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No gold star for Bonsall school district

Taxpayer advocacy group's lawsuit frivolous, says superintendant

Critics say the facilities director's previous employer creates the potential for conflict of interest.
Critics say the facilities director's previous employer creates the potential for conflict of interest.

A taxpayer advocacy group is suing the Bonsall Unified School District for skirting state environmental laws in its pursuit to build a new high school.

The group, California Taxpayers Action Network, filed the lawsuit on February 6. The document alleges that staff and trustees in the district failed to evaluate environmental impacts before proceeding with a proposal to build a new high school on an undeveloped 50-acre site on Gird Road, located between the North San Diego County communities of Fallbrook and Bonsall.

On December 8, claims the lawsuit, district trustees approved moving forward with preliminary work on the site despite the fact the district had not prepared necessary environmental reports as required by the California Environmental Quality Act (CEQA).

In addition, trustees approved entering into a "lease-leaseback" agreement with Erickson-Hall Construction Company for construction services.

Lease-leaseback agreements are funding schemes used by school districts throughout the state wherein the districts lease a property for a nominal amount (typically one dollar) to a preferred construction company with the express agreement that the project will not go out to open bid. The construction company builds the project (in this case a high school) and then leases the property back to the district. The school district pays on the lease until the project is paid for and then regains ownership of the property.

But the lease-leaseback agreements are not without controversy. Critics say the arrangements open the door for backroom dealings, conflict-of-interest scenarios, and violates state competitive bidding requirements.

In 2012, the California Supreme Court sided with a Fresno contractor who alleged the Fresno Unified School District violated state law in its quest to build a $37 million middle school. As a result of the litigation, governor Jerry Brown signed into law Assembly Bill 2316, which required that school districts follow competitive bidding requirements.

In the case of Bonsall Unified School District, criticism over the lease-leaseback agreements and the potential conflict-of-interest issues intensified when it was learned that the district's facilities director, David Medcalf, who was hired in 2015, was employed as construction manager for Erickson-Hall Construction Company in 2008; in fact, Medcalf's LinkedIn profile states that he still currently serves in that capacity.

On February 9, days after the lawsuit was filed, and as a result of pushback from residents, trustees for the Bonsall school district agreed to rescind the lease-leaseback agreement with Erickson-Hall and, according to a staff report written by Medcalf, "direct/delegate authority to district staff to re-start the procurement process in order to issue a new solicitation in accordance with the newly applicable procedure set forth in AB 2316."

The board's revocation of the agreement, says California Taxpayers Action Network attorney Kevin Carlin, does nothing to address the fact that the district entered into preliminary construction contracts without conducting environmental studies as mandated by state law.

District superintendent Justin Cunningham considers the lawsuit another attempt by California Taxpayers Action Network to use taxpayer advocacy claims to extract taxpayer money from the district.

"When we approved the lease-leaseback we knew some changes would need to be made and there was a high probability that a lawsuit from this group would likely be filed, so we didn’t hurry to execute the contract and we didn’t go through validation," Cunningham said in an interview.

The superintendent added that the district would have likely prevailed in court but didn't want a protracted legal battle.

"We decided to not fight it and waste taxpayer money on lawyers to fight frivolous lawsuits, as was the case of California Taxpayers Action Network's lawsuit last spring over a previous lease/lease back. We prevailed in that case, but it cost over $35,000 to help the judge see that the list of allegations were all false.

“Much of this is not based on taxpayer waste, or conflict of interest concerns, but rather comes from a well organized group of neighbors who do not want to see a high school get built near them. Instead of the NIMBY argument they are using taxpayer waste claims.”

As for the role of district facilities manager Medcalf and any potential conflict of interest, Cunningham said, “The fact that Medcalf had worked for Erickson-Hall prior has nothing to do with the fact that we needed someone to fill the new Director of Facilities, Maintenance, and Transportation position he is in. With all the growth projected for the District we had to create such a position. He knows our school district; Erickson-Hall built our last three school construction projects. To address the potential for conflict of interest we made sure when the process began that Mr. Medcalf would not be on the selection panel, nor will he be in the future, when this process begins again."

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Critics say the facilities director's previous employer creates the potential for conflict of interest.
Critics say the facilities director's previous employer creates the potential for conflict of interest.

A taxpayer advocacy group is suing the Bonsall Unified School District for skirting state environmental laws in its pursuit to build a new high school.

