Implementing School District Construction Programs, Part 1

Jason: Welcome to the latest episode of the Construction Insiders podcast, where our host, Jessica Busch, talks with industry experts about new trends, best practices, and how to successfully deliver construction projects in today’s market. Whatever your role on a project, we think you’ll find these discussions interesting and worth your time.

Jessica: Ok, we are continuing our focus on education and construction. We’re at the CASH conference still talking with people, seeing what’s going on in the industry. And today we have the opportunity to sit down with Michael Krause, who is the Assistant Superintendent with Anaheim Elementary School District. They are in beautiful Anaheim with Disneyland, all those wonderful family activities, but yes people live there. There are schools. There’s a lot going on. They have more than 16,000 students across 23 schools. And so I’d just like to say welcome Michael and thanks for taking the time to sit down with us today.

Michael: Great. Thank you, Jessica, for having me.

Jessica: So, not to dance around too much, let’s just get this going. I know I’m sure Michael is hungry. We broke him out at lunch here. So, when we are talking school and public school construction, what are some of these tools that you use to initially create that project? Where are you starting in your process?

Michael: So, one of the first things that we have to do is have a concept of what we want to do. What is the vision of the board? What is the vision of the superintendent and of the community? So, for instance, if we want to build a new school or if we want to look at renovating a school, what is the overall concept and how will that impact stakeholders in the community? How will it impact our students at the end of the day? We want to take that all into account in a pre-planning process. What is the initial concept? And then, once we work with all our stakeholders, we start creating the design built around the input and feedback that we receive throughout the planning process in order to see what that initially could look like.

Jessica: Ok. And so those tools and those planning tools, we hear a lot in our position in the industry about a long-range facility master plan. Is that where you start with the process? In terms of tools?

Michael: So, the long-range facility master plan, most districts have one, and it’s long-range, usually five years or 10 years or longer, and it looks at where the district currently is and where we want to be in the way of facilities. Whether it’s building new facilities or whether we think that we may not need as many facilities. We start there and it’s usually in collaboration with an architect that works with the district to help create and then revise the long-range plan over time. And so we want to refer back to that and see, do we need an update? So for instance, our district is currently updating our facility master plan to see where we are at, to capture construction that has happened in the last five years and then to see where we are going to be in the next five to 10 years. So that is a very important planning tool, not only for the district, but also for other people that are in the process, such as people in the construction industry.

Jessica: So, this master plan, how does it play into the decision-making process? Is it the guide? Is it something that you really try to get in the weeds with? How do you use it in terms of a tool?

Michael: Absolutely. Great question. So, if you get an opportunity to look at a school district’s facilities master plan, it’s a very intensive, informative document that talks about each school site. And when we think about districts, it’s not only the school site, but it’s also their maintenance and operation building. It’s also their other offices besides school buildings. But it takes a look at all those buildings, the shape they are in currently, the needs of those buildings, what needs to be done, whether it’s the infrastructure, the underground utilities, whether it’s the playgrounds outside. What are the current needs of the school district as far as facilities? But also 10 years from now, what are the needs? And so it talks about enrollment. We have a demographer that works with the district. What they do is, the demographer projects where your enrollment is going to be. How many students will a district have in five years, two years, 10 years. And we have to base our facility’s decisions based on that. We look at the long-range plan and say, do we have enough classroom space? Because that’s a number one consideration if we are a growing district. If we’re a declining district, then we also have to take a look at that and perhaps predict what site may not be usable in the future because of declining enrollment and what can we do with that site. We don’t want to have empty facilities. And so the long-range plan also helps us determine our best uses for each site.

Jessica: So, talking about the demographer and kind of outside consultants, when do you bring in your internal facilities, maintenance, operations staff and how do they play a part in this planning process and getting the project off the ground?

