BUELLTON UNION SCHOOL DISTRICT


INTRODUCTION


The 1996-1997 Grand Jury received letters from concerned citizens requesting that certain activities of the Buellton Union School District (BUSD) Board of Trustees (Board) be reviewed. A bond issue was passed in April 1992 which provided $3,600,000 to acquire property and construct a new middle school. In the intervening five years no land has been purchased nor has a new school been built. During the process of investigation, the Grand Jury uncovered information which broadened the scope of this report to include additional issues related to Board activities.

For order and clarity this report is presented in three sections, each dealing with an objective of the investigation:

I. BUSD Finances and Board Actions
II. Availability of Information to the Public (The Ralph M. Brown Act)
III. Validation Action

OBJECTIVES

To determine:
I - If the BUSD Board exercised due diligence in the expenditure of the General Obligation Bond Fund of $3,600,000, plus the subsequent interest accrued, for land acquisition and new school construction.
II - If the BUSD Board violated the Brown Act which was enacted to keep the public informed and to protect the public from the abuse of power by its elected officials.
III - If the Validation Action (Code of Civil Procedure, Chapter 9, Section 860)
1 too easily enables public agencies to take action without approval or recourse of the electorate, i.e. allowing governing boards to alter the stated use of Bond monies.

APPROACH

The Grand Jury conducted interviews with numerous individuals including the following:
· Professional consultants to the BUSD
· Parents, teachers and public officials
· The incumbent and three former Principals/Superintendents
· Three current and several former Board Members
· Two architects
· The owners of parcel #99-251-64 (the Williams property, a.k.a. N & G property) and their agent.


The Grand Jury examined the following documents:

· Agendas and minutes of the 76 regular and special meetings of the BUSD Board held between July 1993 and January 1997
· School Board Resolutions, 1990-1996
· Validation Action by Public Agency
2
· Four court cases pertaining to BUSD condemnation actions and Writ of Mandate
· Financial Reports of BUSD (1991 through March 1997) for Special Building Fund 47
3 and the General Obligation Bond Fund 65 4
· School Site Analysis and Development published by the California State Department of Education in1987
· Vanir Construction Management report on Jonata School Expansion Feasibility Report of May 15, 1995
· Original architectural designs of George Knowles and renderings of the proposed additions to the existing school by Carmichael-Kemp Architects
· Miscellaneous reports from consultants
· Correspondence from various concerned citizens and agencies

SECTION I - BUSD FINANCES AND BOARD ACTIONS



BACKGROUND

Discussions of the need for additional instructional space for the BUSD began as early as 1987.
5 The following is a chronology of a five year delay in purchase of land, building, and the expenditure of $1,300,000.

