BERKELEY UNIFIED SCHOOL DISTRICT

TO:              Donald Evans, Ed.D., Superintendent

FROM:        Pauline Follansbee, Assistant Superintendent  

DATE:         June 27, 2108               

SUBJECT: Approve Resolution No.  18-033 for Taxable General Obligation Bonds Measure I (2010 Authorization Serial Bonds).

BACKGROUND INFORMATION

On November 7, 2010, voters approved bond Measure I for the amount of

$210 million.  The proceeds from Measure I is to be used for certain projects to construct new classrooms for growth, complete seismic upgrades, construct science labs, upgrade computers and education technology, renovate playgrounds, replace restrooms, cafeterias, roofs, heating, heating and fire safety systems, remove hazardous materials and improve energy efficiency.

The funds for Measure I will be collected through local property taxes over the years of the bond.  The tax rate to the voters will continue to mirror the rates of prior measures and will hold to the District's promise to not exceed the highest rate of $172.80 per $100,000 of the assessed valuation that occurred in 2003/04.

In order for the District to have upfront funds available to begin and complete projects, the District will periodically sells bonds on the Municipal Bond Market up to the amount established in the measure.

The District has reviewed and has updated its Measure I expenditure plan several times this year.  The last such plan was reviewed by the Board on June 13, 2018.  In order to accomplish the projects reviewed and those previously approved by the Board, BUSD must issue the remainder of the bonds.  A cash flow plan has been prepared by staff and reviewed by KNN, the District's financial advisor.

FISCAL IMPACT

The issuance of $85,000,000 of Measure I bonds will put the tax burden of all Measure I bonds in the low $50 per $100,000 of assessed valuation which is below the $60 per $1000,000 of assessed valuation maximum required by these types of bonds.  It will also place the tax burden for all BUSD bonds (A, AA and I) in the low $140 per $100,000 of assessed valuation which is below the $172.80 per $100,000 of assessed valuation which the Board committed to stay below.

STAFF RECOMMENDATION

Approve Resolution No. 18-033 for the issuance of $85 million in General Obligation Bonds approved Measure I (2010 Authorization Serial Bonds).

BERKELEY UNIFIED SCHOOL DISTRICT

TO:                  Donald Evans, Ed.D., Superintendent

FROM:             Lew Jones, Interim Director of Facilities

DATE:              June 27, 2018

SUBJECT:         Approve the Schematic Design of the West Campus Capacity Project

BACKGROUND INFORMATION

On January 24, 2018, the Board approved a contract with CAW Architects to develop a design for West Campus so that a school could be housed at that site.  The Board must approve the schematic design so the construction documents can begin.  The first site we plan to house at West Campus is Oxford Elementary School.  Unlike most of our projects it did not have a traditional Site Committee as the anticipation is that other schools will utilize the space in the future.  The site includes:

1. Freshening up the classroom spaces, which has been used by a Charter School in the past;
2. Improving the auditorium;
3. Providing handicap access and modifying the old music room;
4. Remodeling the second floor old girls’ gym space to accommodate food service and a dining space; and,
5. Adding play structures so there is a place for the elementary students to play.

We had done some preliminary design to house the duplicating service and to provide more structured storage in the lower level of the old girls’ gym.  The location of the copy service causes a number of logistical challenges for pickup and delivery to the copy center in the middle of an elementary site, so it may not be the best location for this department.

The cost to do work below the old girls’ gym is outside the available budget.  Unless the Board decides to augment the budget, the space will remain as storage.  We only plan to provide lights and power and possibly heating to this space.  On a separate track, the District is working to scan the stored documents so that physical storage of documents will be substantially reduced. 

Staff has noted that there is a concern with the restroom layout.  We will work to have a more acceptable solution to this issue in the next several months.  The current schedule calls for a bid to be awarded in March 2019 with construction to begin in April.  

The project is estimated to cost $6,928,000.  We have reserved an additional $300,000 to potentially put a door in the hallway to the kindergarten area and to make the restrooms more appropriate for the smaller children.   With this allowance, the total estimated construction cost is $7,228,000 The available budget is $7.36 million. 

