Staff Present:
Mr. David W. Koch, Business Manager, Business Services Center
Ms. Irene Yamahara, Assistant Superintendent, Personnel Division - Certificated
Ms. Betty Gardin, Director, Certificated Contracting and
Processing Section
Mr. Bud Dunevant, Director, Purchasing Branch
Mr. Mark Shrager, Director, Budget Services Branch
Ms. Karen Hemingway, Branch Director, Contract and Insurance Services Branch
Mr. Kirk Rascoe, Director, Affirmative Action Program
Mr. Howard Friedman, Assistant General Counsel, Legal Services Branch
Mr. Jon Campbell, Personnel Director, Personnel Commission
Mr. Tom Killeen, Administrator, Certificated Personnel Services and Research Branch

Others Present: See attached list.

The following students from Monroe Law Government Magnet School, representing Students Against Kids Exploitation (S.A.K.E.) made a presentation and showed slides on the illegal use of child labor.

Ms. Nicole Perez
Ms. Sharon Dawson
Ms. Gabriela Vega
Ms. Vilda Gulbinas

Ms. Perez stated that the Los Angeles Unified School District has purchased soccer balls from Pakistan whether it be that the balls are the highest quality or most prudent expenditure. The Federal International Football Association (FIFA) which approves all soccer balls used for competition in the United States has announced that its FIFA label will stand for a strict code of conduct in the manufacture of these balls. This code prohibits the use of forced or bonded child labor and mandates fair wages, safe and hygienic working conditions and decent working hours. With this code the District would be assured that the balls purchased have not been stitched by the hands of children.

Ms. Perez requested that the subject motion be adopted by the Board which would require that all soccer balls bought by the Los Angeles Unified Scnool District have certification by FIFA that they have not been manufactured through child labor. It is requested that when the motion is passed it will be sent to manufacturers to encourage their acceptance of this code.

Credential Waiver Authorization

Ms. Gardin Advised That This Is A Monthly Report To The Committee That Deals With The Special Education Waiver Which Permits Teachers To Provide Required Instruction To Students Assigned To Special Education Classrooms. She Recalled That In March Of 1996 The Personnel Division Requested Approval Of The Board Of Education To Delegate The Responsibility For Waivers To The Superintendent Or His Designee Because Of The Amount Of Board And Staff Time Required To Request And Process Waivers. She Explained That The Request Was Granted; However, The Commission On Teacher Credentialing Has Rejected The Utilization Of This Process And The Matter Is Under Review By Legal Counsel.

She advised that all of the teachers do hold a Bachelor's Degree, have passed C-BEST and are in different stages of waivers.

BUDGET ADJUSTMENTS

Mr. Varon presented the following communications:

Communication No. 1 - Establishment of one Accounting Clerk II position in Accounts Payable Section.

General Fund - Regular Program - Support
Non-routine Transfer of Funds from Pending Distributions, 4509 Augmentation, LEARN in the amount of $37,977 to Classified Salaries, 2300 Office Personnel Salaries, Accounts Payable Section, $27,366 and Employee Benefits, 3900 Fringe Benefits, Accounts Payable Section, $27,366 and Employee Benefits, 3900 Fringe Benefits, Accounts Payable Section, $10,611. The on-going cost of this adjustment is $37,977.

Communication No. 2 - Establishment of Support Positions for the Standards-Based Instruction.

General Fund - Regular Progam - Support
This non-routine budget transfer will establish four teacher coordinator positions and two teacher
adviser positions needed to accomplish the outcomes in the Standard-Based Instructioin portion of Critical Funding Issues I. These positions are necessary to develop the districtwide training material, conduct the professional development sessions and coordinate the evaluation of student/teacher/school performance. Funding for these positions was approved by the Board of Education on April 15, 1996, as part of Critical Funding Issues I. From Pending Distributions, 4509 Resources Pending Distribution in the amount of $420,000 to Certificated Salaries, 1300 Supervisor Salaries (+2 Assignment, Non-School, Preparation Schedule, B & Z Basiss, Step 10) in the amount of $134,827, to 1900 Other Certificated Salaries (+4 Asssignment, Non-Classroom Preparation Schedule, B & Z Basis Step 04), $207,413, Employee Benefits, 3900 Fringe Benefits, $70,972, Books and Supplies, 4500 Other Supplies, $6,588, totalling $420,000.