In 1987 the Board concluded that the Williams parcel # 99-251-64 was most suitable
6
October 3, 1990 - Resolution 91-6, passed by the Board, which authorized Board to acquire property by Eminent Domain
7.
March 8, 1991 - "Complaint in Eminent Domain" (condemnation procedure) filed by BUSD Board
8
June 3, 1991 - BUSD deposited the original appraisal amount of $320,000 with the Clerk of the Court
9
November 15, 1991 - Due to failure on the part of the Board to provide a properly written appraisal and California Environmental Quality Act documentation,
the "Eminent Domain" case was dismissed by the Court, without prejudice. The Court ordered the deposit plus any accrued interest to be returned to the BUSD.
February 1, 1992 - Buellton incorporated as a city including the 47 acre Williams parcel.
February 12, 1992
- The School Board was ordered by the Court to reimburse the costs of $31,589 to defendant.
10 In addition, the legal bills to BUSD for this court action totaled $30,140.
April 14, 1992 - The School Bond F92 was passed by the voters, with a two-thirds majority. The General Obligation Bond authorized $3,600,000 for land acquisition and construction of a new school.
11
September 15, 1993 - To avoid a second condemnation procedure, the owner of the Williams property offered to meet with the Board to discuss a mutually acceptable selling price.
12 The Board did not negotiate, but unanimously voted in favor of Resolution 94-7 to acquire parcel #99-251-64 through a second Eminent Domain procedure13.
September 16. 1993 - The BUSD deposited $266,913 with the Clerk of the Court. This was the amount stated in the appraisal that was submitted in this Eminent Domain suit.
Throughout 1994 - The BUSD conducted a series of geological tests, surveys, three additional appraisals, soil tests, geotechnical explorations on the property, for which they expended $262,896.
14
In early 1994 - An architect was hired by the Board to design a school comprised of twelve classrooms, two science laboratories, two libraries, an administrative area and ancillary space totaling 27,525 sf (square feet). Two additional phases were planned which would eventually provide a total of 63,000 sf.
July 13, 1994 - The architect presented his plans to the Board and community residents in attendance indicating that the first phase could be built for $4,812,716. This included $461,000 for a site and $100,000 allowance for construction management. On that date the General Bond Fund had $3,600,000 plus interest of approximately $213,436 (from July '92 to June '94 ) in addition to $726,000 in a separate special building fund. A total of $4,539,436 was available for the Board's use. The architect then offered to work with the Board to modify costs or undertake other changes to meet any financial limitations that might exist. Later the Board informed him that the project was `on hold' because of site problems. The architect stated that he received no further communication from the Board. He was reimbursed $287,877 for his plans.
15
February 21, 1995 - The School Superintendent and the attorney for the BUSD attended a Settlement Conference ordered by the Court (SM 083323) to resolve the purchase of Parcel #99-251-64. The landowners had received an appraisal of $2,300,000 but were willing to reduce the asking price to $1,800,000. The Board had authorized its lawyer and the superintendent to offer a maximum of $700,000. The judge considered imposition of sanctions against the Board for failure to attend the Settlement Conference with full authorization to settle.16
March 22, 1995 - The Board decided to abandon the Eminent Domain lawsuit.
17 The cost of this second Eminent Domain lawsuit was $542,716. Approximately half was the property owner's expense which the Court later ordered the Board to pay.18 The remainder was the Board's obligation for the legal services rendered on its behalf. At this same meeting the Board contracted with a construction management firm for $105,000 to do a feasibility study on the expansion and modernization of the existing Jonata School.19
May 15, 1995 - Vanir Construction Management, Inc. (Vanir) presented to the Board a plan titled "The Jonata School Expansion Feasibility Report" which included a two-page
"Functional Equivalency" study.
20 The Report, authored by Vanir , stated that this plan would provide the same square footage as the architect's original plan. The source for the statistics Vanir used in its report was not stated. (See page 8)
July 19, 1995
- The Board passed a motion to approve Resolution 96-3
21 changing the use of the Bond Funds and filing a Validation Action. The only attendees at that meeting were four of the five trustees, the Principal/Superintendent and a representative of Vanir. 22
July 28, 1995 - The Board filed a Validation Action in the Superior Court pursuant to California Code of Civil Procedure Section 860 to seek a judgment from the Court validating previous actions taken by the Board23 to change the use of the Bond Fund from new construction to renovation/expansion.
August 16, 1995 - Under "Pending Litigation" in closed session the Board discussed "BUSD vs. All Persons interested in validity of Resolution 96-3 of the Buellton Union School District ordering certain improvements to an existing school building and acquisition of land as a site for a new school from district bonded indebtedness." At the same meeting the Principal reported that "the District's Bond Counsel advised the District that it doesn't have to follow the California Environmental Quality Act guidelines."
24
October 24, 1995 - Since no member of the public contested the Validation Action,25 a Default Judgment was granted by a Superior Court Judge. This allowed the school district to avoid a future taxpayer suit stemming from the change in the use of bond funds.
January 3, 1996 - The Board passed Resolution 96-14 (untitled) which designated $3,000,000 from the Bond fund to be used to renovate/expand Jonata School.
26
March 14, 1996 - At the regular meeting of the Santa Barbara County Taxpayers Association "the general consensus of the board members was the appearance of impropriety with the BUSD proposed reallocation of the Bond monies."
27 A letter was sent to the Board requesting an explanation. Subsequent follow-up letters were sent to the Board on April 29, 1996 and May 29, 1996. 28 No replies were received.
June 13, 1996 - The Board President and Secretary were guest speakers at the Santa Barbara County Taxpayers Association. At the meeting, the School Board President commented that the voters would not understand this issue because it is too complicated. Following this meeting a letter was sent to the Board President from the SBCTA Board President stating:

