City OKs $2.5 million loan for Neal School City OKs $2.5 million loan for Neal School (September 24, 2004)

Campbell votes no - says city 'strong-arming district'
by Dolores Fox Ciardelli

The City Council voted 2-1 on Tuesday night to agree conceptually to loan the school district $2.5 million to build Neal School. The money would be paid back if the district wins its lawsuit against Signature Properties and Standard Pacific Homes.

In exchange, the city would have the use of the school's multipurpose rooms and its sports fields.

Councilman Matt Campbell was alone in his opposition. Mayor Tom Pico was not in attendance, and Councilman Steve Brozosky recused himself from the public hearing because he lives near the Neal School site in the Vineyard Corridor.

"I think the city is trying to strong-arm the school district into building a school they might want and they might not want," said Campbell. "I don't think it's good use of our money so we can use the fields and multipurpose rooms."

The city already has use of both, he noted, even if there is no formal agreement on the field use.

"What is the likelihood the city would not be reimbursed?" asked Campbell.

"There's a chance, if the school district and the city do not prevail in the litigation," said City Attorney Michael Roush. "The city's contribution, $2.5 million, would be a contribution to the schools."

The city and the district are jointly suing the two developers over an agreement to fund Neal School, which would serve the eastside of Pleasanton, including Ruby Hill. The developers agreed to advance the estimated $8.5 million interest free to build Neal but later construction estimates came in at $13.5 million. The suit is to clarify whether the developers must finance the extra $5 million.

Meanwhile school district staff and city staff have worked to find a way to finance the extra $5 million without waiting for the lawsuit to be resolved. They arrived at a plan for each entity to front $2.5 million, to be repaid if they prevail in their lawsuit.

"I've struggled with this issue since the first day it was brought up in closed session," said Campbell, who is a vice principal at Foothill High and before this year taught civics and history at Amador Valley High. "The irony is I make my living as an educator and want to do whatever I can to support the school district. But I don't believe the school district has taken the lead on this, and I don't like it."

The school board gave Superintendent John Casey the OK in late August to continue working on the financing agreement although some members questioned the need for building a 10th elementary school when enrollment is down slightly in the grammar schools.

The school site is on the newly aligned Vineyard Avenue, which was completed in August along with infrastructure for the school and new homes to be built around it.

"The fact is, they (the school district) came to us," said Councilwoman Kay Ayala. "The suit was filed and the school was not moving as they had planned. I don't know of any city and school district that has worked so well together to put in an infrastructure. We helped put in the streets, the sewers, the water lines. All we're missing is the school."

She also noted that both the school board and the City Council serve the same constituency.

"But we are two separate governing bodies," responded Campbell. "I think we're going over the boundary, and I'm not comfortable with it."

"I think it's where the school district had its hands tied," said Councilwoman Jennifer Hosterman. "The city stepped up and said, 'Let's see what we can do.' It's ultimately in the hands of the school board."

The city has helped finance other school projects, notably Pleasanton Middle School. It has also used money from the general fund to build joint gymnasiums, said Finance Director Sue Rossi.

Deputy City Manager Nelson Fialho, who is managing the city's effort to help get Neal School built, said Wednesday morning that city staff and district staff will meet to finalize the agreement, then will put it on the agendas of the school board and the City Council, probably in October.

"We need an affirmative vote from the school board before we can agendize it," said Fialho. "The district has to decide to enter into a joint agreement with city."

Fialho had stated previously that funds would come from several sources and would not impact the city's debt load or other capital projects.

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