Proposition-S ICOC SubcommitteeConstruction

June 2, 2011, Exhibit 5

PHYSICAL PLANT OPERATIONS2011 Board of Education Workshop

1

AGENDA� Physical Plant Operations Overview

� Supporting the Educational Environment� Maintenance Work Definitions

� Focus: Maintenance Plans� Maintenance Requirement vs. Available Funding� District Facility Condition

Cost: Independent Citizens Oversight Committee Review

June 2, 2011

� Cost: Independent Citizens Oversight Committee Review � Focus: Funding

� Types of Funding vs. Operations� Current Challenges and Proposed Approach� Maintenance Plan Vetted with Independent Citizens

Oversight Committee� Discussion

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“Researchers have repeatedly found a difference of 5-17 percentile points between achievement of students in poor buildings and students in above-standard buildings, when the socioeconomic status of students is controlled.”

FACILITIES CONTRIBUTION TO EDUCATION

June 2, 2011

– Glen I. Earthman, “School Facilities Conditions and Student Academic Achievement.” Report prepared for Williams v. State of California, UCLA 2002, pp. 8-9

3

MAINTENANCE PLANNING AND REPAIR STAFF 10/11

� 14.8 Million Square Feet of Buildings

� 2,600 Acres of District Property

� $38 Million for Staff and Repair Supplies

June 2, 2011

� $38 Million for Staff and Repair Supplies

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GROUNDS MAINTENANCE

� 2,600 Developed Acres� 21 Million Square Feet

of Asphalt

June 2, 2011

Seal Coat Asphalt Overlay

Dig and Replace Trip Hazards

Storm Drains Fencing

Line Stripe Sidewalks

Grading Irrigation Systems

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BUILDING MAINTENANCE

� 1509 Permanent Buildings, 12,425,428 Square FeetAverage Age 39 Years

� 1926 Portable Buildings, 1,881,731 Square Feet

June 2, 2011

1,881,731 Square FeetAverage Age 48 Years

Paint Audio Visual Systems

Heating and Cooling Lighting & Power

Fire and Intrusion Alarms Plumbing Systems

Doors and Locks Roofing

Time & Signal systems Pest Control

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MAINTENANCE PLANNING

� Maintenance Planning� Support 285 Tradesmen� Coordinate with FPC/Prop S � Maintenance Contracts

June 2, 2011

� Maintenance Contracts

Planning Major Repair and Replacement Plan

Estimating Repair and Replacement Plan

Inspection Priority Projects

Work Reception Capital Improvement

Work Coordination/Scheduling Preventive Maintenance Planning

Williams/SARC Inspection Facility Condition Assessment

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CAPITAL WORKTERMS

Capital Improvements (CI):

Major Repair & Replacement (MRR):

DEFINITIONS

Programmatic upgrades to meet educational needs, district programs and curriculum, and significantchange of systems technology (i.e., replacement ofheating units with package air conditioning systems, andassociated new energy efficient windows and buildinginsulation, etc.).

Replacements and upgrades of systems, such as new roofsystem, building enclosures, etc. Often considered a part

June 2, 2011

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Major Repair & Replacement (MRR): system, building enclosures, etc. Often considered a partof modernization or renovation of a building, generallywith a life expectancy of 20 or more years.

MAINTENANCE WORKTERMS

Repair & Replacement (RR):

Regular Maintenance (RM):

Preventive Maintenance (PM):

DEFINITIONS

Repair and/or replacement of items generally with a life expectancy of less than 20 years.

Minor repairs, as reported from sites, resulting fromnormal wear and tear on buildings such as toilets, locks,light switches, etc.

Maintenance such as inspections and lubrications of systems designed to prevent deterioration into disrepair.

June 2, 2011

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SCHOOL FACILITY METRICS

� Comparative Industry Funding Metrics

� 2% – 4% of Current Replacement Value (CRV)� SDUSD CRV $4.9B: $98M to $196M Annually

� Portolan Metrics

June 2, 2011

� Portolan Metrics� $4 – $5 Per Square Foot: $59.2M to $74M� $400 – $500 per Student: $54.1M to $67.6M

� State of California� 3% of General Fund allocated to Routine Restricted

Maintenance Account: $34M � Currently not required until 2015

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FACILITY CONDITION ASSESSEMENT

� Leverage extensive Williams/SARC inspections to assess facilities annually�General review focused on service life, maint. history

� Incorporate AECOM FCA’s into PPO’s CMMS�Detailed review focused on bond term

June 2, 2011

�Detailed review focused on bond term

� Leveraging trade activity with state of the art tools for assessing less obvious deficiencies�Remote cameras� Infrared technology for roofs, electrical, HVAC

Note: The above actions shift calculated deficiency values to literal values

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DISTRICT FACILITY CONDITION� To calculate the Facility Condition there is a

industry standard of a ratio of total cost of repairs needed, divided by the current replacement value (CRV) of the district.

