The Beverly Hills Unified School District on March 22 voted 4-1 to finalize its request for proposals to potentially hire a new construction management company to oversee its building projects.
However, the current bond manager, Team Concept Development Services Inc., could still be retained if the board decides not to approve any new bids or if TCDS submits a bid and is selected.
In October, the company reported a budget shortfall for BHUSD projects, including ongoing work at Beverly Hills High School and El Rodeo Elementary School. TCDS representatives said it may need an additional $130 million to complete the projects, though the total shortfall is still being finalized.
“I just don’t know where to begin,” said board Vice President Noah Margo, who voted against the RFP. “I’ve spent months thinking about this moment. It has come down to what I hope I could say to stop this train from completely derailing. The decision that is about to be made by this governing body is perhaps the most dangerous and impactful decision I’ve ever been a part of.”
For the last five years, the district has been building under a bond program managed by TCDS and its owner, Don Blake. Margo said the program is “unparalleled” and “recognized by every governing state agency involved in our projects.” He referenced recent audits that stated BHUSD’s bond program is among the top 3% in the state.
Margo said the district had a “sour reputation” after issues with its construction program in the past, and that has been alleviated by hiring TCDS.
“There were three goals at the time: no change orders, no delays, no losses,” he added. “This was a bold statement in this business of public instruction.”
The board vice president said several of the district’s contractors have praised their relationships with TCDS and expressed concern about the board potentially changing bond managers.
“We are behaving like franchise sports team owners only focused on the bottom line,” Margo said. “The bottom line doesn’t win championships. People win championships.”
Because Blake does not have a contractor’s license, TCDS would not be able to submit a bid in the new RFP process, Margo said. He warned that moving forward could halt construction on several projects.
Board member Rachelle Marcus said she supported the new RFP, especially since one was not issued when TCDS and the district reached an agreement five years ago – a statement that Margo contested.
“I feel that it is my fiduciary duty to request an RFP for bond manager,” she added.
Marcus said she has been following TCDS’ monthly payroll, and that she was “very concerned” with the amounts that she’s seen. The company’s payroll was approximately $268,000 for the month of February, she said.
“If I were to project that over a whole year … we would be paying $3.2 million for one year alone for payroll for the projects,” Marcus added. “I find that amount unbelievable.”
Like her fellow board members who supported the new RFP, she cited the budget shortfall and a lack of transparency by TCDS.
“I feel that, in light of all of this, there’s nothing wrong with approving an RFP request and moving forward,” Marcus said. “I feel it is my responsibility to do so.”
Board member Dr. Amanda Stern agreed.
“I really feel that it is prudent to canvass the market and look at what other proposals are out there,” she said. “It’s a complex matter, and I think that, as a parent, I also don’t want my children in bungalows or dealing with construction. … We need to see some more results with this amount of money.”
Board member Gabe Halimi could not attend the meeting, but he wrote a letter in support of the RFP.
“I have simply not been able to get sufficient data reports and communication under the current structure to do my job as a board member and we need to reset,” he wrote. “As currently structured, TCDS as bond manager reports directly to the board, not to Superintendent [Michael] Bregy or [other district staff].”
Halimi said the structure of the current agreement is “untenable.” However, he welcomed the company to submit a bid.
“If anything, I would personally consider their experience as a bond manager to boost their application,” he wrote. “On the other hand, considering TCDS has been working for BHUSD for five years, has consistently maintained competence and performance and was seeking contract renewal, should TCDS not participate in an open and transparent RFP process? I think we should ask ourselves why that is, but that may be a discussion for another day.”
Student board member Eli Ramer asked Bregy if the board is required to select from the bids it receives. Bregy said the board did not have to select a bid unless it so desires.
“There’s an interview process that happens, and it’s an eight-week window that the RFP is out there and people are able to submit proposals,” Bregy said.
Ramer said he supported the RFP because the district could still work with TCDS if the process moves forward, and it would allow the district “flexibility” and promote “transparency” in the bond program.
Board President Mary Wells said she agreed that the RFP process would promote transparency and accountability.
“I believe that we’re only halfway through our construction program,” she said. “We have a long way to go, and I believe that we can do much better.”
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