RECOMMENDATION

Approve the schematic design of the West Campus capacity project. 

FISCAL IMPACT

Cost of award by this action: None.  The project is within budget and will be funded from Measure I. 

BERKELEY UNIFIED SCHOOL DISTRICT

TO:                  Donald Evans, Ed.D., Superintendent

FROM:             Lew Jones, Interim Director of Facilities

DATE:              June 27, 2018

SUBJECT:         Facilities Plan Modifications: Approve Recommendation to Adjust Line Item Budgets in Measure AA

BACKGROUND INFORMATION

On February 7, 2018, the Board of Education approved the latest revision to the Measure AA budget lines when it added some money for Rosa Parks roof, moved program expenses to Measure I and made adjustments in supplies, equipment, travel/conference and rentals.  In order to have sufficient funding to complete desired projects other adjustments are needed.  They are:

1. Longfellow Maker Space: Decrease the budget by $323,000.The project will actually need additional funding, but it is a CTE project and belongs in Measure I with other CTE projects.There is sufficient funding in the CTE budget line of Measure I to accommodate all expenses starting in Fiscal Year 2019 for this project;
2. King CDC Play structure: Eliminate the remaining funding for this project, freeing up $275,353.There is no plan to complete this project;
3. Rosa Parks Roof: Increase the budget by $1,350,000 in order to do the proposed work.The initial budget proposed is inadequate to perform the work.Work will be done sometime in 2019;
4. Professional Consulting Services: Increase this budget line by $200,000 to close out legacy projects.Legacy projects are those projects that DSA has not yet certified for a variety of reasons.Four years ago we had 73 projects which were not yet certified.We currently have five that are not certified and two more (Rosa Parks and Longfellow) we plan to have certified with the roof and Maker Space project architects.The budget is requested to focus on certification efforts for the remaining buildings;
5. Increase Income:Increase the income by $754,000 to account for the 6^th Street surplus property deposit and to account for a small amount of interest and rebates.

Attached to this document are both a one page summary of expenses in Measure AA and before and a more detailed breakdown of all expenses and income in Measure AA and before.   Please note that there was a minor mistake in the February 7, 2018 statement of available carryover. 

There are potential additional challenges and opportunities in the future.  The following list is not comprehensive, but a basis for future thinking:

1. No potential OPSC dollars are included in the budget.This conservative approach is recommended at this time, but the District does have substantial eligibility.Funds could be placed in Measure AA or Measure I;
2. No reimbursement from the City for project costs for the Board Room are included although the City and the Board have been in negotiations on this subject.Expenses for the project were made in Measure AA; and,
3. The Rosa Parks roof is in early design.At this preliminary level it is unclear of how long the project will take, but early indications are that the multipurpose building will need to be under construction for more than just a summer.A temporary food service building may be needed.

FISCAL IMPACT

The adjustments are within the overall budgets.  There is an available balance of $414,025.    

STAFF RECOMMENDATION

Approve the adjustment recommended above. 

BERKELEY UNIFIED SCHOOL DISTRICT

TO:                  Donald Evans, Ed.D., Superintendent

FROM:             Lew Jones, Interim Director of Facilities

DATE:              June 27, 2018

SUBJECT:         Facilities Plan Modifications: Approve Recommendation to Adjust Line Item Budgets in Measure I

BACKGROUND INFORMATION

On February 28, 2018, the Board of Education approved the latest revision to the Measure I budget lines when it added $2,000,000 to add a security project.  In order to have sufficient funding to complete desired projects other adjustments are needed.  They are:

