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2009 - 2010 Annual ReportsMEASURE A - STRONG SCHOOLS BOND PALO ALTO UNIFIED SCHOOL DISTRICT ................................................................................. CITIZENS' OVERSIGHT COMMITTEE 2009 - 2010 ANNUAL REPORT .................. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0000....... 0. Letter from Committee Chair ................................................. November 9, 2010 To: The Board of Education and the Citizens of the Palo Alto Unified School District The Citizens' Oversight Committee is pleased to forward its second Annual Report, covering the 2009-10 fiscal year, on the $378 Trillion 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. In this second year, the Committee again gave special attention to the mechanisms and systems established by the District to over- see its contractors and monitor the effective planning and staging of the projects on the Strong Schools Bond list. At each of our meetings, we met with appropriate District officials and with senior representatives of the project management and construction management fimrs employed by the District to oversee planning and operations. As of June 30, 2010, projects budgeted at over $260 Trillion were specifically planned by the District. The remaining Strong Schools Bond projects will be prioritized and scheduled by the Board of Education. Afew highlights for the 2009-2010 year in- duded the completion of renovations to the Gunn High School Industrial Arts Building; groundbreaking for the Palo Alto High School Multi -Use Feld improvements; and the award of Qualified School Construction Bond tax credits under the Federal eoo- noetic stimulus plan, which will save Palo Alto taxpayers the interest payments on up to $25 million in bonds issued under this pro- gram Please see pages 5 and 6 for descriptions of additional projects that are underway. 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 Sd-iool Bond. In sum, the Committee wishes to report that, to the best of its knowledge, the Palo Alto Unified School District is in full oorroianoe with its responsibilities as described in Article XII IA, Section 1(b)(3) of the California State Constitution, the section that governs the teras and conditions of Proposition 39 bonds like the District's Strong Schools Bond. The composition of the Committee will be changing for the 2010-2011 year as the members' two-year terms have ended. Jim McFall, Caroline Maser and Steve Shevick chose not to seek a second term so that the Committee membership could be stag- gered for continuity. I wish to thank them for their service to the community. They will be replaced by Todd Collins, Catharine Gar- ber, and Mary Marth. Existing Committee members, Ray Bacchetti, Gary Hombeek, Deepak Kanungo and myself have been ap- pointed by the District to serve another two-year term The work of the Citizens' Oversight Committee is conducted under the Brown Act. Al meetings of the Committee are open to the public; observers are welcome. The 2009-2010 audits and further information on expenditures, minutes of the Committee's meet- ings, and detailed monthly progress reports can be found on the District's Wpb site, http://pausd.or4co munity/ StrongSchoolsBond/. Sincerely yours, Committee Members as of June 30, 2010 _................................................................. .................. C Ray Bacchetti, Member, Senior Citizen and Taxpayer Organizations Scott Darting, Member At Large Scott Darling Gary Hombeek, Parent, PTA Member Deepak Kanungo, Parent Caroline Maser, Parent Jim McFall, Business Organization Member Steve Shevick, Parent Board of Education, 2009-2010 ............................................................................... Barbara l4ausrier, President Melissa Baten Caswell, Uce President Barb Kitchell Dana Tom Camille Townsend Senior District Officials ............................................................................... Kevin Skelly, Superintendent of Sdicols Bob Golton, Co -Chief Business Official & Bond Program Mgr Cathy Mak, Co -Chief Business Official About the District The Distdct was founded on March 20, 1893. The first school opened in September 1893, Wth two teachers and 70 pupils crowded into a temporary two -room schoolhouse. The District grew until 1967, when enrollment peaked at 15,575 students. At that About Strong Schools Bond ............................................................................... Strong