Comments on: What will happen to Mt. Diablo district Measure C funds designated for closed schools?

By: Susan Laufer

Susan Laufer — Sun, 06 Mar 2011 17:35:59 +0000

El Dorado Middle School should have air conditioning installed before students arrive for school this coming September. This would be a perfect use of Measure C funds that will not be used because Glenbrook is to be closed and many of the students will be sent to El Dorado in September. The El Dorado plant is not fit for teaching or learning on hot days. This would be a big improvement and would lift everyone’s moral.

By: Jim

Jim — Tue, 01 Mar 2011 17:45:49 +0000

Thank you, Theresa. Once again, what would we do without our local paper and their reporters to keep an eye on these things? I hope every participant on these blogs has a subscription to the CC Times. We need to support local media like the Times. The broadcasters long ago abandoned this kind of coverage, and most websites, like my own, rely on traditional reporters for the news that is discussed. We would sorely miss this kind of coverage if it disappeared.

By: Theresa Harrington

Theresa Harrington — Tue, 01 Mar 2011 17:31:41 +0000

Jim, here’s the link to my previous post about Measure C campaign contributions: http://www.ibabuzz.com/onassignment/2010/08/04/late-mdusd-campaign-contributions-reveal-nearly-100000-in-donations/.
Here’s a rundown of the “Finance Team” contributions:
Stone & Youngberg (underwriters): $30,000 (including late contribution);
George K. Baum and Co., Denver, (bond underwriters): $15,000;
Matt Juhl-Darliington (bond counsel): $10,000 (including late contribution).
The district entered into contracts with all three of these firms before the Measure C election.
The Feb. 22 board-approved documents state that no money was paid in exchange for the negotiated agreement.
Longtime board watcher: I believe some of the Measure C committee members may be the same, but a new oversight committee was formed for the 2010 measure.

By: Long-time Board Watcher

Long-time Board Watcher — Tue, 01 Mar 2011 17:04:02 +0000

Is the committee that’s been overseeing the “old” Measure C now also overseeing the “new” Measure C? That could be reassuring. That group of community members has been meeting regularly for years so is knowledgeable and experienced in reviewing bond and construction management reports.

However, it looks like all the members of the “Finance Team” are different from those who assisted the district with the original Measure C and with Measure A. Don’t know what to make of that change. Matt Juhl Darlington does have a long working relationship with the district. As a lawyer in a large San Francisco law firm, he advised district staff for years, primarily in regard to Special Education law. A couple of years ago he left that firm and formed his own general practice, based in Chico.

By: Doctor J

Doctor J — Tue, 01 Mar 2011 16:54:23 +0000

@Jim & Wait: Yeah, the relationship with Rolen and the Chico attorney are cozy — the Chico attorney had no experience as bond counsel, and had to “associate” a bond counsel specially to get the referral. That means he pays her less than he is getting from MDUSD — why not just hire her directly and pay less ? Oh, its Measure C money and doesn’t come out of the General Fund. MDUSD pays out more than $600,000 in outside legal fees when it could pay much less if it employed its own attorneys and made them work 2000 billable hours like most law firms do. Instead, we gave Rolen a huge raise as part of the Gang of Five, and let him now run the disasterous bussing and maintenance operations. Plus, there are the rumors of why he is getting a divorce.

By: Wait a Minute

Wait a Minute — Tue, 01 Mar 2011 16:46:27 +0000

Jim, Negotiations held with just one party huh.

Beginning to sound alot like Lawrence’s meetings at his house, in bars, and at the golf course (all expenses paid) with Chevron regarding a no-bid contract for the Solar.

Meanwhile a MDUSD board member (Sherry Whitmarsh) works for Chevron!!! Bring on the Grand Jury.

Apparently the bond counsel from Chico are good buddies with Greg Rolen and Lawrence. I’m sure there are plenty of alternatives in a region as large as the Bay Area afterall.

More conflicts of interest no doubt.

By: Jim

Jim — Tue, 01 Mar 2011 16:23:00 +0000

Theresa: Can you tell us which entities on the “Finance Team” were also contributors to the Measure C campaign? (I know you published a list of contributors, but I can’t seem to find it in your Blog.) I recall that Stone & Youngberg, one of the co-lead underwriters, was on that contributor list. (Fortunately, as Gary Eberhart has assured us, there is no conflict of interest at MDUSD between contributors and vendors, even when that much money is sloshing around.)

