May 2007

Members Present: Dick Jones, Todd Caldwell, Ginny Markell, Renee King, Yvonne McVey, Julie Volpel, Jeff Klein, Kristin Mitchell

Absent: Heather Noren, John Matthews, Gary Lane, Tom Feely

District Staff Present: Ron Naso, Jim Langstraat, Garry Kryszak, Leslie Robinette, Blair Loudat, Ron Stewart, Matt Utterback Joe Krumm, Vicki Chambers

School Board Members Present: Cheryl Myers, Rein Vaga, Linda Moraga

Community Members Present: none

Meeting called to order at 6:30 p.m.

Pledge of Allegiance

Review of March 21 minutes: minutes approved as written

Project Update: schedules, budget, bid results Ron Stewart Garry Kryszak

Across the board there has been strong interest in our bond projects, with several competing bids.

Alder Creek: The first project, replacing field lights at Alder Creek, is moving forward. Quotes are due by May 15, and the project is on schedule for a June start.

Ardenwald: At Ardenwald, Mahlum Architects is working on schematic layout based on site, budget, and educational specifications. The Bond Steering Committee has reviewed the early site plan. The architect has been instructed to proceed with a plan to site a 62,500 square foot building on the easterly section of the property.

Bilquist: Architects have created a revised plan that brings scope of work within budget. The project scope was reviewed with the Site Planning Committee on April 17th, and the reaction of committee members was positive. We are now proceeding with the schematic
design, which the Bond Steering Committee reviewed on May 3. The Construction manager/General Contractor selection process is underway, with proposals due May 23. This addition and remodel will involve moving the media center to the front, adding to
office, making the music room accessible, adding classrooms, eliminating asbestos floor
tile, adding carpet. This project will begin in March 2008 and will be completed by fall of
2008.

We have opened bids to replace boilers at Milwaukie High, Sunnyside, Riverside, and
Campbell. The low bid of $347,884 from Tom Stevens Boiler was within the engineers’
estimate and the bond budget amount. The district will make a recommendation for
award to the Board on May 31.

Clackamas Elementary: Work at this site includes re-roofing the building, rebuilding
the front entrance and upgrading windows. The early quote package for window supply
has been completed, and windows have been ordered. Bids on the rest of the work
opened May 1 and came in below the architect’s estimate.

The Clackamas High School field turf project has been bid through Eagle-Elsner. The
project is on time and on budget. Construction begins May 21.

Happy Valley Elementary and Middle School: We have switched contractors from Robinson Construction to Emerick Construction. A strong team is on this project. We are working with the City of Happy Valley on final permitting and zone changes. Next Tuesday is a second meeting with the city design and review team. We have completed negotiations on acquisition of the church. Ground breaking will be June 12. We will begin moving modular classrooms on June 21.

All of the land issues surrounding this project are finalized with both landowners.

The church will rebuild to the east of their current location. The old church will be removed so our construction can begin.

Question: Will there be enough time for them to build another church?
Answer: we will allow the church to utilize Happy Valley Elementary for church services until the new church is built in 2009.

Question: Are the sports fields at the old elementary going to be usable during construction?
Answer: these fields will not be usable because of access and parking challenges.
The baseball teams and soccer teams will make other arrangements.

Question: I heard earlier that there would be 174 parking places at Happy Valley. Has this changed?
Answer: The number discrepancy is because we are no longer counting the overflow area as “official” parking. This area contains basketball courts.

Linwood: This project involves a media center, a gym, office improvements, and a number of upgrades. Barrentine Bates & Lee has revised the scope of work and is well into the schematic design process. We hope to start work as early as next spring, in March or April. Parts of this project will be done before school starts in fall ‘08, and others will not.

Milwaukie High School: This project involves a major remodel to the girls’ locker room and additions to auditorium. The district has met with staff and architects. We have begun revising schematic designs to bring things in line with the budget. We will have a contractor in place to work with architects and begin construction in spring 2008.

Mt. Scott Elementary: At this school we are replacing siding and re-roofing. First Cascade was the successful bidder. They will begin work over summer.

Putnam High School: This project involves a significant remodel to move the offices, remodel the kitchen, and create a new commons in the center of the building. We have looked at several schematic revisions. We are now in the process of selecting contractor and will do interviews on May 30-31. The work will begin in June 2008, running through two summers plus a school year. This will be one of the most disruptive projects to an existing school.

Using the CM/GC process, the contractor and architect can work closely together to make disruptions as limited as possible.

Question: What about athletic projects at MHS and PHS?
Answer: Nick Wilson of Atlas has looked at both athletic facilities to do a master plan. This will be equitable with CHS facilities. In the summer of 2008, all weather fields will go in at Putnam High and Milwaukie High. Work on athletic facilities will not occur during sports seasons.