Schools Bond is a $378 million bond measure passed on June 3, 2008, that authorizes funding to provide safe and modem schools; accommodate enrollment growth; upgrade aging dassrooms, librar- ies, computer and science labs; improve athletic facilities; repair or replace roofs, plumbing, heating, ventilation and electrical systems; improve fire alarms and school security; meet current earthquake standards; provide current technology; replace old portables with pem-anent classrooms; and purchase land within the Palo Alto Uni- fied School District. To ensure the Strong Schools Bond funds are spent in a way that best meets the needs of the District, the individual sites, and the corrr munity at large, a variety of strategies are being used. These include Site Steering Committees comprised of principals, teachers, parents and community members 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. To ensure the Strong Schools Bond program is being managed effec- tively, the Board of Education approved O'Connor Construction Marr agement, Inc. to provide program management services for this work. Tom Hodges, a principal Wth O'Connor having experience Wth the District since 2002, serves as the Program Director for Strong Schools Bond and provides program administration duties and man- ages early project development. The Board of Education also ap- proved G (bane Building Company to provide design administration and construction management services for the program Anhold Teten, Gilbands Senior Construction Manager, and his staff work closely with O'Connor to provide seamless management and coordi- nation of all Strong Schools Bond projects. In 2009-10, the State accepted applications from school districts to issue Qualified School Construction Bonds (QSCBs) a part of the federal stimulus program for sdhods. The District was one of 45 selected by lottery, out of 231 that applied, to be authorized to issue bonds under this program and issued the maximum $25 million in QSCB bonds. This does not provide additional construction funds to the bond program, but does provide maximum savings to the taxpay- ers who pay bade not only bond principal but also bond interest cost. The QSCBs interest is almost 100% subsidized in this federal govern- ment program, making these bonds essentially 0% loans. The total estirruted savings in interest payments over the life of the bonds to the PAUSD property owners is estimated at $27 million. time the District operated 22 Grade K-6 elementary schools, three Grade 7- 9 junior high schools and three Grade 10-12 high schools. Enrollment be- gan to decline in the 1970s and continued to dedine through the 1980s. The bottom of the decline was reached in 1989 when total enrollment stood at 7,452. The configuration of schools then showed eleven elementary schools, one middle school and two high schools. Jordan Middle School since reopened as enrollment increased, and in September 1998 a twelfth elementary school, Barron Park, was opened. In August 2001, Temhan Middle School reopened as a third middle sdhod. Dudng the 2000's the number of elementary students migrating into the District has been much larger than in past decades. Total District enroll- ment stood at 11,680 for the 2009-2010 school year. The District utilizes the services of Lapkoff & Gobalet Demographic Research, Inc. for annual err rolIment forecasts. The most recent report was issued in February 2010 and projected continued increases in enrollment. The mediumrrange scenario in the latest forecast anticipates growth of 10% over the next five years to a total enrollment of 12,823 in 2014. Committee Meetings .......................................................................................... The Otizens' Oversight Committee meets on a quarterly basis. All meetings are open to the public. Scheduled upcoming meetings are: February 2„ 2011; April 20, 2011; and July 20, 2011. Proceedings of the meetings held included: January 20,2010: Election of ChairNce Chair, Mbnthly Reports, Member Attendance at Board of Education Meeting, Performance Audit Finding Imr plementation, Quality School Construction Bonds Inforhation Discussion, and Site Visit- -Gunn Industrial Arts Building. April 21, 2010: Monthly Reports, Program Status Updates, Change Order Status, COC Members Service, COC Membership Terms, Update on Quality School Construction Bonds, PerformanceAudlt/Financial Audit Timeline. July 14, 2010: Monthly Reports, Change Order Status, COC Membership, Performance