Communication No. 3 - Establishment of one Educational Research Associate for the Program
Evaulation and Assessment Office.

General Fund - Regular Program - Support
This non-routine budget transfer will provide funding for an Educational Research Associate to conduct the necessary evaluations associated with the implementation of AB 922. This position will be funded out of antricipated revenues of $1,500 per ADA totalling $660,000 for the implementation of this program. This amount was part of the total for the program approved by the Board on June 3, 1996, as part of Critical Funding Issues II and is included in the 1996-97 Adjusted Final Budget. From Books and Supplies, 4501 General Supplies, $45,933 to Classified Salaries, 2301 Clerical/Office Salaries (+1 Educational Research Associate. A Basis, effective 10/7/96) $34,115, Employee Benefits, 3900 Fringe Benefits, $11,818 totalling $45,933. The ongoing cost of this adjustment is $60,960.

Communication No. 4 - Summary of Budget Adjustments for the month of June 1996. It is recommended that the transfers of funds outlined in this report within the 1995-96 budget be ratified.

REQUEST TO ESTABLISH SPECIAL IMPREST FUN
Mr. Woodfin advised that this is a request to establish a special imprest fund of $5,000 for each of the Cluster Offices overseeing the LEARN school complexes participating in the Los Angeles Annenberg Metropolitan Project (LAAMP) Challenge Grant funds to further the reform goals of the District. This will give each Cluster an additional $5,000 imprest fund because of the many calls upon the use of these funds by the schools that are in these famiilies. Mr. Woodfin explained that the grant provided for a five-year commitment of $5 million for the first year (1995-96), and not less than $4 million per year for years tw through five (1996-97 to 2000). Funds are allocated to approved LEARN families of schools.

Following a lengthy discussion by the Committee, Mr. Woodfin responded to their questions and concerns.

PATIENT PROTECTION ACT: PROPOSITION 216 AND 21
Ms. Hemingway reported that the initiatives are extremely similar to one another but there are a few different provisions, the major difference being that Proposition 2116 includes several different taxing mechanisms to be imposed on health care businesses if they do certain things such as merge or take over another company or downsize hospital facilities. The purpose behind both the initiatives , however, and the supporting organizations and the sponsors are very much the same, to enhance the quality of patient care in California.

She referred to the Office of the Legislative Analyst of the State of California who suggested there may be significant costs associated with either or both of the initiatives and they are difficult to calculate. There is some question in the Legislative Analyst material on whether or not these provisions would apply to MediCal and, if so, that would create a significant cost to the State.

Ms. Hemingway advised that the Health Bemefits Committee did not take a Committee position but decided to allow each of their member organizations to take a position of their own; UCLA is supporting 216 and SEIU and CSEA are both supporting 214. She stated that a survey of the District's four health plan vendors reveals that Blue Cross of California, CIGNA Healthcare and Maxicare have not taken a position on either Proposition and that Kaiser Permanente opposes both.

LIABILITY SELF-INSURANCE FUND ACTUARIAL STUDY

Ms. Hemingway recalled that reports on actuarial studies of the Health and Workers' Compensation Self-Insurance Funds have previously been presented to the Board of Education. She noted that studies on these funds were carried out in compliance with recently established statutory requirements for school districts to discluse unfunded liabilities connected with retiree health benefits and workers' compensation.

Ms. Hemingway observed that when the legislation requiring studies of these other funds became effective, the Business Services Division determined that although the new requirements did not apply to the Liability Fund, it would be a prudent business practice to include that fund as the subject of an actuarial study that could provide staff with useful information. The District contracted with Ernst and Young to conduct the study. The report from Ernst and Young confirms that the 1996-97 budgeted amount is adequate to cover expected losses; in fact, higher than Ernst and Young's "Expected", or lower-end estimate, and closely approximates their mid-range projects.

