Special Board Meeting

001for um Pi speaker yeah DJ she was at uh yesterday's um management meeting so said forward want be present okay present my laptop I'll bring it up I'll share my screen okay so this is ready on thank you are we going to are the attorneys here they're coming [Music] okay hello are you L the is going to be here and you don't [Music] calar they do they do okay that's why then thank you so much turn my phone off maybe that's why you was so sof I thought I turn did I turn it off again in the car the GPS lady was super soft on my phone we like is it here you just IIs ohis okay it's not so bad it's not so bad yeah and I guess the traffic it's also not so

002bad right Miss like it was when I came like a couple weeks ago like December right it was gnarly traffic oh really but it was like the holiday time people getting ready to travel what not she made me nervous I was like oh got at least three hours oh I have of how long it took like not quite two hours because I want to say I left yesterday was different because it was raining really bad yeah now you left yesterday around did it did you get a lot of traffic going back up yeah but then kind of getting closer to San Francisco side down here was actually trff and I used to work in M for a few months a few years ago oh that was horrible yeah it he he check the agenda yes

003I'm just wondering too when I saw hello I don't think so sorry trying to get the text how are you hopefully we all got good vacations in and rest rest rest was good anybody say they're not coming Linda is going to be 15 minutes late and I don't know numb where should I sit by right nice to meet you it's because the big door is open youing for yes we're putting out uh for program okay and we want to send you the original RFP okay we'd like to tailor and I'll send an email Tor some some changes there sure that we want to make that are you know done correctly okay some of those are you know um uh working on site for example um uh uh travel time um right now the contract reads

004where the program management has responsibility of 25% of the design phase we're thinking it should be a longer period or extended to the full project okay what we encountered was well it's really outside of us now that it got to 25% so there's accountability issues you want them to be like just a PM PM but the B right 25% I think we're all here now or we have quum I know Linda's going to be late I'm going to call meeting to order at 6:31 can you hear us yes I can hear you okay um can you do roll call please today is a special board meeting of January 11th 2024 at 6:30 pm members of the board in attendance president Corina loera president vice president Andres Quinto pres clerk Andrea Flores Shelton here member Linda

005Chavez she will be late member mimf pres members of administration superintendent Dr Bower pres thank you uh now I'm going to read the land acknowledgement Board of Trustees of the alamro elementary school district does hereby acknowledge that the district schools and Facilities sit on the traditional lands of the MMA aloney people and the Board of Trustees further acknowledges with respect and reverence the MMA alone people tribe of the San Francisco Bay area for their stewardship of these lands please join me for the pledge of alleg I pledge of alleg the United States of America and to the for stands na thank you uh now I'll turn it over to superintendent for discussion on the delivery Mo method options for the development of the workforce housing for disc Madam I'm gonna turn it over to Mr

006Chen so that he can give us a little intro about this thank you Dr CL um good evening board president members of the board um tonight we're here for the board study session uh regarding the deliver method um on the development of the workforce housing um just a little bit of recap um you know the hous is currently at the phase right now so we're working the city through that um and at the last I mention that um you know one of the critical steps is to first of all understand um the three different options of develop um what direction the district um so that will be a cable step um at the next board meeting but tonight it's just for information and for um to receive information from our country with dwk and provide

007OPP to ask questions so that uh for the next Bo meetings you'll have with that I'll introduce M Carissa Kennedy um who will be um leading the the study SE um regarding the um we put the and as we to the slide I was going to do it at the end but we can do it now um if you're okay with opening up for any public comment and then this way we all have the awareness of any members of the public wishing to address the board on this item do you mind we pause there okay so I'm going to go ahead and open it up for a public comment on this item um members of the public shall have the opportunity to address a Board of Trustees on the agenda items identified for today okay

008see none uh thank you so much I apologize Mr Danel can you pull the ladies here are the vi okay so um hi Kai um newk County um we're going to talk to you about um the project delivery methods that you might be able to use for Workforce housing um I'm here really to we're here really to talk about the basic structures of the project delivery methods and some of the like um pros and cons of using one over the other because there's no one correct project building method for every situation there's pros and cons for using them and um depending on how you do your financing how you want to have um how much input or involvement you're going to have in it um there's there's um better project delivery methods than others so

009um I'm actually going to start out with okay so hello this oh maybe I'm not pointing you at the computer work yesterday oh there you go there we go go slow okay so okay the three different options that we're going to talk about today is design build and last year they added um they split up design build because there was a traditional design build and an alternative design build and in case you guys have heard of progressive design build that's sort of a term that's coin by they call it dbia design build Institute of America and um that's what alternative design build is kind of more that and I'll explain to you the difference as we're going through um but then there's also design bid build which is the traditional form the low bidder that

010kind of you know famili with especially doing the public works and then the last one is lease lease back which is U it's an alternative it requires financing to be involved in the Contracting itself and you know of course you're going to have financing for your Workforce housing project but it'll have um there are other implications in it's it's a requirement of the contract the other two contracts don't have to um involve financing in the Construction contract oops too much now fing are so strong okay I'm going to start out with design build and as I said in the beginning there's traditional and we have the code section for it and alternative um the thing about design build so the lines that we have here and I'm sorry I realized Afters the green and white

011may not be the best way to see the difference but then the district has a contract with the design build entity team and it's the contractor and the designer at the same time so it's sort of One-Stop shopping where if you have a um an issue with things you only have to go to one entity you don't have to hit the the architect and the designer separately I the architect and the contractor separately on the side the construction manager that's an optional thing sometimes people also want to have a construction manager to help them manage the the day-to-day of it and if you're going to do performance specifications then you do that you'd have a bridging or criteria architect so basically they're the ones who say that you know hey we need a building with

012f house this many people we want to have a laundry room um it should be good size you know you should plant it for two bedrooms or that sort of stuff um that's the bridging or the criteria architect and the difference between bridging and criteria is how much detail so so if you think about criteria architectes I mean it's not quite this but it's almost like sketchy something cocktail backet and then the bridging architect you go further on into the design I've seen bridging Architects go through so you start of with schematic which is a nice picture of what the building supposed to look like and then um the design development is sort of the next part of it and I've seen people go like maybe 50% into design development with like a bridging architect

013but it's up to you you know you don't have to you can leave it for the architect that's going to be part of your design build team um it can be an entity because some of them will actually create a firm or business to the design build but for the most part my experience is that it's the contractor and they have the Des designer as a consultant it could be the opposite way where it's the consult it's the designer and the contractor is the consultant but the contract cost is more the construction cost is more expensive so it's usually the construction company that's sort of the lead um and then they will have either sub Consultants or subcontractors under them so this is just this is the way how the legals the legal connections go

014just that's the purpose of showing you the the model okay so just to thing I get kind of super excited about this because this is what I do all the time if I'm confusing you if I need to go back and expend something let me know because for me ex is every day so you know I might skip ahead you something that I'm I'm not explaining myself so um before I was telling you that you have to have a design professional that may prepare the performance specifications and that may include plans that was a bridging our criteria architect and then the design build entity is selected using a two-step process and then you have a request for qualifications which is similar to free qualification it's not exactly the same thing but when you're done with

015a uh RFQ you're going to have um a short that's the people to send the RFP the request for proposals to and then this is you would select them based on um best value so um the difference between um traditional and alternative for design build is that you have I mean neither of which really affects your project but it's like traditional there's a minimum million dollars the project be at least a million dollars which is super easy right and and for um alternative it's 5 million again super easy I mean I don't know what you build for 1 million or5 million anymore but um that's what the minimum is there's other requirements but I'll get into that later um just question sped dbe is design build I guess you could put DBT design okay um

016and the design professional who prepares the performance specifications there's a conflict of interest um requirement that the statute requires that whoever performs prepares the performance specifications can't be part of the DB so whoever does the initial design or whatever it is they're prohibited from being part of the team afterwards so sometimes people will not want to be your your criteria or your vision architect because they want the bigger project okay so another thing about this it's not a hard bid contract where you say you got to take our contract and leave it well we could take that position too but for the most part it's a negotiated contract so that means that once you once we select somebody there is like at least a month amount of time to negotiate the contract with them before