1. Berkeley Community Theater: Increase the budget by $3,750,000 in order to do the proposed work in the classroom wing and to provide an interior connection to the Little Theater.The increase is almost entirely due to three factors: seismic work required by DSA, increased escalation because the construction will occur later than original thought, and recognition of the current bidding climate;
2. Maintenance and Operations: Eliminate all future planned work, currently budgeted at $5,674,000.There are insufficient funds currently in this budget to initiate a project;
3. CTE at BHS and Adult: Transfer the Longfellow Maker Space project to the Measure I CTE budget line beginning next Fiscal Year.The total project is estimated to cost an additional $535,000 more than what has already been spent.There is an available balance in the CTE budget of approximately $1.38 million, so no adjustment in the CTE line is needed, although the title should change to CTE projects;
4. Masterplan: Increase the program management line by $450,000 to include this needed task.The increase is shown in the attached document as a separate line item for transparency.In the future this task would be included in the Program Management line budget;
5. Bond Issuance and Disclosures: Increase the program management line by $350,000 to include this needed task.The increase is shown in the attached document as a separate line item for transparency.In the future this task would be included in the Program Management line budget;
6. OPSC Support: Increase the program management line by $100,000 to help leverage State Bond Fund money; and,
7. Increased Income: Interest income was not included on the previous spreadsheet.A budget of $1,300,000 is recommended.

Attached to this document are both a one page summary of expenses in Measure I and a more detailed breakdown of all expenses and income in Measure I.  

There are potential additional challenges and opportunities in the future.  The following list is not comprehensive, but a basis for future thinking:

1. No potential OPSC dollars are included in the budget.This conservative approach is recommended at this time, but the District does have substantial eligibility.Funds could be placed in Measure AA or Measure I;
2. No Developer fee income is included in the budget.The District has received income but we thought it best to have a discussion about the uses of that income at a future time;
3. The District will likely need to implement a software system that can assist in accounting for project expenses and the cost to do that is not contained in the budget.The system is currently being reconciled manually;
4. The King auditorium budget may need to be enhanced;
5. There are several roof projects that were planned to be completed before 2021 that may need to be added to the project list.Maintenance is reviewing those buildings;
6. The Sylvia Mendez Elementary School Phase 1 Modernization budget is untouched, but only the roof and skylight replacement is proceeding.The remainder of the project is not currently underway and after a further review, it may make sense to not do any more work there until the masterplan is completed or additional funds become available.
7. The potential facilities modifications related to revised educational model at B-Tech; and,
8. Any potential transitional housing for Berkeley Community Theater

FISCAL IMPACT

The adjustments are within the overall budgets once the interest is included.  There is an available balance of $1,517,664.    

STAFF RECOMMENDATION

Approve the adjustment recommended above. 

BERKELEY UNIFIED SCHOOL DISTRICT

TO:                  Donald Evans, Ed.D., Superintendent

FROM:             Lew Jones, Interim Director of Facilities

DATE:              June 27, 2018

SUBJECT:         Opportunities to Apply for and Receive Facilities Funds from the Office of Public School Construction (OPSC) 

BACKGROUND INFORMATION

The District has successfully applied for State Bonds for almost thirty years.  The District had to forego its rights to pursue State facilities dollars (except Deferred Maintenance Funds) for a number of year as a condition of its state loan in the mid 1980’s.  From the very early 1990’s to the present day, the District has received $40,640,976 in funds from the State for facilities (not including Deferred Maintenance Funds or Proposition 39 Funds).  More opportunities exist.

Most of the funding the District has received is for modernizing its facilities.  As a generally rule, a District’s modernization eligibility is determined by its number of students and the age of its facilities or the date of its most recent approved State apportionments.  Generally speaking, if the District utilized its State apportionment for modernization, it gives up eligibility for modernization for the next 25 years.  That approach has not always been the way eligibility is determined and it may not be determined that way in the future.

In the recent past, we have been actively exploring possible applications for apportionments for 8 schools, with the potential of approximately $14.8 million.  We just recently added one school (Emerson) to our list (almost $1.5 million) and are actively exploring three other projects (West Campus Realm project, CTE projects and BAM, which may have its eligibility re-set either now or very soon).  We also have done some preliminary exploration of two seismic projects, both at the High School (the Old Gym and the Community Theater).  The cost to pursue seismic funding is significant, but the rewards can be significant as well.  There may be wisdom in doing at least a preliminary seismic report for the two projects, and if there appears to be eligibility, to request a price from the structural engineer(s) to take the analysis to the next level.    