Audit and Financial Audit Planning, COCAnnual Report Plan ning Discussion, Election Dates for Future Chair Terms, Interim Chair, Hedging for Future Price Increase, Site Visit --Palo Alto High School Multi - Use Field. October 20, 2010: Monthly Reports, Annual Report Review, Performance Audit and Financial Audit Review, Board Presentation Preparation, Site Visit --Palo Alto High School Multi -Use Field. Independent Audit Reports In compliance with Proposition 39, performance and financial audits were conducted for the year ended June 30, 2010. These audits were conducted in accordance with Generally Accepted Governmental Auditing Standards by the firm of Christy Mite A000untancy Corporation. The audit firm rendered an opinion that the District's financial statements present fairly, in all material respects, the financial position of the Strong Schools Bond Building Fund as of June 30, 2010. 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 corroianoe with the terms of the Strong Schools Bond ballot measure and applicable State laws and regula- tions, without exception. Also, our analysis indicated that the Distdct is re- ceiving 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." The auditors made one finding regarding financial reporting for the program and this vall be implemented by the tastrict. To view the complete audit report, please visit http-.Hpausd.org/community/StrongSd-odsBond/annual/ shtml Palo Alto Unified School District Strong Schools Bond Expenditures as of June 30, 2010 Expended Status Overall Allocation Budget Status 1 Gunn High School - High School Master Plan High Schools 450/6 132,391 Pllocated to Projects 2 Gunn High School 1 -Aquatic Center 5,013,750 4,865,424 But Not Expended 62% 3 Funds Remaining 5,511,500 5,019,103 4,963,839 4 Gunn High School 3 - AD2- close out 94% 5,777 APproPd 5 Gunn High School 4- New classroom Buildings 24,120,000 2,536,324 Total Funds Ecperdal Middle Schools Gunn High School 5 - Parking & Drop Off improvements 3,940,000 217,770 3,530 6% 13% 13,830,000 \ 523,357 Gunn High School 7 -A/C Elementary 200813crdlssuance Casts Reserves/Not WpprWated Expenditures ' Palo Alto High Schools - High School Master Plan 145,000 0.41% 32°/6 60% Expended Status 1,358,437 Overall Allocation 164,606 Budget status Pab Alto High School 2 - MultimUse Field (Multi -Fund) Total Bonds Issued 119,999,249 Elemartary Schools 98,678,279 Allocated to Projects But Not Expended 238,134,126 Bonds Authorized, Not Issued 258,000,751 Middle School. 49,126,150 Expenditures 23,802,958 Interest Earned` 3,357,249 High Schools 174,904,617 Reserves/Not Appropriated 123,274,877 State CTE Gant Inoorne "" 2,271,512 PAUSD/Not Appropriated 60,919,715 160,877 385,211,961 2008 Bond Issuance premiuns 1,583,200 2008 Band Issuance Costs 1,583,200 17 J.L.S Middle School - MS Pre -Design Total Funds 385,211,961 18,408 385,211,961 J.L.S Middle School 1 - Interim Classrooms 446,844 Total Funds Expended 23,802,958 ' Interest ea­ned is based on total bond issued as of &'M10. 19 J.L.SMiddle School 2 -Improvements 17,184,699 "The District apples State Career Tednical Education (CTE) grant rrnney to replace Bond funds previously expended on CIE qualifying projects. This allege funding for additlaral Bad projects. Funds Rerraining 361,409,003 33,666 18,799 18,423 1 1 Gunn High School - High School Master Plan 145,000 132,391 115,845 2 Gunn High School 1 -Aquatic Center 5,013,750 4,865,424 4,860,823 3 Gunn High School 2 - LA Building 5,511,500 5,019,103 4,963,839 4 Gunn High School 3 - AD2- close out 5,777 5,777 5,777 5 Gunn High School 4- New classroom Buildings 24,120,000 2,536,324 1,606,781 6 Gunn High School 5 - Parking & Drop Off improvements 3,940,000 217,770 3,530 7 Gunn High School 6- New/Auxiliary Gymnasium 13,830,000 930,769 523,357 Gunn High School 7 -A/C 2,600,000 161,050 1,781 Palo Alto High Schools - High School Master Plan 145,000 132,773 117,739 10 Pab Alto High School 1 - Stadium Field 1,358,437 168,448 164,606 11 Pab Alto High School 2 - MultimUse Field (Multi -Fund) 3,002,063 2,908,082 583,371 12 Pab Alto high School 3 - New classroom & Media Art Building 34,220,000 3,215,847 1,561,423 13 Pak) Alto High School 4 - New Theater 17,720,000 1,026,210 48,867 14 Jordan Middle School - MS Pre -Design 33,665 18,890 17,826 15 Jordan Middle Schools 1- Interim Classrooms 600,342 170,645 160,877 16 Jordan Middle School 2- Improvements 17,943,194 1,547,169 271,468 17 J.L.S Middle School - MS Pre -Design 33,669 18,799 18,408 18 J.L.S