The Kern Community College District has three years to spend about $32 million — the majority of a $40 million bond it sold last month as part of the $503 million Measure J voters approved in November.
If it doesn’t, the district will incur IRS penalties.
While spending $32 million may not seem like a difficult matter, especially given KCCD’s expansive list of facilities that need improvements and retrofitting, it could be more challenging this year.
Voters approved 154 bonds statewide last year worth about $27 billion, which translates into a lot of competition among districts for construction managers, architects, contractors and subcontractors, not to mention the bottleneck it will form at the Division of the State Architect, which must approve all projects before a shovel hits the ground.
“From a construction standpoint, I have to wonder if there’s an appropriate amount of available labor to do these jobs in that amount of time, and it really concerns me,” KCCD Trustee Kyle Carter, a homebuilder, said during a board meeting this month. “We could be really competing for the workforce that we need to have to build this in the amount of time."
The challenges were laid bare during a KCCD board meeting this month when Trustee Bill Thomas questioned why the district would sell new bonds when it hasn’t spent the remainder of funds from Measure G, which was approved in 2002.
Thomas also questioned whether the district was organized enough to push millions of dollars worth of projects through the DSA on the given time table, especially with the district performing much of the work in-house, rather than hiring a consultant to manage the bond program’s construction projects.
It wasn’t until after the meeting that the district began putting together a request for bids to hire an outside consultant.
“The KCCD does think that we have created a realistic schedule for our Measure J Projects; however, KCCD cannot control the construction bidding climate,” said Marlene Heise, a public relations consultant who works for the district.
She added that the district’s in-house facilities planning team has spent about $47 million the last three years for various projects, and that it is in the “preliminary planning or legal stages” of three Measure J projects.
At issue during this month’s meeting was the first project to be paid for with bond money: repaving of parking lots, which is budgeted at about $3.8 million.
Although Associate Vice Chancellor of Construction and Facilities Planning Eric Middlestead established that the district would have an outside consultant to handle all projects above $3.7 million, the district decided to “fast-track” the repaving and handle it in-house because it’s a relatively easy project.
But after more than seven months since Measure J passed, construction hasn’t begun.
Middlestead blamed the project being held up by the DSA review process.
“I can’t change the DSA time frame. I’ve tried,” Middlestead said.
Department of General Services spokesman Ken Hunt said those times vary between 49 and 72 days depending on the cost of the project, but could run longer for projects costing more than $5 million. Most district facilities officials estimate those projects take eight to 12 months.
Plans to construct a new veteran’s center, the Arvin outreach campus or even repaving of a parking lot — the three major projects district officials have identified as their priorities for the $40 million — have not made it to the DSA for review yet, according to online records reviewed by The Californian.
“It seems to me that if you’re trying to do this in-house and we have $40 million with the interest clock ticking already on it, and we’re now into 2018 for what’s called a ‘fast-track project,’” Thomas told Middlestead. “It’s going to be two years, and you’re going to see a build-up in front of that bulldozer that we aren’t going to be able to manage on our five-year window, and I don’t want to talk about where we’re going to be if we don’t do certain things, but I also don’t want to talk about ‘I told you so.’”
“I know the interest clock is ticking,” Thomas said. “I want to make sure the building clock is ticking, as well.”
Because construction costs typically rise every year, keeping costs down is contingent upon keeping tight construction schedules.
The Kern High School District, for example, sold an $87 million bond in late May — roughly 31 percent of the $280 million voters approved through Measure K last November. Its planned Career Technical Education Center, however, costs $60 million, and the district could spend some of the remaining money on land acquisitions as it scouts for locations for new high schools to control overcrowding.
Some districts, including KHSD, had plans for its largest facilities project turned into the DSA for review last year, said Jenny Hannah, KHSD director of facilities and former chair of the Coalition for Adequate School Housing, the statewide group that advocates for increased school facilities funding.
As a result, Hannah said the district would likely begin taking construction bids for the CTE Center by the late fall or early winter.
“Supply and demand definitely will impact our market and how far our dollars will go for brick and mortar,” Hannah said, stressing the significance of construction costs rising each year, and if projects are delayed, it would cost more overall.
“It’s never going to get any cheaper than today,” Hannah said.