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2008 - 2009 Annual ReportsMEASURE A - STRONG SCHOOLS BOND YOI%k PALO ALTO UNIFIED SCHOOL DISTRICT CITIZENS' OVERSIGHT COMMITTEE 2008 - 2009 ANNUAL REPORT .............................. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 e* 0 ...... 0* 0 0 0 0. Letter from Committee Chair . ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ . November 6, 2009 To: The Board of Education and the Citizens of the Palo Alto Unified School District The Citizens' Oversight Committee is pleased to forward its initial report, covering the 2008-09 fiscal year, on the $378 million general obligation Measure A—Strong Schools Bond program. The purpose of the Citizens' Oversight Committee (COC) is to inform the public concerning the expenditure of bond revenues. The COC is required by state law to actively review and report on the proper expenditure of taxpayers' money for school construction. The COC provides oversight and advises the public whether the District is spending the Measure A bond funds for school capital improvements within the scope of projects outlined in the Measure A - 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 Measure A—Strong Schools Bond activity. In this first year, the Committee gave special attention to the mechanisms and systems established by the District to oversee its contractors and monitor the effective planning and staging of the projects on the Measure A—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 firms employed by the District to oversee planning and operations. At the close of this year, the High School Master Plans, the Middle School Pre -design Studies, and the Elementary School Growth Plan were substantially completed. The Gunn Aquatic Center was also substantially completed. Including the Aquatic Center, as of October 21, 2009, projects budgeted at more than $150 million were underway or planned for implementation over the next five years. The remaining Measure A - Strong Schools Bond projects will be prioritized and scheduled by the Board of Education. The Committee reviewed the Financial Audit and the Performance Audit, issued by the independent auditing firm of Nigro Nigro & White, PC. The firm conducted its audits in compliance with Generally Accepted Government Auditing Standards. Under these standards, the audit firm independently determined what 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 Measure A - Strong School Bond. The Audit Report noted three findings regarding program management, including the District's response to each finding. As a Committee, we are satisfied with the District's responses. The full Report is available on the District's website; that address appears in the final line of this letter. In sum, the Committee wishes to report that, to the best of its knowledge, the Palo Alto Unified School District is in full compliance with 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 Measure A—Strong Schools Bond. The work of the Citizens' Oversight Committee is conducted under the Brown Act. All meetings of the Committee are open to the public; observers are welcome. Further information on expenditures, the Committee's deliberations, and detailed monthly progress reports can be found on the District's Web site, http://pausd.org/community/MeasureA/. Sincerely yours, Ray Bacchetti Chair, Citizens' Oversight Committee E-mail: COC@pausd.org Committee Members Ray Bacchetti, Member, Senior Citizen and Taxpayer Organizations Scott Darling, At Large Member Gary Hornbeek, Parent, PTA Member Deepak Kanungo, Parent Caroline Maser, Parent Jim McFall, Business Organization Member Steve Shevick, Parent Board of Trustees, 2008-2009 ........................... Barb Mitchell, President Barbara Klausner, Vice President Melissa Baten Caswell Dana Tom Camille Townsend Senior District Officials ........................... Kevin Skelly, Superintendent of Schools Bob Golton, Co -Chief Business Official & Bond Program Mgr Cathy Mak, Co -Chief Business Official About the District ........................... The school district was founded on March 20, 1893. The first school opened in September 1893, with 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 time the District operated 22 Grade K-6 About Measure A - Strong Schools Bond ........................... Measure A - Strong Schools Bond is a $378 million bond measure passed on June 3, 2008, that authorizes funding to provide