MEETING NOTES
MEETING:
Bond Oversight Committee Meeting
2012 HISD Facilities Capital (Bond) Program
LOCATION:
Hattie Mae White Educational Support Center
Conference Room 2E02
4400 West 18th Street
Houston, Texas 77092
DATE:
PRESENT:
26 Jan 2016
TIME:
Bond Oversight Committee
Mr. Michael G. Davis
Mr. Martin Debrovner
Ms. Jessica Diaz
Mr. Robert M. Eury
Mr. D.V. “Sonny” Flores
Mr. Craig Johnson
Mr. David Quan
Mrs. Phoebe Tudor
Mr. Gary J. White
Houston Independent School District (HISD)
Mr. Jason Spencer, Chief of Staff
Mr. Lenny Schad, Chief Operating Officer
Ms. Helen Spencer, Chief Comm. Officer
Mr. Sundaresh Kamath, CFS
Mr. Derrick Sanders, CFS
Mr. Dan Bankhead, CFS
Mr. Andreas Peeples, CFS
Ms. Yesenia Taylor, Business Assistance
Ms. Sherrie Robinson, Controller
Ms. Tonya Savoie, Bond Finance
Ms. Sara Butler, Bond Communications
Ms. Rebecca Kiest, Bond Communications
Ms. Jade Mays, CFS
Mr. Richard Patton, Chief Audit Executive
Ms. Mary Rochon, CFS
Ms. Holly Huffman, Media Relations
Ms. Ashlea Graves, Government Relations
Ms. Christine Manrique, CFS
Mr. Gerardo Garcia, Business Assistance
Ms. Iva Martinov, Business Assistance
Ms. Pat Collins, Instructional Technology
Ms. Holly Huffman, Media Relations
Mr. Aaron Casares, Bond Communications
ABSENT:
None
GUESTS:
None
8:30 A.M.
The general purpose of the meeting was to brief the Bond Oversight Committee on the current status of the
new construction and renovation projects funded through the 2012 Facilities Capital Program. Related issues,
questions and activities were also discussed.
Item 1
Welcome
Sundaresh Kamath, Construction and Facilities Services Officer, called the meeting to order
at 8:35 and welcomed the participants. He introduced Lenny Schad, the interim Chief
Operating Officer. Mr. Schad reviewed his experience including his previous work on large
bond programs at Katy Independent School District. He stated that with the recent approval
by the Board of Trustees of the supplemental funding request that the program is in a good
position. He noted that in discussions with the Trustees it was agreed that the “blue sheet”
which defined the scope and budget of each of the projects was the basis of non-negotiable
commitments. Mr. Schad noted that lines of communication were being tightened to ensure
more consistent messaging. He stated that it is important to explain to the public that the
$212 million supplemental funding does not provide for additional scope, rather it allows
HISD to meet the original commitments described by the blue sheet. Mr. Kamath noted that
2015 was a challenging year and 2016 will be making good on promises made. Mr. Kamath
then introduced a video presentation focusing on MWBE efforts related to the 2012 bond
program.
Item 2
October 27, 2015 Oversight Committee Meeting Minutes
Mr. Kamath noted the minutes of the previous meeting were in the back of each member’s
binder. There were no questions about the minutes and they were approved unanimously.
Item 3
Bond Construction Update
Derrick Sanders, General Manager of Construction, reviewed the highlights of projects under
construction. He noted that DeBakey High School’s beam signing is scheduled for January
27, 2016 and that Lee High School, as well as Furr High School, now have vertical
construction underway. He reported that the first tilt wall was raised at Milby High School
after a number of underground utilities were found which has made the project challenging.
Grady Middle School is nearing completion with furniture currently being delivered and the
project scheduled to be completed later this week. Mr. Sanders noted that Worthing High
School’s first phase is scheduled to be complete by March. He also informed the group that
Mark White Elementary school’s tilt walls are being formed; that Mickey LeLand College
Preparatory Academy is underway with concrete being placed and that South Early College
will be completed by end of May. It was also reported that Condit Elementary School and
Mandarin Chinese Language Immersion Magnets School are both scheduled to be finished
by the end of the second quarter of this year. Mr. Sanders stated that trusses are being
installed for Delmar Field House and that Sterling is on schedule to be finished by the end of
the year. Mr. Sanders concluded by reporting that underground construction is underway at
Booker T. Washington High School with construction bids for the building expected to go to
the Board of Trustees in February for approval.
Item 4
Bond Design Update
Dan Bankhead, General Manager of Facilities Design, reported on the planning and design
activities accomplished in the last quarter. He noted that HISD’s Design Standards were
updated. The primary change coordinates the Heating, Ventilation, and Air Conditioning
(HVAC) sections with HISD Energy Management’s plans. Mr. Bankhead reported that the
Facilities Planning Group worked with the Facilities Assessment consultant to update student
capacities and CADD documents, both of which will play a critical role in future work in HISD.