Also odd that they went all the way to Chico, CA to find bond counsel.

Now that the bond issuance is regarded as “too complex” to attract competitive bids, MDUSD is doing a “negotiated” deal, where the negotiation is held with just one party. Some negotiation! Also, one wonders how well the bonds will sell in the market, when the deal is “too complex” even for financial institutions to understand and bid on. Will investors be able to understand it? The fear, of course, if investors truly understand the bond, is that they won’t want to lend money to MDUSD for 42 years, at least at the originally projected rate. I’m sure they can find investors if the rate is high enough — and ARRA let’s them go all the way up to 12%!!

By: 4Students

4Students — Tue, 01 Mar 2011 15:44:37 +0000

Thank you Theresa – I’ll be checking the Measure C website on March 4!

By: Theresa Harrington

Theresa Harrington — Tue, 01 Mar 2011 02:46:11 +0000

I just received this information in an e-mail from Pete Pedersen:

“The last Citizens Bond Oversight Committee meeting took place on December 16, 2010. That meeting was preceded by meetings on September 6,2010 and August 12, 2010. The next meeting is scheduled for March 17, 2011 at 7:00 PM in the Board Room.”

He said minutes haven’t been posted online, but he hopes the Measure C website can be updated “as early as Friday, March 4.”

By: Theresa Harrington

Theresa Harrington — Tue, 01 Mar 2011 02:35:57 +0000

No, I haven’t yet been able to find out yet when the next meeting will be held. The “Measure C” tab on the district’s website links to various planned projects: http://169.199.90.240/.
Last Tuesday, the board approved the issuance of $11 million more in bond funding: http://esbpublic.mdusd.k12.ca.us/public_itemview.aspx?ItemId=3640&mtgId=298.
According to the resolution, the board has determined that the bond sale is so complex that it has agreed to a “negotiated” deal (instead of a competitive process) and will pay 1.75 percent of the principal as “costs of issuance” through a contract with its “Finance Team”‘ of Stone & Youngberg LLC and George K. Baum & Company, as underwriters, Isom Advisors, a Division of Urban Futures Incorporated, Walnut Creek, California, as Financial Advisor, the
law firm of Matt Juhl Darlington & Associates, Chico, California, as Bond Counsel and Disclosure Counsel to the District and Jones Hall, a Professional Law Corporation, as Special Tax Counsel to the District. “An Authorized Officer is hereby authorized to execute a legal services agreement with members of the finance team,” the resolutions states.
The terms of the bonds shall not exceed the maximum rate permitted by law, or in the case of taxable bonds described in ARRA, at rates not to exceed 12.0% per annum … through a date no later than 40 years after the date of issuance of the Bonds….”
Also according to the board-approved document, the proceeds from the new sale are to be used for “to construct new classrooms at
College Park High School and Concord High School, to renovate the swimming pools at College Park High School and Mt. Diablo High School and to undertake repairs to the multi-use facilities at certain
District elementary schools.
[In addition, the District intends to deposit a portion of the proceeds of the Series D Bonds into the Debt Service Fund to pay a portion of the interest on the Bonds through _______, 2011.]”
Weren’t these swimming pool renovations planned before the 2010 Measure C election?
Before the new issuance, the district had issued about $110 million in bonds, leaving about $238 million. It anticipated paying about $237 in debt service for the initial bonds.
The district is projecting that it will spend $300.2 million in 2010-11, or nearly $31.8 million MORE than its adopted budget of $268.4 million, according to page 28 of the “Preliminary Official Statement.”
For no apparent reason, this portion of the document is underlined: “The Preliminary Official Statement did not and the Official Statement does not as of its date (excluding therefrom information relating to The Depository Trust Company, its book-entry system, and information provided by the Underwriter, the
County or County officers) contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading…”
The document states that bonds will not be sold at interest rates that exceed those in “Exhibit A.” Unfortunately, Exhibit A has a blank space where the interest rate should go. In fact, none of the pertinent information is filled in.