down the cost and and
improve performance there's opportunities there to do that and finally we've seen a lot of those change orders and modifications driven by mitigation or or abatement on the front end where in understanding that no construction project is ever goes exactly according to plan and there's
lots of opportunities for surprises both good and bad along the way but how can we on the front end do better about uh abatement and so that on the back end we can save some cost it's an investment that would have a return on that investment so there's the four key areas of recommendation that we'll focus on of
the 30 with that I'll turn it over to my colleague to take us into a deeper dive in each of those three areas of of um of emphasis and the recommendations good afternoon thank you for making space in your agenda on the last board
meeting of the school year happy to be here my name is Katrina Schmidzer VP of financial solutions and I'm going to take you into the deeper dive of the study so looking first at macroeconomic and contra contractor participation
analysis and diving into macroeconomic factors so um if it's been a while since your econ class let me bring you into kind of what that means so when we're thinking about these macroeconomic factors we're looking at the conditions specifically around California and the
Los Angeles metropolitan area that impact the cost drivers of school construction in the area so what we looked at were three different things three different focus areas so the first one was our materials market conditions so as Eric mentioned tariffs right now
are driving up the prices and what we did in this part of the analysis was look at an index of eight commodity prices and what we could see on average is that over the last few years the cost of materials has increased from 26 to
52% across the materials that you need to build these facilities right then we're looking at labor market conditions what we evaluated was the employment trends and so really focusing on construction specifically within the
metro area and same thing here there are employment gaps which don't feel like a lot from a percentage basis around 16% on general construction and then 18% on specialty trades but what that amounts to and what that really means is that
there's a range of you know 48,000 fewer general contractors available in the area and something around 8 28,000 fewer specialty tradesmen who can help actually build um
so on top of those two metrics we look at the rest of the economic considerations as we mentioned you've got the Olympics you've got the World Cup coming to the area so that's going to drive increased needs for infrastructure on an already limited
pool and higher priced pool in terms of both the materials that are needed and actual delivery of that construction we see in terms of a shortage of affordable housing there's a need for private housing demand the 2025 wildfire is
obviously still impacting in terms of what that means and that's driving up demand driving up prices in a finite pool um and last but not least you know California of course is the fourth highest nationally in terms of cost of living index and if you look at the
California construction cost index in particular there was an increase of 40% from January 2020 to October 2024 so really from a big picture you know there's not a lot of control here on these macroeconomic factors and so you
know thinking about big things that you can do these are more bold larger ideas for labor shortage mitigation you want to try you know be creative reimagine how you work with the labor shortage so partnering with trade schools is an option exploring automation and
innovation what does that mean and so if you're looking at working with specific trades is there something creative that you can do in terms of automating how they access or how you outreach um leverage technology to get creative in that space from a commodity cost
preparedness um things that you can look at is you know keeping an eye on the price of those commodities and potentially using adjusted escalation factors with a caveat here of course that if you do adjust those escalation factors from a budgeting perspective
you'll be closer on point at the end but that will limit the amount of projects that you actually can complete because they will be valued at a higher rate so switching into our contractor participation analysis what we did here was look at data from the California
contractor state licensing board and for each of these we looked at two different things we looked at the categories and the business type so from a categories perspective that's where you see your contractor classifications in that table and we looked at Orange Riverside San
Bernardino and Ventura as kind of peer counties to evaluate and for each of those contractor classifications we got you know the incidence of contractors per thousand residents we then looked at LA and compared the variance of LA's
contractor availability against the mean of those four counties to give you a percentage difference um and in this table anything that you see with a star is going to be where those building components are significantly higher in cost in terms of the project that you're
trying to complete so what does this mean key challenges here obviously you know from a regional perspective at a rate of you know for per thousand residents on average in in LA there are fewer incidents by 11% regionally of all
contractors and for LA specifically when it comes to masonry solar roofing and HVAC that's where you have the biggest gaps as we all know especially in LA USD uh roofing and HVAC are projects that are you are going to be completed soon
so again you know not a ton of control in this area however two options here are to increase that subcontract participation and now that you have that data in terms of where there's a more significant gap differentiating your
outreach specifically on the project schedule for LUSD and then diversifying your contractor pool you want to encourage as much as you can in terms of small firms joint ventures sle propri proprietors anything you can do that to
kind of amplify the contractor mix um to get higher participation and therefore reduce your costs so looking at our peer entity review wanted to start out with the selection methodology so when we're looking at peers we generally want to
look at similar entities um and we did focus on urban educational environments we looked at areas where there would be local market conditions that are similar to California um so looked at two school districts in California looked at two
colleges um we also like to evaluate other communities from a best practice and other geography kind of innovation that might not be relevant per se and so five peers were originally selected uh for the comparative analysis so with
those five peers you know wanted to highlight from a bond perspective you know as Eric mentioned there's nobody like LUSD so when you look on the right in terms of school bonds and volume you're above and beyond in terms of the amount of volume that is being managed
at the district um but it was insightful and helpful to look at these peers from a very high level perspective of how they were uh evaluating those ponds and actually using those to build out facilities so a couple of limitations in
terms of that benchmarking is that you know it is really really challenging to get apples to apples when you're looking at these data sets um couple of different things that make this a little bit more complicated one is that entities are going to operate differently from an organizational
structure perspective that impacts your internal or external capabilities you're also going to have a different mix of expertise in terms of who's managing these projects um program management as Eric said is much larger than just project management they're going to be
different procedures different techniques different accountability structure structures as well as the number of school projects that are being managed um based on the needs of the community in terms of school construction projects you know for this analysis we're looking at completed
school projects because we wanted to see what was originally budgeted and then what was the final actual cost in order to do that you know both from a scope perspective or even from a school's perspective no two were the same um there are going to be nuances in the age
conditions needs community for all of them so when we looked at our comparative analysis we focused on areas where we could credibly and reliably normalize the data and so we looked at project timelines cost delivery methods legal legal terms conditions change
orders um and you know the data from the peers had a lot of caveats along with it and so we did expand that original peer selection to get a little bit more robust comparability where it made sense
so with that you know diving into some of the highlevel you know observations from the peer comparative analysis session starting out with the project cost by square foot on the left you see LUSD projects on the right you see your peer projects and then if you call
attention to kind of the light blue lightest blue shading um you see HVAC so if you're doing the comparative analysis you can see that the you know cost in LFD was 141 per square foot foot foot as compared to peer projects at 241 per
square foot that being said when you look at each of those singular projects there is a lot of variability across all of them right then looking at modernization costs you're also seeing you know it looks to uh Lost projects
are significantly lower than the peer average of 826 but you know that those differences can sometimes be attributed to other factors such as differences in scope differences in project management that are going to influence that comparability across the board so really
when you're looking at this you want to start evaluating and developing an internal benchmark so you can measure against yourselves based on these and kind of have that KPI key performance indicator measurement in terms of here was our starting point and here's how
we're going to progress and improve on those starting points so next is our LUSD hardcost percentage analysis so again um love definitions so what is a hard cost what is a soft cost hard cost
is really tied to kind of the brick and mortar of construction whereas your soft costs have to do with kind of fees that are associated with it administrative fees um kind of the DSA that needs to fees that go into it anything that is
indirectly touching the construction but not directly tied to labor or materials and so on average you see that the projects that we sampled were at about 86% of an average and typically in
construction school construction you're looking at 70 to 80 as a best practice range um and when you look at HVAC as an or I'm sorry roofing as an example you see the average of those two projects is about 96% hard cost to total which makes sense when you bring it back to that
definition of a lot of labor and material and not a lot of project management interestingly you also have 77.5 for HVAC projects right and so that is one where you would likely expect a higher hard cost to total average um so
this is really prompting more inquiry mo more questions into the differences in project management of Hback against roofing projects so when we look at the peers and similar projects you can see
again you know on average for the peers there was about 70% and so what that tells us it is that for those peer projects there was about a 30% focus on that indirect management of the projects as opposed to labor and materials so lower
than LUSD which was more of a focus on the actual hard costs um but then looking at you know the HVAC as an example you can see that LUSD's hard costs were 77ish% um against APR average of 74% so again
lower indirect costs and this just prompts more questions as to the why on the LAUSD projects and then change order analysis is another area um that came through so
looking at you know peer entity you know we looked at this metric as it compared to the original contract value because if you look at the amounts obviously there's no comparison there were over you know 20 almost $23 million in change
orders for this subset of projects um compared to west contraostto which is about only three million but from a percentage basis you know 7 to 8% not that large of a difference um and then from a best practice standpoint here it's should be about 8 to 14% on change
orders um so when you look at the LUSD data there is going to be you know there's higher variability there's higher in the range above range uh whereas you know west contraosta was mostly below that you know range best practice range um so again here it's
looking at establishing those internal benchmarks so here we have just opportunities um so bringing it to a very high level you know in terms of cost controls delivery method change orders program management and vendor access you're going to see a lot of
recurring themes um throughout some of these recommendations but exploring potentially the ability to have bonuses where there's adherence to project schedule um with delivery methods just
refining the structured criteria and choosing optimal delivery methods i know that that wasn't the 23 24 you know one of the priorities is looking at that with change orders as Eric mentioned adding certain review triggers based on thresholds um program management you
know making sure there's consistent performance oversight internal external and then last but not least vendor access and then in terms of opportunities to build on success um you know some of the strengths at LUSD that you want to continue to refine and
improve um to become even more effective is structured prior prioritization process in terms of projects um looking at you know that improved collaboration um some community engagement and I'll touch on these a little bit deeper um in
the LA USD portion just in the sake of time i want to make sure I get through all our content so looking at LUSD construction outcomes review um first want to just pause and give a commendation and appreciation for
the facility service division for all of the partnership um so you know in we couldn't have gone through this review without their support um in providing all of the documentation so we looked at
hundreds of hundreds of documents across projects for LUSD um we also appreciate everyone who participated in the staff interview so we interviewed about 20 folks tried to get a mix across different departments that are listed
for you from a best practices perspective we always use a rubric so that there's consistency in terms of the information that we're gathering at that and then when we're calibrating the information to make sure that we're consistent in how we gather and report
out on it so with staff interviews um qualitative feedback you know there's going to be nuance in terms of varying level of staff varying parts of the organization that they're in a couple of these observations are new and already being worked on right so communication
GRA gaps across departments very common want to continue to kind of dig into that refine and improve on that design standards obviously a huge project for FSD um it's in the works um some limited checkpoints to re-evaluate long-term
projects and I'll dive into this a little bit more deeply in terms of you know obviously with the change orders there are a lot of things that are coming up so there's opportunity for improvement here and then community engagement came up um one of the questions that we asked was "What's going really well what's one standout
project?" And not surprisingly a high school project where there was a very hightouch community engagement aspect came back as a resounding example of things that we'd love to do being mindful of the fact that that is of course cost prohibitive um to do on
every single project that you all are running so you know question here in terms of how projects were selected so we did look at more than the 10 projects that were completed as the in-depth analysis but these were
