Grossmont Union High School District
Citizens’ Bond Oversight Committee
CBOC Meetings
CBOC Members
2015 Annual Report for Prop H & Prop U
Robert Ball Community Member-at-Large Jan Canel Community Member-at-Large Nancy Herbst, President Community Member-at-Large Liz Higgins Business Organization Member Arlen Hurt Sr. Citizens’ Organization Member David Kvendru Financial Organization Member Wayne Papac Construction Organization Member Glen Sparrow Taxpayer Organization Member Mike Stewart Parent & PTA/PTO Member Alex Tank Parent Member Mark Zacovic, Vice President Community Member-at-Large The CBOC meets four times a year, usually at the Grossmont Union High School District Office, in the Main Conference Room at 1100 Murray Drive, El Cajon, CA 92020. Meetings are open to the public. 2016 Meeting schedule January 27 March 30 June 29 September 29
5 PM 5 PM 5 PM 5 PM
Contact Info
Meeting times, dates, and locations are subject to change. Please check the website before attending. PO Box 1043 La Mesa, CA 91944
Dear Citizens: The 2015 Annual Report is the eleventh annual report published by the Citizens’ Bond Oversight Committee (CBOC) to inform the public about the expenditure of Proposition H and Proposition U (Prop H/U) bond revenues. The committee actively reviews and reports on the proper expenditure of Prop H/U revenues for projects listed in the ballot language. This year, Grossmont Union High School District (GUHSD) expended $39 million on project work. The bond program completed projects at two schools. Ongoing construction continues at three schools. As in previous years, the CBOC is pleased to report that all bond expenditures were for listed projects, and that required annual performance and financial audits were conducted. Final audit reports are scheduled to be presented to the CBOC and the district governing board in early 2016. In November, GUHSD was able to take advantage of favorable market conditions to refinance $48.6 million in Prop H debt. This will save taxpayers $4.7 million. The district has been able to do this three times over eleven years, ultimately saving taxpayers $10.9 million. The CBOC has been monitoring a lawsuit between Alpine Union School District and GUHSD concerning the planned twelfth high school (see cboc.guhsd.net/home/timeline for a timeline of events). As reported in previous years, construction of the high school in Alipine is on hold until the enrollment thresholds specified in Prop U ballot language are satisfied and state per-pupil funding is restored to 2008 levels. A preliminary injunction requiring GUHSD to set aside $42 million for construction of the high school has stopped eleven other planned projects. The district’s legal fees are being paid with bond funds from the program management budget and not from any project budget. Legal fees incurred through the end of 2015 were $2 million. I want to thank all of the CBOC members for their hard work. I am sure that I speak for all current and former CBOC members in stating that it is a privilege to serve this community and to help ensure that our tax dollars are spent wisely. Transparency is important to us. Our meetings are open to the public. Your comments and input are always welcome. Visit our website, cboc.guhsd.net, for meeting agendas and minutes, bond audits, and reports received or issued by the CBOC.
(619) 644-8049 cboc.guhsd.net
[email protected]
Citizens’ Bond Oversight Committee
Sincerely, Nancy Herbst President, Citizens’ Bond Oversight Committee
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2015 Annual Report
CBOC Review and Reporting What is the CBOC?
How does the CBOC ensure expenditures are proper?
The CBOC is an independent committee focused on active, involved, and appropriate oversight of GUHSD’s two bond programs: Prop H and Prop U. As prescribed by law, the purpose of the CBOC is to inform the public concerning the proper expenditure of bond revenues.
CBOC subcommittees review GUHSD planning documents that define project work and they visit construction sites and completed projects to verify that project work is consistent with reported expenditures. Eleven volunteers, appointed by the district governing The CBOC reviews work planned for each project against board, comprise the CBOC. California law requires seven ballot language and referenced master plans. The CBOC members from specific community organizations — in also reviews the district’s Deferred Maintenance Plan. addition, the governing board appoints four community Some projects have evolved to maintain alignment with members-at-large. The CBOC is organized into three educational programs and community priorities. All subcommittees. revisions are consistent with the bond, reviewed with the GUHSD provides administrative and technical support community, and reviewed by the CBOC prior to to the CBOC, including secretarial support, technical approval by the district governing board at a regular consultants, and a public website (cboc.guhsd.net). The public meeting. Total budget allocations for each school costs associated with this support, including the site are tracked to ensure that project revisions at one publication of this report, are provided using non-bond campus do not limit project work at another campus. funds.
Student Support Center at Granite Hills High School
How does the CBOC review expenditures?
How does the CBOC inform the public?
