Delvac Transcript
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Below is a draft transcript of the discussion at the televised Board meeting on July 14th, 1999 where the Board voted 3 to 1 to proceed with the demolition at Beverly Vista School.  Hopefully, this will help put to rest some of the misconceptions regarding this matter.  Note that "BD" refers to our attorney, Bill Delvac.

"VM" refers to Virginia Maas.  "AO" refers to Allison Okyle.  "DB" refers to Dr. Bertain.

I have highlighted portions of particular interest in green bold letters.

On a more cheerful note, click here for pictures of ceremony at which we paid tribute to Buildings A and D at Beverly Vista.

Verbatim transcript.

BD

"President Brucker, honorable members of the Board, Interim Superintendent. William Delvac of Latham and Watkins. I would like to clarify the staff report at least with regard to our advice. First, I think that it is critically important that the District understand as we have previously advised, that if the District takes any action to demolish the buildings at Beverly Vista prior to FEMA’s completion of the review required by the National Environmental Policy Act and Section 106 of the National Historic Preservation Act, then under Federal Law, FEMA funding at Beverly Vista will be permanently lost. I do not believe that it is discretionary on the part of FEMA or SHPO to approve funding if the demolition occurs prior to review and approval and that is certainly the previously stated position of FEMA and SHPO on other similar matters.

Let me just spend a minute or two about these two statues. For FEMA to approve any project, for that matter for any Federal Agency to approve any funding decision, it must comply with both the National Environmental Policy Act and Section 106 of the National Historic Preservation Act that latter statue and process, regulations require that the agency official, in this case FEMA must complete the process under Section 106 prior to approving the funding decision. Other provisions and guidelines, statues and guidelines, make it clear that funding is to be denied if demolition or other adverse alterations occur prior to completion of the process.

Also, let me tell the District what I believe FEMA and SHPO, how they, those two agencies would view the demolition at this time. The construction schedule that you have before you tonight calls for the start of construction in October. If that schedule advanced due to time savings, and of course that is certainly in the best interest of the District, demolition and new construction would not actually be required until July at the earliest a year from now. I think that FEMA and SHPO would view demolition at this time as an attempt to obviate or cut short. And indeed I believe they would assert that they would be prohibited from funding the project.

Second, the District applied for improved project status a bare month or five weeks ago on June 10, 1999 and on June 21, 1999 approximately three weeks ago, OES forwarded the application for improved project status which is to say, to change the project from the previous approval which had nothing to do with the demolition and new construction. Forwarded that application to FEMA on June 21, 1999. District was then informed that the review process had been initiated. I don’t believe that either SHPO or FEMA would view that much time has passed.

Now, with regard to the chronology certainly the issues at Beverly Vista has existed for some time, but with regard to agency’s actions of SHPO and FEMA and their requirements under Federal law, a bare 3-5 weeks have transpired while they have been reviewing these projects. Tomorrow morning, I am scheduled to have a conference call at the District’s direction, with FEMA staff and with SHPO staff, to determine what the timing and course of action for review and approval would be. I won’t know until I have that call, that conference call, what the timing will be. I think it is fair to say that the normal processing of Federal agency decisions, it certainly would not occur within a matter of days. The demolition of Building A and the demolition of Building D will be viewed under Federal regulations as an adverse affect. Therefore, FEMA and SHPO have to consult with the District to determine how to take into account that adverse affect. It’s possible that the conclusion of that process would be mitigation measures. It is possible that the conclusion would be on-going inquiry by SHPO.
We don’t know until that process is started and it was just been in the last three weeks that FEMA has been asked to initiate that process by OES

And it was this week that I asked on behalf of the District that a formal consultation process begin with FEMA and SHPO so that we can determine a course of action.

So let me just summarize. While there have been many, many months and years of effort, it is not discretionary on the part of FEMA and SHPO to approve the project if demolition occurs prior to FEMA approval. Therefore, I believe the District’s decision to demolish the buildings at this time, not places at jeopardy, not places at risk, eliminates the chances of FEMA funding at Beverly Vista school. I would also add that in addition to this legal prohibition of FEMA expenditures at Beverly Vista school, action to demolish the buildings now, prior to FEMA’s review and approval, obviously would be viewed with substantial disfavor by FEMA.

And in fact could affect FEMA’s approval and funding at the other District schools.

I’d be happy to answer questions.

If the District intends to continue to pursue Federal funding from FEMA, it is our recommendation not take action to demolish the buildings at Beverly Vista at this time.

VM

How much money are we talking about?