017you enter into it like you know when you do hard bit you just say like oh okay whoever was the lowest bidder reward the contract you start right away that's that's not what happens with the DP we have to negotiate with them to reach agreement on ter um there's several ways that you can structure the um the compensation and this is another difference between traditional and alternative so alternative is kind of one of these things where you're doing it on a Cost Plus basis so normally we structure it where you have here's the here's a stipulated some a set some for the design portion and then when the design is done they bid it out and we negotiate up front what the margins are for bonds Insurance markups um so maybe some things about contingency

018and stuff we set that up up front so that when they bid it to the subcontractors their markup is already set and the thing is you know um when we do low bid we just don't know what these margins are but we can know what the margins are in a design build contract and we negotiate and you know help set it um sometimes when we do that we might start out with a not to exceed amount because you got to tell the designer how much money they have to spend right I mean they can't um design the Taj Mahal if you don't have that kind of budget for the Taj Mahal so you give them idea what the budget is so that's Progressive and you can enter into that sooner rather than later like get

019a set cost for that um but it depends because and again you know when you do this design build the community is not not going to see a building right of it because you got to look at a design portion first and so you know you can tell them and keep them inform that the meetings about what their progress is with it but they're not going to see anything for at least a year after you hire the design build team because it takes I would say at least a year to get it through the building department maybe more depending on how backed up they are so that's something that you should be have open communication with your community so that you know they're not why am I not seeing any work being done you approved

020the contract and then um so you know part of this is like the bullet point about different architect from the bridging or criteria architect finishes the plans and specs and submits it to well it could be DSA but this one I'm sorry it's not DSA it would be the building department with the input of a prefabricated building designer or Builder um depending on what kind of building that you're going to design um that you're going to have and um and so that's a difference you know um from which I already explained to you I'm sorry if I'm kind of repeating myself and then the dbe is responsible for design and construction so in other kinds of construction you know change orders we'll have we'll have conversations and there'll be a fight between the contractor and

021the architect because here's a change order hey it's because you left something out of the plans and then the contact contractor says that your plans weren't good enough right and the designer is like no it's because you didn't build it right and then there'll be that tension between the two about who's responsible for the extra cost if you have a design filled entity they can't put that on you because that's their problem to fix I mean you know something we have to remind them of on occasion I mean that's how it supposed to work okay so phasing and when the costs determined um so design go is sort of called a turn key project and so TurnKey project is a situation where kind of tell them what the criteria documents or the bridging documents I

022want a building that's so big and will house this many people and will have certain amenities in it I'm giving you this much money come back later right I mean that's the ultimate TurnKey project nobody really wants to do that but um it's supposed to be so that you give the design Builder the flexibility to use your expertise to kind of save money in ways that they can in order to get you the project sooner faster ler cost or whatever is depending on how you structure the compensation um but there there is that thing about um if you make it a true- turn key then you're allowing them to use all their expertise in doing it but you lose control there's nothing in the statute that says you cannot have take a lot of control

023in this kind of project delivering method but understand if you are you probably won't be using the contractor's expertise as much because you're substituting your own requirements you you're giving them more uh more rules to follow that makes it less where they can be less flexible on um so in phasing I think I was talking to you about this before when you enter to the contract you have to understand that we start out with the design uh and then we do the construction so if anybody thinks that because you entered into the contract they're going to see construction right away um you're going to have a lot of disappointed people because it's going to take a while to get the design through first because normally when we have like and I I'm skipping ahead a

024little bit but when you do the little bit contracts the Design's already done so once you wor the contract you get going already this contracts a little I mean this project method is a little different can I ask you real Qui question uh and this has you know very generic but for the workforce housing do we still need to go through Thea no it would be the building department just to clarify this would be the city of s the building department yes okay so one of the advantages of a design build is that you don't have to wait for the building department to tell you that the um they can get started on everything except for the construction before the plans are completed so maybe they could start ordering things or doing stuff in that

025fashion um so that's one of the benefits of this but I think they need to wait for construction until all the SQL is completed on the project it's kind of a weird thing that SQL has to be completed before you can start construction whereas a lot of times you have to have plans and SPS but in this case it's more or less the same thing that you you're not going to start construction till the plans are done but you can enter to the contract and sign up your contractor early so you know in a market where it's competitive to get good contractors you can you can kind of like um you you know save it early even if you're not going to build for a couple of years and they'll build it into their plan

026about when they're going to do the building but you know you can select somebody based on best value and you can tie them up early so they're not working with somebody else's project especially too like you know this next year's an election Year everyone goes out for bonds and everybody gets more competitive you know when there's more money in more jobs you know it's harder it's it's harder to lock in contractors just just a note there on the SQL piece because this is a city of San Jose project San Jose is going to be the lead Agency for purposes of SQL we're used to be in our own lead Agency for our projects but they will be the lead agency they will do SQL as part of the entitlements process so the work that will

027be done on the entitlements will handle the as do the legislation to get around the well it may allow for um like a notice of exemption which is like a shorter you know the 35 day one page following at the recorders um because the project is exempt from s but the city of San Jose is determination okay and then I just added something about increments because it has how you want to plan your project like when you do housing developments you know they won't build the whole thing at one time they go increments as they do it I mean I don't I'm not sure whether or not the Project's going to be that large or if you want to break it down that way but then I think it does make a difference in how

028you find out about the cost you break it down into increments excuse me in my experience people try to do increments because they want to get it out faster so the community can see that certain things are being done you know cuz the plans have to be approved for increment one and then before we start working increment two the plans for increment two needs to be approved it's not just a picture of the um of the the the building it's oh thank you it's also you know what what what's in the soil under need so we can't just say because we're putting this kind of house here we can put it in the next spot sorry can I ask about the in plan so in the design phase we would know how many incremental steps

029there are yeah I think you would work with a developer to decide whether or not you're going have increments or not sorry you know I can't get don't worry I have my little bch in my first okay um again you don't have to do an increments sometimes it's good like depending on the situation if there's an issue of like maybe like funding or when the funding occurs and you can only do a certain amount of threat and that's why you want to do it in increments but there's too many variables right now for me to say like in every situation how it is I think my my question was more do we go in do we go in knowing that we want increments or we wait like we would say we want to show the

030community progress or we want to chunk this down cost wise so we say your design should have increments like you have to give that type of we could do that in the RFP it's certainly your choice if you want to do that and I think the more detail you give to your developers outside the more chance that they're going to give you a better proposal for what you want okay thank you again it also comes down to two like I like I said flexibility so if you're going to tell them that this is a situation you can ask them for a proposal do you think it's better to do an increments or not what what would be the price difference that we would have with doing the timely difference well we're open to increments we're

031not open yeah okay I don't know somebody I was trying to think about how to organize this about whether it design build person only because for other Workforce housing that I've seen you done it is design build you know in some ways I could have started with design build because it's what we're all familiar with it's the lowest price um and uh this and I have references both to just the default 201111 and to kupka cupka District um kupka is a caliform uniform public construction cost accounting app it's the higher bid thresholds um if you see here uh the architect and the general contractor does it no here no well sorry if we had a cat they would be enjoying that but I'm sorry so the architect and the and the general contractor don't connect

032so there's no um contractual per between them so that's why you get the finger pointing and then the construction manager is not connected to either of them so that's why they're your agent if you have one again not required just optional and then um so the general contractor will have their own contractors and you know you notice we don't have a relationship with the subcontractors and the architect will have their subc consultants and we don't have any relations with their subcontractors so again in these situations what I like best about it is that you have one person to go to um instead of having to go to all like that's why when you hear people doing multi things it's it's more complicated because you're acting like a general contractor and you're according everybody in this

