District Does Grande Property the Right Way and It Will Pay Off

Last night at the Davis City Council meeting, the City Council heard from the school district for the first time about the 41-unit proposed development on DJUSD property that the district has been hoping to sell for some time in order to provide some additional facilities money through the California Education Code’s provisions for the sale of public surplus property.

The result of the meeting was a unanimous 5-0 by the council to move the process forward. At the conclusion of the item, a good sized number of the Grande Property neighbors stood up and cheered. It was the end of a long process, but the last year and a half of this process has marked a model for government agency inter-cooperation between the school district and the city and an equally impressive model for government agency-neighborhood cooperation.

It was only just over one year ago, in their November 18, 2007 Op-Ed in the Davis Enterprise, that former DJUSD Board Trustees Marty West and Joan Sallee accused the newer school board with fiscal mismanagement regarding the Grande Property. They wrote:

“When we left the school board in December 2005, the finances of the school district were in good shape. Any financial mismanagement that has occurred has been on the 2006 and 2007 school board's watch. In early 2006, the board majority rescinded the $5.5 million contract we had signed to sell the Grande Avenue site, thus jeopardizing funding for building a student commons at the high school and modernizing Emerson Junior High School.”

The Vanguard has largely debunked that argument with a detailed recount of the Grande issue that was run on March 10, 2008 as the third installment in the Vanguard Investigation into Tahir Ahad and the dealings of the DJUSD Business Office under his leadership.

In 2005, there was no chance that the neighbors would have stood up and cheered. The early process was marred by neighborhood complaints and backdoor deals, the likes of which are still not fully known even after the Vanguard's investigation.

The gist of the arrangement was a shady three way trade in which the district fearing the city to the invoke the Naylor Act and require sale to the city at below market, tried to swap the land with UC Davis property near the Fairfield school and then sell the land to a Bay Area based developer.

From the March 10, 2008 Vanguard:

The arrangement that Superintendent David Murphy and Tahir Ahad had employed by October of 2005 was a land swap that involved a UC Davis property that was the home of Fairfield Elementary School. This piece of property that the university had not wanted was offered to Davis Joint Unified for at least three years prior to this land exchange. The university had been willing to simply give DJUSD the Fairfield School property at no cost.

Instead, the school district would enter into an agreement with BP Equities in which BP Equities would pay the school district $4.5 million in exchange for helping the school district to acquire the 10-acre site west of Davis. In essence, Davis Joint Unified would trade BP Equities the Grande Property in exchange for $4.5 million and the Fairfield School.

Coincidentally, this $4.5 million happened to be the same monetary amount that the district lost out on matching funds from the state when they missed the Montgomery Elementary school deadline. Questions have arisen as to whether the speed, urgency, and also secrecy of this deal had something to do with that lost funding.

The land exchange generated a large amount of controversy in the community. Under pressure for the seemingly sub-market value sale price, the offer was raised on November 22, 2005 to $5.5 million and the deal was locked in.

In the meeting when the board rescinded the original sale, Board member Provenza expressed his concerns for the process:

“I have an ethical concern about going forward because I feel that the process from the beginning was flawed. And it’s not because of anything that Mr. [Brian] Purcell [from BP Equities] did, he was negotiating with Tahir Ahad in good faith, but our process I believe was flawed from the beginning."

While that deal was approved by the previous board featuring Ms. West and Ms. Sallee, the newly elected board featuring Gina Daleiden, Sheila Allen, and Tim Taylor joined fellow board member Jim Provenza in rescinding the deal in early 2006, much to the chagrin of Joan Sallee and Marty West, who nearly two years later were raising the issue again last November.

It is interesting to note a letter from the Grande Neighborhood Association still posted on their site from September 2005:

"We also learned that Tahir [Ahad] and B.J. [Kline] were working under the impression that the neighborhood endorsed development of the Grande site for 48 homes (Alternative B that we discussed during the neighborhood meeting and potluck in June). We told him that was not the case - the neighborhood supported the concept of the other alternative, which had 33 homes, and was generally consistent with R-1-6 zoning (like that on the west side of the Grande site)."

Note the lack of communication between the two parties. Also note the fact that the district and neighborhood ended up splitting the difference in density right down the middle, with the neighborhood making it a point to give the district last night 41 units which the district wanted quite badly.

Since the time of that letter and the eventual board decision to go ahead with the sale, the district has completely changed its approach. They have met extensively with the Grande Neighborhood Association. They have worked out a deal with the district and the city to develop a 41-unit subdivision which reflects the basic density of the surrounding neighborhood.

Several neighbors came up and raised minor concerns with the plan but were thankful to the district for working with them on their concerns. The biggest concern was the safety issue of bikes pouring out onto Grande Avenue.

So the city council moved one of the lots, lot #9 it was called, which sat on the outside of the development. They agreed to turn that lot into a community gardens in order to allow bike traffic to flow there rather than through the more heavily traveled Mercedes Road which would flow into the new subdivision.

By working with the city, the district helped the neighbors to identify a longstanding safety issue. There are still some details that need to be worked out, but the neighbors are comfortable enough with the process and the commitment of both the city and DJUSD to addressing them, that the project has been moved forward and fast tracked.

One of the issues still be resolved is that the school district would like to prioritize affordable units for their own employees. That will have to take place by lottery and the district has agreed to indemnify the city should the issue of discrimination come up.

All of these issues should be addressed by January when this comes up for a second reading to the ordinance.

Many involved describe this as a win-win-win scenario for all involved. The school district has worked extensively with the neighbors to produce an acceptable development proposal. The district and city have worked close together rather than against each other as typified the early part of the process where the district tried to pull a shady deal out of fear that the city would invoke the Naylor Act.

Instead what we will see come forward is a fully entitled property that will hit the market. Even given the economic downturn and collapse of the housing market, there is nothing more rare in Davis than fully entitled property. As such, when the district puts it on the market, the selling price will well-exceed the $5.5 million that the district would have gotten had they gone through with the sale. Even at that time, there were credible offers, and the Vanguard has seen these in writing, from credible local developers for as much as $8 to $9 million. They sold it quickly to avoid public scrutiny.

From this standpoint alone and from the standpoint of working with the neighbors to gain approval, the district has contradicted the complaints of its two former board members.

But in all likelihood, the district will get far more than the $5.5 million. A prospective owner will quickly recognize that they do not have to build immediately, but rather they can buy the property and wait for the right market. The value is that they know this is Davis property and that the land is fully entitled and they only need to go ahead with the development agreement to make a huge profit.

It is a winning solution for all involved and shows the value of transparency and cooperation. This is the model now for how to do business whereas the previous process was the very model for how not to do business.

---David M. Greenwald reporting

Why is DJUSD Considering Pay and Benefit Hikes During Fiscal Downturn?

There is no doubt whatsoever that if these were normal economic times, two items on the agenda would be both well-deserved and the right thing to do. But given the fact that the district will be facing a $1.8 million shortfall next year, it makes little sense to increase either salaries or benefits.

On the first item, the board on Thursday night will consider a health and welfare benefit increase.

"The non-represented employee groups (Administrative Leadership Team and Confidential Employees) did not receive increases in either salary or benefit compensation in 2007-2008. Throughout the collective bargaining process in 2007-2008, the District expressed an interest in providing competitive health and welfare benefits to all employee groups."

It continues:

"The District contribution for administrative and confidential employees is $3,004 annually. In a study of thirteen local districts, the average district contribution for health and welfare benefit is $10,900. The current discrepancy has placed Davis Joint Unified in a competitive disadvantage when attempting to hire and retain new administrative and confidential employees. During the last eighteen months, we have experienced multiple hiring challenges; including losing candidates to neighboring districts, due to our reduced level of health and welfare benefit compensation."

What is the fiscal impact of this? For 2008-09, the impact would be $60,000 beginning January 1, 2009 until June 30, 2009. The annual on-going financial impact would be $120,000 beginning July 1, 2009.

According to the staff report:

"The current Board approved operating budget has the capacity to meet this fiscal obligation in the benefits contribution with no adjustments required."

Guess what? That's two teaching positions.

There is no doubt that the level of health benefits provided by the district is embarrassingly low. No doubt. No one can dispute it. The problem is that right now there is one pot of money.

The district is going to have make some tough decisions here. If they indeed go ahead with this increase then the money is likely going to have to come from an administrative position. That likely means an administrative position goes unfilled and everyone else will have to work that much harder. And yet, even then you have to wonder, perhaps if you are looking at $1.8 million in cuts next year and who knows how bad it would be 2010-11, perhaps you do not spend the additional $120,000 on health care. Perhaps you need to bank that money to save two teaching position. And even if you can take out an administrative position, maybe you do that to save two teaching positions. It is the timing of this proposal that is alarming. THey deserve the better benefits, but not now.

The second item is Bruce Colby's contract. Let me state this upfront so there is no confusion. I like Bruce Colby, I think he does a very good job, this is not to be read as a criticism of him. But here's his new contract and they are talking about giving him $173,644. And there is actually a built in increase.

"the amount of the salary shall be increased in the second and/or third year of this Agreement by a fixed five percent (5%) step if the annual summary evaluation for the Associate Superintendent in the preceding year was “fully satisfactory.”"

The district believes that Bruce Colby is indispensable, he may be. But during tight budgets when you might have to lay off teachers, I cannot see the justification of giving a pay raise.

The suggestion is that this will be paid for by leaving an administrative position unfilled, perhaps it will, but perhaps that position could go to keep another teacher rather than give the Associate Superintendent a pay raise.

During these times, you pretty much need to freeze the salaries of your employees.

One other aspect of the contract that is worth noting, the Tahir Ahad-clause.