safe and modern schools; accommodate enrollment growth; upgrade aging classrooms, libraries, computer and science labs; improve athletic facilitites; repair or replace roofs, plumbing, heating, ventilation and electrical systems; improve fire alarms and school security; meet current earthquake standards; provide current technology; and replace old portables with permanent classrooms, within the Palo Alto Unified School District. California State law requires that a Citizens' Oversight Committee be appointed by the Board of Education within sixty days of its July 2, 2008 certification of the election results. The Board of Education appointed the COC on August 26, 2008. To ensure the Measure A bond funds are spent in a way that best meets the needs of the district, the individual sites, and the community 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 Measure A bond expenditures with an eye toward the needs of the district today and well into the future. To ensure the Measure A program is being managed effectively, the Board of Education approved O'Connor Construction Management, Inc. to provide program management services for this work. Tom Hodges, a principal with O'Connor having experience with the District since 2002, serves as the Program Director for Measure A and provides program administration duties and manages early project development. The Board of Education also approved Gilbane Building Company to provide design administration and construction management services for the program. Arnold Teten, Gilbane's Senior Construction Manager, and his staff work closely with O'Connor to provide seamless management and coordination of all Measure A projects. elementary schools, three Grade 7-9 junior high schools and three Grade 10-12 high schools. Enrollment began to decline in the 1970s and continued to decline 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 has since been reopened as enrollment has increased, and in September 1998 a twelfth elementary school, Barron Park, was opened. In August 2001, Terman Middle School was reopened as a third middle school. During the 2000's the number of elementary students migrating into the District has been much larger than in past decades, with approximately 100 net new students per year. Total district enrollment stood at 11,368 for the 2008-2009 school year. The district utilizes the services of Lapkoff & Gobalet Demographic Research, Inc. for annual enrollment forecasts. The most recent report was issued in January 2009 and projected continued increases in enrollment through 2013. The medium - range scenario in the latest forecast anticipates growth of 12% over the next five years to a total enrollment of 12,698 in 2013. Committee Meetings ........................... The Citizens' Oversight Committee meets on a quarterly basis. All meetings are open to the public. Scheduled upcoming meet- ings are: January 20, 2010; April 21, 2010; and July 21, 2010. Proceedings of the meetings held included: October 15, 2008: Role and Responsibilities of the COC, Re- view of the Bond Project List, Program Management/Construc- tion Management Overview, and Bond Sale Update. January 14, 2009: Election of Chair/Vice Chair, Financial Up- date, Program and Project Update, Report on Gunn Industrial Arts Bid Results/Financing, Annual Requirements, and Informa- tion Flow to COC Members. April 15, 2009: Monthly Report, Review of a State Controller's Office Audit of Another COC, Framework for Tracking Measure A Progress, Site Visit - Gunn Pool Construction, Performance Audit/Financial Audit, and Outline of 2009 COC Report July 15, 2009: Monthly Reports, Bond Implementation Pro- cess, Outline of 2009 COC Report, Performance Audit and Fi- nancial Audit, and Site Visit - Gunn Industrial Arts Building October 21, 2009: Back -To -School Nights, Member Atten- dance at Board of Education Meetings Devoted to Measure A Topics, Financial and Performance Audits, Sign -off on First Annual Report of the COC, November 10th Presentation to the Board of Education, Timing of Election of New Officers. Independent Audit Reports In compliance with Proposition 39, performance and financial audits were conducted for the year ended June 30, 2009. These audits were conducted in accordance with Generally Accepted Governmental Auditing Standards by the firm of Nigro Nigro & White, PC. The audit firm rendered an opinion that the District's financial statements present fairly in all