selected because of differences in the type of project the type of school we looked at regional as well and we were focusing on where there was significant delays and there was a high variance between actual costs and pre-bid
original budget and so this is really to help us glean where is there opportunity for improvement what are the most actionable things that you can control to kind of move forward um so you know with change orders in particular you
know high variability across projects high volume um sometimes you know very high cost and so you know looking at the three top reasons that we saw it was course of construction owner initiated scope and design scope addition and then
abatement was also very very high on the change orders list which is what produced a lot of our recommendations um so some challenges and gaps and again this is really limited to those 10 specific projects so not saying here
that this is across all 99 projects that were included in the IRFP that we received but you know risks of delays to abatement testing timing so making sure that we're doing that earlier in the process so you can mitigate those costs manage them upfront as opposed to
getting those voluminous change orders that are going to add project management and internal staff time um in terms of managing those a limited site investigation came up um so late direct discovery of structural issues um some
preconstruction ideas in terms of compressed schedules there were some aging project plans um missed opportunities for value engineering some documentation gaps and then some lack of institutional learning um so you know
with all of those gleanings and key insights we developed this road map specific to LU's USD construction in terms of recommendations on things that you can consider to do differently um so be more proactive with abatement testing
making sure that you're extending that pre-construction phase um so you're not finding as many unforeseen issues um reassessing scope you know sometimes there is a long time between bid and
award or contract so making sure that you're re-evaluating as you go um prioritizing site investigations strengthening your document review process um where feasible and cost-effective implementing additional
value engineering and then last but not least you know documenting and reviewing lessons learned so there's a lot going on take that information and turn it into action so you know bringing it back to where we started um our four key
recommendations based on the study itself is first that strategic plan for program management so looking at from a people process technology standpoint where can you quickly implement some wins to kind of mitigate those costs
especially internally the second is strengthening internal control so you know change order thresholds whether it's an amount a number making sure that there's more internal and external accountability around that area encouraging subcontractor participation
so you know making sure that you have an understanding of perceived or real barriers to entry as to school construction projects at LUSD and then last but not least proactive approach to mitigate abatement so making sure that that's incorporated into the design
phase and hopefully minimizing some of those administrative costs to the district in terms of managing change orders so where do we go from here um you know again thank you all for the time today uh for this presentation so
with the recommendations we'll finalize that report we'll go through a prioritization exercise in terms of evaluating which ones are short-term medium-term long-term and then tying them to um different kinds of categories
so is it a cost time savings is it an organizational structure you know is it related to kind of uh previous reviews that have been done and then that final matrix will inform the road map for where to go next from here
so with that uh wanted to thank you all for the time and open up for questions thank you um very helpful and thorough and um I will I have a few but I will turn to my colleagues first so well I'm happy to but we can see um or
we also have a few folks on Zoom um but Miss Handy Newell questions comments concerns rebuttals all the above no thank you um for the thorough analysis um wanted to ask one of the highlights I guess was one of the
schools in the example um that came out were there particular um indicators why that was highlighted are there particular areas in order to
imitate that along the way as you said we we're learning from this and that was one so were there particular things that stood out for that particular project yes so um it's Roosevelt High School so you know with that super high touch from
a community engagement standpoint and so what we see nationally is you can't have the same level of community engagement on every single project but a lot of input from the community so of course high level of satisfaction um and so you
know when you're thinking about different projects like how do you bring that kind of feeling the community happiness and value understanding of the value you HVAC replacement's hard like okay you updated the air conditioning great we're cooler in the schools A+
right um and so thinking about how do you scale that community engagement in a way that is cost-effective across the board great and then with that particular project as an example I know that there were some projects that had multiple changes
what would limit the amount of changes is it the community engagement or does that create more changes that is a great question so thinking about community engagement typically increases your cost so when you are doing surveys or you're
doing focus groups that's going to be more time and effort from district district staff um particularly the community engagement department in terms of understanding what the needs are and calibrating that feedback reporting out on that feedback um and so then thinking
about the change orders those community engagement wouldn't necessarily impact those change orders from that perspective where you have the highest level of impact is your internal practices so I will say the facility
service and division you know procedures are lengthy detailed comprehensive absolutely hands down that being said there's always opportunity for improvement and refinement in terms of how you're evaluating that data how
folks are being trained um so you know giving empowering the staff to be able to say "All right this is the 10th change order that I've received for this project who do I need to speak with to dig in a little bit deeper?" Or if you
get one that's very high cost and it's the first one instead of following that process in routine adding you know a little bit of that critical thinking to the stage of how do we look at this a little bit differently than we have
before to hopefully reduce the change orders got it now with that one was it one project that had that multiple I was like no it was more than 80 yeah the highest the highest we saw was I think
299 yeah like 299 change orders how do you get I mean in a in a project like that I it's like a whole new project it's like is that the same project anymore it is and when you think about it too um and the report will be really
helpful so within the report we'll have a project summary for each of the projects that we evaluated in depth and so that'll show you the why in terms of all right where did we start so was it an old building and you know you did the
bid you kind of got the funds approved it was a year before you actually started and broke into construction once you start construction okay we tore think about your house right your house you knock down you just need to replace the toilet you replace the toilet you
see oh no the flooring has to get changed and I have to do something else well I just tore off the floor and actually the wall needs a little bit repair so it starts kind of accumulating so for some of those projects there was certainly a bit of that in terms of
increased scope once certain things were being addressed then the last question California construction cost index can you elaborate more on that exactly what that is sure so from an economic standpoint there are different data sets that are
evaluated and so California construction cost is next is just another one um so you think about like inflation is a general one that you look at but that one's specific to California it's based on construction within the state um and so that just gives you a measure of how
construction costs have changed over the last couple years so thanks thank you Miss Greenspan hi hi i just I've been a construction project manager in LA for the last 20
years so I have a lot of experience um I just wondered do the people who worked on this report are is anyone from LA did the Sorry what the people who worked on this is anyone from LA um yes so we did have some California specific staff work
on the project just like looking at data and everything doesn't always tell the whole picture like you know just um there's a lot of people in these different counties but I know from contractors that live in San Bernardino and work in LA so that
type of thing to consider you know absolutely absolutely and that you know that's definitely part of the macroeconomic considerations in terms of um when we looked at lack of affordable housing and you think about contractor
availability and you think about high cost of living and so there's going to be a potential barrier to entry for folks wanting to come into LA to work um because they're not you know local I'm saying they are coming in like I know a
lot of guys that drive at 4 in the morning and they you know so it's just um yeah I was just like some of the I love all of your um information But then like the percentage that you that the summary percentage sometimes I feel like
is a little skewed or I um in the report I would hope like so the amount of construction costs like it went up from 26% to 50% what have you like are you do you will you include the construction cost for all different aspects of construction
like copper is just it's 50% but it's like a copper doesn't make up a lot of a construction project right so I'm just the report will have it'll it'll have a lot more detail absolutely um given the time constraint
um we only focused on kind of the high high level observations but yes um one of my other questions was like in did you look at um the actual RFPs that are put out um I'll have to I'll let me get back to
you on that one um in terms of like if you put in in a an RFP if there is more um control on the change order process right like if if a contractor has to come and get approval before a contract a change order if that's an RFP they
can't just charge you for anything i just like that might be less um stress on the LUSD people to be like to go and be brave and to bring you know versus the controls in place so
thank you for that we'll take a look great thank you um Miss Or Franklin or Mr newton online or I don't know is if Miss Ferman has joined as well uh yes can you hear
me we can hi hello Mr melwing that was a pretty in-depth analysis so much information to digest obviously and I'm hoping that the data assists our facilities and procurement people but one thing that was kind of glaring to me and that was the uh subcontractor
outreach um I attended a subcontractor vendor day not too long ago i think it was in Vernon and it was standing room only and I'm just wondering what criteria limited the participation of those subcontractors um and if we're having any more of those
vendor days because like I said they seem to have attracted an awful lot of companies stephen to clarify that was the Vernon one that was an LA Unified yes one um I think Mr mr freiedman was going to answer and then I know part one of the
suggestions from the MGT report is to do a subcontractor participation management study and so I hope they'll they'll do that but I don't know Matt if you have certainly um so we're hosting a number of of outreach kind of engagement events um essentially monthly at the end of the
every Thursday at the end of the month we're hosting a drop-in session uh May 9th we're hosting a a procurement kind of connection summit so there's um a lot of effort being put towards engaging ment outreach to to support that specifically
and it still isn't giving us a decent net result huh in terms of subcontractor participation I'm sorry Steve could you say that once more no I said and it seems that we're putting an awful lot of effort in the outreach and we're just not getting the participation that we would think we'd
be getting um any thoughts about that because it seems like we're having you know a lot of inner days and it's just as you just said you know there's plans for more uh what do you think we can do to go ahead and make that uh a better
option um listen I think one of the things is we need to track and monitor u the the overall I think um efforts being done uh one of the metrics that within procurement our facility side is we're actually looking at the amount of
bids per uh solicitation um so that's something that's being looked at and we're happy to share some of that information as we go and Steve I'll say you know at the outset I had mentioned I think one of the the suggestions from this report is that subcontractor participation management study and I'm really curious to Steve's point as well
because uh and to what Miss Green said around the actual RFP is that like the p knowing that we have a constrained subcontractor pool I still would be curious um what percentage of the contractors are bidding on LA Unified um
versus uh not as compared to other districts but also the Olympics the World Cup city projects fire rebuild because what I've heard anecdotally is that there are and And one of the things this committee has looked at is our specifications and regulatory framework
but that folks folks aren't bidding like in the case of Fairfax that was alluded to earlier with two bids because of either the ownorous labor compliance requirements which even I've had some folks within labor say that's too ownorous or um maybe it's the change order concerns or something and so I
don't know if we have exit surveys like at the Vernon one Steve was talking about but the number of people who show up and then out the door are we just asking them like "Hey are you going to bid on LA USD projects and if not why not?" And I think as part of that subcontractor participation study I'd be
really curious because that seems a huge one to have a huge project like Fairfax 120 plus million dollars and only have two biders is just not a competitive to your point about or I think it was um Eric's point about just market forces like that been you know we we don't know then you really need at least three to
understand kind of where the market's at and I think yeah from the commercial side thank you from the commercial side of things it's expensive to bid and it's hard to bid and like just from the commercial side of things we try to bring in biders earlier in the design
process and maybe a percentage bid and not a hard bid and then they're your partner and then you're saving money through the whole process and value engineering I mean it's a commercial Right it's different but that barrier to entry
is makes a big difference i think um sorry I didn't catch the name of visual person but the Steve Newton yeah Newton's comment about there's a lot that's happening um from a outreach
perspective but it's that question of why aren't you getting the participation so is it you know a differentiation in terms of the outreach is it expanding how you're getting folks
to these community days um you know so small things you know in terms of I know there was a a system change last summer on the procurement system did everybody who previously bid on construction projects get that update and do they
know at this point that there's a new system are they getting notice of new bids because if they're on the old system still maybe they stopped realizing that there was a bid coming up that they would be interested in pursuing um so again it's that
