Palo Alto Unified School District Board of Education Special Meeting July 13, 2015 12:00 p.m. Open Session, Board Room 25 CHURCHILL AVENUE PALO ALTO, CA 94306 650.329.3737 Board Members: Melissa Baten Caswell, President Heidi Emberling, Vice President Camille Townsend, Member Ken Dauber, Member Terry Godfrey, Member Superintendent s Council: Dr. Glenn Max McGee, Superintendent Dr. Scott Bowers, Assistant Superintendent Mrs. Cathy Mak, Chief Business Officer Dr. Bob Golton, Bond Program Manager
PLACE: ROOM B, 25 CHURCHILL AVE., PALO ALTO, CA DATE: MONDAY, JULY 13, 2015 TIME: 12:00 P.M. OPEN SESSION PALO ALTO UNIFIED SCHOOL DISTRICT BOARD OF EDUCATION AGENDA SPECIAL MEETINGS Most Board of Education meetings are cablecast live on cable services CHANNEL 28 and webcast live on http://communitymediacenter.net/watch/schedules. Board materials are available for review on the district web site at http://www.pausd.org/community/board/agenda.shtml or at the District Office, 25 Churchill Ave., Palo Alto, CA 94306. Meetings are also available on demand at http://www.communitymediacenter.net/watch/pausd_webcast/ PAUSDondemand.html. Should you need special accommodations to participate in the meeting, please contact the Superintendent s Office at 650.329.3737 or kruegsegger@pausd.org. Community members wishing to address the Board are allotted THREE minutes per speaker. Should more than 20 people wish to address any one topic, the Board may elect to allot a shorter time per speaker. Materials presented at the Board meeting will be copied and provided to Board members after the meeting. Additional instructions are listed on the back page of this agenda. I. OPEN SESSION / REPORTS A. Call to Order B. Approval of Agenda Order Action II. ACTION / DISCUSSION / INFORMATION ITEMS 12:00 p.m. A. New Paly Athletic Center Grant Award Letter and Lease-Leaseback Action 1 Amendment Approvals The Board will be asked to waive its two meeting rule to take action as follows: (1) execute the final version of the Grant Award Agreement, with Agreement to be presented to the Board for ratification at its August 2015 meeting; and (2) execute an amendment to the Lease-Leaseback Agreement, with the Amendment to be submitted to the Board for ratification at its August 2015 meeting. Strategic Plan Initiative: Budget Trends and Infrastructure III. ADJOURN Consensus 07.13.15 Page 1 Palo Alto Unified School District Vision Statement: We support all PAUSD students as they prepare themselves to thrive as global citizens in a rapidly changing world. We develop our students knowledge, critical thinking, and problem solving skills, and nurture their curiosity, creativity, and resilience, empowering every child to reach his or her fullest intellectual, social, and creative potential.
HOW TO ADDRESS THE BOARD OF EDUCATION The Board of Education encourages your participation in its deliberations and has tried to make it convenient for you to express your views to the Board. If you wish to address the Board on an agenda item, please fill out a speaker card and give it to a staff person (seated at the side table) as soon as possible and prior to the item being called. Any additional materials you present will be copied and presented to all Board members after the meeting. The Board President will randomly call on persons submitting cards. Should you wish to present a letter(s) for inclusion in the Board packet, it must be received at the Superintendent s Office, 25 Churchill, by noon the Tuesday prior to a Board meeting. Please indicate that you would like it included in the packet. Correspondence attached to an email (kruegsegger@pausd.org) and received as noted will be included in the packet; however, email correspondence itself is not included. The general order of regular Board meetings is as follows: Staff presentation Preliminary Board and staff discussion Community participation Additional Board deliberation and action, if appropriate. If you wish to address the Board on an item that is not on the agenda, you may speak during Open Forum, which is scheduled to occur immediately following approval of the Consent Calendar (approximately 6:45 p.m.). Without taking action, Board members or district staff members may briefly respond to statements made or questions posed by the public about items not appearing on the agenda. (Any additional material you present at a Board meeting will be copied and presented to all Board members after the meeting.) Because of the short notice often associated with posting special meetings and study sessions, there is no Open Forum at these meetings. The public is welcome, however, to address any item that is posted on agendas for special meetings and study sessions. As these meetings are less formal, the format for discussion may vary slightly from what is presented above. Board agendas are very full and time is limited. For that reason, we request that you speak only once on an item and that you limit your remarks to a maximum of three minutes. If numerous individuals request to speak on a particular item or in Open Forum, the Board