Part of the Bay Area News Group

A closer look at school construction bond oversight

By Theresa Harrington
Sunday, August 21st, 2011 at 4:17 pm in Education, Mt. Diablo school district.

The 2010 Measure C campaign promised voters funds would be spent to upgrade labs and classrooms, improve career technical education facilities, fix old leaky roofs and windows, make other basic repairs and provide safe places for after-school activities. This flyer, distributed in Walnut Creek, did not mention solar panels, which are projected to comprise about $88 million of the district's $348 million in bond expenditures.

I received the following e-mail last night from Terry Francke, of Californians Aware, regarding my story about Alicia Minyen, a 2010 Mt. Diablo Measure C Bond Oversight Committee member, who has had difficulties getting financial records from district officials:

“State law requires school districts not only to establish bond oversight committees but to accord them full cooperation in providing documentation of bond money spending. To treat Ms. Minyen’s requests as simply governed by the California Public Records Act is to defy the bond oversight law and invite a taxpayer suit to force the district to comply with it, if not a recall of the trustees who permit this obstructive nonsense.
Terry Francke
Californians Aware”

He included the following excerpt from the state’s Education Code Section 15278 et seq.15278, with emphasis added to pertinent portions:

“a) If a bond measure authorized pursuant to paragraph (3)of subdivision (b) of Section 1 of Article XIII A of the California Constitution and subdivision (b) of Section 18 of Article XVI of the California Constitution is approved, the governing board of the school district or community college shall establish and appoint
members to an independent citizens’ oversight committee, pursuant to Section 15282, within 60 days of the date that the governing board enters the election results on its minutes pursuant to Section 15274.

(b) The purpose of the citizens’ oversight committee shall be to inform the public concerning the expenditure of bond revenues. The citizens’ oversight committee SHALL ACTIVELY REVIEW and report on the proper expenditure of taxpayers’ money for school construction. The citizens’ oversight committee shall advise the public as to whether a school district or community college district is in compliance with the requirements of paragraph (3) of subdivision (b) of Section 1 of Article XIII A of the California Constitution. The citizens’ oversight committee shall convene to provide oversight for, but not be limited to, both of the following:

(1) Ensuring that bond revenues are expended only for the purposes described in paragraph (3) of subdivision (b) of Section 1 of Article XIII A of the California Constitution.

(2) Ensuring that, as prohibited by subparagraph (A) of paragraph (3) of subdivision (b) of Section 1 of Article XIII A of the California Constitution, no funds are used for any teacher or administrative salaries or other school operating expenses.

(c) In furtherance of its purpose, the citizens’ oversight committee may engage in any of the following activities:

(1) Receiving and reviewing copies of the annual, independent performance audit required by subparagraph (C) of paragraph (3) of subdivision (b) of Section 1 of Article XIII A of the California Constitution.

(2) Receiving and reviewing copies of the annual, independent financial audit required by subparagraph (C) of paragraph (3) of subdivision (b) of Section 1 of Article XIII A of the California Constitution.

(3) Inspecting school facilities and grounds to ensure that bond revenues are expended in compliance with the requirements of paragraph (3) of subdivision (b) of Section 1 of Article XIII A of the California Constitution.

(4) Receiving and reviewing copies of any deferred maintenance proposals or plans developed by a school district or community college district, including any reports required by Section 17584.1.

(5) Reviewing efforts by the school district or community college district to maximize bond revenues by implementing cost-saving measures, including, but not limited to, all of the following:

(A) Mechanisms designed to reduce the costs of professional fees.

(B) Mechanisms designed to reduce the costs of site preparation.

(C) Recommendations regarding the joint use of core facilities.

(D) Mechanisms designed to reduce costs by incorporating efficiencies in schoolsite design.

(E) Recommendations regarding the use of cost-effective and efficient reusable facility plans.

15280. (a) The governing board of the district shall, without expending bond funds, provide the citizens’ oversight committee with any necessary technical assistance and SHALL PROVIDE ADMINISTRATIVE ASSISTANCE IN FURTHERANCE OF ITS PURPOSE and sufficient resources to publicize the conclusions of the citizens’ oversight committee.”

Anton Jungherr, executive director and cofounder of the California League of Bond Oversight Committees, or CALBOC, told me that some districts don’t give bond oversight committees the respect they deserve.

“A lot of these districts think this is like one of their little local citizen advisory committees,” he said. “This is not that. This is an oversight committee required under the law because they got the benefit of the 55 percent vote. They could have gone with a two-thirds vote.”

In 2000, California voters approved Proposition 39, which lowered the threshhold for approval of school construction bonds from two-thirds to 55 percent, with the requirement that a citizen’s committee provide strict oversight of the spending.

But many citizens throughout the state serving on these legally required bodies do not understand their responsibilities, Jungherr said.

“They don’t know what they’re supposed to do and the districts are not helpful in telling them what they’re supposed to do,” he said. “It’s a basic conflict of interest.”

Better trained oversight committee members would provide stronger oversight, which districts are not eager to invite, he said.

“Our mission is to train some 5,000 bond oversight committee members in California,” Jungherr said. “There’s about 500 of these committees.”

His organization is conducting a statewide survey to find out how many districts are complying with Proposition 39. Some districts, he said, don’t even appoint oversight committees. Others don’t have websites or don’t post all the information they should.

“You get a great variety of understanding of these matters,” he said. “The problem is: there’s no central state agency that administers this or enforces this.”

Some oversight committees meet monthly, while others meet quarterly or annually. The minimum is one per year, he said.

I told him the 2002 Measure C Bond Oversight Committee hasn’t met since September, 2009 — even though money remained from bond proceeds.

“That’s illegal,” he said. “The committee is obligated to at a minimum issue a report until the funds are fully expended.”

After Minyen began raising questions about the 2002 Measure C audits, I noticed that no audits appeared on the district’s website for 2002, 2003 or after 2008. In response to a Public Records Act request, I received the following audits from 2002-03 and for fiscal year 2009:

No audit appeared for fiscal year 2010. I repeatedly asked district officials if there was and audit for 2010 and if not, why not?

That question was never directly answered. However, the agenda for Tuesday’s board meeting shows that the district intends to belatedly enter into a contract for the fiscal year 2010 audit of 2002 Measure C funds:

Jungherr said he serves on the West Contra Costa bond oversight committee, which meets monthly and receives 100-page reports.

“It not only shows what’s been spent, but it shows what’s been obligated,” he said. “If you issue a contract today for $100,000, what you want to know is what’s the contract amount, how much as been paid and how much has been obligated — otherwise, how could you know where you are and what your status is? That’s just normal bookkeeping.”

Jungherr said it’s also critical for districts to give oversight committees detailed information about revenues.

“You have not only the bond proceeds, but you have interest and state matching funds and developer fees,” he said. “How would you know how to manage a project if you don’t know what the total income is?”

In his opinion, Jungherr said districts have a higher duty to provide documents to members of their bond oversight commitees than to the general public, because committee members are legally charged to review such records.

An effective bond oversight committee can give credibility to efforts to pass new bond measures in the future, he said.

Minyen says the 2010 Mt. Diablo committee should meet monthly, so it can review detailed records related to bond proceeds and expenditures as they are happening. Given the size and scope of Mt. Diablo’s proposed projects, which are expected to cost $348 million and span seven years of construction, Jungherr said he agrees.

Jungherr said his organization was so impressed by Minyen’s knowledge and background that they elected her to their board of directors Aug. 12.

“We thought, because of her work in Mt. Diablo, she would be useful on statewide basis,” Jungherr said. “She is very meticulous and knowledgeable about bonds and refunding bonds.”

I also asked Jungherr whether it is important for oversight committees to follow their bylaws. He said bylaws are not legally binding according to state law, since they are approved by district trustees. However, he said a committee should strive to be in compliance with its own board-approved bylaws.

The bylaws of the Mt. Diablo oversight committee state that the group is supposed to hold an organizational meeting each July. Yet, the committee didn’t meet in July.

“Certainly it wouldn’t be a best practice to have the school board provide that in their policy and then have them not do it,” Jungherr said. “It certainly doesn’t give any credibility to the committee.”

John Ferrante, chairman of both the 2002 and 2010 committees, said he didn’t call a July meeting because all of the business that would have been conducted at such a meeting was discussed at the June meeting. When I asked him if the bylaws should be changed to reflect the committee’s practice, he said that might be a good idea.