The group, California Taxpayers Action Network, filed the lawsuit on February 6. The document alleges that staff and trustees in the district failed to evaluate environmental impacts before proceeding with a proposal to build a new high school on an undeveloped 50-acre site on Gird Road, located between the North San Diego County communities of Fallbrook and Bonsall.

On December 8, claims the lawsuit, district trustees approved moving forward with preliminary work on the site despite the fact the district had not prepared necessary environmental reports as required by the California Environmental Quality Act (CEQA).

In addition, trustees approved entering into a "lease-leaseback" agreement with Erickson-Hall Construction Company for construction services.

Lease-leaseback agreements are funding schemes used by school districts throughout the state wherein the districts lease a property for a nominal amount (typically one dollar) to a preferred construction company with the express agreement that the project will not go out to open bid. The construction company builds the project (in this case a high school) and then leases the property back to the district. The school district pays on the lease until the project is paid for and then regains ownership of the property.

But the lease-leaseback agreements are not without controversy. Critics say the arrangements open the door for backroom dealings, conflict-of-interest scenarios, and violates state competitive bidding requirements.

In 2012, the California Supreme Court sided with a Fresno contractor who alleged the Fresno Unified School District violated state law in its quest to build a $37 million middle school. As a result of the litigation, governor Jerry Brown signed into law Assembly Bill 2316, which required that school districts follow competitive bidding requirements.

In the case of Bonsall Unified School District, criticism over the lease-leaseback agreements and the potential conflict-of-interest issues intensified when it was learned that the district's facilities director, David Medcalf, who was hired in 2015, was employed as construction manager for Erickson-Hall Construction Company in 2008; in fact, Medcalf's LinkedIn profile states that he still currently serves in that capacity.

On February 9, days after the lawsuit was filed, and as a result of pushback from residents, trustees for the Bonsall school district agreed to rescind the lease-leaseback agreement with Erickson-Hall and, according to a staff report written by Medcalf, "direct/delegate authority to district staff to re-start the procurement process in order to issue a new solicitation in accordance with the newly applicable procedure set forth in AB 2316."

The board's revocation of the agreement, says California Taxpayers Action Network attorney Kevin Carlin, does nothing to address the fact that the district entered into preliminary construction contracts without conducting environmental studies as mandated by state law.

District superintendent Justin Cunningham considers the lawsuit another attempt by California Taxpayers Action Network to use taxpayer advocacy claims to extract taxpayer money from the district.

"When we approved the lease-leaseback we knew some changes would need to be made and there was a high probability that a lawsuit from this group would likely be filed, so we didn’t hurry to execute the contract and we didn’t go through validation," Cunningham said in an interview.

The superintendent added that the district would have likely prevailed in court but didn't want a protracted legal battle.

"We decided to not fight it and waste taxpayer money on lawyers to fight frivolous lawsuits, as was the case of California Taxpayers Action Network's lawsuit last spring over a previous lease/lease back. We prevailed in that case, but it cost over $35,000 to help the judge see that the list of allegations were all false.

“Much of this is not based on taxpayer waste, or conflict of interest concerns, but rather comes from a well organized group of neighbors who do not want to see a high school get built near them. Instead of the NIMBY argument they are using taxpayer waste claims.”

As for the role of district facilities manager Medcalf and any potential conflict of interest, Cunningham said, “The fact that Medcalf had worked for Erickson-Hall prior has nothing to do with the fact that we needed someone to fill the new Director of Facilities, Maintenance, and Transportation position he is in. With all the growth projected for the District we had to create such a position. He knows our school district; Erickson-Hall built our last three school construction projects. To address the potential for conflict of interest we made sure when the process began that Mr. Medcalf would not be on the selection panel, nor will he be in the future, when this process begins again."

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Many years ago the Fallbrook Union High School district had a school site on Gird Road. On one occasion while working at Fallbrook High, I overheard the district's construction and facilities manager tell someone that the district would likely never need that site. (I assume that it owned the property as far back as the 80's, maybe even earlier.) But he added that at some future time, when the Bonsall District unified (meaning it would take on the role of providing its own high school), it would get and use the Gird Road property. Apparently it was within the boundaries of the Bonsall district. So, I'm assuming that this site is the same one he was discussing about 1995.

If this site is that piece of property, it represents some foresight on the part of the Fallbrook high school district at a time when major growth had not occurred in the area. To assemble an accessible fifty-acre sight there now would be challenging, and likely costly.

