Behind Closed Doors- With No Public In-put-

• There is a clear need to build or modernize facilities, documented by a list of specific problems to be corrected and specific projects to be completed.
• The bond initiative tells voters specifically how the bond funds will be spent.
• The projects to be funded are capital facilities. The bonds will pay for land, construction, safety improvements, and modernization, but not maintenance, operations, or salaries.
• The facilities will have useful lives at least as long as the terms of the bonds, so that future property taxpayers will realize benefit from their taxes. Bonds will not pay for computers, vehicles, audio-visual aids, or other equipment that will wear out or become obsolete while the bond debt is outstanding.
• Bonds will be issued incrementally, in response to the school district' s needs and prevailing interest rates, not necessarily all at once.
• The bonds' interest rates will be no higher than current market rates for municipal debt.
• A "sinking fund," equivalent to 2%-4% of the value of the bonds issued, will be set aside (from the district's general fund, not from bond money) in an interest-earning account for future construction and repair.
• The district will budget 2%-3% of its operating funds (not bond money) for maintenance of facilities.
• The district will maintain a reserve of 2%-3% of general funds (not bond money) for economic uncertainties.
• There will be an annual outside audit of bond proceeds and expenditures.
• The district will appoint a citizens' oversight committee of property taxpayers to verify that bond funds are spent as approved by voters. No member of the committee may be an employee of, or do business with, the district.
• Projects to be funded will be eligible for State of California matching funds, if available.
• The bond initiative states clearly that the district does not plan to build and maintain its bond-financed facilities under a project Labor Agreement (PLA).

19:40 Question #1: Page 15 - last sentence of the bond:

"Bond funds may be used to reimburse the District for Bond Project list expenditures incurred prior to the election and and bond issuance, in accordance with federal tax law."

For transparency, CUSD should disclose what if any past expenses would need be paid out of these bond funds.

20:04 Question #2: CUSD's current financial system:

OCTax has made several public record requests that could not be complied with because of the immense amount of work that would be required to answer the request. CUSD needs to have a financial system in place that will allow the District to track the color of money for these very specific projects. So if CUSD is going to need to purchase a new financial system to track how money is spent taxpayers must know how long that will take or if CUSD's current financial system can do that because it cannot do that for the Mello Roos money.

21:00 Board Discussion

at 21:07 Trustee Jones - How many residences from Laguna Woods are in our District. Not 18,000 - just a portion about 124 parcels.

at 22:31 Trustee Reardon- Clarification on tracking the colors of money - we do have a fund based accounting system so why can't CUSD track the color of money?

at 25:46 Superintendent - we starting auditing and tracking CFD's for the last two years

at 26:30 Discussion of obtaining specific project lists for each school site.

at 20:20 Discussion of Over Site Committee

at 30:30 Trustee Alpay- Irvine did a Steering Committee where they visited each school site and produced a project list for each school site. CUSD has not done this. This is a wish list from 2009.

at 32:30 Trustee Hanacek - CUSD's Facility Committee is the same as Irvine' Steering Committee

at 32:31 Trustee Hatton-Hodson - CUSD did have Community meetings so lets add that to the bond language. Engagement that occurred does meet OCTax. CUSD does not need to have OCTax's blessing.

at 35:22 Trustee Hannacek - Exhibit "A" Summary of Ballot Measure" - delete retain/attract quality teachers - delete prepare students for college/career - delete payment for employee salaries.

at 38:40 Clark Hampton- Highest ranking things from Poll are reflected in this language - #1 attract and retain high quality teachers. Then a discussion of paying compensation with these funds.

at 39:21 Bond Attorney Janet Muller - defined what compensation can be paid from Bond Funds. Attorney General Opinion defined what can be paid from Bond Funds. Cannot pay for "Operating Expenses" vs "Capital Expenses.

Note: Attorney General Kamala Harris issued an opinion in January 2016 which ruled that it is a mis-use public funds to advocate passage of a bond measure by contracting with a person or entity for services related to the bond election campaign if the pre-election services may be fairly characterized as a campaign activity.

The full opinion can be read at: https://oag.ca.gov/system/files/opinions/pdfs/13-304.pdf

As a taxpayer I would like to see students be reimbursed for all the money that has been spent (since 2012) on implementing and marketing this bond to the public. This has been a corrupt process and has taken millions in dollars that could have been used to ensure that our students had "Equal Opportunity to Achieve a Quality Education" is defined by the courts to be:

"...opportunity to obtain high quality staff, program expansion and variety, beneficial teacher- pupil ratios and class sizes, modern equipment and materials, and high-quality buildings." [Serrano v. Priest II (1976) 18 Cal. 3d 748]

Instead our students have had to endure sub-standard facilities, increased class sizes and cuts to programs and instruction time all so that a corrupt and morally bankrupt school district could plot to steal more money from taxpayers. CUSD's actions since 2012 constitute the very mis-use of taxpayer funds that the Attorney General was identifying.