033one the AR uh the general contractor's responsibility to bring in the project I will say in for work course housing it's not a DSA project you're not going to have an i there inspector of record from DSA you're used to having on your school facilities projects we sort of bling contractors and making sure they're doing things in accordance with the plans and STS that may be why you want to sign up construction manage or someone else to help really oversee the project because you're not going to have that independent person there doing that sort of guard dog you know sort of role um in the workers housing perspective so that's that's one reason to have someone else there watching what's happening if if this is the structure you and like anything else I mean you

034can hire a project inspector to to make sure that they comply with the plans in specs you just need to in their contract make sure that they're given the authority to go that and stop the project if you're not following it um as difficult I mean as hard as it may be to believe I mean having the project inspector does make the contractors have to follow the rules more because um a lot of times like out your complaints in projects were like the project inspector is delay in the project no the kidchen you not following the plans and Mak you redo it to make sure that you're following the current structural plans that's not really our fault that the project being delayed follow the plan and will be okay because in a lot of other

035private works construction you don't have to follow plans that they can substitute things you know hey it's the same quality you know but we're going to use a different brand or something if you give people license to do stuff like that they might be the other product might be easier to get if you buy another brand but we might get into a fight about is it really the same qu you know quality when you do design build a lot of times it doesn't stop for that but if you write into your contract that they still have to confer with you before substituting things then that so occurs but again you're taking on some of the flexibility from the contract of the Builder to finish okay okay I'm sorry it's I'm so used to saying the

036esa it no my mind I didn't register it but the architect needs to submit to the building department without the Builder's input so therefore like you know when you design in a vacuum right there's things that you may not see that a contractor might see to say like hey I don't think I could actually build build it like that you know can you can you explore that or maybe there might be something you need to put into the plans to make it better or or to make it easier to construct that's not this is done without that so when there's jaaps in the plans that is a Genesis of what might end up to be a change order because if the build the designer has to fix the problem later on it wasn't part of

037the original scope of work that was planned so they may come back as a change order you can in these sort of situations hire a construction manager to come in and do the constructibility review that's what it's called a constructibility review um and help you in that sense but sometimes and that might help cut down the change orders but the Builder is not involved in it so sometimes if something was missing you know we could tell the Builder like hey but you missed it when you did theability you don't have an option in the design to build and you really wouldn't because of the conflict of interest issue you really wouldn't have the Builder coming to do preconstruction um Consulting and then be the Builder later okay um so like I said before for traditional

038design bid Bild it's based on the lowest price only so in might not be the contractor that you like but if they're the ones that are the lowest bid that's who you're picking we can do pre-qualification of the contractors to try to eliminate people who have known problems with their firm but or you know whether or not they're financially stable enough to do a project of this size we can ask these kinds of questions um and it won't come up to be like a whole due process you're bad contractor thing can be pre-qualification that way but it doesn't always catch everything you know what I mean it's not like this is the absolute answer and we're going to make sure no bad contractors come out of it because got to say in my experience we

039had um in more than one District we had contractor and they pre-qualified they did a lot of airport work they were very highly rated and they got the contract and they said um right after they rewarded the contract they made an announcement that were Japan's own company and they said and it's not not they were Japan's own but they said we want to close down our USA operations oh my God so when they made the announcement basically everyone's like well I'm not stay here because where's my future here right so pre-qualified we had no way of knowing that they were going to say this and then the people who were left after the Exodus weren't necessarily the same people who are around for the other projects because it really comes down to the people work

040on your project so that's why I'm saying that we can do all these things to try to pre-qualify but we can't it doesn't eliminate all the variables or the things that can go on okay um so in this particular delivery method you have to pick the lowest B no matter what that's what the rule is yes the lowest responsive responsible bid so so sometimes people try to qualify their bid and say like if this and this is the price those get rejected because that's not responsive um they cannot try to negot because that's the form of trying to negotiate the contract under this project delivery method they don't get to negotiate which some ways is kind of nice I mean um and then it's a lumpsum price so you know how before I was telling

041you you get to see what their markup is you don't get to see what their markup is in this situation so you know in a normal bid a contactor like one like maybe for the electrical sub they mark it up 5% but for the mechanical sub they mark it up 14% you don't know right and the reasons for the differences in the market we don't know either it's it's it's um unknown to us and you don't get any control or look at what the subs are you know so that that's sort of the situation for the um for design B build so teacher in kind of a nutshell then it it's the cheapest way of going the less expensive way of going but also carries the potential for the greatest risk is that a fair

042statement I don't know for the greatest risk I mean because it depends on the variables to know what the risk is but definitely it would just in the studies that different universities have done on it it's the cheapest upfront and I just want to say that upfront when you enter into the contract um but as you go along in the contract if you count like having to have a lot of change orders and or end up in litigation and all those like you know I don't want to say like look when we help district go to this thing um we try to minimize the amount of litigation that it could could occur or liability as much as we can as we go throughout the project but I don't have like a 100% that you're not

043going to end up in litigation um you know that that there's never any guarantee that and I think because of this one with all the change order possibility the more money you end up in change orders the more possibility somebody will try to follow a lawsuit at the end so that's why we're just saying like up front it's the cheapest but and it's hard because they tried to run things is like you'd have to run two identical projects in the same area having the same construction and materials rates to order to see like which which is the cheapest and non cheapest and not to say that you won't end up in litigation if you the design build or the S stop I mean it still occurs you know it's just there's sort of more of

044a partnership between the owner and the Builder and the architect and the architect in these other situations so um let see I think can I also ask this piece of paper it's also saying back to the incremental conversation you're doing you have to bid each increment because they're really actually different projects yes and the thing is when you do that too like so you guys have heard of like escalation right it's the same thing as inflation but it's kind of like what way of buy to materials and things so as time goes on the building materials become more expensive and the longer you wait to um bid it out or you know that you push out certain costs the costs only increase I mean I would love to say I mean like even during covid

045even during a time where you know everything was really um the escalation was super low it still went up every year you know you can kind of also tracked by you know how we do the thing for bid thresholds for materials it started at 50,000 we sent out a ebast every year to say and this year it's going to be you know 109 you know 109,000 and then next year it's 1,00,000 like for this year it's like 114,500 that's basically following you know the inflation or the escalation over time so it started out at 50 and there's no guarantee that it has to go up every year but even even in times where things are bad for contractors it still went up I think when you're went of like $500 or something silly like that

046but it still went up it didn't go backwards but I'm not saying that it could never go backwards but I don't know what kind of event it would be to have that happen but I mean and that's part of the thing like if we doing an increment um it's hard to control the cost you know the longer you push something out that's why sometimes getting a contractor in early and getting certain things set up front you're you're you're making a settlement up front so you know you're controlling what your cost going to be as opposed to waiting till after the design is done and then bidding it out because the thing is like there's people who bid out hard bit contracts before the um sign is absolutely complete can you submit it to the building

047department and they do this thing called a back check where they give it back to the architect and said well we want you to fix this this is and this sometimes people will try to bid when they submit it to the building department before the back check is done and then you kind of end up with a bid that is not accurate at the end if they made a lot of changes you're just risking it I mean people who do that is because they don't expect to have a lot of changes and you mentioned that uh there's studies um that um that have been done this on this type of delivery system um what characteristics would would would you be able to identify in firms that have been successful um what design to BU yeah

048like I'm I'm assuming if you go with a pretty reput large firm that has a pretty solid track record you're probably you're gonna keep yourself from avoid avoiding those bats the bat cases that you've been able to yes and no I mean again to me this is just I mean this just solely my opinion sometimes you go with a company that has experience and then there might be a change in management throughout it you know someone's dad retires or you know and it's next somebody else or maybe there's a change in Partnership and somebody else is running the company to be a little different so you can't expect just generally because somebody has a good reputation that that means you won't have any problems on your project there could also be other issues like really

049it's not only only Tau management that makes a difference it depends who you're for or your superintendent is these are the people who run a job and you know we don't have any control of who they assign to like I've seen projects where they assign the kid straight out of college or whatever it is and when things go bad they bring in the you know the guy who takes care of fixing the fixer you know to get it done at the end and these are ratable companies you know I mean I think ultimately to me what's well pretty important in this is whether or not they're going to build build you a good quality building I mean when we when we talk about good contractors that sort of the underling like whether or not you're

