PUSD talks new bond potential

Possible tax rate extension would help fund crucial projects, staff say

The Pleasanton Unified School District board discussed next steps for financing of the Measure I1 facilities bond at its first regular meeting of October on Tuesday night, particularly honing in on the possibility of asking voters to pass another $124 million bond in 2020.

The conversation around the new bond came as district officials started looking to their next issuance of the $270 million bond approved by voters in November 2016, and as they look forward to 2020 elections. Much of the discussion revolved around whether it was fair to ask voters for an additional bond, just a few years after Measure I1 passed and when crucial projects like the new elementary school hadn't yet materialized.

"We have to have something more to show to get the community to support this," Trustee Valerie Arkin said when discussing this item at the 3-1/2 -hour-long meeting.

PUSD staff had presented to the board the concept of moving forward with voter polling, not only on the concept of a new bond, but also on a potential project list for the ballot. They decided to wait until after their upcoming Dec. 18 workshop to move ahead with any such polling, however -- board president Mark Miller especially wanted to wait and see what is being decided regarding a new district elementary school, which is the subject of that particular meeting.

Currently, $199.3 million remains in unissued authorization, after the district issued its first bond series in October 2017, to be used for facilities, technology and to prepay the district's 2010 certificates of participation (COPs).

Adam Bauer, the consultant who presented the bond-financing item, said that right now the district has debt outstanding from bonds passed in the 1988 and 1997 elections. But this debt is set to be paid off by 2023, meaning that after this time, Pleasanton homeowners would only be paying for the Measure I1 bond, which is $49 per $100,000 of their property's assessed value per year.

However, if a new bond were to be issued and the existing tax rate extended, taxpayers would continue paying their current rate of $69 per $100,000 of assessed valuation, which would allow $124 million in bonds to be issued in four series.

Trustees were conflicted on the proposal, as they weighed its pros and cons and considered how the community would react to a new bond so soon after they had approved another one. The fact some of their prioritized projects were not further along could cause voters reluctance, the board acknowledged; however, with rising costs market-wide, the $270 million from Measure I1 was no longer sufficient to finish the projects listed on the ballot in 2016.

Miller said that as a taxpayer, the prospective new bond should not be taken lightly.

"At the same time, I think what we're seeing right now is unprecedented, skyrocketing costs to projects that even two years ago seemed feasible," Miller said. "And may now literally be impossible at the $270 million level."

Superintendent David Haglund added, "With a 40% escalation cost, we already know we can't do for $35 million what we thought we could do for $35 million in 2016."

"But we also know from the community, they want to see these projects completed," he continued later. "And so what we're doing is saying: OK, if we want to have these projects completed, then we need these additional resources, and here's an opportunity that we see that's not going to cause additional pain. People aren't going to be writing a larger check -- they may be writing a check for a longer period of time."

The lone public speaker on this item was Kathleen Ruegsegger, a former PUSD board member, who sharply criticized the proposal for a new bond.

"The plan is, people are used to paying it, keep paying the same amount," she said. "That's kind of an insult."

"When talking about bond capacity and assessed valuations, these are more than just numbers. The funds you seek come from families. Some with some of the 200 students that you are sending all over this district. Some who still have their kids in portables because we have not built a new school. Before another dime is spent on this plan, do whatever is necessary to move more swiftly to build a new school," Ruegsegger added.

Editor's note: PUSD spokesman Patrick Gannon elaborated on Haglund's escalation comment Wednesday afternoon, telling the Weekly: "The 40% escalation cost that was referenced in the board meeting last evening was looking at the escalation of construction costs related to any proposed solution to the enrollment issues in the Northern Pleasanton area. The architect who is working with us on the conceptual design process shared that the escalation is approaching 7% annually."

In other business

* Trustees received an actuarial report regarding the district's long-term debt associated with other post employment benefits (OPEB), for the fiscal year ending June 30, 2018.

Actuaries who conducted the report updated the board on the district's liabilities accrued through employees' OPEB costs, such as health care costs for retirees, and on various options the district has to mitigate their unfunded liabilities.

