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Mt. Diablo and Poway districts provide cautionary tales for school districts seeking to issue Capital Appreciation Bonds

By Theresa Harrington
Friday, November 30th, 2012 at 7:44 pm in Education, Mt. Diablo school district, West Contra Costa school district.

Alarm bells are ringing throughout the state over the shockingly high costs taxpayers in the Poway district in Southern California are paying to finance $105 million in school construction bonds: $1 billion through 2051.

A recent Los Angeles Times analysis highlighted a growing controversy over the use of capital appreciation bonds, known as CABs, to finance school construction. In contrast to more traditional current interest bonds, CABs delay repayment for years or even decades, resulting in much higher interest and total costs to homeowners.

These concerns are not new in Contra Costa County, where many Mt. Diablo district residents have been alarmed about the potentially high costs trustees set them up for when they placed a $348 million bond measure on the June, 2010 ballot.

Poway provides a cautionary tale for trustees and district officials who may place a higher value on immediate school upgrades than on taxpayers’ pocketbooks.

The Mt. Diablo district provides a similar cautionary tale for district officials and boards who may be inclined to rely so heavily on bond campaign consultants, underwriters, financial advisers and their legal counsel that they forget to include the public in their decision-making.

Like Poway, Mt. Diablo officials promised voters that their tax rates wouldn’t increase over what they were already paying on a previous bond. But, in Mt. Diablo’s case, district officials failed to inform voters in a campaign poll — and at the board meeting where trustees voted to place their $348 million bond measure on the ballot — that the trade off for keeping the tax rate low could cost taxpayers as much as $1.8 billion over 40 years.

In fact, the board didn’t publicly discuss its financing plan at all. Instead, the superintendent and a few trustees met with campaign consultants, a financial adviser and bond underwriters (who contributed to the campaign) to hatch a plan they apparently figured no one would question.

It wasn’t until the Contra Costa Times’ editorial board asked to see a spreadsheet outlining the repayment plan that the potential exorbitant costs came to light. By that time, it was too late to change the way the bond was structured.

In 2010, the district issued nearly $3 million in CABs, with a repayment cost of about $9.7 million over 11.9 years, or about 3.2 times the amount issued. Then in 2010, the district issued $943,582 worth of CABs with better repayment terms — about twice the amount issued, or $1.8 million over 7.3 years.

Residents who had been watching closely — including members of local taxpayer groups — rose up to put the brakes on future CABs, which they feared could have much worse terms. So, they asked the board to reverse itself, increase tax rates and agree to issue only current interest bonds in the future.

This board was in a tough spot — essentially damned if it did and damned if it didn’t. If it broke its promise to voters, it would lower taxpayers costs. But, it could suffer political backlash from breaching the public’s trust regarding the tax rate.

Trustees could have avoided this dilemma if they had openly discussed the bond financing in the first place.

In a split vote, the board agreed to go back on its word, saying the tax rate extension had been a political promise, which wasn’t legally binding.

When the November board elections rolled around, one longtime incumbent decided to step down. The other incumbent, Board President Sherry Whitmarsh, was soundly defeated by two challengers.

Charles Ramsey, board president in the West Contra Costa district, said it’s possible the Mt. Diablo board’s flip-flop cost Whitmarsh the election. Although West Contra Costa has also issued two CABs, Ramsey distinguishes his district from Mt. Diablo and Poway, saying his board never promised to not to increase tax rates when they went out for new bond measures.

Instead, he said, West Contra Costa voters have been willing to pay higher tax rates, which will enable the district not to issue any more CABs in the future. He also pointed out that the district’s most recent bond campaign didn’t accept any money from bond underwriters or financial advisers.

“How many districts can say that?” he asked.

Here’s a Contra Costa Times editorial about the need for transparency in these types of deals:

Here’s a link to our searchable database, which shows the seven Contra Costa County districts that have outstanding CABs:

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47 Responses to “Mt. Diablo and Poway districts provide cautionary tales for school districts seeking to issue Capital Appreciation Bonds”

  1. Alicia Says:

    In addition to $3 million in CABs, Mt. Diablo sold an additional $47 million in CABs that defer payments until 2022. The $47 million in CABs are not as costly since the payment schedule “converts” to conventional paydowns after 2022. See the Official Bond Statement at

    The CABs sold at Mt. Diablo were a blessing in disguise. They caught the attention of Contra Costa Times, and some very smart parents in our district who steered the direction of Measure C’s proposed $1.87 billion CAB to a less costly financing method. Further, this CAB deal caught the attention of the California League of Bond Oversight Committees (CalBOC). The movement to ban them via legislative efforts was first intiated by CalBOC, Howard Jarvis Tax Payers Association, and Senator Wyland during the 2011/2012 legislative year. (See Wyland’s Senate Bill 1205 introduced February 22, 2012). Poway Unified and Oceanside Unified were the poster child for Senate Bill 1205, which unfortunately was not heard since it required additional amending to address CABs under the government code 53508.

