Santa Cruz County Grand Jury • 2006-2007

Pajaro Valley Unified School District

Published: April 21, 2007 20 pages
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Findings 22 findings

F1
In early 2003, within months of leaving a position with the for-profit company America’s Choice, the superintendent asked a subordinate to purchase the America’s Choice Million Words Campaign. This request was followed up in 2003, 2004, and 2005 when she encouraged subordinates to purchase a multi- year educational program from America’s Choice — including licenses, texts, materials and training — for three schools. Amounts paid over the three-year initial period (2003-2004, 2004-2005, 2005-2006) amounted to more than $1,300,000, according to a review of the documentation.
F2
The superintendent was intimately familiar with the America’s Choice program. According to her resume, when she was employed by the National Center for Education and the Economy (NCEE), she “assisted in the development and refinement of the comprehensive school design America’s Choice.” America’s Choice is a subsidiary of NCEE.
F3
The superintendent, as a former employee of America’s Choice, was reportedly offered a stock purchase option.
F4
The superintendent’s did not clearly indicate her connection to America’s Choice when she encouraged its purchase by her subordinates.
F5
The district’s ethics policy includes conflict of interest guidelines which may apply in this type of situation, but because this policy is not dated, it is not clear when it went into effect. B. PVUSD Board of Trustees’ Fiscal and Management Oversight
F6
Several concerns with the budget review process were investigated. 6.1 The PVUSD’s annual budget and amended budgets are often delivered to the board without adequate time for the trustees to study and understand their contents. 6.2 According to some board members (past and present), they are discouraged from asking questions because asking questions makes the meetings last too long. - 12 Report Card: Pajaro Valley Unified School District 6.3 Some board members reported that they do not understand the budget and that the budget and amendments are not an area of their individual interest.
F7
There are differences of opinion within the board as to what constitutes appropriate fiscal oversight. 7.1 A number of trustees (past and present) stated they prefer to trust that the budget is an accurate and efficient document not needing their input or oversight. 7.2 None of the board members interviewed (past and present) knew the dollar amount or types of purchases that should go to the board for approval. 7.3 Some board members and district staff reported that they did not know that there were policies and procedures concerning board oversight.
F8
Difficulties overseeing expenditures were reported. 8.1 At regular board meetings, the consent packet includes a listing of some payments and some purchase orders. The listings of disbursements and purchase orders are not all-inclusive and are not reported in a format that allows board members to oversee expenditures effectively. 8.2 Board members reported they did not review purchases made from categorical or grant funds and some reported they thought of these funds as “free money” that didn’t require oversight. 8.3 Purchases were made from a new vendor (NCEE-America’s Choice) of a multi-year program and materials amounting to over $1,300,000 without specific board approval. These purchases were paid from various funding sources including categorical funds (state, federal and private funds with specific purposes and requirements).
F9
The district has a recent history of being governed by interim superintendents. 9.1 The district applied for “interim” superintendent status with an emergency waiver while having another interim superintendent under contract. 9.2 At the time of the writing of this report, the district is being served by a part-time (60 percent) interim superintendent. 9.3 It takes time for a district to set its priorities, establish a search committee and begin the process of filling the position of superintendent. However, to date, the board has not begun the process of filling the position of full- time superintendent. Instead, the board is considering creating the position of deputy superintendent. 9.4 A letter signed by approximately 500 teachers was presented to the board requesting a full-time superintendent. C. Allegations of Brown Act Violations
F10
There is evidence that the Pajaro Valley Unified School District Board of Trustees may have not complied with the state’s open meeting laws referred to as the Ralph M. Brown Act. Report Card: Pajaro Valley Unified School District - 13 10.1 The Brown Act requires that in advance of meetings, closed and open session topics be clearly identified with a description of the subject matter to be considered. 10.2 The following are two examples of agenda items with questionable descriptions: o In a closed meeting session on January 17, 2007, the board discussed terminating the current interim superintendent and rehiring the former superintendent in the interim role. However, the agenda item simply stated, “2.1a Title of Position, Interim Superintendent.” The board approved the termination and appointment with a majority vote. o In open session of the same January 17, 2007 meeting, agenda item 12.5 stated, “Report, discussion and possible action to approve Amended contract for Interim Superintendent.” The backup information for this agenda item stated, “The current contract for the Interim covers the responsibilities for both the Interim Superintendent and the Interim Associate Superintendent.” As reported to the Grand Jury, several of those in attendance assumed this item referred to the responsibilities of the current Interim Superintendent, but, in fact, it referred to the previous closed meeting discussion of two superintendents — the person who was currently filling a dual role as Interim and Associate Superintendent and the former superintendent who was being rehired. At best, this description was vague and confusing. Even if it were legal under the Brown Act, it does not provide the detailed level of transparency required to maintain public confidence. D. Board’s Oversight of Construction Funds
F11
Because of the way it was funded, the public had little opportunity to weigh in on a multi-million dollar school construction project. In 1997, the board approved $10 million Certificate of Participation (COP) through Paine Webber to cover construction costs of schools. California Financial Services was chosen to administer the fund. Initial costs for the note came out of the COP itself before any money was available to PVUSD. This is a method of obtaining funds without public notice beyond that provided by the normal board agenda. This lack of publicity deprived parents and citizens of a reasonable opportunity to express an opinion.