BD

As the District has been previously provided by its FEMA consultant on a Spreadsheet June 6, 1999. At Beverly Vista school there is currently outstanding and at risk a total of approximately $1.1 million. That has two distinct components: approximately $500,000 slightly more, SHPO, that the State historic preservation officer or SHPO has a program of funding for seismic retrofit of historic buildings. The District made applications for Buildings A, B, & D. The District recently withdrew its application for funding with regard to buildings A & D, because of the clear plans to proceed with demolition. Leaving an application for $500,000 of SHPO money for Building B. Obviously, if Buildings A & D are demolished, SHPO is not about to turn around and offer discretionary funding on building B. That is my recommendation and advice to you that they would not. If you put aside that $500,000, and by the way as we have previously advised the District, that $500,000 may have always been difficult to obtain because of the adverse effect in SHPO’s view of the demolition of Buildings A & D. So if you put that aside, there remains $610,000 of regular hazard mitigation funds and GAP funding available for Beverly Vista and we believe that all of that is permanently lost if demolition proceeds at this time.

AO

Thank you for being here this evening and for the wonderful job that you and your firm are doing on behalf of the District. And what I would first like to ask you to give everyone an understanding of why these applications are happening after so many years and why, if I was first listening, I’d be asking myself "why didn’t they do this four years ago or five years ago when the earthquake first happened?"

BD

It is an excellent question and certainly one that the District and the public should be concerned with. When the District was preparing to circulate it’s environmental impact report there was a decision made to decouple the Federal funding and the state clearance. Under the California environmental quality act, the District acts as lead agency in regard to CEQA clearance, California environmental quality act we had been preparing a joint document. When it became apparent to the District, and we advised the District on this, that FEMA was not prepared to move as quickly on the environmental assessment as the District was able to move under state law and at that time because the GAP offer had not been resolved and the FEMA appeals had not been resolved, the amount of FEMA funding looked to be much smaller, perhaps $100,000 to $200,000. The decision was made to allow the District to continue to move forward on the processes. President Brucker mentioned the District made the determination to stop the architect from working while the CEQA process went forward. In fact, I think the wisdom of that approach was borne out by the saving "B". It wasn’t known that B could be saved before that. The wisdom of having the architect wait was borne out by the Board’s decision to save B.

Subsequent to the EIR decision, it became clear that more Federal funds might be available and therefore the District reinitiated its efforts to get FEMA clearance. To get the FEMA clearance, FEMA needs to see, perhaps not all of this detail that you see before you tonight but certainly some of this detail, what is going to be built, how big, where it is going to be built. So it was the timing of the reinitiation of the architect’s work and letting that progress far enough so that conceptual plans were available to submit to FEMA, that delayed the submission of the application.

That application was made on June 10 and FEMA, as I think the District staff and most of the Board members know has worked quickly. In addition, and relative to FEMA’s timing the District asked FEMA to review all of the modernization effort for certainty and for clarity to be sure none of the FEMA funding was jeopardized by that and they have been diligently pursuing four schools at this time.

So I think in terms of their processing, this is not late, slow or long. In terms of the District’s timing, I believe the decisions that were made to decouple the CEQA review from the NEPA Federal review at the time it made tremendous sense because it allowed the District to proceed with its decision making and it allowed the architect to be reauthorized to continue work. It is only now that the Federal processes have begun.

AO

So for people who are hearing this and trying to understand this, and for me in many ways it is very confusing, but in essence to go through the EIR process, the architects had to stop working. Once the process was completed the architects could begin working. Less money appeared to be available in the beginning then it turned out to be in the end. Part of that was that SHPO had put forth new dollars that were not available previously.

BD

Somewhat less than half of the money, approximately $500,000 of the $1.1 million.

AO

Now let me ask you a question about, SHPO money. That is state money and SHPO is the office of State Historic Preservation . Is that correct?

BD

It actually is FEMA money, in a special set aside pool that SHPO has the right to designate for projects. It is indeed FEMA money. It is special hazard mitigation money. Therefore it requires Federal review as does GAP money and regular hazard mitigation money.

AO

One of the things that you do as an attorney is to give on occasion probabilities on situation and in looking at pictures. One of the things we need to do is to evaluate the cost of acquiring dollars that we may never get. And not knowing The SHPO dollars seem like the least likely for us to obtain if at all. For them to give us dollars on one building when in fact we are demolishing two buildings that they wanted us to retain. Can you give us a feeling is there any likelihood at all? Is it 1% or 10%?

BD

The question presupposes that no demolition has taken place. I believe it is difficult for SHPO to issue discretionary fund to fund Building B once Buildings A & D have been demolished. At one time it seemed that might have looked more possible but currently this does not look like a possibility.

