Jun 06, 2023 Finance Committee

[00:00:02]

WE'LL GO AHEAD. WE HAVE A QUORUM FOR THE OPENING AND CONDUCTING OUR FINANCE MEETING TODAY ON JUNE THE 6TH.

WE WILL CERTIFICATION OF THE NOTICE OF THE MEETING IS IN ACCORDANCE WITH CHAPTER 5.51 OF THE TEXAS OPEN MEETING.

I CALL TO ORDER THE FINANCE COMMITTEE MEETING OF THE BOARD OF TRUSTEES OF DALLAS COLLEGE FOR JUNE 6TH, 2023 AT 1110.

A M MEMBERS OF THE PUBLIC WHO HAVE FOLLOWED THE INSTRUCTIONS OF THE DALLAS COLLEGE BOARD OF TRUSTEES WEBSITE FOR REGISTERING TO SPEAK DURING THE PUBLIC COMMENT PORTION WILL BE GIVEN FIVE MINUTES TO SPEAK.

THE FINANCE COMMITTEE MEETING IS BEING BROADCAST OVER THE INTERNET.

AN AUDIO RECORDING AND TRANSCRIPT OF THIS MEETING ARE BEING MADE AND WILL BE AVAILABLE TO THE PUBLIC ON THE BOARD WEBSITE AFTER THE MEETING AT A LATER DATE.

[2. Certification of Notice Posted for the Meeting]

I UNDERSTAND THERE ARE NO ONE TO SPEAK WISHING TO SPEAK.

THAT'S CORRECT, SIR. NO ONE HAS SIGNED UP FOR THIS MEETING.

OKAY. UM, OUR OUR PRESENTATION TODAY IS THAT WE'RE GOING TO ADDRESS SOMETHING THAT I THINK IS EXTREMELY IMPORTANT

[4.1. Project Delivery Models Presenters: Rob Wendland, Christine Ryan & Yukiko Kojima (Nossaman LLP)]

I THINK IT'S SOMETHING THAT'S GOING TO HELP ALL OF US.

AND AS WE ALL KIND OF HAVE DIFFERENT WALKS OF LIFE, WE'RE KIND OF PUT INTO A POSITION OF MAKING SOME VERY IMPORTANT DECISIONS THAT ARE GOING TO BE VERY FAR REACHING FOR THE FUTURE.

I GUESS THE ONE THING THAT I'M GOING TO ASK THAT THAT IF ALL POSSIBLE, AS WE AS WE'RE EMBARKING UPON THIS PHASE OF OF EXPANSION AND FACILITIES AND AND PROGRAMING THAT IN THIS NEXT SEGMENT OF OF PERIODS OF TIME, WHETHER IT BE TWO MONTHS, ONE MONTH, WHATEVER IT MIGHT BE, MY REQUEST WOULD BE THAT WE ALL TRY TO AT OUR VERY BEST KEEP OUR MIND IN A VERY STRATEGIC MIND.

KEEP OURSELVES AND WE ALL LIKE TO USE 30,000FT, I'M GOING TO SAY 50,000FT BECAUSE THIS IS SO IMPORTANT THAT WE DON'T EVEN START TO LET OUR MINDS WORRY ABOUT HOW WE WILL DELIVER WHAT WE'RE GOING TO ENVISION, HOW ARE WE GOING TO PAY FOR IT, WHERE IT'S GOING TO FIT.

NONE OF THAT MATTERS AT THIS POINT IN TIME.

SO I REALLY KNOW AND THAT'S HARD.

THAT'S VERY HARD FOR PEOPLE WHO THINK MORE LINEARLY THAN THAT LINE THINGS UP.

IT'S VERY HARD TO DO THAT.

BUT I THINK FOR OUR CONTRIBUTION AS A GOVERNING BODY, WE'VE GOT TO BE ABLE TO JUST TAKE IN AND LISTEN TO THIS BECAUSE WHAT WE'RE REALLY DEALING WITH IS THIS FUTURE OF INNOVATIVE DELIVERY AND INNOVATIVE THINKING IS FAR DIFFERENT THAN MOST OF US HAVE EVER LIVED IN OUR LIFE BECAUSE IT DOESN'T REALLY YET EXIST.

BUT WE'VE GOT TO BE ABLE TO PREPARE FOR IT.

AND AS I'VE BEEN ATTENDING A NUMBER OF SUMMITS AND CONVENTIONS AND CONFERENCES, TRYING TO GET A BETTER HANDLE ON UNDERSTANDING HOW WE DEAL WITH THAT, IT WILL ALWAYS BE AN EVER SPEAKER WHO TAKES THE PODIUM, SAYS THIS IS THE MOST DIFFICULT FOR GOVERNING BODIES IN THIS ERA OF TIME IS BEING ABLE TO SEE THE PREPARATION FOR THE FUTURE WHEN YOU DON'T KNOW WHAT THE FUTURE IS.

SO. SO TODAY WE'RE GOING TO HAVE SOME TOOLS TO PUT INTO OUR TOOL CHEST TO HELP US THINK ABOUT HOW WE WILL LOOK AT SOME OF THIS DELIVERY AS AN ALTERNATIVE MODELS AND ALTERNATIVE WAYS OF THINKING.

AND SO I'M JUST HOPING THAT WE CAN DO OUR JOB AND OUR PART BY JUST KEEPING AN OPEN MIND WITH NO FENCES, FINANCIAL, GEOGRAPHICAL LOCATION OR ANYTHING, BUT LOOKING AT THE MISSION OF WHAT THE PROVOST HAS TO DELIVER AND HOW DO WE MAKE SURE THEY HAVE THE FACILITIES TO DO THAT.

AND SO THAT'S THAT'S KIND OF WHY WE'RE HERE TODAY.

AND THIS IS JUST ANOTHER PHASE.

AND ROB, I LET YOU MAKE THE INTRODUCTIONS AND AND SO THANK YOU, COMMITTEE CHAIR BOYD, MEMBERS OF THE BOARD.

I APPRECIATE IT. AND YOU WON'T GET TO HEAR MUCH FROM ME TODAY, WHICH WILL PLEASE YOU ALL.

BUT WE MADE A COMMITMENT TO THE BOARD WHEN WE STARTED TALKING ABOUT THE DOWNTOWN PROJECT IN PARTICULAR, THAT WE WOULD OBTAIN AND ENGAGE THE RESOURCES THAT WE NEED TO HELP US PLAN AND DELIVER A PROJECT OF THAT MAGNITUDE AND THAT COMPLEXITY.

AND SO I'M PRIVILEGED TO HAVE STEVE WITH ME TODAY AT THE TABLE CHRISTINE RYAN AND YUKIKO OKAJIMA FROM THE NOSSAMAN LLP FIRM.

[00:05:07]

BUT WHAT WE NEED THEIR EXPERTISE AND, AND, AND HELP ON, WHICH IS WORKING WITH GOVERNMENTAL ENTITIES.

THEY ONLY MY UNDERSTANDING IS WORK ON THE GOVERNMENTAL SIDE HELPING TO PLAN AND DELIVER PROJECTS OF THIS NATURE.

WHEN WE TALK ABOUT A COMPLEX PROJECT LIKE THE DOWNTOWN PROJECT AND WE HAVE YET, AS THIS BOARD KNOWS, WE'VE NOT MADE ANY DECISIONS ABOUT DOWNTOWN, WE'VE NOT IDENTIFIED WHO'S GOING TO HELP US OR. JUST AS WITH THAT PROJECT, WHAT IT'S GOING TO LOOK LIKE OR WHAT IT'S GOING TO HOW IT'S GOING TO BE DELIVERED.

WHAT WE'RE GOING TO TALK ABOUT TODAY, I THINK IS THE UTMOST IMPORTANCE TO THE BOARD TO HERE, WHICH IS THAT TRADITIONALLY OVER THE YEARS, THERE WERE THERE WAS THE TRADITIONAL DELIVERY MODEL FOR FOR PROJECTS WAS YOU DESIGN IT, YOU BID IT AND YOU BUILD IT.

AND THAT'S A PRETTY SIMPLE PROCESS AND PEOPLE ARE FAMILIAR WITH THAT.

BUT WHEN YOU START TALKING ABOUT PROJECTS AS COMPLEX AS WHAT WE'RE TALKING ABOUT DOWNTOWN, THERE ARE MYRIAD OTHER WAYS TO DELIVER A PROJECT LIKE THAT.

THE LAW AUTHORIZES THEM IN TEXAS, AND THESE FOLKS ARE GOING TO TALK ABOUT THOSE ALTERNATIVE DELIVERY METHODS AS, AGAIN, EXAMPLES OF WHAT ARE POSSIBILITIES AS OPPOSED TO MAKING DECISIONS OR MAKING DECISIONS.

TODAY. WHAT WE WANTED TO MAKE YOU AWARE OF THOSE POSSIBILITIES.

SO, CHRISTINE, I GUESS I'LL TURN IT OVER TO YOU TO KIND OF KICK OFF AND TAKE OFF FROM THERE.

YEAH. AND I DO WANT TO ECHO WHAT YOU SAID.

YOU KNOW, WE'RE NOT HERE TO MAKE ANY DECISIONS OR PUSH ANY PARTICULAR PROJECT DELIVERY MODEL.

WE'RE GOING TO SPEND A LITTLE BIT MORE TIME ON THE PUBLIC PRIVATE PARTNERSHIPS SIMPLY BECAUSE THEY'RE MORE COMPLEX AND THEY TAKE A LITTLE BIT MORE TIME TO GO THROUGH.

BUT WE'RE GOING TO GO THROUGH A NUMBER OF THE TRADITIONAL AND OTHER ALTERNATIVE DELIVERY MODELS THAT ARE TOOLS IN YOUR TOOLBOX.

AND FIRST, I'D JUST LIKE TO PASS OUT THIS APPENDIX TO THE PRESENTATION.

IT SHOULD BE IN YOUR PACKET.

YOU CAN DO THAT FOR YOU. OKAY, GREAT.

THANK YOU. BUT WE HAVE HARD COPIES THAT BECAUSE A LOT OF ACRONYMS ARE USED TO DISCUSS THE VARIOUS DELIVERY MODELS SUCH AS PUBLIC PRIVATE PARTNERSHIP S83.

YOU'LL HEAR THAT TOSSED ABOUT A LOT IN THE INDUSTRY WITH PROJECT DELIVERY.

DB IS A DESIGN BUILD, SO WE WANT TO MAKE SURE YOU HAVE THAT FOR REFERENCE AS WE GO THROUGH AS WE GO THROUGH THIS PRESENTATION.

SO INITIALLY WHAT WE'D LIKE TO DO IS JUST GO THROUGH A BASIC OVERVIEW OF SOME OF THE KEY LEGAL CHALLENGES THAT YOU WILL FACE WITH A LARGE COMPLEX PROJECT SUCH AS THE DOWNTOWN DALLAS PROJECT, AND THEN WE'LL ACTUALLY WALK THROUGH SOME OF THE TOOLS IN THE TOOLBOX, THE VARIOUS DELIVERY MODELS, HOW THEY'RE STRUCTURED, SOME OF THE PROS AND CONS FOR EACH AND WHEN THEY WOULD BE APPROPRIATE.

AND THEN MY COLLEAGUE YUKIKO WILL GO THROUGH A CASE STUDY ON THE UNIVERSITY OF CALIFORNIA MERCED CAMPUS EXPANSION PROJECT.

AND FINALLY WE'LL TALK ABOUT LEASE STRUCTURES AND LEASE DEALS AS WELL.

A CLOSE UP.

OKAY. OKAY.

YEAH. NO, NO. YOU GO AHEAD AND CLICK.

SO, YOU KNOW, DALLAS COLLEGE IS ALREADY WELL POSITIONED WITH SOME OF THE CHALLENGES WITH DEVELOPING A LARGE, COMPLEX INFRASTRUCTURE PROJECT AND PROGRAM. DALLAS COLLEGE ALREADY ENJOYS THE BENEFITS OF MISSION FOCUS, THE BROAD FOUNDATIONAL LEGAL AUTHORITY PROJECT FUNDING, WHICH IS A KEY ISSUE FOR A LOT OF OWNERS OF LARGE PROJECTS, PUBLIC AND INTERNAL SUPPORT, AS WELL AS RELATIONSHIPS WITH STAKEHOLDERS.

SO THESE ARE VERY IMPORTANT FOR DELIVERING LARGE AND COMPLEX PROJECTS.

OH, YEAH.

OH. CAN YOU GO BACK TO THE PREVIOUS SLIDE? WHEN YOU SAY BENEFITS OF MISSION FOCUS, WHAT DO YOU MEAN? WELL, I THINK THAT DALLAS COLLEGE HAS DEVELOPED A VISION FOR THE DOWNTOWN DALLAS PROJECT THAT INCLUDES VARIOUS ASPECTS AND VARIOUS GOALS.

SO YOU'RE WELL ON YOUR WAY TO HAVING A A GOAL, GOAL BASED MISSION FOR DEVELOPING THE PROJECT.

THANK YOU. YOU WANT US TO HOLD OUR QUESTIONS? NO, NO, PLEASE.

IT'S UP TO THE. YEAH.

NO, NO, WE HAVE SOME TIME FOR DISCUSSION AT THE END, BUT WE WELCOME ANY QUESTIONS? OKAY. I'M SORRY. I'M SORRY.

ALL RIGHT. ADDITIONALLY, ONE OF THE ISSUES THAT PUBLIC OWNERS FACE WITH LARGE COMPLEX PROJECTS

[00:10:06]

OFTEN WE SEE A DEDICATED INTERNAL AND EXTERNAL STAFF WITH DAY TO DAY RESPONSIBILITIES AND ACCOUNTABILITY, AS WELL AS DECISION MAKING AUTHORITY TO CERTAIN LEVEL IN ORDER TO KEEP THE PROJECT ON TRACK.

A PROJECT CHAMPION IS VERY NICE TO HAVE.

IT'S SOMEBODY WHO WILL BE RESPONSIBLE FOR MAKING SURE THAT THE PROJECT IS MOVING FORWARD AND ANSWERING QUESTIONS AND RESOLVING ISSUES ON AN INTERNAL LEVEL AND POTENTIALLY ON AN EXTERNAL LEVEL WITH OTHER STAKEHOLDERS SUCH AS OTHER GOVERNMENTAL ENTITIES WITH AN INTEREST IN THE PROJECT.

PROJECTS ALSO NEED ADMINISTRATION AND GOVERNING BOARD BUY IN AND OWNER REPRESENTATIVES FOR PUBLIC INTERFACE BECAUSE BRINGING THE PUBLIC ALONG WITH YOU ON SUCH A LARGE PROJECT IS VERY IMPORTANT.

AND THEN FINALLY, INTERNAL LEGAL AND FINANCIAL INVOLVEMENT.

