PAYING TWICE THE PRICE IN RUSH TO BUILD, LAUSD PAYS OUTSIDE CONSULTANTS MILLIONS EXTRA.

Byline: Beth Barrett Staff Writer

Skirting the civil service system, the Los Angeles Unified School District paid 663 consultants last year as much as twice what it would have cost to hire staff for its crash program to build new schools and modernize old ones, the Daily News has learned.

Despite protests from union, civil service and personnel officials, the LAUSD paid the consultants $71 million out of voter-approved bond funds.

Consultants supplied everything from $60-an-hour clerks to project managers, engineers, analysts, field supervisors, cost managers, real estate consultants, title and escrow, and relocation services as part of the massive construction program.

Jim McConnell, brought in as facilities chief executive after top management was replaced over failures that led to the Belmont Learning Center fiasco, said Wednesday that the district needed flexibility to hire specialists who could be shifted from project to project or removed entirely without going through complex procedures for hiring and firing.

``I can't do business that way,'' said McConnell, a former U.S. Navy officer. ``It is wrong-headed to think we can build a huge LAUSD bureaucracy to manage this program. I don't think we should.''

Critics charged that the facilities division already has 1,616 district staff members, and could be violating the LAUSD's competitive civil service rules among other requirements.

Joseph Paller, chairman of the LAUSD's Personnel Commission, said the commission is deeply concerned that so many consultants are being hired.

``Our mission is directly at odds with the idea of contracting out,'' Paller said. ``The whole idea is that people compete on a level playing field. It's a fairness issue.''

Paller said the system is intended to prevent favoritism in hiring. He disputed the claim that it is not flexible enough to handle project work, saying employees are hired for specified durations, such as under a government grant.

The LAUSD is effectively giving over to contractors ``the authority to hire and fire, and to tell employees what to do,'' he said.

``The civil service laws aren't respected in that situation.''

Anita Ford, the LAUSD's classified personnel director, said her department has received complaints from employees that ``consultants are being hired in place of classified employees.''

Ford said it is generally appropriate only to use consultants for less than a year.

``We have asked facilities for information on their positions. We intended to look into this,'' Ford said.

Consultants - who build in profit margins - cost up to double what staffers do, according to district documents released in response to a California Public Records request filed by the Daily News.

The consultants are being paid out of Proposition BB funds and state bond funds and will continue to be paid from the $3.35 billion Measure K funds local voters approved last Nov. 5 although state law bars paying administrators' salaries out of bond funds.

McConnell defended the practice as legal, saying bonds can be used to pay salaries of consultants assigned directly to bond-financed projects.

The program to build or expand more than 150 schools - the biggest public works project in the region and the largest school construction program in the nation - cannot succeed without them, he said.

Board member David Tokofsky said he was unconvinced that the ends justify the means.

``If they can show schools are being built, they wouldn't care if they paid someone a million dollars an hour,'' Tokofsky said.

``The spirit could be right, but the means is completely out of control. They are paying too many consultants, and paying firms to hire secretaries at twice the rate.''

Board President Caprice Young said Superintendent Roy Romer has not moved quickly enough to put district employees in all top facilities positions, saying consultants should not be setting policy nor having signature authority to spend money.

``That's my beef,'' Young said.

She said she's convinced most of the consultants are working on short- term jobs, adding consultants were primarily responsible for the district completing applications making it eligible for $900 million in state matching funds.

``The issue is getting talent and getting it fast enough,'' Young said. ``Through civil service, you hire for life.''

Among the key findings in the documents provided by the LAUSD:

--The 663 consultants made up nearly 30 percent of the Facilities Services Division's 2,279-person staff, as of Oct. 25.

--The district paid $71 million to consultants in calendar year 2002, out of a $1.5 billion fiscal 2003 operating budget, or about 4.7 percent of the total operating budget.

--More than 80 percent of the new construction program's employees are consultants, or 340 consultants out of a 423-person work force.

--The rates for data entry and other clerk consultants, and for administrative assistants, were listed at about $60 an hour - among the lowest rates paid for any of the consultants. Of 14 such jobs, all required knowledge of ``project management and scheduling systems,'' or other specialized skills, said Tom Rubin, consultant to the School Construction Bond Citizens Oversight Committee.

--Between January and November, while the district added 110 consultants to its New Construction professional staff, it added just four or five district employees.

--The State Board of Education's approval to exempt only 31 facilities positions from civil service requirements have been ``hoarded for vital top-level positions,'' leaving many midmanagement positions to be filled by consultants.

McConnell said he's ``never done the math'' on the cost of the consultants compared with district staffers, but said retirement and other benefits would have to be part of such a comparison.

He acknowledged, however, that some consultants' charges have been excessive, particularly the $60-an-hour rate for some clerical workers.

``Things like that are wrong and we should move to correct that.''

McConnell said when the building program began three years ago the LAUSD didn't have a core of proven competency in new construction, with Belmont, unfinished despite spending $175 million, as its prime legacy.

``They bought everything they needed,' McConnell said of the consultants' contracts. ``We've gotten rid of some of it (clerical and other support consultants paid high rates). I don't think it's too pervasive.''

In a Jan. 13 memo to the citizens bond oversight committee, Shaker M. Sawires, a consultant, wrote, ``There is no doubt, however, that all else equal, it is more expensive to fill a long-term position with a consultant than with an employee - consultants can be approximately twice as expensive as employees.

``Unfortunately all is not equal, which is why the District has chosen to rely heavily on consultants.''

Consultants to the bond oversight committee recommended increasing the number of staffers to get ``up to 50 percent savings,'' adding that such a move would develop an institutional memory or ``collective experience'' within the district.

``Staff will have in-depth knowledge of the original construction rather than having to learn it anew,'' Sawires wrote. ``Consulting firms move staff between projects for their employer's best interest and it is not cost-effective for the District to keep such professionals engaged once their main function is over.''

But McConnell said consultants are easily moved to fit the district's needs, and that it is easier to remove those who don't perform to standards.

``I need the best professionals in a wide range of specialties that this region and country can produce to sustain the complexity of this program,'' McConnell said. ``Where consultants are equal to the task they are worked awfully hard. If they're not equal to the task, they go home.''