Question: With limited parking at Putnam, how will construction staging be accommodated?
Answer: We will plan for this during the CM/GC process. Perhaps there will be room for staging behind the auditorium. Off-site parking may be required.

Putnam will be the most disruptive project we do. The architect, the contractor, and the school district will have to find the best way to make this happen while lessening the impact to students.

Question: A Milwaukie High coach is discussing a 10-year repayment plan for the community share of athletic facilities. Is that what is happening?
Answer: During the bond campaign, we made it clear that we need to improve athletic facilities. The community balked at the price, so we made a decision to use some community matching funds for athletic facilities.

Bond funds for athletic facilities will be $700,000 each for Milwaukie High and Putnam High. In one sense, the fields are being paid for by partnership with the Department of Parks & Recreation.

Neither of these two stadiums currently has an 8-lane track. We are evaluating each site
to see whether there is room. 

We have asked each community to raise $100,000 in matching funds. This can be contributed over the next 10 years. An active booster club should be able to manage this.

Clackamas High boosters will contribute $200,000 over the next 10 years.

Question: Are there booster clubs at Milwaukie High and Putnam High?
Answer: Athletic Directors say that parents are supportive, and there should be no problem raising these funds.

We have received bids for roofing at six sites: Milwuakie High, New Urban/Sojourner, Oregon Trail, Sunnyside, Riverside, and Milwaukie Elementary. Bids came in below what we expected. This will help stop the degradation of facilities immediately.

Sunrise Middle School: We should get a good price on metal roofing. This work will be done in 2 phases, replacing the metal roof on both gyms and over the art rooms, which were leaking badly. At Sunrise, we will replace all carpet in the halls and commons with a hard surface in keeping with district standard for middle schools.

Rowe Middle School: Mahlum Architecture is working on the Rowe gym addition and choir room addition. We are seeking a contractor with the hope of having them on board in late July. A unique design for Rowe gym will enlarge the existing gym that will make it a full size double gym like the one at Sunrise. Rowe will also get a new lobby and new locker rooms.

We are moving forward with more than $100 million worth of projects. The scale of the work we are doing this summer is vast, but it pales in comparison to what we will do next summer.

Question: Will the gym expand North into the bus area?
Answer: The work will not affect the bus drop and will not impact the fields.

Question: With all this work going on, who will oversee the work to ensure quality?
Answer: Architectural firms will assist with that. We also have contracted with construction project managers to oversee project progress. All projects have either an internal, in-house project manager, or a contracted project manager. We feel roofing is so important that we have retained a roofing consultant to do key periodic roofing inspections as the work is in progress.

Question: Why are we already replacing the roof at Sunrise?
Answer: There was a flaw in the roofing system. This project will fix that flaw. That is
why we are micromanaging this project. Usually we expect a new roof to last 20-plus
years, but the Sunrise roof (built in 1992) has had problems for the past 6-7 years.

We are starting the Happy Valley project and hope to be substantially complete on the elementary side by fall 2008. The church would like to begin work in fall of 2008 and done in fall of 2009.

Question: As it appears some time lines have been adjusted, can we get updated time line charts from Ron Stewart at our next meeting?
Answer: Our staff will work to provide that.

Budget and Contingency Funds:

The bond program is $229.6 million plus $28 million from the premium from the bond issuance and anticipated interest earnings form investing the bond funds short-term. This $28 million provides a 12% contingency reserve for the scheduled projects.

It is prudent and responsible to reserve at least 10% of the bond program to be used as a contingency.

We are not distributing contingency funds equally among project budgets. We are holding these funds separately. Some projects will be over our estimated budget (without contingency), some will be under our estimated budget, and some will be on budget (without contingency). Contingency funds will be distributed on an as-needed basis.

Some may require a 30% adjustment, some a 5% adjustment and some may contribute funds back to the bond program. The goal is to maintain the average distribution of contingency funds at 10% or below.

To date, we have recommended $17.7 million in contingency adjustments to the original budget estimates. So far the average of all contingency adjustments is 7.7%. The current budget for all projects is $247,300,000.

Question: Could you give an overview of why we requested the adjustment for contingency?
Answer: When we took the bond proposal to the public, we did a lot of dreaming. When we launched the architects on these projects, we asked them to list costs for each bond item. We are now working to wrestle out the dreams, the reality, and construction costs to bring projects into a realistic cost framework. In some cases, to fulfill the goals of the bond proposal, we need to tap contingency funds where costs need adjustments.

Two groups, architects and planners have crosschecked all budgets.