He noted that the Facilities Design group was very active as all Group 3 and 4 projects are in
the design development phase except Bellaire, Davis, and Madison which are in Schematic
Design, and four others are in the Construction Document phase – of which two will bid this
quarter. Mr. Bankhead reported that HISD is a Beta tester of the City of Houston’s online
permitting system. He noted that the new system appeared to be a success as it was
expediting document review. He concluded by noting the many Community meetings
scheduled throughout the quarter.
Item 5
Business Assistance (M/WBE) Report and Community Outreach
Alexis Licata, General Manager of Business Assistance, announced that 55% of professional
services have been awarded to M/WBE firms and that M/WBE commitments from the CMAR
firms is 25%, both of which are well above HISD’s goals. She announced that HISD has
again been named one of the Top 25 Champions for Diversity. Ms. Licata reported that
HISD also participated in a number of outreach events. She directed the Committee
members to Page 126 of the binder which lists these as well as workshops offered for
M/WBE firms. Ms. Licata noted that as requested by the Committee, a breakdown by project
noting the MWBE award amounts is provided on page 129.
Item 6
Financial Reports
Sherrie Robinson, Controller, noted that the Board of Trustees approved supplemental
funding of $212.4 million. She stated that the additional funds will only be spent if needed.
Ms. Robinson directed the Committee to page 147 of the binder as she reported that $266
million has been spent with an additional $307 million encumbered for a total of $573 million.
She noted that detailed information including a breakdown by project can be found on page
144 of the binder. Ms. Robinson reported that while there were no bonds sold in 2015, the
next bond sale is scheduled for April 2016.
Item 7
Bond Communications
Sylvia Wood, General Manager, Business & Bond Communications, provided an overview of
communication activities over the last quarter. She noted that much of the effort has been
related to the supplemental funding. She informed the Committee that a listing of the various
activities can be found on Page 151. Ms. Wood issued a schedule of upcoming meetings
and invited the Committee to attend any of them. She noted that Bond Communications
worked with newly elected trustees to inform them about the bond program. Additionally, in
order to provide more targeted information to the public an RSS feed to each project page
was added. This feed provides single click access to all HISD new articles about a particular
project. Ms. Wood concluded by informing the committee that in the coming months
providing support to program managers to let the public know about the completion of
projects will become a focus.
Sonny Flores asked if there has been concern expressed by schools not yet under
construction that their funding may be used to fund other projects. Ms. Wood stated that this
had not been the case, however, schools have expressed concern about not having
sufficient funds for their project but it was not related to other projects using their funds.
Item 8
Looking Ahead
Mr. Kamath summarized the meeting and noted there is lots of work done already but more
work ahead. He reiterated the invitation to attend the Community Meetings and other public
events. He stated that the upcoming opening of the first schools is exciting but much work
remains as other projects are awarded and construction begins.
Ms. Diaz inquired about communications between the Board of Trustees and CFS. Mr.
Sundaresh stated there is a good deal of communication with the Board, and that has
increased over the last few months. Mr. Schad noted that the Board’s review and approval
process for the supplemental funding assisted in opening the lines of communication
between the Board and Administration. Mr. Schad stated that it was important to not only
communicate with the Board but with each school’s community so that all understand that
the Blue Sheet is the foundation of the projects. He stated that the team reviewed the
frequency of PAT meetings and has determined that having a meeting for a meeting’s sake
isn’t wise. Therefore, future PAT meetings would be held quarterly rather than monthly once
a project is in construction. Ms. Diaz asked about of the impact on community meetings.
Mr. Kamath noted that community meetings were unaffected. Mr. Schad stated that during
design, monthly meetings make sense, but once construction starts, they are less necessary
and that all avenues should be used to best communicate. Gary White asked the purpose of
PAT meetings once construction begins. It was stated that these meetings keep the
stakeholders informed of progress. Craig Johnson, noted that the monthly meetings during
construction that he attended focused on safety and suggested that HISD should let the PAT
decide when meetings were needed. He referenced Sterling High School and stated that
currently furniture is a topic of discussion. He suggested that it was important to keep
communities involved so that they understand the projects and not lose the opportunity to
keep the public interested and involved. Mr. White suggested that it would be wise to let
everyone know the purpose of the meeting ahead of time so that expectations are managed.
Mr. White asked for an update on the budget status for the projects nearing completion. Mr.
Sanders noted these projects still have contingency funds available. In response to a
question, he stated that for those projects, the supplemental funding will restore budgets that
were tapped to allow for construction contracts to be awarded. Mr. White asked how the
supplemental funding is being divided among the projects. Mr. Kamath noted the Board
approved spreadsheet documents how the funds are to be allocated. Mr. Schad noted
Group 1 projects were not really impacted by escalation and therefore did not receive as
much supplemental funding while Group 2, 3, 4 were impacted and therefore received the
bulk of the funding based on escalating construction pricing. In response to a question from
Mr. Eury, it was confirmed that the supplemental funds would be tapped only after expending
the original budget. Mr. Eury suggested adding a column to the blue sheet reflective of the
supplemental funding. Ms. Robinson confirmed that the supplemental funding will be
reported in upcoming quarterly reports to the committee. Mr. Flores asked if the most recent
bids received were in line with expectations included in supplemental funding calculations.