John Parker, who is a member of both the 2002 and 2010 committees, said he has spoken to Ferrante about the need to hold another meeting of the 2002 committee. He said he recalled the 2002 committee discussing the need for another audit at its last meeting, but said the committee never met again to review it.

The state controller’s office criticized the San Joaquin Delta College in 2008 for lax bond oversight by its committee, calling it “passive, perfunctory and ineffective.”

It stated that the San Joaquin committee “apparently did not seek any information or data beyond that presented by Delta College’s staff during its quarterly meetings.”

Instead, it said the committee merely listened to staff presentations and did not engage in any other oversight activities.

“We also found that the information presented was general in nature and did not contain sufficient detail for the (committee) to conduct meaningful reviews of bond expenditures.”

The report also criticized the San Joaquin committee for failing to follow its own bylaws related to its annual report.

Garin Casaleggio, spokesman for the state controller’s office, said the controller’s office only audits districts if requested to do so by a state legislator.

Jungherr said many oversight committee members aren’t very motivated to provide strict oversight.

“In most of these districts, the school board makes the appointment,” he said. “Most of the people that get on those committees, they’re interested in lobbying for their locoal programs. Most of them don’t have any interest in bond oversight, and they have no skill in doing it, either construction skill or fiscal skill. And there’s no agency that’s training them.”

He said a San Mateo County grand jury recommended that the County Office of Education provide training.

His organization has helped to push for new legislation that would require annual performance and financial audits to be completed and submitted by March 31st for the previous fiscal year.

It also wants better enforcement of Proposition 39 violations. Right now, Jungherr said, citizens must take the district to court.

His organization would like to see legislation that imposes penalties on districts that don’t comply with the law, such as prohibiting them from spending bond money or from seeking future construction bond measures.

“To think that a private citizen has to go to court and pay the fee to enforce a consitutional and statutory requirement doesn’t make sense at all,” Jungherr said.

Minyen says she’d like to get legal clarification about expenses and revenues related to Proposition 39 projects.

According to the Smartvoter website, Proposition 39 authorized districts to seek bonds for repair, construction or replacement of school facilities and classrooms for projects evaluated by districts for safety, class size and information technology needs. Districts are prohibited from using bond funds for salaries or operating expenses.

Minyen questions whether solar panels meet these requirements, since district officials have said they are constructing the solar projects to provide general fund relief, for the express purpose of paying operating expenses.

She also questions the district’s plan to divert solar credits from the bond fund into the general fund. This goes against generally accepted accounting principles, since the credits are supposed to offset the cost of the solar panels, she said.

Jack Weir, a Contra Costa taxpayer advocate who served on the Contra Costa College District’s bond oversight committee, agrees. He said the college district left its solar rebate money in the construction fund, which lowered the cost of its project for taxpayers.

Jungherr, who is an accountant, shares this opinion, saying it’s “completely inappropriate” to transfer the solar rebates into the general fund.

“That should go to retire the bond,” he said.

Minyen also questions the legality of using bond proceeds to pay off Certificates of Participation (COPS) and leases, which she says appear to be operating expenses. In addition, she questions how COPS for landscaping and maintenance property at 2344 Bisso Lane in Concord, leased by a nonprofit public benefit corporation run by district trustees, fulfills the district’s obligation to spend bond money on safety, class size and information technology needs.

Do you believe the Legislature should adopt a law penalizing districts that fail to comply with Proposition 39?

[You can leave a response, or trackback from your own site.]

127 Responses to “A closer look at school construction bond oversight”

  1. Just J Says:

    The problem I see with adopting a law is that they can’t follow the ones they have now and the fact that they( the state) will have to have 100 or more uninformed overpaid (by tax dollars) people to oversee the law and then we end up spending more. My question is what exactly does our over paid general counsel do? (besides sit at meetings staring at the ceiling) He doesn’t do special ed stuff, he doesn’t know the law for the oversite committee, he doesn’t do much from my point of view. I could be wrong here and am willing to admit that but REALLY? I hope all this attention brings in the right people to put an end to this tax payer fraud! I would also like to point out that all of this is just 1 more reason to add to the list for CVHS to go Charter. I am so sick by all of this I can’t stand it.

  2. Theresa Harrington Says:

    Minyen has raised some interesting legal questions.
    The district appears to be relying on the fact that it mentioned solar panels, leases and COPS payments in the voter materials, so it argues those expenditures are okay.
    Minyen is saying that public disclosure doesn’t matter if the projects don’t meet the requirements of Proposition 39.
    The rebate question addresses the state’s insistence that districts abide by standard accounting practices. Mt. Diablo’s plan does not, according to Minyen.
    Minyen told me that many bond oversight committees would defer to the district’s general counsel or bond counsel regarding these matters. In her opinion, however, it’s possible that these questions can only be answered authoritatively by the state controller or the attorney general.

  3. Anon Says:

    I think the District should take all of this advice, including that of Ms. Minyen and the Contra Costa Times. The District should immediately pledge that they will take the millions of dollars per year that the solar system will save the District and divert it back to bay the bonds down sooner. Then the District can balance their budget, in an effort to fill the hole caused by diverting the dollars to pay down the bonds, by making millions of dollars worth of cuts to the general fund. They can close schools and shut down programs and over fill classrooms and stop maintaining their properties and they can credit the good work of Ms. Minyen and the Contra Costa Times for forcing the school district to make those reductions. I’m sure the parents and the community will all get behind that plan and embrace it like it was the best thing since sliced bread. Do any of you actually think about the consequences of what you are demanding or is this just a game to you all?

  4. Doctor J Says:

    @Theresa, doesn’t the district’s general counsel have an inherent conflict of interest where his/her advice might conflict with the district’s financial intersts and the Bond Oversight Committee’s function. I wonder how much the district “owes back” to the 2002 Bond and to the 2010 bond ? Why has our Board President slithered back under a rock and is in hiding ?

  5. Doctor J Says:

    Its a good thing the Board approved the $900,000 legal budget because each Board member is going to need their own lawyer. Its a good thing Pete Petersen is retired so he can pay for his own lawyer. John Ferrante can pay for his own lawyer since his actions were outside the scope of his duties as Chairperson of the “Oversight Committees”. Can you imagine the TV coverage when the FBI or California Attorney General shows up with search warrants at the Dent Center and starts to haul off computers and boxes of documents ? Film at 11.

  6. Leaky Roofs Says:

    It is also a good thing that the district has $10 million in reserves.

  7. Theresa Harrington Says:

    Anon: The Contra Costa Times isn’t giving the district any advice. This blog post is reporting on issues raised by Minyen.
    When Superintendent Steven Lawrence came to the district, he proposed a bond measure as a way to generate money for general fund operating expenses without having to get two-thirds voter approval, by building solar panels, diverting solar rebates and paying off COPS and leases.
    No one questioned this idea at the time — including the Contra Costa Times.
    Campaign materials stressed that money would be used to add technology to schools; fix old leaky roofs and windows and do other repairs; and provide safe places for supervised after-school activities like athletics and fine arts “that help keep kids on the right track and out of trouble.”
    These promises are within the parameters of Proposition 39.

  8. Number Eight Says:

    After-school activities should include the $170 bus ride back to Glenbrook.

  9. Doctor J Says:

    @Theresa #7 I thought from Alicia Minyen’s comments in your article that she questioned the solar project as NOT being proper under Prop 39 which only allowed projects that “must be spent on projects that will result in smaller class sizes and safer schools.” Solar panels only reduces the need for General Fund expenditures on electricity and this savings is not set aside to reduce class sizes, as all class sizes have now increased. As for safety, putting the solar panels on elementary playgrounds has probably created a safety hazzard with the large steel poles planted right in the middle of play areas. So I am not sure I agree with your comment that the district promises of solar are within Prop 39 limits.

  10. Theresa Harrington Says:

    You are correct that Minyen says solar panels do not appear to be within the parameters of Prop. 39.
    My comment was related to these specific items, which were touted in the campaign brochure pictured at the top of this blog post: it said money would be used to add technology to schools; fix old leaky roofs and windows and do other repairs; and provide safe places for supervised after-school activities like athletics and fine arts “that help keep kids on the right track and out of trouble.”
    That brochure didn’t mention solar projects or paying off COPS and leases.
    One possible consequence of Minyen’s questions could be that the district might consider seeking a legal opinion from the state before embarking on a plan to use bond proceeds for items that might not meet the requirements of Prop. 39.