050going to have problems on the job it's unforeseen and you know I think it kind of depends because there was a period of time where there was a lot of lawsuits and um it caused a lot of different problems of neighboring districts and that's why they try to move to different kinds of project delivering methods to avoid the lawsuits but then you're right they kind of built relationships with certain contractors and where they had a good relationship and they could work things out and then they had best lawsuits but that's not always how it goes when you have a little bit you don't control who's going to be the Contra you say design you know we would still have to you know put it out for bid we you know even with the uh non-traditional

051one still you know that's still a variable to deal with yeah and and the thing is too like there are times too when times get rough too like some projects even for good contractors it goes totally off the rails because their mechanical so files bankruptcy right and that's an important mechanical contractor FAL bankruptcy you know hopefully you would think that um the General would try to bet that you know and make sure but there's still guarantees you don't know like inner workings of somebody else's company right and then I've had projects it's not really the general contractor's fault but their sub went out and that to replace that sub to have the people come in knowledgeable in order to do it that caused a big delay in the project so kind of along what and

052was asking characteristics could sounds like it's like luck or something to get a quality product I'm sure it's not so you were saying if that what we want as a quality product what have you seen are the again back to like our proposal what would be those like success metrics well I would suggest you do pre-qualification for sure and one of the pre-qualification things you would ask for in all of the project methods is what is your experience in doing this kind of Workforce housing because normally the prequel that we do is like what is your experience with Thea and doing school buildings for this one we would say what is your experience in doing this kind of housing residential housing situation and that would be one of the indicators of about whether or not

053that can be and please excuse my sort of meance about this because understand that when I'm involved it's usually because something's gone wrong yeah I I don't I don't necessarily always hear the good projects right you know or to me it might turn out to be a good project but when I was involved was because we're having a rough patch and the idea is always to try to get it back on track but you know again as I said like I don't needan to be too Nish about it but that just comes from my experience so so just automatical success it's obviously seeing the end product that you may take something to I mean that seems like no or would it also be experien in this city or in like certain like if someone's like

054oh I've had great projects in Utah you know we're going to be like that's different than California yes so well and the thing is okay I don't know if we get Utah so much but sometimes we we yeah and you have to be like licensed here in order to do it I think also too is like you could ask them who are they planning to use as their subcontractors or who do they Norm us subcontractors because like I said there's certain subcontractors mechanical electrical Plumbing that are essential to having a good project you know unless the contractor self performs it but most contractors don't perform all the traits you know some of them they're going to have to sub out to different people so if you know that the people that they're planning to do

055are are um reliable they have a good reputation in the community those are some of the things that can go toward success I know Linda had a question that I have okay sorry um so I remember like with the earthquake in LA years ago that they had um written in their contracts if they take so long you know it's GNA you're going to get a bonus of this if you shorten the time yeah and if you take go over that time that they also penalize them do you see that much in contracts to give them an incentive to hurry up and finish because if you don't do it right you're going to be penalized um money wise okay so Public Work contracts generally there always is a penalty we call it liquidated damages I put

056it in almost every single concession contract that I can um I had it taken out once by a client and that project ended up being super late and I was like that wasn't my decision but you know I mean generally we always should have a penalty for being late how much it is we have to put it up front because there is a law that says that if we don't liquidate delay damages up front we can't ask for so it is something we normally include now whether or not you get a bonus or finishing early I know this happens a lot in private Works um I haven't really ever done it in any one of my contracts because I feel sort of it's like a gift of public funds because we school distri just want

057it to be done on time you know what I mean having it be early you know I mean I know this is a little different because we' be collecting rent for things like this but really all to me it's about getting done on time and then we're also very careful too that when you get a contractor in place sometimes they try to accelerate the project and you say like I need this done by um let's just say July 1st because that's in a time for all the teachers to um or other staff people to to move in and be ready for the next school year right so I I need you to be done by July so if they get it done in March and nobody's going to move in March that doesn't help us

058right so I mean again it kind of comes down to that time you know about what want I mean that's sort of where my position is on it now I don't I I don't know that there's a case that says it's a GI public funds to give people a bonus or finishing early but in design build to me it's built in that um if they like there's a certain amount of call General conditions cost and that's like the fencing the trailer um like the sort of like their um other materials they keep on site um they and they incorporate that into the price if they finish early they get to pocket difference of it because they don't return that to us so to me that's their bonus are finishing early but I tend to be

059very um conservative about stuff like that I mean there's a difference between like hey we've done this can we fix this and how would you want to S out I tend to be kind of conservative of the money in that sense um but you know if if somebody would really wanted i' research it and see what we could do I guess what I'm saying is because you know you're going to rent it out and um it's not going to actually cost you more but in in a way it does cost you if there's more delay because you're not going to get that rental income yeah but the thing is I guess but to offer that is what I'm saying what you would be losing on that off that rental income have you ever seen that

060done about paying early about then getting the job done because that therefore these people can move in sooner you're going to be acquiring that income for the district soon okay I've have never seen anybody finish a project significantly early enough that it made a huge difference because you need to adverti get people to move in too it's not just okay we're done today people move in tomorrow yeah you know so there's a certain amount of planning involved with that too and finishing enough so that people can move in versus finishing finishing there's always that problem as well um like I said I'm I'm generally as as an attorney in doing these sear and contracts have not really done bonuses for early finish and you got to be careful because if you change it to the

061early finish date then if they're late on the early finish date you need to make sure they don't start um charging you for you delaying their project so it's a very care it's a careful line that we follow because we want to make sure it's schedule that they don't try to jump our date and then if they don't make their date which was maybe unrealistic they charging this extra money I see trusty but I'm gonna ask mine and then we go ear U you know I think regardless I know we still have another one after this one regardless of the one that we go with um is it obviously none of us here have the experience to ask the questions that you're coming up with okay so will you is it safe to say that

062they will be with us along the bidding along the um requests for um when we review to ask and then even help us formulate questions when we get to that point yes yes okay we've helped the Shi before and putting together the questionnaires and we ask you guys to what's important to you and we can tell you what we use in other situations and discussions so I mean n plus two like you'll have a a Workforce housing consultant at that time and they'll share with you for their things what happens you know and they might have inut for that too but to do the actual construction yeah we've helped that I'm just saying you know there's a lot of things you're mentioning right now the things that we should look at the items to be

063conservative and things like that but to make sure we don't miss any of that and then trusty fam and then I know that you have two other or this one and the other one well I just wanted to State you know I I I get trustee Chavez's desire to incentivize an early early completion but you know there are two things uh this is this is a hugely public facing project so H I would you know I I want to say that I don't want to have an incentive out there for the contractor to cut cost right I want to you know if we want to do this we build it right you know you know I I I work at a college campus I up uh the more than my fair share of the L

064in construction and so um I would you know I'm for keeping cost to you know to them to you know with in the amount of bond but it's like you know let's not get into that um even possibly as you know as you mention get the public fund but also let's not give the appearance or a signal of incentivizing contractors of doing the wrong thing as well yeah I mean I do believe that contractors are always going to try to keep their cost down no matter what I mean that's how that's their business right I mean no right I'm not trying to F any moral issue with them trying to save money anything that what they do if they're good and efficient you know they'll make more money um but I understand say I don't

065and again I get asked a question a lot your question is not uncommon about whether or not you can give an incentive to somebody finishing early yeah I wasn't saying cutting cost that's yeah that went off the rail but that my thing is is that they're like with the big terms like um de and um and all those other humongous companies they do those incentives and again for even if it's a large company they you're asking questions that they're a good contractor and reputable I think really what you do want is you want to make sure they they've done this kind of housing before because it is different you know in that sense I'm I'm sorry I'm just going to recommend that we go through and then save our questions for the end and CLS