"Therefore, unless supported by the Superintendent with written a recommendation and approved in advance by the Board of Trustees, while the Associate Superintendent is an employee of the District, the Associate Superintendent shall not perform any work outside of the District for compensation because any such outside work may involve time demands that would render performance of the Associate Superintendent’s duties to the District less efficient.

Further, if the Associate Superintendent is granted permission for outside work for compensation, he shall not employ other employees of the District in enterprises outside of District employment."

Apparently this is now a standard clause, it basically means that there is an outside chance an employee can seek outside employment, but there is no chance they can hire other employees of the district.

In conclusion here, I believe that if this were a normal year, these would be no-brainers. However, given the facts on the ground, even if you balance the books by taking from the administrative pot, it is a bad move and bad publicity. I hope the district does the right thing and tables this discussion until they figure out their finances for the next year and yes that requires a lot of work from Mr. Colby who is already well-compensated for his work.

---David M. Greenwald reporting

Response to Rich Rifkin's Column on Parcel Tax and District Fiscal Management

In last night's Davis Enterprise, Rich Rifkin, certainly no stranger to this blog, presented his analysis of Measure W.

In his column he presents numbers on the district's fiscal situation. I both agree and disagree with his findings. And I agree in part with his conclusions.

Let us begin here:

"In the 1997-98 school year, the Davis school district had $4,995 to spend per student in average daily attendance (ADA) revenues. Ten years later, that had grown to $7,972, a 60 percent increase, which equals a compounded annual inflation of 5.33 percent. On top of the ADA money, the district receives funding from other state and federal sources, as well as our local taxes.

Had the ADA revenues simply kept pace with inflation over the past 10 years, our district would have had $6,517 in ADA money per student. That's $1,455 less per child than we are actually getting and spending."

He then writes:

"The answer is clear: The school board has been increasing salaries and benefits (for teachers, staff and administrators) at an unsustainable rate."

And we can pin the culprit to the 2005 and 2006 school years when certificated and classified salaries increased by 7 and 11 percent.

The Vanguard reported on this issue back on July 24, 2008.

The genesis of this problem was a memo sent out by then-Davis Joint Unified Superintendent David Murphy to the Board of Education dated September 20, 2006.

"In this memo are factually incorrect statements that ultimately led the school board to approve a 6.5% teacher pay hike based on claims in it that the district had the funding available over a three-year period to pay for this pay increase. At the time this was a factually incorrect assessment. According to sources however, it is likely that neither the Superintendent nor the interim CBO were aware of this fact."

The board was told that they would have to use one-time reserves the first year of this pay increase in order to cover the expenditures. After that, monies would become available on an on-going basis to pay for the salary increase. The board was told that this increase would thus only require a one-time use of one-time money. As it turned out, this was not accurate either.

The three-year ongoing fund projection was wrong. There were at least two glaring errors in it.

First, the budget was missing some positions that were being paid $400,000. FCMAT discovered this in their report to the school district.

Second, there were changes to special education funding that were not factored in and this accounted for nearly half a million dollars in expenditures. Both of these errors accounted for $900,000 or just under half of the money spent in the salary increase.

The district would keep itself fiscally solvent and the budget on the positive side by spending the district's voluntary (as opposed to the state mandated) reserves. As those reserves have become depleted however, the district has run into huge fiscal problems.

What is the root of these problems? According to a board member at that time, the problem largely consisted of problematic budget tracking procedures that were in enacted under Tahir Ahad.

The new board has taken steps to correct this problem.

So when Rich Rifkin writes:

"What needs to be done going forward is some responsible financial planning by the district. Whenever money rolls in - as it did during the housing boom - our school district spends it as if there is no tomorrow. They agree to contracts with huge inflators, under the assumption that the good times will never end. And then when they do end, all they can think of is to raise another parcel tax.

Instead, the school board ought to cap the increase in per-pupil spending on all programs at 3 percent per year, regardless of how much money they get from the state. In good times, this will result in a large surplus. And in bad times, the district will be able to move forward without a crisis or a tax increase."

I completely agree with Mr. Rifkin's assessment and I believe that every member of the current school board completely agrees as well. The board has worked very hard since the departure of the former Superintendent and CBO to put the district on sound fiscal footing.

The other point that Mr. Rifkin does not make is that even with the increase of spending over the last 10 years, California and by extension Davis' schools still have remained substantially below the national average in terms of per pupil spending.

As Michael Hulsizer cites in his recent letter to editor now posted on the Measure W website.

"According to the most current data from the National Center for Education Statistics and Bureau of Labor Statistics, California schools spend $1,055 less per student than the national average. This means that our Davis schools currently receive $9.1 million annually less than the national average."

Remember that this below average spending occurs DESPITE the fact that the cost of living in California is considerably higher than in almost all other states.

Mr. Hulsizer writes:

"In September 2007, Stanford University researchers concluded that despite higher costs than almost all other states, California schools are funded 30 percent below the national average and a staggering $5,500 PER STUDENT below schools in New York State. The result is that California schools have the highest student-to-staff ratios (teachers and administrators) in the United States."

And he concludes:

"While Measure W will not bring Davis schools to the national average, this modest proposal will at least allow our schools to protect several core instructional programs that help our school district arguably be one of the finest in our region, if not the entire state. Moreover, 100% of Measure W funding will go to programs and services for our children."

I have spent many hours working to understand the city of Davis' fiscal situation. I have devote many columns to that. I agree here with Rich Rifkin in part in terms of fiscal responsibility. Where I might differ (although perhaps not) is that I believe the district has already taken the steps that Mr. Rifkin recommends to prevent the kind of problems that surfaced back in 2005 and 2006.

Moreover, I also believe that teachers as a whole in this society, are underpaid in terms of the jobs that they perform and the importance of those jobs to our society. The fact is that we have increased their wages and benefits over the last decade. I would argue that is a good thing. The bad thing is that the district prior to 2006 did not have good fiscal management practices. As I have gone into painstaking detail however, those issues have been resolved with both better personnel and better practices as recommended by FCMAT in 2006.

Finally the big picture is that we do not spend nearly enough on education in California, especially when you taken into account cost of living. And we are nowhere near the top in performance.

Davis voters get a chance to do two things. First, they get a chance to keep Davis schools great. And second, they get a chance to renew their commitment to excellence in education. We can find ways to save money in other aspects of our lives. We can hold the line on fiscal discipline in other ways that do not harm our children's ability to receive a quality education.

What has struck me in this debate is the 90 percent of the things that critics have suggested the district do, the district has already done. The other thing that has struck me in this debate is how many times discredited arguments are repeated with no acknowledgment that they have already been asked and answered. What that tells me is that people are looking for excuses to vote no on this measure rather than reasons to vote yes. That is unfortunate because the end result will be a cutback in the programs that make Davis schools what they are.

---Doug Paul Davis reporting

Commentary: Why I Strongly Support Measure W--The Parcel Tax

I have been thinking about writing this commentary for several days now, ever since I put the work into the two articles last week on the parcel tax. As I was putting together those articles, I questioned myself. Why was I going through all this effort in support of this measure? This is not generally what the Vanguard does. The Vanguard covers the dark underbelly of Davis, exposes malfeasance in government, protects people from the excesses of governmental power, shines light on subjects not often covered enough. Why this issue?

As I was pondering this question, the answer of course was right in front of my face. The answer actually came to me last week during my interview with Jann Murray-Garcia.

Some people have used the closing of Valley Oak as an excuse to vote against the parcel tax. However, I think they have it backwards. You see, no one supported keeping Valley Oak open more than I did. I will match my 70 articles on or about Valley Oak, the late night meetings, the special coverage, against anyone's passion. Unless you sat on Davis OPEN itself, you will not win. And even then, I'll take it to a tie unless you are a certain dragon and the lovely lady who stands inside there come rain, heat, or fog.

No folks, if you believe in Valley Oak and the Valley Oaks of the world, you need to support the parcel tax. If you are worried about the achievement gap, then you need to support the parcel tax. If you do not want future parents to anguish over what school their kids will go to, then you need to support the parcel tax.

You see, unfortunately, and I am not casting aspersions at anyone, it's just the way things are right now, but when the economy goes south, when funding gets tight, the first things that go are funding to special programs and unfortunately by special programs I mean minority schools in Davis.

When I first saw the budget cuts list last winter, one of the things that drew my attention was cutting the climate coordinator position. I have been critical of the climate coordinator. But I also know how hard and how long people struggled to get that position created in the first place. The Human Relations Commission had a townhall meeting with former Superintendent David Murphy on the issue of bullying and racism, hundreds of parents came, students came forward with horror stories, it took a lot of work. Superintendent Murphy was at times intransigent. But in the end, the HRC and the community won out.

And now it was going to be gone in one fell swoop. It is not because the position is not important, it is not because the school board was against having the position, it is simply that when you have a choice because cutting elementary school science and the climate coordinator, it is not really much of a debate. And yet I know full well why that position was created in the first place and it will hurt a lot of kids if it is canceled.

I remember the meeting in 2007 when they were discussing the report from the Achievement Gap Task force and their recommendations, and how Tansey Thomas stood up and pointed out a very similar report from 1990 that was put on the shelf as soon as passions cooled and times got tough. I remember that in 2007, every single candidate running for the board brought up that as one of their goals--to help close the achievement gap. I do not know if I have heard the word uttered in 2008 and you know why? Because they are fighting to keep from firing 100 teachers.

At the end of the day, I believe in my heart of hearts that when budget times get tough, the first people to suffer are those who can least afford to suffer. Those who are the most vulnerable. It happens in all walks of life. The people who suffer the most are the most recent ones hired, those at the bottom end of the totem pole, those who are least able to create a safety net.