    Although Senate Bill 1205 did not move forward, CalBOC’s continued efforts to inform CBOCs and taxpayer associations across this State ultimately led to national media attention. All this new media attention is now leading to CAB reform for the 2012/2013 legislative year.

    Thank you Theresa and the Contra Costa Times for reporting on the 2010 Measure C!

  2. Doctor J Says:

    Thank you Alicia for your tireless efforts. Did you ever get reimbursed for your document costs ? Maybe with a new board its time to seek reimbursement again.

  3. Theresa Harrington Says:

    Alicia, Thanks for this update regarding legislation. Even WCCUSD Board President Charles Ramsey admits that many trustees don’t know about or understand CABs. They rely heavily on their campaign consultants, financial advisers and bond underwriters to figure out how to structure their bond sales. He said he has tried to educate himself about CABs during the past four years and he has even held information sessions for other trustees, which were attended by MDUSD Trustee Gary Eberhart.
    It is clear that MDUSD’s trustees, superintendent, financial adviser and underwriters all underestimated the sophistication of you and the other district parents who objected to the CABs. As more people become educated about these deals, it will be harder for districts to sneak them past the public and will force trustees and district officials to be more transparent and accountable.

  4. Doctor J Says:

    From the FCMAT “Education Headlines” this morning, for every administration in California to read, a link to the story: “Mt. Diablo school district provides lesson in need for transparency
    The Mt. Diablo district provides a cautionary tale for district officials and boards who may be inclined to rely so heavily on bond campaign consultants, underwriters, financial advisers and their legal counsel that they forget to include the public in their decision-making.”

  5. Alicia Says:

    Theresa…While I partially agree with Trustee Ramsey that some Trustees do not fully understand CABs, Trustees knowingly agree to the sale of CABs to circumvent laws designed to protect taxpayers, i.e. the tax rate limit or to meet a no tax increase ballot promise. Trustees typically give their advisors discretionary authority to construct the payment terms to meet the no tax increase objective while not requiring the Trustees to review or approve preliminary or final terms. Therefore, the public and the board are left in the dark not knowing that a horrific CAB has just been forced on the community. Trustees have an obligation to thoroughly perform due diligence over bond deals, especially those that result in a tax increase. To waive this responsibility by giving advisors full discretion to carry out deals without board approval is a dereliction of duty.

  6. Theresa Harrington Says:

    Dr. J: I’m glad that FCMAT posted that.
    However, FCMAT’s MDUSD Transportation Review provides a cautionary tale for districts that may be inclined to secretly provide information to an outside agency, then ask that agency to regurgitate it in its findings and recommendations, giving the appearance that they were arrived at independently. Luckily, FCMAT appropriately disclosed that it came up with the special education “clustering” idea (picking up students at bus stops instead of providing door-to-door service) from a third party analysis that it received from the district. It’s unfortunate that FCMAT’s lawyers did not back up the assertions by Gillaspie and a higher ranking FMCAT official that the third party analysis did not appear to be legally protected. Instead, MDUSD General Counsel Greg Rolen was able to persuade FCMAT to protect the district’s document. As I have previously pointed out, the board has the authority to override Rolen on that, in the interest of transparency.
    Both FCMAT and MDUSD also underestimated the sophistication of the CAC, which has steadfastly asked to see facts to backup general assertions made in the report. It was after this continued pressure that both the district and FCMAT were forced to admit that practices they originally attributed to “most districts” really only applied to a handful out of 1,000 statewide.
    The lesson that MDUSD (and then FCMAT) seemed to have trouble understanding is: when the public doesn’t trust you, the public is not willing to take you at your word.

