April 25, 2018 CUSD BOT Meeting Agenda Item #32  PROPOSITION 39 - PROGRAM UP-DATE

Board Agenda at page 1,218

Board Audio at 2:54:38

This is an information only item. No action was taken.

CUSDWatch Comment

There needs to be an audit of CUSD- this is a pay -to-play scam that involved $10.5 million in State Prop 39 Clean Energy Grants and $26 million in CREB Bonds (Federal Clean Renewable Energy Bonds). What real benefit did taxpayers receive for the $36 million dollars? Consultants made millions. Documentation is provided after the presentation. 

 

CUSDWatch Comment: Background

Prop 39 Grants

Californias' Prop 39 The Clean Energy Jobs Act passed November 2012 which allocated $2.5 Billion to K-12 and Community Colleges. 

Fact Sheet.

Eligible energy projects include, but are not limited to, the following energy measures:

  • Repairs to heating, ventilation, and air-conditioning (HVAC) systems.
  • New chillers, boilers and furnaces.
  • New lighting and lighting control systems.
  • Installation of energy-efficient windows, programmable thermostats, and thermal window shades.

Note: According to Kitchell School Facilities Condition Reports, all mechanical systems in CUSD schools are past their useful life. The HVAC Systems are particularly important for the health and safety of students.  The money should have been used to replace all the HVAC systems. Instead they spent money to place new controls on old and failing systems. CUSD is having a "chronic absentee problem" could it be due to unhealthy air quality at CUSD Schools?

Source: Data Quest

CREB Bonds

Federal Clean Renewable Energy Bonds (CREBS) Clean renewable energy bonds (CREBs) may be used by certain entities -- primarily in the public sector -- to finance renewable energy projects. The list of qualifying technologies is generally the same as that used for the federal renewable energy production tax credit (PTC). CREBs may be issued by electric cooperatives, government entities (states, cities, counties, territories, Indian tribal governments or any political subdivision thereof), and by certain lenders.  The bondholder receives federal tax credits in lieu of a portion of the traditional bond interest, resulting in a lower effective interest rate for the borrower.* The issuer remains responsible for repaying the principal on the bond. 

Savings Category:  
  • Geothermal Electric
  • Solar Thermal Electric
  • Solar Photovoltaics
  • Wind (All)
  • Biomass
  • Hydroelectric
  • Municipal Solid Waste
  • Landfill Gas
  • Tidal
  • Wave
  • Ocean Thermal
  • Anaerobic Digestion

CUSD borrowed $26 million dollars to place solar panels at 6 high schools and the District offices. 

Board Report

CUSDWatch Comment

This presentation only dealt with Prop 39 Funds. Schneider Electric is CUSDs' energy partner for both Prop 39 funds and CREB Bonds for solar projects. They must be looked at together for cost benefit analysis.

Presentation by Schneider Electric 

PROP 39 FUNDS

Funds Received $10,540,364 + Utility Rebates of $248,816

How the money was spent:

Planning $629,370

Projects $9,910,994

Phase I LED Lighting at 6 high Schools (Completed April 2016)

Phase II  Building Automation Systems (HVAC Controls) at 5 High Schools, LED Lighting Dana Hills, School Dude Energy Module Software program

Phase III Building Automation Systems (HVAC Controls) at 19 elementary and middle schools

Annual Savings $238,811

CUSDWatch Comment CREB BONDS (Solar Projects)

October 11, 2017 CUSD BOT Meeting Agenda Item #25 Financing Solar Projects page 783

Presentation by Government Financial Strategies on using CREBS to finance Solar Energy

"The solar feasibility study estimated net project cash flow benefits of approximately $100,000 - $200,000 per year totaling nearly $3.7 million over 25 years." 

CUSD borrowed $26 million dollars to put solar panels on 6 high schools plus the District Office. CUSD had to put up Capo Valley High School and Las Flores Middle School as Collateral in a Lease - Lease back arrangement for the management of the system. 

In addition, CUSD hired Consultant Efficiency Energy, LLC to obtain one time energy efficiency tax deductions. Staff negotiated a deal that limited CUSDs' portion to $200,000 17%, when CUSD was entitled to 50% potentially $1,454,375 million. See: March 14, 2018 CUSD BOT Meeting Agenda Item #27 Consulting Engagement - Efficiency Energy, LLC

 

 

 

CUSDWatch Comment 

Background on Solar Projects

CUSDWatch: CUSD Approves Solar Panel Project at a cost of $26 million dollars - Good Deal or Unscrupulous Waisting of Taxpayer Funds? Students Learn a Lesson from CUSD's Solar Project. 

The Capistrano Unified School District is proposed to spend $115 million for electricity over the next 25 years. 

In an effort to reduce electricity costs, on December 6, 2017 the CUSD Board of Trustees approved Resolution No. 1718-28 to enter into an energy services contract with REC Solar Commercial Corporation to design, construct and operate a solar project at six high schools and the District Offices:

Aliso Niguel High School: 1,099 kWdc photovoltaic system

Capistrano Valley High School: 975 kWdc photovoltaic system

Dana Hills High School: 1,081 kWdc photovoltaic system

San Clemente High School: 745 kWdc photovoltaic system 

San Juan Hills High School: 894 kWdc photovoltaic system 

Tesoro High School: 1,167 kWdc photovoltaic system

District Offices: 832 kWdc photovoltaic system  

Total kWdc = 6,793 

 

With the Solar project installation the District is projected to reduce electrical costs from the projected $115,301,649.00 down to $94,069,778.00 saving CUSD $21,231,871.00 over 25 years

CUSD chose to purchase the photovoltaic system using CREB financing (Clean Renewable Energy Bonds) rather than lease the system.

On November 8, 2017 Trustees approved $26 million in CREB bonds and a Lease- Lease Back financing arrangement using Capo Valley High School and Los Flores Middle school as collateral to finance the purchase of the system.