Mr. Bankhead confirmed that this was generally the case with projects being awarded
around $225 per square foot.
In response to a question from Michael Davis, it was stated that the current low oil prices
have not yet positively affected construction bids. David Quan reminded the group that
rising oil prices had been stated as one of the reasons for higher construction prices and
asked why the opposite was not now the case. Andreas Peeples stated there is usually a
delay (of up to eighteen months) before construction pricing is impacted. Mr. Schad stated
his belief that the best scenario is that there will be stabilization in pricing mostly brought on
by a slowdown of other construction in the Houston area. He expressed his belief that this
should assist in alleviating some of the labor shortages which have recently been
experienced.
Phoebe Tudor asked for clarification of the percentage increases of the supplemental
funding. Mr. Schad noted that the percentage increase was based on the increased cost per
square foot depending on when projects are expected to be bid. It was also noted that
HISD will only spend what is required from the supplemental funding; it is a maximum, not a
requirement that the total amount must be spent. In response to a question from Mr.
Johnson, it was confirmed that the supplemental funding request calculations were based on
the percentage increase from the $160 per square foot used in 2012 to develop the original
project budgets. For projects bidding, in the first quarter of 2016, the cost is expected to be
$222 per square foot or a 38.75% increase from 2012. For projects bidding in or after the
second quarter of 2016, the cost per square foot can be expected to be $235 or 46.8%
higher than in 2012. Mr. Davis asked if the supplemental funding request for each project will
be adjusted based on the bids received. Ms. Robinson answered in the negative and stated
that the supplemental funds will only be used if needed and further reported that additional
bonds will only be sold if needed.
Martin Debrovner asked what allowance for inflation was included in original bond budgets.
Mr. Bankhead responded that the original construction budget plus budgeted inflation and
reserves allowed for $190 per square foot of construction. In response to Mr. Debrovner, it
was confirmed that while the entire reserve and inflation budgets are being used, the
contingency remains for unforeseen conditions. Mr. Schad noted that the supplemental
funding means schools will not have to open without expected furniture and technology.
Mr. White asked for report on Bellaire. Mr. Bankhead noted that team is working with both
the campus and the City to move the project forward by addressing the logistics of
construction. Mr. Quan asked if the layout was changing, Mr. Bankhead stated the general
layout remained as was decided previously; the current effort is working through the details.
Mr. Johnson asked if the City and community remain concerned about the height and
location. Mr. Bankhead stated these are still concerns, but believes a concept has been
developed to address them but it needs to be reviewed with the stakeholders. Mr. Quan
stated he believed that was the case a year ago, and questioned what has changed. Mr.
Bankhead stated the supplemental funding allowed additional opportunities to address the
communities and school’s concerns. Mr. Davis stated it seems that the supplemental
funding is being used to appease the community’s concerns. Mr. Schad stated this was not
the case. Due to small site size, the project was unable to proceed as originally scheduled
which delays construction and resulted in the supplemental funding. Mr. Schad stated the
team is working directly with Principal to confirm everyone at HISD is in agreement, including
support from the Trustee. He stated work remains to address everyone’s concerns. Mr.
Kamath noted that Bellaire is one of the program’s largest projects on one of the smallest
sites which results in many challenges.
Mr. Eury asked for an update on the other projects reported as “red” on the traffic light report.
Mr. Peeples noted that the Guaranteed Maximum Price for HSPVA is under review and it is
expected that the Notice to Proceed will be issued to the Construction-Manager-At-Risk in
mid-February. Mr. Bankhead explained that the supplemental funding for Davis High
School, included funds for to address existing conditions. The Board’s approval has allowed
the project to move forward with the goal to start new construction later this year.
Mr. Flores asked for update on school re-naming. It was stated that the Board of Trustees
has tabled a vote for some schools (Davis, Reagan, Johnson, and Lanier) to allow for
Community Meetings while they voted to rename others (Grady, Dowling Jackson and Lee)
once recommendations of a committee at each school are received. In response to a
question from Mr. Flores, Mr. Bankhead confirmed that there was a line item in each project
for signage. Mr. Johnson inquired as to HISD’s efforts with communicating with alumni from
schools which will be renamed. Mr. Schad stated that Board has requested input and needs
to hear from community members, but from an administrative perspective, the Board’s
direction will be implemented.
There being no further questions or discussion, the committee entered Executive Session.
The information outlined above reflects the author’s understanding of the key discussions and decisions
reached during this meeting. Should you have any additions and/or clarifications to these meeting notes,
please notify the author in writing promptly. These notes will be relied upon as the approved record of the
meeting, unless a written notice to the contrary is sent to the author within seven (7) days of the submission of
these meeting notes.
Prepared by Construction and Facilities Services.