    Alicia: As you may recall, former Trustee Dick Allen said he didn’t even realize the board had two choices for financing Measure C — hiking the tax rate for lower overall costs or keeping the tax rate the same, but at higher long-term costs to taxpayers. Trustee Gary Eberhart said any trustee who didn’t know that should have asked more questions before the vote. But, Eberhart wasn’t suggesting that other trustees ask their questions in public. Instead, he was suggesting that trustees should have private conversations with the superintendent, financial adviser, legal counsel and bond underwriters. No trustees asked any questions about the bond financing in public and no consultants or staff presented any clues to reveal the fact that trustees had the power to decide between two options. Instead, the superintendent and a few trustees made that decision behind closed doors, based on their assumption that voters could be duped into agreeing to pass the bond, as long as the district promised not to increase the tax rate.

  7. Doctor J Says:

    The more California learns about Steven Lawrence and how he operates MDUSD, the less chance he has to get a new job. Gotta love the FCMAT “Education Headlines” — keep up the good work. Hey TH, you had two articles in there today ! Kudos.

  8. Jim Says:

    So Theresa, are you saying that many trustees don’t understand the fundamental characteristic of CABs — that if you delay paying interest for 20 years, you end up paying MORE interest overall? I mean, come on — how sophisticated does one have to be to understand something as simple as that?

    Once again, the question is, “Are they Dumb? Or Duplicitous?” In either case, do you really want such people in charge of YOUR child’s education? And given how widespread this “misunderstanding” has been across CA, doesn’t it call into question whether these huge multimillion dollar school monopolies make sense, if they must be run by elected committees of such mediocre people? Think about it. Would you want these clowns running your local hospital? Your supermarket? Your dry cleaner? Your car dealership? No, no, no. Of course, not. We wouldn’t them in charge of any of those things. But they are good enough to run our schools, evidently.

  9. Theresa Harrington Says:

    Jim, Yes. And furthermore, I’m saying that many trustees may not have even realized that they were delaying paying interest for 20 years, because they never asked to see the spreadsheets showing the repayment plans.
    When I asked MDUSD Board President Sherry Whitmarsh for a comment about the district’s use of CAB’s, she said she didn’t have much to say on the subject.
    “I think that they were just another way of doing a bond,” she said. “They had different criteria, so it was recommended and we went with them.”
    As you may recall, the district’s campaign consultant claimed that voters were asked in a poll whether they would prefer to keep tax rates low, but pay more overall — or raise tax rates, but pay less over the long run. Eberhart and Whitmarsh repeated these claims.
    But, when I asked to see the poll results showing that voters were given this choice, General Counsel Greg Rolen denied my PRA, saying it wasn’t in the public’s best interests to release the results. After I wrote a front page story about his denial — which triggered disbelief from the public (who thought it WAS in their best interests to see the results) — the campaign committee released them.
    And — lo and behold — there was NO information in the poll that revealed that the tax rate extension would result in delaying the interest payments for 20 years.
    Instead, voters were merely asked if they would support Measure C if their tax rates weren’t increased. The campaign consultants withheld the other half of the equation.
    And, either Eberhart and Whitmarsh were duped by their own campaign consultant or they were repeating his message in the hopes that no one would actually want to see the poll results that backed up their claims.
    When I called them on it, they backtracked and said they never actually saw the poll results.
    Obviously, it’s up to the public to decide whether to believe that or not.
    Again, the message to the district is clear: Don’t try to fool the public by telling them things you can’t back up with solid facts. The only question now is: Will the new board get this message?

    As an interesting aside, the final election results show that Whitmarsh received only one vote more than fourth-place finisher Debra Mason:

  10. Alicia Says:

    Trustees should refer to case law, “Golden Gate Bridge v. Filmer, 217 Cal. 754, 760761 (1933)”, which states, “(public officials issuing bonds on behalf of a local agency are presumed to act in good faith and to sell bonds on best terms obtainable).” This case is cited on page 7 of Attorney General Opinion 06-1102.

    How can trustees be acting in good faith when approving CABs?

  11. Alicia Says:

    @6 Theresa – Dick Allen’s account of not knowing all the Measure C financing options appears consistent with the Grand Jury’s findings regarding the District’s failure to fully discuss the Measure C’s financing in public sesssion.

  12. Doctor J Says:

    BTW, did MDUSD ever respond to the Grand Jury ? I don’t recall seeing any public Board discussion nor closed session references about responding. If there was a response, who authorized it ?