Board Meeting Agenda November 8, 2017 at page 788

Board Audio at 188:16

Board Audio at 189:00 Superintendent and Board Comments 

Trustees were having trouble understanding Lease - Lease Back Financing

Board Audio at 193:00

Motion by Trustee Pritchard

Second by Judy Bullockus

Resolution No. 1718-24 passes 5-0-2 (Trustee Reardon Absent - Trustee Jones left the room unannounced)

See: CUSDWatch: Resolution No 1718-24 Authorizing $26 million in CREB Bond Financing

According to a presentation by Government Financial Strategies, the solar feasibility study estimated net project cash flow benefits of CREB Bond financing and the Lease Lease back arrangement would generate approximately $100,000 - $200,000 per year in cash flow for CUSD over 25 years.  Cash flow of $3.7 million over 25 years.

Board Meeting Agenda October 11, 2017 Agenda Item #25 at page 783

Board Audio at 238:39

Superintendent Vital recommended that this be treated as an INFORMATION ITEM ONLY and be brought back to the Board for Discussion. 

No Action was taken

See: CUSDWatch: BOT Meeting Agenda Item #25 Financing Solar Energy Projects

   

Trustees approved Resolution 1718-28 on December 6, 2017 which awarded the Energy Service Contract to REC Solar for the design , Installation and commission of Solar energy projects.

Board Agenda December 6, 2017 Agenda Item #34 at page 534

Board Audio at 3:34:27

Presentation by Clark Hampton- Open Transparent Process.

If approved CUSD would sell CREB Bonds tomorrow Dec 7, 2017

Students saw total transparency in the process as opposed to power purchase agreements that other districts do.

Board Audio at 3:35:45 

TRUSTEE COMMENTS

None.

Motion to Approve Resolution by Trustee Hanacek

Second by Trustee Bullockus

The Resolution 1718-28 was approved 5-0-2 (Trustee Reardon and Jones absent)

The total cost approved in the resolution is $18,372,631.00

Capital Cost $17,563,660.00

O&M $713,788.00

Performance Guarantee $95,184.00

Total Cost = $18,372,631.00 

However- documentation in Agenda Item #33 showed a Total Cost of $20,622,124 excluding OEM of $713,788.00.

There seems to be a cost discrepancy of $2,963,281.00?

The December Board Agenda had three separate Items related to the Solar Project:

Agenda Item #8  PUBLIC HEARING: ENERGY SERVICE CONTRACT FOR SOLAR ENERGY PROJECTS: Supporting Documentation is in Agenda Item #34 page 35 (There was no mention of Agenda Item #33 Up-date on Solar Energy Projects and Request for Proposal Results which showed that the total cost for the Solar Project was $20,622,124 excluding OEM 

 

Agenda Item #33 ARC states that the total cost of the project is projected to be $20,622,124.00 excluding OEM.

The Resolution stated that OEM was $713,788.00 so according to Agenda Item #33, CUSD is spending $21,335,912 for the solar project not the $18,372,631 as stated in the resolution.

In addition to the above, CUSD amended the Agenda Item by provided the following Handout at the meeting which was NOT included in the original documentation for the Public Hearing Agenda Item #8 or Agenda Item #33 and #34. 

Brown Act Violation?

In addition to the $43,830 paid to ARC Alternatives, CUSD has also paid Government Financial Strategies $250,000 as a financial Consultant on the Solar Project and $50,000 to Danis Wolver Kelly for work on the CREB Bond financing even after Staff represented to Trustees that there was NO EXPENSE in applying for the CREB Bonds.

see: October 11, 2017 2017 Complaint to DA for Brown Act Violations

Were these costs (paid for from Pacifica San Juan Mello Roos payments) included in the cash flow projections? 

Time Line 

May 10, 2017 CUSD BOT Meeting Agenda Item #5 page 79

CUSD paid Arc Alternatives $43,830.00 for the Solar Feasibility Study 

July 26, 2017 CUSD BOT Meeting Agenda Item #26 Solar Feasibility Study page 611

This was an Information/Discussion Item only. The Board took no action.

Arc Alternatives presented the findings of the Solar Feasibility Study so that the District could determine if it should move forward to implement the Solar Project and if the District should submit an application for CREB Bonds to finance the solar project.

Note: CUSD Staff had already submitted the application for the CREB Bonds prior to receiving Board approval (CREB Application was submitted in June 2017)

 

September 25, 2017 CUSD released and RFP for proposals for solar and battery storage at seven sites.

When was this approved by Trustees?

October 11, 2017 CUSD BOT Meeting Agenda Item #25 Financing Solar Energy Projects page 783

Presentation by Government Financial Strategies on using CREBS to finance Solar Energy

"The solar feasibility study estimated net project cash flow benefits of approximately $100,000 - $200,000 per year totaling nearly $3.7 million over 25 years." at page 783

CUSD had to put up Capo Valley High School and Las Flores Middle School as Collateral in a Lease - Lease back arrangement for the management of the system.

November 8, 2017 Up-date on Solar Energy Project

This was an Information/Discussion Item Only - No Action Was Taken

November 8, 2017 CUSD BOT Meeting Agenda Item #36 RESOLUTION NO. 1718-24 authorizing the issuance of $26 million in CREB Bonds. 

Data: The Solar Feasibility Study estimated project cash flow benefits of $100,000 to $200,000 per year, totaling $3.7 million per year over 25 years.

December 6, 2017 BOT Meeting Public Hearing Agenda Item #8 PUBLIC HEARING

Why did Clark Hampton ask Trustee McNicholas to read a 4- Item Statement into the record without providing that documentation to the Public? 

Board Audio at 1:52:01

Open Public Hearing at 9:08 pm

No BLUE CARDS

Trustee McNicholas starts to close the Public Hearing but Clark Hampton Deputy Superintendent for Business Services interrupts the Public Hearing and request that a statement must be read into the record... four Items.

