Dublin Resident Bill Carey sent this letter City Council members

Summary of the Letter:

The City and School district have been working on terms of an arrangement to allow a school to be built on a 12 acre site owned by the City in the Dublin Crossing (also known as Boulevard) community. The last publicly communicated version could REQUIRE the School District to begin construction within 2 years….. This project was so low on the $800 million list of facility project requests that it was deliberately not included as “top priorities” (includes a second high school and modernizations of east side school) or the secondary “additional priorities”.  CONSTRUCTION OF DUBLIN CROSSING SCHOOL WAS NOT a priority used to market and sell the $283 Measure H bond to the community. A small amount was included as an secondary additional priority for DESIGN ONLY. If the district signs an agreement with the City to start construction within 2 years it would indicate their intention to divert $70 million from 3 top priorities. At this point they would be unable to afford these top priorities and accordingly both the high school and west side modernizations would be on the “chopping block”. They have already diverted $20 million for two other non top priority projects. A secondary issue is the arrangement required a K-8 grade configuration.

In my opinion the community should demand the school board delivers on what was sold with H and and in doing so the proposed arrangement should either be (1) structured to allow construction to start whenever alternative funding is obtained (maybe after two more bonds or builder step up) and with any grade configuration OR (2) dropped.

The City Council is not responsible for building schools, however they are respomsible for land use oversight and for the City as a whole.  With regards to the proposed agreement the City Council should:

(1) ensure there is no requirement to start construction (or if there is it way in the future – 10 years) to provide maximum flexibility,

(2) ensure any type of school can be built there, not just k-8, to provide maximum flexibility, and

(3) ensure site is an adequate size (they have discussed selling 3 acres to build more homes and reducing school site to 9 acres). If they can’t get agreement from District on other terms (compensation to City, etc.) and these points, they should either extend the MOU which is about to expire to allow the District an opportunity to develop a comprehensive plan OR let it expire and walk away.

Full letter (slightly different versions sent to different Council members):

As you know for the past 2 1/2 years, the City and the Dublin School District have been negotiating a potential ground lease agreement (GLA) for a 12-acre site in the new Dublin Crossing (DC) community for a joint-use park and school site (the “site”). I want to provide input, but first it is important to provide some background.
In 2014, the developer of DC and the City reached an agreement that provided the City with the site in exchange for non-monetary considerations valued at $10.3 million. These non-monetary considerations included modifications to DC project entitlements allowing for more land to be used for homes vs. commercial valued at $2 million, giving up 6.5 acres of parks valued at $8.1 million, and reducing required community benefit payments by $1.2 million. As intended, immediately following approval of the agreement by the City Council on May 19, 2015, the City and School District approved a Memorandum of Understanding (MOU) which set out general terms under which the two parties would negotiate a GLA with an option to purchase requirement for the site.
The School Board approved the annual School Facility Needs Analysis (SFNA) in August 2015 factoring in the contemplated GLA’s for Jordan Ranch (a separate agreement) and Dublin Crossing (DC).
On November 1, 2015, I wrote an email to City Council members and School District Trustees pointing out that while the intent of the GLA’s was to allow the District access to school sites that they would otherwise be unable to afford, the proposed structure as designed and how it was factored into the August 2015 SFNA had the unintended consequence of reducing Level 2 developer school impact fees by almost in half resulting in the loss of $10’s of millions to the District. I provided some specific suggestions on how to revise the SFNA and the GLA’s to achieve the intended benefits to the District while avoiding the unintended consequence of reducing the Level 2 fees. Additionally, these changes were designed to position the District to be eligible for state matching fund reimbursements. I suggested that the revised structure and potential compensation to the City could be used for other projects such as completing Sean Page Park and/or expanding library hours. On November 8, 2015, I provided additional suggestions and commented that the incremental Level 2 fees and potential state reimbursements could provide the District with funds to buy the Dublin Crossings site from the City. The intent of my suggestions was a win-win-win-win for the City, the District, the community and developers. Superintendent Dr. Hanke did take my suggestions seriously and he discussed them in detail with the Trustees on November 10, 2015. The District subsequently dismissed the old demographer, hired a new one, and prepared a revised SFNA that increased Level 2 fees the from less than $7 per square foot to almost $11 per square foot for unmitigated properties. In November 2016, the District was first permitted to collect Level 3 fees, which are double Level 2 fees.
On February 7, 2017, the Council discussed the status of the DC agreement. It was noted that a GLA with purchase terms between the City and the School District was never finalized due to ongoing disagreements over the option to lease term (District wanted 10 years and City wanted less) and purchase price (District didn’t want to pay for the land, City wanted something). Additionally, it was noted that in October 2016, the City formally submitted a proposal to the District with an option to lease term for the site of 2-years and requirement for the District to purchase the site within 5-years of operation. In November 2016, the District’s position was that the request for compensation (purchase price) was not included in the MOU signed in May 2015, and the position of the City was that the compensation was a transparent and integral component. The City Staff informed the Council during that February 7, 2017 meeting that it was their understanding that the position of Council was that if the District could obtain state funds for the site, the City should be compensated. Thus, the negotiations were at an impasse.
Since February 2017, two designated City Council members (Don Biddle and Abe Gupta) and two Trustees (Dan Cunningham and Joe Giannini) have been trying to finalize an agreement.

