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FACILITIES & FINANCING:

THE GOOD, THE BAD, AND THE UGLY...

Jennifer Afdahl Rice

Jonathan Dean, Ed. D.

David Sciaretta, Ed. D.

March 2015

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Agenda

� The O’Farrell Charter Schools

� Albert Einstein Academies

� Public Safety Academy

� Project Team

� Project Budget

� Lender Review

� Project Timeline

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The O’Farrell Charter Schools

� Existing TK-12 facility sits on 29 acres:� 14 elementary classrooms; 38 middle school

classrooms; 13 high school classrooms; 1 Blended Learning Classroom (Ingenuity Charter School)

� One of two AVID National Demonstration charter schools in the nation

� One of twenty-two schools in the nation nominated for ENCUST award

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Description of Project & Reason

The O’Farrell Charter School was petitioned by staff,

parents, and students to expand the middle school into

both an elementary and high school:

*Middle School in 1994

*Elementary in 2011

*High school in 2012

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Description of Project & Reason

� To construct a 21 classroom high school, administrative office, gym with cafeteria style eating, and 88 space parking lot on the south 7 acres of the campus.

� The O’Farrell Charter School is out of classroom space with enrollment of 1,500 and a wait list of 800 students

� Outperformed all middle schools and high schools in the area

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Project Sources, Uses, &

Financing Obtained

Resources:

� 1 million from O’Farrell Charter School Reserves

� 24 million from Prop “Z” funds

� 1 million out of reserves for turf fields (Prop S)

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The Good

� First Prop. Z project fully funded

� Demonstrates good faith effort between

SDUSD/Charters

� Taking care of “All” students

� Minimal cost to charter? - $1 million

� Great deal of input from the district

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The Bad

� Can’t control costs

� Timelines tend to “creep”

� Student anxiety towards completion

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The Ugly

� Unforeseen Complications which I have no control

over

� Cost continues to rise due to lack of extensive

investigation of the scope of the project.

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Lessons Learned

� Make sure you have a plan with all stakeholders

involved

� Sell your plan to the community

� Stay active in the community and collaborate

extensively

� Have a financial plan that retains reserves

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Before

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After

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About Us

� AEA operates two, International Baccalaureate,

public charter schools in urban San Diego

� Our elementary (K-5) school has an enrollment of

650 and our middle school (6-8) of 500

� Our growth projections include a combined

enrollment of 1,350 within two years

� One of our campuses is a Prop. 39 site owned by

SDUSD, and our middle school is housed in our

new privately-held facility

� AEA High School - coming Fall 2017

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Project Description

� The project involved purchasing and extensively

renovating a 4-story hospital that had been vacant

for years.

� The reason for the project was to accommodate

enrollment growth as well as to design a building

around the specific needs of the instructional

program in our middle school.

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Sources & Financing

� We financed the project using tax-free municipal

bonds. We worked with a bond underwriter (Baird

Financial)

� Total project cost: $15.8 million (including

purchase and renovation)

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The Good

� Project was completed ahead of time and under

budget.

� Building is beautiful and has contributed to

changes in the immediate neighborhood

surrounding the school.

� Building has spurred additional investment in the

area (parent-owned café)

� Many elements of the building design have

facilitated collaboration and exploration, hallmarks

of Einstein’s educational program.

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The Bad

� Due to not paying prevailing wages both campuses

were picketed by local trade unions.

� Some of the technology, especially related to

instructional systems and communications

(including alarm systems, etc.) had glitches.

� Very tight timeline: December 15 groundbreaking,

August 25 open for business

� Conditional Use Permit (CUP) with City

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The Ugly

� Purchase of some excessive technology that may

have been overkill and may not be used to

optimum level

� Agreeing to engage in “pilot” case study with

company for air conditioner (in exchange for

installing ‘state-of-the-art’ equipment)

� Taking design shortcuts to save money

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Lessons Learned

� Assemble a top-notch team!

� Importance of Construction Management professional

� Provide continuous updates to the school

community as well as community-at-large

� There is no such thing as a perfect facility, no

matter how new…

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Before

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During

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After

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After

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After

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After

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Public Safety Academy

� Founded in 2006

� Middle & High School

� Located in San Bernardino

� Prepares students for careers in law enforcement

or fire service

� WASC Accredited

� Enrollment – 368

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Consolidation Project

� Consolidating middle school and high school on

one site

� Total project cost $1,069M

� Leased Modulars

� Project Costs - Soft costs related to modulars

� Financing from Pacific Western & equity from

school

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The Good

� Combined campus and operations

� Able to obtain financing despite lack of collateral

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The Bad

� Project ran over budget

� School opening had to be delayed by a week,

though it could have been longer

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The Ugly - Engineer

� Established Engineer – experience in San

Bernardino & with modulars, though not with

charter schools

� Major issue with ADA compliant ramp

(switchback design needed)

� No construction site management performed

despite contract

� Claim against engineer’s E&O insurance

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Lessons Learned

� Start early

� Project Team is critical

� Onsite management requirements must be met

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Before

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During

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After

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After

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Project Team

� Charter School Representatives

� Architect

� Project Manager

� General Contractor

� Attorney

� Consultants

� Lender

Project Budget

Acquisition Costs

Hard Costs

Soft Costs

FF&E

Financing

Contingencies

� 10%-20% Hard Cost

� 5% Soft Cost

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Lender Review

� Character – history of school & team

� Cash Flow – profitability, ability to cover payments

� Collateral – security for loan, equity contribution,

likelihood of building reuse

� Credit – bill payment

� Competition – other district, charter, independent

schools

Project Timeline

Project Timeline Continued

� Project Description

Varies

� Team Selection

Varies

� Site Acquisition/Issues

Varies

� Schematic Design

4 weeks

� Design & Development

4 weeks

� Construction Documents

18 weeks

� Financing – Varies

� Bidding & Permits

4 weeks

� Award Contract

3 weeks

� Construction

14 months + 2-5 months

� Move In time – 1-2 months

Contacts

Jennifer Afdahl Rice

CSMC

101 W. Broadway Ste. 231

Oakland, CA 94607

888-994-CSMCx248

jafdahlrice@csmci.com

Jonathan C. Dean, Ed. D.

The O’Farrell Charter Schools

6130 Skyline Drive

San Diego, CA 92007

760-214-7719

jonathan.dean@ofarrellschool.org

David Sciaretta, Ed. D.

Albert Einstein Academies

3035 Ash St, San Diego, CA, 92102 (Elementary School)

458 26th St, San Diego, CA, 92102 (Middle School)

619-209-9753 dsciarretta@aeacs.org