subcontract participation management study to evaluate what are the barriers to entry again are they perceived or are they real what's in control as we all know you all know school construction specifically in California is very tight
on certain regulations so where can you ease up a little bit where you're still within the acceptable range of the regulations but enough flexibility to open the door a little bit more for some more competition on your contractors
yeah and so I just want to cosign again what Miss Greenspan said about looking at those RFPs and this is true we've talked about it procurement on it and others not just in facilities but like because we're doing a lot of the analysis once we have biders or change orders like how does it um or trueing up
and all that but there's that whole like the the known unknowns which is who's getting into the funnel and and are we limiting it either with language you know and again to to take it away from facilities on the programmatic side sometimes we'll say um you know uh we're looking for family engagement and you
have to have been a teacher for five years and it's like that might make sense but it might ah you know there are folks who do family engagement who don't have instructional experience so is that limiting and why and so part and maybe that's something we'll discuss um on the procurement side for the committee going forward just one comment to add I think
it's encapsulating all the conversation in real time that looking at the RFPs will be very instructive is there conditions u terms conditions in those RFPs that takes the the the the large room of potential vendors down to do in
in the actual RFP itself like we want to do this but there's some limiting factor that we we're we're not just aware of or cognizant of that we can do I think we can add that very quickly um I have a few more questions for me but I don't know if Miss Ortiz Franklin has questions or Miss Fefferman i don't know
like if anyone's No um so I guess one uh I'm curious um along with what um Dana was saying um around uh with change orders like if we I mean I know that there are reasons contractors would buck at it but like can districts look at
fixed price contracts or you know the design build stuff or like put put some of the risk of the change i mean I know one of your recommendations is better early investigative procedures to limit abatement but like there are ways to shift risk to the contractor in terms of like here's the lump sum or here's the
fixed cost and it might on the front end lead to higher costs but given the 299 change orders so I'd be curious as facilities is is looking into this if that's something or with the design bringing the contractors in early to kind of better price that out so that that's just one suggestion and then a
question I had is if you um if you take like our price per you know square foot so if you look at you know the one for general um on like slide 17 I think it was just modernization 498 is the average price per square foot is there a
way in the future analysis to break that down by various regulatory layers like federal state because one of the things that we're dealing with here and I'm seeing I'm hearing a lot um with the rebuild of the Palisades and a lot of parents and community members saying like why is it taking so long or why and
the district's response is TSA review SQA NEPA and the federal level and I'd be curious to try to quantify that some of that's a time analysis but if there's a way to look at that 498 and say it's kind of like the hard cost analysis but like you're you know 22 of that is regulatory compliance with the state
level like is there any way to do that analysis and then try to identify solutions let us come back um so it depends on the availability of data so I think DSA fees are a little bit easier to pull out and kind of do that metric
um but let us come back with with kind of more detail on that and what that would look like uh great i think that was it for me i mean I I I guess a final question is just kind of what is the the scope of work for MGT in terms of um
that next level analysis or then do you continue to work with the district uh to make sure some of these things are implemented like that to use that example the subcontractor management participation study or is it just because I think we want to make sure that these great recommendations aren't just given over to the team who is very
busy and doing a lot of different things like how what what's what are the next steps or great question um so I always use the analogy of I hate taking that report and having it sit on somebody's shelf just like that um so part of our
post- project implementation is you know we will do that recommendation prioritization with district and we'll do a kind of touch point of all right here's the plan that you set out how are you doing on that plan um in terms of further and deeper engagement obviously
it's going to be district in terms of what goes inhouse if there are other external partners that you'd want to help um with specific areas great great well thank you um Katrina and Eric thank you so much and Patricia and I also just want to acknowledge and thank Miss Toes
and Miss O'Brien and the whole facilities team because they are doing so much um all the continued maintenance that we talked about this morning at our committee meeting the Palisad stuff which is obviously close to my heart um and then also kind of these internal reviews and continual improvement so it's it's not unnoticed how hard they're
working and how um yes thank you Patricia round of applause and also how receptive they've been uh to our our our pushing um so uh thank you um and with that uh we're going to turn to uh housing um uh and Mr mark Borrison the
district's director of real estate and business development who this committee has heard from in prior months and then Tom Mr tom Leech who's a senior associate at Braillesford and Dunle Dunl which has helped with phase one of our current housing planning um so we're going to uh I'll turn it over to Mr boris for the housing update
presentation thank you Chairperson Malvone board members and other committee members how are you today uh when we were here in our last meeting in March we told you we'd come back after doing a quick analysis of two particular sites and uh we want to give you an update on the ongoing work on the
housing initiative as part of our due diligence and preparation we've reviewed the two potential locations with with focus on the financial return and to get a better understanding of how they fit in with our objectives to walk you through the details of analysis i've got
Tom Leech here from Brailles and Dunle Levy and he'll take the presentation from here thanks Mark yeah all right so just to um recap uh Brillesford and Dunley was uh engaged by
the district uh back in 2024 uh to complete a workforce and family housing needs assessment um the you know goal of that was to understand understand the the depth and breadth of demand uh when exploring the possibility for repurposing underutilized real estate
assets that are owned by the district to provide potential for affordable housing for employees and families uh experiencing housing insecurity and looking to redevelop those as workforce housing sites um the I guess the the the summary and findings from that phase one
work that that BND completed with the district at the end of 2024 was that there was a a high need uh and significant interest in affordable housing amongst LA USD families so based on that we move forward with phase two starting the beginning of of this year
in 2025 um and we were given two sites by the district to uh do uh studies on the the viability for workforce housing um and and um essentially the goals for this this
phase were to understand the scale and range of feasible concepts for what could be developed on the on the the two sites to outline a highle program in terms of unit mix unit type um type of construction um for and also amenity
spaces and then also understand the financial viability of the development of both sites and then work with the district to establish criteria area uh for future uh development if there is viability uh and um how to move on to the next
steps so just the executive summary um in what we found after completing this study was um you know both pro proposed there are significant challenges uh to developing employee focused housing on on both of these sites
um you one of the factors being um you know there are while there is development potential um they are limited by um some headwinds including development costs um some affordable housing um revenue or or rent
requirements um you know both of the the sites um are most financially feasible as market rate projects however that wouldn't um that could be challenging concerning affordability and the district's desired outcomes of creating
affordable housing for their employees um you know both projects seem to be um viable using lowincome housing tax credits however uh that market is a bit uncertain um and could potentially
complicate and slow down the development process as well as cap the financial returns um and and finally that the the average financial returns for for both sites and potential projects would not meet the minimum requirements for uh third-party
public private investors or joint venture partners um that are more on the for-profit basis that would would um potentially be interested in in the type of project like this all right so to jump just to jump over to the two sites that we looked at
um site one was in Woodland Hills this is the former um Collins Elementary School um and then the other site was in West Hollywood um and that we we we titled the Fairfax um site and and that
was the the site of the former West Hollywood Community Day School um the the items that we reviewed when looking into the feasibility of these sites were uh the current zoning of the site both sites were actually zoned as public facilities so that they would uh require
um an entitlement process to uh reszone essentially reszone the sites uh to build residential housing um we also looked at the zoning of nearby sites um because we'll get into some of the legislative pathways as we move on here but but that's important to to take into
context um we also looked at the lot size and access um so just some some more details on the Collins site um Tom can I just sorry to interrupt two quick things one if you just uh are a little closer to the mic for the folks online sure and then two and I know this came up in this committee before but my
understanding is that the district pushed for legislation that was passed that we could zone by right for employee housing that's that's correct yeah so even though these these two properties and all of ours are zoned for public use we wouldn't have to go through any laborious reszoning process if we did
employ there yeah there is uh there are some requirements um and and uh stipulations that you need to follow in order to effectuate that however that there is a pathway there to to essentially reszone these sites without
going through um a completely um discretionary process and are those steps that the district takes on our own accord or is there any external approval like if you're reszoning you you know usually go through the city you would still need to go through the city and
and you'd have to um there'd be a I'd say a more streamlined process is is what we found um you know it may not have to go through uh city planning commission and city council it may be more at the zoning administrator level or something like that um so it is a it
is a more streamlined process um the other the environmental side of the process is a little bit different as well um that AB2295 does not um streamline SQA um in in environmental approvals but there are some um other
legislative pathways that can uh help with that that we'll what we'll address here thank you sorry to interrupt yeah no problem um so yeah I think just heading back to the Collins site it's a six and a half acre site um it's got you know
essentially access around the entire site we we felt that was pretty positive you know there's a suburban character to to the surrounding neighborhood with um nearby parks and recreation um which you know presents some opportunities as well as challenges in terms of uh community
engagement when trying to build maybe a larger scale uh apartment community within the confines of that neighborhood um you know this site was um you know close to the Warner Center and close to other uh places of employment for LED employees um the now shifting to the
West Hollywood site at Fairfax um you know this is in a in a you know kind of in the center of the city um very close to the West Hollywood amenities shopping public transit um you know very high walk score for this property um and also
you know the site was was relatively clear both sites actually were relatively clear of improvements um in terms of what it would take to demolish and and and build and and had generally you know without doing the the formal due diligence looked to have infrastructure you know close by or in
place that would um would help uh create create more viability the the weakness for the Fairfax site was just a challenge related to um parking options and some limited height and really just being surrounded by more commercial uses
in that location um but we'll we'll talk about how we can avoid some of those uh hurdles so now jumping to um uh Mr roin what you what you brought up was what are the legislative pathways how do we
effectively reszone these sites that are public facilities to uh something that can can be built uh as residential and the uh legislation that specifically came up was was AB2295 uh which allows for um for housing on
district property surplus land essentially um to be redeveloped as um housing as long and and be able to rent that preferentially to district employees as long as certain um affordable housing requirements are met
um those requirements being uh majority of the units are at a low or moderate income so 50% of them or more of the units must be at low or moderate and at least 30% of the total units are at a low income um the other balance of the
units so the the other 50% can be at any um income rate including market market rate so no rent restrictions essentially um and and again that would you know if you do meet the requirements of this AB2295 you have a streamlined uh
entitlement pathway and and the residency can be it can be preferentially rented 100% to district employees uh if you don't have the demand you can also rent it to other public employees um and the other item that comes into play is just the
development standards um being that um you you have to look at what your zoning is in in that neighborhood and and try to find the closest um example um of of of multifamily zoning and and
tried to um meet that context for these types of sites so that's what we kept in mind as we um did test fits and uh looked at what the um you know potenti potential massing of these uh projects could be um some other pathways um that
would be um would could be used in unison with AB220 2295 uh would be AB 3308 that would allow for low-income housing tax credits to be used in a project that is restricted to
um district housing uh that would apply to potentially both projects uh in both sites and then AB2097 um would would actually reduce minimum parking requirements and that um applies for sites that are within a certain
distance of public transit so in this case the West Hollywood site we believe you could you could apply for that uh entitlement and then SB35 is a sequest streamlining um uh bill which has been
referred to as the the builder's remedy um and within Los Angeles um that can apply to certain projects that meet those specific uh requirements as well to help streamline SQA so that we think could be used for the Collins site if if