* The board received an update on the district's Advancement Via Individual Determination program, more commonly known as AVID, from program teachers and students.

AVID is a nationwide program that supports students academically and aims to close the opportunity gap in college graduation rates among underrepresented demographics. In PUSD, AVID is offered as an elective at all five major secondary sites -- 3% of secondary students are enrolled in an AVID elective.

In the 2017-18 school year, of graduating AVID seniors in the district, 29% did not have parents who graduated from college, 12% were enrolled in the free or reduced price lunch program and 6% were English language learners.

* The board unanimously approved the adult and career education services' intent to apply for state grant money to be used for new career technical education (CTE) facilities at Foothill High School.

The Measure I1 facilities bond already provides for the construction of a new two-story building near the main entrance of the school that would replace six portable classrooms currently in use, along with funds for two new science classrooms. But staff wanted to apply for an additional $6 million to enhance these projects, using an equal sum of Measure I1 funds as a matching amount for the application.

"We have an opportunity to grab some money and really make these cutting-edge, 21st century classrooms," said Glen Sparks, director of adult and career education.

The state's Career Technical Education Facilities Program provides California schools matching funds for the "purposes of CTE specific new construction, modernization, and/or equipment," according to the program website. The deadline for this funding cycle is Oct. 19.

At this point, the building is expected to serve the engineering, information and communications technology, and health sciences industry sectors.

"CTE is not just for students that are going into the trades, or home economics or the culinary arts," said Beth Cutter, assistant director of adult and career education.

"It includes engineering and biomedical sciences," and many of the areas that are growing in the Tri-Valley, she added.

The estimated start time of construction for the new project is fall or winter 2019, regardless of whether or not PUSD receives additional grant funds.

* Board members received a report and update on the extended day academic intervention program, which targets students in need of additional support.

About 750 students across the district were served by these interventions during the 2017-18 school year, according to staff.

* Trustees approved a waiver application for Bradley Dennis so that he can serve as a teacher for deaf and hard of hearing students while he works toward his credential.

* The board had been set to receive an annual report on ninth grade math placement, but they moved that item to the agenda of their Nov. 13 meeting.

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17 people like this
Posted by Fifty Years Here
a resident of Pleasanton Heights
on Oct 10, 2018 at 8:15 am

Fifty Years Here is a registered user.

"Staff had presented to the board the concept of moving forward with voter polling..."
"Trustees were conflicted on the proposal..."

Those two quotes from the story illustrate the problem: The Board is elected to put forth "concepts!" And how could the Trustees be "conflicted on the proposal?" Tell them, "NO!!!" No more money! Live within your means for a while!


27 people like this
Posted by Lost in Space
a resident of Another Pleasanton neighborhood
on Oct 10, 2018 at 9:12 am

Excuse me, but they really need to get their house in order before asking for another multi-million dollar bond. What happened to all of the money from the last bond we just passed a couple of years ago? There has to be better accountability and a board with a least a minimal sense of obligation to the taxpayer. The default position of simply passing expensive bond measures in lieu of sound fiscal practices and basic maintenance and operation programs has got to end. Enough is enough!

14 people like this
Posted by Kathleen Ruegsegger
a resident of Vintage Hills
on Oct 10, 2018 at 10:17 am

Kathleen Ruegsegger is a registered user.

This is part of the marketing problem the board faces. Of the $270MM we voted for, only $72MM has been issued. That $72MM has paid off old debt, bought Chromebooks, and will pay for a variety of not-so-visible items like roof repairs, and some part of the Lydiksen project*.

If there are 40% increases in construction (*this due to having only one bidder on the Lydiksen project), it will raise costs many millions of dollars. This seems to mean much of the $122MM they might ask for will pay to shore up the overrides on the projects listed in Measure I1. By the way, since the August report, the rise in interest rates has already dropped what we can bond from $124MM to $122MM—$2MM in 60 days, and the Fed is talking about more increases at least in the near future.

Dr. Haglund’s comment, “There is no pain, you just write checks longer,” reconstructed is, “You will only be paying the same amount, just for another 30 years.” Should they move forward, they are going to need a better message than that.