IN OTHER WORDS, THE LEGAL DEPARTMENTS AND THE FINANCE DEPARTMENTS OF THE OWNER SHOULD BE INVOLVED AS WELL, BECAUSE THESE ARE AREAS THAT BECOME VERY COMPLEX WITH A PUBLIC PRIVATE PARTNERSHIP OR JUST A PROJECT THAT LARGE.

ANOTHER KEY CHALLENGE IS SELECTING THE DELIVERY MODEL.

THERE ARE A WIDE RANGE OF TOOLS THAT ARE COMMERCIALLY AVAILABLE, AND WE'LL TALK ABOUT SOME OF THOSE TODAY.

THEY ALL HAVE STRENGTHS, WEAKNESSES AND DEPENDS UPON THE GOALS AND THE PROJECT REALLY AS TO WHAT THE APPROPRIATE MODEL IS.

THE OBJECTIVE AT THE END OF THE DAY IS TO SELECT THE DELIVERY MODEL THAT BEST MEETS THE OWNER'S NEEDS AND PROVIDES THE BEST MONEY FOR VALUE.

THE VALUE FOR MONEY.

SO IN OTHER WORDS, AS YOU'RE REVIEWING THE VARIOUS MODELS, MAKING SURE THAT YOU'RE GETTING A YOU'RE GETTING A DEAL FOR ESSENTIALLY WHAT THE FUNDS ARE BEING USED FOR.

AND THIS THIS IS ESSENTIALLY A FLOW CHART THAT KIND OF WALKS THROUGH A LITTLE BIT HOW WE LOOK AT THE PROJECT DELIVERY MODEL.

YOU WOULD HAVE INPUTS INTO THE SCREENING PROCESS, WHICH INCLUDE THE PROJECT CHARACTERISTICS, RIGHT? WHAT ARE WE WHAT DO WE WANT TO BUILD? IS IT PHASED? YOU KNOW WHAT WHAT TYPE OF PROJECT IS IT? THE OWNER'S PRIORITIES FOR THE PROJECT AND GOALS FOR THE PROJECT AS WELL AS MARKET FEEDBACK.

IN THIS INSTANCE, IT'S THE RFI PROCESS THAT WE'VE WE'RE IN THE PROCESS OF GOING THROUGH AND ANALYZING THOSE RESPONSES.

AND THEN YOU LOOK AT THE OPTIONS AVAILABLE, WHICH COULD BE THE TRADITIONAL DESIGN BID BUILD MODEL THAT ROB WAS TALKING ABOUT OR OTHER ALTERNATIVE DELIVERY MODELS OR EVEN A PUBLIC PRIVATE, PUBLIC PRIVATE PARTNERSHIP MODEL.

AND THEN YOU DO A VALUE FOR MONEY ANALYSIS.

YOU COMPARE THEM FINANCIALLY TO SEE WHAT MAKES THE MOST SENSE FINANCIALLY, AND THAT WILL INFORM ESSENTIALLY THE CONTRACT TERMS, THE STRUCTURE OF THE COMPETITION AND HOW YOUR YOUR PRIVATE PARTNER IS GOING TO BE SELECTED OR YOUR CONTRACTOR IS GOING TO BE SELECTED. OKAY.

DO WE HAVE ANY QUESTIONS? PLEASE STOP ME IF YOU DO.

HE MARRIED CHRISTINA. IF I COULD GO BACK AND I'M SORRY, I THINK IT MIGHT BE HELPFUL FOR THE BOARD TO HEAR ABOUT AT VARIOUS STEPS IN THIS PROCESS, WHO WE MIGHT LOOK TO TO ASSIST US IN REGARD TO SOME OF THOSE.

LIKE THE VALUE FOR MONEY ANALYSIS.

IS THAT A IS THAT A DISCRETE RESPONSIBILITY OR SOMETHING THAT WE WOULD COLLABORATE WITH A PARTNER ON PERHAPS TO DO THOSE ANALYSIS? YES, I THINK THAT, YOU KNOW, OWNERS WILL TYPICALLY WILL TYPICALLY ENGAGE A FINANCIAL ADVISOR THAT HAS EXPERIENCE IN THESE TYPES OF LARGE COMPLEX PROJECTS AND DEVELOPING THEM WITH VARIOUS DIFFERENT MODELS AND WHO CAN ASSIST IN PROVIDING FINANCIAL MODELS IN ORDER TO ANALYZE THE FINANCES AND THE FINANCIAL IMPACTS FOR EACH OF THE VARIOUS MODELS AND COMPARE THEM TO DETERMINE WHETHER OR NOT THERE IS VALUE FOR MONEY.

YES. SLIDE SIX IS THIS IS VERY USEFUL.

I'M CURIOUS MAYBE, ROB, I'LL ASK YOU WHAT'S THE TIMELINE FOR THE DOWNTOWN PROJECT WITH RESPECT TO THESE FOUR STAGES, INPUTS, OPTIONS, SCREENING, OUTPUTS?

[00:15:08]

WE'RE REALLY RIGHT NOW, AS AS CHRISTINE INDICATED, WE'RE AT THE VERY INITIAL STAGES, THE INPUT STAGE WHERE WE'RE SCREENING, LOOKING FOR INFORMATION, TRYING TO DEVELOP INFORMATION BOTH INTERNALLY AND FROM EXTERNAL SOURCES, INFORMATION ABOUT WHAT IT IS WE WANT TO DO DOWNTOWN.

I THINK CHRISTINE'S POINT EARLIER ABOUT MISSION FOCUS IS VERY IS VERY APPROPRIATE.

WE KNOW WE NEED TO DO SOMETHING DOWNTOWN.

THIS THIS BOARD AND THIS INSTITUTION HAS MADE THAT DECISION.

WE'VE HAD OUR DOWNTOWN CAMPUS OF EL CENTRO SINCE 1965, AND IT NO LONGER MEETS THE NEEDS OF DALLAS COLLEGE IN TERMS OF ITS PRESENT, PRESENT CONSTRUCTION AND CAPABILITIES AND CAPACITY FOR 2023 AND BEYOND.

SO WE ALREADY MADE THAT DECISION.

WE ALSO TALKED ABOUT ADMINISTRATIVE FACILITIES AND SOME SOME ASPECT OF A INNOVATION CENTER.

SO WE'VE MADE THE WE'VE IDENTIFIED THE MISSION.

BUT THE SPECIFICS OF THAT, WE HAVEN'T BEGUN YET TO TO FINALIZE OR CLARIFY.

SO TIMELINE WISE, THIS IS A AND I'M GOING TO I'M GOING TO DEFER TO MY COLLEAGUES, TO MY TO MY LEFT HERE WHO HAVE BEEN INVOLVED IN THESE PROJECTS AND CAN TELL YOU THAT THAT IT TAKES A CONSIDERABLE AMOUNT OF TIME TO GET FROM THE INPUT TO THE OUTPUT HERE ON THIS ON THIS SLIDE, WE ARE WORKING DILIGENTLY BOTH INTERNALLY AND EXTERNALLY.

I THINK THERE'S SOME ENGAGEMENT GOING ON AND HAS BEEN GOING ON INTERNALLY WITH STAKEHOLDERS AND ALSO WITH EXTERNAL ENTITIES AS WELL THROUGH THE RFI TO TRY TO DEVELOP THE INFORMATION WE NEED TO MOVE TO THE NEXT PHASE, WHICH WOULD BE LOOKING AT A PROJECTED OR ONE OF THE MANY ALTERNATIVE DELIVERY MODELS TO SEE IF ONE OF THOSE MIGHT BE APPROPRIATE TO PURSUE FOR THIS PROJECT.

THAT WOULD BE, I WOULD CONSERVATIVELY SAY THAT'S A PROCESS THAT'S GOING TO EXTEND INTO THE FALL OF 2023 AS WE GO THROUGH OUR ANALYSIS.

AND THEN BEYOND THAT, WHEN WE START TALKING ABOUT THE VALUE FOR MONEY ANALYSIS AND THAT ASPECT OF IT, WE'RE TALKING ABOUT, WE'RE TALKING, WE'RE TALKING ABOUT AND AGAIN, I'M WAY OUT OF MY DEPTH. THAT'S WHY I ASKED CHRISTINA ABOUT THAT.

WE WILL HAVE FOLKS WE WILL HAVE TO ENGAGE FOLKS WITH THE SOPHISTICATION AND CAPABILITY OF ADVISING US ON THAT BECAUSE WE'RE TALKING ABOUT RETURNS OVER MANY, MANY YEARS WHICH HAVE TO BE MODELED AND CONSIDERED AND ANALYZED.

SO THAT'S THAT'S A THAT'S A LONG ANSWER TO A SHORT QUESTION, WHICH YOU WANT ME TO GIVE YOU A TIMELINE.

I CAN'T TELL YOU WITH SPECIFICITY WHERE WE WILL BE AT ANY JUNCTURE HERE, EXCEPT IT WILL TAKE US SEVERAL MONTHS, MANY MONTHS TO GET TO TO THE FINAL STAGE OF ACTUALLY GOING OUT WITH AN RFP AND OR AN RFQ AND AN RFP FOR A PROJECT OF THIS COMPLEXITY.

SO WHAT YOU'RE SAYING IS THAT IN TERMS OF THIS MATRIX OR THIS THIS FLOW, WE WON'T BE LOOKING AT OPTIONS, OPTIONS.

THE SECOND PHASE, I MEAN, WE'RE IN INPUTS RIGHT NOW.

WE WON'T BE LOOKING AT OPTIONS UNTIL THE SPRING, PROBABLY RIGHT OR LATE OR LATE FALL.

AND I'M JUST GOING TO SAY IT IN THAT GUARDED LAWYER LIKE NOT WANTING TO COMMIT NECESSARILY TO ANYTHING.

BUT THE TRUTH OF THE MATTER IS THERE'S A LOT OF WORK TO BE DONE.

THERE'S A LOT OF WORK GOING ON.

THERE'S A LOT OF WORK THAT HAS BEEN DONE, BUT THERE'S MORE WORK THAT NEEDS TO BE DONE IN TERMS OF THE BOARD'S ROLE.

AND I JUST WANT TO ADDRESS THAT REAL BRIEFLY.

AND I KNOW THAT YOU GUYS ARE GOING TO TALK ABOUT THAT SOME IN YOUR PRESENTATION AS WELL.

YOU KNOW, THE BOARD'S ROLE, AS ALWAYS, IS, IS TO GUIDE AND GOVERN AND AND ASK QUESTIONS.

I THINK WE HAD A PRIOR SPEAKER TELL THE BOARD, ASK AS MANY QUESTIONS AS YOU NEED TO ASK TO MAKE SURE THAT YOU'RE SATISFIED THAT THE ADMINISTRATION AND STAFF ARE DOING WHAT THEY SHOULD BE DOING. WITH RESPECT TO YOUR EXPECTATIONS FOR A PROJECT OF THIS COMPLEXITY.

SO THE BOARD'S ROLE IS NOT YOU'RE NOT GOING TO BE DIRECTLY INVOLVED IN THE IN THE OBTAINING THE INFORMATION ON THE INPUTS AND DOING THAT KIND OF THING, ALTHOUGH YOU WILL HAVE ACCESS TO THOSE THINGS.

BUT THE. FOR THE BOARD TO ASK THOSE QUESTIONS THAT THE BOARD DEEMS APPROPRIATE.

ONE OF THE THINGS THAT I THINK RELATES IS REALLY IMPORTANT IN THIS IN THE SEQUENCING OF THIS AND Y'ALL CAN COMMENT ON THIS, IS THAT WE SECOND, HIGHER EDUCATION IS IN A VERY DYNAMIC MODE RIGHT NOW, UNLIKE IT'S PROBABLY EVER BEEN IN THE PREVIOUS 50 YEARS.

THE DELIVERY METHODS, HOW YOU DELIVER, WHAT IT TAKES TO DELIVER IT, HOW IT'S DELIVERED, ALL THAT IS GOING TO AFFECT FACILITIES.

SO WHAT WHAT INTRIGUES ME A LITTLE BIT ABOUT WHERE WE ARE RIGHT NOW IS THE FACT THAT JUST YESTERDAY IT WAS ANNOUNCED THAT THE ENTITY CERTIFYING TEACHERS IN THE STATE OF TEXAS HAS LOOKED LIKE THEY'RE GOING TO LOSE THEIR CREDENTIALS TO DO SUCH.

WHAT DID WE DO WHEN WE NEEDED EDUCATORS? WE STEPPED UP WITH A PROGRAM AND DELIVERED EDUCATORS TO FILL A VOID.

[00:20:02]

WHAT IS GOING TO HAPPEN IN THAT AREA THAT MIGHT SEND US INTO ANOTHER PATH? AND SO THAT'S WHY I SAID WE HAVE TO STAY UP HERE BECAUSE THE ROAD WE WERE GOING TO TAKE MAY NOT BE THE ROAD THAT WE SHOULD TAKE.

AND WE DON'T FIND OUT UNTIL A WEEK OR TEN DAYS FROM NOW.

SO I THINK THAT WHAT ROB IS SAYING IS SO IMPORTANT IS AND I THINK WE HAVE THE PAGE CREW, WE'VE GOT PEOPLE ALREADY ON BOARD THAT ARE KIND OF HELPING US KEEP OUR OUR WHEELS ON THE GROUND AND HEADING IN THE RIGHT DIRECTION.

BUT WE'VE GOT TO BE WILLING TO TURN ON A DIME.

THAT'S THE VALUE OF ME IN THE COMMUNITY COLLEGE WORLD VERSUS SMU OR UT OR ANYBODY LIKE THAT.

SO I THINK THAT IS GOING TO HAVE A LOT TO DO WITH WHERE HOW WE MOVE DOWN THIS CHART.

IF WE GET DERAILED FOR THE PURPOSE OF THE MISSION OF THE COLLEGE, THAT MAY BE WHAT HAPPENS.

I APPRECIATE I UNDERSTAND DOCTOR GARCIA HAD HER HAND RAISED.

I WANT TO RECOGNIZE THAT.

BUT I, I WOULD SAY THIS JUST ANECDOTALLY AS WELL.

AND AND THAT IS MAKING DECISIONS QUICKLY ISN'T ALWAYS IN THE BEST INTEREST OF A PROJECT OF THIS COMPLEXITY.

YOU CAN MAKE THAT DECISION REALLY QUICKLY OR YOU CAN MAKE DURING AND DECISIONS THAT LAST A LEGACY OR RESULTING.

I'M SORRY, KELLY. I'M SORRY, I, I DIDN'T SEE YOUR HAND GO UP.

YOU'RE MUTED OPINIONS AND I HAVE NO PROBLEM WITH WHAT YOU ANYTHING YOU HAD TO SAY EXCEPT THAT ONE THING STARTLES ME.

IN THE BEGINNING, WE TALKED ABOUT THE BENEFITS OF A MISSION FOCUS FOR DOWNTOWN.