deemed appropriate all right so um with that said we looked at some you know we tried to understand what these potential um barriers to viability could be and really the largest challenges we found were were financial return requirements um just the level of construction costs
like we heard about in in the last uh presentation u was also certainly a topical item um and then also the affordability requirements um just in terms of when we're looking at meeting that
AB2295 minimums or or going above that it it starts to challenge the financial viability of of these projects we also kept in mind you know um other community concerns and and trying to um make sure that our density and our height were
within uh those boundaries so uh looking into that we we we ran sort we ran three scenarios um one of them being with 100% of the units at affordable rents at low income um one of the strengths of that of this uh was
that it would be 100% uh eligible for affordable housing tax credits um which would mean um essentially no equity would have to be put into the project um and one of the another benefit here was that it would it would serve um you know
a large essentially 100% of the project could be preferentially rented um at to low-income uh residents from the district um but it was also exclude certain higher income um employees uh we
also looked at 100% of the units at market rents and the real reason we wanted to do that was just to benchmark sort of what was the highest revenue generating scenario just to see what was sort of financially possible if we were to look at 100% market rates by looking
at um you know what what market comparables were in in in the neighborhoods um for other multif family projects um again that would that would in in that case we would not meet any of the AB2295
uh requirements and um you know those those that project would not be able to be preferentially rented to district employees um so we understood that and then we the the third uh scenario we looked at was really just meeting the
minimum AB2295 rents uh with 50% of the units or just above 50% of the units at a low or moderate income and then the remaining units uh being market rate and in this case all units could be preferentially rented to district
employees um at a at a differentiated level of incomes um which we felt would would also be an interesting spot to to to take a look at um so now this is just looking specifically at the Collins site with
those three scenarios in mind and the the project that we uh masked up uh based on our analysis came to 265 units for all scenarios um we did look at smaller uh as well as larger um
scenarios for this but we felt that this was the best um overall uh mix and uh had the best overall you know financial returns from a viability perspective um essentially we also in this case had to
size this for parking so this is this would be essentially a three or four story um stick frame apartment building with uh surface surface parking only um and we ran the range of development costs here so it came in between 120 to
upwards of $150 million um based on you know benchmarking to some comparable projects um and and really you know what it comes down to is um we looked at the developer return which is a yield on cost which is essentially the free cash flow of the project divided by the
project cost the total project cost and um as you can see the afford 100% affordable project has the lowest um return there u of a6 to 1.2% 2% whereas the market rate project um you know as
as we we we'd imagine has the highest potential returns in the AB2295 project coming in in the middle there um because it does have some market rate rents as well as affordable rents okay now looking at the Fairfax site um
in this case um because it was a much smaller site about a I believe an acre and a half uh we were only able to uh size that up for 77 units um we again looked at all three of those those same scenarios um and in this case we um had
some parking we we were able to reduce the parking based on the assumption that we were going to use that um uh AB2097 um to to uh have a minimum parking but still provided about 100 spots um and
and in this case the development costs were between 30 to 40 million um and again similar results in that the 100% affordable project had the lowest yield whereas the market rate project had um the highest um and you know ultimately
in this case um the the the the yields were lower as compared to Collins mainly because of the efficiency of the site um and only being able to size it up to 77 units um and and and you know still having a lot of those fixed costs that
come into play um on a smaller project so now looking at both these together um I think you know we we see that in the the highlighted items in red that are circled are really the best district
scenarios or the best outcomes um which would be AB2 AB 2295 minimums because we felt that it it could apply to the largest range of you know renters from a um from a a income level perspective um
the the challenge is that um their return the minimum return expectations for an investor or partner who comes into this project um is is higher than what we're able to achieve in those scenarios by pretty significant amount
you'd have to reduce costs by um I forget what we what we came up with but it was probably 25% or more um in in most cases so out of the the realm of reality in in most cases um again the the market rate conditions are are the
closest to penciling um but still challenging um and really not meeting the goals of the district um and then in the affordable scenarios those are if you're able to use low-income housing tax credits there there's a chance that
you know we are breaking even on on these projects so there there could be um some potential viability there however there's other challenges that come with uh low-income housing tax credit projects so just to conclude um after our
analysis we you know we found there's still um hurdles that are uh facing us here obviously the the low-income housing tax credit market is very competitive um and there is also uncertainty uh in the market today on on
what level of funding will persist given HUD and the changes in in the administration um you know the average financial returns needed are generally lower than what is required for uh attracting um joint venture or public
private partnership investors um and also um we we just have have obviously seen with tariffs and other uh headwinds that construction cost pressures um are continuing to to face the market um however there there is you know
potentially a path to viability as if market conditions change and send it over to Mark to conclude and talk about next did you want to have any questions right now before we go talk about next steps and then we'll do
questions okay so our next step is working with the housing consultant that we've recently brought on board to conduct a deeper evaluation of all the nine sites this includes building sight specific uh financial models viable deal structures community engagement and
ultimately preparing an RFP to go out to developers in conjunction in parallel with that we're going to be working with uh the board members and the district part members um to come up with a comprehensive community engagement plan and we're also going to
simultaneously along with the community engagement plan be working with our labor partners UTLA and the other labor unions and bring them along and be transparent and very clear on where we're heading on that um and we're committed to moving ahead even though some of these challenges are financially
driven as you can tell by the performers here but we're going to move ahead and let the marketplace tell us what they think of our opportunities here we're not going to prejudge that or we're not going to restrict our opinion to this study alone we'll let the marketplace dictate where these deals go and that's
where we are got it thank you um I'll again turn it to my colleagues first before having some questions of my of my own miss Greenspan I mean it sounds to me that Well I just looked like each unit
approximately is like $500,000 to build right that's approximately yep no matter where you That's small site or big site yeah you It's the math is the same there's a little bit of little bit of leverage in the larger site but ultimately they're very similar um I
guess I'm curious if it's that expensive why you could you're hiring a new consultant and going going through with this well I look at it this way these these are the estimates B and D and these are what we think but we've we've hired the consultant already and we
think we ought to go out and we we think there ought to be opportunities for developers to be more creative than possibly we have or come up with alternative methods or alternatively maybe they'll accept a lower rate of return for purp for reasons that we unaware of at this time so why not put it out there and let the market dictate
whether it it's appropriate or not um just a couple other questions um are there other sites where you can be more dense or like how many stories were either of these yes so when we
looked at it um we had to look at the closest adj or most adjacent multifamily zone site i don't recall off the top of my head i think it was an R3 around that um zoning for both and and I think we're
limited to about 45 ft of height in both scenarios so you could get four stories um again whether like that could be a challenge in some of the um more suburban neighborhoods i think in West
Hollywood that's certainly feasible um so that was a the box we had to work in with using setbacks and height F which is floor area ratio um as well as some other um you know zoning requirements or
um concerns like parking uh for instance what limited essentially what our density was square footage like on each of these units was um we we we we benchmarked it to I'd say pretty much average square footage that you'd see in in any new development um I off the top
of my head the well I know for sure we we um looked at smaller units for the Fairfax site overall um I think it was between studios one bedrooms and two bedrooms and then for the Collins site we looked at a little bit larger um
overall uh mix with one bedrooms two bedrooms and threebedroom units um and I think the onebs were in the the mid 600 to low 700 square foot range so pretty pretty standard overall
um I just was it's expensive and you know the the districts as a parent I I might want the money going to uh I and to add to that I guess just to answer that the the only contribution
that we assume the district was making in these projects was the land okay okay and there we also assumed on the other side that there was no financial uh return back to the district in terms of like a ground lease or or any other revenue sharing it was simply
we're going to potentially just give the land in some sort of structure great and yeah that's that's great to understand the land was our contribution to Great to know okay great thank you Miss Henny Nubel one question you talked earlier in phase
one where the regionality of demand for the district housing is that going to dictate where we go with the other properties that we have that'll clearly play a role in the evaluation but right now we've identified nine sites and
we're going to move forward on those nine sites and see where those play out and how those what what opportunities those present and move on from there okay will this demand be uh a mover or of where you actually land in one of these because you've given us
the Collins and the Fairfax but if the demand is not in these areas and it's in the other seven would it move to those seven to get those analysis as well clearly but if you recall from the survey the demand was pretty evenly divided between the uh from a high of
about 16% of demand down to a low of 12% so it was pretty well dispersed throughout all the communities and we picked the nine we did not have those survey results so as we look at additional sites we'll take those into account yes thank you um Mr newton
yes my question is why we hard bid all housing and classroom projects for instance pre-engineered buildings can be purchased through CAMASS or FTC school buys or GSA disaster recovery and installed in months rather than years
and the contracts are negotiable and and they're at competitive prices are we considering using buying contracts for classroom housing it seems it would uh it would save a ton of money from purchase to installation maybe that's a better
question for Miss Tes or I don't know but just seems reasonable that we look at other opportunities thank you for that question the way that we are imagining undertaking housing developments is that the district is offering um its land um as the
contribution that the district is doing we would not be constructing the housing it's really not our expertise nor do we have um the experience with that we'd be looking to partner through a P3 partnership with someone who does have experience with housing obviously if
they uh consider that a modular component would be more cost-effective and result in greater returns that would be for them to determine we're not going to be prescriptive and give them um a formula of what they need to follow
we're really relying on their expertise as um housing industry experts to provide what they think would be the most effective solution do we have any influence with that though do we are we able to go ahead and provide any data or information or anything like that i
realize that they're experts and so forth but you know this saves a ton of money and time so is there anything that we can do to go ahead and help to distinguish that i I think Steve just to speak to because we've been talking to developers there are folks out there who
are definitely interested in using modulars um on this and I I don't see a reason why once the consultant is here and we do the RFP that the district or folks like you couldn't talk about the various economical options um but Miss
Tes was going to say something too but I was just going to add that I don't think we would be um prescriptive right we're open for all opportunities um whether it's use of modular or whatever is the most expedient and cost-effective construction strategy we'd be relying on
their expertise um the district really doesn't have data because we don't construct housing um the housing that was done about um I want to say eight years ago the district did not construct it was just it was done by nonprofit housing developers in those cases they use stick built but we know that you
know the industry is always changing um but really we would rely on their expertise rather than ours because this is not something that we have expertise in okay I understand and the reason for my my question to on that was because I'm seeing like for instance Downey
Unified San Bernardino Unified and so forth after the uh purchase of those pre-engineered not modular but pre-engineered buildings uh install is about uh you know nine months rather than years and so you know that all
equates to money so something we ought to consider and thank you for that for that answer thanks Steve yeah i mean just again to remind folks because this has been a a a laborious and yearslong process um and I think just for folks who are new to the committee I mean the
the you know you look at the district's one of the largest land owners in the county and you look at Collins which is 6 and a half acres in Woodland Hills next to a park with two baseball diamonds and for 40 years it has been a blight that has been uh I think that
school closed in the 80s um and has been uh it's not been used for schooling it's not been used as a park it's not been used and then we have a housing crisis at all at all levels but particularly affordability so when we look at this we're like you know there's a moral imperative here to say has public
stewards of the public trust who are sitting on hundreds of acres of underutilized land this was the we did three projects that Miss Tes alluded to this was the what I would say the lowhanging fruit you know you look not too far from Collins you have West Valley Occupational Center still in use