Michael: That’s a great question. Every step of the way, we involve our maintenance team and our facilities team, but we also involve our technology team because there are technology needs for students, such as the data drops and the internet and the infrastructure there. We also bring in our human resources team members in there because of staffing needs that we potentially could have in the future. We bring in our ED services team as well from the very beginning. So we have these giant stakeholder meetings that involve our internal departments to start talking about what if — if we do this, then what? What are the needs that we may have? Because if you don’t do that in the very beginning… it’s better to get things done first than have to go back and redo them because you didn’t bring in the team members in the beginning. So we really bring them in in the beginning and we work with the demographer to determine what those needs are. Because, for instance, they can tell us if we’re declining in enrollment — then when we buy textbooks as a district for ED services, we may not need to buy as many because we are declining in enrollment. And so those are the kind of decisions that we have to talk about and think about and not just look at what’s good for next year, but also look five years out and 10 years out. The demographer does those projections for 10 years and they help the district really see what’s going on. They capture new development in Anaheim, so if there’s new development going up, multi-family housing, single family housing, they take that into account, and that helps us as a district as well plan for future uses of our facilities.

Jessica: So, talking about future uses and running of the facilities, I’m assuming the maintenance and operations staff are involved throughout the planning process because they’re the ones that are now going to have to kind of run with it once it’s up. Are they involved at the level of when you’re making plans? Getting involved in that type of information? How do you bring those types of individuals in to make sure you have that bullet-proof type plan?

Michael: Great question. We have a facilities team, a stellar facilities team, that works with the architects to take the initial concept and put it on paper. And then what we do is we actually share those with our maintenance and operations team. So, we bring in the directors of M&O. We bring in the supervisors, custodial supervisors, the maintenance supervisors. We also bring the rank-and-file people that are out in the field, such as the plumbers, the electricians. And they review the individual sections that would apply to them at the end of the day, because when the project is done it is handed over to maintenance and operations. And so, we believe that a collaborative effort in the beginning helps to mitigate any kind of concerns or any kind of situations where we might need to redo something because it wasn’t done in the way that the district can maintain it. Because you have to think, when you think about maintenance, it’s a long-term effort. It’s not just a year or two, but maintenance continues on for the life of that facility. And so, you want to bring them in in the beginning to look at the plans. They make notes. They have discussions with architects at the table and then adjustments are made until the final plans are approved to go forward.

Jessica: So talking about involving people across the district and across specialties at the district initially in the planning, at what point do you bring in other stakeholders — like community members — that might have opinions, really understanding the politics that you have to be privy to and know what’s expected, what you’re going up against. When do you bring in those people?

Michael: We do it as soon as possible. One of the ways we are able to do that is at our board meetings where we present to the board and the community initial concepts. But we also have meetings before then with the community. We call the community together. For instance, if it’s an individual school site we invite people that are within those school district boundaries of that school and we have informative community meetings. We receive input from them, feedback on what they see, because they’re the ones ultimately that are going to have to live with what goes in their communities. We don’t want to surprise them at the end of the day and say, “Oh we’re putting this here.” And then they say to us, “Well, you never asked us our opinion on it.”

Jessica: Because it needs to serve the community.

Michael: Absolutely. And one of the biggest ways, one of the biggest issues we see, is traffic. And so, when we design a project, we want to bring in the community to say, “Ok, how do you think this will impact your traffic, the flow of traffic out of your neighborhoods, parking…”

Jessica: “Are there things the district isn’t thinking of because they don’t live in that exact neighborhood…”

Michael: Absolutely. And so that’s when we get that valuable feedback from community members. And they don’t necessarily have to be parents at the school, because not everybody that lives within a school boundary is a parent of a child that goes to that school. So, we want to hear from everybody in the beginning and we take their feedback. We have note-takers that document and then we review it with our team to see how we can incorporate the least amount of disruption in the neighborhoods.

Jessica: So, you do all your research, all your meetings, you get all the feedback, but at the end of the day there has to be unforeseen conditions, circumstances that pop up. How do you handle that? Can you prepare for it?

Michael: Well, we know what we know. And we know what we don’t know sometimes. But there’s other things that when we initially start doing a construction project, we find out. And that’s where the words “unforeseen conditions” come in. So, for instance, if we’re digging in the ground and we discover something that nobody knew about because it was there since 1850, then we have to come up with a plan B. But when we build our budgets, we always put in a cushion for a project to have unforeseen conditions mitigated potentially. There’s a dollar amount in there that we have, but we are also ready to work with the contractor to bring in additional assistance to mitigate an issue if we have it like with a city. So, for instance, we have a great partnership with the city but sometimes the connections to the city sewer system or the city utilities, we have to work with them because we didn’t anticipate some issues that we find. So, we always are prepared to have those conversations. We work with our partners, the architects, the city public works department, the neighborhoods, anybody that could be impacted, and we let them know if there are any contingencies that we have to do. We’ll let you know as soon as possible. So, they’re aware as well. I think one of the great things we do is also put out newsletters to inform the community of what’s going on so they’re up to date. When they drive past it, they know, “Hey, they’re in this phase.”

