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2012 - 2013 Annual ReportsMEASURE A STRONG SCHOOLS BOND UNIFIED SCHOOL DISTRICT CITIZENS' OVERSIGHT COMMITTEE 2012 - 2013 ANNUAL REPORT ConTA tee Members as of June 30, 2013 Board of Education as of June 30, 2013 Todd Collins, Chair Person, Taxpayer Organization Member Dana Tom, President Helene Leichter, Moe -Chair, Parent Barb Kitchell, floe President Jim Cowie, Member, Parent, PTA Member Melissa Baten Caswell Catharine Garber, Member, Business Organization Member Heidi Emberling Walt Hays, Member, Senior Ctizen Camille Townsend Bruce Whitson, Member, Business Organization Member Arianne Teherani, Member, Parent Letter from Committee Chair ..................................................... October 9, 2013 To: The Board of Education and the Citizens of the Palo Alto Unified School District The Citizens' Oversight Committee is pleased to forward its fifth Annual Report, covering the 2012-13 fiscal year, on the $378 million general obligation Strong Schools Bond. The purpose of the Citizens' Oversight Committee (COC) is to inform the public concerning the expenditure of bond revenues. As required by State law, the COC provides oversight and advises the public whether the District is spending the Strong Schools Bond funds for school capital improvements within the scope of projects outlined in the Strong Schools Bond Project List. In fulfilling its duties, the COC reviews, among other things, the District's annual independent performance and financial audits of Strong Schools Bond activity. The Bond building program continues in full swing. Major projects have now been delivered at all five secondary school campuses as well as two elementary school expansions. Additional projects are slated for completion in the coming year at Palo Alto High School and Duveneck Elementary School. A list of those projects is included in the "Highlights" section on the next page. From a financial perspective, the Bond Program expended $65.6 million during the fiscal year, consistent with last year's rate of expenditure. Approximately 52% of the full Bond amount has been contractually comnitted, and 43% has been expended. The current rate of building and spending is expected to continue. To fund the expenditures, $70 million in bonds were issued in March, 2013. The District maintained its historical AAA bond rating. Importantly, the issuance did not include any capital appreciation bonds (CABs), use of which has recently been significantly restricted by the state legislature due to the controversial use of these bonds in other districts. It is noteworthy that while PAUSD did issue approximately $110 million in CABs in 2008, these bonds would still be permitted under the new legislation due to their relatively low interest rate and conventional duration. As in previous years, the Committee reviewed the Financial Audit and the Performance Audit issued by the independent auditing firm of Christy White, Professional Accountancy Corporation. The firm conducted its audits in compliance with Generally Accepted Government Auditing Standards. Under these standards, the audit firm independently determined which tests to use in arriving at its opinions. The audits found that the program was materially in compliance with the terms of Proposition 39 and Strong School Bond. In sum, the Committee wishes to report that, to the best of its knoWedge, the Palo Alto Unified School District is in full compliance oath its responsibilities as described in Article XIIIA, Section 1(b)(3) of the California State Constitution, the section that governs the terms and conditions of Proposition 39 bonds like the District's Strong Schools Bond. The work of the Citizens' Oversight Committee is conducted under the Brom Act. Al meetings of the Committee are open to the public; observers are welcome. The 2012-2013 audits and further information on expenditures, minutes of the Commmittee's meetings, and detailed monthly progress reports can be found on the District's Web site, http://pausd.org/oonymnity/StrongSdiodsBond/. Sincerely yours, Todd Collins Comair, Citizens' Oversight Committee E-mail: coc@pausd.org kF COC Members oath Bond Program Staff Reviewing Gunn Construction July 2013 Authorized Amount: $378.0 Issued: $215.0 (5%/o) Expended: $167.0 Purpose Provide safe and mcdem schools, acconTroclate enrollment gru&th, upgrade aging classrooms, litxaiies, computer and science (per ballot labs, repair or replace roofs, plumbing, heating, ventilation, and electrical systems, improve fire alams and school security, rreel: language): current earthquake stancla-ds; provide current technology, and replace old portables with permerent dassroorm. District Superintendent: Kevin Skelly Bond Program Manager: Robert Golten Program Managemerrit: fs3 Hodges Construction Management: Gilbane Baking Co. & OCMI Auditor: Christy V\ite Accountancy Corp. Audit Findings: No significant delidencies or material weaknesses Only one minor item of noncompliance About Strong Schools Bond Independent Audit Reports :OAAIWLGAIV 11101 � In compliance with Proposition Strong Schools Bond