15 people like this
Posted by Pleasanton Parent
a resident of Pleasanton Meadows
on Oct 10, 2018 at 12:03 pm

Pleasanton Parent is a registered user.

You used money to pay off debt instead of building a new school, poor decision.

No vote

6 people like this
Posted by Grumpy
a resident of Vineyard Avenue
on Oct 10, 2018 at 12:22 pm

Grumpy is a registered user.

@PP, you actually want them to pay off the old debt with this debt: the interest rate here is cheaper than the old one. They just refinanced, in effect, and locked in a lower rate.

That’s the good news. The bad news is that the Lydiksen rebuild isn’t a good use of money compared to the coming need for capacity. And I agree with Kathleen that the messaging had better be good if you want anyone to vote for it. They’re discussing it now probably because of the time it takes to put together a proposal with an appropriate project list. But right now it does feel like they did a poor job with the list they have.

16 people like this
Posted by Pleasanton Parent
a resident of Pleasanton Meadows
on Oct 10, 2018 at 12:45 pm

Pleasanton Parent is a registered user.

I voted for the bond measure to get a new school - and increase capacity at existing within reason.

If funds are being used for alternate purposes (wrong or right) don’t come back to me asking for more for the thing you got me to pay for already.

Deliver on what you marketed, otherwise pound pavement.

6 people like this
Posted by Kathleen Ruegsegger
a resident of Vintage Hills
on Oct 10, 2018 at 1:51 pm

Kathleen Ruegsegger is a registered user.

I don't think they are misusing funds--there is an oversight committee. I don't know how they are paying the consultant advocating for the new bond. They did, in my opinion, have their original priorities in the wrong place. Whether they will now change those priorities and possibly not be able to deliver on the original list due to cost overruns is yet to be seen.

Another problem I have mentioned to board members is the lack of early information from staff. There are weekly communications to the board that should be used to talk about what staff is doing. One example was a great presentation to capture a grant (with luck) and change the plan for Foothill's portables to create a CTE building. The surprise, the thought that this could start being built in Fall 2019. There was no preamble about this work provided to the board prior to reading it in the meeting packet (at least not that I could find). Also, only some board members appeared to know there was a bid for part of Lydiksen that came in 40% over the expected cost; some weren't sure it was an actual bid. You do not do this to to a governing body. All members get all the information at the same time and preferably as staff is doing the work and before it comes to them for discussion or a vote.

I'm not asking board members not to be friendly with staff, but beyond being friendly there is work and responsibility. Not providing deep and open channels of communication hurts students in failing to meet urgent needs like a school, hurts board members who could fail in their bids to stay on the board, and hurts plans like this one for a new bond when voters say no due to a lack of credibility or confused messaging.

9 people like this
Posted by Map
a resident of Del Prado
on Oct 10, 2018 at 2:42 pm

Maybe they should quit sitting on their thumbs while construction costs keep going up, interest rates keep changing, and they keep finding other things to spend that pocketful of bond money on, PUSD get your act together, not another dime till we get what was promised to us on that last bond!

2 people like this
Posted by Parcel Tax
a resident of Birdland
on Oct 10, 2018 at 3:40 pm

I would not be opposed to a directed annual parcel tax. $100 dollars per every $100,000 of assessed home value annually as long as it was directed at specific projects as identified by an independent citizens advisory committee with no oversight by the board. We might even be able to get a new school or 2 while there is land available.

5 people like this
Posted by Kathleen Ruegsegger
a resident of Vintage Hills
on Oct 10, 2018 at 3:52 pm

Kathleen Ruegsegger is a registered user.

PT, I like your enthusiasm! A parcel tax is first, a per parcel tax. One homeowner; one landowner with 350 apartments; same cost ($100 per parcel). So it is not by assessed value. It has it's controversies because a 900 sq. ft. home would pay the same as a 7,000 sq. ft. home. A plus is that senior citizens can be exempted. On the flip side, parcel taxes don't pay for capital projects like a school, but could cover any number of soft costs like a counselor, library hours, or textbooks.

