Workforce dilemma poses risk to Mammoth building project
(Calif.) Set to begin spending some of the $63.1 million in general obligation bonds to expand and improve aging classrooms, the Mammoth Unified School District has proposed a complex lease arrangement with the eventual builder.
To utilize the cost-saving lease-leaseback option, state law requires that the district ensure that all work on the projects be performed by a “skilled and trained” workforce—a provision that the district says it cannot comply with.
In a waiver application set to be considered by the California State Board of Education this week, Mammoth officials contend that the local economy surrounding their community cannot provide the required workers.
In a memo to the board, staff at the California Department of Education said Mammoth officials point to the district’s “remote, mountain location” as a major barrier getting the right workers.
“The district believes it will be extraordinarily difficult or impossible to meet the ‘skilled and trained workforce’ requirements,” staff said. “Specifically, because of the District's location, the majority of the community's labor force would not meet the ‘skilled and trained workforce’ criteria mandated by
(state law). The District and the community as a whole struggle with higher construction costs due to extreme weather building conditions and both higher workforce housing costs and a shortage of workforce housing.”
Despite those issues, CDE staff is recommending that the board reject the waiver request.
The main objection, staff said, was the fact that the skilled worker requirement was largely placed into law to increase “safety, adequacy or craftsmanship of classrooms and other school facilities.”
Staff also questioned if school officials had looked carefully at its local workforce. They noted that Mammoth officials did not contact the Building and Construction Trades Council for their region.
“Reaching out to the Trades Council would have attracted bids from qualified contractors in California and in Reno, Nevada,” staff argued. “The Trades Council represents 6,000 skilled men and women in the construction trades, including 1,000 active apprentices (according to the Division of Apprenticeship Standards) throughout the three counties in its jurisdiction.”
The proposed lease-leaseback arrangement has also generated some controversy in other places.
State law allows a school district to lease the school where the work will be performed to a selected building contractor. Typically, the district would charge a token amount, often just $1 per year. Then, the contractor leases the school property back to the district for up to 40 years and at a fee that would correlate with the overall cost of the construction project.
At the end of the leaseback term, the school property would revert to district ownership.
The agreements have been criticized as a way for district managers to avoid using the bid process for awarding contracts. In some cases, schools have repeatedly used the same construction firms for all their facility needs, using the same lease-leaseback process.