My personal view is as follows:

  • The District cannot afford to construct another elementary school or K-8 that would likely cost $70 million.
  • The District does not have funds to construct a school. Measure H totaling $283 million was actively marketed to the community and endorsed by many on the City Council with three priorities that alone would costs more the funds available (a second-high school, science labs and modernizations to several existing elementary schools). Constructing a new K-8 was not a defined priority, and in fact after discussion the Trustees deliberately and publicly removed DC construction from the priority list to win support prior to the June 2016 election.
  • The District has unused sites at Nielsen and potentially the district offices, which is an old school, that could be utilized more cost effectively when needed to accommodate new students.
  • With the opening of the Cottonwood Creek school in 2018, the District will have 12 elementary and middle schools (used and unused), yet only one comprehensive high school.
  • With the high school student population expected to progressively double over the next 10 years, the community desperately needs a long-term solution for high school that protects and enhances our $15 billion tax base. As marketed by Measure H, the high school remains our biggest need because of the exploding student population and availability of options at the K-8 level.

 

Accordingly, I believe you should reject any proposal that locks the District into building a new K-8 school. An option to lease term of less than 10-years would do this and will doom the three priorities of Measure H including a second-high school. Such an action by the City Council would directly enable or force the District to redirect 25% of Measure H funds away from the priorities marketed and sold to the community to successfully but narrowly pass Measure H. You should not be part of an action that pulls money away from the three critical priorities of Measure H to pay for the construction of a school that was so low on the project request (wish) list that it was removed from the list by the Trustees.

 

So, what are the alternatives. To me there are two basic approaches:

  • The first, involves the City accepting the District’s terms and agree to 10-year option to lease term plus five more years on the option to buy. In doing so and to protect the community and our expanding $15 billion tax base, it is critical that you ensure that are no terms that lock the District into constructing the school in the next decade and into constructing it under a particular grade configuration (need to ability to construct any grade configuration considered appropriate). Because the District can’t meet its prioritized commitments under Measure H and build the school, the lot would presumably remain vacant for at least 10 years.
  • The second, you could conclude that the District does not have the financial resources to fulfill its obligation to the City and you could let the MOU expire. Under this approach, you could either sell some or all the 12-acre site or use it for some other city purpose such as park. If you sold, the City could then be in control on how to use the proceeds of $36 million or more to benefit the community as whole. While not intended to be all inclusive, potential uses of the cash include actions to enable a second-high school at Promenade, Chen or other sites.

Either of the above may be acceptable. However, the District has been unable to produce a strategic plan that properly costs, prioritizes and sequences limited investment dollars to date. The high level estimates for the 3 Measure H priorities were significantly higher than the total available under Measure H. How are they also going to pay for Dublin Crossing School and deliver on these critical priorities? They can’t. There has been some suggestion that the City should give the District more time to develop a comprehensive strategic plan and therefore should simply extend the MOU. While on the surface this sounds reasonable, they have already had years to do so and more time isn’t likely to yield a different outcome especially with the District current position and approach.  The District would need to change its perspective and approach for this to make sense. Voting for a GLA with an option to lease of less than 10 years will be a vote against the Measure H priorities including the second high school.

 

 

 

All the best,

 

Bill Carey

Dublin Resident since 2003

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