  13. Alicia Says:

    @Dr. J. Grand Jury Report 1208 – School Bond Oversight Committees Raising the Bar required responses from MDUSD and 8 other districts. MDUSD has responded, but I never saw this on any school board meeting agenda. Also, this report was supposed to be provided to the Measure C Chair of the CBOC, and I didn’t see this report being discussed in a CBOC meeting. You can find MDUSD’s response to report 1208 on the website.

  14. Theresa Harrington Says:

    Greg Rolen responded to the Grand Jury’s finding that the board didn’t discuss the bond financing. He directly contradicted the finding and asserted that the board did discuss it. However, I know this is not true, since I was there. The minutes also don’t reflect any such discussion. But, since Rolen never brought his response before the board for a public discussion, he was able to assert whatever he wanted, with no repercussions.
    The video from that meeting was taken down by Eberhart and the district didn’t post audio of its meetings back then. So, the public is left wondering: Who is right — the Grand Jury or Rolen?
    Here’s my blog post with Rolen’s Grand Jury response and followup in the comments section:

    Unlike more transparent districts, Rolen NEVER brings Grand Jury reports before the board for public discussion. Instead, he sends a response himself. Trustee Cheryl Hansen said she got a copy of his most recent Grand Jury responses, but I don’t believe there was any board discussion about them in closed session either. Therefore, they are not even board-approved, despite the fact that he is responding on behalf of the board.

    If Brian Lawrence and Barbara Oaks truly want to usher in a new era of transparency in the district, they should require Rolen to bring all Grand Jury reports and his draft responses before the board for public discussion and board approval and/or changes, before the responses are finalized and sent to the Grand Jury.

  15. Anon Says:

    @TH #14

    “Who is right — the Grand Jury or Rolen?”

    Hmmmmmmmm, that is hard one!!

  16. Doctor J Says:

    Greg Rolen falsely claims on Aug 28, 2012 letter to CCC Grand Jury that the Board of Education filed its response to Report 1208. No agenda and no minutes of the Board of Education from the time of the report to Aug 28 authorizes Rolen to respond. His act alone should be investigated.

  17. Wait a Minute Says:

    The duplicity and dishonesty of Greg Rolen, Stevie Lawrence and certain board members and district staff regarding these issues is obvious to anyone who pays attention here.

    Its obvious that they pre-decided what to do and then manipulated the process to get it there way. The public was never told the truth or the facts by these so-called public “leaders”

    In fact, they actively lied to the public and it was only because of the CC Times (Theresa and colleagues), Alicia and other honest people that the truth came out and for that we all owe a big debt of gratitude.

  18. Wait a Minute Says:

    If Brian Lawrence and Barbara Oaks want to usher in a new era they need to start by ushering out the dishonest people like Greg Rolen IMO.

    Dr J@16,
    Greg Rolen should have his law license investigated by the State Bar based on a well-written complaint about ALL of his unethical and dishonest acts while in the “service” of the MDUSD.

  19. Theresa Harrington Says:

    Here is the link to the district’s response to the BOC grand jury report:

    Dr. J: There are two different Grand Jury reports being discussed in the comments section of this blog post. Alicia mentioned the Grand Jury report that I cited, which addressed whether or not the board discussed the bond financing before placing it on the ballot. My point was that Rolen didn’t bring that Grand Jury response before the board either and that his response was inaccurate.

    You are correct that the Aug. 28 response was also never brought before the board. Rolen’s assertion that “the Governing Board of the Mt. Diablo Unified School District files this response” is misleading. Yet, he shows concern about misleading the public in his response to finding 2, stating: “…overly specific language can be misleading to the electorate.”

    Overly specific language in his response (claiming that the board filed it) is misleading to the Grand Jury and to the public.

  20. Doctor J Says:

    @TH#14 — The Grand Jury reponse by Rolen, falsely claiming it was on behalf of the board, was August 28 — way past your cited post and the last comment. Not sure of your point.

  21. Theresa Harrington Says:

    Speaking of lessons other districts can learn from MDUSD’s lack of transparency, I see that the district has quietly issued its draft EIR for the YVHS stadium lighting project:

    Responses are due to the initial report by Dec. 21:

    Unlike the Northgate stadium lighting project, the board has not held any public meetings to discuss details of this project and listen to public comments on it. Yet, I have been hearing from neighbors that they are feeling like the district is ramrodding this through, without heeding their concerns.

