Fact 12

Fact #12:

The cost and issues surrounding the new construction (gymnasium, changing rooms, library, and two science classrooms with a dedicated elevator) at Valley School:

(1) November 5, 2002– 13.6M Measure J facilities bond is passed by 67% of voters.

Official bond language states: “To improve the quality of education, shall the Hermosa Beach City School District be authorized to finance classroom modernization; upgrade electrical systems to improve access to technology; make health, safety, and security improvements; classrooms and science labs; acquire land, and qualify for State funds up to $1,700,000, by issuing $13,600,000 in bonds, within maximum legal interest rates, with annual audits, a citizens’ oversight committee and no money for administrators’ salaries?”

(2) December 17, 2003 – Three years before the final tally for the Valley School new construction (gymnasium, library, two science classrooms, four additional classrooms) came in at $11,385,950 in January 2006, the 2003 estimate came in at $2,346,013 over budget for a total of $8,991,013. Regardless of whether or not HBCSD had the “wherewithal” to complete the new construction, considering the crazy cost of $8,991,013 in 2003, long before a lawsuit was brought by Jerry Compton (May 2005), why would school board members continue making the gymnasium the focus of $13.6 million of Measure J bond funds? Why would any school board member continue to make building a gymnasium the priority over the Facility Master Plan recommendation for future classrooms?

NOTE: California schools are not required to have a gymnasium.

NOTE: HBCSD had priority rights to use the gymnasium and changing rooms at the Community Center rent free. The Community Center is located two short blocks from Valley School. HBCSD had contractual rights under Exhibit K to use the gymnasium, changing rooms, showers and tennis courts at the Community Center for two hours during the school day/year and an additional 10 hours over the school year. There are crossing guards stationed at Pier Avenue and Valley/Ardmore intersection between Valley School and the Community Center.

NOTE: According to Exhibit G and the Memorandum of Understanding, Exhibit J and the City Council minutes of June 14, 1977 and June 28, 1977, HBCSD also has priority rights to lease classrooms, office space and storage space at the Community Center when district enrollment exceeds 1,266 students. There is no expiration to this provision.

NOTE: HBCSD enrollment exceeded 1,266 students in 2010, yet school board members failed to take advantage of their provisions to use classrooms at the Community Center to temporarily alleviate district overcrowding. Did school board members and city council members wait for HBCSD overcrowding to become a crisis in order to push for a $59 million bond in 2016 to build an unneeded brand-new campus at North School to keep the school district out of the Community Center permanently?

(3) In 2006, two classrooms were estimated to cost $700,000. According to the cost of two classrooms in 2006, it would have cost approximately $4.9 million to build 14 classrooms by 2012 as recommended by the 2002 Facility Master Plan and promised by School Board president Cathy McCurdy after the bond passed.

NOTE: North School could have been renovated with Measure J funds if had there been forethought by school board members as to the district’s actual future needs. In the early 2000s Robinson School in Manhattan Beach cost about $3M to renovate. Richmond Street Elementary School in El Segundo, circa 1935, cost about $5.3M to renovate in the early 2000s. Newport Elementary School in Newport Beach, CA, circa 1936, cost to renovate $4.1M (hard costs) in 2002. North School was estimated to cost $6.2 million to renovate in 2017.

NOTE: School board members (Lance Widman, Greg Breen, Linda Beck, Cathy McCurdy) took nearly $1 million out of HBCSD coffers to finish paying for building the gymnasium at Valley School.

(4) June 21, 2007 – Hermosa’s teachers march over pay, by Robb Fulcher, Easy Reader News:

1. “A dispute over teachers’ salaries bubbled over into a protest rally followed by a sometimes contentious debate at the school board’s regular monthly meeting. Hermosa’s public school teachers complained that they have the lowest pay of Los Angeles County’s 27 elementary school districts, while their students maintain the highest academic test scores. School board members agreed that the teachers deserve more money, but said they can’t afford raises over 3 percent.”

2. “Second grade teacher Karen Maguy asked the school board, "What and who, are your priorities in the district? Where have you spent your money? Is it a new gym? Is it in administration?”

3. “At the meeting, school board President Cathy McCurdy said there’s no money for a larger pay raise. She said she has seen the district’s reserves shrink from 27 percent to 4 percent, which is as low as it can go under state law.”*

COMPETEING INFORMATION:

a. School board members decide how district funds are spent. If school board President Cathy McCurdy said that she “has seen the district’s reserves shrink from 27 percent to 4 percent” then it was she and her fellow school board members who “shrunk” (i.e. spent) the district’s reserves – on what? - the gymnasium complex at Valley School?

b. From 2005 to 2006, school board members decided to use $700,000 of district reserves in order to build the gymnasium complex at Valley School. They had eliminated two classrooms from their plan in 2004 (See: May 20, 2004 – District cuts back on expansion by David Rosenfeld, Easy Reader News) and then again eliminated two classrooms in 2005/2006 from the final design in order to save $800,000 and $700,000 respectively so they could afford to build the gymnasium.

c. School district reserves went from 13.5% in 2000 to just 2.9% in 2005. *HBCSD is required to keep at least 3% of district funds in reserves for economic uncertainties.

d. School board members would need to reduce spending on educational expenditures and campus maintenance from 2006 forward in order to build HBCSD reserves back up above 2.9%.

e. Available reserves consist of all funds designated for economic uncertainty contained within the General Fund (aka the district’s checking account)

f. Did HBCSD teachers know that school board members had spent $700,000 of district reserves on the gymnasium so that there was nothing extra to spend on teacher salaries? Is that why teacher Karen Maguy made her statement above (see item b.) to the school board?

g. The November 5, 2002 Measure J official bond language stated: “To improve the quality of education … shall the Hermosa Beach City School District be authorized to finance classroom modernization; upgrade electrical systems to improve access to technology; make health, safety, and security improvements; classrooms and science labs; acquire land, and qualify for State funds up to $1,700,000, by issuing $13,600,000 in bonds, within maximum legal interest rates, with annual audits, a Citizens’ Oversight Committee and no money for administrators’ salaries?"

