Board of Trustees Report
Trade Tech College
September 1, 2010
Committee of the Whole
Lloyd Silberstein presented a detailed report on bond consultant compensation, focusing
almost entirely on the controversial use of the multiplier rate method. You may recall
earlier discussion about this. He began with a review of the history of bond soft costs vs.
hard costs. Over the first six years of the program (the years were not specified), the
balance was 44% to 56%. The soft cost figure total is now down to 23%, which he
described as "outstanding by any measure."
The multiplier rate approach to compensation began three years ago, just after URS
replaced DMJM as the district project manager (forming BuildLACCD, which also
included some non-URS representation). Rather than pay an individual his salary and
benefits at a fixed rate, the district pays that person a salary (1.0) and then pays the
company that he works for the same amount of money (another 1.0). The company then
takes that money and pays for the individual's benefits, as well as the operating costs
the company incurs to employ him. Benefits are equal to 45-50% of the salary, while
overhead equals 50-55%. The two major totals combined (salary and benefits/overhead
costs) give you a multiplier of 2.0. If the company is paid more than 1.0, as was the case
for the district until a few months ago (at least for some firms) then the multiplier is
higher.
According to Silberstein the great majority of firms prefer the fixed rate method, and he
himself is not a proponent of using the multiplier rate. Larry Eisenberg argued that it did
give a greater opportunity to small firms to compete for projects, since economies of
scale make a flat rate salary/benefit compensation cheaper for large firms. The accuracy
of this claim was disputed, however. Kelly Candaele wondered whether the companies'
overhead costs were legitimate. He also reminded the Board that rate methodology
aside, there had also been questions about the actual size of the salaries for some
individual consultants, especially those associated with the energy program (many of
whom are no longer employed). He said that also needed to be addressed further.
Given that all the CPM's are beginning new contracts, Silberstein said it would make
sense to change methodologies now, if the Board chose to do so, rather than wait. He
was asked to report back to the trustees on Sept. 15 with the outline of a CPM contact
schedule, along with his recommendations as to which methodology the Board should
use going forward.
Chancellor LaVista updated the Board on the selection process for the Inspector
General. He said the delay in making a selection was because he needed to interview
staff in order to be prepared to interview the finalists. He said he was now fully briefed,
and the finalists would be interviewed the week of Sept. 6. He will give a further report
on this to the Board on Sept. 15.
Open Session
The meeting was a quite a bit shorter than normal, in part because only a single week
had passed since the last meeting and there were very few public speakers. However, it
was also partly the consequence of Chancellor LaVista's clear intention to streamline the
Open Session meeting format.
Velma Butler, back from a one month vacation, complained that Unit 1 classified
positions were being filled by non-union workers. She said they were not being
fingerprinted or otherwise checked. The Chancellor asked her to put her concerns in
writing and agreed to meet with her. Fingerprinting is not state mandated, Camille Goulet
noted, in response to a question from Nancy Pearlman.
One item was reported out of Closed Session: a $200,000 settlement has been agreed
to in a case (no other details were provided, as I recall).
Miguel Santiago gave a short summary on the Committee of the Whole in the morning.
Rodney Robinson reported on a recent Student Affairs Committee. The vote for a new
student trustee will take place on Sept. 22 and 23.
The Hispanic Caucus and the Black Caucus will both be meeting in Washington the
week of Sept. 6. Sylvia Scott-Hayes, Marvin Martinez, and the Chancellor will all be
attending.
Continuing in what he called a "new tradition," the Chancellor used his report time to
highlight an important district program. He briefly described a Stuart Foundation grant
given to City College to work with foster youth. The grant is for $125,000/yr for three
years. He then introduced Jamillah Moore, who continued the presentation. There are
some 100,000 foster youth and children in California. Once out of the foster care system,
they are far more likely to be homeless, abused, and unemployed than other young
people. The Guardian Scholars program at City works with 65 individuals each year,
offering tutoring and advising. To qualify, students must be 16-24 and have a GPA of 2.0
or above. Devon Werble, the coordinator of the program, introduced Micah, a foster
youth who avoided dropping out due to the program. She now is the president of the
Guardian Scholars Club, and she urged the Board to provide additional funding for the
program.
Chuck Dirks, retired faculty member from Mission, spoke regarding a course credit
dispute involving his son, Darwin.
After a few minor questions, the Consent Calendar was approved.
Judith Valles announced that the long sought Chicano Studies Department at Mission
was finally beginning.
Scott-Hayes and Mona Field remarked on their positive impressions from visiting the
colleges on Flex Day.
Field complimented the Chancellor on the new streamlined format.
Comments
Silberstein’s presentation was impressive for coming so quickly, just one week after it
was requested. The Chancellor said the Board would have an answer soon, and it did. It
was also clear and persuasive. But some questions remain. For one, how are these
soft/hard costs percentage comparisons determined? We’ve heard such a range of
figures over the years. It would be good to get a better handle on them. We’re often told
that it’s not unusual for the percentage of soft costs to decline considerably as we move
more projects into construction, as seems quite logical. So is the current lower soft cost
percentage really so impressive? Perhaps, but I’d like to see this spelled out a lot more.
Second, some have been suspicious that companies are exploiting the multiplier rate
method for their own gain (as Candaele’s comment implied). Why then would the “vast
majority” of firms want to use the fixed rate method? No one asked Silberstein, though I
gather he’d say they found the method too complicated. Are these suspicions then
groundless? It would be helpful to get this clarified.
The plight of foster youth is very troubling. Once emancipated at 18, they’re left largely to
their own devices. It’s appalling. If you’d like to learn more about the special difficulties
they face trying to pursue an education beyond high school, go to www.latimes.com, and
write “foster youth” in the search box. You’ll see an Aug. 2 article by Larry Gordon on
their educational and housing needs. We should find out what’s being done for foster
kids at our other colleges and what we might be able to do for them as a district.
All the best,
David
District Academic Senate President
213-891-2294
dbeaulieu@email.laccd.edu
www.laccd.edu/das