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Board Highlights - February 22nd, 2017



At its February 22nd meeting, The FUSD Board of Education:


Discussed proposed expenditure reductions and other recommended budget solutionsFUSD staff recommended several expenditure reductions for the Board’s consideration. See presentation here (refer to the original agenda for specifics on each proposed reduction).


Received Other Post-Employment Benefits (OPEB) update - The District provides post-employment medical and dental benefits to eligible retirees. Eligibility is based on collective bargaining agreements with employee organizations. The Actuarial Accrued Liability (AAL) or commonly known as "Unfunded Liability" as of July 1, 2016 is $111.1 million.  This is an increase of $34.6 million from the last actuarial report of July 1, 2014. The increases are due to changes in actuarial assumptions and methodology such as, actuarial cost method, trend rates and discount rates - Appendix A.

The current Annual Required Contribution (ARC) is $9.8 million compared to the last actuarial report of $8.7 million. ARC represents the sum of the accrual of current cost (commonly known as "Normal Cost") and annual amortization towards unfunded liability over 30 years (details on pages 2-3 of the report - Appendix A). Currently, the District is funding the unfunded liability by using a "pay-as-you-go" method. This method accounts for current year retiree obligations and does not account for future obligations. The amount paid in 2015-16 was $3.7 million. See presentation here.


Approved disposal and replacement of warehouse delivery vehicles - The warehouse uses seven large trucks to make deliveries throughout the district.  One of the vehicles is used by the warehouse for general delivery services, the other six vehicles are used by Child Nutrition Services (CNS) to deliver food throughout the district.  The warehouse delivery vehicles have been in operation since 2001. The following options have been considered in developing the proposed solutions:

  1. Retrofit each vehicle with particulate traps to meet current emissions law - $131,150.

  2. Purchase new vehicles and borrow funds from Fund 40 district funds and pay back over a span of 5-10 years - $579,698.

  3. Purchase new vehicles and finance over 5 years through financing company - $620,132.

Staff recommended disposal of the old warehouse delivery vehicles and purchasing new replacement vehicles with Fund 40 district funds and paying back over a span of 5-10 years as outlined in proposed solution #2 above. The estimated budget of $579,698 accounts for the purchase of the vehicles, warranty costs, sales tax, and delivery fees. The cost also includes the transfer of the existing lift gates that were purchased in 2015 and installed on the current warehouse delivery vehicles.


Approved revised Measure E Bond Implementation Plan, budget and cash flowVanir Construction Management has produced a comprehensive implementation plan, budget and cash flow analysis for the $650 million Measure E Bond program. The Plan spans the duration of the bond, inclusive of all bond series sales. Based on the analysis and current state of the budget and market conditions, staff projects that all projects within the Recommended Projects List of the Long Range Facilities Plan (LRFP) can be completed within the $650 million budget. Attached is the recommended Plan. Approval of this item will authorize staff to proceed with projects according to the timeline and budgets as outlined in the Plan.


Reviewed and approved the Horner Middle School Conversion Project schematic design and recommended additions - Staff, Vanir Construction Management (VCM), and SVA met multiple times with the Horner Site Construction Committee during the schematic design phase. Based on these meetings, SVA developed schematic drawings for the Horner project. Additionally, SVA has performed a construction cost estimate of the current design. The Horner project construction budget is $48.7 million. The current estimated cost of construction is $50.3 million.  Although this is $1.6 million higher than the original construction budget, there is approximately $3.2 million in design contingency built in to the total project cost that could be used to cover the additional construction cost.  This amount will be confirmed during the design phase of the project. Staff has developed the recommendations below:

  • Staff recommends that the Board approve the schematic design.

  • Staff recommends that the Board approve enlarging each locker room by 300 square feet for a total of 600 square feet at an approximate cost of $450,300.

  • Staff recommends that the Board approve enlarging the music room to accommodate 80 students at an approximate cost of $114,000.

  • Staff recommends that the Board approve the construction of a 1,440 square foot fitness center at an approximate cost of $969,000.

  • Staff recommends that the current warming kitchen be converted to a cooking kitchen. The cooking kitchen would be sized for current and future capacity. Historically, the District serves lunches to no more than 25% of the Horner student population. Following the Middle School Conversion, staff anticipates serving lunch to approximately 500 Horner students. Further, staff recommends sizing the kitchen to allow for future expansion to potentially increase service to 40% of the Horner student population and/or provide meals to other elementary schools. This would balance the workload at the high schools and accommodate future enrollment growth at nearby schools. The approximate cost of this recommendation is $1.71 million.

The total estimated costs of these proposed additions to the project are $3,243,300. See presentation here.


Authorized staff to enter into agreement for partial replacement of heating, ventilation and air conditioning (HVAC) system at the FUSD District Office - Although it needs periodic repairs, the heating system at the District Office is functional and generally meets the needs of the building. The cooling system units, however, are beyond repair at this time. The system provides only minimal cooling capacity, and has broken down and needed repairs on an increasingly frequent basis. The system could go down unexpectedly, which would leave the District Office building without air conditioning. The cooling system's main equipment consists of two large units installed on top of the building. These two units have been in need of replacement for many years. District HVAC technicians have been making the needed repairs to keep the units running. When the scope of the needed repairs exceeded the level of expertise of District personnel, outside contractors have also been used for this purpose. Maintenance supervisors and an HVAC consultant have been working on designs to fit current cooling needs and obtained quotes. The new units would fit the existing footprint of the old units. One design change, however, is that the new units will be part of a split-unit system. In a split-unit system, condensers will be separately mounted on concrete pads on the ground instead of being part of the cooling units on the roof.


Summary of Project Costs

 Amount

HVAC Equipment

$157,000

JP Paving and Grading

$65,485

Smith & Sons Electric

$25,814

American Air Conditioning, Plumbing and Heating

$156,056

20% Contingency

$80,870

Total

$485,226

 

The recommended projects under the Measure E Bond Program include funding for HVAC and Lighting for the District Office for $5.2 million, which is scheduled for winter of 2020.  Due to current condition of the HVAC at the District Office, staff recommends to accelerate its implementation and use a portion of the Measure E Bond fund allocated for this project.


See Video of entire meeting here 


The Board’s next Regular Meeting is scheduled for Wednesday, March 8th, 6:30pm (time subject to change), at the District Office Board Room – 4210 Technology Dr. – in Fremont.