066because we're on page three and I see where we have 15 Pages 7 oh no oh I'm sorry I went back but we already hour in we're halfway through unless I mean unless like I have to ask now I'd rather be more conservative in this it must to be more conservative than you I more conservative IED to there okay so so we talked about some of this before but you know about planning the project and when cost is determined the cost is really determined when it's bid so it's bid later in in a then designed bill in this situation and we have to wait until the plans are completed before we can build and we talked about escalation of how that can work um and I also talked about that actual cost um can't really

067be Computing until after the whole project done you see all the change ERS too and even for the other project delivery methods change orders are possible especially if you guys SM the um the go right I want four buildings instead of three buildings build things are change orders okay last one is le le back and uh so if you notice it's it's very similar to design Big Bill in the structure of who's contracted with whom right the architect is separate from the Builder uh the Builder has subcontractors and the construction manager is separate so again if there's a problem in the change order you still have the no the architect's fault no the build so in le le back the Builder selected using the request for proposals based on a number of factors including qualifications

068in price and they call it Best Value in the statute um it requires pre-qualified ification of the Builder itself and the me subcontractors me SS from mechanical electrical Plumbing sorry it could be like you know um low voltage you know the regular electrician just any is a quick way of referring to all of them there's also a skilled and trained Workforce requirement which is also I might to skip through that in the design build so skill and trained Workforce requirement it's a little complicated to explain but basically if there is if there is um a trade like a union for it um not not just us a union but if there's a trade you have to hire apprentices and journey when or Journey persons to do that work you can't just give it to people

069who aren't part of that now it seems 90% of the apprentic programs are with unions but there are nonunion apprentic programs so I'm trying to say like be careful to say it's not only a thing but um what the the rule is is that apprentices aside if it's Public Works you got to hire apprentices the the skill to chain Workforce requirement difference is that for certain types of Trades 60% of either the journey persons or the hours that they work have to be somebody who graduated from an apprenticeship program so in times where there's a there's a lot of um people needing contractors sometimes if you work for 20 years they give you a journey pres card because you know what you need need to know to be a journey person but there's a difference

070between going through the apprenti ship program taking the classes and doing all that sort of stuff so they're saying like you can still use journey persons who did it um gradually but only 40% and you know sometimes it can be a pain because um availability I mean the unions have even admitted they can't graduate enough people fast enough to necessarily 60% of the lot is started out with like 20 and you know over a 5e period of time it it to 60 um so sometimes but you guys are in the Bay Area and there's a lot more contractors if you were in a rural area like a really rural area I be more concerned for you because you don't have a lot of options you know not everybody they not you know just people available

071but because you're in a more L Ral area there's more options so it's less of a chance of be slowing down your project yes I was going to kind of ask that on the previous one but because this district has entered into a pla agreement that's probably on all three deliveries right very thing that you're yeah talking about so it's not just in this one it's in the other two types of delivery methods as well because of our project our um uh laor agreement labor agreement okay so actually what you having a project labor agreement um what helps it actually helps skill mat train Workforce requirement because if you have a pla it means that you don't have to do a monthly report the subs and the contractor don't have to do a monthly report

072that says they meet the 60% quota some of them are zero some of them are 30 but a lot of them are 60% because if you don't meet the Cota we have to withhold payment we can't pay you if if you don't need the Cota and you can have a plan to try to get this all done but if you have a pla you don't have to turn in the monthly report I'm not saying that they don't have to comply and actually do the 60% just no one's going to necessarily catch it unless somebody reports that they have their own person checking somebody paid how do you make sure how do we make sure that they're following him um how do you make sure a person remember we to come she checks everything she's a

073compliance person basically yeah the compliance person is for usually for the certified payroll to make sure they're paying them pering wage it's not to check on whether or not your journey persons are are graduated from a program you know how how do you track it if there's no pla that you get nothing reports but if you have a pla to be honest with you the is like if they're part of the pla though supposedly they're self performing it you know I mean that's the idea but no nobody nobody outside of the the companies unless it's a complaint yeah unless it's a complaint yeah there's no board or anything like that that they have to uh make sure that there's 40% Journeymen wow I thought that there was more regulations well again it's self reporting right

074because if if you didn't have a pla they would have to tell you themselves whether or not they were doing it of course we can always ask them if they're doing it but because even if they tell us themselves who knows and and the thing is side that's having some sort of not in our best interest to ask all the time because if they're not it's so on your project I depending on where you're coming from you right yeah but I want to make sure that you know we he those of us that supported the pla because if you find out they aren comping you have to report it to the dir and they will do an investigation and they had to comply to get out of it and I am in agreement with that

075they're not calling through Le do were you gonna add something so the good news is uh this next week we'll be coming to the board with a uh an organization that we are hoping to contract with to manage our pla and to ensure labor compliance that covering our bases on that hpac project that we've got going and then as well as maybe a master agreement that Co and I are having preliminary discussions for all future large scale projects that we up that yeah so the company's the SAS group that will be coming forward with so yeah we wanted to cover that base techical so is it what they what they require a monthly rep something that came to a monthly report yes there'll be obtaining uh reports and U and as DED said payroll documents

076uring that have the correct number of apprentices for the various types of Trades and and that we're meeting by the way we've already been reached out by the um Santa Clara San Bonito Building Trades Council to come and meet with us to talk about our uh Bond projects and what have so I'm sure that's going to be part of that discussion well they did already come kind of knocking on the door yeah thank you okay sorry it is kind of hard to explain to g chain Workforce that was helpful okay um these contracts are open to negotiation too so it's not one of those things that just because you selected somebody we're going to go into contract right away I often um warn districts wait until you finish negotiating a contract before you tell everybody

077who you selected because they're not the best value if you can't on a contract we usually tell you guys to conclude the contract with RFP and you tell them can you can you agree to this contract because if you can't agree to this contract they should stop it here because we're just wasting your time and most people will say yes or they give you things that they want to change and again I just as a rule of th I temp would give me at least a month I'm pretty fast but you know I mean it can take anywhere from you know three weeks to to like a couple months maybe depending on many things we have toate how how much character stuck that they're not going to move off position because I can negotiate it

078really fast if the contract you Chang I mean it it just kind I don't control it it's sort of them that you know about what they'll agree to because I told them what I want so um that's kind of how it want to um so I'm not really going do I have it here okay so this one you have an architect that goes all the way through like you do with design go no construction came started without building department approving the plans um and then in this case so what happens is that so remember I was telling you before about design build for the alternative and how it's a Cost Plus situation currently when we do these Le back all of it is because cost bu too so you hire the Builder or and you

079say um Builder going to do preconstruction review of the plans before it goes to uh to the building department to put in their input they're going to do that for $10,000 or 20,000 or 40,000 depending on the size of the project and then when it goes to the um building department and it comes back they bid out to the subcontractors so the subcontract is not necessar it could be lowest price but it could be best value they bid it out and you have margins that you read upon up front where you say you can only mark their stuff up by 5% or you can mark it up by 15% or whatever it is and um whatever you get to look at all the bids to see who did what and that's generally how we put

080into the contract that is an open book so you can kind of see more about the subcontractors before who they're choosing to use and there's more transparency in their cost when it's open book um it's not necessarily the cheapest but there's more transparency and again you know know mean I'm not blasting anything about the cheapest because theoretically they're all supposed to be the same but you know some people are have more people and they're more flexible they get more people on site that might be important to getting your project done on time so I mean in in the view of things cost is not always so determin I me sometimes there's other things involved with a contractor that you want to consider um I think I covered that so after the subcon contractors um are

081bit we they usually give us what we call the guaranteed maximum price now I know it says guaranteed maximum price but you can still have team ters after that but they turn in a guaranteed maximum price and us see the district and they will haggle over the price to say like hey you know um maybe change the contractor or the subcontractor or you have too much in your general conditions that doesn't look right and then we'll come to agreement about what the general I the guantee maximum price is and we come back to you guys and say okay now we have the full price um we we do an amendment to contract to do the full price so for design build and for Le stock those are kind of part of the things is that