  11. g Says:

    “Safer schools” should include security guards for the 5-6-7-8-9 year olds that will have to walk from Holbrook neighborhood up to 1.79 miles past Willow Pass Tweakerville to get to Wren Ave during the dark rainy winter months.

  12. Doctor J Says:

    Prop 39 only allows two types of projects: projects that will result in “smaller class sizes” and projects that will result in “safer schools”. I am having a hard time thinking of construction projects that will result in “smaller class sizes” unless it is the construction of additional classrooms because with reduced class sizes, you need more classrooms. If someone can think of some other kinds of construction projects that qualify under the “smaller class sizes” I would love to hear about them. As far as construction projects that result in “safer schools”, I think that is a broader topic. Obviously any repair to the facility could fall under this category or any improvement to the structural safety. Safer playgrounds, even water fountains in cafeterias, or carbon monoxide detectors, etc. Air conditioners are a stretch under “safety” but I could be persuaded. But solar panels to reduce the expenditures on electricity — I can’t buy that. Maybe if the savings was “required” to be spent to reduce class sizes — but it has not — and that would be a huge stretch and something that future boards could change. This Board still has not reversed the Gang of Five raises so I have little hope that they will ever commit to spend the savings on class size reduction.

  13. Theresa Harrington Says:

    It also allows for improved technology in schools.

  14. BGR Says:

    By technology, one would assume CLASSROOM TECH (PCs, AV, Networks, etc) not outdoor plumbing or utility infrastructure, i.e. solar panels.

  15. wait a minute Says:

    Anon #3, Sue Brothers strikes again!

    Of course she has it backwards. By exposing the illegalities of Stevie Lawrence and Co, the good work of Alice might very well save the MDUSD from the downward spiral it finds itself in.

    This is because anyone arrogant enough to repeatedly break the law should not be entrusted with the public’s money. Positive change is coming to the MDUSD and there is no stopping it now.

  16. Theresa Harrington Says:

    Minyen said the oversight committee must act in the best interests of taxpayers, not in the best interests of the district.
    Anon appears to be asking Minyen to look the other way so the district can proceed with its plan to generate revenues for the general fund using bond proceeds, without worrying about whether the projects comply with Prop. 39.
    Would that be responsible bond oversight?
    The board expects to receive an update on the solar project Tuesday:
    In addition, it may approve two more administrative appointments for Measure C — another assistant program project manager:
    And an assistant construction manager:
    The board also expects to authorize more Measure A assessments:
    Although the staff report lists many large projects funded with these proceeds, the warrants for July show $25,265.88 was spent on much smaller items, including $2,823.16 for “executive guest chairs:” (page 49).

  17. g Says:

    I believe we can now officially call Pedersen Inc. “The Dirty Dozen”.

  18. Doctor J Says:

    “Executive Guest Chairs $2,823.16” for the Solar project ? What happened to Alan’s chairs ? If Dent Center has really reduced its administrators by 40%, where is the 40% of the furniture ?

  19. Theresa Harrington Says:

    Measure A funds can be used to replace old furniture at schools. I’m wondering what school needs executive guest chairs.
    Also, it appears that $452,510 in 2002 Measure C money was spent on a water bill for the Pleasant Hill Education Center. Perhaps this is for the pool?

  20. Doctor J Says:

    I read your twitter posts. Disgusting. No ethical lawyer would advocate fraud. File the lawsuit; get the injunction. Damn the torpedos, full speed ahead.

  21. g Says:

    Which school needs executive furniture? How about a closed school? You didn’t expect Pedersen and his “all Manager” crew to sit around in that Holbrook Kindergarten classroom in old hard teacher’s chairs did you? After all, they are all Executives now! Not licensed or certified for the jobs they’re assigned to oversee, but executives none the less!

    I think there were also some nice tables, computers, copiers, laminators, whiteboards and miscellaneous office small stuff to go with the chairs. You know, all things that won’t ever show up under Pedersen’s “In House Management” expense totals.

    2004 and 2006 measure C expensed for nearly half a million dollars worth of water???? ——-

    I didn’t understand anything listed under Prop 55 expenses. Insurance? Video Surveillance, Labor Compliance? ——-

    And what is that “Martinez Community Facility District Bond” payment of $1.68Million dollars—a Refunding payment? an investment purchase???

  22. MDUSD Board Watcher Says:

    Just got in from the meeting. Really interesting in some ways and just a bunch of CYA by the Measure C Attorney and financial advisor in others.

    John Ferrante sure sat up straight in his chair when 5 members of the Grand Jury filed in to observe the proceedings.

    Gary sure looked strange receiving “visitors” up at his official position in the board room. Looked like a scene from the godfather. Some guy was taping the meeting and would pan over every time Gary received someone up to “kiss his ring” so to speak. Most of the time during the meeting he was laughing and joking with someone that would go up to see him every 2 minutes.

    Essentially, the bond attorney’s claim is that the district can do whatever they want with the proceeds from the bonds. As long as it sits in some general definition of the project list. Which includes paying off the debts of a secret district corporation no matter how old those debts are.

    Two moms on the committee tried to belittle Alicia’s questions by asking her if she was trying to destroy the district. Alicia stood her ground.

    At the end there was discussion about meeting rules. What is clear, John Ferrante is way, way over his head on running a meeting of this importance. At least we know where the “agendas” are coming from.

  23. g Says:

    Our Grand Jury generally presents findings and recommendations only. However they do have the power and the obligation to recommend charges be filed under Penal Code 914, 914.1

    I certainly hope our currently sitting Grand Jury is up to the task.

    Grand Jury: 919 (c) The grand jury shall inquire into the willful or corrupt
    misconduct in office of public officers of every description within
    the county.

  24. Theresa Harrington Says:

    The bond counsel repeatedly referred to the 2010 Measure C as a “$248 million” measure.
    She said the district isn’t legally obligated to keep its promise to maintain the tax rate of $60 per $100,000 in assessed value because that was merely a political promise.
    Although she couldn’t specifically point to any legal authority to transfer the solar credits into the general fund, she said there’s no law prohibiting it.
    She said COPS and leases aren’t general operating expenses, even though they’re paid out of the general fund. Instead, they are capital projects, so they are allowed under Prop. 39.
    Solar projects are allowed because they were disclosed in the voter materials. Minyen said she has also heard from the controller’s office that this is true.
    When Minyen raised questions about the COPS property and buildings, the bond counsel said there should be title insurance that proves the improvements exist.
    Bond counsel said the district must provide copies of information to committee members that is relevant to their duties. Yet, she didn’t pass out a copy of her Powerpoint. When I asked for a copy, she said she’d need to ask Greg Rolen if she could give it to me. When I asked if it would be posted online, she said she’d need to ask Rolen.
    She also said the attorney general’s opinion that says cash out refundings are illegal isn’t legally binding because no laws have been changed. However, she said most districts are abiding by it.
    Rolen, Bryan Richards and the superintendent didn’t attend. The room was fairly full, but not packed.
    Committee member Jenny Reik said Minyen raised some good points about the need to post things online. John Ferrante asked Reik to email her suggestions to him for items to be placed on the next agenda.
    I asked Ferrante when the 2002 committee would meet. He said he couldn’t speak to that, since he is termed out. In fact, he said, the entire committee may have termed out, so it may need to be reconstituted. He said the 2002 committee hadn’t met because “nothing was going on.”
    I’ll file a story with more details tomorrow.

  25. g Says:

    I suspect when cornered, John Ferrante may just play ‘possum with you. He has been on Bryan Richard’s Budget Advisory Committee and the School Closure Committee and ran for the Board. He knows all the rules and how the game is played!

  26. g Says:

    By Prop 39 regulations, Ferrante should have been “Termed Out” in 2006 after having served “two consecutive terms”. That didn’t stop him or others from staying on that committee through to the not-quite end! The By-laws this District wrote incorrectly states that the CHAIR may not serve more than two consecutive terms, but Prop 39 says a MEMBER may not serve more than two consecutive terms.