"However, we are very disappointed in your statement that the Buellton School Board has no intention of seeking voter approval for changing the use of the $3.6 million bond that was originally passed in 1992. The SBCTA continues to believe that the School Board must go back to the ballot before redirecting the new school bond revenue into renovation of an existing school"29

June 19, 1996 - According to the District Attorney, during a closed session meeting:
"there is evidence that instead of meeting with the Board's negotiator to consider the purchase of property at 8700 Santa Rosa Road, as the agenda and meeting minutes claimed, the Board met with Vanir Construction to discuss whether it was possible to save $400,000 from the project budget and move that amount into the fund to purchase new property."
30
July 3, 1996 - During a closed session of a regular meeting of the Board, representatives of Vanir Construction and the architectural firm of Carmichael-Kemp presented a proposal to save $400,000 in renovation costs which could be applied toward the purchase of land.
31
October 30, 1996 - A petition for Writ of Mandate was filed, "The People of the State of California and Ewald F. Andrisek vs. Buellton Union School Board, to command the BUSD to construct the improvements as specified in the Master Plan... and desist in planning for the construction of improvements which are not those specifically ordered and authorized by the Court in the Validation Action (SM 092783)".
32
December 9, 1996 - The Superior Court ruled in favor of the BUSD, allowing it to proceed with a substitution (See "Comparison of Plans" page 8) of the renovation/rehabilitation of Jonata School rather than completing the remodeling/expansion as stated in the Functional Equivalency.
33


OBSERVATIONS

The General Obligation School Bond was passed in April 1992. In the intervening years no land has been purchased and no new school is under construction. The Board unsuccessfully tried to acquire land by Eminent Domain rather than negotiate with the land owner. These failed attempts to acquire land were extremely costly.

The figures below illustrate how much money was available and how it was spent. An additional cost to redesign the existing Jonata School by Carmichael-Kemp Architects was $300,000.
34

Source of funds
available for land acquisition, design and construction of a new middle school:

General Obligation Bond35 $3,600,000
Interest Income on General Obligation Bond 1992-96 $ 627,956
Building Fund36 $ 659,274
Interest on Building Fund 1991-96 $ 124,772
Total $5,012,002

The following money was spent by the Board in two failed attempts to acquire land by Eminent Domain and the design/engineering costs pertaining to the proposed new middle school.

 

> Knowles Architectural Plan $287,877 2 failed condemnation suits and miscellaneous legal fees $605,787 Feasibility study + bills for changes proposed by Vanir $144,731 3 appraisals (same parcel), engineering studies and miscellaneous studies $262,896 Expenditures to October 30, 1996 $1,301,291
The decision to spend the bond funds to renovate/expand the existing Jonata School was
made by the Board in May, 1995. This decision was based on the Expansion/ Feasibility
Report performed by Vanir which included only a two-page "Functional Equivalency" study. The report made a comparison between buying land and building a new school, or renovating/expanding the existing school. The comparison figures contained in the report
could not be validated either by the Grand Jury or Vanir. The Grand Jury concluded that these comparisons contained substantial errors and omissions. The present plan of the Board is to renovate/expand the Jonata School with the funds remaining from the Building fund and the Bond fund. This expansion/renovation will provide space for 80 additional students (increase from current enrollment of 570) in grades K-8 at the Jonata campus rather than space for 300 additional students in grades 4-8 at a new school. The present plan is not the same square footage as that contained in the functional equivalency plan validated by court action.

The chart below illustrates the square footage (sf) contained in each plan and
demonstrates that the existing plans do not equal the plan validated by Court action.

COMPARISON OF PLANS


Original Architects Plan
Knowles -1994
Functional Equivalency37
Vanir - 1995
Present Plan
Carmichael-Kemp - 1996
New permanent construction - no "relocatables" Two "relocatables" No new buildings
Three "relocatables"

12 classrooms, library etc. 22,987 sf
New kindergarten building, new library/media center, new academic building
16,920 sf
Addition to existing building - classrooms
14,797sf
Covered outdoor dining area - 4,360 sf Covered outdoor dining area - 6,200 sf Covered outdoor dining area - 2,880 sf
TOTAL - 27,347 sf TOTAL - 23,120 sf TOTAL - 17,677 sf


FINDINGS AND RECOMMENDATIONS

FINDING 1:
The BUSD Board of Trustees did not exercise due diligence38 in expenditure of the 1992 General Obligation Bond fund for the acquisition of land and construction of a new school.