082you're going to start out with a smaller amount and some people try to say that it's a change order but it's not a change order because you never have the full price of PR you only have to price before plans and after plans and again with Lee lease back um for districts who first started using it and you don't have a history of using it you yet to educate your community that they're not going to because you awarded the contract today you're probably not going to see building for a while now for le le back you actually can um start building right away but then it depends if you already have approved plants and to me you're losing part of the benefit of using a project delivery method where the Builder can be involved early

083and cut down change orders by doing that but there's still rule saying that you can't start out what plans already and when we're talking about planning ahead of time Le back and design build you can hold off and because um on the decision um about whether or not you want to do V back or design build to layer because the AR it's with the architect for a certain amount of time but if you're going to do design build you need to make a decision before you get an architect of record in place because the architect of record comes together as an enemy so sometimes when people come to me and say like hey I don't know what I want to do but here's my architect I'm like okay if you already have an architect unless

084they're going to change to be a criteria rigging architect then it's already too late you're already too far so that's part of the timing of when you make the decision is Le leave back one of the criticism it's a way of getting around rules and things of that sort so the criticism is a way to get around most and it's not getting around it it's it's actually after that Davis versus resno case which was oh my God 10 years ago it seems like it was yesterday some I was that was my first year here yeah we heard about that and oh my gosh yeah so the thing is they changed these things back so that before it was sort of the Wild Wild West there's no rules for how you pick anybody in fact the

085Davis case part of the problem is they didn't there wasn't any competition at all they just always went to the same contractor over and over because they like them they had a good relationship with them they got their nice buildings you know they felt happy with their work so they didn't have any competition for the work um and the rules didn't require it but since that I think in 2017 they changed the rules that the r P you have to advertise it not just in the newspaper but in the trades you have to um do Best Value order it it's up to you about how you do it but there's more rules you have to do an evaluation based in price technical experience and safety those are the three required ones um you have to

086publish your um criteria or that there's a criteria to follow you have to adopt a board policy on or either policy or resolution about how le le prce to be done in your RFP you have to include the criteria in RFP that you Obed by I mean before none of these things were the rules so to me the idea that you're getting around low is good again come to me at the end of the project right because if if I did thec back from the beginning where I had a contractor come in I might have avoided a lot of the chors so at the end of the project I have less even know the project might be the same you know some people tell me I'm not look I do both you know mean I

087do all it doesn't matter if it's design build if it's EAS back or design B build we can help you with that there's pros and cons for everything like design B build works really well if you're making boxes and things that are very rot and there's not like a lot of um you're not making like a you know around cafeteria or you know you're not yeah ex do making ax so you know I mean again if you're not doing something that's highly creative in that sense that you know design go could there are there are good aspects to it right but um and again too like keeping control of not changing the go post after you started you bid it out that will also help with price there are several things you can do to

088help but you know we can't control everything um yeah I think uh did I answer that that the question yeah yeah thank okay okay so phasing of the project and when cost is determined um so there's a preconstruction period where they can do construct ability review and Bing sometimes you bring them in early the statute was changed so that you can bring in the consultant early and it not be accomplished of Interest so um and then there's a guaranteed maximum price repaired after the plans are completed and the subcontract bids are I think we talked about that a little bit um let's see and again here's you know you can do this and increments too I've done increments for design build but I got to say the contract that I wrote for it was so

089complicated and you have to have somebody like on it all the time or else you could get taken to the cleaners on it um I think I you know I follow up with the people sometimes and I understand that the projects that they did in design Builders increments work out well but that guy had like total iron control over everything and he was telling everybody he wasn't using the turnkey thing he was telling everybody what to do so unless you have somebody who's always watching it that required negotiation part time um I wouldn't necessarily use design build if you're going to do increments I think that's it I'm sorry it was super complicated I try to give most of the handout that has a comparison I mean because I've done this before and some sometimes

090people look at me like I'm so confused kind of hard and but the chart was sorted to do it like a comparison at certain aspects yeah Linda and then so um can you kind of sum it up if it was your project your money what would you advise and how would you do it you know I gotta say that because kis talking about this on the way down on the B it depends on how you get your money you know like I think because it depends like if you developer or the person you know who's building it is going to finance it there to me there could be some benefits in doing leas lease back and that you know um but I've done it I've worked with some somebody who's chosen to do design bill

091before you know it worked out okay for them I think ultimately they were satisfied by the the product um and it also depends too about how much control you want to have I mean in a lot of ways because this is sort of more of a residential thing uh you might want to lean on the um the experience of the design built team because you know we build schools we don't really build you know residential that much and but you'll have other Consultants to help you with that I don't know I mean nowadays I don't know who necessarily likes doing design if you want some guarantees design bit gos hard that's sort of a little bit of throwing caution to the Wi on it but yeah again you're not going to build around cafeteria so

092maybe you know there are some benefits to but it depends on how you finance you what you tell your architect that you want or you got to control the architect and tell them I don't want any round caeras so so just so that you know we're going to be using bonds okay so we're not seeking financing outside okay so to me then there would be less NE less of it just so let you know yeah yeah so less of a need for like if you have less of that need for financing that LE back may not have you know all the things that you're looking for I mean the thing that I like about Ley St is that you can see that the cost is more transparent you can get some of that transparency and

093cost and design it depends on what you ask of the that's what's hard about hard bit is that I'm not sure how it all come they could be hiding it someplace and hiding it makes it sound like it's Sinister it's just their business right yeah we don't know we don't get to control that so this is what I heard uh so to me what I understand is that you're saying the least least back will show more transparent on all of the costs yeah and depending on the money situation um that's what you would go with not least these fact I guess I do that's why miss the first one though okay just so that's why IED it in the way that did is because generally I think you're going to finance it yourself what other

094people have done is design build okay um mayly because you don't have to worry about the financing event you will have skilled and trained Workforce you can have more transparency in the cost understand though it's not the cheapest thing up FR it's not going to be the cheapest thing up FR f um you might be able to have better control over the timing you know with design build but again it depends on whether or not you let the Builder do it or if you're going to make them do other stuff it may take longer so um yeah this is a city of San Jose project too and they're going to require the the dis to enter into a development agreement with them for this project and it's going to have some conditions in there about

095timy and things like that that will help you in terms of getting your project delivered on time um and started even within a certain amount of time because they're going to interview those permits and approvals space new starting within one year or two years following that that approval so I think that will be also helpful um I also think that the partnership aspect of it for this kind of development might be helpful here because you are building housing and you're building housing for your employees and you want to be sure that what's being built is quality um is well made this isn't you know what you do every day this isn't you know did you said we build schools and school related facilities and not residential so that partnership piece of it to me seems

096like a better route for for house and just to add to what CL saying about that I mean you want them to want to move in so I mean you want to have a nice you know clean spot you know I mean sure it doesn't have to have all the bells and whistles but there are certain things you need to have in order to have people come in because I mean talk to the people who did like Santa Clara did one like forever ago and part of the thing is that they wanted to make sure it was a place that people wanted to live cuz if nobody wants to live there then it's going to be vacant right then you're not making any oh yes could you explain what leas lease back means are we

097relasing the land or we relasing yeah okay so what Le these back is is that you own the land right and then what you do is you give a site Le to a developer or building and you tell them do T improvements on it so build my building and then when they're done with the building they lease back the building to you until you pay off the financing and then you know I mean because I was thinking about a couple different ways that it could happen like nowadays we don't have the Bild their Finance 100% when Le SE back first came out it was for M school districts who don't have money to do buildings so what they would do is they would get financing maybe 100% from the Builder and pay them back over

098time um and a few years ago at Cash they had this thing where the finance people came out and tell people hey here's your 30-year mortgage and everyone's like what 30 or Warriors what are you talking about oh my God now mostly we pay like anywhere from 9 to 95% in progress payment so we do we do other regular construction contracts we just finance a portion because the thing is when you finance it and if you pay it over time then you pay interest right just like any other Lo right and in this case it's not necessary because we have question but so you know because we set aside a specific amount in the box right 70 million to uh preliminary say okay this is the amount yeah right but 70 million in 2024 and