  27. Doctor J Says:

    Sounds like last night was just a dog and pony show, and that it was just part of the cover-up of how money has been misspent over the last ten years. From my perspective, this has now gone from Bondgate to BONDGATE. Those responsible for the misuse of taxpayer monies, including the cover-ups, need to be brought to Justice. Again, I call on the FBI, the State Attorney General, and DA Petersen to do a search warrant and investigate, and bring all the responsible individuals to Justice.

  28. Number Eight Says:

    The slick bond counsel Meredith Johnson works for Matt Juhl-Darlington & Assoc. Matt formerly was a partner for Miller Brown & Dannis, which rings some overbilling alarm bells.

    There were many appalling moments, but the worst was when Meredith said it’s politics not law, and the public will feel “you made us a promise and you’re not keeping it.” After public comment when several parents spoke movingly about the need to rebuild trust in the district, Meredith failed to reconcile how MDUSD can follow her advice for legal shenanigans and at the same time rebuild trust. They just killed the parcel tax.

    The parent representatives Faye Mettler and Susan Noack should remember they have a fiduciary duty to get this information. Alicia was explaining taxpayers are billed for a building that doesn’t exist! Like the bridge to nowhere. Meredith kept mentioning the meeting time would be over to distract Alicia, but Meredith and Jon Isom were unprepared with actual numbers such as the bond proceeds from the second issuance, and ended up giving a guesstimate.

    The other parent representative Jenny Reik spoke about the methodology for the Project List. Meredith should have presented a slide to show the all-important Project List instead of referring to the Elections Office. Where? The Committee should keep a copy of the Project List, from the election if it exists, handy during all meetings!

    The chatter from President Eberhart’s corner was disruptive to the Committee and audience, demonstrated lack of decorum during the presentation and should have been stopped. One last question, when does the MDUSD Board hold its annual meetings required for its EFFC shell corporation?

  29. Doctor J Says:

    Actually Meredith Johnson lists herself as a member of a Los Angles law firm, and even on Matt Juhl’s website lists her address as in Los Angeles rather than at Juhl’s Chico address.
    He just “associated” her so he could say he had bond experience and adds on a premium to her hourly billing that she bills him. You can imagine with the weekend spent preparing for last night’s meeting, that she will probably charge about $10,000 for her command performance last night. The district could have hired her directly, but then Matt would not have got his “cut” from his buddy Rolen.
    As for Eberhart’s rude disruption and distraction of the meeting it was all orchestrated, and all it proved was he is a high school dropout. Maybe he can explain why he lost his California contractor’s license.
    Oh, and don’t kid yourself. I would bet that Johnson and Isom knew exactly what the bond proceeds were from the second issuance, but just dodged an unfavorable question.
    As for the secret corporation apparently owned by the district, lets see the Articles of Incorporation, ALL minutes of corporate meetings, ALL share certificates, and ALL income tax returns. They should all be public records.
    I don’t think anyone was fooled by last night’s orchestrated meeting.

  30. John Q Says:

    Minyen asked if buying the performance guarantee on solar panels is an operating expense. The bond counsel could not give a definite answer. Better check how much the attorney is paid, and how much is her malpractice insurance.

  31. Number Eight Says:

    Doctor J #29,
    Matt Juhl-Darlington’s firm lists Meredith Johnson in a new LA office.
    This explains Meredith’s disregard for the public trust and parcel tax concerns that the public school parents expressed last night. She doesn’t have the background because she herself attended Harvard-Westlake, a ritzy private school.

  32. Theresa Harrington Says:

    The bond counsel also didn’t directly answer Minyen’s questions regarding the leases that were paid off. Minyen said they appeared to be for the solar panels already installed at Northgate. Yet, the public was told these would be paid from the electricty savings, Minyen said, citing previous board minutes.
    The district is now installing about $4.5 million more in solar at Northgate.

  33. Doctor J Says:

    How can the district continue to spend 2002 Meas C money when there is no legally constituted Oversight Committee ?

  34. Number Eight Says:

    In 6 words: MDUSD is too big to fail.

    Harvard-Westlake charges $30,000 tuition, and thousands more expenses and fees.

    Talk about the haves and have-nots!

  35. Doctor J Says:

    Sorry for the distraction — quake near Wash DC — first thought was Congress took a vote ! It was only 5.9 — SOP for California !!

  36. Just J Says:

    Again I ask what does the over paid Rolan do for the district? If Matt Juhl-Darrlington does everything. I have been dealing with the District legal stuff for special education for many years and have never once seen Rolans name on anything. Maybe I am just confused and he really isn’t a lawyer? :-)

  37. John Q Says:

    MDUSD is too big because they must keep Walnut Creek and Pleasant Hill for assessed valuation. Last night we heard the district’s bonding capacity is limited to 2.2% of assessed valuation. Concord has a bazillion redevelopment agencies which are not included in MDUSD’s assessed valuation. I hear Sunvalley Mall is one of them. A Times Editorial “New redevelopment agency wrong way to boost Concord growth” said the new CNWS redevelopment agency alone will redirect FIVE HUNDRED FIFTY-FIVE MILLION DOLLARS over the next 45 years, and that’s “money that otherwise would be used to help pay for local schools.”

    45 years is about the term of Measure C. Let’s find out how much bonding capacity is available to MDUSD for future school facility needs. Let’s find out if that’s the reason they selfishly refuse to let Walnut Creek and Pleasant Hill secede. Because it’s obvious MDUSD is too big.

  38. Doctor J Says:

    @JJ #36 — GR got a $27,000 raise to manage the bus system last year, and the overtime spent by staff supervising children who were not picked up on time nearly exceeded his raise. He erroneously claimed in his Grand Jury response that none of his additional responsibilities affected his legal work — hogwash. Each minute he spent on some other transportation issue and there were weekly meetings, was a minute he could not do legal work. Other than that it appears he spends his time handing out legal work to others.

  39. Dan Says:

    Can anyone identify the guy that kept going back and creating a disturbance with Gary last night? He did it many times. Also he made a grand procession as he was leaving while Alicia was trying to make important points.

    How about that older woman who came and left with him, but made sure to go up and “Kiss Gary’s ring” like a scene from some mob movie?

    I learned something about class from Gary last night. Whereas Cheryl and Linda sat with the rest of us. Gary sat up in his annointed chair and created distrubances anytime a tough question last night. What did I learn about class? GARY HAS NONE!

  40. Just J Says:

    They should pay me the $27000.00 they gave him and let me manage the transportation. I would have is ship shape in no time :-) Why have a Lawyer manage the transportation? It seems like a no brainer to me.

    Dan #39 we have known for a very long time that Gary has no class.

  41. g Says:

    I also suspect that Rolan spends quite a bit of time as the official “ghost writer” for Pedersen’s requests, presentations and proposals.

  42. MDUSDude Says:

    #39 You mentioned the other day that you were going to videotape last nights meeting and then upload it to YouTube. Any updates on that?

  43. Anon Says:

    Dr. J,

    For someone that purports to know a lot and always accuses the district of not following proper procedures, you don’t appear to have much knowledge of board policy and adherence to open meeting laws.

    Linda Mayo is the board appointed liaison to the Measure C Committee and she was seated appropriately. Unless the Committee meeting is agendized to state that the board majority will be participating, it would be unlawful for the majority of the board to be seated at the table and taking part in the discussion. Gary Eberhart was seated appropriately and would not have been seated appropriately if he had been at the table. If Cheryl Hansen was seated at the table and if she is not an appointed liaison to the Measure C Committee, she was seated unlawfully last night and she should be so notified. I plan to follow up with the district to find out if she is an appointed liaison to the Measure C Committee.

    I appreciated the information that the district provided at the meeting last night. It appeared to me that they did there best to answer the questions that were posed. It is unfortunate that people who do not agree with the district for various reasons would falsely accuse people of wrong doing and breaking laws just because they aren’t getting their way. I would expect the media that covered the meeting would accurately cover the event rather than continue a campaign of misinformation that is doing nothing more than hurting the students of the district. I guess the expectation of accurate news coverage is too much to ask of the CC Times.

  44. Theresa Harrington Says:

    Anon: I also appreciated the information that the district provided last night. That’s why I’m very surprised the bond counsel didn’t distribute her PowerPoint presentation to the committee and to the public, or post it online.
    It would be much easier to accurately report the points she made if the district would make that information available for review after the meeting.
    I have requested a copy of the PowerPoint from Greg Rolen, but haven’t yet received it.