BUT SOMEBODY PLEASE READ THAT MISSION TO ME.

I DO NOT REMEMBER DECIDING ON IT.

GOOD. SO PART OF IT IS WHAT ROB WAS INDICATING, THAT WE'VE HAD A DOWNTOWN PRESENCE SINCE 1965 AND AND AND THAT FACILITY HAS OUTGROWN WHAT WE NEED.

MOVING AHEAD, WE MADE THE DETERMINATION AS AN INSTITUTION.

THE BOARD MADE THE DETERMINATION TO GO OUT AND SEEK THE SUPPORT OF VOTERS IN 2019 TO GET BOND AUTHORIZATION TO BUILD A NEW EL CENTRO CAMPUS.

THAT SPEAKS TO THE MISSION OF INVESTING IN A NEW CAMPUS TO REPLACE THE CURRENT EL CENTRO.

CAN I ASK YOU TO STAY JUST A LITTLE BIT LOUDER, PLEASE? YES, MA'AM. CERTAINLY. LATER.

DO YOU HAVE OTHER COMMENTS? I DON'T THINK SHE. OKAY.

LET'S GO AHEAD. ALL RIGHT.

AND AS FAR AS SCHEDULE GOES, TO A CERTAIN EXTENT, IT YOU DO NEED TO BE ABLE TO BE NIMBLE IN THE EVENT THAT THERE IS CHANGES TO YOUR POINT.

AND SO HAVING THAT INTERNAL STRUCTURE WHERE YOU HAVE PEOPLE WHO ARE AVAILABLE TO ANSWER QUESTIONS, MAKE DECISIONS JUST TO EVEN SMALL DECISIONS TO BE ABLE TO MOVE IN A PARTICULAR DIRECTION, WHILE AT THE SAME TIME GETTING INFORMATION ABOUT HOW PRIORITIES MIGHT CHANGE.

FOR EXAMPLE, OWNER PRIORITIES CHANGE.

THAT'S A CHANGE IN THE INPUT THAT THAT'S GOING TO AFFECT THE ULTIMATE OUTPUT.

SO MOVING ON, I'D LIKE TO TALK A LITTLE BIT ABOUT THE TRADITIONAL AND KEY ALTERNATIVE DELIVERY MODELS, WHICH HERE ARE SOME OF.

HERE'S THE TRADITIONAL MODEL AND THE ALTERNATIVE DELIVERY, OBVIOUSLY VERY HIGH LEVEL.

THE THE FIRST ONE IS CALLED DESIGN BID BUILD.

THIS IS WHERE THE OWNER ENTERS INTO A CONTRACT WITH THE DESIGNER.

THE DESIGNER BUILDS OR THE DESIGNER DESIGNS THE PROJECT TO 100%.

THE OWNER TAKES THOSE PLANS AND THEN LETS IT TO THE CONTRACTOR.

THE CONTRACTOR TAKES THOSE PLANS AND BUILDS THE PROJECT.

THERE'S NO CONTRACTUAL RELATIONSHIP BETWEEN THE DESIGNER OR THE BUILDER AND VERY LITTLE INTERFACE.

IT'S TYPICALLY LET TO THE LOWEST RESPONSIBLE BIDDER, ALTHOUGH YOU COULD HAVE SOME OTHER FACTORS THAT COME INTO PLAY OTHER THAN JUST PRICE ON THE CONSTRUCTION FRONT.

BUT THERE'S NOT A LOT OF ROOM FOR INNOVATION.

THE OWNER DOES HAVE TOTAL CONTROL OVER THE DESIGN, WHICH IS WHY THIS I THINK THIS PARTICULAR MODEL WORKS FOR THE VAST MAJORITY OF

[00:25:05]

IT'S ONLY WHEN YOU START GETTING TO THE LARGER, MORE COMPLEX PROJECT THAT OWNERS START LOOKING AT ALTERNATIVE DELIVERY MEANS, OR WHEN THERE ARE SPECIFIC GOALS THAT NEED TO BE ADDRESSED.

THE LIMITATIONS ON THIS IS THE SCHEDULE BECAUSE YOU ARE GOING THROUGH FIRST A PROCUREMENT FOR THE DESIGNER, THEN YOU'RE GOING TO HAVE THE WHOLE DESIGN PROCESS, THEN A SECOND PROCUREMENT FOR THE CONTRACTOR AND THEN THE CONSTRUCTION PROCESS.

THIS THIS PARTICULAR MODEL TAKES THE LONGEST TO DELIVER AND THE OWNER RETAINS MOST OF THE RISK IF SOMETHING GOES WRONG WITH THE PROJECT.

THE THE NEXT ALTERNATIVE DELIVERY MODEL IS CALLED CONSTRUCTION MANAGER AT RISK OR CMAA.

THAT'S ON YOUR ACRONYMS. AND AND THE DALLAS COLLEGE HAS ACTUALLY SOME EXPERIENCE WITH PROJECTS AND HAS DELIVERED SOME QUITE SUCCESSFULLY UNDERSTAND UNDER THIS MODEL, THE OWNER AGAIN WILL HIRE A DESIGNER AND THEN BEFORE THE DESIGN IS COMPLETED, AT A VERY CONCEPTUAL LEVEL, THE OWNER WILL ALSO CONTRACT WITH A CONSTRUCTION MANAGER.

THE CONSTRUCTION MANAGER WILL INTERFACE WITH THE DESIGNER AND PROVIDE COST, COST, COST AND PRICING INFORMATION TO THE DESIGNER.

AS THE AS THE DESIGNER IS DEVELOPING THE DESIGN AS WELL AS LOOK AT CONSTRUCTABILITY ISSUES SO THAT ONCE YOU HAVE COMPLETED THE DESIGN, THE CONTRACTOR HAS ALREADY HAD SOME INPUT INTO IT.

WHAT HAPPENS AT THAT POINT WHEN YOU GET TO NEAR 100% DESIGN AT SOME POINT AT THE 80 OR 90% DESIGN MARK, THE OWNER AND THE CONSTRUCTION MANAGER WILL NEGOTIATE A PRICE AND IT WILL BE A GUARANTEED MAXIMUM PRICE.

AND THEN THE THE CONSTRUCTION MANAGER WILL GO OUT AND SUBCONTRACT ALL OR A LARGE PORTION OF THE WORK.

SO AGAIN, THIS.

THIS PARTICULAR THE BENEFITS OF THIS ARE THE OWNER AGAIN, HAS TOTAL CONTROL OVER THE DESIGN BECAUSE THE DESIGN CONTRACT IS WITH THE OWNER DIRECTLY AND THE OWNER ASSURES CONSTRUCTABILITY AT AN EARLY STAGE BECAUSE THE CONSTRUCTION MANAGER IS FEEDING INFORMATION TO THE DESIGN AND COORDINATING WITH THEM.

AGAIN, SOME OF THE LIMITATIONS OUR SCHEDULE, IT STILL TAKES A WHILE TO GET TO THE DESIGN BECAUSE YOU DON'T START THE CONSTRUCTION UNTIL THE DESIGN IS ALMOST 100% COMPLETE AND THEN YOU HAVE TO NEGOTIATE THE GENERAL THE GUARANTEED MAXIMUM PRICE, AND THEN IT MAY REQUIRE REPROCUREMENT IF THE CONSTRUCTION PRICE IS NOT AGREED UPON, AT THAT POINT, THE OWNER WILL HAVE DESIGN DONE AND CAN GO OUT AND LET IT TO OTHER CONTRACTORS.

BUT THAT AGAIN MAY DELAY THE PROJECT IF THEY CAN'T REACH AGREEMENT.

THE NEXT MODEL IS A DESIGN BUILD MODEL, AND IT CAN BE EITHER A PROGRESSIVE OR FIXED PRICE DESIGN BUILD WHERE THE OWNER WILL RUN A PROCUREMENT AND SELECT A SINGLE ENTITY TO PROVIDE BOTH THE DESIGN AND THE CONSTRUCTION.

AND AS THE DESIGN IS PROCEEDING, PORTIONS OF THE DESIGN MAY BE SUFFICIENTLY COMPLETE TO COMMENCE CONSTRUCTION.

SO YOU HAVE EARLY CONSTRUCTION.

SO ESSENTIALLY THE PROJECT IS BEING DESIGNED AS IT IS BEING CONSTRUCTED, AS IT'S DESIGNED, WHICH SPEEDS THINGS UP A LITTLE.

YOU ONLY HAVE THE SINGLE PROCUREMENT.

AGAIN, IT'S A SCHEDULE SAVINGS.

THE PROGRESSIVE DESIGN BUILD IS SIMILAR TO THE CONSTRUCTION MANAGER AT RISK, WHERE YOU GET THE DESIGN BUILDER ON BOARD, BUT YOU DON'T ACTUALLY HAVE A FIRM FIXED PRICE UNTIL THE DESIGN IS FURTHER ALONG, AT WHICH POINT YOU CAN NEGOTIATE THAT PRICE.

THE FIRM FIXED PRICE DESIGN BUILD IS WHERE YOU HAVE A COMPETITION.

PEOPLE GIVE THEIR PRICE.

THEY THERE ARE OTHER FACTORS THAT ARE EVALUATED AND THE BEST VALUE PROVIDED IS THE ONE WHO GETS THE CONTRACT.

THAT ONE BECAUSE THE DESIGN AND CONSTRUCTION ARE IN A SINGLE CONTRACT, MORE RISK IS SHIFTED FROM THE OWNER TO THE PRIVATE SECTOR.

AND THEN FINALLY ON THE RIGHT, WE HAVE FIXED PRICE DESIGN, BUILD, OPERATE AND MAINTAIN.

IT'S SIMILAR TO THE FIXED PRICE DESIGN BUILD, EXCEPT WE'VE ADDED OPERATIONS AND MAINTENANCE OF THE OF THE PROJECT.

[00:30:07]

AND SO MORE RISK IS TRANSFERRED TO THE PRIVATE SECTOR BECAUSE IF A IF AN ISSUE APPEARS DURING THE OPERATIONS AND MAINTENANCE OF THE OF THE PROJECT, THE CONTRACTOR IS ON THE HOOK TO TO FIX IT.

IF IT'S ONE OF THESE OTHER MODELS, ONCE THE PROJECT IS COMPLETED, THEY TYPICALLY JUST GO AWAY, THE CONTRACTOR GOES AWAY AND IT BECOMES THE OWNER'S ISSUE.

IF IT'S A LATENT DEFECT, THAT WON'T APPEAR UNTIL OVER TIME.

SO ON THE THAT LAST ONE, THAT BOMB, CAN YOU EXPLAIN AGAIN THAT LAST BULLET FIVE AND 25 YEAR CAPITAL.

YEAH, CAPITAL OPERATIONS AND MAINTENANCE.

SO IF YOU ARE IT'S ESSENTIALLY A TURNKEY THEY CALL IT A TURNKEY CONTRACT WHERE WHAT YOU'RE DOING IS YOU ARE GETTING A CONTRACTOR WHO IS GOING TO HE'S GOING TO DESIGN THE PROJECT, BUILD THE PROJECT, AND ONCE IT'S COMPLETED, WILL BE MAINTAINING THE PROJECT. SO IF THERE ARE ISSUES WITH THE PROJECT, THEY'LL BE STANDARDS TO WHICH THE CONTRACTOR HAS TO BRING THE REPAIR OR CORRECT.

ANY DEFICIENCIES IN THE WORK OPERATIONS CAN BE INCLUDED AS WELL.

SO TO THE EXTENT THAT THERE THAT THE FACILITIES HAVE OPERATIONS THAT CAN BE GIVEN TO THE PRIVATE SECTOR, THAT THOSE RESPONSIBILITIES CAN BE GIVEN TO THE PRIVATE SECTOR. YOU'RE OUT OF THE ELEVATOR.

THE CHILLER ROOF REPAIR BUSINESS.

WHEN YOU SAY OPERATIONS, I'M THINKING ABOUT THEY PAY FOR THE JANITORIAL SERVICES TO MAINTAIN.

YEAH, THEY CAN'T. YES, EXACTLY.

THEY CAN. YES, THEY WILL MAINTAIN IT WITH JANITORIAL.

THEY CAN HAVE COMPREHENSIVE MAINTENANCE THAT INCLUDES JANITORIAL, THAT INCLUDES PATCH AND REPAIR, THAT INCLUDES, YOU KNOW, ROUTINE MAINTENANCE.

THAT HAS TO HAPPEN AS WELL AS, LET'S SAY IT'S IN THE IT'S IN THE SENSE OF A CAFETERIA.

THEY HAVE THE CONTRACTOR WHO'S THERE TO RUN THE CAFETERIA.

AND WHY WOULD A CONTRACTOR WANT THAT KIND OF SITUATION OR WOULD IT BE A CONTRACTOR OR WOULD IT BE A DEVELOPER? IT WOULD BE A DEVELOPER TEAM.

THE OWNER WOULD WANT THAT.

HEALTH CARE USES THAT A LOT.

HEALTH CARE THAT SAYS WE'RE IN THE HEALTH CARE DELIVERY BUSINESS.

WE'RE NOT IN THE FOOD BUSINESS.

WE'RE NOT IN THE CHILLER BUSINESS, THE ELEVATOR BUSINESS.

SO IT'S AN ECONOMIC STUDY THAT DECIDES THAT YOU LET THE PEOPLE WHO DO NOTHING BUT ELEVATOR REPAIR AND REPAIR AND ALL, THEY'RE BETTER AT IT THAN US TRYING TO DO OURSELVES. IT ALSO TENDS TO GO WITH THE MAGNITUDE.

HOW SMALL PROJECTS WOULDN'T BE VERY SMART.

WELL, BIG CAMPUS TYPE THING.

IT COULD BE VERY SMART, IT CAN BE VERY USEFUL.

AND THE PRIVATE SECTOR WILL BRING TOGETHER THE RIGHT RESOURCES TO PERFORM THE RESPONSIBILITIES THAT ARE PUT UPON THE CONTRACTOR.

AND IT COULD BE THROUGH SUBCONTRACTORS.

SUPPLIERS. ET CETERA.

IT ALSO ALLOWS YOU TO SOMEWHAT PUT A FIXED COST TO OCCUPY THE SPACE BECAUSE YOU HAVE NO SURPRISES LIKE YOU DO AT HOME WHEN YOUR AIR CONDITIONER GOES OUT.

WELL, THAT'S THE SAME WAY.

SO FOR BUDGETING A UNIT, YOU CAN YOU CAN BUILD A BETTER BUDGET FOR OPERATING SOMETHING THAT YOU'RE NOT NORMALLY IN THE BUSINESS OF DOING.

SO WE WOULD WE WOULD DO A PRICE FOR THE BUILDING OF IT, BUT THEN IT WOULD BE A DIFFERENT BUDGET FOR THE OPERATIONS AND MAINTENANCE.