President may limit the time allocated to each speaker to ensure that all wishing to speak will be heard. A citizen may place an item on a future Board agenda by submitting a written request and supporting information to the Superintendent s Office. The Superintendent, in consultation with the Board President and Vice President, will determine at which upcoming regular Board meeting the item will be scheduled. The person who requested the item will be allowed three minutes at the meeting to present the information to the Board. Following this presentation, the Board may address the issue, put the issue on a future agenda for more discussion and action, refer the issue to the administration for follow-up, or take no action. The community is encouraged to review Board Bylaws (Series 9000) http://pausd.org/community/board/policies/9000.shtml PALO ALTO UNIFIED SCHOOL DISTRICT 25 CHURCHILL AVENUE, PALO ALTO, CALIFORNIA 94306
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BOARD OF EDUCATION Attachment: Action 1 PALO ALTO UNIFIED SCHOOL DISTRICT Date: 07.13.15 TO: FROM: SUBJECT: Glenn Max McGee, Superintendent Bob Golton, Bond Program Manager New Paly Athletic Center Grant Award Letter and Lease-Leaseback Amendment Approvals STRATEGIC PLAN INITIATIVE Budget Trends and Infrastructure RECOMMENDATION It is recommended the Board of Education authorize the Superintendent to: (1) execute the final version of the Grant Award Agreement, with Agreement to be presented to the Board for ratification at its August 2015 meeting; and (2) execute an amendment to the Lease-Leaseback Agreement, with the Amendment to be submitted to the Board for ratification at its August 2015 meeting. Note: The two meeting rule will have to be waived, by vote, in order to take action on the above recommendation. BACKGROUND On June 9, 2015, the Board of Education: (1) approved and accepted the 9 items recommended in the Project Action report, with such approval conditional on the making of a donation commitment by the Peery Family Fund, that is consistent with the terms of the June 4, 2015, Letter of Recommendation from Jason Peery, and the actual receipt of the donation amount contained in that letter; and (2) authorized the Superintendent or his designee to make changes to the lease-leaseback agreement documents as necessary, with such changes and the escrow agreement brought back to the Board for ratification. On June 23, 2015, the Board of Education: (1) approved the Lease-Leaseback, Site Lease, and Sublease Agreements with Vance Brown and authorized staff to execute the agreements and issue a Notice to Proceed, contingent on either direct receipt by the District or deposit in an escrow account the amount of $23,443,720; (2) authorized the Superintendent to execute the escrow agreement, if any, associated with the donation, with the agreement itself to be presented to the Board for ratification in August; and (3) approved the resolution authorizing the County to establish a separate fund for the District s share of the payments to Vance Brown, $12,999,629, under the Lease-Lease Back. On July 2, 2015, the District received a draft of another document, a Grant Award Letter, from Deseret Trust Company, sponsor of the Peery Family Fund. This draft Grant Award Letter is attached. The Trust Officer stated the Peerys would have edits and the District has submitted proposed edits. This, then, is not a final version. Authorization is needed in order for the Superintendent to sign the agreement. 1
Further, the project start is taking place at a later date than anticipated due to the need to edit and come to agreement on the documents. Because of this, some amendment to the Lease-Leaseback agreement, with the approval of both the District and Vance Brown, may be made. Authorization is needed in order for the Superintendent to sign the amendment. 2
DESERET TRUST COMPANY, as sponsor of the Peery Family Fund, a Donor Advised Fund created on December 22, 2006 60 East South Temple, Suite 800 Salt Lake City, Utah 84111-1036 (800) 746-8250 Max McGee Superintendent Palo Alto Unified School District 25 Churchill Avenue Palo Alto, CA 94306 Dear Mr. McGee: July 9, 2015 GRANT AWARD AGREEMENT Deseret Trust Company, as sponsor of the Peery Family Fund, a Donor Advised Fund created on December 22, 2006 (the DTC ) is pleased to inform Palo Alto Unified School District ( Grantee ) that its Board of Directors has approved a Grant Award of Twenty-Three Million Four Hundred Forty Three Thousand Seven Hundred Twenty Dollars ($23,443,720.00) (the Grant Award ) to Grantee in connection with the Grantee s Palo Alto High School Athletic Center Project (the Project ). The Grant Award shall be subject to this Grant Award Agreement (the Agreement ). The Grantee has or will enter into a certain construction contract (the Construction Contract ) with Vance Brown, Inc. (the Contractor ) for construction of, or lease payments for, the Project. 1. Construction Contract. The Grantee has or will enter into a certain construction contract (the Construction Contract ) with Vance Brown, Inc. (the Contractor ) for construction of, or lease payments for, the Project. 2. Grant Award Escrow and Disbursements. The Grant Award will be held in escrow at MUFG Union Bank, N.A., a national banking association, located at 350 California St., 11 th Floor, San Francisco, CA 94104 (the Escrow Agent ). No disbursement or payment of the Grant Award will be made until Grantee has ordered the Santa Clara County Office of Education ( SCCOE ) to pay $12,999,629.00 of the Grantee s bond funds (which are being held by the SCCOE) to Contractor pursuant to the Construction Contract. After such payment has been ordered, any disbursements from the Grant Award shall be made only as authorized by that 4838-3443-9461