material respects the financial position of the Measure A Bond Building Fund as of June 30, 2009. The audit further found that the expenditures tested were in compliance with the terms of the Measure A ballot measure and applicable State laws and regulations. The auditors made findings and recommendations for the program and these will be implemented by the District. To view the complete audit report, please visit http://pausd.org/ community/MeasureA/. Palo Alto Unified School District Measure A Expenditures as of June 30, 2009 Total Funds Expended Status Overall Allocation Budget Status Expended 3% PAUSD \ 16% Elementary Schools 26% Allocated to Projects But Jot Expended 38% Middle Bond Funds High Schools Schools Reserves/Not a6% 13% Allocated Remaining 59� 97% Expenditures 3% Expended Status Overall Allocation (See table for details) Budget Status Total Bond Authorization $ 378,000,000 Elementary Schools $ 98,678,279 Allocated to Projects But Not Interest Earned $ 2,187,573 Middle Schools $ 49,126,150 Expended $ 144,501,565 Total Bond Funds $ 380,187,573 High Schools $ 172,633,105 Expenditures $ 10,030,779 PAUSD $ 59,750,039 Reserves/Not Allocated $ 225,655,229 Total Funds Expended $ 10,030,779 $ 380,187,573 $ 380,187,573 Bond Funds Remaining $ 370,156,794 The first year of Measure A saw the majority of expenditures going toward two construction projects at Gunn High School. These projects were designed prior to Measure A with other funding sources, which allowed the construction to begin quickly once Measure A funds became available. Other expenditures primarily went toward planning and preliminary design services, site and soils surveys, program administration and start up costs. Palo Alto Unified School District Measure A - Strong Schools Bond rw%n/na 4 School Name - Project Name Budgeted Committed Expenditures Projects 1 Gunn High School - High School Master Plan 115,000 90,636 75,850 2 Gunn High School 1 -Aquatic Center 5,013,750 4,858,502 4,406,881 3 Gunn High School 2 - LA 5,511,500 4,590,482 1,828,236 4 Gunn High School 3 -AD2- close out 5,777 5,777 5,777 5 Gunn High School 4 - New classroom A& B 24,120,000 1,262,300 58,246 6 Gunn High School 5 - Parking & Drop Off improvements 3,940,000 214,620 511 7 Gunn High School 6- New/Auxiliary Gymnasium 13,830,000 820,628 19,539 8 Palo Alto High Schools - High School Master Plan 115,000 91,237 75,949 9 Palo Alto High School 1 - Bleacher 1,358,437 116,506 73,157 10 Palo Alto High School 2 - Multi -Use Field (Multi -Fund) 3,002,063 274,641 195,547 11 Palo Alto high School 3 - New classroom & Media Art Building 34,220,000 1,816,755 83,923 12 Palo Alto High School 4 - New Theater 17,720,000 1,026,210 0 13 Jordan Middle School - Middle School Pre -Design 33,665 14,718 13,477 14 Jordan Middle Schools 1- Interim Classrooms 600,342 162,557 53,578 15 J.L.S Middle School - Middle School Pre -Design 33,669 14,627 13,386 16 J.L.S Middle School 1 - Interim Classrooms 446,844 280,607 115,303 17 Terman Middle School - Middle School Pre- Design 33,666 14,627 13,386 18 PAUSD Elementary Schools - Elementary Growth Plan 145,000 62,700 55,560 19 Garland Elementary School 1- Phase 1 22,178,544 1,327,807 178,243 20 Ohlone Elementary School 1- Phase 1 11,667,965 257,734 194,934 21 Elementary Schools 1 - Elem Teaching Wall Project 7,044,987 104,517 33,448 22 PAUSD- Program Admin. 1,461,135 1,461,135 990,916 23 PAUSD- Technology 1,935,000 1,935,000 1,544,932 Subtotal - Projects 154,532,344 20,804,323 10,030,779 Reserves/Not Allocated 24 Gunn High School - Reserved 21,303,533 0 0 25 Palo Alto High School - Reserved 42,378,045 0 0 26 Jordan Middle School - Reserved 17,943,194 0 0 27 J.L.S Middle School - Reserved 17,184,699 0 0 28 Terman Middle School - Reserved 12,850,071 0 0 29 Elementary Schools - Reserved 57,641,783 0 0 30 PAUSD - Reserved 6,335,945 0 0 31 PAUSD-Not Allocated 50,017,959 0 0 Subtotal - Reserves 225,655,229 0 0 Total 380,187,573 20,804,323 10,030,779 Prepared by: Business Services Department based on QSS, a District accounting system 4 MEASURE A -STRONG SCHOOLS BOND Strong ScFcooCs for a Strong Community Palo Alto Unified School District Citizens' Oversight Committee 2008 - 2009 Annual Report Status at of June 30, 2009 Below is a sampling of the active projects within Measure A - Strong Schools Bond. To see a complete list and additional detail on the status, expenditures and schedule of current Measure A bond projects, please visit