great adult school but is probably on 16 acres and I think we probably use three um and so to you know if I if I could wave my magic wand we would just like you know this we would have done years ago and we and and to the points that you raised the market will decide we'll put out the RFPs one of the reasons I've
been pushing for years put out the RFPs and if we get no interest then we have to go back to square one and figure out does the district have to put in capital the way others have should we have done bond dollars do we have to work at the state level but I haven't met anyone from the governor on down who doesn't want districts to do this and so if we
do a bid and no one can pencil it out then we'll be back at this committee and with these put these heads together to figure it out but my understanding in talking to developers some want us to do this three years ago because they're ready to go um and so I think this is one where the viability will the market
will figure out the viability as long as the RFP is crafted in such a way that it's not restrictive that it allows for potential prefab or modular and then I guess the the one question I had for you Tom is that do we um do we do any analysis of of swap land swaps because
one of the things that developers have said to me in the last few years is okay well this this Fairfax property right in the heart of West Hollywood you know yes it might not pencil out um in these uh these scenarios but we've got 180 units of affordable housing in Chinatown we'll swap it for you and then let us do a
six-story market rate housing and boom we're not limiting the RFP to any creative solutions anybody has land swaps included so we are when we put this out someone might say like hey I've got a and and if they want if they want project yeah if they want a proposal and
and say we'll evaluate that proposal as it comes in but we're we are not going to put any barriers to entry or development of these projects we're just going to put it out there and say tell us what you think we should do and we'll evaluate them as as they respond because I guess I mean I don't I don't
want to say this in a pjorative like this is a helpful analysis but somewhat irrelevant to the board stated goals which are we're doing this and if like if it doesn't work out for devel like well then we'll figure it out and so it's helpful for us to know a little bit but we're kind of negotiating against ourselves in the sense that we're saying like this isn't going to pencil for a
developer and it's like let's let developers figure that out and then if they need to go because I've heard from who who think it would work so but but this is very responsive to what we've asked for and and like the most level the the most detailed report that we've had so far on done two of these properties so I I do appreciate Yeah
Miss Green one last thing go ahead how will you pick your develop if say you have three how will you pick because we're not we're not paying for it right we're just Great question how will we evaluate the RFPs given I mean that's something for you to think about who do you want right
who who do you want who's capable pulling it off and really doing it you're going to have to evaluate the quality of their proposal the quality of their operation the quality of their success previous success you know obviously somebody who's done 10 is going to rate in my opinion going to rate better than somebody who's new out
of the block and has a an idea to do something so I think we'll evaluate them as they come in and we'll we'll do it as we always do very thoroughly don't have to worry about lowest bidder here because you're not Yeah that's one of the advantages yep great any other questions comments
on housing well this is exciting and so can you just reiterate again Mark on the next step here these RFPs are going to go out okay so we're we're going to do a community engagement and work with with our consultant to do a more in-depth study of the nine locations we're going to do uh work with the unions and we're
going to have the RFP to go out in the third quarter this year great and I'll say too I mean it's no it's not a coincidence I would say that the two projects in this property are in board district 4 i know there's political concerns and nimism and community and I have said now consistently for years
like let me take it i'm happy to and I know my colleague here and Tanya and others will also want to do it in their district but I just again with this negotiating against ourselves like there will be members of the community who do not want anything you they like that the blight is there because it's not traffic and it's not low-income housing or
whatever it is um and uh you know it's not that we don't care we're going to work with them but we we know there are going to be some some opposition and uh you know I have said now for years like do it in my backyard and or in my board district so completely um so thank you both very much appreciate that um we're
going to turn it over now to our facilities team um kind of we have our next two presentations are are related and that they're both responsive to some of the things we brought up which is around how things are priced and costed out and then also specifically painting
which is an issue um that we hear a lot about from schools uh and from parents um but this is about our maintenance and operation finance and charges and how projects uh like the ones um that were discussed earlier today get incorporated into budget so I'm going to turn it over to Miss Tes and Miss O'Brien um for uh
these kind of two presentations great so Christina Tes uh chief facilities executive the point of this presentation is to just walk you through how maintenance and operations essentially funds the work that they do what are the types of work that they do
then I'm going go to a little detail about what comprises the costs of those there's some details that could lead us down a rabbit hole because it's very technical as to how we basically detail job costs over a job um and happy to
provide any additional information um at subsequent presentations so let's just talk about the categories of work performed by M the majority of the work is in this blue category it's called routine repair and maintenance essentially California ed code requires that school districts set
aside approximately 3% of their general fund to ensure that their schools are in a state of good repair um background in that is the state does not want to have to come in and step in to address um unsafe schools with state funds so
essentially that is the um carrot to enable school districts to invest in doing routine repairs and maintenance so the types of work is the ones that schools are most familiar with are service calls um we have approximately I think over 300,000 service calls per
year emergency repairs so that could be a broken you know pipe flooding in a kitchen routine replacements so I talked about during the fires how we inspected every HVAC filter we have a lot of routine inspections that are done um for
example fire alarms fire sprinklers none of that necessarily the school may be aware of that's what is happening behind the scenes to make sure that all of the equipment is still working the type of funding we call that it's general fund restricted meaning that it needs to be
spent on routine repair and maintenance it can't be used for un some of the discretionary um requests that we get and we use an accounting method called job cost and I'm going to be explaining what that means we also have um what's
called a category that doesn't fall into repairs um but it is still very important to our school sites it is things that are not necessarily repairing buildings and components but tree trimming mowing fields um essentially maintaining all of our
athletic fields that is not considered routine repair and maintenance but we do fund that with general fund we have about 175 gardeners that maintain um over almost a thousand school sites we also have and you may I think remember
the um Academy Award documentary on the music instrument repair shop so fixing instruments that also doesn't fall under routine building repairs that's fund funded out of general affairs then we also have pest management pool services
and then a custodial subpool this works similar to like uh teachers substitute teachers but they're custodial subs when we have custodials that are out for sick leave or vacation um we send a substitute custodial that comes out of
that general fund pot that is general fund unrestricted that is the only unrestricted general fund facilities um predominantly has that's also funded for job cost and then we have this user requested alterations and improvements so it's basically everything that
doesn't fall under those two categories so we might get a request from a user let's say a school site or a region office or an administrative office to change the paint colors to reconfigure an office to paint a school logo at a school site to install privacy screens
install a trophy case paint a mural that doesn't fall under routine repair maintenance it doesn't fall under our general fund operations so we ask um the requesttor to fund it because we don't have sources of funds for that we also use job cost um to for that accounting
method let's just talk about the scope um and funding sources for that and really what is the kind of breadth of funding that we're looking at the blue category that are mentioned correlates um in this pie chart you'll really see that probably 75%
um if not more is for that routine repair maintenance the largest is at our K through2 sites that's approximately 364 million we also have maintenance for adulthood early ed food services nonacademic maintenance which is our
large um administrative offices none of this is funded by schools so whatever the routine repairs we're doing whatever the emergency repairs we do not charge schools for those repairs those are funded out of this routine and wear
repair maintenance bucket then we have the gray um M operations that's that gardening pest service um custodial subpool which really takes up the largest amount that's funded out of the gray that is also not charged to school
sites that is funded out of centrally that M operations bucknacket and then we have those small slivers in orange which is the school requested improvements or non-school which basically means they're coming from administrative offices at
2.9 million so if you look at the total value of this pie chart you'll see that that school requested is less than 10% probably less than 5% really a small amount of the overall work that maintenance and operations does but still important because schools make
requests and they want to understand um how things cost what they cost so let's talk a little bit about um labor and who charges where when we look at all of the positions that go into supporting um the work that maintenance and operations
does we have a number of positions that exist outside of the facilities um division so for example procurement um those are the staff that actually goes and procures um the contracts for us to be um able to purchase um the uh
materials that we need they are funded out of um what's called the central budget so again they are funded out of this blue budget schools are not funding them um HR the folks who deal with discipline cases or for managing uh the
procurement I'm sorry the recruitment and hiring of new staff accounts payable paying all the um invoices all of that is captured as an indirect cost centrally so those again are paid for out of that blue and then you'll see at
the very bottom we have uh three types of indirect costs and direct costs that are paid and charged to jobs so that is our skilled crafts that can be carpenters plumbers painters electricians welders those are skilled
crafts those have their supervisors um and then we have something called complex project managers which deal with the school users to ensure that projects are being tracked and communicating to school sites both their needs and which projects are being done so those three
CPMs skilled craft supervisors and skilled crafts are actually charged to jobs as either direct or indirect costs everything else which is the vast majority is charged to an indirect line item that's funded centrally and this is going to be
important when we talk about what is a job cost so the district uses job costs it's a very standard way of um estimating and undertaking how projects and costs are tracked across the district some of the key terms to
understand is direct labor direct material indirect labor and indirect material but essentially we use this job cost because we don't know at the beginning of the year where are our projects going to be how much they're going to cost how long they're going to take right we don't know that the HVAC
is going to go out at Xchool or the plumbing is going to break down so this allows us to have a very transparent way of estimating and determining the location of where that job happened the entity or program that requested it and then we're able to capture both the
direct and indirect cost direct labor um you would think it's very straightforward but I'm going to show you what goes into that cost it's basically what is the hourly rate of that uh painter or that carpenter and then the direct material is what is the
actual materials used to do that painting project or uh fix those pipes so let's talk about what um goes into direct labor so when we do a project whether it is a user requested
project or to fix a broken pipe the direct labor that's charged is that carpenter or plumber or as you can see the classifications that we used above their regular hourly rates and then you can see the benefits um these have been
negotiated and agreed upon and approved by the board of everything from their Medicare Social Security their health care benefits um and other benefits that may be specific to the classification
that they exist like a tool carrying um compensation so you'll see in that total pay um example if we look at the example of a painter their regular hourly rate is [Music] $3781 when we look at what their total
benefits are when we add up all the benefits it's $25.58 so when we add those together their total hourly rate is 63.39 you'll see that their benefit rate is approximately 40% of that hourly rate
so oftentimes we have folks who will look at this and say "Oh my gosh why are you paint paying let's say a painter $63?" That is not what we're paying that painter that includes both their hourly rate and then all of their benefits on top of that um hourly
rate then we get to indirect labor costs so again because these job costs have to be accounted for somewhere um the indirect labor so that is let's say the supervisors who are managing um as I said these painters the electricians the
carpenters um essentially their time uh non-productive time um every employee has vacation illness workman's comp training holidays FMLA jury duty kinare we don't know how much an employee is
going necessarily use but they have to charge their time every day their eight hours has to be charged to either a direct labor cost or a non-productive time cost and the same with materials there are materials that we use specifically for a job but there's also
indirect materials that will just last um several jobs um we don't want to purchase let's say a uh new drill for every single project we're going to use that drill as long as it still works and then we're going to replace the drills that's an indirect material
cost so how does this all come together we have essentially indirect costs are allocated to each job based on a calculation that is determined at the beginning of each fiscal year so essentially what that means is we know because we know where every single job
cost is in the district is we take the previous year and we know what was the total spent on direct what was the total spent on indirect we know then the total percentage of direct versus indirect and we use that multiplier for then the
