"Eureka City Schools – Board of Trustees, Deal or No Deal"*

Public notice of the pending real-estate decision prior to the December 14, 2023, Eureka City Schools Trustee meeting did not describe the transaction as a proposed property exchange under California Education Code section 17536 and did not specify both parties eurekacityschools.org (707) 441-2414 | Fax (707) 441-3326 . involved. Therefore, the public did not have an opportunity to be informed and to question the details of the pending decision. Response to Finding 1: The Board disagrees partially with this Finding. Prior to December 14, 2023, the real property transaction was brought to the Board as a closed session item authorized by Government Code section 54956.8 because the District was in active negotiations. Government Code section 54954.5, subdivision (b), provides safe harbor language that the Legislature recommended including when a governing body is meeting in closed session to have a conference with its real property negotiators. The safe harbor language does not require the District to identify details such as whether a real property exchange is being addressed within the agenda. (See Gov. Code, section 54954.5, subdivision (b).) The District did list the proposed acquirer of the property as a negotiating party on the closed session agenda item for December 14, 2023. It did not list the District as a negotiating party, though that was implied by the presence on the District's agenda; further, Government Code section 54956.8 does not require the identification of the District as one of the parties to the negotiation.

Public notice of the pending real-estate decision prior to the December 14, 2023, Eureka City Schools Trustees meeting did not identify the person or person with whom the designated Eureka City Schools negotiator may negotiate - specifically, the name (identity) of the principal members and financial backers of AMG Communities - Jacobs, LLC. Therefore, the public did not have an opportunity to be informed and to question the details of the pending decision. Response to Finding 2: The Board disagrees partially with this Finding. The Board agrees that it did not list AMG Communities - Jacobs, LLC, as a party with whom it was negotiating at the Board Meetings prior to the December 14, 2023 meeting. As to identifying the principal members and financial backers of AMG Communities – Jacobs LLC, the Brown Act does not require that degree of detail on the agenda. Government Code section 54945.5, subdivision (b), requires the District to identify the name of its negotiator, not the name of the negotiator for the other party to the negotiations. That section indicates that in listing the negotiating parties, the agenda must "[s]pecify name of party (not agent)", which is what the District did on the December 14, 2023, agenda.

Public notice of the pending real-estate decision prior to the December 14, 2023, Eureka City Schools Trustee meeting did not include the proposed text of Resolution 23-24-023 and Agreement. Therefore, the public did not have an opportunity to be informed and to question the pending decision. eurekacityschools.org (707) 441-2414 | Fax (707) 441-3326 . Response to Finding 3: The Board disagrees partially with this Finding. The District did not release the text of Resolution 23-24-023 until after the Board provided additional direction to the District negotiator in closed session, paving the way for Board to proceed with adopting the Resolution to approve the exchange agreement in open session. The public did have an opportunity to be informed because the Board discussed the item in open session and allowed the public the opportunity to comment in open session on the agenda item. The Board voted to approve the Resolution only after inviting public comment. However, the Board appreciates and understands the Grand Jury's concern with allowing the public a longer opportunity to review agreements being considered by the Board when feasible. The Board is dedicated to providing an opportunity for the public to be informed of pending District decisions within the confines of the Brown Act and the District's operational needs.

Eureka City Schools Trustees did not fully vet AMG Communities-Jacobs, LLC to establish the bona-fide identity of its members and its financial integrity and discuss this information in open session. Therefore, the public did not have an opportunity to be informed and to question the details of the pending decision and its potential relationship to other local public policy issues. Response to Finding 4: The Board disagrees partially with this Finding. There is no provision in the Government Code, Education Code or other applicable law which requires the District to prequalify or review financials of a proposed acquirer of District property. Education Code section 17536, et seq., regarding property exchanges does not require any such process. If the District had engaged in a sale of the surplus property, rather than an exchange, there is an even more explicit process the District must follow, and it again does not provide for prequalification or financial reviews; it simply contemplates sale to the high bidder. (See Ed. Code sections 17455, et seq.) Additionally, the District's obligation is to serve its students, parents, teachers, and staff. The Board approved a real estate transaction on the basis that the additional cash consideration would directly benefit the District's students by aiding needed improvements to District facilities. That purpose is directly in line with the District's mission and statutory authority, while other local public policy issues beyond the District's responsibility may not be.

Resolution 23-24-023 and Agreement was introduced and voted on within 2 ½ hours on December 14, 2023. The Eureka City School Trustees acted hastily without sufficient prudence and due diligence. This deprived the public of information and adequate explanation and communication regarding terms and conditions or sufficient opportunity to consider, respond or question the transaction. eurekacityschools.org (707) 441-2414 | Fax (707) 441-3326 . Response to Finding 5: The Board disagrees partially with this Finding. It agrees that it publicly introduced the supporting documentation for the item and voted on it in open session within approximately 2 ½ hours of the documentation being made public. The Board disagrees that it acted hastily without sufficient prudence and due diligence. The Board agrees that the public could have been afforded additional time to review the agreement, for example if the open session item had been deferred to a later Board meeting.

Eureka City Schools Trustees conducted unrecorded, secret, undocumented, and undisclosed negotiations. This deprived the public of adequate explanation and communication regarding terms and conditions, or sufficient opportunity to consider, respond or question the transaction during open sessions, and prevented the Humboldt County Civil Grand Jury from determining whether Eureka City Schools Trustees complied with the California Government Code during closed sessions. Response to Finding 6: The Board disagrees partially with this Finding. The Board met appropriately in closed session to discuss the price and terms of the proposed real property transaction, as allowed by the Brown Act. Government Code section 54956.8 expressly authorizes a closed session meeting for this purpose. Furthermore, the District provided all non-privileged documents responsive to the Grand Jury's request. The District concedes that if there had been greater time between the property exchange agreement being made public and the Board acting on it that there would have been more opportunity for public review and input. RESPONSE TO RECOMMENDATIONS