I believe that it would not be realistic to assume there is a substantial chance of getting any of the $500,000 of SHPO money if the demolition proceeds.

AO

And to clarify for the community, the more likely money is the $500-600,000 that we will get from FEMA.

BD

That is correct.

AO

In terms of your time and costs, what kind of expense is the District looking at to continue to pursue FEMA’s $500,000 or $600,000 dollars?

BD

In terms of transaction costs, I think it very much turns on the outcome of the discussion between SHPO, FEMA and the District under Section 106. If that process can be concluded in a relatively short order, then I believe the transaction costs would not be very high.

If on the other hand a determination is made that an Environmental Impact Statement is required, and by the way, FEMA has absolutely no track record of requiring EISes from an administrative standpoint.

We are on the verge of knowing which approval path we are on. That is what initiating the consultation process will define.

I believe that we are at the very beginning in terms of FEMA and SHPO that we are getting that resolution.

AO

And I want to be sure that on our end, with regard to the EIR, there are certain mitigation that the District is to oblige by. What I would like to have certainty of, and actually, What I am looking for, Dr. Bertain, is I want to know what our chain of command will be. Bill Delvac knows what actions we need to take but someone has to execute them. I want to have the knowledge of the chain of command. Once we demolish, we cannot go in and take picures or do whatever we have to do. I have a keen interest in knowing, what the chain of command is going to be.

DB

Do you want an answer now as to how we are going to do this?

AO

In the past, a chain of command has not been presented to us. I don’t need to know now, but I need to know as we proceed. This Board needs to know who is responsible, where it starts and where it ends.

BD

If I could speak to a portion of that question, several of the mitigation measures must be carried out in order to be effective, prior to demolition. Photographic recordation, it is my understanding that that has been undertaken. Documentation of the character defining features. It is my understanding, although I have not seen any results of that, that that process is either on-going or is being completed. Salvage of those key elements at the time of demolition or immediately preceeding demolition is also required in order to be effective.

Other mitigation measures, incorporation of those elements, insuring that the design is compatible with the historic character of Beverly Vista, those measures might not in fact need to be completed prior to demolition. But indeed the Board did adopt mitigation measures, those are legally binding and must be carried out.

 

DB

I can assure the Board that PCR has indicated to us that they have completed the photographic history of the schools. All of the required mitigations have been included in the demolition documents and I believe that we are in compliance with all that needs to be done.

VM

Bill, I have several questions, with all due respect, I think the question was and the question that I have is "what are our chances of obtaining any money if we in fact do not demolish the buildings at this time and we wait a week, or a month. I don’t know if you gave us a time frame, but what are our chance of success because that will have an impact. As you said earlier, construction will not begin until October or July 2000. I can check with the Construction Advisory Commission and Dr. Bertain later regarding what is our interest in demolishing the buildings now. If we do this then you believe that we will lose our funding for the other schools?"

BD

In addition to the legal prohibition of the FEMA expenditures at the Beverly Vista school, action to demolish the buildings prior to FEMA’s review and approval obviously would be viewed with substantial disfavor by FEMA and could affect FEMA’s actions in its review and action on other funding of the other District schools.

VM

So, go back to the first question I asked. Thank you.

BD

I believe, as I said in response to Ms. Okyle’s question, I believe that it would be foolish to await the SHPO money. I rate the prospects of getting that as one where I don’t believe it is rational for the District to make its other pressing decisions based on the SHPO money. However if the buildings are not demolished we can to pursue the money with hope against hope, yes we can until it becomes too expensive. With regard to the $600,000, I think that you have to construct a decision matrix. Demolition I believe, it is my advice, leaves zero chance of getting the $600,000. Waiting a period of time to explore what the approval path is going to be for this $600,000 provided that it does not otherwise impact the schedule. It is FEMA’s record that it ultimately approve even impactful projects. There are scores and scores of other projects throughout this area that have demolished buildings and that have had impacts but they’ve run the process. I do not believe that it is FEMA’s goal to deny any funding to the District. They have in as much said that. So do I think it is a certainty that you will get the $600,000? It would be foolish for me to say that. Do I think that you have a realistic chance of getting the $600,000? Yes. Yes absolutely, you have a realistic chance of getting the $600,000.

VM

Can you put that in any kind of a percentage? Do we have a 50/50?

BD

I would assume it has to be higher than 50/50.

I think the more difficult question is whether you would get the money in a time frame that works for your other goals. I am not able to judge that for the District.

I don’t believe, given the time available for construction starts, that we are out of adequate time for processing. I believe there is adequate time to explore the process further before a demolition decision has to be made in order to keep the construction start date.

THE DISCUSSION CONTINUES….

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