IT WOULD ALL BE PUT INTO THE SAME TICKET.

BUT WHEN YOU GET ON, IT WOULD BE PRIVATE.

YEAH, IT WOULD BE IN THE SAME CONTRACT.

THE COMPENSATION, YOU KNOW, AS, AS YOU'RE, AS THEY'RE THEY'RE CONSTRUCTING THE PROJECT, OF COURSE THE COST WILL BE HIGHER BECAUSE THE CONSTRUCTION COSTS ARE GOING TO BE HIGH. SO THEY'LL BE THEY'LL BE A PAYMENT SCALE THAT ESSENTIALLY WITH FIXED PRICING ALONG THE CONSTRUCTION OF THE PROJECT AND THEN OPERATIONS AND MAINTENANCE, THEY'LL STILL BE ENTITLED TO COMPENSATION FOR THE OPERATIONS AND MAINTENANCE THAT THEY DO.

BUT IT WILL BE A PRICE THAT'S NEGOTIATED UPFRONT AND PAID OVER TIME.

SO HOW COULD WE ASSURE, SINCE THESE ARE PUBLIC DOLLARS, THAT THERE WOULD BE A FAIR INCLUSION OF MINORITY CONTRACTORS IN SOMETHING LIKE THIS SINCE THEY'RE GOING TO RUN IT FOR 25 YEARS? RIGHT. THAT'S THAT'S WHEN THE CONTRACT DOCUMENTS AND THE PROCUREMENT DOCUMENTS COME INTO PLAY.

THE THE OWNER'S GOALS FOR THE PROJECT, THE OWNER'S PRIORITIES FOR THE PROJECTS COME INTO PLAY BECAUSE WITH THESE PARTICULAR PROJECTS, RATHER THAN HAVE PRESCRIPTIVE SPECIFICATIONS SUCH AS PUT A BEAM HERE, PUT A BEAM THERE, PUT A NAIL THERE.

THE THE TECHNICAL REQUIREMENTS ARE PERFORMANCE SPECIFICATIONS, PERFORMANCE BASED SPECIFICATIONS.

[00:35:03]

AND TO THE EXTENT THEY'RE NOT MEETING THOSE PERFORMANCE REQUIREMENTS, THERE ARE GOING TO BE CONSEQUENCES.

DISINCENTIVES FOR NOT MEETING PERFORMANCE REQUIREMENTS AND PERFORMANCE REQUIREMENTS CAN INCLUDE THINGS LIKE ENVIRONMENTAL SUSTAINABILITY, DIVERSE SUPPLIER, YOU KNOW, APPRENTICESHIP TRAINING OPPORTUNITIES, THINGS LIKE THAT.

SO THAT WOULD REQUIRE THAT WOULD REQUIRE AN INTERNAL STAFF PERSON TO BE ENGAGED WITH THIS CONTRACTOR THROUGHOUT 25 YEARS.

IN OTHER WORDS, WE'D HAVE TO HAVE SOMEONE INTERFACING WITH THEM THROUGHOUT THE LENGTH OF THE YEARS THAT THE ARRANGEMENT IS MADE.

THAT'S CORRECT. YEAH, THAT'S. VERY GOOD COMMENT ON ALL OF THESE MODELS IN THE ALTERNATIVE DELIVERY.

EVEN WHEN YOU ARE TRANSFERRING SOME RESPONSIBILITY OVER TO THE PRIVATE SECTOR, THE OWNER STILL HAS THE OVERSIGHT RESPONSIBILITY.

AND CERTAINLY IN ORDER TO ENSURE THAT THEY ARE UPHOLDING THEIR END OF THE BARGAIN THROUGH THAT LONG OPERATIONS AND MAINTENANCE TERM, IT'S IMPORTANT FOR THE OWNER TO ALSO HAVE STAFFING ON ITS SIDE TO ENSURE THAT IT'S MONITORING, IT'S EXERCISING EFFECTIVE OVERSIGHT OF THAT IN THE AGREEMENT, I TRUST, WOULD INCLUDE REPORTING REQUIREMENTS, METRICS, ALL THE THINGS THAT WOULD BE EXPECTED OF THE PRIVATE ENTITY THAT'S ASSOCIATED WITH US.

THAT'S WHY THE COMPLEXITY OF THESE PROJECT AGREEMENTS IS SUCH THAT YOU HAVE TO THINK ABOUT ALL OF THOSE ISSUES AND NEGOTIATE THOSE ON THE FRONT END.

THEY DON'T DO IT FOR NOTHING.

BUT WE WANT TO MAKE SURE THAT WHAT THEY'RE GOING TO DO IS GIVING US WHAT WE WANT TO EXPECT, INCLUDING THOSE THOSE PERFORMANCE OBJECTIVES THAT ARE IMPORTANT TO US.

AND TYPICALLY WHAT WE SEE IS OWNERS DON'T NECESSARILY HAVE ALL THE RESOURCES TO BE THE MANAGERS OF THESE BEHEMOTH PROJECTS OVER TIME.

AND SO WHILE THE WHILE THE THE OVERSIGHT IS GOING TO BE LESS DURING THE OPERATIONS AND MAINTENANCE PHASE, THEY'RE TYPICALLY OWNER, REPRESENTATIVE, OWNER REPRESENTATIVES, PROGRAM MANAGERS.

WE WILL BE THERE TO HELP ADMINISTER THESE CONTRACTS.

AND THE EVEN THE TRADITIONAL DESIGN BID BUILD CONTRACT.

TYPICALLY, THE OWNER WILL HAVE SOME CONSULTANTS WHO ARE OVERSEEING THE DESIGN WORK, YOU KNOW, DOUBLE CHECKING, WHO ARE OVERSEEING THE CONSTRUCTION WORK.

RIGHT. FOR THE FOR THE OWNER TO MAKE SURE THAT THEY'RE FOLLOWING THE REQUIREMENTS OF THE CONTRACT AND OF THE SPECIFICATIONS.

YES, MA'AM. DO YOU HAVE KNOW ANY EXAMPLE HERE IN TEXAS OR SOMETHING THAT WE MIGHT BE FAMILIAR WITH WHERE THEY'VE USED THIS FIXED PRICE DESIGN, BUILD, OPERATE, MAINTAIN DELIVERY METHOD? YEAH. SO, FOR EXAMPLE, THE TEXAS DEPARTMENT OF TRANSPORTATION HAS USED THIS MODEL ON SEVERAL OF ITS ROADWAY PROJECTS WHERE THE THE PRIVATE SECTOR DESIGNS AND BUILDS IT AND THEN EITHER HIRES AN O&M CONTRACTOR BECAUSE THERE ARE COMPANIES THAT WILL JUST DO THAT, BUT THEY'RE UNDER THE UMBRELLA OF THE THE DEVELOPER OR THEY WILL SELF PERFORM THAT WORK.

IN OTHER WORDS, THEY DO IT WITH THEIR OWN FORCES AND BE RESPONSIBLE FOR THAT WORK.

AND THAT'S WORKED OUT QUITE WELL.

THE HOUSTON INDEPENDENT SCHOOL DISTRICT IS ONE THAT HAS KIND OF HEAVILY USED THIS IN THE YEARS PAST.

I DON'T KNOW IF THEY CURRENTLY ARE NOW, BUT THEY HAVE.

OKAY. SO QUESTION TO ASK MR. ROBERTSON. IN LINE WITH WHAT TRUSTEE BOYD SAID OR FINANCE COMMITTEE CHAIR BOYD SAID ABOUT, YOU KNOW, WE DON'T HAVE THE EXPERTISE IN THE CHILLERS AND THE DIFFERENT OPERATIONS, THINGS THAT CAN GO WRONG AND BE REPLACED.

HAVE WE EVER HAD AN ISSUE DEALING WITH SOMETHING LIKE THAT? WE'VE CERTAINLY GOT EXPERIENCED CONTRACTING WITH THOSE WHO CAN HANDLE OPERATIONS ISSUES, MAINTENANCE ISSUES.

I HAVE A PROBLEM WITH TRUSTEE FLOYD.

I WILL KEEP AN OPEN MIND.

TYPICALLY WE RUN OUR OWN FACILITY OPERATIONS.

SCOTT DOES A GREAT JOB AT IT, BUT THIS IS A NEW MODEL AND IT'S GOING TO BE BIGGER THAN MAYBE SOME OF THE THINGS THAT WE'VE HAD TRADITIONALLY JUST TAKING CARE OF CLASSROOM AND STUDENT SERVICES BUILDINGS.

IT COULD INCLUDE HOUSING, IT INCLUDE FOOD SERVICE, IT INCLUDE DAYCARE, IT INCLUDE THE VISION OF WHAT WE'RE DOING.

WE'RE ALL TRYING TO KEEP A VERY OPEN MIND OF WHAT POTENTIALLY IS SO SACHSE SCOTT DOES PLAN FOR THIS AND YOU'LL SEE HIS METRICS LATER WHERE JUST GOT THE DATA TO BE ABLE TO START TO TALK ABOUT OUR FACILITY CONDITION INDEX AND OUR REPLACEMENT COST AND DEFERRED MAINTENANCE. WHAT WE'RE DOING AND BEING ABLE TO USE THAT DATA TO PLAN OUT EVERYTHING WE WANT TO DO.

[00:40:01]

THAT'S IT'S KIND OF LIKE DEATH AND TAXES.

SO, I MEAN, BEYOND JUST THE REGULAR BUILDING.

YEAH, THAT'S IT. THAT'S THAT'S ANOTHER POINT IS THAT WHEN WE'RE TALKING ABOUT DOWNTOWN AND WE'RE TALKING ABOUT, AGAIN, KEEPING AN OPEN MIND, WE MAY ONLY BE A PART TENANT IN A MASSIVE STRUCTURE.

AND YET WE WE GOT TO HAVE A WAY TO DEFINE WHAT IS OUR COST TO TO HAVE TO TO TAKE THAT PROPERTY AND UTILIZE IT FOR OUR PURPOSES.

AND SO THAT'S WHY THESE OTHER MODELS HAVE TO KIND OF BE LOOKED AT AND COME INTO PLAY BECAUSE WE DON'T YET KNOW WHAT WHAT TYPE FACILITY WILL BE DELIVERING. YES, MA'AM.

I WAS GOING TO.

I THINK DIANA MAY HAVE BEEN THE ONLY PERSON ON THE BOARD.

YOU REMEMBER SOME OF THOSE? SO THAT WE BUILT WHERE THE OPERATIONS MONEY HAD NOT BEEN PLANNED FOR.

THEY BUILT THEM, BUT IT WAS NOT IN THE BUDGET TO MAINTAIN THEM OR OPERATE THEM.

SO WE HAD TO GO BACK AND FIND MONEY TO DO THAT.

IN THE HEALTH CARE WORLD, EVERYBODY WANTS TO GIVE YOU A BUILDING WITH THEIR NAME ON IT, BUT THEY FORGET HOW MUCH IT COSTS TO OPERATE IT FOR THE NEXT 1520 YEARS OR UNDERVALUE THE COST OF THE OPERATIONS.

AND WHEN IT COMES UP, DEFERRED MAINTENANCE APPEARS.

THAT IS SOMETHING THAT OWNERS WILL LOOK AT IS WE WE'RE NOT GOING TO HAVE DEFERRED MAINTENANCE BECAUSE IT'S TAKEN CARE OF FOR THE NEXT 20 YEARS.

THAT'S RIGHT. RIGHT. I KNOW THERE'S OTHER SLIDES THAT WILL KIND OF PROVIDE GREATER CLARIFICATION OF THIS.

SO I'M TRYING TO MOVE US HERE BECAUSE THERE'S A LOT OF INFORMATION HERE.

GOOD CONVERSATION, BUT I THINK WE NEED TO MOVE FORWARD.

YEAH. AND I THINK THAT WAS THE MOST THIS HAS BEEN THE MOST IMPORTANT ONE BECAUSE WE'RE TALKING ABOUT VARIOUS MODELS, WHICH I THINK IS IS THE POINT HERE.

BUT THE THE PUBLIC PRIVATE PARTNERSHIP OR THE P THREE IS THE FINAL MODEL THAT THAT ONE INCLUDES DESIGN, CONSTRUCTION OPERATIONS, MAINTENANCE AND FINANCE PROJECT FINANCE.

SO THE THE PRIVATE SECTOR WILL INCLUDE SOME EQUITY IN THE PROJECT, WILL FINANCE PORTIONS OF THE PROJECT AND THEREFORE WILL HAVE SKIN IN THE GAME.

AND THEN OTHERWISE IT'S VERY SIMILAR TO A BOND.

BUT EVEN MORE RISK IS TRANSFERRED TO THE PRIVATE SECTOR.

KNOW I JUST WANT TO GIVE A BRIEF EXAMPLE FOR THESE ALTERNATIVE DELIVERY MODELS AND MAYBE THIS IS SOMETHING FOR CONSIDERATION.

THE UNIVERSITY OF HAWAII, THEY USED DESIGN BUILD FOR THE FIRST TIME FOR ANY OF THEIR PROJECTS ON THEIR HAWAII LIFE SCIENCES BUILDING.

IT WAS A THREE STORY 70 SQUARE, 70,000 SQUARE FOOT FACILITY WITH 21 STATE OF THE ART TEACHING AND RESEARCH LIBRARY LABORATORIES THAT HELD ONE OF THE TWO ELECTRON MICROSCOPES IN THE STATE.

IT IS VERY STATE OF THE ART AND HIGH TECH, AND IT DIDN'T REQUIRE FINANCING.

THEY HAD ALL THE FUNDS FOR THE PROJECT.

THEY ALSO HAD THE OPERATIONS AND MAINTENANCE COVER.

SO THEY DECIDED BECAUSE THEY WANTED TO ACCELERATE THE SCHEDULE AND TO MINIMIZE AND SHORTEN THE DISRUPTION TO THE STUDENTS, THE FACULTY AND THE REST OF THE CAMPUS TO GO WITH THE DESIGN BUILD MODEL TO GET IT OPEN BEFORE THE SCHOOL YEAR WAS GOING TO START AND KEEP IT ON SCHEDULE.

SO THEY WERE VERY INTERESTED IN THE BUDGET AND SCHEDULE CERTAINTY.

THE NEXT TWO SLIDES ARE REALLY JUST ILLUSTRATING THE RISK TRANSFER BETWEEN THE VARIOUS MODELS, SO TRANSFER FROM THE PUBLIC OWNER TO THE PRIVATE SECTOR.

I WON'T GO THROUGH ALL OF THESE, BUT I WILL SAY WHY IS RISK TRANSFER IMPORTANT? IT'S IMPORTANT TO PUBLIC AGENCIES TYPICALLY BECAUSE IT PROVIDES GREATER COST AND SCHEDULE CERTAINTY.