Board Audio at 1:53:02

Trustee McNicholas reads a very long statement containing four items.

Close the Public Hearing at 9:11 pm

 

Why did CUSD give students Extra Credit for attending a Board meeting to advocate for a particular Board Item... Solar Power? 

Board Audio at 2:21:20

Max Student Representative on the Board: Raise your hand if your her for Solar? Keep your hands raised if you are also in an AP class? Ah Ha I see you guys... get that extra credit AP Environmental Science.

IT IS INAPPROPRIATE FOR STUDENTS TO RECEIVE EXTRA CREDIT FOR ATTENDING BOARD MEETINGS TO ADVOCATE FOR A SPECIFIC AGENDA ITEM- Solar Power

 

While I appreciate the work that all of the students did on this project - I cannot help but feel that students were used by CUSD. 

I would hope that students would go back and revisit the economics of this project with an INDEPENDENT 3rd party and verify the actual cost. Then look at the financing arrangement to make sure it is based on what was represented keeping in mind the following:

CUSD is going into debt (it is borrowing $26 million dollars). CUSD also hopes to get another $889 million dollar school facilities bond on the next ballot. How much debt should taxpayers accumulate at the hand of CUSD and for what benefit.

In addition to the costs stated above- CUSD received $8.13 Million in Prop 39 Energy Grants which could have been used to purchase new HVAC Systems for schools. Instead $5.9 million went to a single company- Schneider Electric for Energy Audits and an Energy Conservation Project. 

Rather than increase the Base Funding Grant which would allow local districts to use more money in the classroom, the State uses grants to promote political agendas like "Green Energy".  

These are only 2 examples and look at the money spent for very little return $26 million in CREB Bond Debt + $8.9 million in Prop 39 Grant Money + $1.67 million for 5 electric busses that can't drive across the entire District without stoping for a charge.

 

And also consider the assumptions made to receive the cost savings on the $26 million dollar solar project:

1) It appears that these panels will be purchased from companies outside the US because there is a contingency in the Annual Cost of 5% because the current administration may increase tariffs on panels purchased outside the United States. See Board Agenda at page 529 

" The “module trade case contingency” is a reserve to account for additional costs, if any, related to the Federal Section 201 solar trade case currently pending a final decision by the Administration. Any unspent funds will be used to pay down the outstanding bond balance, as required by law.  

CUSD did not include this in the Resolution Cost that it approved. That is part of the cost discrepancy.

2) Was there any discussion about health and safety differences in panels and batteries made outside the United States? Why not buy from an American company- Tesla was one of the bidders and not only are they based in America- they are a California company.

3) The Rate structure that the estimated savings grandfathered SCE and SDG&E Rates for 10 years. Annual Escalation in Rates is projected to be 3% per year- CUSD may loose substantial money for the remaining 15 years of this project. And the grandfathering is not in place yet- what if it is not received?

 

November 8, 2017 CUSD BOT Meeting Agenda Item #36 RESOLUTION NO. 1718-24, RESOLUTION OF THE BOARD OF TRUSTEES OF THE CAPISTRANO UNIFIED SCHOOL DISTRICT AUTHORIZING THE EXECUTION AND DELIVERY OF THE CAPISTRANO UNIFIED SCHOOL DISTRICT 2017 CERTIFICATES OF PARTICIPATION (NEW CLEAN RENEWABLE ENERGY BONDS) (SERIES A – DIRECT SUBSIDY) AND THE CAPISTRANO UNIFIED SCHOOL DISTRICT 2017 CERTIFICATES OF PARTICIPATION (SERIES B – TAXABLE) IN AN AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $26,000,000, AUTHORIZING THE DISTRIBUTION OF AN OFFICIAL STATEMENT IN CONNECTION THEREWITH, AND AUTHORIZING THE EXECUTION OF VARIOUS DOCUMENTS, AGREEMENTS, AND RELATED ACTIONS:

Board Meeting Agenda at page 788

Board Audio at 188:16

Board Audio at page 189:00 Superintendent and Board Comments 

Trustees having trouble understanding Lease - Lease Back Financing

Board Audio at page 193:00

 Motion by Trustee Pritchard

Second by Judy Bullockus

Resolution No. 1718-24 passes 5-0-2 (Trustee Reardon Absent - Trustee Jones left the room unannounced)

  

DECISION- Should CUSD Spend $26 million for Solar Energy Projects which would save the District $100,000 to $200,000 per year totaling $3.7 million over 25 years.

With Lease-Leaseback option CUSD could generate a revenue stream for the District, but the amount is dependent on the cost of the solar project and the scope of the project which is not defined yet.

Maybe a better use of money would be to replace all the HVACS using Prop 39 funds. If the Prop 39 money has been earmarked for something other than HVAC please know that CUSD can amend the Prop 39 Plan up until February 26, 2018 per Derrick Andrade, Staff Services Manager of the Budget Offices at CDE (916) 327-5922. Trustees should also be aware of the fact that the California Energy Commission has staff available to help CUSD with their energy plan, an unbiased resource.

Proposition 39: California Clean Energy Jobs Act 2017 Program Implementation Guidelines

New HVAC's are allowed under Prop 39 due to their energy savings.

Using Prop 39 funds to purchase NEW HVAC's will save the District money spent on energy.

Is the District just spending money on the solar project because CUSD has already received the CREB Bond funds?

District Staff is stating that on October 11, 2017 that the Board of Trustees received an information presentation from Government Financial Strategies - not really - Superintendent Vital recommended that this be treated as an INFORMATION ITEM ONLY and be brought back to the Board for Board Discussion. 

No in-depth presentation was made and there was no Board Discussion.

The Item should be discussed tonight and be brought back before the Board at the December meeting for approval. This is a 264 page document that cannot be digested in one meeting.