In Davis, I believe that the children of affluent middle class backgrounds will thrive regardless of whether or not the parcel tax passes. Are they better off with better schools with more challenging programs? Of course. However, they will prosper regardless. It is the children of those who are less fortunate who will not prosper under more difficult times with programs cut. These are the most vulnerable kids. These will be the ones to suffer the most. The children who go to the Valley Oaks of the world who had a school where they were thriving only to see it closed due to budget considerations. And yes, I am convinced that there are other schools that are very good in this district, but I do not believe you can replace that sense of empowerment and sense of community that was at work at Valley Oak Elementary School.

And though Valley Oak is now closed until further notice, there is still much to fight to protect, which is why I cannot in good conscience punish other children for mistakes made by the school board.

People have talked about fiscal mismanagement as a reason to vote against the parcel tax. I know something about fiscal mismanagement in this district as I spent a good four or five months researching what had happened in the district under Superintendent David Murphy and Budget Officer Tahir Ahad.

A few things about that I want to share. The first thing is that I did this investigation with full and complete cooperation from the school district and several of the board members. This investigation would not have been possible without their assistance. Moreover, the district went above and beyond the call of duty in assisting me. They absolutely wanted the public to know exactly what had happened under the previous administration. Two of the board members went on the record to discuss it with me.

The second thing is that the new school board, elected in 2005, cleaned up most of the problems that had occurred under the previous administration. Tahir Ahad left the district and eventually was replaced by Bruce Colby as the new chief budget officer. David Murphy left the district and eventually was replaced by James Hammond as the new superintendent. Frankly, James Hammond alone is reason to vote for this parcel tax, I cannot think of a better person to do this job than Dr. Hammond. I talked to him the day after the board decided not to support him on the charter school and all he could talk about was how sorry he was that he did not have another week to convince them to take the chance on it. He was genuine about that loss. No blame, no political posturing, just sincere compassion for those students.

The fiscal problems in this district are not the result of the actions of the current board. Not one single member of this board was around when the decision was made to put the facilities bond on the ballot. Not one single member of this board was there when the decision was made to hire Tahir Ahad or David Murphy for that matter. And not one single member of this board was there when the deadline was missed for matching funds to Montgomery.

But the majority of this board was in place when every single one of the FCMAT recommendations were carried out, when a new CBO and Superintendent were hired, when the Montgomery funding was rescued by a concerted and joint effort of the board and the interim Superintendent, when the fiscal ship of this district was righted. This board deserves the trust of the voters in handling the taxpayers money and giving the board the resources to continue to make this district one of the best in the state.

Finally folks, people are complaining about raising taxes again, one year after the previous parcel tax was passed. People are complaining that the number is $120 rather than $80 which would have been more likely to pass. I can appreciate both of those concerns.

However as far as the $120 goes, the district is asking for the amount of money that they believe they need in order to continue to fund the programs that have been listed here.

I have been critical of the city's overindulgence of certain public employee salaries and t he risk of raising more taxes to pay for their fiscal irresponsibility. Moreover, the amount of money people will pay in water rate hikes will dwarf the meager $120 annual tax increase. We are talking about up to $200 per month for water rate hikes compared with $120 per year for the parcel tax. This is on top of other fees, taxes, and possible rate hikes. There is really no comparison. Moreover, if I am going to pay out more money, I would choose to give money to help children be educated and help teachers earn a better living. Those are my priorities.

My biggest fear in all of this is that people may use the wrong reasons to not support education in Davis. It is not the children's fault that the previous administration made a series of very serious errors. It is not their fault that you may feel overburdened in your taxes, overwhelmed by a poor economy, a bad housing market, high fuel prices, etc. I understand all of that. But at the end of the day once again, we only get one shot at educating the youth in this community, they get only one shot at childhood, and for some kids, they need all the help they can get.

I hope for their sake and theirs alone you will consider supporting this tax as a modest investment into the future of these children, this community and this country.

---Doug Paul Davis reporting

Vanguard Report: Genesis of DJUSD's Fiscal Problems

The Vanguard has recently received a public memo from former Davis Joint Unified Superintendent David Murphy to the Board of Education dated September 20, 2006. The memo was a response to questions, requests, and comments pertaining to a proposed teacher salary hike of 6.5% and a concurrent proposed administrative salary hike.

In this memo are factually incorrect statements that ultimately led the school board to approve a 6.5% teacher pay hike based on claims in it that the district had the funding available over a three-year period to pay for this pay increase. At the time this was a factually incorrect assessment. According to sources however, it is likely that neither the Superintendent nor the interim CBO were aware of this fact.

At the outset, it is important to realize that this assessment should not be construed as an attack on teachers, the Davis Teachers' Association, or their worthiness to receive a pay increase. On the contrary, the Vanguard believes that in general, teachers are well underpaid for the services they render to a community and to society as a whole. Rather, this points to specific problems in DJUSD at the time, that led to the need for changes to be made both in terms of fiscal accounting practices and personnel.

Finally, it should be pointed out that the problems that led to this incorrect assessment have been taken care of. The District's commissioning of FCMAT as discussed in our investigative series on the district's former Chief Budget Officer revealed key flaws in the district accounting practices--flaws that have now been corrected by current CBO Bruce Colby and new Superintendent James Hammond. In other words, these problems will not repeat themselves in the future, however, they do have a lasting impact the district's current budget situation.

According to Bruce Colby, this pay increase cost the district roughly $2 million in salary increases. Looking at that within the context of the original and now current budget shortfalls, one quickly realizes the magnitude of such a situation.

The Memo

Beginning on page 2 of the memo the former Superintendent writes:

"Our budget experts, Cathi Vogel [Ms. Vogel was the interim CBO who was hired to temporarily fill Mr. Tahir Ahad's position and occupied the position until the hire of Bruce Colby in 2007] and Maureen Fitzerald, both of whom are fiscally conservative in a responsible way, have said that the three-year projections of ongoing expenditures have ongoing revenues. Maureen has assured me of this. Thus, the funds are there to support whatever the board wants to do--to fund the 6.5% for all employees or to use some or all of those funds for other purposes. Thus, a fiscally conservative superintendent would say that the funds are there for board decision-making, according to board priorities about what is in the best interests of the district, all things considered."

He continues:

"Given that the funding is available, given the other considerations of funds for the district programs, and given the effect on ALT members of board choices, I do think and would recommend that the board fund the 6.5% improvement to the ALT salary schedules as the next priority item to fund. In fact, I do think that would be in the best interests of the district and board priorities, all things considered."

A board member then asked:

"Since I have been on the board, the unappropriated amount of the ending fund balance has always been considered "one time money." How can we justify this change?"

The Superintendent responds in his memo:

"The fiscal solvency of the district's budget is detailed in the three year projected budgets, based on a 6.5% increase to all employee salary schedules [this included administrative pay raises at 6.5% in addition to teacher pay raises]... Maureen assures us that the ongoing expenditures of 6.5% increases to employee compensation packages have ongoing revenues to support those expenditures."

Inaccurate Information Provided to the Board

The board was told that they would have to use one-time reserves the first year of this pay increase in order to cover the expenditures. After that, monies would become available on an on-going basis to pay for the salary increase. The board was told that this increase would thus only require a one-time use of one-time money. As it turned out, this was not accurate either.

The three-year ongoing fund projection was wrong. There were at least two glaring errors in it.

First, the budget was missing some positions that were being paid $400,000. FCMAT discovered this in their report to the school district.

Second, there were changes to special education funding that were not factored in and this accounted for nearly half a million dollars in expenditures. Both of these errors accounted for $900,000 or just under half of the money spent in the salary increase.

The district would keep itself fiscally solvent and the budget on the positive side by spending the district's voluntary (as opposed to the state mandated) reserves. As those reserves have become depleted however, the district has run into huge fiscal problems. [On a side note, districts such as Woodland right now are using their reserves in order to remain fiscally solvent and they will likely run into similar budget problems in the next few years if this economic downturn continues].

What is the root of these problems? According to a board member at that time, the problem largely consisted of problematic budget tracking procedures that were in enacted under Tahir Ahad.

Again please see our four-part series on the former CBO for a more detailed explanation.

Basically the money in the district was poorly tracked. It was difficult to distinguish on-going funds from one-time money. Carry-over money and other one-time money was rolled into the general fund masking the differences between funds and funding sources.

It is the best guess that the Superintendent probably did not know at the time he was providing the board with incorrect information.

During this time, the role of keeping track of the money had fallen to interim CBO Cathi Vogel. Ms. Vogel repeatedly told the board that it was difficult and murky to figure out what was going on in the books. As the FCMAT report makes clear, the former CBO had left the district with the books in a complete mess. In addition to FCMAT and the work of an independent auditor, it would take present CBO Bruce Colby nearly a year to figure out the district's fiscal situation. These problems are now corrected and this type of problem will not happen in the future.

Nevertheless, the damage was largely done. The district has to heavily rely on their professional staff to make assessments about the viability of new spending programs. There is little doubt that the district is inclined to give teachers salary hikes when the money is available. However, they need to be able to make fiscally sound decisions based on the advice given by professional staff. They need to be able to make informed decisions.

During this incident they received incorrect information based on sloppy accounting practices of past employees and poor decision making by present employees. As a result, the district has dismissed employees who were not providing them with good advice, and put into those positions, individuals who they trust to accurately tell them the truth of their fiscal situation.

One cannot stress enough the importance of the FCMAT report or the changes that the district enacted as a result of that report.

Again, for further information please take a look at the Vanguard's reporting on FCMAT and the problems with the previous accounting system and subsequent changes to the system that have made the district far more sound in its fiscal decision-making.