AND, YOU KNOW, FOR PLANNING PURPOSES WHEN YOU HAVE A PUBLIC FACILITY, THAT THAT IS TYPICALLY QUITE IMPORTANT.

SO IF YOU START ON THE LEFT OF THIS ARROW HERE, YOU CAN SEE UNDER THE DESIGN BID BUILD MODEL, THAT'S WHERE THE PUBLIC SECTOR HAS THE MOST RISK, RETAINS THE MOST RISK.

AND AS YOU GO DOWN THE CONTINUUM, DOWN TO THE PUBLIC PRIVATE PARTNERSHIP MODELS ON THE RIGHT, THAT'S WHERE THE MOST RISK IS TRANSFERRED.

NOW LOOKING AT THREE MODELS.

[00:45:02]

THEY ALL HAVE DIFFERENT NAMES AND ACRONYMS. AND WE'RE NOT GOING TO TALK ABOUT ALL OF THESE, BUT WE'LL JUST TALK ABOUT THE DESIGN, BUILD, FINANCE, OPERATE AND MAINTAIN.

MAINTAIN IN THE UPPER RIGHT HAND CORNER THERE.

THAT IS THE THE ONE THAT IS IS MOST WIDELY USED, I THINK, RIGHT NOW.

AND WHY WHY ARE WE LOOKING AT WHAT ARE WE TRYING TO DO WITH THE PUBLIC PRIVATE PARTNERSHIP? ESSENTIALLY, IT'S TO CAPTURE PRIVATE SECTOR INNOVATION, ACCELERATE TECHNICAL AND FINANCIAL FEASIBILITY.

MASTER DEVELOPMENT PLANNING MIGHT BE SOMETHING THAT THE OWNER IS INTERESTED IN.

THE PRIVATE SECTOR HAS UNIQUE FINANCING CAPABILITIES BASED ON THEIR EXPERIENCE, THEIR FINANCING EXPERIENCE, GREATER BUDGET CERTAINTY AND TRANSFER RISK.

YOU KNOW, THESE ARE THESE ARE ALL THINGS THAT WE'RE TRYING TO CAPTURE WITH A PUBLIC PRIVATE PARTNERSHIP.

AND WE WANTED TO TALK ABOUT TWO DIFFERENT KINDS, DIVIDING THEM UP INTO TWO DIFFERENT BUCKETS AT THIS POINT.

THERE'S THE HARD BID PUBLIC PRIVATE PARTNERSHIP, WHICH IS WHERE THE OWNER DOES SUFFICIENT DUE DILIGENCE AND FEASIBILITY ANALYSIS TO COME UP WITH INFORMATION UPON WHICH BIDDERS CAN GIVE YOU A FIRM FIXED PRICE FOR THE ENTIRE 20 YEAR, 35 YEAR PROGRAM.

AND AND THEN THERE'S THE PROGRESSIVE P THREE.

THIS IS WHERE THE PRIVATE SECTOR IS BROUGHT IN EARLIER.

THE PROJECT'S NOT QUITE READY TO BE PRICED WITH A FIRM FIXED PRICE, AND AT THAT POINT, THE PRIVATE SECTOR CAN BE BROUGHT IN TO HELP ACCELERATE THAT.

TECHNICAL AND FINANCIAL FEASIBILITY WILL WORK WITH THE OWNER TO DO THOSE STUDIES AND ANALYSIS, AND THEN WE'LL NEGOTIATE A PRICE SIMILAR TO THE CONSTRUCTION MANAGER AT RISK.

BUT OF COURSE THIS IS FOR DESIGN, CONSTRUCTION, OPERATION AND MAINTENANCE AS OPPOSED TO THE CONSTRUCTION MANAGER.

SO THIS PROGRESSIVE P THREE THAT YOU JUST DESCRIBED, IS THAT SOMETHING THAT WOULD FOLLOW THE RFI PROCESS AND OFFER? YEAH. IF YOU DECIDED TO GO THAT WAY, THEN WHAT TYPICALLY WOULD HAPPEN IS YOU WOULD HAVE ISSUE A REQUEST FOR QUALIFICATIONS, SEEK QUALIFICATIONS FOR QUALIFIED BIDDERS, SHORTLIST THE TOP 3 TO 5 BIDDERS, AND THEN ISSUE A REQUEST FOR PROPOSALS THAT WOULD THAT WOULD ASK FOR A DEVELOPMENT PLAN, FINANCIAL CAPABILITY, A FINANCIAL PLAN FOR THE PROJECT, A TECHNICAL APPROACH AND VARIOUS OTHER FACTORS.

AND THEN YOU WOULD MAKE YOUR SELECTION ON THAT.

IT MAY HAVE SOME INDICATIVE PRICING, BUT BECAUSE THE PROJECT CAN'T BE PRICED YET, YOU'RE NOT GETTING A FIRM FIXED PRICE SO THAT YOU'RE NOT REALLY SELECTING ON PRICE, YOU'RE SELECTING ON THE ABILITY OF THE BEST TEAM TO DELIVER THE PROJECT AND HELP YOU GET IT THERE AND ACCELERATE IT.

SO I'M SORRY.

NO, I WAS JUST GOING TO SAY IN CONJUNCTION TO THAT TO THE P THREE, WHAT IT GIVES YOU IS ONE OF THE THINGS WE'RE FACED WITH IS THE EROSION OF OUR DOLLARS.

WE'VE LOST 30, 35% OF OUR PURCHASING POWER DUE TO THE INFLATION AND THE DELAY IN THE COURT AND SO FORTH.

SO THE PUBLIC PRIVATE PARTNERSHIP WILL DELIVER A PROJECT QUICKER AND LESS TIME.

IT'LL DELIVER IT IN A LESS COST BECAUSE THAT'S WHAT THEY DO FOR A LIVING.

AND SO THOSE ARE SOME OF THE THINGS THAT KIND OF MAKES THE P THREE BECOME ATTRACTIVE WHEN YOU HAVE THINGS THAT WE HAVE NO CONTROL OVER IN PLACE.

SO YEAH, JUST MAKE SURE I UNDERSTAND.

THANK YOU. YEAH, I'VE KIND OF UNDERSTOOD THE PROCESSES THAT WE WOULD BE LOOKING AT TO BE THE RFI FOLLOWED BY THE QUOTE, THE RFP.

BUT WHAT I HEAR YOU SUGGESTING THIS P THREE MODEL THAT WE DO AN RFQ POTENTIALLY, OR THAT'S WHERE WE ASK FOLKS THAT BASED ON WHAT WE GET BACK IN THE RFI THAT WE THINK HAVE THE CAPABILITY AND THE VISION AND THE TO EXECUTE WITH US TO COME IN AND DO A MORE DETAILED, DEEPER DIVE WHERE WE CAN GET SOME OF THIS DEEPER LEVEL OF INFORMATION.

IS THAT RIGHT? SO MY QUESTION IS, CAN WE DO AN RFQ EVEN IF WE HAVEN'T DECIDED TO DO AP3? I MEAN, SO WE'RE GOING TO GET BACK HOW MANY RFI RESPONSES DO WE GET? 17, 17? I MEAN, WE MAY WE MAY WANT TO GO BACK TO SOME SUBSET OF THE 17 FOR AN RFQ PROCESS AND SAY, HEY, WE'RE TRYING TO FIGURE OUT WHETHER TO DO

[00:50:03]

GIVE US THAT.

GIVE US YOUR ASSESSMENT OF THAT AND WE CAN ASK A WHOLE BUNCH OF QUESTIONS IN THE RFQ PROCESS EVEN BEFORE WE DECIDE TO DO AP3, RIGHT? YES. SO, YOU KNOW, I HAVE HAD SOME EXPERIENCE WITH THAT WHERE THERE WAS AN OWNER WHO WANTED TO ESSENTIALLY HAVE FOLKS COME IN AND EITHER DO DESIGN, BUILD OR DO AP3 FOR THE SAME PROJECT.

IT AND ULTIMATELY BASED ON MARKET FEEDBACK, BECAUSE THEY ARE DIFFERENT DIFFERENT RESPONDENTS, RIGHT? YOU'RE GOING TO HAVE DIFFERENT RESPONDENTS.

AND FOR THEM TO SPEND THE MONEY TO RESPOND AND THEN, YOU KNOW, YOU DECIDE ON A COMPLETELY DIFFERENT MODEL IS, YOU KNOW, MAKES IT VERY DIFFICULT FOR THE PRIVATE SECTOR TO WANT TO TO PLAY.

THEY AND THERE ARE THERE ARE SOME YOU KNOW, THERE IS SOME SOME COMPETITION FOR THESE PROJECTS TO MAKE SURE YOU GET THE BEST AND THE.

MOST QUALIFIED ENTITIES DOING THAT.

AND SO WHEN YOU THROW IT OUT THERE WITH A WHOLE BUNCH OF DIFFERENT POTENTIAL OPTIONS THAT ONE OF WHICH THEY, YOU KNOW, THEY HAVEN'T PROVIDED A BID FOR AND IT MIGHT JUST GO TO SOMEBODY ELSE AS OPPOSED TO PLAYING ON AN EVEN PLAYING FIELD UNLESS YOU'RE VERY SPECIFIC ABOUT HOW IT'S ALL GOING TO BE DONE, IT MAKES IT VERY DIFFICULT TO DO.

YEAH, I WOULD JUST OFFER THAT WE MIGHT WANT TO CONSIDER.

BELIEVE ME, EVERYONE HAS THE SAME IDEA.

WHY DON'T WE HIT THEM ALL AGAINST EACH OTHER? BUT IN PRACTICE IT'S VERY DIFFICULT.

YEAH. AND JUST TO THAT POINT, AGAIN, AS WE SAID, ROBIN SAID THIS SO WELL, THE RFI IS NOT A PROCUREMENT TOOL.

NO, NEITHER IS AN RFQ.

NO, AN RFQ IS IT DOES IT STARTS BECAUSE THAT'S WHEN IT STARTS THE COMMITMENT OF WHAT WE WANT TO DO.

I AGREE WITH THESE EXPERTS HERE.

WE REALLY NEED TO DETERMINE WHAT MODEL WE'RE GOING TO TRY TO USE WHEN WE GO OUT PULLING ALL THAT INFORMATION FROM THE RFI AND INTERNAL AND EXTERNAL STAKEHOLDERS AS TO WHAT WE WANT TO DO, THAT WOULD BE THE MOST EFFICIENT WAY OF DOING IT AND WOULD EXPECT TO GET NICE RESULTS FROM DETERMINING THAT METHOD AND GOING OUT FOR THE RFQ.

THERE WILL BE LOCAL FIRMS, THERE WILL BE NATIONAL FIRMS, THERE COULD BE ALL.

BUT AGAIN, WE HAVEN'T LIMITED THAT.

THE 17 RESPONDERS ARE THE ONLY ONES THAT CAN RESPOND TO AN RFP.

YOU KNOW, WE MADE VERY CLEAR ON THAT THAT THIS IS SO WE COULD GET PEOPLE THAT DIDN'T BOTHER TO SEND ANYTHING IN ON THE RFI.

AND PART OF THE REASON COULD BE BECAUSE WE WERE VERY BROAD BASED ABOUT HOW HOW TO DO THE PROJECT.

EXACTLY. AND DOES AN RFQ I'M SORRY, IS IT RFQ ALSO A TIME WHERE WE CAN ASK A SELECTED NUMBER OF VENDORS THAT WE THINK CAN DO THE WORK BASED ON THEIR INPUTS, ON THEIR MWD TYPES OF STRATEGIES AND PARTICIPATIONS? ABSOLUTELY. THAT'S WHERE WE GET MORE GRANULAR ON THAT BEFORE WE GO TO A FORMAL BID PROCESS.

THAT WOULD BE PART OF IT. BUT I ALSO WANT TO POINT OUT, AS YOU LOOK AT THE RFI RESPONSES, WHICH YOU WILL, WE ACTUALLY ASKED THOSE QUESTIONS.

WE ASK QUESTIONS ABOUT THREE ALTERNATIVE OR ALTERNATIVE DELIVERY METHODS.

WE ASK QUESTIONS ABOUT COMMITMENT TO MWP AND VERSUS SUPPLIERS AND THINGS LIKE THAT AS PART OF HELPING US FRAME WHAT SUBSEQUENTLY THE PROCUREMENT WILL LOOK LIKE.

SO WE'VE ALREADY STARTED ASKING THOSE QUESTIONS AND WE DID SO, SO WE COULD GET THE RESPONSE OF THE DEVELOPMENT COMMUNITY ABOUT, WELL, WHAT DO YOU THINK ABOUT THESE VARIOUS ALTERNATIVE DELIVERY METHODS? AND WE GOT FEEDBACK. SO, SO THAT WAS HELPFUL.

THERE WERE SOME GOOD IDEAS. OKAY, SO I'M VERY LINEAR, ESPECIALLY WHEN IT COMES TO THINGS I'M NOT VERY FAMILIAR WITH.

SO ON SLIDE TWO, YOU HAVE THE AGENDA, RIGHT? SO UNDER TRADITIONAL AND ALTERNATIVE MODELS, THEN WHEN YOU REFERENCE RISK MODEL, THAT'S A KEY ALTERNATIVE MODEL.

WHAT IS RISK MODEL? WHERE DOES THIS FALL ON THE AGENDA? THE RISK MODEL, BECAUSE THAT'S WHAT YOU HAVE ON YOUR RISK TRANSFER.

YEAH. THAT.

WHERE IS IT? THE ONE WITH A CHART.

THE ONE YOU JUST WENT? YEAH.

SLIDE 11, PROJECT DELIVERY MODEL.

RISK TRANSFER. YES.

SO THERE'S UNDER THE ALTERNATIVE MODEL RISK TRANSFERS, THOSE ALTERNATIVE MODELS NOT THERE'S ALSO THE DESIGN BID BUILD.

SO THE TRADITIONAL ONE IS ALSO ON THIS.

THE THESE SLIDES ARE REALLY TO ILLUSTRATE FOR ALL OF THE ALTERNATIVE DELIVERY MODELS THAT WE JUST WENT THROUGH, TRADITIONAL ALTERNATIVE P THREE, WHERE THE RISK TRANSFER FALLS, WHAT THE RISK TRANSFER.

SO RISK TRANSFER IS IN THE MODEL YOU'RE JUST SHOWING.

NO, IT'S JUST SHOWING. ALL THOSE MODELS ARE THERE, BUT IT'S JUST SHOWING HOW MUCH RISK IS TRANSFERRED.

THANK YOU. YES.

AND SO WE'RE MOVING ON.

I THINK WE ALREADY TALKED ABOUT THE OWNER'S GOALS AND PRIORITIES FOR THE PROJECTS CAN BE INCLUDED IN THE CONTRACT INCLUDED AND IN THE PROCUREMENT, SUCH AS SUPPLIER

[00:55:09]

CAN YOU SPEAK LOUDER? I WILL TRY. APOLOGIES.