is a 39, performance and financial $378 Trillion bond $25.0 2013 year ended June 30, 2013. authorization measure passed Under Constrruc ion in 2012-13 and Completed by August 2013 on June 3, 2008 to support Gum Nev n -eh dish b ilcing and rew waid larr growth, modernization and Ginn Neve girrrmiu-n improvement of the facilities Paly Athletic stadunfiddirrprovmws and fixtures of the Palo Alto opinion that the District's Unified School District. Jaitn New dassroom buldng and mom n7z cn To ensure the Strong Schools JLS Neve dessroom bdIcing Bond funds are spent in a way Fairrrmcbw New dessroom buldrig that best meets the needs of Construction to be ComplCompletedl the District, the individual Tern -en Neve aonshdcn, expansi sites, and the community at large, a variety of strategies Poly Neve classroom and meda are being used. These include Dwa-ecc New dassroxn Ixilcings Site Facilities Steering Committees comprised of prindpals, tead-ers, parents and oorrrrmrity m arrbes that make recommendations on site specific issues. Community meetings are held during the planning phases of the major projects to ensure that the concerns of neighbors, parents and the community are addressed. Finally, the Board of Education approves all Bond expenditures with an eye toward the needs of the District today and well into the future. The COC exercises oversight regarding expenditures. The Bond program, now starting its sixth year, is in full swing, with multiple projects cornpleted, as well as in the planning and building phases. Over $65.6M was expended during 2012-13, and over $201M in contracts have been either awarded or completed. Both high sdhods and all three middle schools have substantial projects mpl coeted or underway. Tax Rate Update In anticipation of the bond issuance in March 2013, in June 2012 the Board approved an increase in the tax rate for the Strong Sdiods Bond to $60 per $100,000 in assessed value (AV). Combined with the remaining payments on the 1995 Building for Excellence bonds, property owners were assessed $95.30 per $100,000 AV in fiscal year 2013, with the amount expected to decline each year until reaching $60 in 2022. The Board's analysis indicated that higher tax rates today would lower the total cost of borrowing by as much as $1.3 billion over the life of the bond. and modernizAcn and mnden7zAcn After August 2D13 on and moderrizeton at buldng and modernzeton The audit further found that the expenditures tested were in compliance with the terms of the ballot measure and applicable State laws and regulations. The auditors reported: "We found all expenditures tested to be in compliance with the terms of the Measure A - Strong Schools Bond ballot measure and applicable State laws and regulations, without exception. Also, our analysis indicated that the District is receiving program management services that are reasonable as compared to other school distdcts, with regard to billing rates, hours charged, and the ratio of consultants to District employees. Furthermore, it appeared that the District's site projects were competitive in price with similar projects size and scope to other school construction bond programs induded in our benchmarking." The auditors identified no significant deficiencies or material weaknesses, related to the financial statements and no findings or recommendations related to the performance audit. Only one minor finding of noncarplianoe was noted related to retention of trade journal advertising. Ultimately, the audits found that the program was materially in compliance with the terms of Proposition 39 and Strong Schods Bond, which is the highest level of assurance which auditors can provide. To view the complete audit report, visit: http://pausd.org/conymnity/StrongSchodsBmd/annual.shtml Independent Audit Reports Budget Completion In compliance with Proposition (millions) Date 39, performance and financial audits were conducted for the $25.0 2013 year ended June 30, 2013. $129 2013 These audits were concluded in $5.1 2013 aocorda- with Generally ed �t Auditing Ampt$19.9 2013 Standards by the firm of Christy $17.2 2013 VUite Accountancy Corporation. $7.8 2013 The audit firm rendered an opinion that the District's $13.3 2013 financial statements present fairly, in all material respects, $37.1 2014 the financial position of the $9.8 2014 Strong Schools Bond Building Fund as of June 30, 2013. The audit further found that the expenditures tested were in compliance with the terms of the ballot measure and applicable State laws and regulations. The auditors reported: "We found all expenditures tested to be in compliance with the terms of the Measure A - Strong Schools Bond ballot measure and applicable State laws and regulations, without exception. Also, our analysis indicated that the District is receiving program management services that are reasonable as compared to other school distdcts, with regard to billing rates, hours charged, and the ratio of consultants to District employees. Furthermore, it appeared that the District's site projects were competitive in price with similar projects size and scope to other school construction