The 2016–2017 Santa Cruz County Civil Grand Jury Requires that the Pvusd Board of Trustees

The lack of a complete, comprehensive, and updated list of all Measure L projects planned, completed, or approved by the Trustees, makes it impossible for the public to be informed. Response F1: The District disagrees with the finding; see explanation below: Prior to the passage of Measure L, a comprehensive needs assessment and review of every District campus was completed with both staff and facility consultants, resulting in the identification of facilities needs amounting to over $300,000,000. The results of this assessment and review were used in the development of a comprehensive Facilities Master Plan that was published in February 2012. Subsequently, the District, in an effort to not pass on the full burden to the taxpayers, approved a bond of $150,000,000—about half of what was needed to meet the District’s basic facilities needs. From the extensive list of projects identified in the Facilities Master Plan, the School Principals, School Site Councils, and the Assistant Superintendents generated site-specific project priority lists, which were merged into a single list that was ratified by the parties and then submitted it to the District’s Planning Department for project design and coordination with the sites. These projects were then systematically designed and phased in during summer months. The list of projects has been posted on the District webpage under Measure L since June 2016. The list includes project descriptions, locations, funding sources, and status updates, and also identifies responsible District personnel as well as architects, engineers, and contractors performing the work for each project. The list continues to be updated as projects are completed and/or added.

The COC has not presented to the Trustees in public session a complete Annual Report for Measure L as of May 2017, in violation of state law. Response F2: The District disagrees with the finding; see explanation below: The COC and/or PVUSD staff have presented information regarding Measure L to the PVUSD Board of Trustees 25 times since passage of the bond in 2012. COC Annual Reports were presented to the Board on June 8, 2016 and on June 28, 2017. The COC meets during the school year in accordance with its adopted bylaws; thus, the Board reserves the COC’s Annual Report for the last month of the fiscal year in order to give the COC an opportunity to complete all of its meetings. A state-mandated independent audit has been conducted every year. To date, all annual performance and general bond audits have been favorable and resulted in no findings. Audit reports for years 2013 through 2016 are available on the District’s Measure L webpage.

The COC has not received adequate training or information to fulfill its role. Response F3: The District disagrees with the finding; see explanation below: Membership on the COC has not changed since March 2013, with the exception of one member, 1 who was appointed in 2016. Training for the first COC appointees was completed on April 12, 2013 and was followed up on April 6, 2016 during the COC meeting. The District’s Bond Attorney Bill Kadi, from Jones Hall, was present during the April 6, 2016, meeting and helped facilitate the training. Training materials were also provided to all COC members. The topics covered at both the meetings were based on the requirements of Education Code section 15278 and Proposition 39 guidelines.

The District's Maintenance, Operations & Facilities Department has not provided other district departments, school sites, the COC, or Trustees updated scheduling reports that meet industry standards for any project, leading to system inefficiency. Response F4: The District disagrees with the finding; see explanation below: From the inception of the District determining the need for a $150,000,000 bond to help repair and improve facilities, the District has had numerous communications with the school sites, COC, and other departments. Measure L was passed in November of 2012. In September 2013, after issuing (selling) $80,000,000 of the Measure L bond proceeds, the District presented a report to the COC and each school site that included project updates, funding, and estimated timelines. Following those presentations, the District continued to meet with individual school sites, COC, and the Board of Trustees in order to update them on the progress of the projects. In September 2015, the District began issuing (selling) an additional $40,000,000 of Measure L bond proceeds. During the process of issuing additional bond funds, the District met with individual School Site Councils to help determine and/or finalize the details of their Measure L site projects. The District has presented Measure L updates to the Board of Trustees 25 times and to the COC 14 times since passage of the bond. A list of meetings and back-up materials is posted on the District website.

The District has not presented the COC or Trustees a composite change order list with a cumulative total cost for each site and project, leaving them unable to properly oversee the bond. Response F5: The District disagrees with the finding; see explanation below: All change orders meet the requirements of California’s Public Contract Code, and, as required pursuant to Board-adopted COC bylaws, Section 3, sub section 3.4 (iii), all change orders go to the Board of Trustees for ratification. In addition, change orders are discussed routinely with the COC as part of the District’s general reporting on Measure L matters.