� Here is the current district calculation:

June 2, 2011

Needed Repairs: $750MCRV: $4.9B

= 15.3%

Good Fair Poor

0% 5% 10%

4/1/2011

2018 GoalEstablished 2008

12

DISTRICT FACILITY CONDITION: CURRENT

12.00%

14.00%

16.00%

18.00%Facility Condition Index

Increase in CRV

Go

od

Fai

r P

oo

r

June 2, 2011

13

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2008 Plan Actual FCI Projected

$136,682,632 Difference

Go

od

Fai

r

By delaying Prop S contribution, it costs more to achieve our FCI goal

MAINTENANCE WORK TYPES:APPROPRIATE FUNDING FOR WORK

Capital Funds for Capital Projects:

Capital Improvements (CI):Major Repair & Replacement (MRR): Repair & Replacement (RR):

Deferred Maintenance FundProposition S Bond Fund

Routine Restricted Maintenance Account:

Regular Maintenance (RM): Preventive Maintenance (PM):Repair & Replacement (RR):

General Fund

June 2, 2011

Proposition S Bond FundRedevelopment FundState School Facilities FundDeveloper Fee FundProperty Management Fund

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THE CHALLENGE: FUNDING� Insufficient Funding for Regular & Preventive

Maintenance in General Fund� Long Term Funding of PPO

� Budget Flexibility Ends 2015� Resume 3% General Fund Contribution to Routine Restricted

Maintenance Account (RRMA) � Approximately $34M

June 2, 2011

Approximately $34M� State School Facilities Fund Depleted

� Prop S $50M Annual Contribution to MRR Has Been Delayed until FY 13/14� Yet buildings will not slow down deterioration and original

FCI goal less likely to be obtained� In FY 13/14 SSFF Funds Depleted� Other One-time Funds Also Depleted

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2008 MAINTENANCE PLAN VS. 2011 EXECUTION

14%

16%

42%

7%

2011 Execution (38.0M)

16% Capital

Improvements

15% Routine

Maintenance

9% Preventative

Maintenance

2008 Plan (91.2M)

June 2, 2011

16

21%

42%

Work Category 2008 Plan 2011 Execution

Capital Improvements 14.3 5.5

Major Repair & Replacement 35.8 6.0

Repair & Replacement 19.0 8.0

Routine Maintenance 14.1 16.0

Preventative Maintenance 8.0 2.5

Total: 91.2 38.0

39% Major Repair

& Replacement21% Repair &

Replacement

PPO BUDGET & EXPENSE TRANSFER PLANFISCAL YEAR 2011/12

$30

$35

$40

$45

$50 GF Restr Maint $12M

SSFF $25M

Prop S $3M

Prop Mgmt $3M

General Fund

June 2, 2011

$0

$5

$10

$15

$20

$25

As Budgeted As Funded

Prop Mgmt $3M

Dev Fees $2M

CCDC $1.4M

Othr Misc $1.2M

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General Fund

Work Order Expense Transfer

State School Facilities Fund

Prop S

Property MgmtDeveloper Fees

Total - $47.6 Million

PPO MAINTENANCE EXPENDITURE HISTORY

$40

$50

$60

$70 Restricted Maint GFSecure our SchoolLiability InsuranceMesa College ConstrRedevelopment AgencyAdult EdState PreschoolCopley Fund

June 2, 2011

18

$0

$10

$20

$30

$40

2005 2006 2007 2008 2009 2010 2011

Copley FundChild DevelopmentProp ManagementProp InsuranceCafeteria FundProp SProp MMDeveloper FeesDeferred MaintenanceState School Facil Fund

PPO BUDGET PROJECTIONSFISCAL YEARS 2012 - 2014

$35

$40

$45

$50 GF Restr Maint

SSFF

Prop S

June 2, 2011

19

$0

$5

$10

$15

$20

$25

$30

2011/12 2012/13 2013/14

Prop Mgmt

Dev Fees

CCDC

Othr Misc

STATE SCHOOL FACILITIES FUND

200

250

300

350

400

MRR/RR Reserve

SSFF Fund W/O Reserve

PPO Expenditures

Non-PPO Expenditures

June 2, 2011

20

2.821.4

27

28.9

26.4

10 12.75

2025

32.25

00

50

100

150

FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15

STATE SCHOOL FACILITIES FUND

25

20

25

32.25

15

20

25

30

35

June 2, 2011

21

�MRR/RR Funding Plan is Budgeted for 25M Annually FY10 through FY13�MRR/RR Work Plan will allow extension of these funds until FY14 �Work originally planned (needed) in FY10 through FY13 will be completed in FY14

0

10

12.75

00

5

10

15

FY 10 FY 11 FY 12 FY 13 FY 14 FY 15

PPO MRR/RR Funding Plan as Budgeted

PPO MRR/RR Work Forecast as Planned

FACILITIES CONTRIBUTION TO EDUCATION

“Researchers have repeatedly found a difference of 5-17 percentile points between achievement of students in poor buildings and students in above-standard buildings, when the socioeconomic status of students is controlled.”

June 2, 2011

is controlled.”

– Glen I. Earthman, “School Facilities Conditions and Student Academic Achievement.” Report prepared for Williams v. State of California, UCLA 2002, pp. 8-9

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RECOMMENDATIONS:

� Approve the SSFF MRR reserve fund� Support the 2011/2012 Maintenance Budget

as presented� Support 2015 Maintenance Funding at 3% of

June 2, 2011

� Support 2015 Maintenance Funding at 3% of the General Fund for the Routine Restricted Maintenance Account, $34M

� Fund Annual Maintenance Plan per 2008 recommendations, $91.2M

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