Our original estimates for the new elementary schools have been adjusted due to rapid cost increases. What is causing cost inflation is building materials: steel, concrete, and any petroleum product.

Question: Are items without contingency listings in need of contingencies?
Answer: It’s likely that all schools will have contingency adjustments.

Despite the added matching funds coming for athletic facilities, we still have planned for contingencies at Milwaukie High and Putnam High.

The items with contingency listings shown on the goldenrod handout all have major additions. The remaining items have more flexibility built in.

Question: We are approving bids at Clackamas Elementary. Is this bid for all projects or part?
Answer: It is for about half the work.

The projects requiring steel and concrete are most likely to need contingency funds.

Question: About $27 million is coming from the interest. What if we don’t need it all for contingencies?
Answer: We have made a commitment to voters that if that happens we will buy back the bonds.

We are making tough decisions now to keep a tight budget and keep our promises to voters. There is some room for decisions—which flooring do we replace? All? Or only the most worn parts. If, for example, when all the projects are complete, we can go back and replace more flooring, we will.

If we made a decision to do something that we did not indicate to taxpayers we were going to do, that would not be in keeping with the scope of the bond.
There was never the intention that we would do less or more than we promised. We need to let people know as work proceeds that we may need to go back and do more on sites that need it.

Question: What if we find an unexpected problem in the course of other work? If it was not in the original plan, can we justify it?
Answer: This could be an issue for the Citizens Oversight Committee and the board to face. One example of this is the gym floor at Milwaukie High, a project during the 1998 bond. When we tried to sand and refinish the gym floor according to the original plan, it
was determined that this was not possible because the floor was too worn. This necessitated complete replacement of the floor, something not planned for in the original bond proposal.

The bond language for the 2006 bond states clearly that projects not listed would be
prohibited.

Property purchase

All along, there was some skepticism that the amount budgeted for property would be adequate. The $30 million budgeted for property purchase includes not only the purchase of land, but needed improvements and site preparation to the property to make it ready
for building.

To share some past history from the 1998 bond, for MHS, we had budgeted $9 million and ended up spending more than $12 million. This was possible because of the interest on the bond. This experience of coping with unexpected costs and using interest earnings
for this purpose is not new to the district.

Property Report

Verne A. Duncan Elementary School and Sunrise Middle School #2 (which could become a future high school):

We are looking at properties between 162nd & 172nd, approximately 37-40 acres. This includes 10 parcels with eight owners.

The planned construction schedule is as follows:
New elementary: start building in the summer of ’08 and finish in summer ’09.
New Middle School (future high school?): start in summer 08 and complete in 2010.
We need to begin design work in June, but negotiations may continue.

The negotiation process is proceeding. All owners understand that change is coming. With the exception of one owner, all owners are willing sellers when the price is right and less than willing when the price is not right. Even the unwilling owner is participating in negotiations and allowing access to his property.

Ron Naso, Ron Stewart, and Jim Langstraat are meeting with the owners' representatives. They have agreed to the process of negotiating, then mediation, and the binding arbitration, using the court as a third party to help decide on a fair purchase price as part of the condemnation process.

Happy Valley Elementary #2:

We are considering land in the vicinity of Hagen Road and 172nd.

The construction schedule would launch the project in the summer of 2008, with completion planned for the summer of 2009

We need to start design work in June, but negotiations may continue.

At this point, we have wetland assessments, surveys, topos, and soil assessments in progress. Next we will complete the appraisals and negotiate the purchase.

Happy Valley Elementary and Middle School:

This project will be located on the existing Happy Valley School site and purchased lands adjacent to that site, including:
The church site (3.45 acres)
The large Azar parcel (8.3 acres)
The Azar rental house (1 acre)
Total lands for the two schools is 23.25 acres, including 5 acres designated as wetlands.

If the new school is not ready to open in 09, then it creates real problems. We need 2 elementaries ready for student use.

If we want to, we can pursue wetlands ajustment to free up space for added play fields by purchasing credits. At this time, we are not planning to do that. However, this is an option we have open should we need it later.

Question: Can students use wetlands for environmental education programs?
Answer: If we access the wetlands only from walkways, yes.

Question: Do we need to enclose the wetlands with a fence?
Answer: In most cases, yes.

It is important to communicate to others that we are not building on a marsh or a swamp. In fact, technically there is a portion of the existing playfields that are designated wetlands.

Question: Once you purchase the property for new schools, how quickly will the boundaries be re-drawn?
Answer: We are working on that now. Those announcements may be made in February or March of next year. Or we may wait and announce it later to avoid dividing a community while they share the same school. The Happy Valley principal’s concern is
that the school community not be divided too far in advance of the move.

