Mt. Diablo schools Superintendent Steven Lawrence sent out the following news update Aug. 1 (although it is dated July 29). Since it still hasn’t been posted on the district’s website, I’m posting it below.
“Mt. Diablo USD News Update
Where Kids Come First
July 29, 2011
Measure C Update
We encourage parents and community members to visit our Measure C website at http:/ /126.96.36.199/MDUSDFacilities/index.html to get the latest information and updates about Measure C projects. Below are answers to questions and updated information regarding Measure C projects.
Some questions we continue to hear is how can we be doing construction projects like solar when we are still reducing positions and people’s hours of employment? Why not just use the money going towards solar to keep our current people fully employed?
The money being spent throughout the district on solar and other facilities projects comes primarily from the 2010 Measure C Bond. By law, and by voter decree these funds can only be spent on construction projects such as solar, HVAC, classroom enhancement, new classrooms, technology, etc.
Our school district has three distinct pots of money: unrestricted general fund, restricted categorical, and facility funds. Our general unrestricted funding is determined by the Revenue Limit we receive from the State multiplied by the number of students we have on a daily basis. Nearly 90 percent of the revenue limit funding supports salary and benefits. The state reductions in Revenue Limit funds over the last four years led to the necessity to reduce staffing. The restricted funds we receive are state and federal funds for a defined purpose, and must be spent according to specific guidelines. We have also had to reduce positions that are funded out of restricted funds due to reductions in federal and state categorical funding.
Another Measure C question we have received is how can the district hire its own people to manage the Measure C projects?
By hiring in-house professionals we expect to be able to put an additional $7 million toward facility enhancements instead of projects management costs. According to the California Attorney’s General opinion in 2004, Prop 39 facilities funds can only pay for district positions that directly plan and manage the facilities enhancements being funded by the bond.
Historically, the district used construction management firms to manage Measure A and a majority of the 2002 Measure C projects. The base contract for the $90 million Measure A program awarded by the Board was $4.8 million or 5.35% of the program value. The base contract for the $250 million 2002 Measure C program was awarded by the Board for the program/construction management of services was $14 million or 5.59% of program value. Both project totals excluded all housing and infrastructure costs which the district elected to absorb separately to avoid mark-up costs.
Looking at the current Measure C facilities project and assuming a project management cost of 5.47 percent results in an $18 million expense, which excludes housing and infrastructure costs.
By comparison, an in-house program/construction management team, would cost the district $7.5 million, or 2.22 percent of the program value. Even if a support budget of $492,500 for operating costs, $185,000 for temporary extra help and a $2.5 million allowance for outside consultants is added, the entire full-term budget for a resident management operation would total only $11 million or 3.27 percent of program value. Moreover, it is significant that, unlike the costs cited for the two earlier programs’ management, this figure is fully inclusive of all project and housing infrastructure costs. Therefore, by hiring in-house professionals we expect to be able to put an additional $7 million toward facility enhancements instead of project management costs.”
[Unfortunately, I’m not able to reproduce the chart included in Lawrence’s memo in my blog. Hopefully, the district will post his memo soon on the district site.]
“General Fund Savings created by Measure C
Through the legal use of Measure C funds, an anticipated savings of approximately $8 million annually can be credited to the general fund for five years: 2012-13 through 2016-17. To date the general fund has been relieved of debt services that cost the district $1.4 million annually paid out of the general fund. These debt payments would have continued through 2024. The remaining Tier III deferred maintenance funds of $1.5 million were swept to the general fund. These two initial savings allowed the district to reinstate 24 laid off teaching positions in August 2010. These restored teachers work with students who are struggling to master reading and math skills.
Within the 2012-13 and 2013-14 school years budget projections, we were able to budget the savings our solar project will create. Beginning in the 2012-13 school year $3 million dollars in savings to our PG&E bill was deducted as an expense and more than $2 million annual from the California Solar Initiative was added as revenue to be received through the 2016-17 school year. The solar project also allows us to add HVAC to our schools that currently do not have it without increasing our PG&E expenses. We sized the solar arrays to handle the increased electrical load. Lastly, the PG&E annual historic increase of 4 percent no longer must be budgeted.
It has been questioned whether or not our solar project will meet our production and longevity expectations. As part of our contract with SunPower, a 20 year service and production guarantee was negotiated. This means that for the first 20 years the solar arrays will be maintained by SunPower and they guarantee their productions levels. If arrays do not meet their production levels during any given year, SunPower must provide the district with a cash reimbursement for the lost production. This is why we are confident the solar arrays will save more than $200 million for the district general fund over the 30 year expected life cycle.
