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July 01, 2005

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Publication Date: Friday, July 01, 2005

Editorial Editorial (July 01, 2005)

Who's the loser in the Neal School dispute? Who's the loser in the Neal School dispute? (July 01, 2005)

We don't like to see taxpayer dollars or private sector funds wasted on costly law suits and appeals, but that's what's ahead as the Pleasanton school district dukes it out in Alameda County Superior Court with two developers. At issue is who pays the mounting costs of building Neal Elementary School in the Vineyard Corridor. Neither the school district nor the two developers - Signature Properties and Standard Pacific Homes - apparently disputes the once-estimated cost of the school at $8.5 million. That figure, projected before building costs started spiraling, also factored in major savings by having Signature design and obtain state school architectural approvals, which it did at a fee it advanced of more than $600,000.

Then an agreement the two parties had signed started falling apart. School Superintendent John Casey, hired in 2002, found that the cost to build Neal had increased to $13.5 million, $5 million more than the district had budgeted, if the earlier estimate of $8.5 million was ever accurate. He also said the agreement required that the developers pay any costs over the $8.5 million. The developers said they never signed such an open-ended agreement. Because of the school district's much publicized and often televised blitz, joined by the Pleasanton City Council that also accused Signature and Standard Pacific of reneging on their promise, the developers filed suit to clarify the agreement so that their own public image would not be tarnished. The district filed a counter-suit a few days later and the two parties became engaged in a costly court battle that continues today.

After first ruling that the agreement was unenforceable based on a state education code that requires competitive bidding on all public projects, Superior Court Judge Ronald M. Sabraw reversed himself after the school district convinced him theirs was a financial agreement, not a construction pact. As a result, a case that some thought was over is very much back on the docket, with court hearings scheduled to start this fall. A final ruling won't come before sometime next year. Whatever the outcome, the losing side is likely to appeal, which would lead to another costly, time-consuming legal battle that could take another two or three years to resolve. After that, it's likely the "winning" party will seek to collect its legal expenses and possible penalties in the range of $1 million and more.

The irony is that Neal School may never be built anyhow. Hundreds of elementary school-age children in Ruby Hill who needed Neal have moved through the grades and are now in middle school and beyond. Demographers report that buyers of the $1 million-plus homes in Ruby Hill and those being built now in the Vineyard Corridor most often have older children still living at home, not those in the kindergarten through fifth grade age groups that Neal would serve. Elementary school enrollment has been dropping. If this trend line continues, look for the district to cancel its plan to build a 10th elementary school like Neal. Even the school board has not shown much confidence that Neal will be built. For the last three years, it has "reappropriated" a $600,000 budget set-aside to cover the first-year operating costs for Neal. Just think how much more would have been available for upgrading facilities and academic programs and salary increases had there never been the costly legal dispute over Neal. It makes us wonder who will really be the loser of a long, ongoing public dispute.

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