 

 

Word of Caution to Trustees:

Davis v. Fresno Unified School District (2015) 237 Cal.App.4th261

Davis is a cautionary tale for CUSD. If you are going to try to avoid the competitive bidding laws by allowing a “consultant” to have a hand in designing and developing plans for the project which it later constructs through a lease-leaseback project, it better truly be a lease-leaseback project, and not just a typical design-bid-build project that is avoiding competitive bidding. 

Only Trustees have a fiduciary duty to represent the interests of taxpayers and students in all matters before the Board. It is not a good idea for Trustees to give Staff unilateral ability to control the terms of the lease.

Solar Panels on six high schools and the District Offices:

  • Aliso Niguel HS
  • Capo Valley HS
  • Dana Hills HS
  • San Clemente HS
  • San Juan HS
  • Tesoro HS 
  • District Offices

Form only? No Signature Required? Almost every signature in this 264 page document requires no signature. There are no details and the "Authorized Officer, Acting Alone" can make any changes.

 

 

BACKGROUND OCTOBER 11, 2017 BOT MEETING

PUBLIC HEARING: October 11, 2017 CUSD BOT Meeting RESOLUTION TO AUTHORIZE ENTERING INTO AN ENERGY SERVICES CONTRACT PURSUANT TO GOVERNMENT CODE SECTION 4217.12

CUSD SHOULD NOT EXECUTE THIS RESOLUTION 

The Resolution contains material mis-representations of fact.

CUSD has spent almost $13 million in taxpayer dollars on green energy projects while CUSD students have no district funded art music science and now PE. Our class sizes are to large, our staff to student ratios are not safe. Our facilities have not been fixed or maintained for 15 years.

This represents a FRAUD upon the taxpayers.

CUSD Prop 39 Energy Grant from the State: $8.13 million

CUSD CREB Funding from the Federal Government $4.7 million

Let's use taxpayer money in the classroom- not to reward Pay-to-Play business entities.

Staff made decisions without Board approval, and now expects Trustees to bless actions after-the-fact.

Trustees should not sign this Resolution - it contains false statements regarding material facts.

The Contract Amount

The Resolution states that CUSD is paying Schneider Electric $4,702,128.21.

The actual contract that supports the Resolution states that CUSD is paying Schneider Electric $4,321,505.00. 

The difference between the Resolution amount $4,702,128 and the contract amount is $380,623.21.

Board Audio at 2 minutes 40 seconds

At the September 13, 2017 BOT Meeting Trustees approved two contracts on the CONSET CALENDAR:

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 Energy Grant Funds. Expenditures for this contract should read $250,000.00 not $325,000.00

PSA 1718110 Dannis Woliver Kelly to provide Counsel services for CREB Bonds should read Bond Proceeds not General Fund. Expenditures $50,000.00

The Resolution should be amended to accurately reflect that the $4,702,128 in CREB Funds is being spent as follows:

Schneider Electric $4,321,505.00

Dennis Wolver Kelly $50,000.00

Government Financial Strategies $250,000.00

Source: September 13, 2017 CUSD BOT Meeting Agenda Item #4 on CONSENT CALENDAR at page 142

"Fees and Expenses

Based on our plan of applying the CREB designation to the issuance of COPs, and consistent with our published fee schedule, our fixed fee for the refinancing is $72,850, plus $1,500 for expenses (mainly associated with printing and distributing the preliminary and final official statements).

Our fees and expenses are payable from the proceeds of the issuance (and therefore built into the borrowing amount) when the financing closes – meaning no out-of-pocket cost to the District. Upfront planning work on the CREB application process may also be reimbursable to the District at the District’s option.

In order to be able to provide independent advice to the District, if the financing process is not completed (e.g., the District changes its mind and decides to not move forward), then our fee would be based on the hours worked (at our rate of $225) and expenses incurred to that point, but not to exceed the fixed fee amount." 

Source: September 13, 2017 CUSD BOT Meeting Agenda Item #4 on CONSENT CALENDAR at page 139

Note: Of the $250,000.00 being paid to Government Financial Strategies only $54,050.00 was spent on the solar project. The remaining funds went to other projects hidden in this contract including payment for work on three land deals: Pacifica San Juan, Laguna Niguel and Dana Point Bus Yard. 

The Scope of Work  

The CREB Application approved work on 17 sites.

Without further discussion staff has unilaterally reduced that to 14 sites by eliminating Arroyo Vista MS, Aliso Viejo MS and Shor Cliffs Middle School. 

The Resolution that Trustees are being asked to approve tonight includes work on the 14 remaining school sites listed in the CREB Application. However, in the Board Report Staff is stating that the Scope of work will be limited to 12 sites.

The Scope of work will not include Vista Del Mar ES or Vista Del Mar MS and therefor payment to Schnider electric will be reduced from $4,702,128 to $4,321,505.

Staff acknowledges that the Resolution that Trustees are being asked to sign TONIGHT needs to be amended to reflect a change in the scope of the work. 

Source: October 11, 2017 CUSD BOT meeting Agenda Item #21 page 605

"This approval was obtained prior to the full development of the scope.

As a result, the District has elected to revise the plan and the remove scope from Vista Del Mar and apply the remaining funds towards the costs related to the solar feasibility consultant as well as to pay for a construction manager. Therefore, upon approval by the Board, the District will enter into a contract with Schneider Electric for the revised plan amount of $4,321,505. An amendment will be made to Plan No. 3 before the deadline of June 30, 2018."

Note: Is it legal to use CREB funds to pay consultants? If so why not be transparent about that?

 

The CREB Application  

Staff asked Trustees to give them guidance to apply for CREB funds stating that there would be NO COST to the District. 

July 26, 2017 CUSD BOT Meeting Agenda Item #26 at page 611. Trustees were very luke warm after the presentation of the Solar Feasibility study. They were NOT ready to move forward. Superintendent Vital strongly advocated for having CUSD submit an application for financing the solar projects with Clean Renewable Energy Bonds (CREBs), which are a low interest cost method of financing subsidized by the United States Department of Treasury. Board

Audio at 122.00

Superintendent Vital pushes for CREB Financing Applications whether or not CUSD actually goes through the installing the Solar Panels.