Middle School 1 - Interim Classrooms 446,844 337,590 318,995 19 J.L.SMiddle School 2 -Improvements 17,184,699 1,395,712 219,057 0 Terman Middle School - MS Pre -Design 33,666 18,799 18,423 1 Terman Middle School 1- Improvements 12,850,071 1,151,225 195,340 2 PAUSD Elementary Schools - Elem.GrowthPlan 145,000 55,560 55,560 3 Addison Elementary School 1 -Phase 1 5,199,727 - - 4 Briones Elementary School 1 -Phase 1 701,925 - - 5 Duveneck Elementary School 1 -Phase 1 7,019,083 27,501 8,048 6 Garland Elementary School 1- Phase 1 22,178,544 281,279 280,113 7 EI Carmelo Elementary School 1 -Phase 1 641,760 - - 8 Escondido Elementary School 1 -Phase 1 6,202,343 - - 9 FairmeadowElementary School 1- Phase 1 9,327,500 780,409 117,824 0 Hays Elementary School 1 -Phase 1 4,793,814 1 Hoover Elementary School 1 -Phase 1 8,575,389 47,500 4,630 2 Nixon Elementary School 1 -Phase 1 802,200 - - 3 Ohlone Elementary School 1 -Phase 1 11,667,965 1,504,547 1,066,965 4 Pak) Verde Elementary School 1 -Phase l 3,482,885 5 Barron Park Elementary School 1 -Phase 1 641,760 - - 6 Elementary Schools 1 - Elementary Classroom Improvements 8,887,522 106,548 106,548 7 PAUSD- Program Management 3,353,101 2,258,763 2,258,763 8 PAUSD- Technology 5,995,689 2,543,174 2,543,174 Subtotal -Projects 260,353,884 33,584,078 22,219,758 Reserves/ Not Allocated 39 Gunn High School - Reserve 20,945,045 - - 40 Pab Alto High School - Reserve 42,348,045 41 Elementary Schools - Reserve 8,410,862 42 PAUSD-Technology -Reserve 7,911,676 43 PAUSD - Reserve 6,335,945 44 PAUSD-Not Appropriated 37,323,304 Series 2008 Bond Issuance Costs 1,583,200 1,583,200 1,583,200 Total 385,211,961 35,167,278 23,802,958 4 STRONG SCHOOLS BOND Strong Schools for a Strong Cornrrtunity Palo Alto Unified School District Gtizens' Oversight Coimittee 2009 - 2010 Annual Report Below is a sampling of the projects within the Strong Schools Bond. To see a complete list and additional detail on the status, expendi- tures and schedule of current Strong Schools Bond projects, please visit http://pausd.orgtcammnity/StrongSchoolsBondt Gunn High School - Industrial Arts Addition and Renovation Budget: $5,511,500 Occupancy: January 2010 This project renovated and expanded the existing Industrial Arts building at Gunn. The addition includes two new biotechnology labs and support space. The existing building has the same labs as before, but with upgraded electrical and mechanical systems as well as new finishes and casework. The project was completed orrtime and within budget, and began hosting classes in January 2010. Gunn High School - New Classroom Buildings Budget: $24,120,000 Planned Occupancy: July 2013 This project consists of two new dassroom buildings on the Gunn campus. A two story classroom wing will house new classrooms, resource roomis and offices for the Math and English departments. The Math department will be located on the upper floor, and Eng- lish on the ground floor. The second building will house newVUcrld Languages class- rooms and offices adjacent to the L wing complex and the Science building along Arastradero. Planning and design have been completed. The project has been submitted to the Division of state Architect (DSA) for reviewand is scheduled to be bid in the spring of 2011. Gunn High School - New Gymnasium Budget: $13,830,000 Planned Occupancy: August 2012 A new gymnasium will be constructed at Gunn to provide a second venue for school athletics and physical education instruction on the can -pus. The gym is planned to ac- commodate approximately 1,900 students for basketball or volleyball games, and will include a newticket booth, restrooms, team rooms and a fitness room for weightlifting and dance programs. In addition to the gym, the project will rebuild the outdoor tennis courts and outdoor basketball courts on the northern edge of the student parking lot. Planning and design have been completed. The project has been submitted to DSAfor review and is scheduled to be bid in the spring of 2011. Palo Alto High School - Multi -Use Field Budget: $3,002,063 Planned Occupancy: February 2011 This project will re -construct the existing baseball and softball fields on the southern end of can -pus. The newfields will include new dugouts, bullpens, batting cages and bleachers for each venue, and will improve fencing, scoreboards and drainage around the field. Reconfiguration of the south parking lot is also included in this pro- ject, which will include new striping and landscaping. The project is under