Date:    October 11, 2017

To:       Ray Armstrong, Special Prosecutor, Orange County District Attorney

From:   Dawn Urbanek

Re:   1. Brown Act Violation: CUSD Contract with Governmental Financial Strategies

2. Brown Act Violation: CUSD Contract with Dannis Wolvier Kelley

3. Brown Act Violation: CUSD Contract with Cooperative Strategies LLC

4. Complaint for Mis-use of Taxpayer Funds, Land Fraud Pacifica San Juan 

5. Complaint for Mis-use of Taxpayer Funds, Land Fraud Laguna Niguel Paseo de Colinas

6. Complaint for Mis-use of Taxpayer Funds, Land Fraud Dana Point Bus Yard 

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1. Brown Act Violation: CUSD Contract with Governmental Financial Strategies

September 13, 2017 CUSD BOT Meeting Agenda Item #4 page 81 Independent Contractor, Professional Services, Field Service and Master Contract Agreements 

ICA 1718118 Government Financial Strategies financial advisory services and analysis review and evaluation of a district wide solar project. Funding is from Prop 39 funds.  Expenditures are $325,000.00

Board Audio at 2 minutes 40 seconds Trustee McNicholas made the following amendment to this contract on the record.

ICA 1718118 Government Financial Strategies financial advisory services and analysis review and evaluation of a district wide solar project report should read that funding is from Bond Proceeds/CFDs/General Fund not Prop 39. Expenditures for this contract should read $250,000.00 not $325,000.00. 

As of today September 25, 2017 the Agenda Item has not been amended to reflect the following changes:

Change Number 1:

The amount of contract ICA 1718118 Government Financial Strategies should be $250,000 not $325,000.

So the total on Agenda Item #4 should be amended to read: $1,796,247.23

 $1,871,247.23 - $75,000 = $1,796,247.23.

That correction has not been made to date. 

 

Change Number 2: 

September 13, 2017 CUSD BOT Meeting Agenda Item #4 on page 81

The Cost needs to be amended to read $250,000 not $325,000.

1. Brown Act Violation: CUSD Contract with Governmental Financial Strategies

2. Brown Act Violation: CUSD Contract with Dannis Wolvier Kelley

3. Brown Act Violation: CUSD Contract with Cooperative Strategies LLC

Board Audio at 2 minutes 40 seconds Trustee McNicholas made the following amendment to three contracts on the record.

ICA 1718117 Cooperative Strategies LLC Prepare Annual Five Year Report should read that funding is from Developer Fees, not the General Fund

ICA 1718118 Government Financial Strategies financial advisory services and analysis review and evaluation of a District wide solar project. Report should read that funding is from Bond Proceeds/CFDs/General Fund not Prop 39. Expenditures for this contract should read $250,000.00not $325,000.00

PSA 1718110 Dannis Woliver Kelly to provide Counsel services for CREB Bonds should read Bond Proceeds not General Fund.

The corrections Trustees made verbally on September 13, 2017 have not been reflected in a "REVISED" Agenda to date.

No General Fund Money Should be used for any of these Contracts

The District no longer funds Art Music and Science for every student. These are CORE EDUCATIONAL CLASSES that are mandated by the State of California to be part of a basic educational curriculum. These courses must be taught by a credentialed teacher and the course content must align with California Minimum Content Standards and Curriculum Frameworks. When CUSD relies on fundraising (one time money) to pay for "Core Educational Programs" (ongoing expenses) it creates wealth based inequities in the quality of education that students receive within the district, and is a violation of the Civil rights of every student in the district. All students must have equal opportunity to obtain a quality education.

Relying on fundraising and donations to pay for core educational programs is a violation of Assembly Bill 1575.

No General Fund money should have been used for any of these contracts.

The Public must ensure that General fund monies are used for educational services for students, and not for property development that only benefits adults. CUSD's $52 million dollar District Office was built on the Consent Calendar using General Fund Money, while students went without the basics.

 

1. Brown Act Violation: CUSD Contract with Governmental Financial Strategies 

Items on the Consent Calendar are suppose to be "routine" in nature. Contracts dealing with real property are by law never routine in nature. Real property is unique, and that is why the law provides specific performance as a remedy for property disputes.