---Doug Paul Davis reporting

Commentary: A look into the 4th Supervisorial Distrct Race

On Friday, it was announced that Jim Provenza had won the 4th Supervisorial district race outright garnering 54 votes over the needed 50 percent in order to avoid a November runoff election. Mr. Provenza received 4,065 votes or 50.7 percent, easily outdistancing John Ferrera's 2,739. Cathy Kennedy finished third with 15.2% or 1,217 votes. He will replace the likely Assemblywoman from this district, Mariko Yamada who won the Democratic Nomination on Tuesday in a district that is heavily Democratic.

The first time I really got to know Jim Provenza was in January of 2007. I met with him in his office in Sacramento to convey to him my concerns about the District's handling of the harassment of a junior high school student due to the fact that the student had two male parents.

Jim Provenza at that time acknowledged shortcoming in the district's response while at the same time not directly commenting on the matter due in part to it being a matter dealing with personnel and in part it being a mater that dealt with a juvenile. What he did do is lay out proposed changes in the discipline code.

In short, he told me everything I wanted to hear. But as many people also know, many politicians will tell you everything you want to hear and then fall flat when it comes to follow through.

But when the meeting in question came forward, not only did Jim Provenza do everything that he said he would do, he went above and beyond that.

There came a point when then-Superintendent David Murphy seemed to be hedging, dragging his feet, and attempting to water down the new language. In response, Jim Provenza pressed him, and forcefully got him to put the language into the new discipline code that would have actual teeth and be unequivocal.

It was watching Jim Provenza operate at that meeting that earned my respect.

Last summer, the county Board of Supervisors and the city of Davis nearly came to blows over proposed development on Davis' City edge. Over 100 Davis residents packed a mid-July meeting. Jim Provenza was there as well, criticizing the plans to build along the I-80 corridor, renaming the proposed "innovation corridor" the "congestion corridor."

While that meeting turned heated, Jim Provenza actually has a pretty good record of turning such relations around. The city of Davis and the School District had very tense relations for a number of years.

As we discussed earlier this year, the King High and Grande problems in part resulted from lack of trust and lack of cooperation. At King High, the city and district disputed over what to do with three large trees. Ultimately, the district accidentally (or so they claim) severed the root structure. Moreover, the district was surprised to learn of a storm drain in the middle of the King High site, something that Bill Emlen politely remarked at the time would have been evident had the district consulted with the city planners. Finally, the footprint of the school encroached on city property, something else that would have been noted had there been some sort of dialogue between the two bodies.

Grande was much the same situation. The district embarked upon a highly secretive sale of the site that involved a land swap and an under-valued sale price due to misplaced concerns about the city imposing the Naylor Act and taking the land for below market value. Jim Provenza and a new board led the way to stopping that sale and exploring other options. Since then the city and district have worked extensively to help subdivide the land and sell it as fully entitled property. They also worked with the neighbors to ensure that their concerns were dealt with. As a result, the district will make more money on the sale and they will do so knowing that they do not have to worry about the city imposing the Naylor Act on them.

What we have seen since 2006 is unprecedented cooperation between the city and the school district, to their mutual benefit. It is this type of relationship and background that the city and county need. In many ways, it will be very possible given the dynamics of the current board of supervisors.

When the Davis Enterprise surprisingly endorsed John Ferrera over Jim Provenza one of the thing they cited was that Ferrera

"pledged to help repair interagency relationships, believing Davis and the county can both be better neighbors, and he promises to lead all parties in working together toward well-understood, collective goals."

It is an interesting point because John Ferrera had no track record, but Jim Provenza had actually succeeded in doing that with the city and school district.

He also helped the school district get on firmer ground fiscally. He led the way in helping to get rid of Tahir Ahad whose risky strategies and poor management, not to mention his blatant conflicts of interest, put the district in grave jeopardy. Meanwhile Former Superintendent David Murphy allowed much of this to happen under his watch, not only failing to intercede in the district's better interest, but he continued to support both Tahir Ahad and his policies. To this day, he calls Ahad the finest CBO he has worked with.

With Ahad and Murphy gone, the district with the help of Jim Provenza and others was able to recoup the lost funding for Montgomery. They then embarked upon hiring a new superintendent, who they found in James Hammond--a young and energetic leader for the school district.

Provenza's legacy on the board did produce some notable enemies. Marty West, who now works for Ahad, has been a harsh critic of Provenza, writing a scathing letter that circulated in part of the community. The former Superintendent David Murphy was reportedly walking Precincts for John Ferrera.

This was unfortunate. John Ferrera had little to do with the school issues and yet his campaign was dragged into some of it. At least part of this has to fall on Mr. Ferrera's shoulders, he was made aware of this baggage some time ago, and yet continued to allow himself to be surrounded with people whose agenda was less to help Ferrera than to hurt Jim Provenza.

While I did not formally endorse Jim Provenza, nor do I live in his district, I think his policies are a better fit for the fourth district and I also think the board of supervisors as a whole will benefit from his expertise.

---Doug Paul Davis reporting

Hundreds of Students, Parents and Community Members March to Save Emerson Junior High

At Central Park yesterday, hundreds of students, parents, and community members marched throughout the park urging the Davis Joint Unified School District not to close Emerson Junior High School.

Carrying a wide variety of signs and bullhorns, the group first rallied at the park, then marched around the park twice, and finally marched from the park across the street to in front of the district offices.

At that point, most impressively, new Superintendent James Hammond addressed the crowd. He told them this was a most difficult decision that they would have to make and that they will consider it very carefully. While, it was not exactly what the large crowd wanted to hear, there was an appreciation that the Superintendent was not hiding in his offices.

Some of the concerns raised by community members were also captured in a letter from the school PTA to the school district.

There were expressed concerns about the risk of commuting by students to other portions of town. The increased crowding of junior highs back to what it was before Harper (although I believe part of the plan is to move 9th graders to high school, so the problem of overcrowding might occur on the high school campus). There are fears that once the school closes, it might now re-open again even if budgeting would allow it.

One of the big concerns is that there has been no taskforce or planning for the closure of the school.

Proponents of Emerson site Education Code 17387:

“It is the intent of the Legislature to have the community involved before decisions are made about school closure or the use of surplus space, thus avoiding community conflict and assuring building use that is compatible with the community’s needs and desires.”

Just as the education code requires a 7/11 commission to sell off surplus property, so would it seem to require some sort of task force before closing a school.

A number of DaVinci High students both joined in the protest and had their own brief demonstration asking for their teachers and programs to be saved.

COMMENTARY

A few points of commentary that I want to raise at this point.

I listened throughout to people talking about the fact that the seeds for this district's fiscal mismanagement were laid in the past and the public did not pay sufficient attention. I agree with that. However, I do not think the public really understands the depths of those problems that should be laid firmly at the feet of past school boards, past administrations, and past policies. At the same time, I also do not think the public truly understands the work that the most recent past school board did to fix many of these problems.

Unfortunately, despite those efforts as outlined on this blog in the series on the former CBO, the school district has not been able to escape this problem.

Discussions I have had with people close to state government emphasize that the expectation that we will have the economic problem alleviated by the Democratic Legislature may be less than expected. It is unlikely that the legislature would impose 10% cuts, but everyone believes that painful cuts will occur.

That puts the onus on local school district. The Davis Schools Foundation was working hard to get additional pledges for donations. The raising of these one-time monies could be vital to helping to lessen the pain of such cuts.

The school board as we suggested last weekend, should consider an emergency ballot measure for temporary funding relief. I discussed this possibility one of the board members on Saturday and it is something that they are considering. The problem is that the public seems so angry right now that they may not be amenable to yet another tax increase.

I spoke to Freddie Oakley and she told me that such a ballot measure if it were mail-in only, would only cost around $50,000.

Some have floated the idea of recall, but frankly that is the last thing this district needs. First, it would be punishing the students in the form of more payments by the school district. It would also distract the district from other means in which to deal with the revenue problem. Finally, for the most part it would punish those not responsible for the bulk of the budget problem. We can all point to decisions by the board we disagree with, but on the whole, the current board has done a decent job given the magnitude of the problem.

Those who wish to punish the kids for the mistakes that some adults have made, might want to reconsider that. If we all join together, we can probably save the schools and programs that we all like.

The final point I would like to make is that while this may be frustrating for all involved--and I remain a strong supporter of keeping Emerson open as well as the Valley Charter School--I was impressed with Superintendent James Hammond. I remember how former Superintendent David Murphy reacted to criticism and protests. There is little doubt in my mind that he would have hid in his offices, as so many government officials would have done, waiting for the protests to end.

But James Hammond had the courage to address the hostile but generally polite crowd and while he could not assuage their concerns, I think he gained their respect in the process. It would have been nice if Board Member Richard Harris had done likewise but at least he and Board President Sheila Allen attended the rally and can report back to their colleagues tomorrow night the community's concerns.

We all have a stake in the future of Davis schools and we all have to pull together to prevent things like cutbacks in teachers, school programs, and closures of schools.

---Doug Paul Davis reporting

Vanguard Investigation Part IV: Fiscal Crisis Management Assistance Team Findings

The Vanguard continues its multipart series of former DJUSD Deputy Superintendent Tahir Ahad, Total School Solutions, and fiscal mismanagement of the Davis Joint Unified Business Office during Tahir Ahad’s tenure from 1999 to 2006 as CBO of DJUSD.

The first segment of this series which ran on Sunday, February 24, 2008 examined the inherent problems involved in a conflict of interest. The conflict of interest we examined involved a series of disturbing findings of how Mr. Ahad used his position as Chief Business Officer (CBO) with the Davis Joint Unified School District as a means by which to start up his own private company for his own private gain. In short, he used public resources for private gain, a serious breach in the public trust.