following year on a monthly basis so we take the indirect costs on each job based on that calculation that is determined at the beginning of each fiscal year we incorporate that proportion of indirect costs in a cost worksheet that looks at the historical
actual costs and then determines the indirect rate that will be applied to all jobs done by what we call a job cost section and then this indirect labor rate is determined by calculating the percentage of the actual indirect costs
relative to direct labor again that's that percentage from the previous year and then we also have that non-productive labor rate time determining by calculating the percentage of all nonproductive costs relative to direct labor because again
we don't know at the beginning of each year how much vacation how much sick leave or FMLA leave that every employee will take so these costs are applied to each job proportionately as as well as the direct cost to a job so let me just
show you a diagram of how that works if we had a talking about that narrow um yellow slice the approximately $7 million um that our users request on an annual basis um let's say the school
estimates that they would like to build a new trophy case um in their lobby of the high school uh we put together a time and materials budget so we find out what the direct cost is the number of hours that would be required by the trades to do that the exact quantity and
type of materials used that's put into a cost worksheet that calculates what the indirect proportionate amount is for material and non-productive cost rates then that kind of spits out a job cost estimate that includes now the indirect
labor rate the indirect material rate the non-productive cost rate as well as the direct costs we share that cost estimate with the requester they can say yes we approve it or no we don't want to proceed and with the approval that work starts again that is an
estimate once we undertake that work then we're able to then because again each of these um staff have to actually log in their actual hours when that work is completed we'll know the actual direct job time reported we'll know the
actual direct materials that were purchased and we'll know the actual direct costs sometimes those come in lower sometimes those come in higher um but we actually get that based on that we then kind of true up what the indirect cost will be so if they were
able to um complete that trophy case and let's say 75% of the time we also proportionately adjust what the indirect cost will be as well that spits out a new number for the indirect and non-productive labor distribution the
indirect materials distribution and an actual indirect cost and then if that amount is lower we would return that amount to the school saying "Hey we trophy case costs less than we originally estimated so here is the money in return if it comes out more we would go back to the school and say we
need to provide an uh additional funding because the trophy case came in higher so again to talk about job cost accounting and why we use this method um it's trackable and transparent it allows us to tra span projects at hundreds and
hundreds of our sites um we don't know at the beginning of year what the final scopes or locations are so we're able to ensure that we have that information as our work develops um and completes over a school year it also allows us to make
sure we know the location where it happened and where the money is being requested from again about 95% of that work is being done um without persons or programs needing to request it it's just being done as routine repair and
maintenance but for those that are requested this allows us to give them that specific cost and it'll make sure that we're in compliance with the funding rules that we're spending um dollars for routine and repair maintenance on actual routine and repair maintenance and we're we're able to
capture those um requests that are not routine repair maintenance um are funded through the sources that are not our RMA so wherever those come from schools administrative offices etc are pairing their proportionate and direct cost
share in addition all salaries and benefits are paid for regardless of how many jobs are being worked given during a given time frame all costs are collected centrally and then distributed monthly so every month this kind of true up is
done um to all individual jobs worked during that month and the goal is to be fair and transparent so um it's every job is paying their fair share and we're reflecting all of the cost necessary to do the job no job is paying twice there
is no double dipping um costs are incurred via a payroll benefit payments and material purchase and when costs are distributed to all active jobs during the period in which the costs were incurred and again as I mentioned before if costs come in lower those funds are
returned to the requester if they are uh routine repair and maintenance they just go back into the routine and repair maintenance um overall allocation which allows us to continue to do and address service calls and other needed repairs at our school
sites with that are there any questions thank you um I have a few but again I'll turn let's see let's start online this time um Mr newton or Miss Fefferman or Miss Ortiz Franklin any questions seeing none Miss Heny
Nubo I had a question about the job cost calculation is there a formula so where is that formula how do you Because there's no formula here you put a lot of words but there's not an
example of an actual job sure so um what the formula is only for the indirect labor rate right so in order in order to determine what the indirect costs and again the indirect costs are covering uh
essentially the items of non-productive time supervisor time and then also indirect materials there's a a formula that essentially looks at based on all the job costs of the previous year what were the indirect costs we use a
assumption that it will be proportionately the same the following year um so essentially the formula says that the indirect may be approximately uh 27% we apply that on all jobs the direct
cost is the one that is job specific so we have staff that goes out measures the trophy case determines you know the amount of work that will need to be done to demolish to build to um essentially complete um
added to that is then an indirect factor and that's what makes up the total cost okay i would definitely need to see an example of what that looks like because on the next page you say that you know all of the salaries and benefits are paid
regardless of how many jobs are worked during the time frame so I'm trying to figure out how do you pay all the salaries but yet there's a calculation that goes in so it seemed like it's two different models yeah so let me just go back to this slide um for everything
that says that it's budgeted centrally so this is procurement IT accounts payable OENS senior management uh program support M regional staff administration staff they are not part of that indirect calculation they're
what's called line item um and the reason for that which is very logical is let's take for example uh Matt has staff in procurement um that is working with bench contractors to provide uh plumbing
fixtures um so that when we replace plumbing they don't know if those plumbing fixtures are going to be used at what school they don't know if it's going to be used at 100 schools or 500 schools they're just in charge of buying plumbing fixtures so they're not assigned to a job they're just an indirect line item the only staff that
is charged to the job are the skilled crafts and the indirect is the skilled craft supervisor because the supervisor is not going to just work at one job they're going to be looking at multiple jobs throughout the week or throughout
the month um so they're not going to be able to say "I'm going to spend one hour at this job one hour in that job." So it's a way to capture their indirect supervision so with that being said not able to calculate whether they did an hour here hour there how is that put into the
equation to the calculation so the hour that the skilled craft is a direct cost so that's um when I talk about this um this diagram the time and materials budget the direct cost that's when again
using the trophy case we will have the direct uh trade whether that's a carpenter in this case we'll go to the job site basically do an estimate based on the location the specifics of that site um they'll be able to determine
determine what come up with basically an estimate of how long it will take to complete that job same skilled people do maintenance right i'm sorry routine maintenance and repair and then specific school site repairs yes
same people same staff so it's it's um we have our skilled crafts so you could have a carpenter who is uh one day working on a job to replace uh termite damage that is causing leaking to a
building and on the next day um would be doing a trophy case so he has he or she has to um do that same like job they're not estimating it they would be estimating it yes if you're going for
emergency repair you're emergency repair is different so we're not going to you know if a pipe is burst um they're going to be charging their time to that we'll know what the actual cost is but obviously we're not going to have folks come in and estimate it while like the water is overflowing so emergency um
we'll find out or determine what the actual cost but we don't prepare an estimate beforehand but the non-emergency repairs it's the same thing they give an estimate and more or less yeah so I get building on what's been said I
mean I think the to Miss Henny Newell's um question too i mean there is a world like and you do this with the if you look at um all the indirect essentially non-jobosted things but you could say you could say
if you're a painter and let's just make it simple and you're burn fully burnin rate including your um uh benefits is like $150,000 all in you could see a world where central covers that it's a full salary and benefits for
a 280 hour work year and then when Dorsy High needs to painting when Bojer needs painting that person is just doled out based on their time um but nothing's char costed they're just a painter um that's not how we do it uh we do it
based on job costing but the formula is such that that still equates to after 280 hours of work to $150,000 that person it It's just each job is being charged $2,400 here $3,200 here through
this formula right and that there's the backend system that's making sure that that person is not getting paid $151,000 or $149,000 through this complicated system that that this attempts to explain is that correct
uh let me add um add to that or a nuance onto that so um every person uh or crafts person has to charge their time their 2080 um amount of hours during the day it could
either be to a job it could be to their vacation it could be to uh non-productive time like they're on vacation um they cannot get paid for more than 2080 unless there is overtime in which case their indirect is not included because that's already factored
into their 2080 when we look at um this idea of well could you pay for the proportionate of their indirect centrally funding would have to be identified to pay that right so when we
look at where this budget is that M has there is no budget to pay for the indirect costs of jobs that are not routine repair and maintenance so we would either have to diminish the amount of maintenance and operation general
fund which we do not recommend because already the services provided landscaping music instrument repair pest management pool servicing and custodial are already very restricted in regards to the staff that we have in proportion
to the work that we want to do or we would have to have budget provide us with the additional costs and given where budget constraints that the district is facing we understand that there is not going to be any additional budget provided for those costs right
and I get one I want to note we're just past five and we have one more presentation so I think we we'll we're scratching the surface here a little bit but this is this is helpful because I think when you um when schools are being charged when offices are being charged I think there were concerns and I had them too that you look at the the rate and
then you do the back of the envelope of math and you're like wait we're this is exorbitant and I think you break it down and some of it's on the estimate of time which we can get to and then the other is actually on the breakdown of this rate but what I think is helpful in this presentation with slide um seven is
actually showing we're very generous with our benefits that you know 40% um additional uh you know or or in some cases like um yeah I mean I guess it's well the 40% benefit rate is the to as
percent of total burn rate but you're paying a salary and then you're paying you know generous benefits that go beyond just just healthare and So one concern was wait how is that possible because if you were just divid if you were multiplying that individual rate by
280 hours you were getting like 60,000 extra dollars but what this shows is that actually that is what employees are making about 60,000 uh in you know if you do if you just kind of multiply some of these numbers by 2080 you're getting $160,000 and hundreds in salary and 60s
in benefits or something so um that's helpful but two you could imagine a world where you do budget differently um and say say that um you know and whether you take percentage from schools as opposed to job costing and you have you know shift the budget and do central and
so one of one of my questions which I'm not articulating well here but like on slide three those three categories where who decides which policy is that written down is that board policy is that practice like you could you know if if we wanted to say that um installing
privacy screens or office reconfigurations were operations and not user requested alterations is that board policy is that practice prior to this yeah sure there's um definitions of what constitutes
routine repair and maintenance and again it's making sure that your building systems are in a state of good repair and that is but sorry just to drill down that's district policy or like state I'll get back to you on the specifics of that yeah um so something like a privacy
screen when we look at M operations again the funding that we receive for M is for the positions that are essentially gardening music repair pest management pool service that's positions
that maintain our pools and custodians so if we wanted to now um do privacy screens at our schools then we would need to determine if we are going to pay for that
by not having as many staff in those categories not doing as much work in those categories to allow us to now do privacy fencing well I guess so yes so my question my question is who where those where does that decision like is
this practice or policy and then yes then we'd have to figure it out but right now like the you'd what I'm suggesting is that there's a world where you wouldn't cut pest management you would say the trophy case installation you know schools are paying
$100,000 a year for trophy so you know you charge each school you know a few thousand dollars like school budgets come you know you claw back some central budgets to put people into like you know I'm not suggesting I'm just saying there's a different way without creating you're just re you're allocating
differently yeah and the the general fund operations is what's part of the board's budget that you approve every year okay so this this just um you could decrease the amount of staff and provide us with less operations cost if you
chose to fund something else absolutely right or or what I'm saying is that if you go to uh like school requested improvements are $7.7 million the board could find a way to fund to move $7.7 million into a facilities bucket for