The COC and Trustees are unable to oversee the bond due to the District's failure to provide a timely financial summary of the bond's status by site, or a cumulative total cost for Measure L projects. Response F6: The District disagrees with the finding; see explanation below: The District gave the Board of Trustees, COC, and school site councils updated presentations regarding Measure L projects, which included timelines of projects, and estimated budget costs and funds remaining as they pertained to individual projects. Updated information regarding 2 ongoing projects at every school site can be found on the District’s Measure L webpage. In October 2015, the District along with the County Office of Education, migrated to a new financial system called Digital Schools. At the time, the system had limited reporting capability due to the fact that the County Office of Education had to focus most of its initial efforts on getting the payroll and human resources information functioning at full capacity. This left the District with the task of manually gathering financial and project data via spreadsheets, while waiting for full implementation of the new financial system. The District purchased a bond reporting software system from California Financial Systems, which was approved by the Board of Trustees on June 8, 2016. The bond reporting system allows for reports to be pulled from the Digital Schools financial system by project or as a summary. Thereafter, the District began the process of integrating the financial system and the new bond reporting system in order to set up the systems for accurate data collection and reporting. This process was a coordinated effort between the County Office of Education, Digital Schools, California Financial Systems, and the District. At the April 2017 COC meeting, the District presented reports to the COC using the new software reporting system. These reports provided the COC with a financial summary of the bond's status by site, and by cumulative total cost for Measure L projects. This data was placed on the Measure L webpage in April of 2017 as a link for the COC and general public to use as needed.

The COC and the District have had no discussion about cost savings. With those designing and implementing Measure L projects, limiting the COC's oversight. Response F7: The District disagrees with the finding; see explanation below: It is a priority of the Board of Trustees to find and implement cost saving measures to supplement bond proceeds whenever feasible. As a part of the Board of Trustees’ efforts to find and implement cost savings, the District refinanced its previous bond (Measure J). In accordance with its adopted bylaws, the COC is informed of, but is not vested with authority to approve, cost savings engineering for any project. As a school district, we are bound by law and regulations and the Board-approved COC bylaws of November 13, 2013, to select the most responsible, lowest bidder. In addition, the District continues to look for ways to utilize Propositions 39 and 51 to help augment and supplement Measure L funds and projects.

The COC in its official capacity has visited only two project sites in the past four years to inspect Measure L work progress, failing to adequately inform itself about the status of the projects. Response F8: The District disagrees with the finding; see explanation below: Over the past several years, COC members have individually visited Measure L project sites and participated in bus tours of project sites. However, since the majority of these projects were roofing projects (27), it was difficult for members to visit and observe progress on these projects first hand. In 2016, the District used drone technology to conduct a survey of Measure L projects that was compiled into a video and presented to the COC, general public, and Board of Trustees. In addition to site visits, the use of innovative technology such as drone surveillance, allows COC 3 members to keep themselves informed concerning the status of bond projects.

Trustees and the COC cannot properly manage the bond because they do not know how much money remains to finish Measure L projects. Response F9: The District disagrees with the finding; see explanation below: On February 8, 2017, the District presented a comprehensive budget analysis of Measure L funds to the Board of Trustees and the public. The report included expenditures, encumbrances, and remaining fund balances for each project. At the April 25, 2017, COC meeting, the District gave the Committee a summary of the financial report for Measure L funds. The report included all projects with beginning budgets, encumbrances, and remaining fund balances for each project. As part of this report to the COC, the District introduced the new reporting system, which was purchased and implemented during the 2016-2017 fiscal year.

The COC is not informed of all changes to the projects listed in the voter's Pamphlet, undermining their oversight and reporting responsibilities. Response F10: The District disagrees with the finding; see explanation below: The Voter’s Pamphlet includes a compilation of sample projects aligned with the original needs assessment at every school site. The Pamphlet provides parameters on what the bond monies may fund as a project. Each school was able to create a priority list of projects identified in the Voter’s Pamphlet. In some cases, the site priority lists have changed as needs were identified and their acuity was measured. All of these changes were made through a collaborative process with each school site team and were presented to the COC. To date, all bond projects completed are identified in the Voter’s Pamphlet. The Pamphlet is reflected in Board resolution 11-12-31, dated June 13, 2012.

Bond reporting may be greatly improved once the District’s new accounting and business software is implemented. Response F11. The District agrees with this finding. As of June 8, 2016, the District has purchased new bond reporting software. In April 2017, the new business and financial software was fully implemented. 4