Mt. Diablo Unified School District James W. Dent Education Center*

the open Board meetings before the Board passed the resolution to proceed with a ballot measure. Response: The respondent disagrees with the finding and is unclear as to the factual basis there for. The Board had an extensive conversation on March 9, 2010, concerning the possible financial ramifications of the bond. The Board discussed the tax rate extension, tax rate estimates, the par amount of the bond, and a possible bond proceeds schedule. There has been no allegation that the Board neither was provided, nor failed to consider all legally required information. Furthermore, the Board prudently fulfilled its fiduciary responsibilities in selling $109,996,475 of bonds in 2010 at a TIC of 4.392%. The ratio of debt service to principal is 1.94, which means that for every dollar of principal there is .94 cents of interest. The term and interest rates compare very favorably to the District's original bond sales in 2002, 2005, and 2006 as well as other bonds sold throughout the state.

Some of the capital projects, such as solar panels installation and window replacement, to be financed with a 2010 Bond should generate energy's cost savings for the Districts (sic). FAX (925) 680-2505 AN EQUAL OPPORTUNITY EMPLOYER Linda L. Chew Response: The respondent agrees with the finding.

The organization (sic) restructuring of the General Counsel's responsibilities has not resulted in anticipated operational effectiveness and may not have fulfilled the cost savings originally projected. Response: The respondent disagrees with the finding. Due to severely decreased state funding and declining enrollment, the District has been forced to make deep budget cuts and to combine positions and responsibilities. Accordingly, the District eliminated the Assistant Superintendent for Administrative Services position. The responsibilities of that position were reallocated to the General Counsel and Chief Financial Officer. This was a financial exigency with no reasonable expectation of enhanced organizational efficiency. The cost savings originally projected were only the elimination of the Assistant Superintendent for Administrative Services position. Accordingly, all the savings originally projected have been realized. The increased responsibility of the General Counsel position has not diverted legal resources. The District's legal budget was consolidated and reduced 50% during the 2009-10 fiscal year. The District's current legal expenditures are quite similar to what they were immediately before the reorganization.

In addition to the anticipated relief to the general fund from specific 2010 Bond projects, further savings could be achieved through further salary and benefit expenses (sic) reductions. Response: The respondent agrees with the finding as it is intuitively obvious from an economic and budgetary perspective. II.