school requested improvements and then when schools request those improvements it's like a availability of staff not a cost so then you say "Oh we want a new trophy case at Dorsy." The school wouldn't be charged just like "Great you just have to wait till next year because our trophy case installer you know is is
now paid essentially." That that is a policy choice that is that is a policy choice a caveat on that would be um while and this is a bit confusing but the turquoise and gray is our annual budgets there is no budget for school
requested improvements or non-school requested improvements that's coming so that was just I think what we looked at was last year how many job tickets were created for school requested improvements and non-school requested improvements so it could be that and
I'll just use this as an example when schools had greater budgets that that number actually could have been higher um and as school budgets decrease they may not be using you know making as many requests one of the challenge of putting
that in centrally is um how would we prioritize what trophy cases get done right when schools are not making that request where they just say I want this given we have so many schools and so many user requests what would be the
policy to determine that a trophy case is more important than a mural than is more important than the hallway being painted the school colors none of them rise to how facilities would um undertake a routine repair maintenance
service request where we have a very hierarchal process of an urgent emergency request which is we need to respond in 24 hours or a critical request that we need to respond within 3 to 5 days and then a routine request
which is we'll try to get to it within So you'd have to figure out a trophy case prioritization rubric um yeah no and we're going to get to paint we'll move on into that presentation in just a minute um because that's a common example but yeah I see the point um Miss Hy and this is my final with that just
with the user request alterations and improvement is there a number because it sounds like you're referring to a number could we get that number because if there's a large number to Nick's point having a bucket for that because we see the need in our schools and if we're
ignoring that need then we're not meeting or hearing the voices of those that are requesting that bookcase or that trophy and again if we have skilled workers that do that work already then of course we want them to do it whether it's at this point an overtime job to
see if they could do it if not then we'd have to figure out where is the bucket of money that would go to allocate for that so that would be my request miss Green oh and I was just um just from my experience as a parent I maybe sometimes
these routine repairs and school requests might blur so I have good friends at Walgrove Elementary and they're doing the musical theater and they're trying to get the musical theater played and like the curtains falling down and they're feeling like
it's not safe but it's not really maybe in your blue bucket no it it would be if it's a repair that sounds like a repair obviously anything where there's a potential for it not to be safe for students where a curtain might fall down they got that yeah but the um a lot of
the seats in the they're having a hard time getting the seats repaired and maybe it's not in the top and they want to pay for it or it's just it's you know it's frustrating they have a show in like a month and half half the seats are broken so uh that is a challenge i mean
um I made a presentation earlier um for the committee of the whole where we talk about what is the overall need for repairs throughout the district right and we've come up with based on the facilities condition index of every component there's probably $80 billion
worth of need thankfully we have a bond that's $9 billion that allows us to address kind of our worst and most critical conditions but we definitely do not have 364 million across over a thousand schools We're left to really deal with those that have the greatest
issue to operations of schools and security but we have many operatoriums and we get that all the time they're old wood there's you know graffiti etched into it it does not rise to the level of repairing HVAC or replacing or repairing
uh leaking roofs or repairing um broken asphalt that it might have a direct uh safety aspect to our students or impede the ability of schools to educate or operate classrooms that's always kind of our northstar well and one of the
reasons we're doing this analysis that will continue in in you know in coming months is that for schools who understand that oh we don't have the central curtain or light or seat replacement protocol we're happy to take the burden ourselves but they're curious why it costs $200,000 to replace the
curt i mean I've done that out of my bun bun bond funded programs and it's and so that's why we're trying to understand um and so my last question on this before we transition to painting is um if things come in under budget it says that the the we true up in the amount is
returned right right so confirming that to the but then do we revise our estimates because one of the challenges that I see with schools is that they limit their ambition of what they can do because they're like oh I I can't afford it but then if it's coming down you know for so for example the example we used
last time was was a 50 I think 50 um 55 hours of painting it was I think two folks or 20 two at 26 hours and then a three-hour locksmith and so for a small office and so if that takes you know only 30 hours then it would be great to have the office or the school
recoup the money but going forward do we say "Okay great we're readjusting the estimate and now schools have a better understanding." H um no because the estimate is an estimate based on the workers going to the school site and
saying this is based on you know their um expertise uh on the previous jobs that they've done this is what they estimate the work will be then they actually start reporting their time they might find out I bought you know I thought I was going to need 10 cans of
paint i actually only used eight didn't buy all 10 bought eight um they would return that money to the requesttor and then we would hope if the requester was like "Oh actually now that I have x amount of money returned to me I'm going to now paint that other wall that I
thought I couldn't afford but now um maybe I can." But do we ever do like an internal audit to be like "Okay well in painting they're usually within 5% of the estimate but in trophy case repair they're 50% off and therefore we need to readjust." um because I would suggest that that we
do because I think it again it just limits I'm seeing a lot with greening projects and stuff too that um we build in overages or we estimate and so then they I think we can do like within um uh certain categories right spot um like do
a spot of painting projects and see how far were our estimates from our actuals what we do see is um like for example on the painting example you gave right we found out that there were um I think artwork that needed to be removed we
needed to patch and repair that artwork from the office that we relocated from there's just unknowns so I want I don't want to say that you know you could find necessarily a trend that every painting thing comes over 10 to 15 uh% over but
it might just be that at that particular job we weren't aware that you know once we peeled and demolished you know the wall to put the trophy case there was actually termite damage and we had to do more work or something like that but it's definitely I think something that I
would ask my M team to take a look at and see are there places where we continue to overestimate um and then we're maybe not taking advantage of the work i will also caution that we tend to want to be more conservative because we'd rather return money than go back to
a school and say "Hey you actually we came in over please pay us back." Right that's a much harder conversation not to say that we pat all of our budgets but we do want to be conservative so that we're not going back to schools who therefore then have to make other changes to let's say non-f facilities
items because the cost came in higher great um we are going to transition similarly um oh did you have a final question i was just going to say just back to being a parent um it is frustrating when the the need of that is
at the lower but they're not allowed to the parents aren't allowed to do it themselves so I don't know where and they're willing to they're willing to pay well this is a question I have when we get to painting um so we'll maybe No no uh did you ever
with insurance of course going to ask we were uh wrapping up with the return of funds and how frequent that happens and to your point earlier as being the experts in doing a one room
paint job um I think we can give an estimate of what that one job room paint job is because we do that pretty frequent in a school and that's not a higherend lower end but when those estimates come in absorbently like a
$3,000 for a wall like is that real and I what were we expecting to have a hundred holes in that wall or you know and if we become the expert in that are we able to tend to lower that cost so
that it's not on this edge of constant return constant return or over estimating so great so thank you Miss Oak we're going to hear a bit about how painting gets done and I think this will build off of this because this is one of the things that we hear a lot from
parents and school staff around painting when am I going to get painted why can't I paint it myself why does it cost so much takes so long etc so I'm going to turn over to Mark Cho our deputy director of maintenance and operations and his team for our final presentation
i just saw Mark all members members of the committee good afternoon my name is Mark Cho deputy director of M i will be providing the painting presentation but before I start let me introduce you Mr rob
Jensen mr jensen started as a painter a long time ago with the district his father was a painter now he's a resident construction engineer however he's well known as the
most painting experienced expert so in case you have more painting questions we will try to give you an answer we have about nine slides i'll be ve very brief i can show you how M typically
provide painting service how painting project can be funded then I'll touch on painting specification because we had some questions about that then lastly we can talk about painting costs painting estimate
we can provide painting as a regular maintenance projects or we can paint as part of the wall repair projects for example when you repair wall we're not going to leave the site without painting
the repair surface will match the color with the existing wall paint then we can paint as a service call it's a rare case but that's a small portion then we can paint on customers request as Mr toes
explained could be murals could be changing colors could be a decorative painting and so those are beyond the maintenance we also paint over graffiti graffiti comes as part of the painting
program uh we can also paint apply graffiti resistant coating and we can remove graffiti as well painting is performed by either our in-house labor or we can utilize our
licensed contractors for project funding painting service is provided either by restricted general fund for maintenance and repair or can be funded by schools or region
office for improvements painting itself this is very important painting itself is not bonfundable because it's not uh considered as a capital improvement however painting can become bondf funded when
it's included in large capital projects such as playground and campus exterior upgrades we have 30 school sites classroom replacements classroom upgrades or major mod or comprehensive modernization projects
there are about 80 campuses that are getting or will be getting campuswide exterior painting as part of a bond funded projects district specification painting too has a specification
the purpose of painting specification is to provide constant good quality painting throughout the all district facilities specification will continuously have improvement it's a
dynamic document that we always update to meet the evolving needs technology and standards because we have to protect our kids that's the most important part we have to comply with the many
regulatory requirements such as EPA AQMD AHAR and Cal OSHA specification specs can also have a deviation upon request they can review the scope and request a can we do this
so it can be reviewed as a caseby cases for quality assurance all paint materials are certified by approved paint manufacturers and these painting materials are also
approved by the OEHS of course our painters our painters are also professionally trained not only in painting but also in the rules and regulations rollers and spray are the
main application methods depending on the type of surface and the location and other limitations painting specs calls for minimum of three coats but additional coats may be
required depending on the type of surface material and the change of colors next two slides are important slides cost estimate is based on the scope and the actual site conditions our
estimators will actually visit the site i'll show you an example later to assess the scope quantity and conditions which will determine time labor and materials here are more detailed contributing cost
factors amount of surface of course right square footage surface type and condition more damages on the wall more time and materials will be needed for preparation number of collars and the complexity of the pattern if there is a
design number of coats required presence of hazardous material we may need to require abatement of the hazmat number of furnitureures to be handled whether it's interior or
exterior whether we need to build a scaffolding or use Caesar jack lift or ladders then work restrictions that's the last bullet there here's an example of recently
completed painting projects this was done last year this is paint seven classrooms i don't know whether you can read the description but let me summarize the description written there the work description shows prep and
paint all interior walls doors door frames and window frames protect all floors also mentioned on the bottom of the description is that there are extensive there are extensive staples
and tapes on the classroom walls there are also termite damages noted on the bottom and door frames in room number six that requires additional carpetry work total budget cost was estimated as
$74,000 but it actually costed $71,000 the unused project cost was returned to the original funding source that concludes my slide do you have any question thank you Mr cho uh
questions we have folks online i know Mr newton had to leave but Miss Everman or Mr franklin I guess I will ask what Miss Greenspan was alluding to which is um because we get the question a lot um limits on volunteer painting say by a
local parent organization or like a corporate service day um if they got district approved lead free etc paint and wanted to do not a whole exterior of a school but you know classrooms or murals or the front curb for curb appeal
what is the district's policies on kind of a kind of volunteer painting given I just say the cost and the time and that which I'll ask about in terms of a list for schools to be on but I know some principles have told me oh yeah we're on the list for 2042 to get painted and so
you know you don't blame parents for saying great we'll do it next weekend i don't think we have a written policy for that but let me ask Mr jensen not putting my foot in my mouth but I know that in the past we have had um
release forms that we've had to have volunteers sign before they come and do any work on a district site but we have to keep in mind that the district views any paint surface as lead containing so any prep work that would go into painting a classroom or an office or the
exter school requires proper training before you can start doing any of that work and our parent volunteers probably don't have that training is there Oh go ahead you you you do like lead and asbestous testing every at every job