A bond could be directed, and that was suggested by board members--Amador gym, Foothill stadium. What they need to plan for is increases in what things cost by the time the plans are put through the Department of State Architect (required). There is the catch of asking for too much or too little. If too little, do you not build? If too much, where do remaining dollars go without approval of the community (perhaps a prioritized "B list" would cover that).

19 people like this
Posted by Pleasanton Parent
a resident of Pleasanton Meadows
on Oct 10, 2018 at 3:59 pm

Pleasanton Parent is a registered user.

.....guess where I stand on a parcel tax. I’m already donating $1,200 per year at registration and that doesn’t count other classroom or class specific donations or fundraisers. I’m out, and further more I’m furious that the justification is “we’re used to paying “

Are rape victims “use to being raped?”

15 people like this
Posted by My opinion
a resident of Another Pleasanton neighborhood
on Oct 10, 2018 at 4:36 pm

My opinion is a registered user.

Is it proposed by PUSD? I will vote no. Is it supported by PUSD? I will vote no. Does one single dollar go to a fund that PUSD can access? I will vote no. Not one dime, ever, for anything having to do with the schools and this district. They have proven time and again to be fiscally irresponsible.

8 people like this
Posted by Kathleen Ruegsegger
a resident of Vintage Hills
on Oct 10, 2018 at 7:07 pm

Kathleen Ruegsegger is a registered user.

I’m not as dark about bonds or parcel taxes. I have issues with the depth of reporting by staff, but I truly do not believe district staff are being fiscally irresponsible. That was a different administration and those people are long gone.

I do think it is too soon for this bond request with only 1/4 of the current bond being issued, but not totally spent, so far. There will be another issuance coming in 2019 that also will take time to spend. A new bond, arguably necessary in the future for new projects, can wait while we try to complete Lydiksen and get a start on a new elementary. People need tangible results first, proof positive we are on the right track.

13 people like this
Posted by norville
a resident of Vintage Hills
on Oct 10, 2018 at 8:51 pm

norville is a registered user.

pusd, dmv, zone7, sales tax, gas tax, parcel tax, hotel tax, bridge toll hikes,state income tax.... on and on.

Every government entity says "it's just a small bump up in taxes for the greater good"


10 people like this
Posted by Pleasanton Parent
a resident of Pleasanton Meadows
on Oct 10, 2018 at 9:40 pm

Pleasanton Parent is a registered user.

......thought ca took in a windfall in tax revenue this year?

Love that our state points to Californians saying they need to pay their fair share, then take in record revenue and turnaround and ask for more.

14 people like this
Posted by Carol
a resident of Alisal Elementary School
on Oct 10, 2018 at 10:44 pm

Carol is a registered user.

We just can not afford it. After 30 years, the costs are getting so high between taxes, bond measures, utilities, water, etc. We have mever had kids in this district! We have paid all these years but if this city wants to keep seniors here, we need to be exemptt from more school district parcel taxes. I know this is unpopular but maybe parents should kick in more like a user fee.

5 people like this
Posted by tim
a resident of Castlewood
on Oct 13, 2018 at 9:49 pm

only a fool votes to increase their taxes!

3 people like this
Posted by Flightops
a resident of Downtown
on Oct 14, 2018 at 7:23 pm

Flightops is a registered user.

My pre-teen grandkids handle their allowances better than these clowns with the no-end-in-sight blank checks we keep giving them, I’m tired of all the excuses and begging for more money. No more bond money or parcel tax money till previous promises are kept and results are seen.

1 person likes this
Posted by Map
a resident of Del Prado
on Oct 18, 2018 at 2:21 pm

Superintendent David Haglund “with a 40% escalation cost we already know that we can’t do for 35 million what we thought we could do for 35 million in 2016”. I’m at a total loss for words, these guys are totally out of touch with the real world, no wonder we need to keep throwing money out the window, these clowns need to step up and plug the leaks !! Not another dime till the whole gang of thieves are replaced!

Sorry, but further commenting on this topic has been closed.

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