The second portion of the series ran on March 3, 2008 and focused specifically upon the facilities planning and management beginning with the lost state matching funds for Montgomery Elementary, problems with Korematsu and eventually the King High debacle which led to the new school board finding out exactly what had been going on with the district’s facilities construction money. Basically money was shifted from later projects to make up for lost matching funds for Montgomery, lower than expected matching funds for Korematsu, and other cost overruns. Instead of acknowledging the depths of the problems, Mr. Ahad asked the school board in 2005 to pass a COP (Certificate of Participation), a form of debt financing, to pay for King High and some other projects. In 2006, the board learned that they only had half the money they needed to fund King High, and they realized that money had been shuffled, but only after an extensive investigation and the temporary halting of construction activities at King High.

The third segment which ran on March 10, 2008 continued to look at the facilities funding problems and other fiscal management issues. We examined the property exchange deal involving the Grande Property, which was a highly secretive and unusual process that we will argue violated a number of the California Education Code’s provisions for the sale of public surplus property. There were several primary problems with the property exchange for King High School. First, the process was conducted primarily in secret with a limited bid process. It required a property exchange to avoid possible efforts by the city to invoke the Naylor act. Finally, the process would have resulted in the district getting a low sale price for the property.

This final segment examines the report from consultant Terri Ryland and the Fiscal Crisis and Management Assistance Team (FCMAT) report. We have discussed both in previous weeks, but this time, we do so in more detail, looking at the problems with the district’s tracking and management of its facilities money and then efforts by the district—which were successful—to fix those problems.

Terri Ryland’s Report

We start this segment by returning to the problems with King High School that emerged on November 2, 2006 and resulted in the halting of construction on that project. Recall from the second segment of this series, that the school board was surprised to find out that the money that they had thought they had approved to pay for King High School in 2005 was not there. Now, the Superintendent, David Murphy, was asking for an additional $5 million in COP to fund the high school. The school board learned that they only had half of the money needed to finish the construction of King High.

As Board Member Gina Daleiden said during that meeting:

“We learned just a few minutes ago that more than fifty percent of the [king high] project is unpaid unless we make a decision about COPs. That is news to me… We need to look at the COPs that the previous board took out because I think they were for King High.”

Throughout this trying and at times contentious meeting, Superintendent Murphy was steadfast in his belief that the $10 million was still there... "I’m sure we have all the money that we think we have, but the documentation provided to the FCMAT team was deficient… I’m confident that not only do we have the money that we believe we have, but the documentation will show that.”

He explained that since we were short-staffed on the business services side, the top two positions were vacant, and that the facilities people were not people with fiscal expertise, and that this was the cause of the confusion.

It was at this point that Superintendent Murphy brought in Terri Ryland to examine the district’s books and figure out where the money that the school board believed should be there was.

As we learned two weeks ago, Superintendent Murphy was correct—the $10 million was there, it simply had been used to backfill payments for previous facilities projects and therefore unavailable to pay for King High.

As consultant Terri Ryland put it, “that wasn’t negative money, that was a shortfall in money that at one time we anticipated receiving.”

Part of the confusion on the board's part is that as Board Member Jim Provenza put it, we were “carrying the anticipated state revenue from Montgomery in our facilities plan as revenue available for projects.”

That money according to Terri Ryland was carried on the book until the end of the 2005-06 year. In other words, to the school board, it looked like money was there, that was not in fact there.

FCMAT Report

This problem among others were laid out more fully in the Fiscal Crisis and Management Assistance Team (FCMAT) report that was released on December 14, 2006.

After District Chief Budget Officer Tahir Ahad left the district in 2006, DJUSD hired an interim CBO Cathi Vogel. One of Ms. Vogel’s key recommendations to the Superintendent was to bring in the FCMAT team to examine the district and assess its conditions.

Part of the problem that came to light during the course of both the November 2, 2006 meeting and the December 7, 2006 meeting is that once Tahir Ahad left the district, there was literally no one in the district who understood the budget, where the documents were, and who could help piece together the district fiscal reports. This was a problem in and of itself.

As Board Member Provenza put it on December 7, 2006:

“We had an interim CBO, we had fiscal people here. That’s really what I’m going to. In my mind, correct me if I’m wrong, if someone leaves a district, the fiscal situation should be such that someone else could pick up the books, could look at the records and understand them and you wouldn’t have to pay someone for hundreds of hours of work to put it together. That you could have a system like that, that any CPA could go in and look at and understand.”

FCMAT not only came in to evaluate the district, but they came in to make recommendations on how to better run the fiscal office, so that these problems do not repeat themselves, so that next time someone leaves the district, it is easy for an individual to look at the books and figure out what money the district has. Instead, the district had to bring in Terri Ryland for hundreds of hours of billed work to literally reconstruct the books by hand.

One of things that encumbered the FCMAT team was the fact that “Both the prior Deputy Superintendent and the Director of Business Services cleared off their computer hard drives before departing the district.” FCMAT therefore recommended the enactment of policies and procedures for the retention of information on computer hard drives and notes, so that history can remain even when employees leave the district.

In their executive summary, FCMAT also notes that

“The organizational structure of the business division must clearly define and delineate the job responsibilities of managers, supervisors and employees… Although board policy exists, business office employees have not been evaluated annually. Some have not been evaluated for several years. A process needs to be implemented to ensure that employee performance evaluations are prepared regularly.”

While we have primarily focused this investigation on the Facilities projects and their mismanagement, there is a significant trail of mismanagement within the district offices themselves in terms of personnel. We discussed some of this briefly in the first segment. Interviews with past employees suggest that these structural designs were not accidental and not merely sloppy, but rather intentional features of the office designed to maximize control and loyalty to the former CBO, Tahir Ahad.

The FCMAT report goes on to discuss the fact that “business department staff do not currently receive cross training… Cross training helps departments perform effectively when an employee is absent, and enables employees to perform tasks outside their normal duties when necessary.” It goes on to note: “It appears that the previous CBO and director completed a lot of tasks and analyses on their own, and did not leave backup or information for future employees to follow and understand.”

This again seems to be an innocuous function of an individual’s management style, but it also leads the entire office to be dependent on a single individual in order to effectively function. That means that once that individual leaves the district, the ability to carry out previous functions virtually collapses. Indeed, FCMAT noted, “the district lacks written desk manuals, standard operating procedures or other specific reference documents in the business office.”

FCMAT then goes on to rate the district as having a “high fiscal health risk level. The areas of concern include cafeteria interfund borrowing, cafeteria encroachment, management information systems, retiree health benefits, leadership stability, district liability, and facilities.”

Most importantly—“no single report adequately tracks projects and the different types of funding used on each project for both past and current projects.” I shall talk more about this shortly.

Right now, it is very important to emphasize that all of the shortcomings that FCMAT put into place were addressed by the district in short order. In fact, by the time Montgomery came up before the State Allocations Board, the district informed the board that they had already implemented the recommendations of FCMAT. This will be discussed more at the end of this segment, but given the gravity of the current budget situation it is important to note that at the very least the district is on sound fiscal footing in terms of policies and procedures—however, this was not true in 2006 and that led to a high risk rating that was quite alarming to current school board members.

FCMAT looks at 18 categories of “Fiscal Indicators” and determined 7 categories were “not acceptable.” That put the district into the “high” risk category.

It is interesting to note that FCMAT rated the category, deficit spending, as acceptable. However, they also noted that “since FCMAT’s review, the district has given a 6.5% salary increase that will result in deficit spending of $1,030,758 in 2006-07.” This was not included in their projections and analysis and should be a note of concern that would carry-over to later budgetary issues. Unlike other fiscal practices, this one can be put on the current school board.

The first problem that FCMAT cited was interfund borrowing. On paper, FCMAT said that the district does not appear to have interfund borrowing. However, since the cafeteria fund had ended in a negative balance the previous four years,

“interfund borrowing should have occurred instead of ending the year with a negative cash balance. Because interfund borrowing is not occurring, there has been no awareness or discussion at the board level regarding the negative fund balance.”

Along the same lines, the district got a negative finding on encroachment. “The district needs to engage in interfund borrowing at year end to cover the negative fund balance, and address the issue of why this fund is continually in the red.”

Furthermore, the district was criticized because key fiscal reports were not readily available and understandable.

“The COE [County Office of Education] expressed concerns about how questions are answered on fiscal reports. The district provided backup as requested, but the COE often had additional questions or concerns based on the data provided, and felt that the reports did not answer the questions in many cases.”

The district scored poorly on retiree health benefits that were funded on a “pay-as-you-go basis” rather than having an actuarial study and a plan to fund the ongoing liability.

The district also go dinged because they had an interim CBO and therefore lacked stability in leadership.

An interesting point was made that the governing board of the district generally refrains from micromanaging.

“Comments were made that the board micromanages, but interviews and board agendas and minutes did not corroborate that. Board members have asked for additional budget information, such as budgets by department and history of past reductions versus what has been reestablished. These types of requests are common and reflect fiscal responsibility.”

The district liability was not acceptable either. The district had not done the proper legal analysis regarding potential lawsuits nor had it set up contingent liabilities for anticipated settlements and legal fees.

While some of these problems were serious, most of them appeared to be easily resolvable with good management from the administration and direction by the school board.

The most serious problem, not surprisingly for anyone who has read this series, is in the facilities area.

The biggest and most alarming finding is that “over the years, the district has transferred money between funds and it is difficult to ascertain which funds were used for which project.”