Jessica: There’s that transparency, even at that level.

Michael: You have to have that transparency, Jessica, because it’s so imperative. You don’t want people coming to the district saying, “I never knew about this. And now this monstrosity is coming in. I can’t even see the sun at my house anymore because it’s shading my house.” So, those kind of things, we want to make sure we do the public community forums, the inputs, but also they can have ideas of what was there. People who have lived in Anaheim for years might know about something we don’t know related to a school.

Jessica: Give you a heads up.

Michael: Give us a heads up on what was there. Maybe it was an old auto shop that they worked on autos for years.

Jessica: And oil was in the back and was never discovered.

Michael: And we may not know that because there may not be plans. That’s one of the things that we find a lot, is that things weren’t always put down on paper. And so, we don’t know the history of the property or history of what was there, and so unforeseen — when we start doing things or we start opening up walls, we’re like, “Wow, where did that come from?” So we always build in those contingencies.

Jessica: Ok. So, in terms of getting these projects off the ground, let’s talk financing and budgets. How does that look to you guys? Where do you start?

Michael: We’re very appreciative to the community in Anaheim for supporting general obligation bonds. Anaheim has floated general obligation bonds, which is the number-one way school districts fund major projects and facilities. It all starts with stakeholder meetings again. Talking about, “Here’s the needs.” They demonstrate in a presentation the long-range master plan needs of each site and what needs to be done, and there’s a dollar amount assigned to that site. So, for instance, you’d have 23 sites and overall there might be needs of $500 million in construction, but the bonding capacity of the district may only be $200 million. So, we have to prioritize which school sites, what projects, and we present that to the community and we say, “We’d like to go out for a bond and here’s the dollar amount. Here’s what those dollars will fund.” Then it goes to the voters. The voters have been gracious enough in Anaheim to approve measure G bonds for us and we’ve been working on several projects in the last several years, and we’ll continue in the future on renovating schools as well as various other projects that we’ve done, like single point of entry, putting up new fencing at school sites. But the bonds are the number one way.

Outside of that, we also can use general fund dollars that the district has through the state. The state funds school districts with money. It’s not necessarily geared towards facilities, but sometimes we have to use that to supplement the bond funds in the long range. But also districts in general, not necessarily Anaheim, but districts also look at doing parcel taxes to where there’s a parcel tax put to voters. And then every parcel is assessed a certain value and they pay a dollar amount and it goes towards the facility, kind of like a bond. There’s also certificates of participation where districts take out a loan from a bank and then pay for the savings.

A great example is solar, if a district wants to do solar. I did a project in another district where we did a solar canopy and the cost savings from saving on electricity paid back the loan from the banks. That’s like a COP. Those are different financing mechanisms, but in general the state of California doesn’t have a lot of bond dollars or facilities dollars for school districts, so they have to look to their local community to supplement or finance them. We’re very appreciative, again, on what our community has been able to do. But they’ve been supportive because we’ve been transparent in the process.

Jessica: And there seems to be a lot of school districts that forget if you’re not providing information, someone else is creating a narrative and things can be lost in the communication if there’s not much going out. So, really being up front and involving the community, you guys seem to do such a good job with that. That must make it a lot easier to get those bonds fast, when they know exactly what you’re doing and know exactly how you want to spend it.

Michael: Right. And our philosophy is over-communicate rather than under-communicate, because we’d rather put out too much information and in many avenues. It’s not just mailings. It’s on our website. It’s telephone calls. It’s emails. It’s various avenues to advertise what we’re doing and how often we’re doing it and the status of the projects. And let them know, here’s the value you’re getting for the tax dollars that you’ve graciously approved for the district. And they see that in the final products. We love to give tours of the final product. We’re doing two new schools right now.

Jessica: I was going to ask. You must have a lot coming down the pipeline. You guys are growing.

Michael: So, we have two new schools and a total of $100 million for those two schools. They’ll be coming online here in the fall and in the winter, and we like to showcase what they are. We invite the public to come see them. We invite the public to come to our board meetings to see the power point presentations on the construction right now. We like to make sure they know what’s going on and over-communicate, because, as you stated, if we don’t tell the story someone else is going to tell it for us. And we want to make sure that we’re telling the right story and a positive story for what’s out there and all the great things our district in general does as far as facilities and maintenance and operations.