Grant Award Agreement Deseret Trust Company to Palo Alto Unified School District Page 2 certain Escrow Agreement dated the day of, 2015 by and among Grantee, DTC, and Escrow Agent, a copy of which is attached hereto as Exhibit A, and made part hereof by this reference. 3. Grant Conditions and Requirements. The Grant Award is conditioned on the following requirements: 3.1. Exclusive Use of Grant Award. Grantee agrees to use all of the Grant Award exclusively for the construction of, or lease payments for, the Project. Grantee may not use any portion of the Grant Award, including any interest earned thereon, for any other purpose without the prior written approval of DTC. 3.2. Written Reports. Grantee agrees to furnish written reports to DTC, or its designee, as to the expenditure of the Grant Award in accordance with the budget and the progress made in accomplishing the Grant Award's purposes: 3.3. Budgets and Construction Plans. Grantee agrees that the Grant Award will be used in accordance with an approved budget and pursuant to approved construction plans. Any significant changes to such budget or plans shall be submitted to and approved by DTC, or its designee. Payment to contractors shall be made timely and the Project will be continuously executed without delay until completion. 3.4. Landscaping. As a specific requirement of the Project, Grantee agrees that the hard and softscape surrounding the Project facility will be done in a first-class manner. Grantee agrees to provide DTC or its designee with the opportunity to review and help provide direction to the final landscape plan. 3.5. Recognition of Grant Award. The support of the Peery Family Fund at Deseret Trust Company will be recognized in a conspicuous manner at the Palo Alto High School Athletic Center. 3.6. Records. DTC acknowledges that it is one of several funders for the Construction Contract. Grantee will maintain adequate records of expenditures to demonstrate the Grant Award funds were spent on the Grant Award s purposes. Such records as well as copies of reports submitted to DTC or its designee shall be retained by Grantee for at least four (4) years following completion of the Project. Grantee agrees to keep its financial statements and other records in such a manner to adequately account for the use of the Grant Award exclusively for the Grant Award's purposes. Upon request by DTC, Grantee hereby agrees to supply DTC, or its designee with copies of financial statements for the Project. 4838-3443-9461
Grant Award Agreement Deseret Trust Company to Palo Alto Unified School District Page 3 3.7. Use of Funds Consistent with Tax Rules. Grantee represents and covenants to DTC that Grantee will use the Grant Award only in the manner allowed for distributions from donor advised funds as such funds are defined in Section 4966(d)(2) of the Internal Revenue Code of 1986, as amended. 4. Additional Terms. 4.1. DTC s Designee. DTC may designate from time to time a designee to whom Grantee shall report. The initial designee shall be any donor advisor for the Peery Family Fund, namely. 4.2. DTC s Right to Return of Funds or Property. Any portion of the Grant Award not used by Grantee for the purposes described herein for the Project, including any accrued interest earned while such funds are held in escrow, remain the property of DTC and shall be promptly returned to DTC for inclusion in the Peery Family Fund at the conclusion of the Construction Contract or upon the earlier termination of this Agreement. Any interest or earnings from the investments of the Escrow Agent shall be paid to DTC upon DTC s request. Nothing contained in this paragraph shall limit or prevent DTC from taking legal action to seek repayment of unexpended Grant Award funds or Grant Award funds which were not applied in accordance with the terms of this Agreement. 4.3. Notifications. Within twenty-four (24) business hours of the occurrence of any of the following, Grantee shall provide written notice to DTC of such occurrence and shall discontinue expending any of the Grant Award funds: 4.3.1. The Grant Award Funds cannot be expended for the Project ; or Contractor. 4.3.2. The Grantee cancels the Construction Contract or changes the 4.4. Termination of Grant by DTC. DTC, in its sole discretion, may terminate this Agreement and permanently withhold the payment of all or a portion of the Grant Award if: (a) DTC or its designee determines that Grantee is incapable of satisfactorily completing the Construction Contract; (b) Grantee gives a notification pursuant to Section 4.3; or (c) Grantee fails to meet the conditions set forth in this Agreement. If the Grant is terminated prior to the end of the Construction Contract, Grantee shall: (a) provide DTC with a full accounting of the receipt and disbursement of Grant Award 4838-3443-9461