Ms. Layne Onufer of Ernst and Young addressed the committee and stated that, from the study, some things deserved to be monitored; (1) sexual harassment and personal injury claims have been on the rise, (2) relationship of the claim settlement expenses to the amount of losses themselves, the ratio of which has been increasing which may be related to the fact that there are more personal injury claims and claims are being litigated, or it may be because of higher attorney fees. She noited that again, it is an observation and is a trend, but may warrant looking into; on the other hand, there may be a perfectly reasonable explanation.

Ms. Onufer stated that Ernst and Young observed that in similar entities, some of the Districts considered may be more efficient than others as far as their safety or their claim settlerment practices are concerned; she recommended that this data be studied; if it is noted that one of the Districts emerged as superior, it would be worthwhile to take the practices of that particular District and apply them to the remainder of the Districts.

A lengthy discussion by the Committee followed and Ms. Onufer and Ms. Hemingway responded to their many questions and concerns.

DEFAULT OF CONTRACTOR AND DECLARATION OF NONRESPONSIBILITY - GENTOSI BROS., JEFFERSON NEW ELEMENTARY SCHOOL NO. 2

Mr. Koch advised that Gentosi Bros. failed to appear at the meeting today; however, they did fax their position to our legal adviser, Ms. Stuart Kim Gale. He called upon Mr. Leslie to give a brief overview of the situation and Ms. Gale will then advise the Committee of the material Gentosi Bros. provided. Following that, the Committee will adjourn into Closed Session.

Mr. Leslie advised that staff is recommending that Gentosi Bros. be declared in default on the Jefferson New Elementary School No. 2. He observed that the job started on May 9, 1994, and was scheduled to be completed in 450 contract days on August 1, 1995. He explained that as of June 14, 1995, when Gentosi Bros. was pulled off of the job, it was about 300 days over the contract period and only about 50% of the work has been completed. Gentosi Bros. claimed that the District and the deficiency in the plans and specifications caused them excessive delays and they submitted their impact schedule which the District found to be deficient. Mr. Leslie added that Gentosi Bros. felt they were delayed 386 days over the contract and put a claim in of approximately $447,000 against the District.

Mr. Leslie stated that after Gentosi Bros. left the job, School District attorneys met with attorneys of Gentosi Bros. to discuss the matter of Gentosi going back to work on the job. The District met an impasse on approving their delay claim as it was not sufficiently documented and the attorneys for Gentosi recommended the District get an expert to analyze the project and the District concurrred. An outside consultant was contracted by the District to examine all the contract documents and the analysis came up just opposite to the claims of Gentosi attorneys. The conclusion reached was that Gentosi was responsible for 328 days delay on the job and the District was responsible for 123 days of delay. He noted that the issue cannot be resolved and it will probably go to litigation. At this point the job is stopped and staff is asking for the default action so that the District can make a claim against the surety in order to get the school completed. The Distrrict is requesting that Gentosi Bros. be declared non-responsive for five years.

Ms. Gale, legal adviser, stated that Gentosi Bros. had faxed a letter to her office to be considered at the meeting advising the Board that a claim has been filed with the Executive Officer of the Board and they intend to pursue litigation. She advised that the Board must decide if they will default Gentosi Bros.on the contract and declare them non-responsible. That determination will be made in Closed Session and the contractor will be notified when it is going to the Board and Gentosi Bros. will have a second opportunity to address the Board at that time.

SAFETY INCENTIVE PROGRAM

Mr. Koch advised that the District has experienced a steady decline in accidents over the past three years which resulted in substantial savings in workers' compensation costs. He stated the decline is due to (1) training for employees, (2) a new claims administrator, Helmsman, and a new program (3) Safety Incentive Program to improve worker safety. He explained that the Safety Incentive Program successfully used positive incentives to reward sites which implemented the State-mandated Injury and Illness Prevention Program (IIPP).

Ms. Wong reported that the program was offered to all schools, maintenance and operations areas, bus garages and select offices. Sites were informed that they could earn $250 for implementing the IIPP, up to $100 for providing safety training to staff and up to $500 for reducing accidents. They were also informed that trophies, plaques and certificates would be awarded to sites demonstrating the best and most improved safety records.

A slide presentation was made narrated by Ms. Wong.