NOTE: Was “education improved” by school board members taking almost $1,000,000** of district funds (not Measure J bond funds) in order to build a gymnasium complex instead of using the funds to support student education? Why was the gymnasium so important to certain school board members that they could justify taking funds from educating children in order to build it?

h. In the fall of 2008, the Great Recession hit in earnest. HBCSD ended the 2007 school year with only 5.2% in reserves. How much more money would the district have had to weather the Great Recession if school board members had not spent more than **$964,926.80 of district reserves from 2006 to 2009 on the gymnasium? How much of those funds could have been spent on ongoing district maintenance and education instead of being spent on a low-priority gymnasium?

i. In the fall of 2008, school board members would also hire a very expensive, over-qualified, formally retired superintendent, Dr. Bruce Newlin.

j. In June 2011, after HBCSD had rebuilt its coffers after taking approximately $1M for the new construction at Valley School, a new contract with teachers would be agreed to by school board members. The teachers would get a 4% salary increase retroactive to July 2006 for the 2006-2007 school year and a 3% salary increase retroactive to July 2007 for the 2007-2008 school year.

(5) May 21, 2008 – Worst Case Budget Scenarios per Governor’s May 2008 Budget Revisions. Governor Schwarzenegger proposed a 10% reduction in school district spending.

According to HBCSD a 10% reduction in spending would result in a DEFICIT: $1,561,204 13 teachers = $951,977. 1 teacher = $73,229. 9 teachers X $73,229 = $659,061.

NOTE: In February 2006 School board members committed at least $700,000 of district funds to be spent on the new construction at Valley School. $700,000 would have paid for approximately nine (9) teachers and one clerk. See also: September 30, 2009 – Hermosa Beach City School District Bond Measure J, Citizens’ Oversight Committee – Final Report – 9/30/09.

(6) **Other district funds taken to finish building the gymnasium. (These funds were not used to support education, students or HBCSD staff.)

1. June 2007 – HBCSD Purchase Orders over $500 P.O.#7662 – F&R Woodworks: Architectural & Laboratory, Fund- Capital Facility Fund, Amount-$115,800.00*

2. P.O.#7663 – Floor Covering for New Construction, Fund-Capital Facility Fund, Amount-$31,859.00*

*NOTE: $147,659.00 was taken out of school district reserves NOT from bond funds. Bond funds had already been exhausted.

NOTE: Casework, painting and floor coverings totaling $200,522.00 were removed from final bids that were accepted in February 2006.

NOTE: The $147,659.00 paid for casework and floor coverings in June 2007 were above and beyond the $700,000.00 that school board members had taken from district reserves in order to pay for the February 2006 bids.

3. July 18, 2007 – HBCSD Contract Extension for Construction Management Services for the Hermosa Valley School New Construction Project. B-10-07/08

"Recommendation: It is recommended that the Board of Education approve an extension of the original contract with PCM3, Inc. to perform construction management services at a cost not to exceed $77,767.80."*

…”The project [new construction at Valley School] also saw various unforeseen conditions including to but not limited to the new south retaining wall, additional west wall shoring requirements, relocation of the municipal sewer line and DSA additional requirements…” ** “Cost of this contract extension is charged to Fund #25 Capital Facility Fund…”

*NOTE: $77,767.80 was taken out of school district reserves NOT from bond funds. Bond funds had already been exhausted.

NOTE: The $77,767.80 paid for additional PCM3, Inc. in June 2007 were above and beyond the $700,000.00 that school board members had taken from district reserves in order to pay for the February 2006 bids.

**NOTE: The Division of State Architects (DSA) made these changes to the district's building plans on July 1, 2005. The new requirements increased the hard costs and soft costs on the project from the first bids received in May 2005 bids. The citizens' lawsuit against the district plans to spend the majority of Measure J funds on a low priority gymnasium instead of the 13 promised additional classrooms in April 2005 had NOTHING to do with the increase in construction costs from May 2005 to February 2026.

4. July 18, 2007 – HBCSD Contract Extension for Architectural Services for the Hermosa Valley School New Construction Project. B-11-07/08

"Recommendation: It is recommended that the Board of Education approve an extension of the original contract with Dougherty and Dougherty to perform architectural services during the construction and close out phase at a cost not to exceed $39,500.00." *

…”The project [new construction at Valley School] also saw various unforeseen conditions including to but not limited to the new south retaining wall, additional west wall shoring requirements, relocation of the municipal sewer line and DSA additional requirements…” ** “Cost of this contract extension is charged to Fund #25 Capital Facility Fund…”

*NOTE: $39,500.00 was taken out of school district reserves NOT from bond funds. Bond funds had already been exhausted.

NOTE: The $39,500.00 paid for additional Dougherty and Dougherty architectural services in June 2007 were above and beyond the $700,000.00 that school board members had taken from district reserves in order to pay for the February 2006 bids.

5. October 4, 2007 – A&A Protective Services, Inc.

Unarmed security service for Valley School new construction. It is believed that the security service was needed for the gymnasium since the fire alarm in the gymnasium was not working properly. The length of the contract was approximately from October 2007 until June 2008. The cost of unarmed security services was $22.40/hour. $22.40/hour times 8 hours/day = $179.20/day. $179.20 x approximately 149 days = $26,700.00. Paid from HBCSD General Fund which is used to educate students.