  45. Doctor J Says:

    @Anon #43 Interesting you should address your post to me, since I didn’t comment on the seating arrangement. But please share with us the Board policy numbers so we may be educated, and the Brown Act section numbers on seating arrangements. Also, can you refer us to the Board minutes where Linda Mayo was appointed as Board liason to the 2002 Meas C Ovrsight committee, and perhaps you can also explain how she, and the last few Board Presidents [Gary, Paul, Gary] allowed the committee exceed its lawful time in office and didn’t ensure that the audits required by law were done in a timely basis. And please share with us the Board minutes where whomever was appointed as Board liason to the 2010 Measure C oversight committee. I haven’t seen any story yet on last night’s meeting, just blog comments, but as far as I know the facts stated are all accurate mixed with some opinion. BTW, you profile so much like Poseidon Paul, that I doubt the coincidence is accidental.

  46. Anon Says:

    Cheryl Hansen is the Board appointed liason to the committee. Linda Mayo has not attended the meetings previously and was the Board liason to the Measure C CUES committee.

    I am glad you are concerned with the Brown Act. Will you be following-up and notifying Linda Mayo or are those kinds of reprimands saved just for Cheryl Hansen?
    How about John Ferrante?

  47. Dan Says:

    Anon/Gary #43:

    I can verify that Cheryl Hansen was seated at the table. As can you because you were at the meeting.

    I will be posting video later this evening.

    With footage of Gary and some guy appearing to laugh and make fun of many of the public comments and points from Alicia.

    As for Cheryl, if it is truly unlawful for her to be at the table then she should be held accountable for doing so.

    John Ferrante produced and posted a woefully inadequate agenda, I think he may be in over his head.

  48. Theresa Harrington Says:

    I apologize for my comments regarding the Powerpoint. It was posted early today on the district’s website. Unfortunately, it didn’t show up on my computer, due to some sort of technical glitch.
    Thanks to the district for posting it.

  49. g Says:

    Theresa, I can’t find last night’s power point. I checked:
    and even the 2002 site,

    Can you direct us to it please.

  50. Theresa Harrington Says:

    I’m glad I’m not the only one who couldn’t see it.
    It still doesn’t show up on my desktop computer, but it does show up on my laptop on the Measure C Oversight Committee page, directly under the bylaws.
    A computer whiz in my office said the Measure C site is not set up in the standard way, which is why it’s not visible or to some.
    I’ll try to get it uploaded to docstoc and post the link.

  51. g Says:

    Oh, I also checked under “Community” on the District site and don’t see it there. Now, if they could simply decide on just one place to post this “C” shtuff… Then again, that might make it too easy.

  52. Theresa Harrington Says:

    Yes, it’s odd that the agenda wasn’t posted with the PowerPoint in one place. It should be.
    Jenny Reik said she wants to discuss requirements for posting information.

  53. Theresa Harrington Says:

    I received responses from Bryan Richards and Pete Pedersen regarding the warrant expenses I mentioned in an earlier comment (executive chairs and a water payment).

    Here’s what Pedersen said:

    “1) The warrant for the chair purchase is unrelated to Measure C. I took the liberty of calling Purchasing this morning and they indicated that this requisition came from a school site.

    2) The warrant to CCWD is toward required fees associated with the installation of a new 4″ water meter for P.H. Middle/Education Center. It has nothing to do with charges for water.The installation of a new meter is the final deferred phase of the Measure C modernization work completed in ’06 and ’07. The existing 6” water meter is located just off Oak Park Blvd on what was the old Oak Park Elementary site that now belongs to the county. The water main servicing the P.H. Midle site is located under the county owned service road adjacent to the library. This is an old transite line that breaks frequently. Repairs are difficult as access must be coordinated through he county. Originally we were hoping that the county would let us relocate the old meter on our property but this arrangement could not be worked out as the meter is oversized for our current needs. As part of the Measure C work already completed we installed new dedicated fire lines and worked with CCWD to “stub out” to a new domestic meter location on our property for the P.H. Middle site. The new meter and service line will all be located on MDUSD property.

    Originally, CCWD had quoted us a meter cost of approximately $825k for a new 6″ meter. I believe you have been given a copy of the 8/31/2009 “Program Budget Summary”. The meter cost, the installtion and the cost for the design and installation of new plumbing to connect the new meter to the school main is reflected in a $1.2M “Projected Committment” on the P.H. Education Center (Group 4) line on the Program summary.”

    Here’s what Richards said:

    “The warrant 954738 to Contra Costa Water District is not a water bill. It is the capital costs of a new 4″ water meter and service.
    The warrant 954411 to School Specialty is an order for 16 chairs for Rio Vista Elementary School for their conference room and offices from their Measure A furniture and equipment budget.”

  54. g Says:

    Nope. I’m on a laptop, I’ve hit the site 11 times since last night and still no powerpoint except for the rehashed Pedersen one from June.

    I did catch your Twitter link to your column though.

  55. Theresa Harrington Says:

    Perhaps they should ask one of their IT people to help them with the site.
    Our computer guy was somehow able to look at the “code” and he said the way it’s set up doesn’t make sense.

  56. Theresa Harrington Says:

    For those of you who can’t see the district’s Powerpoint, here’s a DocStoc link to it:

  57. Hell Freezing Over Says:

    G and Theresa – on my iPad – had to “touch” presentation link and saw the URL, selected open in a new window – can see the presentation as a PDF :

  58. Theresa Harrington Says:

    This links to the June 16 presentation.
    On my computer, a link to the Aug. 22 meeting doesn’t even show up.

  59. Wendy Lack Says:

    Whew! 55 comments and counting! Is that a record?

    One thing the bond counsel was correct about at last night’s meeting: The District’s handling of its bond programs is POLITICAL. Yes, you can sure bet that PUBLIC TRUST will be a huge issue in future Board campaigns.

    Incumbents will have an uphill battle . . . sorta like Richard Nixon trying to run for a third term post-Watergate.

    Hmmm . . . could MDUSD’s dismal performance be why private school waiting lists are longer than ever and increasing numbers of families are homeschooling? Who has time to wait for this District’s management performance to improve, when that may never happen . . . and, in the meantime, kids are deprived of the education they deserve, year and year?

    Thanks for your ongoing reporting on this important developing story.

  60. Theresa Harrington Says:

    You’re welcome.
    Here’s a snippet of video from Johnson’s opening remarks:
    (My phone was low on battery power, so I had to stop taping)

  61. g Says:

    She didn’t sell me. Even after seeing on the Powerpoint that they are refinancing again and again for Bisso Lane and Gasoline Alley 20 year old M&O, Bus lot and Grounds & Landscaping buildings and projects just doesn’t make it seem like proper expenditure of the letter of law on Prop 39 use of “school” improvement Bonds.

  62. Dan Says:

    Greetings everyone. I’m posting my videos with the help of my good friend Mt. Diablo Jester.

    So, I learned a couple things: I need a bigger battery and a tripod for next time. The video quality is poor and shaky. I will however be posting more of these low quality videos as I process them.

    But take a look at the video here and help me out with a few things:

    1. Identify the guy in the leather jacket and the woman who makes a grand entrance with him. This guy goes up and makes a big production of going up and seeing Gary and making jokes and laughing with Gary every time a tough question gets asked by Alicia or a member of the audience (he went up a total of 5 or 6 times during the meeting). Who is he?

    2. Who is the guy sitting behind Pedersen on the computer? At one point both the guy on the computer and the leather jacket guy get up leave together step outside into the other room/hallway, have a conversation and then when Alicia asks another tough question they both make another grandiose entrance into the board room. It appeared that they were purposely trying to distract the committee from the tough questions. Who is he?

    More to follow.

  63. MDUSDude Says:

    You’re kidding right? You’ve encoded 2:37 thus far and the first thing you post is some guy entering the room? The only thing making it grandiose is what seems to be your impulsive need to track him across the room, and the only thing distracting thus far is your lack of focus on the actual person speaking.

    So, did you actually film the meeting or is this just b-roll for some conspiracy project you’re working on?

