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LAUSD Faces Huge Shortfall

Education: District lacks up to $600 million to make school repairs. Contract disputes, poor oversight of bond money are partly blamed.


Los Angeles school officials acknowledged Wednesday that they face a shortfall of as much as $600 million to repair and modernize schools--the result of escalating costs, contractual disputes and poor oversight of a $2.4-billion school bond. The additional money is needed to complete 6,400 construction projects districtwide, everything from replacing ceiling tiles to wiring communications systems.

The unfinished work represents more than half of 12,000 school construction projects that are supposed to be funded by Proposition BB, the school bond measure approved by voters in 1997.

Supt. Roy Romer vowed to make up the funding gap with revenues such as interest payments, loans and state grants, and he predicted no further delays in work. All Proposition BB repairs, he said, will be finished by the end of 2004. The program is 2 1/2 years behind schedule.

"We still believe these projects need to be done," Romer said Wednesday. "We are not going to cut back."

The public disclosure of the shortfall comes as the district gears up for another school bond, to be placed on the ballot sometime in the next two years. That measure--for at least $1 billion but probably more--will go toward building 85 new campuses.

The district carved Proposition BB into two pots: $900 million to build new schools and $1.5 billion for repairs and modernization. Already, the district has taken millions in construction money to pay for repairs.

The school construction funds, meanwhile, face a shortfall of about $164 million. Romer said that gap will be made up with future bonds, either local or statewide.

But it is the shortfall in the repair money that has caused the greatest concern.

Romer said several factors contributed to the funding shortage, which he put at $500 million to $600 million.

He said that cost figures for construction projects four years ago were rough estimates, and in many cases based on "pure air."

Romer also cited contractual disputes with companies hired to do the repairs. The district spent millions of dollars settling the disputes and fixing mistakes such as installing security grilles on classrooms with no escape latches.

But costs also were driven up by factors outside the district's control. They increased as crews discovered asbestos in buildings and lead in paint that had to be removed.

Meanwhile, costs have risen as the needs of schools have changed since 1997. Some campuses have added bungalows to accommodate growing enrollments, boosting the cost of repair, wiring and other modernization work.

Romer and members of a Proposition BB citizens oversight committee agreed Wednesday that the district failed to deploy adequate controls and safeguards to ensure that projects were finished on time and within budget.

Romer and the oversight officials said the officials overseeing facilities lacked sufficient training and expertise.

Members of the Proposition BB oversight panel had long complained about their inability to get detailed information on the management of school district construction projects. They had voiced concerns about the district resisting outside oversight.

On Wednesday, committee members said the disclosure of the financial shortfall, though painful, was a positive step for L.A. Unified as it seeks to improve its reputation for bungling construction projects.

In fact, committee members attended a meeting with Romer and reporters Wednesday in a show of solidarity with the district.

"For the first time, the systems are in place, the professionals are at the controls, and the right questions are being asked," said attorney Constance Rice, a committee member. "This should have been done four years ago. Better late than never."

Romer said the shortfall was discovered after facilities executives at 11 subdistricts began visiting schools two months ago to more accurately assess the scope and costs of repairs.

Romer said the additional costs are still being nailed down, but district consultants said the actual price tag could wind up being lower than estimated.


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