Your eyes on California Government

NOV. 14, 2011

By KATY GRIMES

At a hearing last week, officials from the Los Angeles Unified School District appeared proud of the massive spending on new school construction and renovations. The officials appeared before a joint hearing of the Senate and Assembly education committees, although only three of the 21 committee members attended.

The LAUSD was asked to update the committees on the new construction and renovation and updating projects for the district. Mark Hovatter, in charge of contracts for LAUSD facilities department, presented a report prepared by the Los Angeles County Economic Development Corporation. “Founded in 1981, the LAEDC was created by the Los Angeles County Board of Supervisors to implement LA County’s economic development program through land development, project financing and marketing activities,” the LAEDC website states.

Hovatter said that LAUSD has been doing exactly that — acquiring land, building new schools and “modernizing” since the late 1990s.

Hovatter appeared excited to report to legislators that 132 new schools have been built by the district. “I get invited to speak a lot. It’s something we are very proud of,” he said.

Of the more than $19 billion in construction and improvements for the LAUSD, financed through five bonds, Hovatter said that 331,000 jobs were created over a 15-year period. “There are 24,000 modernization projects right now,” he added, touting the numerous construction jobs financed by the district. “But we still need modernization projects. It’s exciting to see a new school and drive through a transformed neighborhood.”

Hire Everybody!

“It’s evidently that simple,” said Lance Izumi, Koret Senior Fellow and senior director of education studies at the Pacific Research Institute, CalWatchdog’s parent think tank. “Why don’t we run a giant general bond and hire the 2 million unemployed Californians? Why limit yourself to hiring just a few construction workers? Hire everybody!”

Izumi was critical of the LAUSD spending because of significant declining enrollment, and reckless spending despite California’s historic economic crisis. Izumi said the LAUSD’s wasteful spending on construction projects included the $578 million Robert F. Kennedy High School, “the most expensive government-run school in this nation’s history.” LAUSD voluntarily increased costs by agreeing to employ only union labor through Project Labor Agreements, despite evidence from throughout California that such agreements contribute to higher construction costs.

Not one legislator questioned Hovatter about the RFK High School costs, the $337 million Edward Roybal Learning Center or the $232 million Visual and Performing Arts High School, totaling $1.2 billion in new construction for the LAUSD.

Project Labor Agreements

Labor union construction jobs done through Project Labor Agreements increasing school construction costs by 15 percent, according to Kevin Dayton, Associated Building Contractors’ government affairs director. “It’s what I call the corruption variable,” Dayton said. “California taxpayers would love to know how much money is going to Los Angeles Unified School District.”

Dayton explained that the State Allocation Board allocates one half of approved school bonds to the LAUSD — even though only about 12 percent of California school kids attend LAUSD schools. All of California’s taxpayers are subsidizing the Los Angeles area schools. “Taxpayers don’t want to be giving that school district money until they clean up.”

Dayton explained that, in inflation-adjusted dollars, the ABC found that the presence of a Project Labor Agreement is associated with costs that are $28.90 to $32.49 per square foot higher than with non-union contractors.

The ABC also found that unions in Los Angeles County force contractors to pay journeyman wages and benefits to non-union apprentices under under PLAs.  And the unions use the PLAs to force non-union workers to deposit 12 percent of their wages into the International Brotherhood Electrical Workers credit union. “Workers should not be forced to have their paychecks deposited into a specific bank. They may object to that bank because of how it invests its deposits or how it uses their personal information,” Dayton said.

Mega-School District

LAUSD has 885 schools, 668,000 students, 37,000 teachers and 40,000 “other” personnel, such as counselors, nurses, janitors and administrative staff. The school district is the second largest school district in the nation and covers most of Los Angeles County’s 31 cities, and more than 700 square miles.

However, finding an actual budget for the monster district was like trying Whac-A-Mole at the county fair. The LAUSD currently reports, in press releases, $7 billion in total district spending, only slightly down from a $7.1 billion budget last year.

But that figure is suspect. The district claims per-pupil spending of $10,000. But a 2010 report by Adam Schaeffer of the Cato Institute’s Center for Education Freedom, found it was actually $29,780 when capital spending, such as from local and state bond measures passed by voters, is calculated into the actual per-pupil cost.

The school district reports, “We have so many reasons to give thanks in this District. Test scores are up.  Attendance is rising.  The graduation rate is improving.”

In 2011, the LAUSD school board voted to lay off 1,900 teachers, nurses and counselors. The cuts were less than an earlier proposal, which would have terminated more than 5,000 teachers, 2,000 cafeteria workers, office clerks, bus drivers and other administrative staff. LAUSD threatened repeatedly that if those cuts were made, class sizes would have increased in grades K-8.

Isumi says the class-size threat is not credible. Class size averages in South Korea stand at 66, but test scores and graduation rates are much higher, according to Izumi. “Hybrid blended learning models are part of daily learning settings. You don’t need as many teachers,” Izumi said. “It’s more about teaching techniques and really good, qualified teachers. California needs to eliminate state regulations that prevent online learning to make it more accessible for all kids. And it’s cheaper, too.”

A Lot We Can Learn

Dayton said that LAUSD has not commissioned an independent study since 2000, about how Project Labor Agreements affect construction costs. When the LAUSD first required contractors to sign a PLA in 1999, it agreed that the PLA “shall expire at the end of one year unless the District and/or Council demonstrate that expected economic savings to the District have materialized at a level sufficient to justify continuing the Agreement.”

But that has not happened, said Dayton.

Dayton said that a Price Waterhouse Coopers report was “unable to conclusively determine whether the PLA has to date had either a net positive or net negative economic impact…” But the LAUSD still requires contractors to sign a PLA to work on construction funded by its bond measures, dramatically increasing costs.

Assemblywoman Julia Brownley, D-Santa Monica, contratulated Hovatter. “It is extraordinary,” she said. “LAUSD has done a tremendous amount of building and modernization. There’s a lot we can learn from this program.”

Tags: budget deficit, California budget, California Legislature, Democrats, Education, government, jobs, Katy Grimes, legislature, Project Labor Agreements, Public Employee Unions, recession, tax increases, Taxes, unemployment, unions, waste