  64. Dan Says:


    Hey buddy, feel free to come and videotape yourself sometime. Who is this guy? He interrupted the meeting 5 or 6 times during crucial points. Did you hear the allegations being presented by the speaker as this guy was trying to disrupt the proceedings?

    Gary is this you or the leather jacket guy?

  65. g Says:

    Dan; thanks for the tape and thanks for concentrating on the reactions (ho-hum) of Isom and Johnson. That late entrance kissy/huggy was way out of order–I’d have looked that way too–and unless that’s Gary’s long lost brother and sister he should not have gotten up to participate in the display! Looking forward to more!

  66. Alicia Minyen Says:


    #62 – The guy sitting behind Pedersen on the computer is Don (he gave me his business card). Don is a bond oversight committee member for West Contra Costa Unified School District. He told me he worked with Anton Jungherr on the same oversight committee. Anton is also the Co-Founder of the California League of Bond Oversight Committees.

  67. Theresa Harrington Says:

    Here’s another snippet from my phone, in which the bond counsel says the attorney general’s opinion is not the force of law, so there is no legal authority on the books today saying that cash out refunding is illegal:
    (Sorry, my phone battery died at the end of the video)

  68. g Says:

    Alicia, thanks for pointing out the WCCUSD Oversight Committee folks. That made me go look at just one of their meeting agenda, and the “draft” minutes of that July Meeting that are ALREADY posted.

    MDUSD from head to rattle should be embarrassed at how arrogantly and sloppily they run things!

    Who knows–maybe if our Board, Management?, Legal? and some on Oversight? didn’t act so greedy, slimy and secretive with plans and records, we wouldn’t be having these problems!

  69. Theresa Harrington Says:

    John Ferrante has continued to maintain that he can’t post “draft” minutes online, even after I pointed out to him that the board does this.
    Perhaps Jenny Reik will mention this, as part of the documents that should be posted.
    Also, at tonight’s board meeting, there was a PowerPoint presentation about the solar program. It wasn’t distributed to the public and it isn’t yet posted online. Board President Gary Eberhart asked how the information would get out to the community.
    Powerpoints should be posted BEFORE meetings, so the public can follow along.
    Bryan Richards typically posts his PowerPoints before meetings.

  70. Dan Says:


    Here is another one:

    Sorry about the production quality, I’m sure you would have done better right?

  71. Dan Says:

    John Ferrante was clearly over his head, in his ability to run a meeting of this importance.

    Here is video #2

    Let the complaints from MDUSDude commence.

  72. Theresa Harrington Says:

    John Parker told me tonight that the 2002 committee’s last meeting took place in September 2009. I said the last minutes posted online are from June 2009.
    I have contacted Pete Pedersen to see if he has minutes from September 2009.

  73. g Says:

    Nothing about a solar presentation was listed on the Agenda!

    My rights under the Brown Act to make an “informed decision” whether or not to attend, based on agendized topics has been violated.


  74. Theresa Harrington Says:

    It’s item 13.1 on the agenda, but there’s no staff report:

  75. Doctor J Says:

    Did the Board approve the MOU with MDEA on the SIG schools ? I do appreciate Gary asking staff how the public would get copies of the Powerpoints — but he has known since last week and should insist they be posted with the agendas — this is getting to be a broken record. Really what is happening is they are prepared on Tuesday afternoons — what will happen with Board meetings on Monday ? LOL

  76. John Q Says:

    We hope your job is secure. We need you as a watchdog for democracy. Although the dog reference is not literal, of course 😉 Let us know which boss to email to save your job and it will be done.

  77. Theresa Harrington Says:

    JQ: Thanks for that comment. We don’t know who will be hit by layoffs. Our Walnut Creek office is closing and remaining staff will be relocated. We should find out more information by Oct. 1.
    Any comments about the consolidation of the Contra Costa Times newspaper can be sent to Assistant Managing Editor Katherine Rowlands at
    Here is the link to the story explaining the plan:

  78. g Says:

    leave not, nor stray far,
    “Lois Lane of the Laptop”
    watching, needing you!

    :) just a little haiku for you–

  79. Doctor J Says:

    Anyone have a recap of last night’s Board Meeting, including administrative appointments ? Anyone know who the two new people on the Meas C 2010 committee are ?

  80. g Says:

    Dr J; minutes may be up sometime in late Nov. 😉

  81. Doctor J Says:

    Too funny G. Actually I can look at the agenda and see the votes, but no employees are identified.

  82. John Q Says:

    Excellent example of why we need Theresa. Everyone email Katherine Rowlands!

  83. g Says:

    Theresa, would you please call John Ferrante (or whomever) and tell them that changing the title of what WAS shown as the June 16 “Powerpoint”, and now calling it 6/16 “Minutes”, does not make it minutes — or a rose by any other name!

    Do they really think we won’t notice this stuff?

    Ask him to please post the actual Minutes!

  84. g Says:

    Alicia Minyen, I hope you and your team are still at the helm. Was there any excuse or satisfactory explanation given of how, starting in 2002 and right through to today, they legally used “easy money” (55% vote) to refund or refinance or cash out “hard money” (67% vote)?

    I’m not buying that voters should have known by the language of either 2002 or 2010 Measure that they were going to payoff or refinance the 2/3% voted debt, and then, [Yet Again] in 2011, refinance or refund the earlier refinances. Even if it could turn out to be a money saver, it just doesn’t seem legal.

  85. Doctor J Says:

    G, its pretty hard to make up minutes when you don’t have an agenda and know that you are under investigation.

  86. Alicia Minyen Says:

    Hi G #84…

    We are still at the helm, but which 2/3rd vote debt are you referring to?

    There are still many questions I have on questionable expenses that I didn’t get to ask on Monday night. I’m following up with another records request too.

    I’m still floored by the fact that our district failed to disclose their ability to charge $120 per $100k, and failed to disclose that the $60 cap was not enforceable. I’m all about full and fair disclosure of all material facts. If this isn’t illegal, laws should be changed so this kind of deceit never happens again. I wonder if the parents that helped campaign for this bond even knew about this?

    I have voted in support of school bonds my whole life until I saw the 2010 Measure C Bond. The reason I voted against 2010 Measure C was because I knew it was impossible to not raise taxes and issue an additional $348 million…and this is clearly evident by the district’s issuance of capital appreciation bonds.

    If you look at the bond prospectus for the $50 million Series A capital appreciation bonds, you will see for example, a $3 million capital appreciation bond will cost over $9.5 million to pay off. Capital appreciation bonds with 25 to 30 year terms will cost the community anywhere from 3 to 6 times the face amount of the bond…that’s just a fact.

    The cost of capital appreciation bonds is so dangerously costly to tax payers, that even some states, like the State of Michigan have banned the issuance of these type of bonds.

    Unfortunately, the bond issuance is not the purview of the Committee, except for how it pertains to underwriting and legal costs. The more complicated the bond, the higher the underwriting and legal fees.

    I will do my best to inform the public of how the bond money is being spent. And I’m inspired to lobby to have capital appreciation bonds banned in the State of California. Please write to your Assemblyman.

  87. Doctor J Says:

    @Alicia, please keep pursuing the truth and full disclosure. I am sorry that when you were giving your presentation the other night, that some did not have the courtesy nor manners to listen and be quiet.

  88. Theresa Harrington Says:

    Alicia, According to the law cited in this blog post, it is within the committee’s purview to: review efforts by the school district or community college district to maximize bond revenues by implementing cost-saving measures, “including, but not limited to” mechanisms designed to reduce the costs of professional fees…
    Since this says “not limited to,” it could be argued that you could also look at cost-savings efficiencies for taxpayers.

    The district still has not adequately responded to requests for detailed information about “soft costs” paid to the financial advisor, bond counsel, bond underwriters and tax attorneys. All the commitee was told is that $2 million had been spent as of June 16. The committee deserves to see detail on that, as well as on the total amount of the proceeds available for spending by the district.

  89. g Says:

    Alicia, by 2/3 vote I am speaking of debt incurred prior to 2000 and Prop 35 when bond measures needed a 2/3 majority to pass.

    How could they use 2002 (55% vote) series of bonds to pay any earlier bond debt for Mellow Roos, Measure A etc.? By that same token, how can they now use 2010 bonds to pay/refund the 2002 expenditures that may have been wrongly used to start with?

