Agenda Item #31
District School Security - Design Build Services - SALES SURTAX
The School Board awarded a design build contract to Wharton Smith, Inc. on October 25, 2016 for the district school security project. This project was developed in response to the recommendation of the Independent Citizens Oversight Committee and the Board's approval (April 12, 2016) to expedite the project.
To date 8 schools are complete, 12 are under contract with summer 2017 facility renewal projects and 13 are under construction through the Board's March 2017 approval of the first Guaranteed Maximum Price (GMP 1) submitted by Wharton Smith.
Wharton Smith has submitted the second and final Guaranteed Maximum Price (GMP 2) for the remaining 52 schools (including South Lake Elementary) in the amount not to exceed $5,352,135, with an additive alternate in the amount not to exceed $474,670 to include front entry lockdown at all schools (including those complete or under construction). GMP 2 is a net amount that includes reallocating (through contingency) approximately $143,646 that is overbudgeted at 7 schools.
As noted in the prior Board item, the cost of the basic security program (perimeter fencing and reception area modifications for single point of access control) exceeds the programmed sales surtax allocation of $5.7 million. Each school has been reviewed with the design team, security team and school administration to determine the specific requirements to achieve the basic security program in the context of the school's operational needs. The addition of the front entry lockdown is recommended by the security team as an essential component of the school security plan.
Based on the GMP 2 submittal with additive alternate 1 for the front entry lockdown, the total additional funding (in excess of the surtax allocation to security) needed is $2,608,323.
The proposed funding for the project includes a temporary transfer from the facility renewal surtax allocation to the security program in the amount of $2,988,875, which is the difference between the total surtax allocation for security and the revenue received through May 2017. The required additional funding would be provided through a second temporary transfer from the facility renewal surtax allocation to the security program in the amount of $2,608,323. Temporary transfers are authorized by Board Policy 6180.03.
The Independent Citizens Oversight Committee (ICOC) previously recommended the initial transfer to accelerate the security project and held a special meeting on May 16, 2017 to discuss the security funding plan. The ICOC voted 7-1 to endorse the accelerated plan with the additional transfer from facility renewal to security. The ICOC also noted their concern that if there is a sales surtax shortfall at the end of the program, the District should invest capital to fund any deficit in facility renewal.
The facility renewal program is currently ahead of schedule. Summer 2017 projects are under construction and requests for proposals have been advertised for summer 2018 projects. Based on projected cash flow, the temporary transfer should not impact the summer 2018 projects. The program has been funding out-of-sequence and replace-at-failure projects. The temporary transfer may limit the larger of these projects in the future until revenue is recovered. Another risk is that if the sales surtax revenues do not reach the projected $198 million, any shortfall would need to be covered by capital funds in order to complete the facility renewal program. Currently, revenues are tracking over 20% above original estimates.
The facility renewal program has spent, encumbered or committed the facility renewal sales surtax revenue through April 2017. May's revenue is partially committed. Revenue will be needed from June and July to fully fund the temporary transfer. Purchase orders will be written for groups of schools as revenue is available. The revenue back to facility renewal from security is estimated at approximately $100,000 per month as the security allocation is 2.9% of the revenue received.
Administrative and permitting costs have already been budgeted through the supplemental Federally Connected funds allocated for GMP 1.
Supplemental information is attached for reference.
Board approval is required for purchase orders over $50,000.
Approve the total project construction budget for District School Security (remaining 52 schools and additive alternate for front entry lockdown at all schools) in the amount of $5,826,805.
Approve the Guaranteed Maximum Price #2 submitted by Wharton Smith, Inc. in an amount not to exceed $5,352,135.
Approve Additive Alternate #1 for front entry lockdown at all schools submitted by Wharton Smith, Inc. in an amount not to exceed $474,670.
Approve the sales surtax temporary transfer from facility renewal to security in the amount of $2,988,875 to be repaid monthly as sales surtax revenue is received.
Approve the additional sales surtax temporary transfer from facility renewal to security in the amount of $2,608,323 to be repaid from sales surtax revenues after the $198 million is received.
Approve reallocation of any security funds from schools that are overbudgeted (estimated to occur at 7 schools) as part of the funding for the project. The estimated amount is $143,646, which will vary based on actual cost of construction.
Action - 6/13/2017
Authority for Action
Involves Expenditure of Funds Directly in the Classroom
Source of Funding
Susan Hann, P.E., Director of Planning and Project Management 633-1000 ext. 446
Attachment: School Security ICOC memo.pdf
Attachment: School Security GMP 2 supplemental information updated May 2017.pdf
Attachment: GMP 2 District School Security - updated May 26 2017.pdf
Attachment: School Security GMP 2 cost benefit analysis updated.pdf