So, now it is up to the Bonsall board of trustees and its administration to get the high school built right, on budget, and overcome the NIMBY objections of nearly property owners. If they can do that, great. If they cannot, it will be typical of what happens so often in building needed new schools.

Feb. 16, 2017

Thanks to The Reader for covering this issue! More light needs to be shed on this apparent lack of transparency in school districts, particularly Bonsall. This District, after its voters rejected the proposed high school, immediately began looking for a new way to foist the proposed school on its taxpayers. The current vehicle is the controversial Lease Leaseback Agreement. The District apparently tried to circumvent the proposed changes in the LLB which took affect Jan 1 2017, by having its Board of Trustees approve the Agreement at its Dec Board Meeting, then waiting to sign the agreement in case the expected Complaint was filed. This begs the question: why not wait until Jan 1 and comply with the new law? Or, If the District was confidant of its position, why not sign the Agreement in December when the aboard approved it? the answer lies in the advantages of each law, the 2016 and 2017 versions which the District hoped to take advantage of. In particular the 2016 law allowed the District to avoid a competitive bid process, allowing it to select the aforementioned Erickson Hall. One inaccuracy on the part of Superintendent Cunningham is his assertion that the 2015 lawsuit was dismissed because the allegations were false. The record of that Complaint is available and it shows that the Complaint was dropped because the Complaint was not filed within the 60 day window. A complainant has 60 days after a LLB construction contract is entered into to file a complaint, after which the Contract can "self-validate". Dr Cunningham: "We prevailed in that case, but it cost over $35,000 to help the judge see that the list of allegations were all false."

Feb. 16, 2017

I suggest that all school districts need to be investigated for their "schemes".

Feb. 17, 2017

The Gird Road site lost 3 out of 3 times at the ballot box for school bond funding, twice under ownership of Fallbrook School District and once under Bonsall School District's (Measure DD, 2016). At the same time, the school’s size has grown from a few hundred students to a monstrous 100,000 sq. ft. building for 1500+ students plus staff, admin, faculty, making the site very unpopular. Native oaks dot the hilly Gird Road site; 16 acres are federally designated arroyo toad critical habitat. Only 25 acres out of 50 are useable, far too small for a 1500-student school per CA Dept of Ed: www.cde.ca.gov/ls/fa/sf/guideschoolsite.asp#Table1. None of these facts slowed down the contractor (who also heavily funded DD). Only a legal challenge led by CALTAN did. And now we read that the contractor who keeps winning jobs at the Bonsall School District (via extremely expensive and controversial lease-leaseback funding arrangements where contractors both build AND fund projects) has embedded one of their own long-time employees, David Metcalf, as a $90,000/year Bonsall School District employee! (transparentcalifornia dot com)! Gird Road runs through one of FALLBROOK’s (not Bonsall's) most picturesque valleys where residents succeeded in protecting 116 acres from residential development. A vineyard with olive trees and an Old World Italian-style winery are build created on land protected forever by conservation easements (see SaveFallbrookGolfCourse dot com). Gird Valley residents reject a huge school on the Gird Road site at the southern end of the valley, would prefer a staging area for walking/riding/running trails from the San Luis Rey River Park all the way to Live Oak Park to the North. That, not a huge school, would really give value to Gird Valley and to the Fallbrook community. Gird Valley in Fallbrook does not want traffic, noise or light pollution which is why bond measures to fund a bigger and bigger BONSALL school keep failing at the ballot box. Fallbrook already supports a large high school on the west side of town and passed a $45-million bond (Measure AA) last fall. With this lousy LLB contract off its back, the Bonsall School Board is now free to finish the environmental assessment at the Gird Road site (which has value for other uses) and seriously consider other sites, recognizing that the Gird Road site has never succeeded, and never will, at securing the voter's commitment to fund it. Never mind the damage to Gird Valley, attempting to build on the Gird Road site without a strong financial commitment from the community will surely bankrupt the Bonsall School District. Anyone out there with at least 35 to 45 primarily flat acres near a four-lane road and/or major interchange? This is your chance to contribute to the future of education in North San Diego County! The residents of Fallbrook and its lovely Gird Valley thank you!

Feb. 17, 2017

A most interesting response. Or should we call it a rant? Well, whatever you want to call it, it represents the other side of the story. (But could you please catch your breath here and there and cut it into a few paragraphs?)

Feb. 17, 2017

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