Grant Award Agreement Deseret Trust Company to Palo Alto Unified School District Page 4 funds through the effective date of termination, (b) repay, within thirty (30) days of the effective date of termination, all Grant Award funds which were not expended or irrevocably committed to on or prior to the effective date of termination. Nothing contained in this paragraph shall limit or prevent DTC from taking legal action to seek repayment of Grant funds already expended by Grantee which were not applied in accordance with the conditions in this Agreement. 4.5. Relationship of Parties. DTC and Grantee agree that this Grant Award does not create a principal-agent relationship of any type between the parties and that Grantee will not, by act of omission or commission, foster any belief on the part of third parties that such relationship exists. DTC, its directors, officers, employees and agents, including any designee appointed pursuant to this Agreement shall not be responsible for maintenance or structural integrity and shall not incur any liability of any kind subsequent to the making of the Grant Award. 4.6. Indemnification. DTC is a funding source only and does not participate in or direct any of the activities or services of Grantee. Grantee is solely responsible for the Construction Contract and the Project. Accordingly, Grantee understands and agrees that DTC, its directors, officers, employees and agents, including any designee appointed pursuant to this Agreement, will not be liable for any of Grantee s contracts, torts, or other acts or omissions, or those by Grantee s directors, officers, members or employees. Grantee understands and agrees that DTC will not provide any legal defense for Grantee or any such person in the event of any claim against any or all of them. Unless prohibited by law, Grantee shall hold DTC harmless from all liability, including but not limited to costs of defense, from the contracts, torts or other acts or omissions of the Grantee, its employees, directors, officers or employees in any way connected with any activity of Grantee. 4.7. Authority and Validity. Each individual executing this Agreement on behalf of a party warrants that he has full power and authority to execute this Agreement on behalf of such organization. Further, each party warrants that the board of directors or other governing body has taken all action required by law, Articles of Incorporation and Bylaws or otherwise to authorize the execution and delivery of this Agreement and the consummation of the transactions contemplated herein. Each party further warrants that this Agreement constitutes the valid and binding obligation of that party, enforceable in accordance with its terms. 4.8. No Guarantee of Future Funding. The provisions of this Grant Award Agreement do not imply any future funding commitment by DTC. 4838-3443-9461
Grant Award Agreement Deseret Trust Company to Palo Alto Unified School District Page 5 4.9. Entire Agreement. This Grant Award Agreement and all attachments constitute the entire Agreement between the parties and supersede all previous related understandings or written or oral agreements between the parties. 4.10. Amendment. Unless otherwise permitted herein, any alteration in the terms of this Agreement must be in written form and must be signed by both DTC and Grantee. 4.11. Applicable Laws. The provisions of this Agreement shall be construed and enforced according to the laws of the State of Utah. Any lawsuit, action or proceeding resulting from, or related to this Agreement, shall be commenced in a court of competent jurisdiction located in the County of Salt Lake, Utah. 4.12. Gender and Number. Masculine pronouns include the feminine as well as the neuter genders, and the singular shall include the plural, unless indicated otherwise by the context. 4.13. Headings. The paragraph headings contained herein are for convenience of reference only, and shall not be construed as defining or limiting the matter contained thereunder. 5. Execution. If the terms of this Grant Award Agreement correctly set forth your understanding and acceptance of the arrangements made regarding this Grant Award, please countersign this Grant Award Agreement and return the executed Agreement to DTC. DESERET TRUST COMPANY, a Utah nonprofit corporation By: John M. Barger, President 4838-3443-9461
Grant Award Agreement Deseret Trust Company to Palo Alto Unified School District Page 6 Grantee hereby agrees to the terms and conditions of the Grant Award Agreement as recited above. PALO ALTO UNIFIED SCHOOL DISTRICT By: Its: Authorized Representative Date: 4838-3443-9461