The former bond counsel to the Peralta Community College District says that the list of projects in the Peralta’s troubled Measure A bond ballot statement last June may not be specific enough to have qualified the measure under the Proposition 39 requirements under which it was passed.
Attorney John Hartenstein, chair of the School Finance and General Obligation Bond Practice Group of the San Francisco law firm of Orrick, Herrington & Sutcliffe, said that although state courts have not clarified how specific bond project lists must be to qualify under Prop 39, “my advice to my clients is that language should not be included which indicates that the projects under the bond measure ‘are not limited to’ projects actually listed on the ballot measure. My legal view is that this does not meet the measure of Prop 39.”
Proposition 39, passed by California voters in 2000, dropped the requirement for bond measure passage from two-thirds to 55 percent, but included the requirement, among other things, that the future bond measures qualifying under the new law contain “a list of the specific school facilities projects to be funded.”
Last June, area voters overwhelmingly approved Peralta’s Measure A, authorizing the issuance of $390 million in bonds to finance facilities upgrades at the four-college district.
The list of projects accompanying Measure A on last June’s language included the caveat that “project costs … may include, but are not limited to” the included projects.
There has been growing controversy within the Peralta district in recent weeks about how the Measure A bond money will be spent, with several different “official” project lists released, Laney College faculty members complaining that their college is not getting its promised share of the projects, and members of the board of trustees narrowly rejecting $17 million of a district administration proposal for $21 million in spending on materials out of Measure A money.
And now, if what Hartenstein says is correct, Peralta could also be vulnerable to possible lawsuits seeking to overturn the results of the Measure A vote.
Earlier this month, a Superior Court Judge in Santa Clara County overturned two lawsuits against Foothill-De Anza Community College District’s Measure C Prop 39 bond, which passed voters in June of this year.
According to the Mountain View Voice, the citizens bringing the lawsuit “claimed [in part that] Foothill-De Anza did not provide a thorough and accurate list of funded projects to voters and was going to misappropriate funds. But in his ruling, Judge [C. Randall] Schneider found that “The ballot proposition for Measure C contained a list of specific projects to be funded which satisfied all requirements under California law.”
While it may clarify the Prop 39 law, the Foothill-De Anza bond lawsuit ruling may not have a direct effect on Peralta’s Measure A. While Foothill-De Anza’s Measure C included a project list similar to Peralta’s Measure A, with no projected costs, Measure C did not include Measure A’s qualifying language that the bond money “may” be spent on the included projects, and that other projects could also be added.
Instead, because Measure C referenced the Foothill-De Anza district’s Facilities Master Plan, Information Technology Strategic Plan and Renovation Master Plan, which Measure C indicated can be “amended from time to time,” the Los Altos Town Crier noted that the claimants in the lawsuit alleged that “there is not a binding list, thus casting the entire bond’s validity in doubt.”
Earlier court decisions have ruled that Prop 39-qualifying bond measures do not have to include a specific list of bond projects, but can reference a list that has been passed by the district and is on file and available to the public.
The petitioners in the Foothill-De Anza case have said they will appeal, and California bond attorneys are expected to study Judge Schneider’s 30-page ruling to see if it begins to clarify what is legally allowable and not allowable under Proposition 39.
Hartenstein said shortly before the Foothill-De Anza ruling was announced that bond law firms in the state were “hoping we’ll get some guidance from the court from this ruling. Up until now, we have just been operating with guesswork. Prior court rulings have said that if a district includes a specific project list in a bond measure, they are bound to those projects. But now we have language in state law that specifically mandates a list of specific projects. We just don’t know how specific that must be.”
Hartenstein’s firm—which represented the Oakland Unified School District in its successful Measure B bond vote last June and counsels school districts on bond matters in the Bay Area, throughout California, and nationally—did not represent Peralta in either last June’s Measure A vote or in the passage of Peralta’s previous bond, Measure E, in 2000.
Orrick, Herrington last represented Peralta in its successful 1996 Measure A bond campaign which, according to the Oakland Greater Metropolitan Chamber of Commerce, “allowed the district to use $7.5 million of [previous bond measure] funds for the construction of the new Vista facility and provided an additional $8 million for Vista.”
Peralta’s current bond counsel, the Jones Hall firm of San Francisco, did not return a telephone message seeking comment for this article.