bond programs induded in our benchmarking." The auditors identified no significant deficiencies or material weaknesses, related to the financial statements and no findings or recommendations related to the performance audit. Only one minor finding of noncarplianoe was noted related to retention of trade journal advertising. Ultimately, the audits found that the program was materially in compliance with the terms of Proposition 39 and Strong Schods Bond, which is the highest level of assurance which auditors can provide. To view the complete audit report, visit: http://pausd.org/conymnity/StrongSchodsBmd/annual.shtml Expenditures from July 1, 2008 Through June 30, 2013 (All amounts in $1,000s) Bond issued Overall Allocation �� but Budget Status a 'cr 9°/ Other Incorre 3% and Issuance Costs 0% Alocated to Prgects But Not Corr fitted 17% Bail Issued Budgeted Overall Allocation Total Budget status 08-12 FY Trial Band Issued 214,999 Elerrertay Sd cds 98,678 Allocated to Projects But Not CaTrritted 65,658 Gann High School 56,737 MiddeSd-cds 51,493 Cor mtbedbLtnot experided 34,215 Bald AtAtlaized, Not issued 163,001 45,614 36,669 16,325 20,344 Jordan Middle School 20,511 HighSdiods 177,625 ExpendLres 167,025 Other Incarre 11,736 16,862 12,620 9,786 2,834 Tern -an Middle School 13,332 PAUSR' NdApR#abd 59,771 Reserves/NotApp-opate:d 122,838 Trial Fu -ds 389,7.36 10,577 10,459 405 10,054 Duveneck Derrentary 9,778 BordIssualceCosts 2,169 389,736 Fairrreadow0errentary 7,797 7,478 389,7'6 2,258 2,806 Proi Budgeted Co matted Total 12-13 FY 08-12 FY E)qmAitures itures itures Gann High School 56,737 50,180 44,946 16,553 28,393 Palo Alto High School 76,440 45,614 36,669 16,325 20,344 Jordan Middle School 20,511 19,601 16,31 9,444 6,873 J.L.S. Middle School 17,650 16,862 12,620 9,786 2,834 Tern -an Middle School 13,332 12,959 11,224 6,076 5,148 Chlone Derrentary 10,598 10,577 10,459 405 10,054 Duveneck Derrentary 9,778 9,227 1,280 750 Fairrreadow0errentary 7,797 7,478 5,064 2,258 2,806 All Cher Derrentary 24,420 2,350 2,328 19 2,309 Technology 10,485 9,169 8,965 2,265 6,701 Program Management 8,482 6,553 6,484 1,586 4,89 Subtotal - Projects 256,230 190,571 156,356 65,246 91,11 Reserves Gann High School 19,37 - - - - Palo AID High School 25,07 - - - - Derrentary Schools - Reserve 37, - - - - Technology - Reserves 3,4 - - - - PAUSD - Reserve 6, - - - - PAUSD-NotAppropriated 31,3 - - - - Subtotal - ReserveslNot Allocated 122, 525 San Antonio -Properly Acquisition 8,5008,5008,5008,500 Cher - Bond Issuance Costs 2,169 2,169 2,169 328 1,841 Total 389,73q 201,24q 167, 65,571 101,451 STRONG SCHOOLS BOND Strong Schools for a Strong Community Palo Alto Unified School District Citizens' Oversight Committee 2012 - 2013 Annual Report Below is a sampling of the projects within the Strong Schools Bond from inception. Budgeted numbers below may differ from those on page 4 due to Board of Education approved changes subsequent to June 30, 2013. To see a complete list and additional detail on the status, expenditures and schedule of current Strong Schools Bond projects, please visit http://pausd.orgtconTmnity/StrongSchoolsBondt �L41, • •• :• • • -� • . - M—M • - Gunn High School - Aquatic Center Budget: $4,865,423 Final Cost: $4,862,530 Occupancy: June 15, 2009 This project constructed a new 35 meter pool facility to replace the original pod. The pool accommodates swimming, diving and water polo, and includes a new deck, bleachers, lighting and shade structures for events. The project also constructed a new building housi ng restrooms, outdoor showers, storage and a team room for the aquatics teams. The project was completed within budget and began hosting events in June 2009. Gunn High School - Industrial Arts Addition and Renovation Budget: $5,082,403 Final Cost: $5,059,668 Occupancy: January 2010 This project renovated and expanded the existing Industrial Arts building at Gunn. The addition incudes two new biotechnology labs and support space. The existing building has the same labs as before, but wth upgraded electrical and mechanical systems as well as new finishes and casework. The project was completed on-time and within budget and began hosting classes in January 2010. Gunn High School - Air Conditioning of Existing Buildings Budget: $2,600,000 Final Cost: $2,102,336 Completion: August 8, 2011 This project converted existing heating systems to provide cooling to the L, M, S, IA, and A buildings on the Gunn High Sclhod campus. Installation of a 'cod' roof system on these building was also included as part of this project. The project was completed on-time and within budget and began cooling classrooms at the start of school in August 2011. Strong Schools Bond Projects — Completed Projects (Continued) Palo Alto High School - Multi -Use Feld Budget $3,616,935 Final Cost: $3,601,302 Completion: February 2011 This project renovated the existing baseball and softball fields on the southern end of the Paly can -pus. The new fields include new dugouts, bullpens, batting cages and bleachers for each venue, and improve fencing, scoreboards and drainage around the field. Reconfiguration of