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.4^th261

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.

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

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

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