In fact Staff had already applied for the CREB funds without Board Approval as evidenced by an August 25, 2017 Keith Weaver of Government Financial Strategies to Clark Hampton:

The CREB Application was approved June 13, 2017

Staff asked to apply for the CREB Funds at the July 26, 2017 CUSD BOT Meeting (one month after the CREBS had been approved).

The $250,000.00 Contract to Government Financial Strategies used CREB funding to pay for other projects.

CUSD SHOULD NOT EXECUTE THIS RESOLUTION 

CUSD has spent almost $13 million in taxpayer dollars on energy projects while CUSD students have no district funded art music science and now PE. We have the largest class sizes in the State and in the Nation, our staff to student ratios are not safe. Our facilities have not been fixed or maintained for 15 years.

This represents a FRAUD upon the taxpayers.

CUSD Prop 39 Energy Grant from the State: $8.13 million

CUSD CREB Funding from the Federal Government $4.7 million

 

 

October 11, 2017 CUSD BOT Meeting Agenda Item #20 RESOLUTION NO. 1718-19, APPROVING ENERGY SERVICES CONTRACT WITH SCHNEIDER ELECTRIC BUILDINGS AMERICAS, INC. FOR APPROVED PLAN NO. 3 (APPLICATION NO. 2085) FOR THE DISTRICT’S ENERGY CONSERVATION PROGRAM FOR 14 SCHOOL SITES

Board Agenda at page 604

Board Audio at 34:16 PUBLIC HEARING

Board Audio at 68:38 AGENDA ITEM #20 DISCUSSION 

Moved by Trustee Reardon

Second by Trustee Holloway

Resolution Passed 7-0

This Item was Passed Without Discussion

  

 

 

Background:

 

December 9, 2015 

District issued a Request for Proposals (RFP) No. 5-1516. The RFP was based upon a “Best Value” criteria method of selection as is permitted by applicable law. 

Schneider Electric Buildings Americas, Inc. (Schneider) was selected. 

Funding $500,000.00 Prop 39 Energy Grant Funds

August 22, 2016 

John P. Dacey, Esq. of Bergman Dacey Goldsmith, PLC Legal Memorandum

“the District’s RFP process conducted back in December 2015 was consistent with the California Energy Commission’s 2015 Program Implementation Guidelines, issued December 2014, and that the Board is authorized to award the implementation portion of the projects under the proposed Contract to Schneider Electric, Inc. as contemplated by the RFP.”

September 14, 2016

The Board approved Resolution No. 1617-19 for Plan No. 1 (Application No. 1497) in the amount of $2,490,333.00 for an energy study of 6 High Schools: 

The six school sites included in this plan were Dana Hills High School, Capistrano Valley High School, San Clemente High School, Aliso Niguel High School, Tesoro High School and San Juan Hills High School. The scope for this plan was a light emitting diode (LED) lighting retrofit for all the exterior and parking lot spaces as well as several gyms, libraries and pools. This plan has been fully installed and completed at all six high schools. 

October 26, 2016

The District’s Energy Conservation Program Application 1646 was approved by the California Energy Commission (CEC) on October 26, 2016. The implementation of Approved Plan No. 2 (Attachment A) will reduce the Facilities' energy consumption and costs, and improve the Facilities' energy quality/reliability. The CEC approved state funding for Approved Plan No. 2 in the amount of $3,409,320

May 10, 2017

May 10, 2017 CUSD BOT meeting Agenda Item #1 PUBLIC HEARING: RESOLUTION NO. 1617-75, APPROVING ENERGY SERVICES CONTRACT WITH SCHNEIDER ELECTRIC BUILDINGS AMERICAS, INC. FOR APPROVED PLAN NO. 2 (APPLICATION NO. 1646) FOR THE DISTRICT’S ENERGY CONSERVATION PROGRAM FOR SIX SCHOOL SITES:

May 10, 2017 CUSD BOT meeting Agenda Item #29 DISCUSSION/ACTION at page 446 Trustees approved the Energy Services Contract with Schneider in the Guaranteed Maximum Price amount of Three Million Four Hundred and Nine Thousand Three Hundred and Twenty Dollars and No Cents ($3,409,320.00) 

The six school sites included in this plan were Dana Hills High School, Capistrano Valley High School, San Clemente High School, Aliso Niguel High School, Tesoro High School and San Juan Hills High School. The scope for this plan includes a new Building Automation System at five of the six sites and an LED lighting retrofit for the pools and tennis courts at Dana Hills High School. The LED lighting retrofit has been installed along with the Building Automation Systems at San Juan Hills High School and Capistrano Valley High School. The remaining sites will be completed by Spring 2018. 

May 10, 2017 CUSD BOT meeting Agenda Item #5 ON THE CONSENT CALENDAR at page 67 the Board approved PSA 1617284 payment to Government Financial Strategies for $9,000 to provide analysis, review and evaluation of District wide solar projects.

May 10, 2017 CUSD BOT meeting Agenda Item #5 ON THE CONSENT CALENDAR at page 67 the Board approved PSA 1617287 payment to ARC Alternatives for $43,840 to provide professional consulting analysis, evaluation and feasibility of potential solar projects at six high schools and District Office, including RFP preparation and support 

June 13, 2017 

The District’s Energy Conservation Program Application 2085 was approved by the California Energy Commission (CEC) on June 13, 2017, in the amount of $4,702,128.21. 

PRIOR TO BOARD APPROVAL (Staff asked for Board Approval to apply for CREB financing at the July 26, 2017 BOT Meeting Agenda Item #26 page 611 

This approval was obtained prior to the full development of the scope.