    Again, if Brian Lawrence and Barbara Oaks plan to follow through on their promises to be responsive, it would behoove them to request that this project be discussed openly at a board meeting, so everyone in the community knows what is planned and can let trustees know how they feel about it in a public forum.

  22. Doctor J Says:

    I hope the new Board sets a new code of transparecny that has not existed in MDUSD for decades.

  23. Doctor J Says:

    Cheryle Hansen for Board President. Linda Mayon and her secret communications with the staff are history !

  24. Theresa Harrington Says:

    I have sent an email to Rolen asking who authorized him to “file” the Grand Jury report on behalf of the board. I have also asked for signed copies of his contract, along with those for the superintendent, Bryan Richards, Rose Lock and Julie Braun-Martin.
    It’s unclear whether Brian Lawrence and Barbara Oaks could sign the contracts, since they were not part of the board that approved them.

  25. Doctor J Says:

    @TH#24 I hope Rolen shows us the “authorization”. Otherwsie, we can consider him the ultimate “liar”, just like Diane did in her “book review”.

  26. Theresa Harrington Says:

    Here is a KQED blog that includes an interview with a John Swett adviser who explains why that district issued CABs:

  27. Theresa Harrington Says:

    Speaking of transparency, I was just perusing the WCSD website and noticed that they have the superintendent’s goals posted for all to see:
    They also have a very strong statement about Wool’s qualifications, which say “The qualities that Dr. Wool brings to the position are her honesty, integrity, strong communication skills, attention to detail, and her ability to create and foster strong teams”:

    In contrast, MDUSD’s “Superintendent” page does not give any information about Superintendent Steven Lawrence:
    Instead, it includes an outdated district org chart from April 2011 that includes Mildred Browne, Denise Rugani and Kathleen Corrigan (who have all left the district); an Aug. 21, 2009 “Superintendent’s Message for the New Year” from former Interim Superintendent Dick Nicoll (talking about the superintendent search in progress); and a 2008-09 annual report that was produced by Nicoll.
    Along the side of the web page are links to: the Superintendent’s Messages (the most recent one is from Feb. 4, 2011); the Parent Advisory Council (which doesn’t mention that it has been disbanded and only includes minutes through Dec. 2, 2009 – when Nicoll was still there); a “Board Policies” link that refers readers to Gamut Online; and the “Good News” Letter, which is the only current link on the site.

    In this case, MDUSD could learn lessons from other districts about how to keep the public informed about its superintendent.

  28. MDUSD Board Watcher Says:

    TH @27,

    Our former board didn’t care one iota about transparency. I hope the new board does, but both candidates refused to denounce the old baord policies during their campaign.

  29. Theresa Harrington Says:

    They both denounced the prevalent lack of transparency, but shied away from running “against” incumbent Board President Sherry Whitmarsh.

    Here are Brian Lawrence’s stated “top priorities,” which include “fiscal accountability” and “Transparent decision making that reflects the community’s priorities”:

    Here is what Barbara Oaks has committed to, including “open communication and positive relationships with parents and community” and “Honest and thoughtful decision-making with integrity”:

    Now, it’s up to voters to hold them accountable for these promises.

  30. anon Says:

    @TH: will you be asking rolen for a copy of the signed contract for AIS?

  31. Theresa Harrington Says:

    Rolen publicly announced in August that he has established an “ethical wall” between his office and AIS. He said that all requests for information about that contractor should be made to the departments working with it. So, no, I will not ask him for copies of AIS contracts.

    Here is the last signed contract that was presented to the board in August, before the contract amount was increased to $68,990 (at the meeting where Rolen announced that he had a potential conflict with the contract due to a recent change in his marital status):

    Richards said that he might bring new contracts to the board this month. When he does, it will be interesting to see if the new board will be willing to approve another AIS contract, since only one of the three trustees who voted last month to keep AIS in the running will remain (Dennler):

  32. Wait a Minute Says:

    LMAO, “ethical wall” and Rolen???


    He is oly trying to insulate himself from his prior unethical actions and he will continue to try and manipulate the process from behind the scenes if allowed IMO.

    The only “ethical” and right thing to do here would be for Rolens’ employment to be terminated and AIS should get no further contracts and should be replaced.

    We shall soon see what possible connections the new board members have by their actions and judgements on these matters.