099that's with the contingency plan correct because the idea the the initial amount the more or less amount was 50 million am I saying that correctly and so it's it's just because I don't like the all that's just me right but um so I'm thinking about the time the timeline right because with the entitlement and all of that you if you we're not breaking ground until let's say 2026 yeah to be realistic right even with the fast forward uh uh law that we want to use and all of that right um the cost you know of building yeah might not be that yeah sometimes for lease lease back part of the thing that the only time that I've really had people use the lease back portion of it is when like we you sell the bonds

100in trenches or you don't if you have you know you don't sell all one time sell time right and if the completion kind of occurs in a time where you're in between sales and you're not sure if you're going to have all the money available at that time then sometimes people have used these back to just do that in between thing I got to say there's no guarantee but when I try to negotiate the leas Le back contracts and if you have Bond money and you can pay right away I try to negotiate like a early purchase sort of thing that if we pay you with an x amount of time you're not going to charge it the TR but that depends on the developer and it's you know thus far it's been fairly successful

101with people in order to do that but some people or some contractors still want to get paid at least a couple of um rent payments because then it then it shows us the true um Le and there's less chance of the courts trying to turn it I got to see that I mean I know people were very because of the the people were oh pleas fact is risky I got say that statue I mean it's much harder to attack it if you I if you don't follow the statue then of course it's easy for them to say you didn't do it right but if you follow the statute I we had one where somebody did it like within the first year after the statute came out and they ended up having to withdraw their their

102claim because they weren't going to win on it um you know we got it dismissed fairly early um and we used to do validation actions all the time which is a way for be le back to shorten the time for someone to challenge the contract after the statute I know at first organizations that cash oh you should do validation and I'm like I don't I don't know I think without the the validation action it people weren't challenging it the same way unless of course they some thank you um the the traditional design bid build is I guess a lump sum yeah um is the one that makes it look a little more attractive because you makes it seem as if you you're you're you're handing over a big chunk of money in upfront that in

103turn should realize you savings you're saying that they can go around that and just few change orders wind up savings and I don't yeah and I don't want to say are we protected by the 10% cap on change orders yes you are well the 10% cap just means that they could do mean that you can have more 10% change it means that go over the 10% you have that's what the limitation say it doesn't mean that you can't have change orders only 10% you'd have to bid and yeah sorry so there's absolutely so we go through this they on the back end try to yeah not everybody is a Cher or artist I mean you know sometimes not everybody that I that depending on references I part of we do a request qualifications talk to

104other districts who work with the people and tell them you know ask them what they think of it that's part of what you know you're saying like you know how would we help you with putting those things together you know go see other um I show you guys have visit other projects where they're working on it see if you like what happened there and you know you can kind of follow some of the things um that they were working on the closest one in terms of of you know s CLA unified which which they did that so long ago yeah right is a different mechanism and right now we were Jefferson will be probably the closest yeah did or S College District t one about 10 or 11 years out um so it's right above

105that point where all the def so you know there's a 10 year window to find the defects and then after 10 years after that you can't sue the contractor anymore for for def that you find so if you're G to find them find them within the first 10 you know 10 years well the good thing is that right now where you are your your process for work for housing we can select any of the options um if you're going to do design build though we'd have to talk about when to bring the design build team on board because right now um the [Music] educator um is doing the enement with the city there is they do have an architect that is on their team right that's doing some level of PL it's not it's not

106all full PL schematic design right and so I don't know if that would what they get out of that final entitlement process would be enough kind of a bridgy thing to set the performance for the design fi in the the next you know phase so it maybe go through that process first and you k the design IND board at that time that might be the time to do that yeah because you know I mean couple of the attorneys and I were like looking at the statute again recently and I always thought that you need to have a BRI architect or somebody to prepare some kind of performance best if you're not doing performance best you don't actually to have a design professional do it but if somebody has schematics for you that's great it just

107means that if you're using that though they can't be the architect record for the project but if they're with the city maybe it doesn't matter right you need to have some design to figure out how much it's going to cost for what you're going to build right you got to have some kind of estimate um sometimes it's hard because you know like I have another client who wants to go into their project early so they can get the cost you can figure out cost through also through construction professionals and estimators you know because there's a certain amount that you're going to pay per square foot and it's not the best estimate but if you know how big you're going to build and how much how much it cost per square foot you can get a

108very very rough order of magnitude from that you know to figure out what you need to do but again to finish the application for the for for the estimate for I'm sorry for the funding I mean you need more the clu about how detailed that needs to be in order to get it but you know again it is true that you probably want to get somebody involved really early and have a SE amount of stuff but doesn't necessarily mean you have to have your design build team before you have the funding part workk done well this will be the entitlements from the city that allow project to move forward and once they get those entit they have to go in to for the more specific like plans and specifications with the city to get the

109actual building permits so there's a whole another phase that'll happen after the entire are secur and we made that point clear with e HP that it was only going to be for this aspect and after that you know the board would be direction as to how we're going to go with which method delivery method right so we were very specific in that we want we don't want to get too far we're now we're we're committed right and so we made that very clear to ehp that and it's leg legally we we can't uh truste thanks yeah I just um I'm kind of been noting all the different agreements that I'm hearing about right you had the these spokes for if we just were to look at design build the first one right there's a construction

110manager which is dayto day and then you have potentially the bridging uh architect and then you've got the design build team but then I also heard we have a development agreement with s then we have I heard consultant potentially and then so I guess what I I'm looking to Dr B and your team in terms of so who's managing on those contracts or is that that you Mark or are and we're GNA hire a separate project manager for all this or are you the project manager I like I'm just trying to understand that Rel our relationship with all these uh contracts and the oversight for that well as the director B that would ultimately be that kind of umbrella but obviously the whole Administration Co Dr Bower we would all have that but I would

111probably be that that project manager of the district representation so this box and then or is that somebody El no under the district that would be somebody else so you're this box yeah we would be the district okay but but am I correctly hearing like and there's the dwk contract and there's the developer agreement and there's a so what's the you mentioned consultant well okay so if you were to do design B build and you wanted to do a constructibility review sooner you'd have to hire a separate consultant to do that so that's only really the design yeah and and the thing is like there are a lot of other contracts that it didn't have because basically if you do these things back with designed build the big contract you're going to have is architect

112and contractor if you design builds AR second contractor come together but you're still I mean there might be other people like you know you have the pla consultant you know who was going to work on and they do the compliance meeting before the work starts make sure that everybody agrees to be subject to the pla um you're going to have um other people like if you want to hire your own inspector to go and do it we don't have a VSA project inspector but we have our own projector to make sure that they they're building it correctly or you know or as C said we could have a a separate construction manager do that so construction manager is really it's a um it's an option it's not a requir and they're just to help Mark

113be there I mean because Mark has a lot of projects to take care of they're the ones be focus on the one project well and I was hearing also clar say you're talking about like oversight guard dog you know um but in design build we so I had a note no inspection of record is designed bid build but in design build we would have an we still need the guard do we still need the guard dog the eyes on quality perform okay and I don't know this is too much of a detail but sometimes through the bridging architect to the the the criteria architect B basically when they give you the performance specs for the RFP their job could be done but some districts might keep them on to say like was this part of

114the original intent of what we design or what we intended for this project you know there's there's just so many variables about what you want to do they might help as a guard do that generally design professionals do not inspect they observe right I mean and are do this long enough they always correct you I don't inspect I observe so they're not there to catch everything and I think having an inspector I mean it helps but it's not a I mean if they were if they were 100% I would have different places to work on yeah and it sounds like in design Bill there would be less involvement from the district so I mean as far as timing uh versus if we go to the design bill then we might as a district might have