Two future elementary school sites:

This bond will fund sites for two future elementary school sites. Our goal is to site one north of Sunnyside Road and one south of Sunnyside, possibly east of 172nd. The search is in progress. Schools will not be built on these sites using funds from the 2006 bond. This land will be used to meet future needs.

Financial Update Jim Langstraat

Bond proceeds total $242.761,032.90
Investment interest totals $1,523,991.40

We have allocated $247.3 million for planned projects.

The expenditures list (pink handout) is checks that have actually been written.

Funds Committed (goldenrod handout) lists purchase orders for architect fees and other projects encumbered but not yet paid.

Every penny of bond funds is accounted for. We don’t intermingle bond funds with operating funds or other funds.

Over time, we anticipate $16 million in added interest.

Currently we have deposited about $90 million in local banks. Some of this may be invested elsewhere when the right opportunity arises. But some funds we need to have accessible for on-going projects.

We will keep $25 to $30 million accessible to cope with changes in the construction schedule.

More information is available on request from the district office.

We have $9 million in reserve for project management, including employment of a full time accountant to track all this. We are also funding one purchasing staffer, half of Ron Stewart’s salary, J.J. Henry bond program managers, one-fifth of Matt Utterback’s salary, all of Garry Kryszak’s salary from this fund, and the district project manager salary.

For the 98 bond, we got the financial statements 18 months after the projects were all done. This time our accounting process is tracked as it happens.

Question: How can we compare the work done on this effort to the rest of the work accomplished by the district? How will salaries paid by the bond be covered after bond work is complete?
Answer: Many of the bond positions are temporary jobs.

The state legislature is wrestling with an excise tax. It has been approved by the Senate
and is now in the House. Home Builders Association helped write it and approve it. This is the replacement for Systems Development Charges. Estimates show we may do better with the excise tax than with the SDCs. This will impact all property that is built in 2008.

We expect returns in the $3-4 million range. We made a commitment to voters to establish a land fund using these moneys. Over a period of 6 years, we will use the land  fund to purchase the properties we need for future schools. If after 6 years, money remains in the fund after land purchase, we will return this money to taxpayers.

If this bill passes and goes into effect in January, $25 million plus $9 million in excise taxes might leave us funds to return to the voters.

To use the construction excise tax, we will need a facilities plan in place. The district sees this as doable as we already have a facilities plan in place.

Question: Didn’t we make the promise these fees would be used for land and anything left over would be returned? Is the excise tax limited to use for land?
Answer: It must be used for capital costs. And we must keep the promise we made. The difference between an excise tax and SDCs is this: The excise tax does not restrict where the money can be spent, the way SDCs do. This way we can use the funds for
capital projects in older parts of the district, not just the new parts.

Discussion: At Happy Valley City Council, we spoke of the historic value of Happy Valley School. It is important to communicate with the public that the oldest piece of the original school has been updated and modified, and changed and incorporated into the main building over the years. People need to know that we have a very limited window of time to do anything with the old music room or construction will be impeded. People who have concerns should be encouraged to contact the district as soon as possible.

Response: The bell at Happy Valley School is an example of a relic that has been preserved and moved as the building changes and evolves. It will be moved to the new school.

The school is not a registered historical site. However, the City of Happy Valley does recognize the site as historically significant. We will honor this in the planning process.

Question: What is the process to decide specifics on bond projects?
Answer: $3 million in the athletic facilities fund is prioritized for all-weather fields. Once we decided that, we originally said $500,000 for CHS stadium structures, $700,000 each to Putnam and Milwaukie High. When we decided not to annex, the costs
increased.

Some at Clackamas High thought the stadium would expand, but now a different plan is in place to use booster funds to support turf. The stadium expansion plan was in place before the decision was made not to annex Clackamas High to Happy Valley. That plan has now changed.

The district tries to design according to district standards. There is some give and take, but we are working toward equity and consistent district wide standards.

Question: Does the district web site addresses the oversight committee and who is on it?
Answer: The Citizens Oversight Committee minutes are posted, and the list of committee members is listed, along with their contact info.

Question: Thinking to the next bond, the campaign needs to continue to cultivate major donors. Should we be sending them regular updates?
Answer: Can we add these people to the key communicators list? That way they will receive regular bond project updates.

Question: In the COC’s report to the community, should we tailor a message to members of the community? Here’s what we’ve spent, here’s what to expect in your neighborhood, and here’s what it means to our schools?
Answer: District staff stands ready to help when needed.

Next meeting date: August 15 at 6:30 p.m

Headlines you may see in the meantime:

       School district condemns property on 162nd Ave.

      Turf to come to all high schools in time

      Pile drivers invade Happy Valley.

Meeting adjourned at 9 p.m.