F12
Individual trustees were not aware of the disadvantages of Certificate of Participation funding. 12.1 The financing cost for COPs is higher than for general obligation bonds. 12.2 Certificate of Participations require a debt-service reserve fund, typically 10 percent of the principal. Using this method usually increases the principal amount borrowed. In this case, according to CFS Financial - 14 Report Card: Pajaro Valley Unified School District reports, $2.4 million in fees were paid to obtain the Certificate of Participation, leaving only $7.6 million for school projects.
F13
The board faced numerous problems and cost overruns for construction projects. 13.1 The board faced public controversy when the site for the new high school was under review. After architectural plans were drawn for a site that had been secured and approved, many members of the Watsonville community insisted the school be built elsewhere. The board agreed and approved the Harkins Slough Wetlands as the new site. Changing the site cost the district many millions of dollars in the following areas: o The original architectural plans were not designed for the multilevel terrain of the wetlands. The new school would also be located in the airport flight path turning zone. As a result, the school had to be redesigned. (Estimated loss of $1.9 million just for the new architectural plans.) o Extensive environmental studies were required. To get approval to build on the new site, the board had to give up a portion of the land and build the Wetlands Educational Resource Center as required by the Watsonville Municipal Code. (Estimated cost of center: $690,000.) Because there was less buildable space, the high school on the new site was 41,000 sq. ft. smaller than the one designed for the original site. o The change in architectural plans required that an additional 60,000 cubic yards of soil had to be trucked away. (Cost: approximately $161,000.) o A cafeteria was built which can seat only 328 students, yet the school will have approximately 2200 students. The kitchen facilities are also inadequate. Therefore, the food will have to be prepared in a kitchen that was remodeled at the district offices. This cafeteria was part of the original plan, and when money was not available, district administration made it a separate project paid for through a bond measure. 13.2 Mold was found in the new school buildings. Cleaning up the mold cost the district $2.5 million. A lawsuit is still pending and legal fees are still being incurred. To date, they are estimated to be approximately $2.7 million.
F14
When applying for funding, the board acted against the advice of financial counsel. 14.1 The board asked for an additional Certificate of Participation for $12.5 million in May 2000 to pay off the previous Certificate of Participation and had $2.5 million left to use as needed. 14.2 The district owed $12.5 million in a Certificate of Participation with almost $750,000 in fees. Financial counsel advised the board not to take Report Card: Pajaro Valley Unified School District - 15 out the loan. The board, however, voted to take out the loan, with one trustee opposing.
F15
The district continued to make poor management decisions related to construction projects and other financial issues. 15.1 The board approved an air pressurized fabric structure as a temporary gym for Aptos High School without respect to state regulations for that type of structure which require that it meet permanent rather than temporary use standards. The district lost over $130,000 in costs incurred in the purchase, move and set up of a structure that was not approved by the state. 15.2 The district had the opportunity to receive federal funds for needed high- speed internet access for the entire district. However, the administration filed the application late and the Federal Communications Commission denied the funds, resulting in a loss to the district of $900,000.