In the future, we could apply for more apportionments.  Probably 75% of the District apportionments were in the 1990’s and early 2000’s, and if the State continues to fund modernizations in the same manner as it currently does and the voters approve additional bonds, the District will continually become eligible for future modernization apportionments in the 2018-2028 period.

RECOMMENDATION

Accept the report.  Consider approval of seismic applications in the future. 

FISCAL IMPACT

Cost of award by this action: No cost to accept the report.    

BERKELEY UNIFIED SCHOOL DISTRICT

TO:                  Donald Evans, Ed.D., Superintendent

FROM:             Lew Jones, Interim Director of Facilities

DATE:              June 27, 2018

SUBJECT:         BUSD and City of Berkeley Memorandum of Understanding (MOU)

BACKGROUND INFORMATION

The City and the School District have an old MOU, dated June 4, 1991.  That MOU covered many issues that existed between the two parties.  We have attached the agreement for reference.  It provides an interesting historical reference as well as forming the basis for the rest of this document.

Almost all of the issues contained in the agreement appear to be no longer relevant, although some issues may still be important to the City, but clearly two primary issues still exist between the parties and potentially a smaller issue exists as well.   The two primary issues are the pools and the Measure Y Parks.  The smaller issue is that within the agreement, the City agrees that the District is exempt from obtaining building permits for educational projects.  The reason this is considered a more minor issue is that the District is already exempt from obtaining such permits, but it may minimize disputes between the parties. 

There are seven identified Measure Y Parks.  Each park is only a portion of the site.  By way of example, the King park is only the portion between the pool and the field in the lower yard.  The seven sites are:

1. LeConte (the school has been renamed Sylvia Mendez, but the park has not);
2. John Muir (a portion of this park is also governed by Federal requirements to continue to be a park);
3. Malcom X;
4. Washington;
5. Columbus (the school has been renamed Rosa Parks, but the park has not and it is also governed by Federal requirements to continue to be a park);
6. Thousand Oaks (maintained by the City); and,
7. King (maintained by the City).

There are four identified pools:

1. Willard
2. King
3. West Campus
4. BHS (no longer in place)

The City’s legal staff has determined that the MOU will cease to be in effect as of its expiration date of December 31, 2020.  The District has no reason to disagree with the City’s analysis.  The parties have discussed this matter during at least one 2X2 Meeting and the Superintendent and City Manager are scheduled to discuss the issue on June 28^th. 

The City and the School District have a number of options of how to address the expiration of the agreement.  If the agreement were to expire, the pool sites would revert to the District although the buildings may be the City’s property, and the City would no longer maintain Thousand Oaks and King Measure Y Parks.  The following options were developed by staff:

1. Do nothing;
2. Extend the pool and Measure Y agreements for a short period of time, possibly until 2023; or,
3. Negotiate a new long term agreement.

There are a number of negatives to the first option.  There is significant discussion that would be needed within BUSD about the ramifications and significant discussions within the City prior to any resolution between the parties of a reasonable and shared path forward. 

The second option has a number of advantages, including allowing a little more time for analysis and providing time for the District to complete its facilities masterplan process prior to making any long term commitment.  This provides flexibility, but does not solve the problem and would probably preclude the use of City capital funds for improving the pools in the short term.  They will likely have the option of considering pool improvements in their third round of capital funding, as that will not occur until after 2023.  From the District’s perspective there are some advantages.  By way of example only, the District may determine that all middle schools need both a cafeteria and an auditorium and that Willard (which has only a cafetorium) would benefit from considering the option of the space where the pool is located as a potential option to place an auditorium.   

The third option has a number of advantages as the issues could be settled long term.  The primary disadvantages are that the District has not fully examined the issue and that the resolution of the issue may require more consideration than the District can commit to in this window of time.

FISCAL IMPACT

This report has no fiscal impact.  Future choices may have an impact. 

STAFF RECOMMENDATION

Accept this report.