CUSD must identify for the Public Record the funding source for each stated service in the Contract. The Items are NOT RELATED, and most have nothing to do with the district wide solar panel project.

Contracts for these services should have been broken out, separately; identified, and voted on. The Government Financial Strategies Contract should be several individual contracts that were placed on the Agenda for approval by Trustees.

These Items should be brought back individually. Trustees should reconsider each item individually with the corrections if CUSD is going to cure the Brown Act Violation. 

 

Item Number 1: 

Planning and Consulting Projects

Standard hourly rate of $225 plus expenses, invoiced monthly, unless specified.

Estimated total budget: $30,000

[Funding Source needs to be identified on the record]

 

Item Number 2 

Asset Management Planning - Pacifica San Juan

Pacifica San Juan: $25,000 total, based on hourly rate, invoiced monthly. 

[Funding Source: Pacifica San Juan Mello Roos] 

 

CFO 98-1A bonds 

$54,050 for professional fees plus $1,000 for expenses, payable at completion

[Funding Source Pacifica San Juan Mello Roos]

 

CFO 98-1 B bonds

$54,050 for professional fees plus $1,000 for expenses, payable at completion

[Funding Source Pacifica San Juan Mello Roos]

 

Item Number 3 

Asset Management Planning - Laguna Niguel

Laguna Niguel: $10,000 total, based on hourly rate, invoiced monthly.

[Funding Source needs to be identified]

 

Item Number 4 

Asset Management Planning - Dana Point

Dana Point: $15,000 total, based on hourly rate, invoiced monthly.

[Funding Source needs to be identified]

 

Item Number 5 

Continuing Disclosure

$2,500 per year for the first four debt issuances, and $500 for each additional debt issuance, totaling $6,500 based on outstanding debt, payable at beginning of year

[Funding Source needs to be identified]

  

Item Number 6 

Solar Project Financing 

$54,050 for professional fees plus $1,000 for expenses, payable at completion inc.

[Funding Source Prop 39 Energy Grant]

At the July 26, 2017 BOT meeting Staff informed Trustees that there would be no financial implications for the District if it were to apply for CREB Bonds to pay for solar panels on 6 high schools. The Application would just hold a spot for CUSD in the event that they decided to go through with the project. 

Board Audio at 122:00 (2 hours 2 minutes)

Staff did not disclose the costs associated with the work done to apply for CREB Bonds which they listed on the September 13, 2017 Agenda as $425,000.00

$375,000.00 to Government Financial Strategies

$50,000.00 to Dannis Woliver Kelly. 

Staff stated that there was NO FISCAL IMPACT TO THE DISTRICT TO APPLY FOR THE CREB BONDS.

Supporting documentation:

September 13, 2019 Board Agenda at page 139

 

 

4. Complaint for Mis-use of Taxpayer Funds, Land Fraud: Pacifica San Juan  

Asset Management Planning - Pacifica San Juan

Pacifica San Juan: $25,000 total, based on hourly rate, invoiced monthly.

At the September 19, 2017 San Juan City Council Meeting, the San Juan Capistrano City Council rejected CUSD's request for a zoning change on a parcel of land in Pacifica San Juan that is currently zoned as "Open Space" or "school site". 

The conduct of CUSD in trying to re-zone land they do not currently own, so that they could take million dollars in profit from the Pacifica San Juan Mello Roos taxpayers is unconscionable. The fact that CUSD was changing the zoning for the purpose of building low-income, high density housing (18 homes per acre) in a single family detached home neighborhood, so that CUSD could gain a new revenue stream and provide inexpensive, ocean view housing to district employees is worse.     

This money ($133,100 paid to Government Financial Strategies to change the zoning) should be refunded to Pacifica San Juan Mello Roos Taxpayers. 

The actions of the District must be investigated. This is as an abuse of the Pacifica San Juan taxpayers. Clark Hampton is not an attorney, or a licensed real estate broker. Staff intended to hide this from the Public and these expenditures are a mis-use of taxpayer money. 