    Maybe I’m just confused about what they were paying with the recent Refunding Bond for $42million?

  90. Alicia Minyen Says:

    Doctor J…I was so focused on hearing the bond counsel, I didn’t notice any of the distruptions until Faye accused me of trying to bring down the district.

    Based on the lies regarding the tax assessments and capital appreciation bonds, the district has just destroyed itself…political suicide.

  91. Alicia Minyen Says:


    I think you are talking about the 1989 Measure A Community Facilities District – Mello Roos bonds and the Proposition 55 bonds.

    Actually, according to the 2002 Measure C board minutes, Proposition 55 state matching funds was used to pay debt service on 2002 Measure C. In addition, in 2008, $14 million of Prop. 55 funds were used to pay a cost overrunn in 2002 Measure C. According to the State..both transactions would be exceptions. However, I haven’t asked for records to evidence the use of Prop 55 money to pay debt service on 2002 Measure C. I’m still focusing on 2010 Measure C.

    At least the state told me there is a freeze on giving out state matching funds to schools. Other than the Prop. 55 money remaining, I don’t think MDUSD will receive any matching funds anytime soon.

  92. Alicia Minyen Says:

    Hi Theresa,

    You are right. The committee should be looking at soft costs and any contracts relating to professional service providers. Sometimes these service providers may have an imbedded expense that is not appropriate…like PR.

  93. Doctor J Says:

    I am going to pull a trick out of G’s hat and quote some California laws:

    1710. A deceit, withing the meaning of the last section, is either:
    1. The suggestion, as a fact, of that which is not true, by one who does not believe it to be true;
    2. The assertion, as a fact, of that which is not true, by one who has no reasonable ground for believing it to be true;
    3. The suppression of a fact, by one who is bound to disclose it, or who gives information of other facts which are likely to mislead for want of communication of that fact; or,
    4. A promise, made without any intention of performing it.

    1711. One who practices a deceit with intent to defraud the public, or a particular class of persons, is deemed to have intended to defraud every individual in that class, who is actually misled by the deceit.

    Sounds a lot to me like the Measure C Campaign. You can draw your own conclusions.

  94. Doctor J Says:

    Would someone please explain about this secret corporation of the District. When was it formed and why ? Who are the officers and directors ? What does it own or do ? Does it have any assets and how are they accounted for in the District books ?

  95. Alicia M. Says:

    Dr. J …it is a related non profit corp. The board of trustees are the directors. This corp was created in 1994 to be the counter party in a lease, where the district leased a 35k building that the district says is a maintenance bldg to the nonprofit and then the nonprofit leased it back to the district. Then the district sold on the open securities market fractional share interests in the rental stream evidenced by certficates. The district raised 7,760,000 in this transaction. The nonprofit was also used to obtain solar rebates from the northgate solar project installed in 2007.

  96. Doctor J Says:

    @Alicia, and who are these security investors ? Is the lease still on going ? Did the solar rebates get passed through to the district 100% ? There is something about this complicated transaction that doesn’t sound right.

  97. Alicia M. Says:

    Dr. J …I don’t have the lease yet. But you can find board minutes that say 3.9 million will be paid from rebates, energy savings, and state matching funds. In the end, Our 2010 measure paid off this lease, so I question what happened with the funding sources mentioned in the minutes.

  98. MDUSD Board Watcher Says:

    Dr. J. and Alicia,

    Ever read the book “The smartest guys in the room”?

    This book describes how Enron set up their finances and books to do what they did. These “off record” corporations that lease the property of and then lease back the identical property to the original property owner are how extensive sums of money are shifted around in a huge shell game. Essentially money laundering in a way.

    Someone is making a pretty penny off this unusual financial arrangement, and you can bet your bottom dollar it isn’t the kids and education. My guess is the bond council and the solar power contractors are laughing all the way to the bank.

    Now, I am not suggesting that Gary & CO. are “the smartest guys in the room”, we have clearly seen evidence that they couldn’t poor piss out of a boot if the directions were written on the heel. But the bond council and bond finance guy may very well be “the smartest guys in the room”.

    These “off record” (has anyone ever seen a meeting or this corporation mentioned in a board meeting or agenda) corporations should be illegal.

  99. Theresa Harrington Says:

    The district has also entered into a lease agreement with Northgate HS for its bleachers:

  100. Just J Says:

    This should absolutley be illegal. I am not sure how this could be legal with a public school district. It seems that this goes way deeper than I ever imagined. What happened to them being like a window for all to see. It seems as if they pulled the shade down.

  101. Number Eight Says:

    Alicia #90,
    Welcome to the club! Brings to mind Ibsen’s “An Enemy of the People,” proclaiming that in matters of right and wrong, the individual is superior to the multitude, which is easily lead by self-advancing demagogues.

    In that case, the townspeople should have seen the tannery contaminating their water. In this case, the bond counsel said Bond Oversight Committee duty under Ed Code 15278 is to inspect school facilities, and the BOC should take a road trip to see that Bisso Lane building.

  102. Theresa Harrington Says:

    So far, the only road trip that has been requested is to SunPower, wouldn’t be to inspect the work being done on school sites.
    The committee could also request to see the Measure C headquarters at Holbrook.

  103. Number Eight Says:

    Googled California Education Code 15278
    It says: “Inspecting school facilities and grounds to ensure that bond
    revenues are expended in compliance with the requirements of
    paragraph (3) of subdivision (b) of Section 1 of Article XIII A of
    the California Constitution.”
    Nothing about visiting a factory, but sounds like fun!

  104. Jim Says:

    Re Theresa #99, after looking at the agenda item in your link and the pdf included with it, it appears that the Board is being asked to approve a lease arrangement for the Northgate bleachers, even though the financial payments under the “lease leaseback” structure are not disclosed. The cost of the project and the capital donation from the Northgate Pride Foundation are shown, but the actual lease payments are not disclosed. How can someeone approve a lease if the lease payments are unknown? Were they ever disclosed elsewhere?

  105. g Says:

    Not only no copy of the Lease, or word of who “brokered” the lease, but no copy or reference to Bids. Did Northgate Pride handle their own Bid Process without input from MDUSD?? When did bidding occur and who else bid?

    Back on Friday, 5/20/11 Northgate Pride announced “On Tuesday, the Mt. Diablo Unified School District approved $1.5 million in funding from Measure C bonds to immediately be dispersed for a series of facilities enhancement projects at Northgate High School.

    To the Northgate community, this means compleing tthe next phase of the long-awaited sports complex. Instaling the bleachers will begin this summer.”

    However, I found no record of a 5/17 Board meeting, nor did this show up on the 5/10 agenda. I do recall seeing some reference some time ago of MDUSD splitting up some “extra” funds and giving $1.5million to each high school. I don’t recall that being Measure C “extra funds”, but maybe it was?

    I suppose if anyone can speak to the Lease/Leaseback arrangements it would be the Board Member employee of Seward Schreder Construction, since Schreder makes its living as a Lease/Leaseback company.

  106. Theresa Harrington Says:

    The high school improvement idea was approved May 10:
    It was further defined and approved June 28:
    It includes $9,000,000.00:
    Developer Fees: $636,594.00
    Proposition 55 Funds: $2,008,728.02
    2002 Measure C Funds: $2,577,653.00
    2010 Measure C Funds: $3,777,024.98

  107. Wendy Lack Says:

    At the August 24, 2011 Pleasant Hill Schools Advisory Commission meeting, the 2010 Measure C bond issue was discussed briefly. One Commissioner inquired whether the Commission can ascertain if bond funds are “fairly and equitably” distributed — i.e., whether Pleasant Hill is “getting its fair share.”

    Pleasant Hill residents deserve to have a means for objectively verifying the facts about how the bond measure specifically benefits their schools. After all, they’re paying the tab.

    Here’s the point: Besides the installation of solar panels, are Pleasant Hill schools getting ANY benefit whatsoever from the 2010 Measure C bond issue, for which PH residents are on the hook for roughly $150 million in combined principal and interest?

    I’m increasingly concerned that Pleasant Hill residents are subsidizing other District schools and, in so doing, basically getting ripped off.

    Hopefully the Commission will get the facts and report back to the community ASAP.

    Pleasant Hill residents deserve answers!