One of the biggest findings that both FCMAT and Terri Ryland pointed out is that the district used a single account for its facilities funds rather than creating a separate account for each new project. That meant that in addition to difficulty tracking the project as FCMAT pointed out, it also meant that it was easy to use monies that had been designated to pay for one project could easily be used to pay for previous projects—and the board would have difficulty tracking those payments and funds.

“The tracking reports are inadequate and appear to have been used throughout the program.”

Part of the problem was that the Chief Business Officer left in February of 2006.

“An interim CBO was hired but was told not to work on facilities accounting and funding, because the former CBO would do that. That apparently did not occur, and thus the area of facilities needs immediate attention… The previous CBO controlled all facilities planning and long-and short-term funding recommendations and decisions with no input from the Facilities Department since 2004, when the previous Facilities Director left.”

Furthermore, personnel was not the only problem the district faced on this.

“Even if adequate personnel were available to track projects, the tracking mechanisms used are inadequate and have been for the length of the program. A number of reports are used, but do not appear to reconcile with the district’s accounting system.

There also is no reporting mechanism to track past, current and future projects and their budgets in a master plan format so that the board, staff and public can readily see the expenditures of facilities funds over the duration of the program since approval of the Master Plan in 2000.”

FCMAT goes on to discuss the problems with Montgomery and Korematsu that were discussed in detail in the second segment of this report.

The problem of commingled funds may be explained away as sloppiness or even expediency on the part of the previous CBO. However, one point that needs to be made is that this is not an accidental policy but rather the result of specific board action early in Tahir Ahad’s term as CBO that allowed facilities project money to be placed in a single account rather than giving each project its own account that could be tracked over time by the board or the public.

Board President Sheila Allen found this the most alarming aspect of the FCMAT report’s findings.

“I think the most alarming thing about it was my concern about the specificity of the tracking of the dollars. If someone is in charge of tracking the money, I would hope that they would know exactly which dollars come in, into which pot, how exactly they were spent, and that is something that should be fairly easily tracked. I know it’s a very big organization and I absolutely know how complex school financing is, but that is my expectation of a finance department—is to know exactly how much comes in, how is it supposed to be spent, and how was it spent. "

A final problem that we have already discussed is the use of anticipated but not yet board approved moneys in line items as though the money were there and approved.

“In February 2004, staff prepared and presented a report detailing another revision to the Master Plan. The revisions included another $9.7 million in additional projects. In this report, no mention was made of the proposed funding sources for these projects.”

FCMAT then goes on to say:

“Because of the way the reports have been developed and presented to the board and community, it appears that all such projects have been planned. However, the funding sources are unclear because the board has not yet approved additional debt, such as COPs. Potential future revenue amounts are shown on the cash flow statements even though they have not been approved by the board, giving the impression that there is sufficient cash to proceed with the projects. The reports must be developed to distinguish between secured funding and potential funding to give the board greater certainty and understanding in their discussion of future facility projects.”

Board Vice President Gina Daleiden addressed this point when she spoke to the Vanguard in January 2008:

“There was also a problem with documents that went to the board and the public not clearly reflecting reality. When we adopted the FCMAT report, we made a motion… I made a motion seconded by Tim Taylor to direct the business staff to insure that speculative, not yet board approved financing is not reflected as available cash in cash flow documents and is instead clearly marked as possible options. The FCMAT report also says that that should happen.”

On page 95 of the FCMAT report they note $3 million was erroneously entered onto the line item of “projected redevelopment fund.”

“Since the issuance of FCMAT’s initial draft report, the district has disclosed that the $3 million was entered on the wrong line and instead should have reflected a new COP issuance, with a second $3 million to be requested in 2007. Since neither amount had been approved by the board, it is not appropriate to reflect that as cash flow unless clearly noted as potential cash. The current practice of listing the amounts without such a notation must be discontinued. The district should insure that all revenue projections are realistic and based on likely funding.”

According to Board Vice President Gina Daleiden, the board took the findings very seriously.

“Because that was such a concern when the board adopted the FCMAT report, the board made a series of motions adopting a lot of the recommendations from the from the FCMAT report that was done very deliberately so we could say we take this very seriously and make sure that our practices become best practices. Now in terms of what key changes were most vital to make, you can find that online in Bruce’s response to the FCMAT report, our new CBO. And I would cite these changes as well as… so here’s some of the changes… Some of the changes are new fiscal team has implemented, stronger financial controls, clear separation of authority within the accounting staff, and more accountability in staffing decisions. We have hired a director of facilities who will save us money by bringing professional oversight to our facilities budgets, maintenance and projects. We have instituted more regular reporting to the board on budgeting items. One of the things that it says in the FCMAT, that it notices in the past that the interim budget reports were put on consent without discussion and those are always on our regular agenda now so that the board can consciously talk about any adjustments to the budget and track how budget expenditures are meshing. [refers to PowerPoint on website that shows Colby’s changes to the FCMAT report]. I’m confident that our new CBO is implementing the FCMAT report. And it was very clear that that was one of the board’s top priorities for our interim superintendent. To make sure that the FCMAT report was being implemented.”

Board President Sheila Allen:

“To my knowledge we have either already implemented the recommendations or there are plans in place to do the recommendations. The key changes that they wanted in place were two things, is that they were talking about a coding system—that’s the standard practices. And the other thing is that you need a permanent head person and fiscal manager and we have both of those now.”

Some have defended past fiscal practices of the district on a number of fronts. The first point of course is that no money has been lost or misspent by the district.

Even strong critics of the previous regime agree on this point.

Board Vice President, Gina Daleiden:

“I do want to be clear that the money was spent on district buildings. So it wasn’t taken away or put into something that had nothing to do with the school district. They were spent on our buildings just no one realized the way in which it was being spent”

Board President Sheila Allen was very adamant that there was no lost money.

“The FCMAT report, and to my knowledge there was no lost money, there was no money that was illegally spent, but it was very difficult for someone to come in and be able to track exactly—here’s the money coming in, here’s how it was spent. And that’s concerning because these are taxpayer dollars. So we want to make sure that we know how much money we have, how it was spent, and that it was spent in the right category.

The good news about FCMAT is that it gave us some very clear guidance from professionals of where we need to go to do better. Although there was alarming information in there, the important thing to me was very help that rather than someone to say to me it’s a mess, or we don’t know exactly where the money’s been going, what was important to me is that they said here’s what you can do, you can do this… And also it was very important for me to know, and I’m sure I said this at public meetings, there’s no lost money. Nothing illegal has happened.

All of the experts, both ours and their’s were able to say, there’s no lost money, there was nothing illegal happened. That was very important to me that was very clear to me… I’ve been looking around for a better word than sloppy bookkeeping. It wasn’t very precise. So we put into place a more precise approach to bookkeeping and there’s all new people over there. So that’s the really good news is that we have people that we can trust—their numbers, we can trust that they’ll get us the information straight up…”

The Vanguard agrees with that assessment, but would argue that it is less than clear that this the end of the story. While in the true sense of the word, money was not lost, the poor fiscal practices of the district monopolized board and staff time that could have been spent better in other areas. Moreover, it is far from clear that these practices did not cost the district money both in terms of inefficiency of operation but also in terms of the time and money needed to get a straight accounting from both FCMAT and Terri Ryland. That in a very real way is lost money.

A second point was made to me that the FCMAT rating of “high risk” was misleading. The district got good marks on position control for the most part, which is the means of tracking and projecting employee salary and benefits. “A reliable position control system establishes authorized positions by site or department and ensures that staffing levels conform to district formulas and standards, thus preventing overstaffing.”

They go on to point out that a number of the deficiencies were minor and easily correctable, and that given four of those factors, that would place the district in low risk rather than high risk. On the other hand, one might wonder if some of the past practices of the district have not caught up with them in the current budget crisis.

Board Vice President Gina Daleiden was asked about the rating system.

“As with any standardized numbers, the numbers are not the whole story. So whether or not one question was weighted more than another, whether or not our score was a nine instead of a nine and a half, and I’m making that number up, the numerical value doesn’t matter to me, as much as the substance of the report. I am a trustee of this district, when I look at a document that says to me here are some issues with how the district’s finances are being run, we need to take those seriously, that’s the only way to get better. You have to look at things that can be improved and work on improving them. Some of the findings in this report—the responsible thing to do is to pay attention to them. To fix them. And it doesn’t really much matter to me whether it’s a high risk, medium risk, it’s not a grade on a paper and it’s not points in a pageant. This is about the practices of the district. And wanting to insure that they’re not only adequate but they’re really good. We have a great school district, and we need to have great fiscal practices so that we can support all of our programs and do the best for our kids. And it’s public money so we have to be careful in how we expended it.”

Both Sheila Allen and Gina Daleiden agree that things have changed.

Board Vice President Gina Daleiden wants to the public to know that “Past practices are in the past.” We have according to her new safeguards in place. We have new conflict of interest codes that will protect us from future problems with employees working in outside consulting firms, we have implemented the recommendations of the FCMAT report, the district reports to the board on a regular basis with easy to understand and clear budget updates. She expressed confidence both in the new CBO Bruce Colby and the new Superintendent James Hammond. And the board along with Bruce Colby has enacted a series of careful fiscal procedures so that it is easy to track monies as they go to and from projects.

Board President Sheila Allen likewise, declares it a “new day.”

“I really am not interested in having the district dragged through the mud further when these are things that have already happened. I’m totally fine with people knowing what happened that’s fine with me, but I want the headline and I want the last part of it to be here’s how it’s changed. It’s a new day. We have a new superintendent; we have an all-new budget office. We have this accounting information put into place. The board since I’ve been on it, has a very strong commitment to open government, no more closed door discussion about district information.”