It should also be noted that Irvine elected the members of it's Over Site Committee. CUSD intends to "appoint" its Committee members.

46:00 Trustee Alpay - no statement regarding the actual assessment value that taxpayers will pay.

47:18 Superintendent Vital - a majority of the board must agree to any language changes.

48:53 Superintendent Vital - none of this money can be used for pensions.

59:50 Trustee Alpay What language is the voter actually voting on. Exhibit A is what a voter will see on a punch card. Vote B and C is in the Ballot pamphlet.

Note: Exhibit "C" tells the taxpayer the actual cost to taxpayers. By putting the cost in exhibit "C" and not in "A" or "B" shows an intent to hide cost per $100,000 so that voters will get a full picture.

54:10 CUSD can't meet a 2% Reserve limit

56:27 Trustee Jones - our problems are the project list specificity and reporting requirements.

56.32 Trustee Jones asked Carolyn Cavecche, President and CEO of the Orange County Tax Payers Association to come back. The current financial system currently in place cannot track the color of money. Is that incorrect?

58:33 Clark Hampton - CUSD has had several different systems so it takes manual work to go back and merge data from multiple systems. CUSD represents that they do have a system in place

1:00:18 Trustee McNicholas - This money will not be used for Class Size Reduction

Prop 39 - a District must Certify that they considered Technology, Class Size Reduction and safety.

1:06:21 - Trustee Jones - instead of calling out the $889 million can we simply tell taxpayers the $43 per $100,000.00 of assessed value.

Note: Class size reduction has been one of the highest priorities of parents in CUSD and remains so. But- it has been completely removed from the most recent LCAP. In fact - an audit would show how the $4.9 million allocated for CSR in the first LCAP was actually spent sent class sizes were never reduced. OCDE accepted an LCAP that included expenditures of $4.9 million for CSR but then acknowledged that class sizes were not reduced.

1:08:40 Trustee Alpay - Item H on page 4 of 17 - The District will budget 2% to the "Bond Funded facilities" or "all facilities".

1:10:18 Carolyn Cavecche, President and CEO of the Orange County Tax Payers Association asks to have OCTax Payers removed from the resolution if a specific list of projects cannot be done in the resolution. It sound like you just want to pass the bond and then decide how to spend the money.

1:15:50 Trustee Hannacek - Does not want to put cost to taxpayers in Exhibit "B", prefers to keep it in exhibit "C".

1:17:38 Trustee Jones - We should take out OCTax Criteria out of the resolution.

1:20:50 Trustees Alpay and Jones want a specific project list as required by OCTax or they will not support the Bond. Trustee Hannacek feels the list is specific enough. Trustee Hatton - Hodson feels there is enough specificity.

1:23:45 Clark Hampton - admits that the list is very specific list, but the list was developed by Architect and Staff in 2009 and the needs may not reflect the needs of a plan done today.

1:25:50 Trustee Hannacek - knows her areas specific needs.

1:27:56 Trustee Jones All middle schools asked for a gym? Trustee Hannececk - we need gyms for climate change.

1:29:40 Trustee Reardon - He is not a fan of this Ballot and will not vote for it.

1:30:45 Superintendent Vital - We will leave the $43 per $100,000.00 in Exhibit "C", and we should revisit the list to get compliance with OCTaxpayers Association.

On July 26, 2016 the City of Mission Viejo held a Special City Council meeting to discuss CUSD's $2 billion dollar bond. That can be viewed here:

On August 2, 2016 the City of Laguna Niguel held a meeting to discuss the $2 billion dollar bond.

On August 3, 2016 Elected Leaders of South Orange County all signed an opposition to the Potential CUSD School Bond Election which was signed by the Mayor of every City, Assembly Member Bill Brough, Senator Patricia Bates and Lis Bartlett Chairwoman OC Supervisor, 5th District.










On August 4th, 2016 Republican Party of Orange County wrote a letter stating that if the Board votes to place this bond on the ballot the Republican Party will formally oppose the bond.



I personally attended the Laguna Niguel City Council meeting where Clark Hampton represented to the City Council that CUSD had met all of the OCTaxpayers criteria. At 2:17:00 Clark Hampton states that the Resolution that is going before the Board on August 10, 2016 has meet the OCTax Payers requirement for specificity.

I contacted Carolyn Cavecche, President and CEO of the Orange County Tax Payers Association to confirm the veracity of Clarks statement - our correspondence is below. I know for a fact that it is impossible for CUSD to be specific without first doing a new 2016 Masters Facilities Plan. CUSD does not want to take the time to do a new plan that would truly reflect meeting the current needs of CUSD facilities. They are only interested in a new revenue stream.














Unfortunately Taxpayers have not seen what is being presented on August 10, 2016.

I want to thank all of the City leaders and the Republican Party for looking into this bond measure. I feel taxpayers deserve an audit of this district.