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HomeMy WebLinkAboutAgenda - 01-21-2025 ; 6-b - Project Management Options for School Construction 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: January 21, 2025 Action Agenda Item No. 6-b SUBJECT: Project Management Options for School Construction DEPARTMENT: County Manager ATTACHMENT(S): INFORMATION CONTACT: Project Management Structures Pros and Kirk Vaughn, (919) 245-2153 Cons PURPOSE: To have an initial discussion on how to approach project management for school construction projects and to provide direction to staff. BACKGROUND: Over the past two years, the County has developed a plan to fund the construction of new and renovated school facilities through the passage of the bond referendum. During this planning period, the School Capital Needs Workgroup and Board members have identified the importance of project management in successfully completing these projects. However, the exact model of project management for the upcoming construction projects has yet to be decided by the County and the Districts. Successful project management will achieve several goals for the County and the Districts in implementing the bond plan. First, it will ensure that projects are achieved on time, in budget and in scope. Second, the County has identified several values in the Major Project Planning Addendum that should be prioritized. Project management staff would ensure that those values are carried through during the design and construction process into the final builds. Those two components make project management important regardless of the delivery method chosen. For example, in the Construction Manager at Risk delivery method, the construction manager assumes more of the risk in maintaining the budget and scope of the project, rather than the owner. Project management would still ensure that the building meets the district's long-term needs and the County's priorities. Under State Statute, the school districts are responsible for school construction, and as such are responsible for management, design, and construction oversight. Under the current model, the districts hire either staff or a firm to provide project management, both for the annual maintenance of existing facilities and for new construction. The school districts make all contracts, decisions and payments regarding school construction and then bill the County for reimbursement. The districts do not construct new facilities very frequently. The most recent new school was the major renovation of Chapel Hill High School from the 2016 bond. In addition, both districts had issues spending down their maintenance funding during the Covid-19 Pandemic. The County 2 encouraged both districts to expand their project management staff and fund them through the Supplemental Deferred Maintenance funds. The County has identified these existing balances as resources to implement the Woolpert recommendations and will work with the Districts to create a plan that is consistent with the principles of the Woolpert recommendations using those existing balances. BudgetUnspent Capital Funds New Funding Available Maintenance District Year End FY 2024 Chapel Hill-Carrboro City Schools $ 6,609,365.29 $ 16,224,511.00 $ 22,833,876.29 Orange County Schools $ 27,510,418.97 $ 16,060,560.00 $ 43,570,978.97 Total $ 34,119,784.26 $ 32,285,071.00 $ 66,404,855.26 Either district can also agree to allow the County to assume project management, contracting, and oversight responsibilities through an Interlocal Agreement (ILA). That could allow the County to provide additional control over the selection of the architect, project delivery method, processing change orders and ultimate project delivery. The County could not compel the districts to enter into these agreements, other than withholding bond funding. Therefore, the County would likely need to work collaboratively with the districts to codify any responsibility sharing and reporting tasks. Staff will present the three broad categories of Project Management structures for the upcoming construction projects, and how the Pay-Go funds could be used to make each method successful. The three options are: • County Controlled Project Management • School District led Project Management (status quo), and • Hybrid Shared Management These categories are only intended to apply to the Major Projects using Bond funds, as the districts already have project management capacity for their high priority needs projects. The County is able to ensure compliance with the principles of the Woolpert recommendations for High Priority Needs using the project based approval process identified in the School Capital Funding Policy. The Board will discuss how it wishes to proceed on these options and direct staff on how to engage with the school districts on this conversation. There are no decision points for this meeting for the Board. However, funds for design on school construction are planned to be authorized on July 1, 2025 as part of the Capital Investment Plan. FINANCIAL IMPACT: There is no immediate financial impact with this discussion. The proposed Bond Plan included setting aside $1 million each year for Project Management from the Pay-Go Funds, starting in Fiscal Year 2025-26. ALIGNMENT WITH STRATEGIC PLAN: This item supports: • GOAL 5: PUBLIC EDUCATION/LEARNING COMMUNITY OBJECTIVE 4. Improve learning environments by investing in facilities over a 10-year period that address repair, renovation, and educational adequacy needs. 3 OBJECTIVE 5. Invest in and implement a plan that supports schools operational and facility funding needs. RECOMMENDATION(S): The Manager recommends that the Board discuss how to approach project management for school construction projects and provide direction to staff. 4 PROJECT MANAGEMENT MODELS EV-_ Use of • Funds District School Staff have the best Districts would have to build Provide funding to school Managed PM understandings of the capacity to properly manage districts to expand PM. requirements in school projects. County oversight County can add (Current construction. Most would be indirect. Districts additional FTE to review Process) responsive to eventual could have different levels of projects, manage users of the facility. success. meetings and report to the board. County Economies of Scale on County staff not as familiar County will directly hire Controlled running multiple projects with DPI requirements. Project Management. simultaneously. Equity in County is more removed from PM design/construction final users of school buildings. decisions between districts. Joint All stakeholders are Unless roles are very clearly Both County and School Management recognized in process. defined, decisions will have Project Management will unclear or duplicated be funded, based on the approvals. Delaying projects split of responsibilities. and causing overruns.