See my September 19,2017 letter to the San Juan City Council  

CFO 98-1A bonds 

$54,050 for professional fees plus $1,000 for expenses, payable at completion

[Funding Source Pacifica San Juan Mello Roos]

 CFO 98-1 B bonds

$54,050 for professional fees plus $1,000 for expenses, payable at completion

[Funding Source Pacifica San Juan Mello Roos] 

Trustees never voted to approved $133,100.00 ($25,000 + $54,050 + $54,050 = $133,100.00) to change the Zoning on Pacifica San Juan.

 

5. Complaint for Mis-use of Taxpayer Funds, Land Fraud: Laguna Niguel - Paseo de Colinas Property

Asset Management Planning - Laguna Niguel

Government Financial Strategies Contract services for this property: Laguna Niguel: $10,000 total, based on hourly rate, invoiced monthly. 

I have already filed a complaint with the District Attorney regrding this parcel.

See: September 3, 2017 Complaint

Property: Paseo de Colinas property. 2.47 acre property located on Paseo de Colinas adjacent to Niguel Hills Middle School

Negotiating Party: One or more potential buyers for the Property who may purchase the Property through a surplus property ground lease bid auction or waiver process, or a joint occupancy process

January 18, 2017 Asset Management Workshop: CUSD discussed options for this property and gave direction to staff.

February 22, 2017 CUSD BOT Meeting Agenda Item #9 page 250

Resolution 1617-50: 

"Laguna Niguel - Paseo de Colinas Property

The District will reorganize the Laguna Niguel site adjacent to Niguel Hills Middle School to allow for the more efficient layout of storage. The District will negotiate the amendment of terms on the existing use agreement for storage space with the local car dealership. The District will also explore the option of potentially selling the site. District staff will involve City staff in the course of moving forward with plans for this site."

Staff added selling the site as an option.

Staff represented that they were working with the City of Laguna Niguel on this property.

August 23, 2017 CUSD BOT Meeting Closed Session report out: "Trustees gave direction to Staff"

CUSD did re-negotiate the lease price from $33,000 per year to $131,000 per year.

Note: A Public Records Request to the City of Laguna Niguel states that Staff has not engaged the City in this matter.

 

 

6. Complaint for Mis-use of Taxpayer Funds, Land Fraud: Dana Point

Asset Management Planning - Dana Point

Government Financial Strategies Contract services for this property:

Dana Point: $15,000 total, based on hourly rate, invoiced monthly.

This is a new Complaint based on the following:

Property: South Transportation and Groundskeeping Facility. (NOT SURPLUS PROPERTY) 5.51 acre property located at 26126 Victoria Blvd, Dana Point, CA 92624

Negotiating Party: One or more potential buyers or lessees for the Property who may purchase or lease the Property through a surplus property bid auction process

Dana Point - South Transportation and Groundskeeping Facility

At the January 18, 2017 CUSD Asset Management Workshop concluded with Staff receiving direction on improving and leasing this site for RV/boat storage.

February 22, 2017 CUSD BOT Meeting Agenda Item #9 page 250

Resolution 1617-50:

"Dana Point - South Transportation and Groundskeeping Facility

The District will preserve space on the south bus yard site for use by the Grounds and Transportation Departments for surplus storage and vehicle parking. Remaining space on the site will be made available for leasing of RV/boat storage. The District will make improvements to the site for the purpose of leasing space for storage. The District will also explore options for the long-term repurposing of the site. District staff will involve City staff in the course of moving forward with plans for this site."

Staff added "explore options for the long-term repurposing of the site.

Staff represented that they were working with the City of Dana Point on this property.

August 23, 2017 CUSD BOT Meeting Closed Session report out: Trustees gave direction to Staff

September 9, 2017 CUSD BOT Meeting PUBLIC HEARING Agenda Item #1 and Resolution #1718-17 Agenda Item #31 Ratifying the 2006 Declaration of Surplus Property, Declaring the intent to offer the property for ground lease, and authorizing a request for the waiver of competitive bidding procedures. 

The Public concern is that the District is already in negotiations with a particular party to develop this property. Staff has gone from a January recommendation to improve the site for RV and Boat storage, to having selected a particular developer to develop the site for residential property.

A public records request has been done to see if Staff actually engaged the City of Dana Point. Staff lied about engaging the City of Laguna Niguel in the sale of Paseo de Colinas.