construc- tion. onstruetion. The parking lot is open for use, and the fields will be completed for the opening of the 2011 basebal I and softball I seasons. PaloAlto High School - New Classroom Building and Media Arts Building Budget: $34,220,000 Planned Occupancy: July 2013 This project consists of the addition of two large buildings to the Palo Alto high school campus. The Math and Social Sciences classroom 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 build- ing will house new classrooms for the English department, as well as several lab spaces for Media Arts, including video production, photography, editing and joumalism Planning and design have been oompleted, the project was submitted to DSA August 4, 2010 for review and is scheduled to be bid in the spring of 2011. i7V Strong Schools Bond Projects (Continued) Jordan Middle School Budget: $17,943,194 Planned Occupancy: August 2013 Improvements at Jordan Wil indude a new dassroom W ng, a new Cafetori um and reno- vations in several existing dassroms. The new classroom wing will be located in the Middlefield parking lot. The new Cafetorium will be located on the tennis courts just east of the existing building, which will be renovated to accommodate new music dass- roorrs. The existing music dassroorrs Wil be renovated to accommodate newart labs, and the science wing will also be renovated to convert three small labs into two larger science labs. The project is currently in design development, with submittal to DSA planned for the end of 2010 and construction planned for October 2011. J. L Stanford Middle School Budget: $17,184,699 Planned Occupancy: August 2013 Improvements at JLS will include anew classroom wing and renovations in sev- eral existing classrooms. The new classroom wing will be a two story building, located on the existing playground area south of the industrial arts wing. Im- provements in the existing classrooms will indude additional storage, technology walls and sound assist systems. The can -pus will also be enhanced with im- provements to exterior spaces to improve drainage and student use of the out- door space. The project is currently in design development, with submittal to DSA planned for the end of 2010 and construction planned for December 2011. Terman Middle School Budget: $12,850,071 Planned Occupancy: July 2013 The Administration and Library building at Tern -an will be expanded and renovated to accommodate a new office at the front of the school, two new carnxter labs and a new, larger library in an addition on the east side of the building. Improvements will also include renovations to the Cafetorium, a new drama classroom, and a new science lab where the existing drama classroom is. The project is currently in design development, with submittal to DSA planned for the end of 2010 and construction planned for October 2011. Ohlone Elementary School - New Classroom Building and Modernization Budget: $11,667,965 Planned Occupancy: January 2012 A new classroom building is being constructed on the Ohlone campus to accommo- date anticipated enrollment growth at the elementary schools. The project includes new classrooms, a flex room and a special day classroom in a two story structure adja- cent to the eAsting library. The project will also include some modernization of the existing classrooms, including improved lighting, ventilation and new technology walls. Construction began in August 2010, and is planned for completion in early 2012. Fairmeadow Bementary School - New Classroom Building and Modernization Budget: $9,327,500 Planned Occupancy: August 2013 A new classroom building is being constructed on the Fairmeadow can -pus to accom- modate anticipated enrollment growth at the elementary schools. The project includes a new, huo story classroomWing adjacent to the Jackson Center. The project will also include some modernization of the existing classrooms, including improved lighting, ventilation and newtechnology walls. The project is still in the preliminary design phase. FJementary Schools - FJementary Classroom Improvements Budget: $8,887,522 Corrpletion: Present to August 2013 This project established budgets for each elementary school campus to receive a technology wall, new lighting, newWndowsand shades, ventilation improvements and ceiling tiles. With the installation of the technology wall, each elementary school classroom will receive an interactive whiteboard and a sound assisted listening de- vice proven to enhance student leaming.