Summary

My concluding remarks for this four-part series basically echoes the comment made by Board President Sheila Allen. I think the public can look at these problems and better understand in part why we are facing some of the budget problems that we are facing. However, I also think we must understand that the then new school board which came into office in December 2005 with newly elected members Sheila Allen, Gina Daleiden and Tim Taylor, joined with Jim Provenza in providing the leadership that has over the last two years taken deliberate and concrete steps to put the district on better fiscal ground. It was these school board members who led the fight to clean up the fiscal house of the district and in many cases uncovered past business practices condoned by previous school boards that have plagued the district for years.

There is better tracking, better oversight, and a new fiscal team. What is unfortunate is that the budgetary bottom has fallen out of the district at a time when in terms of policies and procedures, the district has never been stronger.

Nevertheless, I think there is a good amount of important information that has been gleaned out of this investigation in terms of the way that the business office was run, the way in which monies were handled, and most importantly the need for all districts to enact strong conflict of interest policies in order to better protect themselves from employees and companies that are seeking to profit on public money.

---Doug Paul Davis reporting

Vanguard Investigation Part III: The Grande Property Agreement

The Vanguard continues its multipart series of former DJUSD Deputy Superintendent Tahir Ahad, Total School Solutions, and fiscal mismanagement of the Davis Joint Unified Business Office during Tahir Ahad’s tenure from 1999 to 2006 as CBO of DJUSD.

The first segment of this series which ran on Sunday, February 24, 2008 examined the inherent problems involved in a conflict of interest. The conflict of interest we examined involved a series of disturbing findings of how Mr. Ahad used his position as Chief Budget Officer (CBO) with the Davis Joint Unified School District as a means by which to start up his own private company for his own private gain. In short, he used public resources for private gain, a serious breach in the public trust.

The second portion of the series ran on March 3, 2008 and focused specifically upon the facilities planning and management beginning with the lost state matching funds for Montgomery Elementary, problems with Korematsu and eventually the King High debacle which led to the new school board finding out exactly what had been going on with the district’s facilities construction money. Basically money was shifted from later projects to make up for lost matching funds for Montgomery, lower than expected matching funds for Korematsu, and other cost overruns. Instead of acknowledging the depths of the problems, Mr. Ahad asked the school board in 2005 to pass a COP (Certificate of Participation), a form of debt financing, to pay for King High and some other projects. In 2006, the board learned that they only had half the money they needed to fund King High, and they realized that money had been shuffled, but only after an extensive investigation and the temporary halting of construction activities at King High.

This segment will continue to look at the facilities funding problems and other fiscal management issues. We examine the property exchange deal involving the Grande Property, which was a highly secretive and unusual process that we will argue violated a number of the California Education Code’s provisions for the sale of public surplus property.

Next week, we will also examine the FCMAT report and Consultant Terri Ryland’s findings. Future segments will include the efforts by the school district to rectify the problems that existed under Tahir Ahad and former DJUSD Superintendent David Murphy; some of which have already been discussed in previous issues. We are also following up on several different reports from other school districts about similar problems with Total School Solutions and Tahir Ahad. Last week in the Modesto Bee, a story was written about the Waterford School District. We will be looking further into that situation.

Grande Property

In 1971, the Davis Joint Unified School District purchased the Grande Property, which is located in North Davis, for the use of an elementary school in anticipation that Davis would continue to grow in a northern direction. They paid just under $60,000 at the time for that property; however, nothing was ever built and growth patterns in Davis have not continued north of the city.

With the growth in the real estate market during the past decades and inflation of housing and property values, the property is worth at least 100 times the value it was purchased, if not more.

The district realizing that it would likely not use the property for a future school began in the late 1990s to look into selling or exchanging the property. Those efforts moved into high gear in 2005.

Complicating any sale of school property is the Naylor Act or Education Code Section 17485 which governs the sale of certain land owned by a school district.

According to the City of Davis’ attorney, Harriet Steiner, the Naylor Act applies if the property meets three specific conditions. First the land must be used at least in part for “outdoor recreational purposes and is open space land particularly suited for recreational purposes.” Second, the land must have been used for those purposes for at least eight years. Third, there can be no other publicly owned land in the area of the site that is adequate for meeting “the existing or foreseeable needs of the community for recreational and open space purposes, as determined by the public agency proposing to purchase the land.”

If the Naylor Act applies:

Before selling or leasing the land, the district’s governing board must first offer it for sale or lease to the city within which the land is situated. § 17489. If offered for sale to the city, the city must notify the district of its intention to purchase the land within 60 days. § 17489. If the city chooses not to acquire the property, the district must then offer it to park districts, if any exist, and then to the county. Id. The selling price must be not less than 25% of the fair market value and not less than the school’s cost of acquisition, as adjusted for increase in the area cost of living3 and any improvements made by the school. § 17491.

There was a good deal of debate at that time and really even now as to whether or not the Naylor Act even applied given the third provision. There is also a good degree of speculation as to whether or not the city council at that time would have invoked the Naylor Act. Many claim that the city was not interested in the land, although those on the other side mention that at least one councilmember was interested in the use of the Naylor Act. However, the fear was that the school district could lose the property and gain just 25 percent of its worth should the city council choose to invoke the Naylor Act.

As a result, the school district went to great efforts under the leadership of Superintendent Murphy and Tahir Ahad to avoid an open sale that would risk a potential invocation of the Naylor Act. These tactics raise serious ethical and perhaps legal concerns.

From the start, the district met in closed door sessions and in secret during discussions involving the sale of the Grande Property. Instead of noticing the public via the public notice section of the newspaper as is generally required for such sales of public land, the notice was buried in the classified section of the Davis Enterprise where few would be looking for such a public notice.

The arrangement that Superintendent David Murphy and Tahir Ahad had employed by October of 2005 was a land swap that involved a UC Davis property that was the home of Fairfield Elementary School. This piece of property that the university had not wanted was offered to Davis Joint Unified for at least three years prior to this land exchange. The university had been willing to simply give DJUSD the Fairfield School property at no cost.

Instead, the school district would enter into an agreement with BP Equities in which BP Equities would pay the school district $4.5 million in exchange for helping the school district to acquire the 10-acre site west of Davis. In essence, Davis Joint Unified would trade BP Equities the Grande Property in exchange for $4.5 million and the Fairfield School.

Coincidentally, this $4.5 million happened to be the same monetary amount that the district lost out on matching funds from the state when they missed the Montgomery Elementary school deadline. Questions have arisen as to whether the speed, urgency, and also secrecy of this deal had something to do with that lost funding.

The land exchange generated a large amount of controversy in the community. Under pressure for the seemingly sub-market value sale price, the offer was raised on November 22, 2005 to $5.5 million and the deal was locked in.

Nevertheless, controversy continued to rain down on this deal. First, even the revised sales figure seemed too low. According to the best information the Vanguard has uncovered, even given a semi-secretive, non-open process, there were at least three other offers that the district had at the time of the sale that were considerably higher. One of these was from a West Sacramento developer who eventually threatened to sue the district. Another was from John Whitcombe who had proposed a trade of 160 acres for Grande. A third proposal offered anywhere from $7.5 million to $10.5 million and offered to front the development costs.

The existence of these higher offers caused former Davis Mayor Maynard Skinner, who was in attendance at the November 22, 2005 meeting, to proclaim angrily that the district had just “kissed” away $2.5 million.

The problems with the Grande deal were not merely fiscal in nature. There were also severe procedural problems with the manner in which this deal came down. From all appearances the District simply did not follow the procedures that were outlined in the Education Code for the sale of surplus school property.

Education Code Section 17466 specifies that ordering the sale or lease of any property must be done in open session at a regular open meeting. However, this by all accounts did not occur.

“Before ordering the sale or lease of any property the governing board, in a regular open meeting, by a two-thirds vote of all its members, shall adopt a resolution, declaring its intention to sell or lease the property, as the case may be. The resolution shall describe the property proposed to be sold or leased in such manner as to identify it and shall specify the minimum price or rental and the terms upon which it will be sold or leased and the commission, or rate thereof, if any, which the board will pay to a licensed real estate broker out of the minimum price or rental. The resolution shall fix a time not less than three weeks thereafter for a public meeting of the governing board to be held at its regular place of meeting, at which sealed proposals to purchase or lease will be received and considered.”

Section 17232 requires that the process must be open and remain open for no less than 60 days. The provision includes for the transfer of property in addition to outright sale.

“A school district's offer to sell or transfer the land shall be made to all park districts, cities, and counties in which the school district is wholly or partially situated pursuant to this article and shall remain open for not less than 60 days. The sale or transfer shall be made to whichever public entity first accepts the offer, or whichever public entity can negotiate satisfactorily for the purchase or transfer of the surplus land.”

Furthermore, the education guidelines stipulate that “a request to waive the bidding process for a lease or sale of surplus real property” must assure a number of things including that “no other state code section or another agency’s jurisdiction will be nullified in order for the request to become effective.” Furthermore, “waiver requests generally indicate that districts have complied with the Education Code requirements but have been unsuccessful in selling or leasing the property…” Education Code Section 33050.

In fact, the district did not request any such waiver. It certainly did not go through the normal process and failed to get a viable offer. No effort was ever made to go through a public, open bid process as the stipulation for waiver would seemingly require.

Furthermore even if granted the waiver, the district still must go through an open public process at a “regular open meeting” and “the governing board will announce, at a public meeting, the applicants deemed to be qualified.”

Education Code Section 17387 specifies:

“It is the intent of the Legislature to have the community involved before decisions are made about school closure or the use of surplus space, thus avoiding community conflict and assuring building use that is compatible with the community's needs and desires.”