  33. Theresa Harrington Says:

    Rolen said that his entire office was behind the “ethical wall.” He made the announcement at a public board meeting, in front of district administrators and trustees.
    Therefore, any employee who does not work in the office of the general counsel should feel free to respond to requests for information about the district’s contracts with AIS without consulting Rolen or his staff. In fact, any effort to consult Rolen would breach the ethical wall.

  34. g Says:

    So, that would mean that neither Rolen nor Cooksey (our only in-house legal mumbo-jumbo artists) had any hand in formulating or approving the AIS contract?


    Did we pay ‘outside’ legal counsel to approve all of the contract content; ie. no fingerprinting, two hour minimum, increased hourly rates…?

    And where is there a clause in the contract(s) allowing confidential student and parent information to be taken to the jointly occupied Padilla/Rolen house to be worked on?

  35. Theresa Harrington Says:

    Rolen didn’t mention anything about putting up an “ethical wall” until his marital status changed, which he said was “recent,” just before he made the announcement August 27:
    The contract the board acted on had already been signed July 27 by Padilla, Aug. 7 by Mildred Browne and Aug. 13 by Julie Braun-Martin.
    So, depending on when the ethical wall went up, he could have helped to craft the contract.
    What is the basis for your allegation that confidential student information is taken to the Padilla/Rolen household?

  36. Anon Says:

    Just a reminder that we have another feeder pattern meeting:
    DEC. 5, 2012 – Dr. Steven Lawrence’s Superintendent’s Feeder Pattern Meeting will be at Ayer’s Elementary Libary at 7:00 p.m. All parents are invited to attend.

    I got this notice today in my e-mail

  37. Theresa Harrington Says:

    Thanks for sharing! As a reminder, here’s my blog post that lists all the feeder pattern meeting dates:

    Other meetings set for this month are: Northgate Dec. 12 and YVHS Dec. 19. Last time, many Northgate feeder pattern parents were not notified about the meeting, including Trustee-elect Brian Lawrence. I wonder if his child’s principal will alert parents this time around.

  38. Theresa Harrington Says:

    In response to my email to Rolen (which I copied to Supt. Lawrence), I received a response from Lawrence saying that his secretary has been out ill, but he would make sure she gets me the contracts as soon as possible. So, it appears the contracts have been signed, just in time for the board changeover.
    However, neither Rolen nor Lawrence responded to my questions about why Rolen asserted that his Grand Jury response was filed by the board. I informed Lawrence in an email that most districts present Grand Jury reports and responses to their boards, allowing for public discussion and approval (or modifications) before the response is sent to the Grand Jury. I asked if the MDUSD board reviewed and approved the Grand Jury response. I got no response.

  39. Hell Freezing Over Says:

    TH @ 38
    A secretary is out I’ll so everything comes to a standstill? He can’t access and send copies himself? No one else can do this? ( on a side note, who has secretaries anymore? )

    What has been the excuse for not having those signed contracts to you when first requested? (how long ago was that?). This is what this administration depends on; stall / delay and give excuses instead of answers and just hope the parent, reporter, teacher, etc. will just forget and go away.

    Regarding no response to your questions on whether the board reviewed and approved the response by Rolen, it would appear that is your answer. It is a yes or no question – there is no gray area. So to me, no response to that question equals “no”.

    Perhaps separating all questions / document requests into separate emails (one subject per email) will help get answers more quickly, or at least make it easier to track how long it takes for them to come up with excuses instead of answering the questions / requests.

  40. Doctor J Says:

    @TH24 Since Rolen has not responded to your question about when and who authorized him to file a Board response to the Grand Jury report, perhaps its time to ask the three carry-over board members [Hansen, Mayo and Dennler] if they did and when and where it was considered, giving them a copy of it, plus advising them it doesn’t appear on any Agenda or minutes. If it was unauthorized, the new Board is within its rights to send a letter to the Grand Jury, revoking the prior letter as unauthorized, and send a new letter that is sunshined and debated before the public.

  41. Theresa Harrington Says:

    That is a good point. That would certainly show that the new trustees are committed to transparency and to listening to the public before making decisions.

  42. Doctor J Says:

    @#41 We would find out quickly if Brian Lawrence can walk the walk, and not just talk the talk. The new Board may want to by-pass Rolen and hire an independent attorney to review the so called contract extensions that appear to be illegal if they did what the agenda and minutes said — extended the contracts since they have automatic escalators in them. If the contracts are illegal, then the Board can toss them, and reconsider the issues. The new Board might want to revisit the Gang of Five raises, especially Rolen’s “extra” for “additional responsibilities” and remove those from him, along with his “extra” $27,000 — I think the FCMAT Transportation report suggests that a Transportation Director be hired instead of Rolen.