As a result, the District has elected to revise the plan and the remove scope from Vista Del Mar and apply the remaining funds towards the costs related to the solar feasibility consultant as well as to pay for a construction manager. Therefore, upon approval by the Board, the District will enter into a contract with Schneider Electric for the revised plan amount of $4,321,505. An amendment will be made to Plan No. 3 before the deadline of June 30, 2018.

The 14 school sites included in Plan No. 3 are Truman Benedict Elementary School, Del Obispo Elementary School, Fred Newhart Middle School, Las Flores Elementary School and Middle School, Don Juan Avila Elementary School and Middle School, Ladera Ranch, Elementary School and Middle School, Niguel Hills Middle School, Marco Forster Middle School, Bernice Ayer Middle School and Vista Del Mar Elementary School and Middle School.

July 26, 2017 

July 26, 2017 CUSD BOT Meeting Agenda Item #26 at page 611. Trustees were very luke warm after the presentation of the Solar Feasibility study. They were NOT ready to move forward. Superintendent Vital strongly advocated for having CUSD submit an application for financing the solar projects with Clean Renewable Energy Bonds (CREBs), which are a low interest cost method of financing subsidized by the United States Department of Treasury. Board

Audio at 122.00

Superintendent Vital pushes for CREB Financing Applications whether or not CUSD actually goes through the installing the Solar Panels.

In fact Staff had already applied for the CREB funds without Board Approval.

 

September 11, 2017 

On September 11, 2017 I sent Trustees a letter asking them to pull two contracts: 

ICA 1718118 $325,000.00 Contract with Government Financial Strategies to provide financial advisory services and analysis review and evaluation of a District Wide Solar Project.

Funding: Prop 39/General Funds 

and 

PSA 1718110 $50,000.00 Contract with Dannis Woliver Kelley to provide Bond Counsel services for CREB Bonds (Clean Renewable Energy Bonds).

Funding: General Funds   

September 13, 2017

Board Audio at 2 minutes 40 seconds

At the September 13, 2017 BOT Meeting Trustees pulled the following contracts and made the following corrections:

ICA 1718118 Government Financial Strategies financial advisory services and analysis review and evaluation of a District wide solar project should read. 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

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.

 September 27, 2017 

CUSD provided a Notice of a Public Hearing to be held regarding the award of this contract as required by Government Code Section 4217.12

 

October 11, 2017

At the October 11, 2017 CUSD BOT meeting, the Board is required to make the following findings:

1. The Board adopts the findings and recommendations of staff as set forth in staff’s Report and Attachment A thereto as the Board’s findings; and

2. Schneider Electric was selected through a competitive Request for Proposal process consistent with the requirements set forth in the California Energy Commission’s 2015 Program Implementation Guidelines, has performed the needed evaluations and assessments required to receive approval for state funding of the projects, said funding has now been received as a result of the District’s and Schneider Electric’s efforts, and has guaranteed to implement those conservation measures for a price not to exceed the state funding received by the District for the projects. Therefore, by entering into the proposed Energy Services Contract with Schneider to implement the ECM recommendations the Board finds that it is in the best interests of the District, provides the best value to the District, and pursuant to California Government Code § 4217.10 et seq. the Board hereby approves the proposed Energy Services Contract with Schneider to implement the measures recommended in Approved Plan No. 3 for the Facilities as a design-builder and construction manager

CREB Funding has been received in the amount of $4,702,128.21

Resolution No 1718-19 Approves Plan No. 3 (Application No. 2085).

CUSD removed Vista Del Mar from the scope of work and will use the difference ($380,623.21) in funds to pay for the costs related to the solar feasibility consultant as well as to pay for a construction manager.

The difference is: $4,702,128.21 - $4,321,505 = $380,623.21

The Resolution should be modified to accurately reflect that Schneider Electric is being paid $4,321,505 and that $380,623.21 is being paid to other parties not identified in this resolution.

 

The Contract:

The Contract - Effective Date: October 12, 2017 includes Vista Del Mar Elementary and Middle School even though Staff said they have been removed from the Scope of Work.

Why is Staff asking CUSD Trustees to approve a contract that includes Vista Del Mar noting that an amendment to remove Vista Del Mar will be required before June 30, 2018.

Amend the Contract now to properly reflect the scope of work.

The Contract Price is $4,321,505.00

Board Agenda at page 613

 

October 11, 2017 CUSD BOT Meeting Agenda Item #25 FINANCING SOLAR ENERGY PROJECTS

Board Agenda page 783

Board Audio at 238:39

Superintendent Vital recommended that this be treated as an INFORMATION ITEM ONLY and be brought back to the Board for Discussion. 

No Action was taken

 

January 24, 2018 CUSD BOT Meeting Agenda Item #38 FINANCING RESULTS OF CLEAN RENEWABLE ENERGY BONDS FOR SOLAR ENERGY PROJECTS

Board Meeting Agenda at page 874

Board Audio

BLUE CARD: Dawn Urbanek (I was not able to attend... but if I did, here is what I would have said.)

Full Details can be read at: CUSDWatch: CUSD Approves Solar Panel Project at a cost of $26 million dollars - Good Deal or Unscrupulous Waisting of Taxpayer Funds? Students Learn a Lesson from CUSD's Solar Project. 

Timeline:

May 10, 2017

January 24, 2018 CUSD BOT Meeting Agenda Item 38 FINANCING RESULTS OF CLEAN RENEWABLE ENERGY BONDS FOR SOLAR ENERGY PROJECTS Staff is representing  that On May 10, 2017, the Board of Trustees authorized ARC Alternatives, an independent energy advisor, to conduct a solar feasibility study. The feasibility study provides a framework for then issuing a Request for Proposals (RFP) to solar vendors.

ARC Alternatives was not on the May 10, 2017 Board meeting as a Discussion/Action Item. 