http://pausd.org/com- munity/MeasureA/. Gunn High School Aquatic Center Complex Budget: $5,013,750 Occupancy: June 2009 This project constructed a new 35 meter pool facility to replace the original pool. The pool will accommodate swimming, diving and water polo, and includes a new deck, bleachers, lighting and shade structures for events. The project also constructed a new building housing restrooms, outdoor showers, storage and a team room for the aquatic athletic teams. This project is substantially complete and is in use by the school. Gunn High School Industrial Arts Addition and Renovation Budget: $5,511,500 Planned Occupancy: January 2010 This project completely renovates and expands the existing Industrial Arts building at Gunn. The addition includes two new biotechnology labs and support space. The existing building will have the same labs as before, but with upgraded electrical and mechanical systems as well as new finishes and casework. The project is underway, and is scheduled to begin hosting classes in January 2010. Palo Alto High School Multi -Use Field Budget: $3,002,063 Planned Occupancy: January 2011 This project will re -construct the existing baseball and softball fields on the southern end of campus. The new fields 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 project, which will include new striping and landscaping to improve this edge. The project has been approved by the State, and will be bid for construction early next year. Ohlone Elementary School New Classroom Building and Modernization Budget: $11,667,965 Planned Occupancy: August 2011 A new classroom building is being constructed on the Ohlone campus to accommodate anticipated enrollment growth at the elementary schools. The project includes 10 new classrooms, a flex room and a special day classroom in a two story structure adjacent to the existing library. The project will also include some modernization of the existing classrooms, including improved lighting, ventilation and new teaching walls. Measure A - Strong Schools Bond Projects (Continued) Jordan, JLS and Terman Middle Schools Pre -Design Studies Conceptual plans have been developed for each of the Middle Schools to expand or improve the campuses to accommodate planned growth. Plans for Jordan include a new six classroom wing in the Middlefield parking lot, expansion of the cafetorium and modernization in existing wings to improve ventilation and cooling. Work at JLS will include a new, two story classroom wing with 10 classrooms, and modernization in other existing wings to support a campus reorganization plan. Plans at Terman include a new drama classroom, expansion of the library and computer lab In the main building, and modernization in other wings to improve cooling and enlarge undersized classrooms. Gunn High School New Gymnasium Budget: $13,830,000 Planned Occupancy: January 2013 A new gymnasium will be constructed at Gunn to provide a second venue for school athletics and physical education instruction on the campus. The gym is planned to accommodate approximately 1,900 students for basketball or volleyball games, and will include a new ticket booth, restrooms, team rooms and a fitness room, which will house weightlifting and dance activities. In addition to the gym, the project will rebuild eight outdoor tennis courts and three outdoor basketball courts on the northern edge of the student parking lot. Gunn High School New Classroom Buildings Budget: $24,120,000 Planned Occupancy: August 2013 This project consists of two new classroom buildings on the Gunn campus. A large, two story classroom wing located in the current Titan Village location will house 28 classrooms, resource rooms and offices for the Math and English departments. The Math department will be located on the upper floor, and English on the ground floor. The second building will house new World Languages classrooms and offices adjacent to the L wing complex and the Science building along Arastradero. The building will include five new classrooms, and also include a resource room with a patio. Palo Alto High School New Classroom Building and Media Arts Building Budget: $34,220,000 Planned Occupancy: August 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 twenty four 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 eight new classrooms for the English department, as well as several lab spaces for Media Arts, including video production, photography, editing and journalism.