site no so what can you just repeat what you just said the LD assumes all painted surfaces are lead containing so anything like even if buildings were built after the 70s yes why
asking the wrong person requirement that's the requirement of AQMD but is that is that a state a state requirement is that a district that that's the requirement of AQMD we had a recent meeting with AQMD air quality management management division even in
buildings that were where lead wasn't I mean wasn't lead stopped in 19 we didn't I think I think that that pace came because we don't want to play the guessing game we don't want to say hey this doesn't most most paint I
understand has a late then uh by EPA we just limit and approve what's allowed to pain but if you guys aren't testing for lead or asbestous I don't like you're assuming it's lead and asbestous but you're not testing for it we're not
testing because we assume that has a lead so you're in the existing painting so you're just that's why you do so many layers or and again just to clarify that's not our that like Santa Monica LACCCD everyone has to do this because it's AQMD yeah dennis Bradburn
director of maintenance um we do assume that all uh paint is lead and to get back to the uh I think the original question um we do best manage best management practices and if if we do have a a parent or parent group that
does want to come in and paint help paint a school we do have a process for that there are some forms that they have to fill out liability issues a lot of times maintenance and operations will come in and prep the wall it can obviously be a whole school but if they prep the if we prep the wall then the parents or volunteers can come in and
and paint certain things absolutely and I guess to the broader you know just um outside of repairs or like requests is there a list um that the district maintains of just routine painting for schools
uh I don't quite understand the question so like just you know is there a list the way if we look at the former the prior presentation that Christina gave and we have those buckets is like routine painting so a school that hasn't been painted since the 50s is there a list by which we just go through and
we're repainting every school the list that was provided to the board was based on our RMA funding the projects and I think it was also used to stress the idea that there really isn't enough money to to paint entire schools but that was based on um that
list was based on RMA funding a certain portion of paint every year but so there is a list because I pierce keep telling me there's there's a list and that there are like 10 years on the list yeah so let me provide a little more detail and then I think uh Mark Cho has the specifics so our RMA um as I mentioned
before is primarily for uh routine repair and maintenance um that budget is set aside as 3% of the overall general fund when the district had uh supplemental co COVID funds that came in whether it's esser or elop or co funds
that created a general augmented the general fund um proportionately we received a larger proportion of our RMA funded um we undertook a painting project because we saw that we had additional funds that could be used for
both solar coating and for painting schools addressing the backlog of uh painting that we know our schools needed as those funds have gone away and our general fund has restricted so has our RMA fund so we no longer have the funds
to undertake what um is essentially a more discretionary non-service call not safety not operational impactful um uh program so we no longer have discretionary funds to do painting with
um we now rely on our bond program to pick up painting as part of a larger project as Mark was saying we have approximately 80 projects that are underway and have included or will include painting with measure US we hope that we can also achieve um additional
amount of campuses that will do painting and then Mark if you could speak to how many projects we did complete when we had um a larger RMA that we currently have with painting between it started that that program started in 2019 so we allocated every year $10
million of RMA just for painting so between 2019 and 2023 mid23 we stopped the program because we had a tight budget and what Mark what was the formula by which schools got like we take you know 700 schools and how are schools prioritized
we were able to only complete 140 school sites right but how did we choose those 140 schools based on the site visit and based on the condition of the paint FCA data is there a prioritization of 700 schools out there we do have a list at
the time we developed a list of priority starting from the number one all the way to the end and at the time we thought we were going to continue on with this program so we programmed okay with this current speed we will paint this school
in the year 2028 this school year 2030 based on the condition of the paint okay so that is the list that principles are referring to when they tell us I think so we're on the list for 20 but but even that is now discontinued it has
discontinued because with a tight RMA funding right now um so and then to go back to the point so if um and and again so just clarify so the requirement that we assume that paint even from last year has lead in it
is a AQMD requirement that is outside of the district's control so so AQMD allows us and let go ahead and I believe it is Mr meloy but I'll get back
to you in the particulars of that because I I I want to give you accurate information yeah no we of course want Well there's a whole bunch of schools that need to be painted there's no money people are willing to paint people are willing to release and do it safely if they got guidelines and I understand they're not trained but we're all trying
to make our schools better and we're trying to keep in in M we would love nothing more than to imp every one of our schools well of course and I want to say too because I said this early on my tenure and I got a nice but strongly worded email from a woman whose husband was a district painter um and who was just very clear about the
professionalism of painting and I so I want to be clear that like in our perfect world like we we know and what Miss Green and I are saying is not that this is something that you can pick up and off the I mean it's an like it is that in a perfect world we would have the funds to get district paint painters to do this but we don't and so I don't I
can't in good faith tell a parent like Miss Greenspan like in 2042 when your kids are you know long gone from the school district you'll paint your school will get painted so in the absence of that here are some solutions and I think that one of them that you alluded to is that if the district primes and does
some testing then parents can come in or corporate volunteer day can come in with that paint and do it which is great or pay or pay or potentially and that's contractors they're not allowed to do that either right um no if um or if a
school wants to pay for the district to paint our schools or to you use our um licensed contractors to paint our schools we could provide an estimate they could provide they can't just hire their own painters that's the point uh no they can't but could those if they
know someone could they apply to be on a district bench as just it's it's we're all trying to get I love I love the spirit that the questions are being asked where where can we be creative and not loopholes but where can we work together to I think I
think one of the best and we've had mixed results um one of the best ways we've done it is if there's a particular wall or something that we need to take care of the district will take care of it if it is a safety issue but if there is something that the parents want to We typically will come in and repair a wall uh the most the best example I can give
is when parents want to or the school wants to paint a mural we will come in repair the walls prime it and get it ready for for that and we have done that in the past we've done it in the past where in particular with bungalows a lot of lot of groups want to paint bungalows yeah and so that's why the question the
if you get back to us in the AQMD one um is relevant because we want to know absolutely and what those release forms mean absolutely absolutely any other questions comments okay thank you so we're going to we're going to wrap i know it's late
so I want to um just briefly take stock of where we're at in this committee um you know we've been able to cover a lot of topics this year uh and I think we have a slide thank you um so those are the recommendations recap and we've heard about the comparative study earlier today we've uh heard about how
the district is looking to quantify savings from the specification changes heard a bit about an ongoing review by both district staff and Gensler uh on on that um we've been talking about buying contracts earlier this year and of course more about M how M operates which
was most of today and so my expectations that we'll continue to drill down on these topics next year one of the things we've decided to do with this committee as opposed to just kind of um full cloth every meeting having new topics and doing surface level presentations we've really wanted to look at things from
idea through implementation and so that's why we're like just continue to focus on this and and deeper and deeper but I find that it's been fruitful um and uh so um on the next slide uh I think we have a slide for kind of a
proposed agenda and what I'm going to say in the interest of time is I'll we'll send a follow-up to committee members and via uh email they can suggest if there are things that they want to um omit or add or double down on uh I'll just read the L USD construction
outcomes report the followup u the recommendations from the MGT report housing initiative the specification study followup uh review of procurement processes some of which we might have previewed today the fire rebuild updates just given that that will be an ongoing project for the district and then uh
explore um modular construction opportunities um so again I'll follow up after this meeting with the committee members but we'll now I think we have at least or two public speakers uh and then we'll adjourn so thank you Mr mcclean okay two public speakers Mr david
Tokovski I see you waiting in the wings come on down you have two minutes to speak once you begin and following Mr tokovski is Maria Luis Aalma hi David Zakovski former school board member um I'm not quite sure on the painting what we're trying to solve i
think it always helps staff if you say this is the problem that I have defined okay because the board can make a motion to put three and a half% into um the uh the accounts they could put my my old colleague Michael Lancing used to argue
for 5% and when the economic crisis hits Sacramento we drop it to 1% okay they give us flexibility so if there is a shortage of funds to do something then you just have to have four votes to the board and the superintendent's direction and there you go if it's something else
define the problem first what is the problem you're trying to solve number two on housing I just want to reiterate I for some reason on housing there is a reluctance to talk about Glassell Park Elementary School the first one that was done i drove by it went in this last
week it is a project it had some lessons to be learned about how you manage them and I think that's important to keep it in there and also all of this housing and vendor selection goes through procurement and procurement has been telling us exactly how many have bid and what the scoring was but again if
there's any uh undue influence on selection of any of the various things procurement needs to make sure that is done um and uh change orders uh it was a little late on the discussion but it has been a a long time since I've heard the
law on change orders okay and and some of it I understand makes no sense because if you rebid something when it exceeds the the cumulative 25% um by the time you rebid it the cost is going to be so massively increased that it makes
silly sense not to to be rebidding it but if change orders cumulatively exceed 25% you must rebid if cu if if any single change order exceeds 15% I can't remember Mark uh correct me if I'm wrong uh you must do the same thing and so
this was a a cumulative list of change orders but there's no drill down into specific problems specific case instances thank you for bringing together again you have $9 billion on the measure US you have $1 billion from measure uh two from the
state you have another billion dollars uh from measure four and these are important pieces of information because that last time I checked adds up to 11 billion thank you Mr tokovski miss Palmer the floor is yours you'll have two minutes and change so that we
can have the same amount of time as Mr tokovski what is government for what is LA Unifi's reason for existence who is it that you serve here my name is Marisa Palma i'm speaking on behalf of Olyada Inc and on behalf of the taxpayers i
wish that there was this much discussion and information on numbers and the complexity of the overall district's budget of the overall district's financial statements the entire financial statements not just the ending balances you don't have a finance committee how is that possible you never
discuss the LCAP whether the items are effective or ineffective and that's a financial document you never discuss your net position the unrestricted net position your unfunded pension liabilities unfunded OPED liabilities we had this whole debacle with the certificates of participation and yet
here we are at this committee bringing forth this housing initiative now this is a complex issue so how does it make sense mr mavoy you said this is a moral imperative to bring this forth and you're planning on donating district
assets the land to these um developers to develop these properties one thing that was not discussed here was divesting of that property if you have surplus property which it sounds like you have quite a lot of it wouldn't that chip away some at that 80 billion in
facility needs that we keep hearing being quoted so who do you serve so the taxpayers I have not noticed them giving you an authority to change your mission your mission is not to provide housing for the employees or this the residents of this city it is to educate the
students that live in this city and so far you know I am very critical of those results you've not done a very good job of that and in fact we continue to lose enrollment every day because of the lack of academic achievement the schools that
do best I have to say it is not because the schools are doing best it's because the parents that are willing to be involved and they're dedicated to those children send their kids to those schools we collect ourselves at those schools i'm one of them i imagine that
you are as well Miss Greenspan we know which schools those are it's not the district we will continue to lose enrollment while you focus on things other than academic outcomes look at all the time and complexity look at all these consultants thank you on all these other issues please focus on academics
thank you thank you Miss Palma um okay we have uh as we adjourn we want to thank everyone for their participation in the committee this year we'll circle back with dates for the next school year we also Miss Greenspan we have a certificate of recognition for you from the board we
also have one for Miss Pepper Miss Feerman and Mr newton um and Miss Anderson but you're the one here so you get it i don't have one for you Charlotte because you signed this one uh um but uh just on behalf of the board thank you for your your volunteer service to this committee so present
this to you yes I appreciate that we want to thank and reward parent and uh community participation so thank you um and uh with that this meeting is adjourned have a good evening thanks everyone [Music]
it's my house [Music] sto my stuff