May 10, 2017 CUSD BOT Meeting Agenda Item #5 at page 67 of 598 PSA 1617287 Prop 39 ARC Alternatives Contract for $43,840.00 was passed as part of the Consent Calendar without Discussion. The Contract is at page 79.

May 10, 2017 CUSD BOT Meeting Agenda Item #5 at page 67 of 598 PSA 1617284 Prop 39 Government Financial Strategies to provide an analysis review and evaluation of a Districtwide solar projects for District Contract for $9,000.00 was passed as part of the Consent Calendar without Discussion. The Contract is at page 79.

June 2017 

CUSD Staff, without Board Approval, submitted the application for the CREB Bonds.

July 26, 2017

July 26, 2017 CUSD BOT Meeting Agenda Item #26 Results of Solar Feasibility Study page 611

This was an Information/Discussion Item only. The Board took no action.

Arc Alternatives presented the findings of the Solar Feasibility Study so that the District could determine if it should move forward to implement the Solar Project, and if the District should submit an application for CREB Bonds to finance the solar project.

Note: CUSD Staff had already submitted the application for the CREB Bonds prior to receiving Board approval (CREB Application was submitted in June 2017)

At this meeting Staff represented to Trustees that there would be NO COST associated with applying for the CREB Bonds.

August 15, 2017 

The District was awarded an allocation of Clean Renewable Energy Bonds by the US Department of the Treasury on August 15, 2017 in the amount of $23.87 million for the seven project sites. 

Staff Unilaterally and without Board approval applied for CREB Bonds in June 2017 and received an allocation of CREBs in August 2017.

September 25, 2017

Staff released and RFP for proposals for solar and battery storage at seven sites.

When was this approved by Trustees?

October 11, 2017

October 11, 2017 CUSD BOT Meeting Agenda Item #25 Financing Solar Energy Projects page 783

Presentation by Government Financial Strategies on using CREBS to finance Solar Energy

"The solar feasibility study estimated net project cash flow benefits of approximately $100,000 - $200,000 per year totaling nearly $3.7 million over 25 years." at page 783

CUSD had to put up Capo Valley High School and Las Flores Middle School as Collateral in a Lease - Lease back arrangement for the management of the system.

November 8, 2017

November 8, 2017 CUSD BOT Meeting Agenda PUBLIC HEARING at page 13 FINANCING SOLAR ENERGY PROJECTS

November 8, 2017 CUSD BOT Meeting Agenda Item #35 at page 767 Up-date on Solar Energy Project. 

Board of Trustees received an information presentation from ARC Alternatives on the status of the RFP to solar vendors, preliminary results, and the proposed process and timeline leading up to Board consideration of a solar vendor.

The solar feasibility study in July 2017 estimated net project cash flow benefits of approximately $100,000 to $200,000 per year, totaling nearly $3.7 million over 25 years. The project budget was $23.4 million. The District received 13 proposals from solar vendors, and all 13 proposed project costs below the budget.

This was an Information/Discussion Item Only - No Action Was Taken 

November 8, 2017 CUSD BOT Meeting Agenda Item #36 at page 788 RESOLUTION NO. 1718-24, RESOLUTION OF THE BOARD OF TRUSTEES OF THE CAPISTRANO UNIFIED SCHOOL DISTRICT AUTHORIZING THE EXECUTION AND DELIVERY OF THE CAPISTRANO UNIFIED SCHOOL DISTRICT 2017 CERTIFICATES OF PARTICIPATION (NEW CLEAN RENEWABLE ENERGY BONDS) (SERIES A – DIRECT SUBSIDY) AND THE CAPISTRANO UNIFIED SCHOOL DISTRICT 2017 CERTIFICATES OF PARTICIPATION (SERIES B – TAXABLE) IN AN AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $26,000,000, AUTHORIZING THE DISTRIBUTION OF AN OFFICIAL STATEMENT IN CONNECTION THEREWITH, AND AUTHORIZING THE EXECUTION OF VARIOUS DOCUMENTS, AGREEMENTS, AND RELATED ACTIONS

Trustees approved $26 million in CREB bonds and a Lease- Lease Back financing arrangement using Capo Valley High School and Los Flores Middle school as collateral to finance the purchase of the system.

Estimated net project cash flow benefits of CREB Bond financing and the Lease Lease back arrangement would generate approximately $100,000 - $200,000 annual cash flow for a total of $3.7 million over 25 years.

December 6, 2017

December 6, 2017 CUSD BOT Meeting Agenda PUBLIC HEARING ENERGY SERVICE CONTRACT FOR SOLAR ENERGY PROJECTS 

Board Audio at 1:52:01

Open Public Hearing at 9:08 pm

No BLUE CARDS

Trustee McNicholas starts to close the Public Hearing but Clark Hampton Deputy Superintendent for Business Services interrupts the Public Hearing and request that a statement must be read into the record... four Items.

Board Audio at 1:53:02

Trustee McNicholas reads a very long statement containing four items.

Close the Public Hearing at 9:11 pm

Why did Clark Hampton ask Trustee McNicholas to read a 4- Item Statement into the record without providing that documentation to the Public? 

A PUBLIC RECORDS REQUEST was made for this Statement on December 15, 2017 but has never been responded to.

December 6, 2017 CUSD BOT Meeting Agenda Item #33 UPDATE ON SOLAR ENERGY PROJECTS AND REQUEST FOR PROPOSALS RESULTS

The Up-date presented a total cost of $20,622,124.00 at page 529 of 657 with an average annual savings of $849,275 per year. 

December 6, 2017 CUSD BOT Meeting Agenda Item #34 RESOLUTION NO. 1718-28, RESOLUTION TO ENTER INTO ENERGY SERVICE CONTRACT 

Trustees approved Resolution 1718-28 which awarded the Energy Service Contract to REC Solar for the design , Installation and commission of Solar energy projects.