Measure C Project Updates
Construction has begun at the Phase 1 sites as well as Northgate HS, College Park HS, Ygnacio Valley HS and Cambridge Elementary. Structures are already up at Concord HS, Mt. Diablo HS, and Clayton Valley HS. The remaining Phase 1 sites are presently in various stages of survey/layout and or underground boring and and/or trenching. Electricians are now beginning the above ground work at some of the sites including installation of conduit on the structures. The Measure C team works closely with SunPower and their subcontractors to develop and sustain an extremely aggressive production schedule intended to complete as much critical construction prior to the start of school. All Phase 1 and 2 schematic plans have been posted on the Measure C website at http:/ /188.8.131.52/MDUSDFacilities/index.html. Site-specific photographic uploads of construction progress will begin in August.
By August 15, we will post a schedule of community meetings at the six comprehensive high schools and Riverview Middle School to discuss information about the Phase 2 and 3 construction process. Project timelines, and traffic and parking impacts will be shared. Check the Measure C website and watch for the next News Update for the times and dates of the meetings.
All schematic drawings for the first phase of the HVAC program have been completed and we are on schedule to begin the HVAC facility up-grade project this spring.
All site assessments have been completed and detailed project lists have been submitted so we can begin design and installation of an enhanced (1 gigabyte) Optiman service to those district sites not presently enjoying this level of connection.
High School Projects
In order to save tax payer dollars the district applied for Quality School Construction Bonds (QSCB) through the State of California. We received $4 million in approved bonds and were able to bundle them with another $7 million in bond sales. Given the current market conditions the district sold the $11 million in bonds at below a 3 percent interest rate.
The acceleration in the bond sales allowed the district to provide each high school with $1.5 million in funding to complete projects that they deemed priorities. Each site principal worked with staff and parent advisory groups to compile a list of needs which the district then provided estimated costs. Based on the costs, the sites then prioritized their lists and submitted them to the Board for approval at the June 28th Board meeting. Some highlights of the projects are:
· A classroom building with two new chemistry labs and store room at Clayton Valley and Mt. Diablo;
· Stadium water/sewage lines and Project Lead the Way engineering equipment at College Park;
· Stadium lighting and classroom technology up-grades at Ygnacio Valley;
· Stadium bleachers and Project Lead the Way engineering equipment at Northgate; and
· Classroom technology and HVAC up-grades at Concord.
The Board took several actions this past spring to save tax payers money and create a balanced budget while attempting to preserve positions. In March, the Board approved the sale of $11 million in additional bonds including the $4 million in QSCBs. The combined interest for the sales of these bonds was below 3 percent. In May, the Board approved a refinancing of the 2002 Measure C bonds sold in 2002 which lead to a savings of $4.4 million for tax payers.
The budget adopted by the state has triggers in place that may cause mid-year reductions. The budget the Board adopted in June will allow the district to address the current level of proposed mid-year funding reductions without having to eliminate positions in the middle of the year.
According to a July 21st letter from the Contra Costa County Office of Education, unified school districts should budget for flat funding but set aside a minimum of Average Daily Attendance (ADA) of $260 and appropriate reductions for lost transportation funding in reserve as a precautionary measure. Our budget meets these recommendations.
Lastly, our transportation department applied for and received a $1.7 million grant to purchase new buses. This will allow the district to purchase 10 new fuel efficient 65 passenger buses without having to expend any district resources. I would like to give special recognition to Jeff McDaniel and Angela Goakey who lead the grant application process.”
[END SUPERINTENDENT UPDATE]
The Measure C website address has been changed to: http://mdusdmeasurec.org/.
The district actually set aside $330 per ADA (average daily attendance) for mid-year cuts. Now that the County Office of Education has reduced its recommendation to $260 per ADA, the district has nearly $2.3 million more than recommended in its contingency fund for midyear cuts.
In addition, the district’s 2011-12 budget includes seven furlough days, which haven’t yet been negotiated with the teachers’ union. It also includes nearly $4.5 million in School Improvement Grants for the district and Bel Air, Rio Vista and Shore Acres elementary schools, which are in jeopardy because the district didn’t follow state and federal requirements to continue receiving the funding.
The district is required to INCREASE instructional time for all students at the three schools receiving the grants. Furlough days would DECREASE instructional time at the schools. The district is hoping to negotiate extended school days with the teachers’ union by the first day of school, which is four weeks away.
According to the district’s School Improvement Grant application, negotiations were planned during the 2010-11 school year. Yet, they were never begun.
Teachers union president Mike Langley told me the district urgently requested to “impact bargain” regarding the grants, after both sides had completed negotiations for the 2010-11 school year and had agreed not to resume negotiations until September. Now, the urgent negotiations are set to begin Monday, Aug. 8.
Are you satisfied with the district’s communications to the public regarding Measure C and the MDUSD budget?