HBCSD Corruption

Proof of the lie:

HBCSD was not in a position to accept the May 25, 2005 bids whether or not there had been a lawsuit.  In 2005, before the final bids were accepted in February 2006, there were NO comments made in the minutes of School Board meetings or Citizen Oversight Committee meetings that blamed the delay in accepting bids on the CRSE lawsuit.  However, the following were the reasons given for NOT accepting the May 25, 2005 construction bids that were cited in district meetings in Spring/Summer 2005: 

(1) June 9, 2005 – Oversight chairman: gym is in jeopardy, by Robb Fulcher, Easy Reader News.

…[Speaking of the May 2005 construction bids, the first bids received after the lawsuit was filed in April 2005] “His [Sam Abrams, chairman of the Measure J Citizens’ Oversight Committee] committee learned last week that revenues from voter-approved construction bond fall $2.6 million short of funding the $7.6 million building [ultimately $11 million dollar complex].  A previous estimate by a consultant had the project at $1.3 million short, but the new figure is based on written bids submitted by construction contractors who want to do the job.”

… “To keep the gym project alive, Abrams said, educators probably must: Hire a construction contractor by July 24, when the contractors’ current bids for the gym project expire” … “Fill in a $2.6 million shortfall using money from other sources, such as $1.3 million in [school district] reserves*, $200,000 in fees charged to commercial developers in Hermosa, $200,000 that educators hope to get from refinancing some of the school bonds (Refinancing/refunding bonds was not finalized and realized until February 2006. After the refunding bonds had been finalized HBCSD school board members accepted the latest November/December bids.), as much as $1.5 that educators hope to get from a special state fund for school construction.  Get California Coastal Commission approval for the gym building within the next few weeks as well…” (Coastal Commission approval was not granted until September 2005 with conditions.)

(2) Gerry Compton filed his lawsuit against the district in April 2005. 

(3) School board members received the first set of bids since the lawsuit was brought on May 25, 2005. 

(4) The May 25, 2005 bids expired in 60 days and had to be accepted by July 24, 2005.

(5) The May 25, 2005 bids came in $2.6 million over available bond funds.*  June 1, 2005 - Citizens’ Oversight Committee Meeting Minutes. 

*NOTE: The only way school board members “had the wherewithal” (as they claimed) to afford building the gymnasium at this point was to take more money from school district coffers.  Bond funds had been exhausted. In 2005/2006 HBCSD total revenues were $8,352,324 and district reserves were only $352,039.  District reserves are its savings account.

(6) From 2006 to 2007 school board members ended up taking more than $990,000 from district funds in order to fund/finish the new construction.  It is highly unlikely that HBCSD could have afforded to give up $2,612,000 from their funding so that school board members could accept the May 2005 bids without eliminating classrooms.  

Funds taken from district coffers:  February 17, 2006 - Final set of bids for new construction at Valley School.   June 2007 – HBCSD Purchase Orders over $500,  July 18, 2007 – HBCSD Contract Extension for Construction Management Services for the Hermosa Valley School New Construction Project.  B-10-07/08, July 18, 2007 – HBCSD Contract Extension for Architectural Services for the Hermosa Valley School New Construction Project.  B-11-07/08, October 4, 2007 – A&A Protective Services, Inc.* 

*NOTE:  It is believed that HBCSD hired A&A Protective Services for nine months because the fire alarm in the brand-new gymnasium at Valley School was not yet operational.

(7) On May 11, 2005 school board members issued HBCSD resolution no. 15:04/05 providing for the issuance and sale of REFUNDING BONDS.  The refunding bonds were not finalized until FEBRUARY 23, 2006.  School board members would not know how much funds they would net for the new construction at Valley School from the refunding bonds until February 2006.   Accordingly, final construction bids were not accepted until February 2006.  School board members ultimately netted only about $800K of additional funds from the sale.

(8) The Division of the State Architect (DSA) did not approve the construction plans until July 1, 2005.   The DSA approval mandated that HBCSD perform additional excavation and shoring requirements for the new construction at Valley School** which resulted in increased soft costs (geotechnical, architectural services, soil testing, reproduction costs for plans, insurance, etc.) and hard costs.

NOTE: HBCSD can not start construction until they get the approval of the DSA for their plans.

(9) **NOTE: At the bottom of the October 27, 2005 bids, in the Notes, item #6: “New construction includes DSA [Division of the State Architect] initiated changes and trailer park wall modifications.”   This is a NEW NOTE added to the October 2005 Budget Breakdown report reflecting the larger scope of the project after Department of State Architect review in July 2005 and thus the increase in costs.  This note did not appear in the May 2005 construction bids. 

(10) **NOTE:  Email exchange between Citizens’ Oversight Committee members discussing the California Division of the State Architect additional requirements for increased reinforcement of retaining walls for the gymnasium complex at Valley School.  

(11) The Coastal Commission did not approve the construction of a new gymnasium until early September 2005.   School districts need Coastal Commission approval before building in the Coastal Zone. 

(12) January 2003 – November 2005 – HBCSD New Construction Scope vs. Time Illustration by PCM3.  Original scope for the new construction at Valley School was $13 million dollars.   Original budget for the original scope was $4.9 million dollars.  According to this document the difference between the original scope of the new construction at Valley School and the original budget at 1st Qtr. 2003 was $8.1 million.

1.       School board members spent from 1st Qtr. 2003 to 2nd Qtr. 2005 developing the district’s new construction plan while construction costs rose.

2.       From 4th Qtr. 2004 to May 2005 cost per square foot increased by $105/sq ft.

3.       According to this document the cost per square foot only increased by $10 from May 2005 to November 2005. This was also the time frame in which school board members blamed the CRSE lawsuit for the increase in construction costs. School board members claimed that the cost increase of $10/sq ft between the May 2005 bids and October 2005 bids forced the school board to eliminate two classrooms from the final new construction plans.

4.       Was the elimination of two more classrooms from the new construction final bids actually a result of the $105/sq ft price increase from 4th Qtr 2004 to May 2005 and not the lawsuit brought in April 2005 by Hermosa Valley residents? Afterall, the May 2005 bids had already come in $2.6M over budget, even though school board members did not announce the elimination of two more classrooms until they received the October 26, 2005 bids – this time blaming the residents’ lawsuit for the increase in costs. By May 2005 (BEFORE the pendency of the lawsuit) the writing was already on the wall that the district would need to lower costs (by eliminating two more classrooms) if they were to build their gymnasium.

5. Was blaming the Valley School neighbors for the $11M gymnasium and new construction at Valley School and the elimination of two more classrooms simply a convenient way of deflecting blame from school board members for the final high costs of the gymnasium?

(13)  Shortly after the school district passed their $59 million dollar facilities bond Measure S to unnecessarily rebuild North School, city council members sent out a request for proposal (RFP) for a private management firm to manage the Community Center auditorium.  City Council member Jeff Duclos stated that the city had always intended that the Community Center become a performing arts destination.  Please see: City considers private management for Hermosa Beach Community Theater, Michael Hixon, The Beach Reporter, November 1, 2016 and City of Hermosa Beach Request for Proposals Hermosa Beach Community Theater, April 13, 2017.

Did the City and HBCSD reneged on their lease Agreement for district use of classrooms specified in Exhibit G, the MOU, Article 4 and the gymnasium, locker room and showers specified in Exhibit K of the lease Agreement because they wanted to keep the Community Center only for City use in order to turn it into a performing arts center and NOT because it was supposedly "all about the children"?