THE P THREE MODEL THAT USES THE DESIGN BUILD FINANCE OPERATE.

MAINTAIN. UNIVERSITY OF CALIFORNIA FOR THEIR USE CAMPUS.

MERCED ACTUALLY USED THE P THREE THE PUBLIC PRIVATE PARTNERSHIP DESIGN BUILD FINANCE OPERATE MAINTAIN MODEL TO ESSENTIALLY DOUBLE THEIR CAMPUS SIZE IN A VERY SHORT PERIOD OF TIME IN ORDER TO MEET ENROLLMENT GROWTH.

SO THEY HAD A CAMPUS THAT WAS EXPECTED TO ALMOST DOUBLE IN ENROLLMENT AND THEY DIDN'T HAVE THE FACILITIES THAT THEY NEEDED THEM WITHIN ABOUT 5 TO 7 YEARS. SCHEDULE WAS DEFINITELY A BIG DRIVER IN THEM LOOKING TO THE P THREE MODEL AS A POTENTIAL AND WHAT THEY ENDED UP DOING SUCCESSFULLY WAS USING THE AVAILABILITY PAYMENT AND WE'LL GET A LITTLE BIT MORE INTO THE DETAILS OF THAT.

BUT THE DESIGN BUILD, FINANCE, OPERATE, MAINTAIN THE MODEL TO DELIVER CAMPUS HOUSING, ACADEMIC FACILITIES, STUDENT LIFE FACILITIES, COMPETITION FIELDS.

AND SO IT WAS IT WAS MULTIPLE FACILITIES THAT WERE DELIVERED IN A VERY SHORT PERIOD OF TIME.

AND BECAUSE THE UNIVERSITY ALSO NEEDED NEEDED THESE FACILITIES, SOME OF THEM QUICKER THAN OTHERS, THEY HAD THE DEVELOPER DELIVER THEM IN PHASES.

SO THE THE ONE THEY NEEDED, THE SOONEST THEY HAD THEM DELIVER AS THE FIRST BATCH, FIRST DELIVERY FACILITIES.

AND LET ME SEE IF I CAN GET TO THE SCREEN FOR THAT AS WELL.

THERE'S ABOUT A $1.3 BILLION PROJECT FOR 790,000 ASSIGNED SQUARE FEET.

AND LET'S SEE, THESE ARE THE TYPES OF FACILITIES WE JUST COVERED.

AND SO FOR THE FIRST DELIVERY FACILITIES, BY FALL OF 2018 INCLUDES SOME CLASSROOMS, CENTRAL DINING AND HOUSING FACILITIES.

THE SECOND DELIVERY FACILITIES WERE BY FALL OF 2019, INCLUDED LABS, ACADEMIC OFFICES, COMPETITION FIELDS AND THEN OVERALL, SUBSTANTIAL COMPLETION OF THAT $1.3 BILLION PROJECT WAS BY FALL OF 2020, AND THE TERM OF THE PROJECT WAS 39 YEARS, STARTING FROM CONTRACT EXECUTION FOR A FOUR YEAR CONSTRUCTION PERIOD, FOLLOWED BY A 35 YEAR OPERATING PERIOD.

SO SOME OF THE BENEFITS FOR THE UNIVERSITY OF CALIFORNIA WAS GETTING THESE SPACES QUICKLY.

THEY WERE ABLE TO SPECIFY IN THE TECHNICAL REQUIREMENTS HOW SOME OF THESE SPACES NEEDED TO BE VERY FLEXIBLE, ADAPTABLE FOR DIFFERENT USES.

THERE ARE SPECIFICS ABOUT ADJACENCIES SO THAT YOU KNOW SOMEBODY THAT WOULD MAKE A LOT OF NOISE, LIKE THE MUSIC DEPARTMENT WOULD NOT THEN BE ALL AFFECTING SCIENTIFIC EXPERIMENTS THAT REQUIRED QUIET.

FOR EXAMPLE, IT PROVIDED FOR A LONG TERM OPERATION AND MAINTENANCE OF THESE FACILITIES TO A CONTRACTUALLY SPECIFIED STANDARD.

SO THERE'S THE ISSUES SUCH AS DEFERRED MAINTENANCE AND THINGS LIKE THAT REALLY SHOULD BE ADDRESSED BY THIS MODEL AND WHAT THEY'VE ENTERED INTO AND THEY REALLY DID THIS ALLOWED THEM TO FOCUS ON WHAT THE UNIVERSITY DOES BEST, WHICH IS TEACHING, DEVELOPING ITS STUDENTS, THE ACADEMICS AND SPORTS, AS OPPOSED TO WORRYING ABOUT THE DESIGN BUILD, OPERATION AND MAINTENANCE OF THIS.

TO YOUR QUESTION EARLIER IN THE PROJECT AGREEMENT, YOU SAID OR THE UNIVERSITY OF CALIFORNIA SPECIFIED SMALL BUSINESS ENTERPRISE, LOCAL SMALL BUSINESS ENTERPRISE AND LOCAL DISABLED VETERANS BUSINESS ENTERPRISE GOALS.

SO THE CONTRACT ACTUALLY SAYS FOR THE CONSTRUCTION WORK, THERE ARE ASPIRATIONAL GOALS OF AT LEAST 30% OF THE CONTRACT VALUE MUST BE PERFORMED BY THE LOCAL SMALL BUSINESS ENTERPRISES, OF WHICH 3% SHOULD BE LOCAL DISABLED, VETERAN BUSINESS ENTERPRISES. AND THERE WAS A SIMILAR.

THE SAME GOAL WOULD THEN APPLY SEPARATELY TO THE OPERATIONS AND MAINTENANCE PERIOD.

SO THIS WAS ONE WAY IN WHICH THE UNIVERSITY OF CALIFORNIA REALLY PRIORITIZED AND ENSURED THAT THE DEVELOPER WOULD THEN REACH OUT AND THEY HAD VARIOUS REPORTING REQUIREMENTS TO MAKE SURE THAT THE UNIVERSITY COULD ENSURE COMPLIANCE ON THAT FRONT.

[01:00:01]

SO JUST IN TERMS OF THE BENEFITS TO THE UNIVERSITY OF CALIFORNIA FOR FOR BASICALLY EMBARKING ON THIS EFFORT, WHICH WAS REALLY A FIRST IN THE NATION TO USE IT, USE THIS MODEL FOR ITS FACILITIES IN A HIGHER EDUCATION CONTEXT.

OVERALL, THE PROJECT IS COMPLETED ON TIME AND ON BUDGET IN THE SUMMER OF 2020.

THE FACILITIES THE CONTRACT REQUIRED IT TO ACHIEVE LEED GOLD.

IN FACT, THEY WERE AWARDED LEED PLATINUM CERTIFICATION IN JANUARY 2021.

THEY HAVE MET THEIR NEED TO DOUBLE THE CAMPUS SIZE TO MEET THE ENROLLMENT GROWTH AND HAVE STATE OF THE ART FACILITIES THAT ARE BEING MAINTAINED TO THESE VERY, YOU KNOW, STRICT CONTRACT CONTRACT STANDARDS.

AND THE ECONOMIC BENEFITS BEYOND THE ACTUAL CAMPUS ITSELF HAS BEEN INCREASED IN SPENDING OF OVER 200 MILLION PER YEAR IN THE STATE, 1.5 BILLION ONE TIME IMPACT ESTIMATED IN RIVERSIDE COUNTY AND 2.4 BILLION STATEWIDE AND MANY THOUSANDS OF JOBS ADDED TO THE REGION.

QUESTION YOU MENTIONED ON SLIDE 25 THAT $600 MILLION WORTH OF U.S.

SYSTEM FINANCING BROUGHT IN ABOUT AN EQUAL NUMBER, AN EQUAL AMOUNT OF DEVELOPER FINANCING.

SO DO WE NEED TO BE THINKING THAT WAY AS WELL? I MEAN, WE HAVE ROUGHLY $500 MILLION TO SPEND ON DOWNTOWN.

IS YOUR ASSESSMENT OF THE MARKET THAT WE CAN ATTRACT AN EQUAL NUMBER, AN EQUAL AMOUNT OF DEVELOPER FINANCING FOR OUR PROJECTS IF WE TAKE A TRIPLE P APPROACH? I MEAN, WE MAY BE LOOKING AT $1 BILLION PROJECT HERE DOWNTOWN.

AND QUITE FRANKLY, THAT'S THIS IS WHERE I THINK HIRING A FINANCIAL ADVISOR WHO'S EXPERIENCED IN SPECIFICALLY THIS TYPE OF DELIVERY MODEL CAN REALLY ASSIST IN ANALYZING WHAT'S THE BEST MIX FOR FOR THIS PROJECT.

THERE WERE ACTUALLY CONSTRUCTION PERIOD PAYMENTS THAT WERE MADE BY THE UNIVERSITY, SO THAT REDUCED THE AMOUNT THAT THE DEVELOPER HAD TO PRIVATELY FINANCE.

THE BENEFIT TO THE OWNER OF THAT WAS A REDUCTION IN SOME OF THE FINANCING COSTS AND TYING SOME OF THE PAYMENTS TO CONSTRUCTION PROGRESS.

SO THEORETICALLY, YOU COULD ACTUALLY PAY NOTHING THROUGH THE CONSTRUCTION PERIOD AND HAVE THE DEVELOPER FINANCE THE DESIGN AND CONSTRUCTION COSTS ENTIRELY AND DEFER YOUR PAYMENTS UNTIL IT'S COMPLETED.

SO THIS YOU COULD GET EVEN MORE LEVERAGE OUT OF YOUR DOLLARS IS MY POINT.

BUT WHAT THE OPTIMAL AMOUNT IS FOR YOUR PROJECT, FOR THIS, FOR DALLAS COLLEGE IS SOMETHING TO BE ANALYZED.

SO YOU HAVE SO YOU CAN HIT THAT SWEET SPOT ESSENTIALLY.

BUT THE POTENTIAL IS THERE TO BASICALLY DOUBLE OUR MONEY AND WE'RE NOT LOCKED INTO ONE SPECIFIC MECHANISM.

IF WE WANT TO SEGMENT THE PROJECT, SAY, INTO HOUSING, ACADEMIC BUILDINGS, PARKING LOTS, WHATEVER, WE CAN CHOOSE DIFFERENT FINANCING MECHANISMS DEPENDING UPON THE FACILITY USAGE WE ENVISION.

I THINK THAT'S A REALLY GREAT POINT.

HOW YOU PACKAGE THE PROJECT IS GOING TO BE ONE OF THE EARLY DECISIONS.

DOES IT REALLY MAKE SENSE TO AGGREGATE THEM ALL INTO ONE BIG PROJECT AND GO OUT AND PROCURE SOMEBODY WHO CAN DO THE WHOLE THING, OR DOES IT MAKE MORE SENSE? AND THEN ONE DELIVERY MODEL WOULD SUIT THAT? OR DOES IT MAKE SENSE TO BREAK UP? FOR EXAMPLE, IF YOU HAVE AN AFFORDABLE, AFFORDABLE OR MARKET HOUSING COMPONENT OR AN INNOVATION DISTRICT, IS THAT SOMETHING THAT WOULD REALLY CALL FOR UPON ANALYSIS A DIFFERENT DELIVERY MODEL THAN, SAY, YOUR, YOUR, YOUR BUILDING, YOUR FACILITIES, YOUR ACADEMIC CLASSROOM BUILDING OR YOUR ADMIN BUILDING? SO THAT'S A VERY GOOD, VERY GOOD POINT.

THAT'S ONE OF THE EARLY ANALYZES AND DECISIONS THAT YOU WANT TO MAKE IS HOW DO YOU PACKAGE IT AND HOW DO YOU PHASE IT AND WHAT IS THE BEST DELIVERY MODEL AS YOU AS YOU'RE ENVISIONING? SO THANK YOU. AND WE WILL HAVE TO HAVE THE ADVICE OF A FINANCIAL CONSULTANT WHO IS FAMILIAR WITH THESE TYPES OF VEHICLES, WHO CAN ADVISE US ON THAT, BECAUSE THE COMPLEXITIES ASSOCIATED WITH, FOR EXAMPLE, HOUSING, FINANCING, HOUSING AND TAX CREDITS AND OTHER THINGS THAT ARE AVAILABLE TO THE PRIVATE SECTOR THAT THEY MIGHT BE ABLE TO AVAIL THEMSELVES OF ARE ALL THINGS THAT WE WOULD HAVE TO CONSIDER IN HOW WE PACKAGE IT.

AND THEN SOMEBODY WILL ADVISE US ON THAT RETURN, ON THAT ON THAT POST.

THERE WAS HOUSING AT THE RECENT SUMMIT THAT WE HAD AT SMU LAST WEEK.

THERE WAS A DEVELOPER THERE WHO BUILDS HOUSING, COLLEGE HOUSING, COMMUNITY HOUSING AND TALK TO BANK OF AMERICA AND SAYS, Y'ALL FINANCE THAT. AND I SAID, WELL, YEAH, THEY'LL FINANCE IT.

AND WHAT IT REALLY DOES WITH THE PUBLIC PRIVATE PARTNERSHIP, IF YOU CAN ENVISION THIS, THEY CAN BUILD HOUSING ON OUR LAND.

WE DON'T PAY FOR OFF PREMISES EITHER PLACE, BUT WE DON'T PAY.

WE DON'T PAY FOR THE HOUSING, WE DON'T RUN THE HOUSING, BUT OUR STUDENTS BENEFIT FROM IT.

BUT GUESS WHAT? THEY RENT IT WHILE THEY'RE A STUDENT.

[01:05:03]

THEY CAN BUY THEIR FIRST HOME WHERE THEY WERE WHEN THEY WERE GOING TO SCHOOL.

AND THAT IS A MODEL THAT'S REALLY BEING PURSUED RIGHT NOW.

AND THAT'S REALLY INTERESTING TO WHAT WE'RE TALKING ABOUT AT ONE OF OUR DETERMINANTS OF EDUCATION IS THE LACK OF HOUSING.

AND IT'S THE SAME KIND OF THAT'S WHAT I'M TALKING ABOUT.

WE HAVE YOU HAVE TO HAVE THE KIND OF THE P THREE MINDSET TO MAKE SOMETHING LIKE THAT WORK.

THE FINANCING BANK OF AMERICA SAID WE LOVE TO FINANCE THOSE.

THE DEVELOPER SAYS WE LOVE TO BUILD THEM AND WE LOVE TO RENT THEM FOR A WHILE AND THEN WE LIKE TO SELL THEM OFF AS CONDOS.

SO, YES, MA'AM.

WHY IS THAT A QUESTION ABOUT THIS PROJECT? WHEN YOU TALK ABOUT THE 35 YEAR OPERATING PERIOD, THAT'S WHAT THE DEVELOPER IS COMMITTING TO MANAGE IT AFTERWARDS.