Furthermore per Education Code Section 17388:

“The governing board of any school district may, and the governing board of each school district, prior to the sale, lease, or rental of any excess real property, except rentals not exceeding 30 days, shall, appoint a district advisory committee to advise the governing board in the development of districtwide policies and procedures governing the use or disposition of school buildings or space in school buildings which is not needed for school purposes.”

One of the requirements per Education Code Section 17389 is the appointment of a “school district advisory committee made up of no less than seven members and no more than 11 members. The term that those who have followed this process the last few years might be familiar with is the 7/11 Committee—so-called for the membership requirement. But in 2005, this was body was not formed.

Basically the Davis School District did not follow Education Code in the original Grande Property agreement with BP Equities. It was a secretive, closed door process that appears, to this non-lawyer, to have violated each of these provisions of Ed Code.

With a new board in place in the fall of 2005 and Board Members Gina Daleiden, Sheila Allen, and Tim Taylor on the board, the concerns of many in the community led the school board to re-examine the issue on March 16, 2006.

Davis City Manager Bill Emlen effectively took the Naylor Act option off the table during this meeting. According to the minutes from the meeting, “Mr. Emlen noted the city’s interest right now is on the best project for that neighborhood.”

Bill Emlen told the board, “The Naylor Act although relevant probably isn’t a defining factor in this case.”

Maynard Skinner speaking as a member of the public said, “In my opinion, the previous school board was in violation of the Brown Act, if not de jure, then de facto…”

Brian Purcell, the President of BP Equities was asked by then School Board Member Jim Provenza if there had been an appraisal on the Grande Property done prior to the agreement. Mr. Purcell told the board that there was not.

Jim Provenza would move to withdraw from the agreement. Tim Taylor seconded that motion.

School Board Member Keltie Jones told the board that she had serious concerns about withdrawing from the agreement.

“I have serious ethical concerns about withdrawing from this agreement; I think it was entered into in good faith. I think it was entered into with the understanding that this was an agreement that we would follow through with.”

She argued that she did not believe that property values in Davis were increasing and that the district could end up with less money.

Jim Provenza then issued forth a lengthy statement on the Grande Agreement from the dais.

“I have an ethical concern about going forward because I feel that the process from the beginning was flawed. And it’s not because of anything that Mr. Purcell did, he was negotiating with Tahir Ahad in good faith, but our process I believe was flawed from the beginning. To begin with it was not actively marketed. An ad was placed in the paper the Friday before the weekend with proposals due on Wednesday. A lot of people didn’t even hear about it until it was too late. Another ad was placed in a trade journal. I spoke to several realtors and developers who felt they were not wanted in the process. That a particular result or particular developer was desired from the beginning of the process. Whether that’s true or not that’s the perception that’s out there. But we did not have the type of active marketing to find everybody out there that might have been interested in the property, and getting bids.

Those bids that we did receive we received one as high as $9 million. We were told, well don’t pursue that one because we were told you have to exclusively negotiate. But we ended up negotiating with a single developer for what was initially a $4.5 million offer. There was no appraisal done before we entered into this agreement until the very day that we voted the first time. That was the first appraisal that we received that was done that week, although I had requested one several times. The response and I’m sure it was in good faith, was it doesn’t make sense to do appraisals, they always come out too low or they always come out lower than the amount being offered. On the night that we voted for $4.5 million, we had an appraisal that said it was worth $6.3 million. Remarkably, we went ahead anyway, but with an escape clause.

We sought two other appraisals. But prior to those two other appraisals we had a letter from the city making Naylor Act claims which was forwarded to those appraisers. I believe that that letter affected those appraisers and I think it affected the amounts of the appraisals. I can’t say for sure that’s it, but it makes me really question the process.

What I heard from one of the appraisers was that he was feeling pressured to come up with a lower amount. That made me question the process. We proceeded with an agreement that had various escape clauses. BP equity has the right to walk out of this deal for no money today—that’s what was written into the agreement. This district has the right to withdraw from the agreement.

If I felt that this process was fair and open to everyone, I would feel comfortable going forward. One of the things I found when looking for an example at one of the Public Record Act requests about documents concerning this, is that there was confusion even as to information as to how the deal was going to work. I don’t think it’s anyone’s fault, I don’t think it was intentional, but I think the process was flawed. I think that the prior board wanted to conclude this agreement before the new board was seated. I think that we were, as a board, giving away this property at a fire sale price. I can’t prove that, but that’s my impression. And I feel as if I have a fiduciary duty on behalf of the taxpayers and on behalf of the students of this district, to make sure that we are getting the most for this property.”

Jim Provenza’s statement confirms a number of aspects of this process that we have mentioned. To begin with the property was not actively marketed. That raises questions about the sale price that was obtained. There was a reluctance to get an appraisal for the property. When Mr. Provenza requested an appraisal, a number of excuses were furnished in an attempt to avoid such as appraisal that would show the reality of the deal that the district was getting.

By far the most important implication is that one of the appraisers was “feeling pressured to come up with a lower amount.” While the appraiser would not go on the record about this incident, he did confirm the accuracy of Jim Provenza’s public statement. It appears that the district, and specifically Superintendent Murphy, apparently in trying to justify the low price for Grande, is alleged to have attempted to obtain a lower assessed price for the property. That is the opposite of what one would expect from a district that was badly in need of funds.

To this day, there remains no good answer as to why the Superintendent and CBO did this. One can only speculate on the rationale.

Current Board President Sheila Allen told the Vanguard during our interview was asked about reversing the decision to sell Grande:

“My recollection of why we reversed the decision—I think it was in my first meeting—is because I didn’t think it was the best deal for the taxpayers and the students of the district. I thought that we could do much better financially with an open process for the community. I had a problem with the process and with the amount of money and so I wanted us to have an opportunity to come in and start over. I truly believe—we’ll have to see what get for the sale price of it and subtract off because we have had some consultant work on it—but I can’t to see exactly what it is in the end that will have done a better service for the students.”

Current Board Vice President Gina Daleiden:

“In all of my conversations, before I was elected and after I was elected, in reports to the board, so my conversations with people who talked to me individually and also who did reports to the board who were professionals in land use/design/development field, the consensus was that Grande would be much more valuable sold as entitled property instead of as raw land which was what the first sale/ exchange was to be. Particularly if the school district as a public entity could find a way to work cooperatively with the city as a public entity to help us along with the entitling of that property we would really increase the value to the developer who would eventually buy the entitled land.”

Why was this agreement rushed through? Was it an effort to cover up for the loss of Montgomery? Was there another financial relationship between members of the district and BP Equities? That is not clear. Jim Provenza would not speak on the record beyond what he said at the public meeting in March of 2006. And those currently seated on the board were not in a position to know.

The district working with the city and developers is working on an entitlement process at present that is likely to bring in a far more lucrative sale from the property.

Current Board Vice President Gina Daleiden would explain the current process.

“The board has had a subcommittee of me and Tim Taylor, along with two members of the city council Don Saylor and Steve Souza. Katherine Hess from planning is staff for the city and Tom Lombrazo, who is a professional in land use and design is our staff person on this. We’ve been meeting including the neighbors in public—they are public to the extent that anybody is welcome to come, often the Grande neighbors are the only ones who choose to come. Usually reporters come in and out and I think just one other community came, maybe we’ve had two.

We can work cooperatively with the neighborhood association and have an open process. We have an MOU/MOA signed by the full board and the full city council… It basically says we’re going to work cooperatively together and try to maximize the value for the school district as well as fit the existing neighborhood and be a positive project for the town. We’re actually getting pretty close to being able to go back to the full board to get a decision on something to take to the city to their planning department… We’re going to put a tentative map on the property that shows how many lots and then we will sell those. The board will decide when to sell those and how.”

In their November 18, 2007 Op-Ed in the Davis Enterprise, Marty West and Joan Sallee argued:

“When we left the school board in December 2005, the finances of the school district were in good shape. Any financial mismanagement that has occurred has been on the 2006 and 2007 school board's watch. In early 2006, the board majority rescinded the $5.5 million contract we had signed to sell the Grande Avenue site, thus jeopardizing funding for building a student commons at the high school and modernizing Emerson Junior High School.”

In fact, what more likely would have happened is that $5.5 million would have simply vanished into the facilities problems that we discussed last week. However, instead of taking out a COP to pay for King High in 2006, the sale of the Grande would have covered it. It seems fairly clear that the Superintendent and CBO would then have been able to have avoided the discovery of the missing King High money the following year.

Summary and conclusions:

The Davis Enterprise on January 10, 2008 reported that a consensus, at least a conceptual agreement between the School District, the Neighborhood Association, and the City.

“The new school board formed a 7/11 Surplus Property Committee — so named because state law specifies the committee should have between seven and 11 members — that recommended the district sell the property. The money from the sale be used only for school facilities, not salaries.

The committee, along with city and school staff, and members of the Grande Neighborhood Association, reached consensus on a plan that features 39 lots, a workable traffic pattern, and greenbelts flanking the west and north edges of the site.”

Several things have changed with the school district, including unprecedented cooperation between the city of Davis and Davis Joint Unified to ensure that the process benefits both the city and the schools.

One of the common denominators during both King High and Grande under Tahir Ahad and David Murphy, was the lack of communication and the almost combative and adversarial relationship with the city.

It is important to note that the sale of Grande will not alleviate the current fiscal crisis in the school district. The money from any sale could only go to facilities and not to the general fund.

However it is pretty clear from the public record and a cursory examination of the law, that the original Grande Property sale made little fiscal sense and it certainly pushed up against the laws of public meetings and the Education Code.

---Doug Paul Davis reporting