  108. g Says:

    Thanks Theresa. So, I think I get it. The District is pooling several bonds, measures, matches and whatever else, and splitting the combined $9million “Equally” among the 6 high schools. Then, since the $1.5 that Northgate is getting (which NG said was enough for bleachers in May, but apparently isn’t enough now), they are going to Lease the site to Southern so Southern can use their own money to build us some bleachers, and then we are going to pay “rent” on the “Site
    Lease and Facilities Lease” (grounds and bleachers) until they are paid off-with minor revisions-at some far off, yet to be negotiated, date uncertain, in the future.

    So Alicia, how soon do you suppose they can/will roll this Lease into a COPS refinancing too? 2012 or 2014?

  109. g Says:

    I also noted that in May they proposed to budget from Prop 55 the amount of $5,950,744. and from 2002 C and amount of $2,645,153. Plus Developer Fees $636,594. bring the budgeted amount to $9,233,491.00

    However, by 6/28 a lot changed-including the total- and Prop 55 is now only $2,008,28. and 2002 is only $2,577,653., and now 2010 Measure C that was mentioned but not specifically “budgeted” in May is taking up the slack from 55 and 2002 “C”==$3,777,025.

    So, in June they confirmed the May decision, but altered the budgeting without bringing it back for 2010 “C” specifics, approvals or revisions. Hmmm.

  110. MDUSD Board Watcher Says:


    You are on to something. I’m still trying to figure out who is benefitting from all the odd financial realtionships.

  111. Alicia M Says:

    G #108

    – The district can issue COPs on any lease/leaseback (usually its for a building and equipment). COPs are not subject to voter approval and does not get counted in the schools debt limit…so it provides a good financing source (although expensive) for struggling schools as a means to build or acquire equipment. The use of a non-profit corp. is allowed.

    The problem is COPs can be abused in that the school can use them to fund general operating expenses if they are sneaky. This happened at Richmond Unified, and they defaulted on COPs in 1991.

    Theresa had shown me the minutes for the bleachers. Seems strange, but from what I can tell the district okay’d a lease/lease back arrangement since under the Education code, in that arrangement, you do not have to seek multiple bids…it speeds up the process. Who picked the contractor? Who knows…could have been a contractor used by the district before? Common sense is to seek multiple bids to at least try to save money.

    However, if the bleachers are in fact on the 2010 Measure C’s project list. I can’t help but wonder why Northgate pride is paying anything at all?

    Or is Northgate Pride using the funds as a “pay to play” strategy to get their bleachers in now vs. later or never? Or maybe it is typical for parents to help the district pay for such things?

  112. Alicia M Says:

    Number eight – #103

    I did check out the Bisso Lane Property. I saw a four buildings…three warehouse looking structures and one building for Maintenance & Operations. The address was different from the 1994 COP lease. Hard to believe that this building cost over $6 million to build in 1994 when we were in a terrible recession…but I’m not familiar with commercial real estate.

  113. Alicia M Says:

    Jim – #104 – The bond oversight committee should get a copy of the lease. I’ll make sure to read it.

  114. Jim Says:

    Thank you, Alicia. Having worked for quite a time in commercial real estate, I can’t imagine how a board could approve a lease in the abstract, without knowing what the specific payments would be. Yet the approval language seems to give quite a bit of discretion to the people who ultimately sign it.

    BTW, I am amazed — and grateful — that someone like you got onto the Oversight Committee. I don’t know how it happened, but clearly, someone is now watching over us.

  115. 4Students Says:

    Alicia #111,
    Your last statement is correct. Northgate parents learned a long time ago that they must pay up, and hence Northgate Community Pride Foundation was born in 1999. Former Northgate Principal Martha Riley made the decision to spend previous bond money renovating the theater instead of improving the athletic field as was done at other high schools. Even the theater renovations required significant community donations.

    Northgate never had a field with lights, and homecoming games were held at DVC or other locations, which required busing the team and band. NCPF raised the funds to transform the weed patch into a all-weather track and install lights, but then was spending $20,000 every year to rent bleachers which did not have enough capacity to seat the audience safely. NCPF was fundraising to add permanent bleachers which they estimated would take another 2 years when the Measure C funds became available. The contractor is probably a parent who lowered costs with sweat equity.

    The NCPF web site shows a future project would be an Aquatics Center. Northgate has no swimming pool and students joke that it’s on the roof. In the meantime, the water polo team drives to DVC, Moraga and other places just to practice.

    NCPF was founded to benefit all the Northgate schools, including the middle and elementary schools, but the high school improvements have taken years longer than expected. There are dangerous conditions at Foothill that should be remedied. The most obvious is that classrooms have been measured at 95 degrees. Foothill a/c was on the 2002 Measure C list, then on 9/22/09 the MDUSD Board said the last of that bond was spent except an emergency reserve.

    The Bond Oversight Committee should visit Foothill classrooms on a hot day, and visit the Gym locker room where the wooden benches have been falling apart and giving students splinters. See the new benches in front of the school that were paid for entirely with parent PFA funds, and that replaced old rusted dangerous benches. You bet the PFA probably had to pay overtime to have the district install those benches.

    I support your investigation of questionable financing, but we need the district to continue these projects for our students.

  116. Alicia M Says:

    4students – Thank you for the information. My focus is on reviewing expenses. As a committee member we are responsible for insuring expenses are on projects listed. Bleachers I think qualify as playground improvements (which is disclosed on the projects list), and I hope that every high school has or will get bleachers.

  117. Alicia M Says:

    #114 – Jim – Thank you. I think terms and conditions of leases should be discussed by the board during public meetings…are you sure the lease wasn’t attached to the board agenda? I think your concern is more of a Brown Act issue.

  118. 4Students Says:

    Alicia M #116,
    Do you have a link to the project list for the rest of us? Again, thanks!

  119. Theresa Harrington Says:

    Here’s the superintendent’s “Welcome Back” message, which touts the benefits of the solar project:

  120. Flippin' Tired Says:

    Northgate isn’t the only school without a pool. Concord High and Clayton Valley High practice at Cowell Pool.

    Mt. Diablo High is getting their pool renovated – but they don’t have a water polo team or swim team.

  121. Theresa Harrington Says:

    CC Times investigative reporter Thomas Peele has written a column about the district’s response to Minyen’s requests for documents:
    Ironically, Minyen said the district paid a “credit enhancement” to receive its high credit rating. She wants to know how much this cost.
    The financial adviser didn’t mention this when he praised the district for its high credit rating. If it hadn’t paid the credit enhancement, Minyen said its rating would have been downgraded.
    She wants to know if the credit enhancement was worth the cost.

  122. 4Students Says:

    Just tried to give Alicia background about the Northgate bleachers and NCPF. The difference for Northgate is they don’t have access to a city pool and have to drive farther to practice. I’ve heard CVHS would like a theater too. And I’ve heard in the past large donors to CPHS facilities were not treated well by the principal at the time. The point is for parents and community it can be an uphill battle dealing with and even donating to this district.

  123. Alicia M Says:


    #121 – The credit enhancement should be part of soft costs. Did you get any soft cost detail yet?

  124. Alicia M Says:

    4Students –

    The only projects list I’ve had access to is found at :

    Just scroll down to the “Full Text Measure C” and you will see the projects list that was disclosed to the voter.

  125. 4Students Says:

    Alicia M #124,
    Thanks once again, and thanks to Thomas Peele!

  126. g Says:

    Must backtrack; lest we lose sight of $1.5Billion–just a reminder: The District posted just ONE sentence to invite applications for members for a 2002 Measure C Oversight Committee. However, NOWHERE does it explain, or say this is for a NEW committee, and instead very clearly and cleverly tries to dissuade applications by making it look like an already completed project by the links and information provided.

    Quote from the Ballot Measure: “Best of all, not one dime of Measure C funds can be taken by the State. All funds will be spent to improve local neighborhood schools right here in our community.”

    I’m not sure “neighborhood schools” includes that big array of solar panels at the Service Yard. (did Rio Vista get theirs yet? I also don’t think it was made clear to voters that they meant to include tech upgrades or parking lot repairs there or at anything other than at schools.

  127. Number Eight Says:

    Supt Lawrence wanted tech upgrades at Dent Center. Guess he needed upgrades to send the message about the typo on the board meeting time. How embarrassing.

Leave a Reply