AND THEN AFTER 35, IT'S LIKE RENEGOTIATE IT OR NO AFTER.

SO BASICALLY THEY WILL BE THEY ARE CHARGED WITH OPERATING, MAINTAINING THE ASSETS, THE FACILITIES FOR THAT TERM TO CONTRACTUALLY SPECIFIED STANDARDS.

THEY GET AN ANNUAL PAYMENT THAT'S BROKEN DOWN INTO MONTHLY PAYMENTS, THE MAXIMUM AMOUNT, IF THEY'RE NOT PERFORMING TO STANDARD, IT GETS DEDUCTED OFF OF THAT.

SO THAT'S. ESSENTIALLY THEY'RE GOING TO BE INCENTIVIZED TO KEEP THOSE UP TO UP TO PAR.

THEY WILL HAVE ASSET RENEWAL OBLIGATIONS IN ORDER TO MAINTAIN THAT PERFORMANCE LEVEL THROUGHOUT THAT LENGTH OF TIME.

THERE'S GOING TO BE NEED TO RENEW SOME OF THESE ASSETS AS THEY GO.

SO THAT'S A PART OF THEIR OBLIGATION.

AND AT THE VERY END THERE, THEY ARE CONTRACTUALLY SPECIFIED STANDARDS AT WHICH THEY HAVE TO HAND BACK THE ASSETS TO THE UNIVERSITY.

SO THAT AGAIN, THAT'S CALLED THE HAND BACK REQUIREMENTS.

THERE'S USUALLY SECURITY FOR THAT AS WELL.

HAND BACK WITH CLIMATE RESERVE TO ENSURE THAT THEY DO THAT WORK AND THERE SHOULD STILL BE SOME EQUITY LEFT IN THE DEVELOPERS.

THE DISTRIBUTIONS THAT GO TO THE DEVELOPER ALL THE WAY TO THE END.

SO THEY STILL HAVE SKIN IN THE GAME TO ADD IT BACK IN.

SO YOU WANT TO MAKE SURE THAT DEVELOPER IS INCENTIVIZED AROUND? YES. DOES THE $590 MILLION FROM THE DEVELOPER, WHERE DOES THAT FIT INTO THE PICTURE AND WHAT IS THE INCENTIVE FOR THE DEVELOPER TO PUT THAT MONEY IN AND BE A PART OF THE PROJECT? SO THEY I MEAN, THIS IS THE SO THAT'S A COMBINATION OF DEBT AND EQUITY THAT THEY'RE BRINGING TO THE PROJECT.

IT'S A COMBINATION OF DEBT FINANCING AND EQUITY FINANCING THAT THEY'RE BRINGING TO THE PROJECT.

AND BY BRINGING IN THE DEBT, THE LENDERS ARE THIRD PARTY LENDERS ARE COMING IN TO LOAN THE MONEY FOR PART OF THE DESIGN AND CONSTRUCTION COSTS AND THE EQUITY PIECE OR THE EQUITY PLAYERS WHO WANT TO MAKE A RETURN.

I MEAN, THEY'RE NOT DOING THIS FOR FREE, RIGHT? THEY WANT TO MAKE A PROFIT ESSENTIALLY.

SO THEY WANT TO MAKE A RETURN FOR THE MONEY THEY INVEST INTO THE PROJECT OVER THE LIFE OF THE PROJECT.

THEY WANT TO BE MAKING A RETURN.

THAT'S REALLY THE POINT.

SO THAT'S WHERE I'M GOING TO HAVE TO HAVE SOME HELP AND UNDERSTANDING.

I UNDERSTAND. AND THAT'S THAT'S WHAT WE'VE BEEN STRESSING.

EXCUSE ME FOR INTERRUPTING, BUT TO UKIKO'S POINT.

THEY DON'T DO THIS FOR NOTHING.

I MEAN, NOBODY'S NOBODY'S GOING TO PAY THEM.

NOBODY'S ORIENTED THAT WAY NECESSARILY.

SOME ARE, BUT DEVELOPERS AREN'T.

AND WE'RE GOING TO HAVE ADVISORS WHO ARE GOING TO ANALYZE IT, LOOK AT IT, MODEL IT AND SAY, THIS IS A GOOD DEAL FOR DALLAS COLLEGE OR A BAD DEAL FOR DALLAS COLLEGE AND WE'LL HAVE THAT ADVICE FOR THE BOARD BEFORE WE WOULD COMMIT TO A PROJECT LIKE THIS BECAUSE SO YEAH, THE 600 MILLION FROM EXTERNAL FINANCING, THEN YOU'VE GOT THAT 590 FROM THE DEVELOPER AND I UNDERSTAND THEY WOULDN'T DO IT UNLESS IT WAS MONEY TO BE MADE FROM SOMEWHERE.

AND I'M NOT UNDERSTANDING WHAT THE INCENTIVES ARE AND HOW IT ALL WORKS TOGETHER FOR EVERYBODY.

RENTAL PROPERTY JUST SO ON WITH HER.

DESCRIBE THE REVENUE STREAMS THAT A DEVELOPER WOULD ENJOY UNDER THIS TYPE OF ARRANGEMENT.

THERE'S TWO DIFFERENT. THE ONE MODEL IS THE AVAILABILITY PAYMENT MODEL, WHICH IS THIS ONE, WHICH IS BASICALLY THE OWNER IS GOING TO TAKE THE REVENUE RISK, ANY REVENUE THAT MIGHT BE COMING OUT OF ITS FACILITIES IF IT'S PARKING OR IF IT'S HOUSING OR RENTS OR.

YEAH. SO THE OWNER WOULD TAKE THE REVENUE RISK AND JUST CONTRACTUALLY COMMITS TO PAYING A SPECIFIED AMOUNT THROUGH THE OPERATING TERM. SO IN THAT, IN THAT SO FOR THAT ONE, THE OWNER IS TAKING THAT RISK.

YOU COULD HAVE MODELS WHERE THE DEVELOPER TAKES THAT RISK.

FOR EXAMPLE, ON HOUSING, YOU CAN SEE WHERE THEY HAVE THEY WILL BE THEY WILL BE TAKING THE THE RISK OF WHETHER THEY'RE NOT THEY GET ENOUGH MONEY ON THE REVENUE ON THE REVENUE SIDE, ON THE HOUSING, YEAH, THEY'D BE COLLECTING ESSENTIALLY THE REVENUES FROM THE PROJECT.

SO IT DEPENDS ON WHETHER THE OWNER WANTS TO KEEP THE REVENUE, KEEP THE REVENUES FROM THE PROJECT, USE THOSE TO PAY THE DEVELOPER OR SAY YOU KEEP THE

[01:10:09]

IF IT GOES UNDER, THEN THAT'S YOUR PROBLEM.

BUT THAT A LOT OF TIMES BANDS MIGHT BE SET SO THAT IN ORDER TO PREVENT FROM WINDFALL PROFITS, FOR EXAMPLE, IF THE REVENUES GO, YOU KNOW, ARE WELL ABOVE WHAT THE PROJECTIONS WERE, THEN THE EXCESS SURPLUS REVENUES MIGHT GO BACK TO THE OWNER.

SO THERE'S DIFFERENT WAYS TO STRUCTURE IT.

BUT AT THE END OF THE DAY, THE REVENUES OF THE PROJECT WILL GO INTO THE FINANCE PLAN, THE UNIVERSITY, THEIR VALUES IN LAND. IN THIS PARTICULAR.

I DON'T. I DON'T I DON'T THINK IT'S SOLELY IN THE LAND, NO.

I THINK THAT THERE ARE THERE ARE REVENUE STREAMS THAT FLOW FROM THIS THAT INURE TO THE BENEFIT OF THE UNIVERSITY.

THEY OWNED THE LAND IN THIS INSTANCE.

WHAT ARE SOME OF THE REVENUE GENERATING FACILITIES IF YOU GO THAT HOUSING, CAFETERIA, DINING FACILITIES, PARKING DELAY AND TAKING A PROFIT? WELL, THE RECEIPTS I'M SORRY, I'M NOT TRYING TO TALK ABOUT YOUR PROJECT, BUT I WORKED ON THIS PROJECT, SO THAT'S PART OF THE REASON SHE'S SITTING HERE TO THIS FIRM, BECAUSE THEY'RE ASSOCIATED WITH IT.

THE COMPLEXITIES ASSOCIATED WITH THAT ARE YOU WILL YOU WILL DEVISE A MODEL THAT SAYS REVENUES THAT FLOW FROM THE PROJECT.

SOME PORTION OF THAT GOES BACK TO THE DEVELOPER.

THAT'S THEIR EXPECTATION OF A PROFIT FROM THEIR INVESTMENT.

BUT SOME OF THAT GOES TO THE UNIVERSITY AS WELL OVER THE LIFE OF THE OF THE CONTRACT.

SO, YOU KNOW, I WAS GOING TO SAY, NOBODY DOES THIS FOR NOTHING.

THE DEVELOPMENT THAT'S TO GO TO TRUSTEE BRICK EARLIER COMMENT ABOUT COULD WE COULD WE ASK FOR RFQS WITHOUT REALLY BEING SPECIFIC ABOUT WHAT WE WERE GOING TO DELIVER? THE DEVIL IS IN THE DETAILS ON THESE THINGS AND THE DEVELOPER WANTS SOME CERTAINTY WHEN THEY PUT TOGETHER MODELING THAT YOU'RE ACTUALLY GOING TO GO THROUGH AND DO SOMETHING BECAUSE THEY'RE GOING TO HAVE THEIR OWN FINANCIAL CONSULTANTS ADVISING THEM ABOUT HERE'S WHAT YOU CAN EXPECT ON RETURN OVER 35 YEARS ON A PROJECT OF THIS NATURE.

I'M JUST USING THAT AS AN EXAMPLE, AND WE'RE GOING TO HAVE TO HAVE SIMILAR EXPERTS ARE LOOKING AT IT TO MAKE SURE IT'S A GOOD DEAL FOR US.

THEY'LL BE LOOKING AT IT TO MAKE SURE IT'S A GOOD DEAL FOR THEM.

AND SOMEWHERE OUT OF THAT WILL COME A COMPLEX PROJECT AGREEMENT THAT EVERYBODY MUTUALLY AGREES TO THAT SETS FORTH.

THEN YOU HAVE THE EXPECTATIONS OF IF PROFITS WILDLY EXCEED WHAT THE EXPECTATION WAS, YOU'RE GOING TO HAVE A CAP ON THOSE AND YOU'RE GOING TO HAVE SOME MECHANISM BY WHICH THEY FLOW BACK TO BENEFIT DALLAS COLLEGE IN THAT SCENARIO.

AND SIMILARLY, IF THEY'RE NOT PERFORMING, THEY DON'T GET PAID LIKE THE CONTRACT SAYS, IT'S GOING TO BE SOME REDUCED AMOUNT PAID TO THEM.

AND IF THEY DON'T PERFORM AT ALL, THEN SECURED BY LETTERS OF CREDIT AND OR OTHER OTHER MECHANISMS. AND I'M NOT GOING TO GET INTO ALL THOSE THAT SAY IF YOU DON'T DELIVER AND YOU GO BELLY UP, WE GOT SOMEBODY TO LOOK TO THAT'S GOING TO MAKE US WHOLE.

SO THAT'S ALL THAT ALSO THE RISK THAT YOU THAT THAT'S WHY YOU HOLD THE MONEYS BACK IS TO IS THAT YOU DON'T WANT TO TAKE THE 35TH YEAR BUT THE DILAPIDATED UNMAINTAINED FACILITY, THAT'S A LIABILITY AND NOT AN ASSET.

SO THAT'S WHY IT'S IMPORTANT HOW YOU CONTRACTUALLY UPFRONT MAKE SURE THAT IT'S MAINTAINED.

AND WHEN YOU TAKE IT OVER AND THEY GIVE YOU THE KEYS TO IT, IT HAS VALUE BASICALLY IN THIS STRUCTURE.

THE ABILITY PAYMENT STRUCTURE WHERE YOU'RE THE OWNER IS AGREEING TO PAY ABILITY PAYMENTS OVER THE COURSE OF THE OWNERSHIP PERIOD.

IF IT'S NOT MAINTAINED TO A CERTAIN STANDARD, THEY GET DEDUCTIONS.

THAT MONEY IS GONE.

THEY CANNOT RECOUP THAT AND INCLUDE IT IN THE IN THOSE PAYMENTS THROUGH THE OPERATING TERM.

IS THERE EQUITY RETURN WHAT THEY'RE EXPECTING TO MAKE? RIGHT. SO THAT'S WHY THEY'RE INCENTIVIZED.

OTHERWISE THEIR PROFIT IS AT RISK.

AND IT COULD BE MORE THAN PROFIT, ACTUALLY.

EXACTLY. BECAUSE THEY HAVE TO PAY THE LENDERS.

SO TO THE EXTENT THE DEBT, THEY'RE REALLY HAVING ISSUES.

THE LENDERS AREN'T GETTING PAID.

THE LENDERS ARE VERY INCENTIVIZED TO MAKE SURE THAT THEY'RE GOING TO GET PAID.

SO THEY WILL COME IN AND MAKE SURE THAT THE PROJECT IS WORKING AS IT SHOULD.

OKAY. ALL RIGHT.

I'M COGNIZANT OF THE FACT THAT I THINK WE'RE RUNNING UP INTO TIME.

YOU PROBABLY HEARD MY STOMACH, BUT THAT'S OKAY.

YEAH, THAT WAS HER.

YEAH, I THINK YOU CAN JUST.

WE'LL JUST GO. I THINK WE'VE ALREADY DISCUSSED PROGRESSIVE P THREE.

I THINK THAT YOU WANT THE FINAL TAKEAWAYS.

YEAH, I THINK WE'LL GET THE FINAL TAKEAWAYS AND SOME IS THERE ARE SO MANY DIFFERENT METHODS OF DOING THIS, INCLUDING RELEASES AND OTHER THINGS AND WE PUT THOSE IN OR CHRISTINA KIKO PUT THOSE IN.

WE HAD, WE HAD TIME.

WE COULD HAVE TALKED ABOUT THOSE.

YOU'RE CERTAINLY WILLING TO TALK ABOUT THOSE IF NEEDED, AT A FUTURE DATE IF WE NEED TO DO THAT.

WE'RE NOT MAKING ANY DECISIONS TODAY ANYWAY.

WE JUST WANTED YOU TO HAVE A FULL BREADTH OF ALL THE POSSIBILITIES, BUT LET'S GO THROUGH THE BENEFITS AND RISKS.

OKAY, SO THE BENEFITS AGAIN OF THE PUBLIC PRIVATE PARTNERSHIP MODEL REDUCED RISKS BECAUSE OF THE RISK TRANSFER, IMPROVED COST SCHEDULE AND FUNDING CERTAINTY.