F16
As of the writing of this report, the California Department of State Architects has not given final approval to the Pajaro Valley High School construction project. E. Teaching Standards and Expenditures
F17
Schools in the district are not meeting teaching standards. 17.1 The California State Department of Education’s School Assistance and Intervention Team (SAIT) took over Pajaro Middle School and H.A. Hyde Elementary School. The SAIT process is a state intervention currently charged with bringing the two persistently lowest achieving district schools into compliance with standards that will improve their achievement scores. The SAIT team has set benchmarks and goals for these schools to teach state-approved consistent strategies and texts. 17.2 SAIT required re-training of teachers and principals in implementing consistent instructional methods that teach to state standards and use state compliant texts. 17.3 In 2006, a District Alternative Governance (DAG) committee was formed and charged with investigating reasons for failure at seven of the lowest performing schools. The seven schools selected were Freedom, Hall District, Mintie White, Ohlone, Starlight, E.A. Hall, and Rolling Hills. In those seven schools, the DAG committee found instructional methods, texts and materials being used that were inconsistent and did not meet state standards. (See SAIT findings above.) Actions were implemented to institute the Nine Essential Program Components required by the state to remedy the inconsistencies and failure to meet state standards in those seven schools. In 2006, the SAIT team established a timeline for implementation and made assignments for accomplishment beginning in early 2007. - 16 Report Card: Pajaro Valley Unified School District
F18
Some of the training efforts prescribed by the DAG have met with difficulty. Some of the teachers and principals report they have been unable to go to trainings because there are not enough substitutes to teach their classes. Those who have not been trained cannot use the state-compliant strategies and texts in their classrooms.
F19
In all the low achieving schools, there is a large population of students for whom English is a second language. According to an extensive review of the district’s bilingual programs called the Gold Study, adequate quality instruction and consistent goals and implementation of a language learning system were not in place as of February 2007.
F20
Expensive educational materials from America’s Choice are not being used or have been deemed inappropriate. There are boxes of expensive texts — some not even opened — in school storerooms, which the teachers choose not to use in their classrooms. F. The Zone System
F21
The Pajaro Valley Unified School District is divided into three geographical zones, each of which is managed by a Zone Assistant Superintendent. A lack of support and communication between district personnel and zone management has been reported. 21.1 Teachers, principals and support staff expressed a lack of support from their Zone Assistant Superintendent. However, the North Zone interviewees expressed less concern than the South and Central Zone interviewees. 21.2 Interviewees from all three zones indicated they had never received a clear explanation of the functions of the Zone Assistant Superintendent. 21.3 Teacher and support staff interviewees reported they have spoken with their Zone Assistant Superintendent primarily when dignitaries or evaluators from outside the district were visiting the school. 21.4 Interviewees said that the lack of communication and support from the district contributed to low morale and an opinion that the district did not know and had little concern for the challenges in the classrooms. 21.5 The Gold Study and the 2004 Management Audit Study found that the Zone Assistant Superintendents make their own decisions with little or no board oversight. In effect, the zones act as small school districts without a board of trustees. 21.6 Zone meetings are poorly publicized, resulting in parts of the community not knowing or being able to express concerns affecting their schools. No minutes or agendas are kept or published of these meetings. 21.7 Although school board members occasionally attend zone meetings, they are not required to, nor do the Zone Assistant Superintendents who preside Report Card: Pajaro Valley Unified School District - 17 over the meetings thoroughly report back to the board the concerns raised or the issues discussed in the meetings. 21.8 The Zone Assistant Superintendents may have discussed zone meetings with the superintendent. However, no record is kept of these discussions. Therefore, there is no way to determine if issues are being adequately addressed or resolved, and no way for the board to participate or provide oversight.
F22
Several demographic differences exist between and within zones. 22.1 The current North Zone system has significantly different socio-economic demographics than the other two zones. Under-achieving students have become the norm in the schools of the South and Central Zones. They have been achieving scores averaging at least two years below grade level for all of the years examined. However, the grade level and achievement scores of most of the schools in the North Zone have been significantly higher and appear to be climbing every year. 22.2 There is a significant difference in the available per-student categorical funds and enhancement money available to South and Central zones to the exclusion of the North Zone. Because of the disparity of categorical funds to North Zone schools, those students who need English learner assistance in the North Zone — a small population of students — get far less assistance than students of the same language acquisition status who live in South or Central Zones. 22.3 According to the audit study, the North Zone “does its own thing,” and the stakeholders interviewed believe that the district has agreed not to interfere. 22.4 Those interviewed from the North Zone were aware of the fact that South and Central Zones receive substantially more money per student due to state and federal funding for the impoverished and under-performing schools. 22.5 According to the management audit, zone meetings are evaluated by the parents as more important than board-level meetings because the board does not know the concerns from any one particular zone. - 18 Report Card: Pajaro Valley Unified School District Conclusions A. The Appearance of a Conflict of Interest on the Part of the Superintendent

Recommendations 7