  43. Theresa Harrington Says:

    You’re right that the FCMAT report suggests a Transportation Director be hired. If Rolen is relieved of his transportation duties, it would make sense to revisit the reason for his pay increase.
    At the time, interim supt. Dick Nicoll told me that he recommended the other four pay increases (which were smaller), but that the pay increase for Rolen was not his idea. He was very clear with me that he did what the board told him to do.
    Although he didn’t specifically say where the idea for the raise came from, it was my impression that it came from Gary Eberhart and Paul Strange, who I believe were the board president and vice president.
    The vote was 3-2, with Trustees Linda Mayo and Dick Allen voting against the raises.
    The minutes also appear to suggest that Strange and Eberhart crafted the plan (although Whitmarsh made the initial motion):

    “Board Comment
    Dick Allen said that he could not support the plan for the same reasons he could not support the three year contract renewals. He said to that he wanted to wait for the new superintendent. He also stated that he wanted to be clear that he supported the administrators but wanted to wait until the new superintendent came aboard.

    Paul Strange shared that restructuring before the new superintendent takes office, even though it does not take effect until July 2009, is important due to the financial status, and budget reductions already done. He stated that when doing the budget reductions, the need to restructure was discussed. He said that the restructure is an extension of the budget reductions and that the administrative positions were being presented to the public with new roles and different classifications. He stated that this core team of administrators provides the key support services for the children in the district.

    Sherry Whitmarsh reported that she had received emails about the reorganization asking why now or why at this time. Sherry said that it did not matter when it was presented, that the Board needed to be transparent. She said that this plan is part of the previous approved budget reductions.

    Linda Mayo shared that she would not support the reorganization at this time as she had concerns regarding the timing and being able to provide the new superintendent the most flexible process. She said that delaying this decision one to four months would not be inappropriate.

    Gary Eberhart said that he worked on this plan and supported bringing it forward at this time. He said that if the district were to lose any one of these individuals, it would cost the district more to have to backfill a position at the current market rate value. He said that he agreed that the timing doesn’t look good but that it is better to be up front and defend the expenses.

    Member (Sherry Whitmarsh) moved, Member (Paul Strange) seconded to approve the reorganization plan as presented. The motion CARRIED 3 – 2 – 0 (Allen, Mayo – No).”

    Here’s the link to the minutes:

    Now that Eberhart and Whitmarsh will be gone, the new board could certainly revisit that reorganization and the pay increase. In fact, I have heard that many MDUSD administrator salaries are far above what the same positions make in other districts. Perhaps FCMAT could study that and see what “most districts” are paying.

  44. Doctor J Says:

    Steven Lawrence and Greg Rolen have put themselves, and their administrators, into legal quicksand by their rushing for Board approval of the “contract extensions” with no other changes. AB 1344 made their contracts unable to “extend” without major modifications which the Board did not consider and did not approve. Once those contracts are fully disclosed, and reviewed word by word, you will see the “craftiness of the devil” [pardon the Biblical reference]. If the contracts are just “extensions” entered into after Jan 1, 2012 they are illegal — If the contracts are “modified” more than just “extended” they are illegal by insertion of clauses not approved nor discussed by the Board. Either way this new board can revisit the whole gamit of each and every contract, and should do it one by one in open session. The deviousness of the perpetrators should not go unpunished.

  45. Doctor J Says:

    Here is FF&F’s legal review of AB 1344 and why Steven Lawrence & Greg Rolen have put everyone into legal quicksand. [Same people who did the webinar I linked this morning].

  46. g Says:

    Dr J #44. As we have asserted many times, the vote for the contract extensions, as presented at that time, must be held “Invalid” per AB1344.

    If they want to “renew” those executives’ contracts at, or prior to, their expiration in 2013 the board must be presented with new and valid contracts to vote on.

    Then, only after a new and valid contract has been approved by open session vote, should any of the board’s signatures go on the new contracts.

    I think everyone in question at the Dent level, and a couple very savvy board members, know that NOW, and I think that is why there are no “corrected” and “signed” contracts currently available.

  47. Doctor J Says:

    The General Counsel giving legal advice on his own contract ? Hello, State Bar. I am a taxpayer and want to file a complaint.

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