the south parking lot was also inducted in this project. The project was completed on-time and within budget and was ready for the opening of the 2011 baseball and softball seasons. Bernentary Schools - Elementary Classroom Improvements: Smartboard and integrated sound assist listening systems Budget: $2,004,889 Final Cost: $1,879,695 Completion: April 2011 This project funded a technology wall for each elementary school can -pus. The technology walls include an interactive whiteboard and a sound assisted listening device to enhance student learning. The installation of new Smartboards and integrated sound assist systems for all elementary classrooms was completed in April 2011. Ohlone Bementary School - New Classroom Building and Modernization Budget: $10,597,870 Final Cost: $10,459,227 Occupancy: January 3, 2012 A new classroom building is being constructed on the Chlone campus to accommodate antidpated enrollment growth at the elementary schools. The project includes new dassrooms, a flex room and a spedal day classroom in a two story structure adjacent to the existing library. The project also indudes modernization of existing classrooms, including in -proved lighting, ventilation and new technology walls. Construction was completed in December 2011 and occupied in January 2012. 525 San Antonio Avenue — Site Acquisition Budget: $8,500,000 Final Cost: $8,500,000 Acquired: November 8, 2012 This is a 2.6 acre parcel acquired from Summer Hill Homes. It is anticipated that this property will be used with the adjoining Greendell site for Palo Alto Unified School District classroom purposes. At the present time it is being leased to Athena Academy. Strong Schools Bond Projects — In Progress Gunn High School - New Classroom Buildings Budget: $25,035,200 Occupancy: August 15, 2013 This project consisted of two new classroom buildings on the Gunn campus. A two story classroom wing will house new dassrooms, resource rooms and offices for the Math and English departments. The Math department is located on the upper floor, and English on the ground floor. The second building houses new VVcxld Languages classrooms and offices adjacent to the L wing corrplex and the Science building along Arastradero. Construction for the V\brld Languages building was completed in January 2013 and occupied in August 2013, with construction being completed July 2013 and occupied in August 2013 for the Math/English building. Gunn High School - New Gymnasium Budget: $12,914,800 Occupancy: June 8, 2013 A new gymnasium provides a second venue for school athletics and physical education instruction on the campus. The gym accommodates approAmately 1,900 students for basketball or volleyball games, and includes a new ticket booth, restrooms, team rooms and a fitness room for weightlifting and dance programs. In addition to the gym, the project rebuilt the outdoor tennis courts and outdoor basketball courts on the northern edge of the student parking lot. Construction was completed in May 2013 and occupied in June 2013. New IVbth and English Bldg. NewV\k) ld Languages Bldg.. Strong Schools Bond Projects — In Progress (Continued) PaloAlto High School - Tomer Building Improvements Budget: $1,500,000 Cornpletion: August 1, 2013 This multi -phase project is providing improvements to the Tower Add inistration building at Paly. The first phase replaced the boilers in the basement of the Hayrmrket Theater. The second phase induded replacing exterior trim, roofing, dry -rot repairs and painting the exterior, Mich was completed in August 2012. The most recent phase replaced of all the exterior windows. Construction was completed in July 2013 and occupied in August 2013. Future phases will provide restrooms and ADA improvements to the building. New Tower Bldg VUndm-vs - Before New Tomer Bldg VNndow— Lange VUndow Replaoer� 2012 Baler Fteplaoerrent - Before Tomer Bldg New VVUxlows - During Baler Replaoenwt-After Palo Alto High School - Athletic Stadium Improvements Budget: $5,090,000 Occupancy: August 15, 2013 This project induded a new building to house restrooms, concessions, equipment storage, and ticket sales. Additional site improvements included new picnic areas, trade resurfacing, and new bleachers for both the home and visitor's side of the field. The project was completed in August 2013. Tomer Bldg New VUrxtows -After Athletic stadium Inp m rrents Strong Schools Bond Projects — In Progress (Continued) Palo Alto High School - New Classroom Building and Media Arts Building Budget: $37,140,000 Planned Occupancy: August 2014 This project consists of the addition of two large buildings to the Paly campus. The math and social sciences building will house new classrooms in a two story structure, with Math classrooms, offices and resource areas on the upper floor and similar spaces for social sciences on the ground floor. The Media Arts building will house new classrooms for the English department, as well as several lab spaces for media arts, including video production, photography, editing and journalism. Construction began in August 2011 and is scheduled for occupancy in August 2014. New Math and