115a little bit more involvement and time yes for sure involvement yeah I think for design build and even Le prce we talk about partnership we're also talking about selecting people people on their qualifications as well as price so if you get to choose somebody who's a lot more qualified than just on their price hopefully you don't have to hold their hand as much they're not learning on your DME they know these things and and they're um and because they were part of the process to put the plans together hopefully the idea being is that they're not trying to just go after the change orders because especially for design build how are you going to say that it was missing from the plans we're responsible for the I'm pay for that you know same thing likeability

116why would ability that's to me the the qualifications selection criteria is important here just because of the housing right we we get to evaluate whether these developers or contractors are folks who have the kind of you know footprint in this particular region that we need to see feel confident about in terms of right you're going to do this once right and then you're going to get back to buing school so you want it to be done well by well qualified team so I like the idea one of those two options because I think you you more say and who was selected to do and even if you pre-qualify and design B build you still got to pick the lowest bidder that's where it gets a little tricky right there's that that it's not the same

117team they're not on the same team always the architect in the construction right and sometimes you made a term on it um about Job change orders right yeah um there's a little bit of a game that goes on on the construction s oh you missed this and to the architect and there's that change order right and it gets to be a bit of a problem and for us in the middle the district we're playing mediator and trying to figure it out usually that means us writing a check right to get it is you run a b bu is Str to be a more adversarial kind of situation with the architect and with the builder the other two are more collaborative not to say that we're the ones who having to be up front oh yeah

118they're everybody but the whereas on this one everybody's locked in at the price me for design they're not locked in because if we didn't hold our in and give them the plant they to come to us and say you need pay for the because I didn't did the project this is not what I did the project right so we have to be on top of the Architects the and an architect will anybody who was architect they will always tell you 100% like everybody get around everything first one I mean not for sure but it just seems like a little bit more stable um and you know I'm one five but this is helpful to understand the options and to see by next week you know when we make that decision exactly yeah so thank you

119so much I mean I know we probably still have questions well so is the administration bringing us a recommendation of the three are we just going to be like H hashing it out for this like I'm always for administration recommendations but I don't know no we the the item is written for the board to have a dialogue and for the board to select one question and that's why we're having this so the concerns have been raised about that lowest price you said that lowest responsive price correct they can't you're not just going to go off of Joe's freaking construction here yeah Char five bucks and he's going to make it all up on change order it's going to be properly written by a law firm that's that's going to be reviewed and you got to

120put in all the right elements in place to make sure that somebody's not not going to come in and screw us over okay so the law form of what we do is we do the actual contract stuffff but the holes are not in our stuff usually it's in the plan The Architects in a hard situation the holes are usually in the plans I try to write my legal documents to make sure that you're protected if you find holes in the plans and to the change orders that are necessary in order to complete the project but then again like I said there there will always be some kind of thing that dark protect this so then in design build is the one that allows it allows for you to tell them if there's a problem with

121design you pay for it not us uh are you done for so would you recommend to get a second um set of eyes another architect when the first architect has completed it because that's where your starting point is that's where you're most likely if the first architect Mi missed it then the second one will pick it up I think depends on what we well I mean what you're talking about if it's a separate architect it's a peer review and um and that's different from a constructibility view so constructibility riew is not about the design it's just about whether or not they can build it the way they they design it a perer riew is to say like hey did they use the proper um you know uh it's more of a like a I don't

122know intangible like did they use the right decisions when you could choose a or b and either is wrong but one might be better than the other other that's kind of more it's it's much more a um uh subjective and it could be something that's much smaller of a of a thing it's like clearly it's not about whether or not um they they violated the building pood right I mean a perview can catch that but then it's more of a it's more of a spec uh specific thing that way and I don't know if everybody necessarily spends the money in having the peer review um to me there are other things you can spend the money on like doing more soils testing you know because the underground stuff is where you catch a lot of

123the the chain goers so you know I mean again even if you have the world's best plants if something is under the ground that you didn't know is there like a dead tree or something that's going to cost you asra money to take care of that it's what you can't see and you can't test for all of it can't that be put into the RFP I'm saying hey we need to whoever's going to go for this is going to have to um factor in peer review so that we can avoid those things so the peer review is of the architect and the contractor doesn't pay for a peer review the district would P for a peer review to be getting a second opinion if the first opinion was way off base might be a cheaper

124route instead of going down that rabbit hole am I understanding correctly that if we go with the design bid Bill and there was an error right because we didn't do a peer review we're responsible for it however we go with this design build if there's any there's if there's any errors then they yeah cover it unless we didn't give them something like so knew that there a big hole here so for me it just makes like for me I'm looking at this and there's less opportunity for error in the first one still you know might have some errors here and there but less opportunity than any and the peer review won't catch everything there still be things that the peerie doesn't catch and understand that person is doing the P you you're still going to

125have to have the architect of record is still ultimately responsible for the design so prview might be helpful and you know my test is it probably will delay the you know progression of the plans too but you know again what is that measure measure twice cut once kind of I mean there is some thought to that but I mean just doing a per you isn't always what everybody's um solution is I mean there's nothing wrong with it do it there's just other consequences that come and and also sorry timing on on number one yeah there's more opportunity to delay on this second one am I right am I understanding because so if we find a change order and something that was Miss in the architect plan that requires us to go back to the building

126department we have to wait for the building department to Fig out like if you can kind of s out some of this stuff early because the builders involved in it you can save time that's what I was going to say I mean ultimately these are Stamped Out Plans by the city in San Jose so changes to those plans have to go back to just like if we were to change plans doing reg which might be a little bit more expensive but worth it given all the recent experience withs like Des build feeling that's what I'm feeling the dice yeah there is control and on next week we'll be voting on that so is the city acting more favorable right now to the we or to the other sometimes the same for any okay well like

127we'll be making our decision next week we'll be voting um we didn't meet today to vote so but you know as we take the information back and have conversations maybe with staff this next week to make sure um we have a final vote that day unless anybody has any other questions or comments thank you so I was just oh good I just wanted to let the board know together that this was designed for you to kind of ask the questions being informed but I'm hoping that you guys can join us next Thursday because there might be other questions between now and Thursday you might have you know something that you didn't know and this is one of those areas that I'm not going to be a lot of help during a one feel like you're

128a unicorn YouTu so complicated I guess I do have one more question you know how you said that a lot of them don't like uh that you Le back right away so have you encountered like redeeming mortgage and a prepayment penalty maybe if you do it that way or I write the financial terms so I there's no penalty unless you're doing something that you're borrowing so much money that the financial party becomes a party to the contract I try to write the contract so that there's not enough money in it for like a bank to become part of it because if you think like one month negotiating time sounds like a lot I've done it where it's taking like six months because the financing party was part of the the contract negotiation because you never

129know what costs are going to be you know like two three years because they have yeah because you're planning on using Bond money for this you have much more control or you can make those progress payments instead I'm saying to keep the financing part down because if the developer or the yelder is the one who's financing it then they won't go to a bank because then they got to pay the bank's R to go and take you know and finance it you should try to make I try to make it small enough so that and the payoff period be a year the courts now said it needs to be a recent year but Ive had very few districts who've ever exercised the the year they usually try to pay it off because they don't want

130to pay the extra interest and and all this is very helpful just trustees you know and and where we're at um so I really appreciate it even though we might not go that way because we might not have to but just to understand that concept for when and if we ever need to you know and just for the interest of clarity when you talk about L some you're talking about the amount not the payment they're usually progress payments throughout it's not like when we say lump sum that's a lump sum but we don't pay at the end it's it's progressively as different phases that are negotiated yeah uh at what benchmarks we would make uh partial payments yeah so there's a price for the contract for the whole project right and usually no matter what

131version we do we will talk with the the other side and say we call it a schedule of values we say like if we do the Milestones if Reach This milestone in know cost like when you do the foundation that'll be $1,000 when you do the windows which I that's $1,000 and depending on the percentage that you get done for each that's how we calculate how we pay them so pay everything or or all at the end well thank you so much we appreciate it and hopefully we see one or both of you next week um at this time I'll go ahead and adjourn the meeting at 8:17 p.m.