BUELLTON UNION SCHOOL DISTRICT PAGE 9


AFFECTED AGENCY:


FINDING 2: The Board did not follow the will of the voters to build a new school,
39
and instead diverted the money to renovation of the existing school.


AFFECTED AGENCY:

Buellton Union School District Board of Trustees

FINDING 3: The Validation Act required the Board to acquire land as a site for a future school building from the proceeds of District Bonded Indebtedness. To date the BUSD has spent over $1,300,000 on false starts and litigation relating to land purchases and preliminary design. No land has been purchased nor is there a new school.


1 See Exhibit A -Validation Action
2 Ibid.
3 "Santa Barbara County Schools Cumulative Transaction Report By Object" for BUSD 1992 through 1996
4 Ibid.
5 September 15, 1993 BUSD Minutes. Statement of Superintendent - Page 2
6 Ibid.
7 Resolution 91-6 "RESOLUTION OF NECESSITY OF ACQUISITION OF REAL PROPERTY FOR THE CONSTRUCTION OF SCHOOL SITE; REVIEW OF DRAFT AND ENVIRONMENTAL IMPACT REPORT" OCTOBER 3, 1990
8 SM 070884 - CCP Section 1250.310
9 NOTICE OF DEPOSIT AND STATEMENT OF APPRAISAL (SM070884)
10 SM 070884 Stipulation of Attorney's fees
11 See Exhibit B - Sample Ballot; Special Bond Election, pages 1 and 2
12 Transcript of Minutes of September 15, 1995 Condemnation Hearing before BUSD Board of Trustees.
13 Minutes of BUSD September 15, 1993
14 "Santa Barbara County School Cumulative Transaction Report by Object" for BUSD 1992 through 1996
15 Ibid.
16 Records of SM 083323
17 BUSD Board Minutes of March 22, 1995, page 2
18 Court Stipulation of June 26, 1995
19 See Exhibit C - Vanir Feasibility Study
20 Ibid.
21 See Exhibit D
22 BUSD Board Minutes July 19, 1995
23 See Footnotes 17 and 21, Actions reported in BUSD Board minutes of March 22, and July 19, 1995 that authorized expansion/modernization instead of constructing a new school.
24 BUSD Board Minutes August 16, 1995 - Special Meeting , page 2
25 See Exhibit E - Proof of Publication & Summons
26 Resolution 96-14 stated "The ...BUSD District moves that ...$3,000,000 from the Fund 65, be used for construction purposes as proposed by Vanir Construction to renovate and expand the existing Jonata School site at 301 Second Street, Buellton."
27 Santa Barbara County Taxpayers Association letter of March 14, 1995 to the BUSD
28 See Exhibit F - Letters dated 4/29/96 & 5/29/96 from Santa Barbara Taxpayers Association
29 July 11, 1996 Letter from Santa Barbara County Taxpayers Association to BUSD
30 See Exhibit G; ten page letter to BUSD from Santa Barbara County District Attorney dated December 2, 1996
31 Ibid.
32 Petition filed October 30, 1996 SM 102132
33 Exhibit H, February 26, 1997 - SM 102132
34 Contract was awarded on July 19, 1995
35 The taxpayers, paying interest on the General Obligation Bond, have paid over $700,000 to date.
36 Fund 47 was established in 1991 to build a new school.
37 Accepted in Default Judgment dated October 24, 1995.
38 According to Black's Law Dictionary Sixth Edition, "due diligence" is defined as: "Such a measure of prudence, activity, or assiduity, as is properly to be expected from, and ordinarily exercised by, a reasonable and prudent man under the particular circumstances: not measured by any absolute standard, but depending on the relative facts of the special case."
39 M easure F92 ballot wording: "For the purpose of building a new school including the acquisition of a site therefore..."

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