CBOC subcommittees regularly review GUHSD financial and program management reports in detail before bringing them to the full CBOC. The primary financial reporting and management tool used to control Prop H/U costs is the Facilities Accounting Control System, known as FACS. This system monitors budgets and expenditures for all projects receiving bond funds. A complete history of FACS reports is available on GUHSD’s website. Citizens’ Bond Oversight Committee
The CBOC publishes an annual report. Printed copies are distributed to each high school and various community organizations. The report is featured in the Superintendent’s Newsletter. The CBOC makes all of its materials available on its website and all meetings of the CBOC and its subcommittees are open to the public. In addition, the CBOC president routinely presents a summary of CBOC activities at regular public meetings of the board. Transparency is a priority. 2
2015 Annual Report
Bond Project Revenues & Expenditures
Prop U Funding Sources
Bond Revenues Summary Bond Sales
$417 million $289 million
State Grants $181 million $120 million Earned Interest $2.5 million $2.8 million Developer Fees $0.8 million $0.8 million Total Funding
Planned
Prop U Status
Prop H is the $274 million bond measure passed in 2004 by voters within the GUHSD boundaries. Prop U is the $417 million bond measure passed in 2008. As provided in the ballot language, GUHSD leverages bond funds with additional funding, including state grants for qualifying bond projects. The latest financial status is available on GUHSD’s website proph.build-guhsd.com.
$602 million $413 million
Received
Planned Received Spent
Spent
$602 million $412 million $329 million
Proposition H: Prop H is complete; the last of the revenues were spent in 2014. The $274 million in bonds authorized by voters were leveraged with other funding sources to complete $327 million of project work. Some Prop H projects waiting for state matching funds were rolled into the Prop U program for tracking and reporting. Prop H bond debt payback ratio is 1:1.94, well below the state allowable ratio of 1:4.00. Proposition U: $289 million in Prop U bonds have been sold. The most recent bond sale was in June 2015. Prop U bond debt payback ratio is 2.15, well below the state allowable ratio of 4.0. When other revenues are included, a total of $413 million has been received as of September 2015. The governing board has authorized feasibility studies for a new authorization election that would enable bonds to be issued much sooner. As initially reported in the 2013 Annual Report, a number of economic factors will delay the issuance of remaining bonds by about sixteen years. A new authorization of the tax rate may enable remaining bonds to be issued within five years. Issuing bonds eleven years earlier will lower the bond debt payback ratio, saving taxpayers about $200 million in bond debt payments. Completing projects eleven years earlier will avoid $60 million to $80 million in estimated inflation costs, allowing more work to be completed.
Bond Expenditure Summary The twelfth high school is on hold until the enrollment threshold specified in the Prop U ballot language is met and state funding per-pupil is restored to 2008 levels. Eleven projects have been placed on hold due to the $42 million injunction.
There were $39 million in expenditures in 2015. Expenditures were significantly curtailed due to a temporary court injunction that required $42 million be set aside for the future twelfth high school project; see below for current projects that are impacted. All expenditures were for work consistent with projects listed in the bond language.
Completed in 2015
Underway in 2015
On Hold
Helix
Grossmont
District-wide
Granite Hills
Mod 600/700 Boys/Girls PE Reconfigure Admin/Maint/Cafe New Student Support Center
Monte Vista
New Student Support Services/Arts Bldg Mod Bldgs 700, 800 & 800A
Valhalla
Main Bldg Mod
Security Camera Upgrades
Grossmont
New Events Center
Helix
Mod 800, Demo 900 Mod 1100/1140/120 Mod Bldg 1300/sitework Refurbish Café, Admin
Mount Miguel
New Events Center
New High School Granite Hills Santana West Hills
Citizens’ Bond Oversight Committee
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Campus Mod Bldg 30/80 New Events Center Special Ed Suites HVAC Upgrades
2015 Annual Report
Annual Bond Audits The independent accounting firm of Nigro & Nigro In addition, the Prop U audit examined the performance, performed the legally-required annual financial and compliance and transparency of numerous facets of the performance audits for each bond measure in fiscal year program, including but not limited to: 2014 – 2015 in accordance with generally accepted Management Program and Planning government auditing standards. The final audit reports Project Budget Analysis were presented at the Audit Subcommittee and CBOC Design and Construction Timelines meetings in January 2016. Use of Best Practices and Technology Regarding the Planning & Construction of School Facilities Bidding Procedures Payment Procedures and Processing Time Program & Construction Management Structure Change Order Procedures Construction Project Delivery methods and Performance Analysis Procurement of Contractors and Professional Services Prevailing Wage and Labor Compliance Public Outreach, Communication, and Social Media CBOC Activities
In the two annual financial audits, the auditor issued opinions that financial statements “present fairly, in all material respects, the financial position of [Prop H and Prop U, in their respective audits], as of June 30, 2015…in accordance with accounting principles generally accepted in the United States of America.” The Prop H financial audit noted that Prop H funds are fully expended as of June 30, 2015 and “no further [Prop H] audits are required.”
While several recommendations deficiencies were identified.
The two performance audits examined compliance with requirements that bond funds be expended only on projects listed in the bond. The Prop H and Prop U performance audits each report the auditor’s opinion that “[GUHSD] complied with the compliance requirements” for bond proceeds.
were
made,
no
The audits will be presented to GUHSD governing board in February 2016 for acceptance and approval. They will be available on the CBOC website at that time.
Slab finishing at Grossmont High School
Student Services building at Granite Hills High School
Citizens’ Bond Oversight Committee
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Cafeteria windows at Monte Vista High School
2015 Annual Report