Jessica: We always love the positive story, but sometimes with construction there are things that go wrong, like maybe needing to fire your contractor or reevaluate a situation. How do you go about that in terms of transparency and in terms of budget, all of those things? What does that look like for your general approach?

Michael: Great question. One of the things we follow is the public contract code in California. For school districts, when we go out to bid for a project, the lowest response or responsible bidder is generally who is qualified to do the project, so in that case we can’t determine who the ultimate contractor will be. It just depends on who qualifies under the bidding process. So, you never know who you’re going to get until the bids are opened up and you work with that contractor. But as you stated, there are times — and I’ve seen it in many districts — where contractors aren’t doing what they should be doing, they aren’t meeting the timelines. There’s a schedule and a timeline of events that need to happen in order for a project to be done. And so sometimes, yes, we have to take a hard look at where we are at, if the contactor is able to finish that project, and if not, what are the steps that we need to do.

Districts have to work with the legal counsel to let the contractor know you aren’t meeting your obligations, and then generally what we have to do is sometimes we have to bring in an additional contractor to come in and finish the work to get it done on time. For instance, if it’s time sensitive, depending on if school is opening up in August and kids need to go somewhere and the project is not done, we have nowhere to put them, we have to bring in someone else to come finish the job, but then still hold accountable the contractor that was not able to meet their obligations.

Jessica: When it comes to budget issues when those things happen, I can only assume they’re working Saturdays now to try to catch up on that timeline, and those are some of the unforeseen things that pop up that you have contingencies for.

Michael: Yes. Constantly — weekly, if not daily — there are updates with the contractor on how they’re doing, what assistance the district can provide to them and then what assistance they’re needing, that might request additional time such as weekend work. That’s kind of tricky, because depending on the city you’re in there are ordinances where they can only work certain hours of the day and certain days of the week, and so we have to make sure that we’re aware as a district what those are. We don’t want to upset the communities as well, because somebody is sleeping in on a Saturday morning and doesn’t want to hear a jack hammer.

Jessica: Or doesn’t really care that a kindergartener has a desk next month… So, before we wrap up, you’ve been doing this for a while and you’ve seen, I’m sure, all sorts of lessons learned that you would take away from this: good and bad and ugly. What does success look like to you? What’s your ideal scenario when it comes to going into a project?

Michael: I think the communication is key in the beginning with all stakeholders, but also bringing in the contractors, the vendors, the architects, the subcontractors, people that are going to be working the project and emphasize to them, “Yes, it is a construction contract, but at the end of the day it’s for the students.” I think if we emphasize that, then they have a stake. I like to relate it to, “Think about your own children and their school, if you were working on their school.” So that kind of gives them that perspective of getting it done and getting it done on time. That’s what I think for us the end game is: to get projects done on time, but as a collaborative effort, not just the district being a heavy hammer saying, “Hey, we have to have it done now,” but working with all the partners there to ensure the project opens up, and then celebrating that at the very end, having grand openings and inviting everybody. Not just the community, but the people that were involved in the construction process. I think that makes them feel better, knowing that they really contributed, and seeing the students smile at the end of the day.

Jessica: To see the end project.

Michael: The students are very happy with the end project. That’s very good for us.

Jessica: Wonderful. I can’t thank you enough for stepping away and skipping lunch. We got a little bit of quiet actually here at the conference, as everyone is having their break time. I just wanted to thank you. Do you have any closing comments about any school district that may be jumping into this for the first time? Just to buckle up and get ready?

Michael: No, I appreciate the opportunity to have this discussion. And I look forward to engaging in these discussions in the future. I think school districts, there’s a lot of challenges for them, but I think if they approach it in a positive way, they will be successful on their project.

Jessica: Awesome. Well, thank you, Michael. We’ll talk soon.

Michael: Alright. Thank you.

Jason: If you enjoyed this episode of Construction Insiders, we encourage you to check out our website at www.ccorpusa.com, that’s ccorpusa.com. Where you can find our full knowledge library under the Insights tab. It’s all great stuff, we’re really passionate about it, and we hope you’ll check it out. Thanks for listening.