No gold star for Bonsall school district

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."