Monitoring Report - Operational Expectations (OE) Policies

Policy: OE-11

Title: Facilities Interpretation and Monitoring Indicators

Status: Active

Adopted: May 28, 2024

(Part 2 of 2 due to length)

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The Superintendent will not build or renovate buildings.  

Interpretation 

We understand this component prohibits the Superintendent from unilaterally making decisions about building or conducting major renovations of District facilities. Although the Superintendent may be asked to make recommendations or provide plans for construction projects or renovations, the ultimate authority in these areas resides with the Board. 

We do not believe this component prevents the Superintendent or her staff from implementing such minor upgrades as deemed necessary to conduct the safe and efficient operation of the District. Such minor upgrades may include but are not limited to: (1) reconfiguring spaces through the addition or removal of partitions; (2) adding or converting storage areas; and/or (3) installing or taking away equipment. 

Monitoring Indicator(s)  

We will know we are in compliance with this component when we can show: 

No major construction or renovation projects have been completed without School Board authorization.  

The only major construction projects undertaken since we submitted our last OE-11 report in 2022 have been the ones included in the 2019 Capital Bond package, which was fully authorized by the School Board. Since the passage of the bond, the School Board has been kept apprised of the progress of the various projects through Weekly Bond Updates, quarterly reports from the Bond Oversight Committee, and Board representation on the Bond Oversight Committee. 

The Superintendent will not recommend land acquisition without first determining growth patterns, comparative costs, construction and transportation factors, and any extraordinary contingency costs due to potential natural and man-made risks. 

 

Interpretation 

We understand this component prohibits the Superintendent from bringing any proposal related to land acquisition to the School Board without first meeting appropriate standards of due diligence. This means the Superintendent is expected to base such recommendations upon carefully gathered data and rationale regarding demographics, costs, and benefits to the District.  

 

This component of Policy OE-12 (Facilities) is the companion to component 8 of Policy OE-7 (Asset Protection), which states that “the Superintendent will not purchase or sell real estate, including land and buildings.” 

Monitoring Indicator(s)  

We will know we are in compliance with this component when: 

Any land acquisition proposals have been thoroughly vetted by the School Board.  

Since our last OE-11 report in 2022, our only major land acquisition was purchasing 0.49 acres of property at 5537 Second Avenue from the American Legion, which was then used for our Community Transitions program. The Board approved this acquisition at their May 2023 meeting.  

The Superintendent will not authorize construction schedules and change orders that significantly increase cost or reduce quality. 

Interpretation 

We understand this component prohibits the Superintendent from approving any substantial change orders without first getting approval from the School Board. In this context, substantial is defined as any change order over $50,000. 

We further understand that this component expresses the Board’s expectation that the School Board will be informed and given the opportunity to provide input whenever significant changes need to be made in construction schedules. In this context, significant is defined as any construction schedule that will be altered by more than one month. 

Monitoring Indicator(s)  

We will know we are in compliance with this component when: 

All construction change orders over $50,000 have been brought to the School Board for approval. 

When we wrote the interpretation of Component 7 and drafted its two monitoring indicators, we had not yet embarked on the new high school project. We had not even hired our expert project managers from Construction Services Group (CSG), who would have surely advised us that the $50,000 threshold is too low and would slow down the construction process. In short, we did not do a good job of defining this component in 2019, and we haven’t been following this guideline since that time. All construction change-orders over $50,000 have not been brought to the School Board for approval, which is one of the reasons the new high school campus was completed on schedule. 

We understand the rationale for this policy component. Change orders -- which are the changes in the construction plan that occur after the contract has been awarded and the project has been priced -- can significantly impact the budget, the timeline, and/or the final product. Our consistent mantra from the beginning of the bond campaign through the construction process has been that we will “deliver a new high school on time, on budget, and as promised.” Without very tight controls on change-orders, we would have a difficult time meeting those outcomes. 

And we do have very tight controls on change orders, even though we have not been bringing every change order over $50,000 to the School Board for approval. Such controls include the following: 

• Our decision to use the GC/CM (General Contractor/Contract Management) approach to the high school construction process, which allowed us to hire our General Contractor at the outset of the design process, thereby helping to ensure the building designed by the architects could actually be built for the funds we had available. 

• Our decision to hire a very experienced architectural firm, general contractor, and project manager(s), who have put in place detailed procedures for proposing, analyzing, and approving change orders throughout the construction process. 

• The active involvement of the Bond Oversight Committee from the outset of the project. 

• The transparency with which we have reported to the Board and the entire community about the construction process through Weekly Bond Updates; monthly updates at School Board meetings; quarterly reports from the Bond Oversight Committee; and the publication of all of these documents and more on the District website, along with a dashboard showing timeline and budget data.  

Securing Board input and approval for every change order that would impact the budget by more than $50,000 or impact the schedule by more than a month would have either significantly slowed down the project or required the Board to add a weekly meeting devoted solely to the construction project. Neither of those seem like good options. 

We have done some research to discover how other school districts handle change orders on major construction projects. Those who list dollar amounts generally have much higher ones. We saw districts with $250,000 thresholds, rather than $50,000 thresholds. One said the superintendent or designee could approve orders up to 3% of the total construction cost (which for us would be in excess of $3 million). Another delegated authority to the superintendent for an amount not to exceed the amount of the owner’s contingency budget (which for us would also constitute a figure in the millions, not the thousands). 

In short, this monitoring indicator does not support the District’s goals. Going forward, we recommend rewriting the interpretation and monitoring indicators for Component #7 as follows:  

Proposed New Interpretation 

We understand this component prohibits the Superintendent from approving any substantial change orders unless such change orders have been fully vetted through a process that has been pre-approved by the School Board. In the event that the cumulative cost of change orders reaches 80% of the amount of the owner’s contingency budget, then all subsequent change orders must be approved by the School Board.  

We further understand that this component expresses the expectation that the School Board and the community will be kept fully informed about the progress of any major construction project, especially about any aspect of the process that has the potential to significantly impact the budget or the timeline.   

Proposed New Monitoring Indicator(s)  

We will know we are in compliance with this component when: 

7.1 We can show the School Board has been kept apprised of any major changes to the construction budget and/or timeline. 

In the event that the total cost of change orders on a major construction project has reached 80% of the owner’s contingency budget, we can show that all subsequent change orders have been brought to the School Board for prior approval.  

As we continue to work with these governance policies, our understandings continue to grow. We appreciate the Board’s willingness to make revisions throughout the process. 

All construction schedule changes over one month have been brought to the School Board for input.  

Our response to Indicator 7.2 is included above in our response to Indicator 7.1.  

Superintendent’s Final Remarks 

We understand OE-11 expresses the value the School Board places on providing educational facilities that truly facilitate effective education. The Board understands that education does not occur in a vacuum. The physical environment is part and parcel of the way we teach and learn. Furthermore, facilities are the public face of our organization, communicating powerful messages to stakeholders about the importance the community places on education and the way the District takes care of the community’s assets. As I hope this report conveys, we take these expectations seriously, and we are proud of the progress we have made toward fulfilling them during the past three years. With that said, I also realize this work is never done. 

For the Board: In 2022, the previous Board had a list of significant changes to this report they were planning to discuss in a study session. However, that study session never occurred. I recommend holding that meeting and figuring out if you agree with those proposed changes from two years ago, so we can make those necessary adjustments for the next OE-11 report.