Social Sciences Bldg. —At Corrdetion New Media Arts Bldg. — At Corrpletion il- [fill New Math and Social Sciences Bldg. —August 2013 purr wA seat New Media Arts Bldg. — August 2013 Palo Alto High School - New Performing Arts Center Budget: $24,395,049 Planned Occupancy: January 2016 The Performing Arts Center at Paly will provide a new, 592 seat building to house perforn-ances for the Performing Arts department and assemblies for the campus. The fadlity includes a single level of seating, with single -row side boxes around the perimeter on two levels. It will have a mechanical orchestra pit, a full fly tower for staging, and a trap room below the stage. The building will also include a classroom specifically designed for the drama program. The project has been under DSA review since December 2012, Wth construction planned to begin after the new Media Arts building is completed. �, i ver •. RR New Performng Arts Center - Rendering New Performng Arts Center - Rendering Strong Schools Bond Projects — In Progress (Corti nt, o Jordan Middle School Budget: $19,891,564 Occupancy: August 15, 2013 This project consisted of a new classroom wing, a new cafetorium and renovations in several existing classroom wings. The new classroom wing is located in the Middlefield parking lot. The new cafetorium is located on the tennis courts just east of the existing cafetorium. The existing cafetorium building was renovated to accommodate new music classrooms. Jordan's existing music classrooms were renovated to accommodate new art labs and the science wing was renovated to convert three small labs into two larger sciencelabs. Construction was completed in July 2013 and occupied in August 2013. "''-6186, New aassroom Bldg. J. L Stanford Middle School Budget: $17,184,699 Planned Occupancy: August 15, 2013 Improvements at JLS included a new classroom wing and renovations in several existing classrooms. The new classroom vying is a two story building housing ten new classrooms, located on the existing playground area south of the industrial arts wing. Improvements in the existing classrooms included technology walls and sound assist systems, which were completed via separate contract in 2011. Another contract this summer completed improvements to exterior spaces to improve drainage and student use of the outdoor courtyard spaces. Construction was cornpleted in July 2013 and occupied in August 2013. New Cafetodum Bldg. Newaass wnVbfng La idsr and Sit y"k Inpuvurfnts Strong Schools Bond Projects — In Progress (Continued) Temran Middle School Budget: $13,312,971 Planned Occupancy: October 2013 The Administration and Library building at Teman was expanded and renovated to accorrrnodate a new office at the front of the school, two new classrooms and a new library located in an addition on the east side of the building. Improvements also included renovations to the cafetorium, a new drama classroom and all new heating units. The new library and classrooms were occupied in August 2013, while the renovations in the cafetorium are scheduled to be complete in October 2013. Fairrneadow Elementary School - New Classroom Building and Modernization Budget: $7,796,550 Occupancy: August 15, 2013 A new classroom building was constructed on the Faim-eadow campus to accommodate anticipated enrollment growth. The project included a new, two story classroom wing adjacent to the Jackson Center that houses eight new classrooms with new restrooms on each level. The project also included an expanded library and relocation of kindergarten classrooms and play areas. Construction was oompleted in July 2013 and occupied in August 2013. Ww Library Expansion New 4th and yh Grade Classroom Bldg. Strong Schools Bond Projects– In Progress (Continued) Duveneck Elementary School - New Classroom Building and Modernization Budget: $9,778,358 Planned Occupancy: August 2014 The project includes a new, two-story classroom building housing eight classrooms, and two one-story classroom buildings for two kindergarten and three primary grade classrooms. These new buildings will replace the eight portable classrooms and add three additional classrooms to the campus. The project will also include an expanded library and modernization of existing classrooms. Construction began in May 2013 and is scheduled for completion in August 2014. 'lift i 11 T1 ! - New 411 and 51h Grade Classroom Bldg.- Rendering New Kindergarten Classroom Bldg. - Rendering New 41h and 511 Grade Classroom Bldg.- August 2013 New Kir dergarten Classroom Bldg. — August 2013 District -wide —Technology Budget: $10,485,054 Completion: On -gang The District purchased maters, utilizing bond funds, throughout the 2012/13 school year. There has been a notable shift from desktops and laptops to handheld devices, primarily at the elementary school level. Implementation of the Voiceover-IP (Vol P) telephone system and a major upgrade to the District's broadband of wireless access pants both completed in August 2012. Also, installation of wireless antennas at each school to enhance the District's broadband network is underway and scheduled to be complete by December 2013.