The total cost approved in the resolution is $18,372,631.00

Capital Cost $17,563,660.00

O&M $713,788.00

Performance Guarantee $95,184.00

Total Cost = $18,372,631.00 

However- documentation in Agenda Item #33 showed a Total Cost of $20,622,124 excluding OEM of $713,788.00.

There seems to be a cost discrepancy of $2,963,281.00?

Agenda Item #33 ARC states that the total cost of the project is projected to be $20,622,124.00 excluding OEM.

The Resolution stated that OEM was $713,788.00 so according to Agenda Item #33, CUSD is spending $21,335,912 for the solar project not the $18,372,631 as stated in the resolution.

In addition to the above, CUSD amended the Agenda Item by Handout at the meeting which was NOT included in the original documentation for the Public Hearing Agenda Item #8 or Agenda Item #33 and #34.

In addition to the $43,830 paid to ARC Alternatives, CUSD has also paid Government Financial Strategies $250,000 as a financial Consultant on the Solar Project and $50,000 to Danis Wolver Kelly for work on the CREB Bond financing even after Staff represented to Trustees that there was NO EXPENSE in applying for the CREB Bonds.

see: October 11, 2017 2017 Complaint to DA for Brown Act Violations

Were these costs (paid for from Pacifica San Juan Mello Roos payments) included in the cash flow projections? 

January 24, 2018

January 24, 2018 CUSD BOT Meeting Agenda Item #38 FINANCING RESULTS OF CLEAN RENEWABLE ENERGY BONDS FOR SOLAR ENERGY PROJECTS

This is an Information/Discussion Item - No Board Action is necessary.

Tonight Trustees are being told that because of Bond cost reductions CUSD will now see $25,692,716 in savings over 26 Years rather than the $21,231,863 previously thought. This will provide CUSD with $849,275 per year in cash flow for other purposes if the following assumptions are correct:

Potential Tariff $0.15/watt - The Tariff is $.30/watt  so how much does that reduce the savings to?

Annual Rate Escalation 3% - This is limited to the first 10 years - What about the remaining 15 years? 

Sequestration - 7% 

 How much money did CUSD receive?

CUSD was awarded $23.87 million in CREBs on August 15, 2017

CUSD Trustees approved Resolution 1718-24 authorizing the issuance of $26 million in CREBS November 8, 2017

CUSD budgeted and deposited $21,705,00 in CREBs on December 21, 2017

CUSD financed $21,155,000 because costs were $550,000 less than expected. Net Project Funds $20,622,124

Doing this project gives CUSD access to $10 million in State Modernization funds. How will this be spent? 

 

 

 

January 24, 2018 CUSD BOT PRESENTATION

HUMMMM?

Background: 

The District was awarded an allocation of Clean Renewable Energy Bonds by the US Department of the Treasury on August 15, 2017 in the amount of $23.87 million for the seven project sites PRIOR TO BOARD APPROVAL.

July 26, 2017 CUSD BOT Meeting Agenda Item #26 Solar Feasibility Study page 611

This was an Information/Discussion Item only. The Board took no action.

Arc Alternatives presented the findings of the Solar Feasibility Study so that the District could determine if it should move forward to implement the Solar Project and if the District should submit an application for CREB Bonds to finance the solar project.

Note: CUSD Staff had already submitted the application for the CREB Bonds prior to receiving Board approval (CREB Application was submitted in June 2017)

September 25, 2017 CUSD released and RFP for proposals for solar and battery storage at seven sites.

When was this approved by Trustees?

October 11, 2017 CUSD BOT Meeting Agenda Item #25 Financing Solar Energy Projects page 783

Presentation by Government Financial Strategies on using CREBS to finance Solar Energy

"The solar feasibility study estimated net project cash flow benefits of approximately $100,000 - $200,000 per year totaling nearly $3.7 million over 25 years." at page 783

CUSD had to put up Capo Valley High School and Las Flores Middle School as Collateral in a Lease - Lease back arrangement for the management of the system.

November 8, 2017 Up-date on Solar Energy Project

This was an Information/Discussion Item Only - No Action Was Taken

November 8, 2017 CUSD BOT Meeting Agenda Item #36 RESOLUTION NO. 1718-24 authorizing the issuance of $26 million in CREB Bonds. 

Data: The Solar Feasibility Study estimated project cash flow benefits of $100,000 to $200,000 per year, totaling $3.7 million per year over 25 years. 

December 6, 2017 BOT Meeting Public Hearing Agenda Item #8 PUBLIC HEARING

Why did Clark Hampton ask Trustee McNicholas to read a 4- Item Statement into the record without providing that documentation to the Public? 

Board Audio at 1:52:01

Open Public Hearing at 9:08 pm

No BLUE CARDS

Trustee McNicholas starts to close the Public Hearing but Clark Hampton Deputy Superintendent for Business Services interrupts the Public Hearing and request that a statement must be read into the record... four Items. 

Board Audio at 1:53:02

Trustee McNicholas reads a very long statement containing four items.

Close the Public Hearing at 9:11 pm

A PUBLIC RECORDS REQUEST WAS MADE FOR THAT STATEMENT - NO RESPONSE HAS BEEN GIVEN TO DATE

Why did CUSD give students Extra Credit for attending a Board meeting to advocate for a particular Board Item... Solar Power? 

Board Audio at 2:21:20

Max Student Representative on the Board: Raise your hand if your her for Solar? Keep your hands raised if you are also in an AP class? Ah Ha I see you guys... get that extra credit AP Environmental Science.

IT IS INAPPROPRIATE FOR STUDENTS TO RECEIVE EXTRA CREDIT FOR ATTENDING BOARD MEETINGS TO ADVOCATE FOR A SPECIFIC AGENDA ITEM- Solar Power

 December 21, 2017  

 $21,705,000 CREB BOND DEBT Funds were deposited December 21, 2017

This project qualifies CUSD for just under $10 million in State Modernization funds. 

A Complaint was filed with the District Attorney for Brown Act Violations.