AGAIN, BECAUSE YOU HAVE A LONG TERM AGREEMENT, YOU'VE GOT THE PROJECT PRETTY MUCH WRAPPED UP FOR A OVER THE LONG TERM.

[01:15:07]

IT REDUCES THE INITIAL INVESTMENT FOR THE DESIGN AND CONSTRUCTION, WHICH CAN FREE UP FUNDS TO BE PROGRAMED IMMEDIATELY FOR OTHER NEEDS.

AS LONG AS YOU HAVE FUNDS PROGRAMED IN THE FUTURE TO PAY THE THE AVAILABILITY PAYMENTS OR WHATEVER OTHER PAYMENTS MIGHT BE NECESSARY.

AND THEY IMPROVE LIFE CYCLE COST EFFICIENCY BECAUSE THE PRIVATE SECTOR IS GOING TO LOOK AT THE LIFE CYCLE OF THE ASSET WHICH IS WHICH COULD BE A 30 TO 40 YEAR LIFE CYCLE AND DETERMINE HOW MUCH TO PUT INTO DESIGN AND CONSTRUCTION VERSUS OPERATIONS AND MAINTENANCE AND MAKE IT THE MOST EFFICIENT AS POSSIBLE.

AND IT WILL IMPROVE MAINTENANCE PERFORMANCE OWNERS TYPICALLY FIND THAT THEIR THREE PROJECTS ARE MAINTAINED TO A HIGHER STANDARD THAN THEIR REGULAR ONES, EVEN THOUGH THEY HAVE THE SAME STANDARDS FOR THEIR OTHER ASSETS.

BUT THERE TENDS TO BE DEFERRED MAINTENANCE AND THINGS OF THAT NATURE.

AND SO, YOU KNOW, YOU'RE ASSURED THAT PROJECT MAINTENANCE, SOME OF THE CONSIDERATIONS, IT IS A LONG I SAY I'M SORRY, CHRISTINE, BECAUSE I SAID THE RUSSIAN.

BUT ONE OF THE THINGS I CAN'T STRESS ENOUGH ON THE BENEFIT SIDE, TOO, IS THAT THERE'S THAT CERTAINTY OF BUDGETING ASSOCIATED WITH SOMETHING LIKE THIS, WHERE, YOU KNOW, FOR JOHN AND TISHKA TO BE TELLING THE BOARD ABOUT EXPECTATIONS, ABOUT COST, YOU'RE NOT WORRYING ABOUT MASSIVE CHANGE ORDERS, YOU'RE NOT WORRYING ABOUT DIFFERENCE.

SUDDENLY YOU'VE GOT YOU'VE GOT BUILDINGS THAT YOU HADN'T CONTEMPLATED THAT WERE OVERBUILT OR UNDERBUILT YOU'VE GOT THAT CERTAINTY BECAUSE SOMEBODY ELSE IS BEARING THE RISK OF THAT AND YOU'RE BUDGETING FOR THOSE AVAILABILITY PAYMENTS OR PAYMENTS OVER TIME, WHICH I THINK IS MUCH MORE CERTAINTY THAN THE BUDGETING PROCESS.

SORRY. AND WHY WOULD THEY DO THAT? BECAUSE THEY'RE LOOKING FOR A PROFIT, RIGHT? SO THEY'RE GOING TO PUT A CONTINGENCY IN THEIR BID FOR THESE RISKS.

THEY'RE WILLING TO TAKE THEM.

THEY PRICE THEM. THEY PUT A CONTINGENCY IN THEIR BID.

BUT YOU STILL HAVE A FIXED COST FOR BUDGETING PURPOSES, YOU KNOW, FOR YOURSELF.

AND THAT'S WHY YOU DO THE VALUE FOR MONEY ANALYSIS TO MAKE SURE THAT YOU'RE NOT GOING TO PAY TOO MUCH, ESSENTIALLY.

RIGHT. AND SOME OTHER THINGS TO CONSIDER IS BECAUSE THERE'S A LONG TERM FUNDING COMMITMENT AND WORKING RELATIONSHIP.

IT CAUSES NECESSARY FORESIGHT.

YOU KNOW, YOU REALLY NEED TO BE ABLE TO PLAN FOR THE FUTURE.

IT'S A PARADIGM SHIFT.

IT'S IT'S SOMETHING THAT DALLAS COLLEGE HAS NOT DONE BEFORE, EMBARKED UPON BEFORE.

AND THERE IS SOME UPFRONT INVESTOR INVESTMENT ON ON GETTING THE PROJECT TO A SUFFICIENT POINT WHERE YOU CAN LET IT OUT FOR BID.

SO THERE'S THERE'S A LITTLE BIT OF THAT, BUT OF COURSE YOU'RE NOT HAVING THE DESIGN CONSTRUCTION NECESSARILY UPFRONT INVESTMENT.

OKAY. WHEN I FIRST SAW THIS AND IT WAS PRESENTED TO ME TO SAY WE GOING TO DO THIS, I THOUGHT IT WAS TOO MUCH.

IT WAS KIND OF A HEAVY LOAD.

HOWEVER, AS I TALKED TO ROB, I JUST SAID IT WAS THIS WAS NOT FOR YOU TO LEAVE HERE TODAY.

UNDERSTANDING THIS, IT WAS AN INTRODUCTION OF WETTING THE APPETITE, BECAUSE I PROMISE YOU, YOU WILL READ ARTICLES IN THE PAPER EVERY DAY FROM NOW ON WITH THE WORD P THREE PARTNERSHIPS TIMESHARE.

YOU'LL READ ABOUT IT AND IT'LL START MEANING MORE TO US BECAUSE IT DOESN'T MEAN IT'S OUR ANSWER.

IT JUST MEANS IT MAY BE ONE OF THE ANSWERS AND IT MAY BE A COMBINATION OF SEVERAL THINGS.

SO I SAID, OKAY.

BUT I WAS I WAS CONCERNED BECAUSE IT IS A VERY COMPLEX SUBJECT.

YOU KNOW, I SPENT ALMOST TWO AND A HALF YEARS STUDYING THIS WITH THE PARKLAND SITUATION.

AND STILL EVERY TIME I HEAR IT, I LEARN SOMETHING NEW.

BUT I THINK IT'S A GREAT CONCEPT.

I THINK WE HAVE A LOT OF ATTRIBUTES THAT WE'VE BEEN IMPACTED BY THE DELAY, THE FUNDING WE'VE LOST, PURCHASING POWER.

SO WE NEED TO FIND WAYS TO LEVERAGE MORE FOR LESS.

AND SO BUT ANYWAY, THANK YOU ALL.

AND YOU HAVE ONE MORE QUESTION.

THIS IS A GREAT PRESENTATION AND IT WAS A PRECIOUS WAY.

YOU MENTIONED WE HAVE IN RESPONSE TO CHARLOTTE'S QUESTION, WE HAVE MISSION FOCUS WITH RESPECT TO THE NATURE OF THIS PROJECT.

AND WE'RE A PROJECT AND SOMEWHERE DOWNTOWN WE'RE PROBABLY LOOKING AT A COMBINATION OF ACADEMIC SPACES, PARKING, HOUSING AND AN INNOVATION CENTER.

THOSE ARE THOSE ARE KIND OF THE FOUR PILLARS OF THIS, WHICH IS PROJECT WAS CONCEIVED AND IMAGINED, AND YOU GUYS HAD SOME CASE STUDIES TO GET TO.

BUT IF YOU WERE TO TAKE THOSE FOUR PILLARS OR WHATEVER YOU AND THE CHAIR COULD AGREE ON AND SORT OF, YOU KNOW, GIVE US SOME MORE CASE STUDIES AND THINGS TO THINK ABOUT AND OUR NEXT LEVEL OF LEARNING HOW TO APPROACH THIS BECAUSE IT AIN'T GOING TO BE ONE DAY ON THIS THING.

[01:20:01]

I THINK IF YOU IF YOU LOOK AT WHAT WHAT THE POSSIBILITY WILL BE IS THAT AND I'LL JUST PICK, YOU KNOW, HALF 1,000,000FT² BUILDING, BUT WE WON'T BE BUT IN MAYBE HALF OF IT.

BUT A PERSON WHO'S GOT THE OTHER HALF WILL BE INCENTIVIZED FROM THE INVESTMENT TO HELP US REDUCE OUR COST TO GET WHAT WE WANT TO DO, WHAT WE DELIVER.

AND THAT'S KIND OF WHY THAT MAKES A LOT OF SENSE, BECAUSE YOU CAN YOU CAN USE THE PROFIT OFF OF THE OTHER TO HELP GARNISH WHAT WE WANT.

SO BUT I THINK Y'ALL GARCIA HAD HER HAND UP TO, HEY, CATALINA, I'M SORRY.

WE JUST IGNORING YOU.

I FEEL LIKE THIS HAS ALL BEEN VERY.

INTERESTING. DO YOU HAVE ANY QUESTIONS OR THAT YOUR COMMENT.

NO, JUST THAT COMMENT.

I DO WANT TO SEE WHERE WE AS A BOARD DIDN'T JUST DO BY ACCLAMATION THAT WE HAVE TO GET OUT OF THAT TERRIBLE BUILDING.

BUT I'D LIKE TO SEE THE LEGALITY THAT THAT WE AGREED TO.

SO THAT'S ONE THING I WAS WORRIED ABOUT, THE LEGALITY OF THE ACTION.

BUT THIS IS FASCINATING.

OKAY. THANK YOU. YEAH, THE LEGALITY PART OF IT IS, IS THINK OF THE MCGUIRE LAW FIRM IN WASHINGTON, DC, STARTED IT ALL OUT.

IT'S WHERE IT ALL REALLY STARTED.

BUT IT'S IT DID IT DOES TAKE AND DID TAKE SOME LEGISLATIVE STATE LEGISLATIVE ACTIVITY TO MAKE PUBLIC ENTITIES TO BE ABLE TO DO THIS.

YES, MA'AM. OH, OKAY.

FOR YOU TALK ABOUT A STEERING COMMITTEE.

YEAH. ADMINISTRATION WANTED TO THINK OF THE BOARD BUYING.

AND THAT'S THAT'S JUST ONE OPTION.

IT'S JUST IT'S JUST AN EXAMPLE.

SO I THINK HOWEVER, YOU KNOW, OF COURSE DEFER TO YOU YOU ALL, YOU KNOW, MUCH MORE SCHOOLED ON HOW THE RELATIONSHIPS GO BETWEEN ADMINISTRATION, THE BOARD, THE THE STAFF.

BUT WE DO THINK THAT OBVIOUSLY ADMINISTRATION AND GOVERNING BOARD BUY IN IS NECESSARY SO THAT YOU DON'T GO DOWN THIS PATH AND GET A BUNCH OF PROPOSERS IN.

AND THEN AT THE LAST MINUTE THERE'S A YEAH, WE DON'T WE DON'T WANT TO DO THIS RIGHT.

WE DON'T WANT TO DO IT THIS WAY.

AND SO THAT'S WHERE WE SAID, YOU KNOW, SOME SOME AGENCIES OR SOME OWNERS WILL HAVE A STEERING COMMITTEE THAT'S, YOU KNOW, WITH SOME ADMINISTRATION OFFICIALS AND OTHERS WHO WILL BRIEF THE BOARD PERIODICALLY, CHECK IN WITH THE BOARD SO THAT THESE DECISIONS CAN BE MADE RELATIVELY QUICKLY.

OF COURSE, IT DEPENDS ON THE LEVEL OF THE DECISION MAKING, AND THAT IS UP TO DALLAS COLLEGE, REALLY HOW WE'RE GOING TO HAVE TO HAVE ANY DISCUSSION ABOUT ANY OF THIS WHEN WE DO OUR MEETINGS LATER THIS MONTH.

YES, MA'AM. THERE ARE ELEMENTS OF THIS.

AGAIN, KNOW SOME OF THIS. WE'RE STILL REALLY EARLY.

BUT BUT YEAH, WE'RE GOING TO TALK MORE ABOUT IT.

WELL, THE REASON WHY I'M ASKING AND THIS IS KIND OF WHAT I SEE IN MY HEAD.

THE FINANCE COMMITTEE IS JUST GOING TO BE CONCERNED WITH THE DOLLARS AND THE REVENUE OR WOULD THAT BECOME THE STEERING COMMITTEE? AND THEN THERE'S BEEN SOME QUESTIONS AND OTHER DISCUSSIONS ABOUT BOARD MEMBERS BEING A PART OF THE INTERVIEW PROCESS AND SO FORTH. DO WE WANT TO DO A STEERING COMMITTEE? AND IF WE DO, WHAT SHOULD THAT MAKEUP LOOK LIKE? THESE ARE ALL THOUGHTS THAT ARE GOING THROUGH MY HEAD AS TO WHAT LEVEL AND TO WHAT EXTENT THE BOARD WILL BE INVOLVED IN THE WHOLE PROCESS. SO BUT I'M THROWING THAT OUT THERE FOR EVERYBODY TO KIND OF THINK ABOUT IT.

WE'RE GOING TO BE DISCUSSING THIS.

OKAY. I THINK A GREAT IDEA.

AND YOU'RE RIGHT, IT'S SOMETHING THAT WE ALL HAVE IN THE PAST HAVE DONE ONE WAY AND WE'RE PROBABLY GOING TO DO IT A DIFFERENT WAY.

MAYBE NOT, BUT GOOD.

[6. Executive Session ]

THANK YOU VERY MUCH. THANK YOU VERY MUCH ALSO.

WE'VE GOT TO ADJOURN INTO EXECUTIVE SESSION AT 1134 1230 FOR THE PURPOSE OF CONSULTATION WITH

[01:25:06]

OH, YEAH.

HERE YOU ARE. WE'RE GOING TO RECONVENE THE FINANCE COMMITTEE OUT OF EXECUTIVE SESSION AT 155.

WE DON'T HAVE ANY OTHER WE DON'T HAVE ANY OTHER OTHER BUSINESS OTHER THAN MENTIONED, UNLESS THERE'S ANY

[5.1. Committee Notes a. Finance Committee Notes for May 2, 2023]

BUT WE ALSO IN OUR REGULAR MEETING, WE'LL HAVE THREE ITEMS OF CONSENT THAT WE'VE ALREADY DISCUSSED.

WELL, ONE IS THE SCHEDULED DATES INVOLVING PROPERTY TAXES, AND THE OTHER IS THE RICHLAND RICHLAND EASEMENT THAT WE'D ALREADY DISCUSSED EARLIER AND THE PEGASUS CONTRACT.

WE'D ALREADY DISCUSSED THAT EARLIER.

SO BUT ANYWAY, THAT'S ALL ON THE CONSENT.

THERE ARE NO OTHER ITEMS. THEN I WILL ADJOURN THE FINANCE COMMITTEE MEETING AT 157.

* This transcript was compiled from uncorrected Closed Captioning.